The Rich and the Poor

HC Deb 28 June 1984 vol 62 cc1174-251

Mr. Speaker

I should announce to the House that I have selected the amendment in the name of the Prime Minister.

4.24 pm

Mr. Roy Hattersley (Birmingham, Sparkbrook)

I beg to move, That this House deplores the widening gap between the incomes of the rich and poor which has resulted from the Government's taxation and social policies; notes that the promised tax reductions have only been made on annual incomes of over £18,000 and that at least two million British people are now subsisting at a standard of living lower than they had five years ago; and calls upon the Government to change the pattern of income distribution in Britain in order to distribute the national wealth more equally in the interests of justice and efficiency. You will have noticed, Mr. Speaker, and so will the House, that the Chancellor of the Exchequer does not regard this debate as worthy of his participation. Had this Opposition day been concerned with arcane adjustments to company taxation the right hon. Gentleman would have taken part, but because we are debating poverty and the poor the Chief Secretary is put up as the compassionate face of capitalism and the voice of caring Conservatism. It is impossible to imagine a more unconvincing representative of those dying virtues. In reality the Chief Secretary is a walking text for a sermon by the right hon. Member for Cambridgeshire, South-East (Mr. Pym).

I ask only one thing of the Chief Secretary. Are the facts on which the debate is based—increased poverty and the increased numbers of poor—admitted. Reading the Government amendment does not encourage me to believe that the right hon. and learned Gentleman will talk about the subject in that honest and objective way, because the amendment asks the House to accept the Government's commitment to a reduction in the amount of public wealth spent by the Government, and their commitment—I emphasise that word—to the amount of disposable income that individuals are allowed to spend on themselves.

The reality of the past five years of Conservative freedom that works is that larger and larger proportions of national income have been taken in taxes and spent by the Government. The Government's extraordinary achievement is that they have spent more in the public sector, but they have managed nevertheless to increase poverty and widen the gap between the rich and the poor. That is because the Government's priorities are not those of the normal British citizen. They prefer to spend money on airfields in the south Atlantic than on houses in the north of England. That is the great condemnation of what the Government have stood for, and, I fear, will continue to stand for.

The increases in poverty and the widening of the gap between the rich and the poor are the indisputable realities of life in Conservative Britain. There may be arguments about why those changes have come about. Some Conservative Members might have the courage to say that they applaud the growing inequalities which the Government have caused. The Prime Minister herself boasted, in her one excursion into philosophy, that she was intractably opposed to the doctrine that the state should be active in promoting equality in the provision of social welfare. I suppose that that is the high argument for a divided society. Naturally enough, the low argument for a divided society came from the hon. Member for Brent, North (Dr. Boyson), who said: The State spends all its energies taking money from the energetic, the successful and thrifty to give to the idle, the failures and the feckless. With those opinions, the hon. Gentleman has become the Minister for Social Security. He articulated them in a book with the interesting title "Down with the Poor".

The Minister for Social Security (Dr. Rhodes Boyson)

That was George Bernard Shaw.

Mr. Hattersley

I agree that the hon. Gentleman has associations with the 19th century, both visible and intellectual, but it is not possible to argue that George Bernard Shaw ever held the view shamefully held by the hon. Gentleman that The State spends all its energies taking money from the energetic, the successful and the thrifty to give to the idle, the failures and the feckless. The lunatic argument for inequality came, of course, from the Secretary of State for Education and Science, who said: A family is poor if it cannot afford to eat … By any absolute standard there is very little poverty in Britain today. It is incumbent upon us to teach the Secretary of State for Education and Science the reality of poverty in Britain today. The poor are increasing in number and becoming poorer, while the rich grow more prosperous, not least because the rich are the sole beneficiaries of the tax cuts promised by the Government at two general elections.

Despite the promises of those two elections, the annual tax bill is now £22,500 million higher than it was in 1979, but only families enjoying an annual income of more than £18,000 benefit from cuts in taxation by the Government, Families on average incomes have been cheated by the Government, because there have been no tax cuts for them. That is the reality for the average family. Today, however, we wish to concentrate on the scandalous treatment of the poor.

To the Government's shame, in speaking of the poor we are referring to millions—and increasing millions—of British citizens. I remind the House of the figures. In 1981, 7¼ million people—one seventh of the entire population—were living at or below supplementary benefit level, which is the accepted definition of extreme poverty. That was an increase of 24 per cent. since 1979. Those people were expected to live on a weekly rate of £62 for a family of four. The House may be interested to know that that is less than the hourly rate of pay received by each of the Saatchi and Saatchi brothers.

Supplementary benefit level is the accepted definition of total poverty. The accepted definition of relative poverty is supplementary benefit level plus 40 per cent.; that is, £86.50 per week plus housing benefit for a family of four to cover all expenses. That is the equivalent of 20 minutes' pay for the highest paid director of the British Oxygen Co. Ltd. On that weekly level of pay, 15 million people—one quarter of the total population—now subsist.

I must confess that those figures were for 1981. That is because at that point the Government prudently—in my view, cynically—abandoned their census of poverty. We know, however, that poverty has increased since then and that there are now 2.8 million more people on supplementary benefit and 120,000 more on family income supplement. That increase is due principally, although not exclusively, to the increase in unemployment which is the direct result of Government policy.

As the number of the poor has grown, their poverty has deepened. The Government have continually increased taxes on the working poor while giving huge handouts to the rich. They have continually reduced the benefit received by the unemployed. They have also continually reduced the level of housing benefit and changed the formula whereby the annual increase in pension is calculated. It is impossible to argue otherwise than that the Government have set out to reduce the standard of living of the poorest 10 or 20 per cent. of the population.

The Government's attitude is typified by one particular instance of parsimony, to which I shall return. It is generally accepted that a long-term supplemenatary benefit rate is desperately needed to meet the new tragedy of long-term unemployment. Two Select Committees have agreed that it is necessary, and many Conservative Back Benchers have campaigned for it, but the Government say that, desirable though it is, the cost of £500 million in a full year is too much for the Exchequer to finance. Yet in the last Budget the abandonment of investment income surcharge and the halving of stamp duty lost the Government revenues of £520 million. The truth is that the Government's priorities are to subisidise the rich and penalise the poor.

Why do the Government insist on taking from the poor and giving to the rich? There are two reasons for which they have tried historically, and may try again today, to justify growing inequality. The first is based on the central intellectual error of Conservatism—the notion that freedom is nothing more than the absence of restraint and the idea that liberty is simply the right of the rich and powerful to use their riches and power in whatever way they choose.

The result of that view is the proclamation of rights which for most of the population are wholly theoretical. In theory, my constituents have the right to buy their way into private schools and private medicine. In reality, however, they have the right to send their children to overcrowded state schools and to put their names down on ever-lengthening hospital waiting lists. Theoretical rights are of no value unless those who possess them have the economic wherewithal to make them realities. Theoretical rights merely amount to the exploitation by the rich and powerful of those who do not share those riches and power.

In the Government's consistent Budget strategy, that notion has a direct and detrimental effect on the lowest income groups in society, because it leads the Government to believe the cliché that people have the right to spend an increasing proportion of the money that they earn irrespective of the effect on society as a whole. That is the message buried deep beneath the clichés of the Government amendment. The so-called rights fall differently on different groups of the population. The man or woman on eight times national average earnings has a right to huge increases in tax concessions. Those on 10 or 15 times national earnings have the right to remarkable reductions in their tax bill as a result of the last Budget. As the last LWT poverty survey shows, however, it is also the right of 5.5 million people regularly to be unable to afford the necessities of a decent diet, for 6 million people to lack essential clothing and for 3 million people to be unable to afford heating in the living rooms of their homes.

I am anxious to see a redistribution of wealth which in a positive and creative way will extend the real rights of those with the least rights in this country—the lowest income groups, who do not have the economic ability to spend the money necessary for a civilised life. For freedom to be real, it must be effective. Theoretical rights are meaningless if they cannot be exercised, and in divided Britain they can be exercised only if there is a positive policy for the redistribution of wealth.

The second argument for inequality which I suspect some Conservative Back Benchers will daringly advance concerns efficiency and incentive. We are constantly told—I have no doubt that the Chief Secretary will tell us again today—that captains of industry will not work with energy and enthusiasm, determination and attachment, without high and constantly increasing earnings. I have never understood why managing directors need the encouragement of constantly escalating salaries, while manual workers in their factories are expected to work harder and harder for deteriorating wage levels.

Mr. Peter Hordern (Horsham)

Will the right hon. Gentleman give way?

Mr. Hattersley

Before giving way, I shall make an assertion which I know the hon. Gentleman will confirm—that in the manual classes of income distribution wage levels are deteriorating.

Mr. Hordern

The right hon. Gentleman, above all others in the House, knows how to restrain income, as he personally introduced the Labour Government's statutory prices and incomes policy. It must surely follow from his present argument that the ratio of supplementary benefit to earnings should now be falling. How does he explain the fact that the ratio of supplementary benefit to average male earnings has risen from 55 per cent. under the Labour Government to 64 per cent. now?

Mr. Hattersley

The hon. Gentleman interrupted me just as I was about to give the facts. The relative rate of manual earnings of the bottom 10 per cent. of the population—the lowest 10 per cent. in terms of earning capacity—is falling too. That is a fact of life in present-day society. If the hon. Gentleman is about to argue that the unemployed are better off now in real terms than they would have been if they had enjoyed the benefits of the small increase in national income which the Government have managed to contrive, he will find it difficult to substantiate that argument on the statistics. I look forward to hearing him do so when he makes his speech, or indeed now.

Mr. Hordern

Taking the lowest decile of gross weekly earnings—which is what the right hon. Gentleman referred to—the percentage of median pay, which has risen since the right hon. Gentleman's Government were in power, was 67 per cent. in 1980 and is 66 per cent. now. Where is the great difference?

Mr. Hattersley

I blame myself for giving way when I was about to go into detail on the point at which the hon. Gentleman aims his criticism. I shall do so now. I remind the hon. Gentleman that the mere removal of the earnings-related supplement has made a difference to unemployment pay which more than compensates for the point which he has tried to make.

I shall put the matter in a wider perspective. It is now a canon of the Government's economic policy that one of the remedies for unemployment is a reduction in wages. Ministers are open about that. The point was mentioned in the Mais lecture which the Chancellor of the Exchequer gave 10 days ago, and various Treasury Ministers have said that the path to increasing the number of jobs is to ask existing workers to accept lower incomes. In pursuit: of that policy, the Government have introduced tight public sector pay limits, abolished the fair wages resolution, and weakened the wages councils. None of those placebos has reduced unemployment, but they have successfully held wages down.

I can give the hon. Gentleman some more statistics about the lowest paid 10 per cent. of the population. In 1978, the lowest paid 10 per cent. of male workers earned 66.8 per cent. of the national average. Last year, their earnings had fallen to 64.1 per cent. of the average. In 1978, the highest paid 10 per cent. of male workers earned 157.9 per cent. of the average. Last year, their earnings had risen to 169.7 per cent. The gap between the lowest paid and the highest paid had widened dramatically and—in my view—unacceptably.

The lowest paid have suffered from two other disadvantages. First, over the past five years they have paid an increasing proportion of their wages in taxes, while the very rich have paid a decreasing proportion. Secondly, the lowest paid have felt the effects of inflation far more savagely than men and women higher up the income scale because—naturally, inevitably and occasionally tragically—the lowest paid have to spend a higher proportion of their salary on the basic necessities of life, and the cost of the basic necessities has risen faster than the cost of the services and goods which are bought and enjoyed by men and women higher up the scale.

The lowest-paid have suffered in three ways, each of which is in part the responsibility of the Government: their pay increases have been held down; their taxes have been increased; and inflation has risen more steeply for them than for other social groups. Under the present Government, poverty among the working poor has increased and the gap between the incomes of the worst paid and the better paid has widened dramatically.

The Government's attitude towards the unemployed poor, the pensioner and the sick has been one of unredeemed parsimony. I offer four examples to prove that point. First, since the Government changed the formula by which the annual increase in the pension is calculated, pensioners have been denied any share in the slow growth of the economy. As a result, every pensioner couple is £3.90 a week worse off and every single pensioner is £2.50 a week worse off than they would have been had the increases been calculated in line with changes in earnings and according to the formula applied by the previous Government.

Mr. Nigel Forman (Carshalton and Wallington)

We would give more credence to the right hon. Gentleman's argument in favour of state pensioners if we did not remember that under the Government of which he was a distinguished member, both in 1976 and in 1978, the kink with earnings as opposed to prices was not kept.

Mr. Jeff Rooker (Birmingham, Perry Barr)

But the result was 20 per cent. higher.

Mr. Hattersley

As my hon. Friend says, the result was that at the end of those years the pensioners received more than they would have received if the calculation had been based on the highest possible element in the formula.

There is another answer, which is irrefutable. Had the present Government applied the policy which we applied in 1979, the pensioner couple would be more than £3 a week better off and the single pensioner would be more than £2 a week better off. Conservative Members do themselves no service by pretending that that is not so.

My second example of the Government's total disregard for the welfare of the least well off is the sorry saga of housing benefit. The whole House knows that the housing benefit scheme, thanks to the changes imposed by the Government, is now a shambles. That shambles is the cause of hardship, suffering and anxiety to poor families who do not know where they stand. More importantly in the long run, the state of shambles which has existed since April helps 2,150 million fewer people than were helped before the Government revised the scheme, and 1,300 million fewer pensioners. The Government plan to deprive more people of the benefits of the housing scheme in November.

The Minister for Health explained on the radio—I read the text this morning—that the Government's reduction in investment income surcharge was introduced as part of the Chancellor of the Exchequer's determination to help the elderly. If the Chancellor wants to help the elderly, he will restore housing benefit to the 300,000 pensioners to whom he denied it last April.

My third example of the Government's callous unconcern relates to unemployment Pay. First, there was the abandonment of earnings-related supplement, which cost the average recipient of unemployment pay £11.60 a week. Now, after a series of other petty adjustments and reductions, such as the recalculation of child support, there is the refusal to extend the long-term rate of supplementary benefit to the unemployed.

Long-term unemployment is, very largely, the creation of the present Government. When Labour left office—

Mr. Douglas Hogg (Grantham)

Nonsense. If the right hon. Gentleman believes that, he does not understand economics.

Mr. Hattersley

Does the hon. Gentleman wish to say anything on this or any other subject? If so, I shall gladly give way to him. I try not to be critical of the hon. Gentleman. Those of us who have been here for any length of time understand and excuse him everything.

Long-term unemployment is very largely a new phenomenon created by the Government. When the Labour party left office in 1979, just over 300,000 men and women had been unemployed for one year. Now, even on the Government's phoney and doctored figures, 1.2 million men and women have been unemployed for more than one year. On an honest calculation, that figure is 1.5 million. As the hon. Member for Broxtowe (Mr. Lester) rightly and courageously said, those 1.5 million and men and women are long-term unemployed, but must exist on short-term benefits. We have complained, and will continue to complain, about the Government's squandering of North sea oil revenue on unemployment pay. All of the evidence makes it absolutely clear that although the bill for unemployment pay has increased by £11 billion, it has increased not because of the Government's generosity to the unemployed, but because they are throwing so many people out of work.

My final example of the Government's parsimony, callousness and lack of concern relates to child benefit. It is now a trifling amount above its 1979 level and it is to be increased by a full 35p. If the Chancellor had improved child benefit by the same percentage as he reduced tax rates—that was the clear intention when child benefit replaced child allowance as a means of supporting poor families—child benefit would be increasing not by 35p but by £1.10. The Chancellor chose a minimum increase in the provision to help families and a maximum increase in the tax concession that most benefits the rich.

I and my right hon. and hon. Friends believe that the simple facts of the Government's record speak for themselves. The facts are the indictment and the callousness is shown by the Government's unwillingness to do anything to alleviate the conditions of the poor. I shall end with just two points. The first is a request and the second is a prediction.

The request is to the Chief Secretary. I ask him to do the poor of Britain the courtesy of attempting to justify the policies that have produced the increases in poverty about which we complain. This is not an occasion for his usual offensive arrogance. He has made his reputation by defending the indefensible, so I hope that he will spend part of this afternoon trying to do exactly that in terms of the Government's attitude towards the poor.

Now the prediction. It is obvious that the Government believe that they can win the next general election by a crude appeal to cynicism and self-interest by asking people in work to forget the old, the poor and the sick. The Opposition have a higher opinion of the British people. There is a growing sense of outrage at the deprivation that the Government have caused. According to the surveys, three quarters of our people believe that the gap betwen the rich and the poor is too wide, and a similar proportion are willing to pay extra taxes to ensure that everyone can afford the necessities. The next general election will be a contest between cynicism and idealism. The Labour party will stand or fall by the belief that the British people want something better for the British poor than the Government have provided.

4.53 pm

The Chief Secretary to the Treasury (Mr. Peter Rees)

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: 'welcomes the continuing economic recovery and falling inflation, supports the Government's economic and social policies as the best means of encouraging enterprise and promoting prosperity throughout the community, and applauds the Government's commitment to the transfer of power and wealth from the State to the individual.' I should have liked to congratulate the Opposition on their choice of theme, because I had hoped that we would have a long-term issue treated seriously. Perhaps it was chosen to re-establish the Labour party's egalitarian credentials. I treat with a little reservation, after his outpourings today, the claim of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) to stand as the candidate for idealism. We have read his notable speeches made outside the House. This is the first time that he has made a speech on a near economic theme for some time.

Mr. Stuart Bell (Middlesbrough)

The Chief Secretary has a short memory. My right hon. Friend made such a speech three months ago.

Mr. Rees

That was some months ago. The hon. Gentleman must recognise that, for those of us who have been in Committee Room 10, life has moved on. [Interruption.] I shall get on with my speech if I am permitted to do so, but at the moment the Opposition seem keener to assault than to listen. If we are to have a serious debate, I know that they will, with their habitual courtesy, listen to what I have to say.

I must say in all candour—I know that the right hon. Member for Sparkbrook would prefer candour as he is the candidate of the hard truth — that the right hon. Gentleman's speech was long on moral indignation but a little short on basic analysis and on objectivity, and very short on realistic remedies, unless his attack on private medicine and private education are to be regarded as a realistic contribution to the debate.

I shall begin by examining the issues a little more objectively than the right hon. Member for Sparkbrook. Our perception of poverty inevitably changes with time. In the previous century it meant insufficient income for even the basics of life, such as food, shelter and clothing. I hope that that is an uncontroversial statement. Even the right hon. Gentleman at his most indignant will concede that standards have improved immeasurably since then. Now, for example, 79 per cent. of households have a washing machine, 93 per cent. have a refrigerator, and 97 per cent. have a television. Such goods, which a few years ago were unimaginable luxuries, are now the commonplaces of life. However, some people are still regarded as poor. In that sense, we can never hope to eliminate poverty, because, as our national prosperity increases, we redefine poverty.

The creation and diffusion of wealth must be a matter of continuing concern for the Government of the day. I hope that all men of good will agree that every Government's aim should be to increase the prosperity of all the people, so enriching every member of society. Perhaps I might cull a telling phrase from one of the right hon. Gentleman's recent speeches. We should aim—it is the aim of the present Government as, I am sure, it was the aim of the Labour Government—to create a society in which lives are more fully lived.

At this point, however, the great divide between the two major parties opens. One offers a society in which the state uses a battery of controls in an attempt to keep rewards for individuals broadly equal. That is presumably what underlies the right hon. Gentleman's phrase, which I hoped he would explain, to the effect that he was not interested in equality of opportunity but only in equality of outcome. It was a pity that he did not devote a little more time to that concept. If he had, the House and the country might have been illuminated.

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

Will the Chief Secretary tell us about the right hon. Member for Cambridgeshire, South-East (Mr. Pym)?

Mr. Rees

My right hon. Friend the Member for Cambridgeshire, South-East (Mr. Pym) published a notable book, which the hon. Gentleman has no doubt studied. [Interruption.] I shall leave my right hon. Friend to expound on that in greater detail.

The Conservative party, to which I am glad to belong, offers a society in which the differences in choice and talent are reflected in different rewards. The state steps back, but encourages individual enterprise. For the Labour party, which has not changed much over the past few years, the creation of wealth must be largely the responsibility of the state through nationalised industries, and the subsidisation, direction and control of business enterprise. Consistently with this, the creation and transmission of wealth by individuals is to be made as difficult as possible.

The Conservative party's philosophy is different. Economies are run by people. Our success or failure is the result of the efforts and activities of millions of people. Most of them are motivated to give of their best and to realise their full potential. They are given the incentive to succeed by the prospect of financial rewards. The Government and the British people recognise the dynamics of a successful economy, the processes that lead to growth and so to better living standards for all. [Interruption.] Opposition Members demonstrate why they remain a minority. That is the philosophic divide, and I shall show the House how it has been translated into practice.

Mr. Jack Straw (Blackburn)

Why does the Chief Secretary not cut through all this badly drafted verbiage and admit that the philosophy of the Conservative party is the law of the jungle, in which the strongest take all the rewards?

If that is not the case, how can he justify the Government's taxation policy, under which £1,000 million a year extra is given to the rich, who are already doing extremely well and were doing extremely well even under the taxation system of the previous Labour Government? How can he justify the fact that the direct tax burden on the poor and those earning up to twice average earnings has been ratcheted up each year? Where is the justice in the Government's policy on taxation?

Mr. Rees

If the hon. Gentleman had contained his impatience and allowed me to develop my theme, he would have heard the answer. He will hear the answer in due course. If he contains himself, I can come to the heart and core of what I have to tell the House. The Opposition are making it difficult. [Interruption.] It is too early to come to my peroration. Not many points in the speech of the right hon. Member for Sparkbrook deserve serious consideration, but I shall attempt to deal with the few that there were.

It is trite to observe that the basis for prosperity for the whole of society depends on the prosperity of the country as a whole. For the past three years the United Kingdom has enjoyed economic growth at an average rate of 3 per cent. a year. We were the fastest growing member of the Community last year. It is true that we went through one of the sharpest recessions since the 1930s, but none of the Opposition's policies would have helped us to come out of the recession faster or more surely.

The European Commission forecasts that we shall be near the top of the Community's growth league this year. We are experiencing one of the longest recovery periods in post-war history. [Interruption.] Opposition Members should compare that with their own performance in government. [Interruption.] All the indicators point to a continuation of the growth in activity through 1984 and into 1985.

We have in this country—we we are one of the few countries that can make this boast — the winning combination of steady growth and low inflation. The right hon. Member for Sparkbrook was right to concentrate on inflation, because the inflation record of the Labour Administration was disastrous. Lower inflation has lifted a great burden from the old and those who live on their savings. The right hon. Gentleman also rightly emphasised that inflation touches most sections of our society. That is why I am surprised that he has not supported us in our endeavours. The containment of inflation is one of the planks of the Government's economic policy.

Unemployment remains a serious problem, and no Conservative Member would dispute that. I am sure that all hon. Members are pleased to see that the recovery is increasingly being reflected in the labour market, which offered an estimated 190,000 new jobs in the economy between March and December 1983. No less than the Labour party, the Government wish to see a lasting reduction in the number out of work. We differ from the Labour party in rejecting the idea that there is a quick or easy solution to unemployment. To pretend otherwise is a cruel deception. Lord Barnett said that, even with the most careful planning, it would be foolish to promise or even to suggest that there is a new, radical solution rapidly to reduce unemployment. Those are wise words which Opposition Members would do well to digest.

Mr. Campbell-Savours

The Americans are doing it.

Mr. Rees

The American economy is a good deal more flexible than ours. I shall come to that later. [Interruption.] It is nothing to do with expansionary policy or the United States deficit. [Interruption.] The hon. Gentleman can take his pick among the economies. He seems to prefer to keep up a running commentary. He should reflect why Mr. Martin Feldstein chose to withdraw from the American Administration.

Mr. Bell

Will the Chief Secretary tell the House what is the Government's definition of full employment?

Mr. Rees

That is a theoretical question.

Mr. Rooker

The Chief Secretary has never even thought about it.

Mr. Rees

Of course, I have thought about it. If I were to produce a number, hon. Gentlemen would probably find it unrealistic, as I would. [Interruption.] I think about it constantly. If the hon. Member for Birmingham, Perry Barr (Mr. Rooker), who is intervening from a sedentary position, remembered the slightly less than £3 million devoted to employment creation measures by the Government, he would recognise that a Chief Secretary must give constant thought to that question.

Mr. Tam Dalyell (Linlithgow)

What is the Treasury's estimate for employment in the coming months in the construction industry? Other than the example given by my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) for the airfield in the south Atlantic, there seems to be little to which the construction industry can look forward. What is the Treasury's estimate?

Mr. Rees

I hate to disappoint the hon. Member for Linlithgow (Mr. Dalyell), because I know of his keen interest in airfield construction in the south Atlantic. This Government, like the Labour Administration that the hon. Gentleman supported before 1979, are equally coy about making employment forecasts. I have learnt that lesson from them.

Mr. Hattersley

I am deeply reluctant to intervene in the Chief Secretary's speech, because I think that it is better to leave him to flounder alone. The assertion that previous Governments did not make forecasts of unemployment has been made so often that it must be refuted. It is true that previous Governments did not give figures, but they invariably made forecasts about whether the path was going up, down, or staying on the level. Will the Chief Secretary do the same as previous Governments and tell us whether the path is going up, down, or staying steady?

Mr. Rees

I am entitled to adopt the answer that came from the lips of the previous Labour Government.

The lessons of experience demonstrate clearly that so-called expansionary policies are not the way to sustain growth and tackle unemployment. The only foundation for a sustained recovery without renewed inflation is continued, firm, macroeconomic policies. That is the basis on which the Government propose to proceed.

In the longer term we must rely for jobs and prosperity on improvements in the efficiency of the economy, supported by macroeconomic policy. The largest task facing our economy, in common with others in the Western world, is to adapt to a new pace of change. We shall persist with our strategy of making the economy work better by abolishing controls, reforming the tax system, sweeping away monopolies, introducing competition and promoting the greater mobility of labour. Those are all part of the process of rediscovering the enterprise culture of which the right hon. Gentleman seems blissfully unaware. They are also tasks to which we shall return with renewed vigour in the European Community as a result of the settlement achieved by my right hon. Friend the Prime Minister at Fontainebleau earlier this week.

As the right hon. Gentleman pressed me hard on taxation, I should say that we aim to improve incentives at every level. That lies behind our firm resolve to reduce direct taxation. As one would expect, the right hon. Gentleman made great play of the top rates of taxation. The top marginal rate of tax on earnings is now down to 60 per cent., which is a full 23 percentage points below where the Labour Government left it. The discrimination by penal taxation on investment incomes, which produced a near-confiscatory rate of 98 per cent., has, I hope, been consigned to fiscal history. A more rational and acceptable structure for taxing incomes is an achievement of which the Government are rightly proud.

The right hon. Gentleman talked a great deal about the redistribution of wealth, but was coy about telling us the means by which he would achieve it. We heard little about the Labour party's fiscal policies, and the right hon. Gentleman owes it to the House in his next great contribution to tell us exactly what the Labour party's fiscal policies would be if, contrary to our hope and expectation, it were returned to power.

Mr. Rooker

Just like the Tories did.

Mr. Rees

The hon. Gentleman is wrong. We were very explicit about what we intended to do.

Mr. Robert Maclennan (Caithness and Sutherland)

As one who has been in the House for long enough not to be surprised by witnessing a dialogue of the deaf, and although I do not wish to enter a discussion about the lack of positive content in the speech of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), could the Chief Secretary—now that rather more than 15 minutes have elapsed since he began his speech—tell us at least something about his view of the nature of poverty in Britain? Will he tell us how he and his colleagues measure poverty, because, when the right hon. Member for Sparkbrook tried to define it—the debate is supposed to be about poverty—the Chancellor of the Exchequer denied the standard definition of poverty as being those who live below the supplementary benefit level? Does the Chief Secretary accept that definition?

Mr. Rees

No, I do not. The hon. Gentleman said that I have been speaking for 15 minutes. He is inaccurate. I may have been on my feet intermittently for 15 minutes, but his intervention has delayed the progress of the debate. If he has an important point to make, no doubt he will catch your eye, Mr. Deputy Speaker, during the debate.

Mr. John Home Robertson (East Lothian)

Why give way to the hon. Gentleman?

Mr. Rees

I could not anticipate what the hon. Member for Caithness and Sutherland (Mr. Maclennan) would ask me. He made a long intervention, which will come better in the speech which I assume he will wish to make later in the debate.

Mr. Campbell-Savours

Will the Minister give way?

Mr. Rees

No. I have already given way a great deal. I have especially given way a great deal during the past two months to the hon. Member for Workington (Mr. Campbell-Savours). Many hon. Members on both sides of the House wish to contribute to the debate. If I am overgenerous, especially with the hon. Member for Workington, some hon. Members may be cheated of the opportunity of contributing to what should, but might not be, an important debate.

The right hon. Member for Sparkbrook was curiously silent about thresholds. Incentives are not just an issue for those on higher incomes. It is hard to justify a system under which people who are poor enough to receive means-tested benefits should also be regarded as rich enough to pay tax on their incomes. A major part of the solution to that problem must therefore be to control public spending and to raise again the points at which people begin to pay tax on their incomes. In the Budget we increased those allowances by 12.5 per cent., which was 7 per cent. more than the rate of inflation at that time. My right hon. Friend the Chancellor of the Exchequer was able to remove 800,000 people from tax altogether. The Labour Administration were unable to match that achievement.

In the previous Budget we also increased the allowances by more than the rate of inflation. Basic thresholds for single people and married couples are about 16 per cent. higher in real terms that they were in 1978–79, and at their highest real level for a decade. As a result, about 1 million households have been removed from income tax altogether. We can be justly proud of that achievement, which gives the lie to the right hon. Gentleman's charge that the tax system is now skewed in favour of the rich.

The right hon. Member for Sparkbrook mentioned the poverty trap, without giving the House a clear demonstration of how he would tackle that persistent problem. If we can pursue the policies that we have initiated and make this sort of progress during a sustained period, we could eventually eliminate the worst aspects of what is generally meant by the poverty trap. I do not deny that the road will be long and difficult, but that cannot be a reason for not setting out along it.

The right hon. Gentleman prefers to emphasise child benefits, but he seems to be sublimely unaware—perhaps because he comes fresh to the subject—that child benefits are now at their highest ever in real terms. But if we are to try to deal with the poverty trap, which is a serious matter—I hope that there is some common ground between both sides of the House on that—increasing personal allowances has several advantages, because it directly reduces the marginal rates of those taken out of tax and increases the net incomes of all taxpayers, whether they are in the poverty trap or have children. Six million families receive child benefit, while 20 million families and single people benefit from an increase in tax thresholds. We are right to concentrate on that method of alleviating what is undoubtedly a problem.

The right hon. Gentleman waxed eloquent and indignant about public spending and the protection of the poor. We have now brought public spending under control, so that in future we can lower the burden of taxation. However, control of public spending has not been at the expense of the poor. They have been protected.

The Government pledged that they would maintain the real value of pensions and other long-term benefits. They have more than honoured that pledge. Between November 1978 and November 1983, pensions were increased by 75 per cent. while the retail price index increased by 69 per cent. That is a statistic on which the right hon. Gentleman should ponder. Child benefit will increase in November from £6.50 to £6.85, maintaining it at its highest ever real level. We are now spending £39 billion, or almost one third of all public spending, on social security. The right hon. Gentleman overlooked that point.

Another matter that does not seem to agitate the Labour party is the diffusion of wealth. Maintaining the safety net is, of course, important, but it is not the end of the story. Part of the oppression of poverty lies in the dependence that it brings on the safety net and on state handouts. The failure to understand that and its promotion of dependence on an impersonal state has made the Labour party a minority interest.

Mr. Hattersley

Can the Chief Secretary tell us what state handouts are?

Mr. Rees

If the right hon. Gentleman reviews the social security programme, he will see a range of them—[Interruption.] Labour Members may recall that every time a relief from tax is introduced, they regard it as a state handout. If I fell into the jargon of the Labour party, I am sorry. Obviously we must all correct our language.

Several Hon. Members

rose—

Mr. Rees

I shall not give way, as I have much more ground to cover.

Several Hon. Members

rose—

Mr. Deputy Speaker (Mr. Harold Walker)

Order. The Minister is clearly not giving way.

Mr. John Morris (Aberavon)

Will the Chief Secretary give way?

Mr. Rees

I shall give way to the right hon. and learned Gentleman.

Mr. Morris

Does the Chief Secretary's remark about state handouts rank with the then Sir Alec Douglas Home's reference to old-age pensions being donations?

Mr. Rees

The right hon. and learned Gentleman must make his own judgment of that. I leave him to debate with himself that fine semantic question.

I want to devote a little thought—I hope that hon. Members who contribute to the debate later will do so as well—to how wealth should be diffused throughout our society. We have enlarged the opportunity for individuals to acquire a real stake in Britain, which does not seem to concern Labour Members at all. That did not feature in the contribution of the right hon. Member for Sparkbrook one little bit.

Perhaps the most important step that has been taken in social terms by this Administration is the sale of council houses over the past five years. More than 700,000 of our fellow countrymen have taken the opportunity to buy their homes. The right hon. Gentleman might have restated his party's position on that matter. Does he believe that it was a wise measure? If the Labour party were returned to power, would it continue that policy? Does it grudge to people who have bought their homes that stake in our country? The right hon. Gentleman was quick to intervene in my speech earlier, but he seems to be a little coy on this question now.

The Government's privatisation programme has provided us with a valuable opportunity to carry forward our policy on the diffusion of wealth. The vast majority of employees in nationalised companies which have been returned to the private sector have grasped the opportunity to buy part of the equity. Let me also emphasise the successful management buy-out of the National Freight Corporation which has enabled the management and employees of that company to own and run that particular part of our economy.

We intend to spread share ownership even more widely. Various measures in the Budget of my right hon. Friend the Chancellor—the cut in stamp duty, the reduction in capital taxation, and the abolition of the investment income surcharge—are all directed to that particular end.

Mr. Rooker

Is that a state handout?

Mr. Rees

It is a sale on open market terms.

Nor must we forget the way in which the-growth of occupational pension schemes has transformed the prospects of millions when they come to retire. As the Diamond commission recognised, that is a real addition to the wealth of over half of our population.

We seek a society in which owners and earners are indistinguishable. We seek an end to the idea that there are two sides of industry—an idea which is nurtured by the Labour party and which has been developed into a philosophy of conflict which has done enormous damage to Britain.

By those means the Government are actively engaged in a most practical way in removing inequalities. They are providing precisely what the right hon. Member for Sparkbrook said he rejects—equality of opportunity; equality to earn and to own. We are also laying the basis for sustained prosperity which, as I said in my opening remarks, provides the only sure means to reduce poverty.

Mr. Eric S. Heffer (Liverpool, Walton)

The Chief Secretary has a good sense of humour.

Mr. Rees

I need it to endure the rather ill-informed contributions of the hon. Gentleman and his hon. Friends.

In an admirable burst of candour—I am sure it was appreciated by the Labour party — the right hon. Member for Sparkbrook said on 15 May, in Committee Room 19, that though the public applaud the Labour party's compassion, they doubt its capacity. Would that he would cast those pearls before us in the Chamber rather than before the Ruskin Fellowship.

On a close analysis, the Labour party's claim to be the party of compassion depends on a cavalier disregard of its past performance in government and an adroit use of statistics. I hope that I have picked my words with care without giving offence. I find that a rather doubtful basis for a claim on the regard of our fellow countrymen. The Labour party's incapacity has been proved by several long spells in government since the war. Nor is there much evidence that that capacity has improved since 1979. It and the country will be the first to recognise the defection of talent to other parties.

We are led to believe that with the departure of the right hon. Member for Blaenau Gwent (Mr. Foot) in the autumn of last year—in retrospect and in the context of the Labour party's present position some of the judgments of his performance were a little harsh—a new-look Labour party has come into being. It may appear slightly different, but we have learnt nothing over the past 12 months, certainly nothing from the speech of the right hon. Member for Sparkbrook, of the mind behind the face. No fresh policies have emerged for us to judge, either over the past 12 months or today. Indeed, the diffidence of all but the extreme Left of the Labour party—now well represented in the constituencies—to state its policies is a notable feature of the political scene and perhaps accounts for the modest contribution of the Labour party to our normal debates in the Chamber.

Mr. Robin Corbett (Birmingham, Erdington)

Is this the peroration?

Mr. Rees

The hon. Gentleman can judge for himself in a moment or so.

I am disappointed that today we have not heard more about how the Labour party would transform our economic base, more of its nationalisation plans, more of its fiscal policy, and more of its plans for capital taxation, which the hon. Member for Thurrock (Dr. McDonald) has told us are under review. I can understand why the right hon. Member for Sparkbrook chose to concentrate on policies for distributing wealth rather than the more important policies for creating wealth. He could not make his policies look attractive even to his party, let alone to the country.

But I can guess, as I am sure my hon. Friends can, what those policies will amount to. They will mean a bleak prospect for rich and poor alike, a stagnant economy cocooned in controls — exchange controls, dividend controls, and price and profit controls. [Interruption.] I have obviously anticipated what commends itself to the Labour party. Perhaps unwittingly it will let out today its real feelings on those policies. I know, too, that it believes that a system of taxation should be out of line with those of our competitors. We believe that we must harmonise it with those of our competitors. The Labour party believes in a system of taxation calculated to thwart and discourage enterprise, initiative and thrift. The right hon. Member for Sparkbrook pretends that the scheme that he has sketchily outlined can be financed by increasing the PSBR by £6 billion. Leaving aside the implausibility of that sum, he is remarkably coy about the impact it would have on interest rates.

The motion oozes a synthetic compassion which conceals the politics of envy which is still the hallmark of the Labour party. It has chosen today's motion so that the antediluvian prejudicies it nourishes can be given an airing—prejudicies which prevent a real debate about real options.

The House and people outside have seen through that synthetic compassion and, as they so strikingly demonstrated in 1979 and 1983, they will continue to do so. The Government's policies alone provide the economic dynamism and the creation and diffusion of wealth which can ensure the health of our society and true opportunities for our fellow countrymen. I commend the Government's amendment to the House.

5.27 pm

Mr. John Morris (Aberavon)

The Chief Secretary proved himself a good reader, but I had hoped that in a busy week he would have had time to read his verbiage and the odd give-away phrase before he came to the Chamber. It took many years for Sir Alec Douglas Home to live down his description of old-age pensions as donations. The Chief Secretary's description today of state benefits as handouts will take many months, if not years, to live down. He will rue the day that he said that before that description is forgotten.

The Chief Secretary praised the increase in social security benefits but he forgot, or did not recognise or realise, that the major portion of those benefits is the result of the necessary increase to deal with the huge rise in the number of people on unemployment benefit. The Government have created a huge pool and that is the basic cause of the increase in which he took such great pride.

I want to concentrate my remarks this afternoon on that part of the Government's amendment which states that they believe that they have the best means of promoting prosperity throughout the community. It has been said recently: Whether fair or not the public perception is of a Government that is indifferent to social problems and wants to cut public spending, not just out of economic necessity but for doctrinal preference". Those are the words, not of an Opposition Member, but of the right hon. Member for Cambridgeshire, South-East (Mr. Pym) in the revealing excerpt from his book, which crystallised, I am sure, a growing feeling on the Conservative Benches. However, I believe that it is a fair view of Government policy.

The most masterly understatement that I have come across in the book's excerpts says: 'On yer bike' is not the most constructive advice to give to the neglected add forgotten unemployed in so many areas. That was a mere anecdotal and rather vulgar way of expressing what the Prime Minister had already said to an audience at Swansea, namely, that if there was no work, one should move on. She did not specify what particular area still had its streets paved with gold.

It is not only public perception that is in issue. It is a belief deeply held, from the Prime Minister down, that toughness leads to national salvation. It is a throwback to the monastic self-flagellation of the middle ages. Whatever its curative properties then, it is just not curing the underlying disease now.

The excerpt endorses the Opposition's motion. I quote again what the right hon. Gentleman says: At present, the real incomes of the 'haves' and the employed are rising steadily; the real incomes of the 'have-nots' and the unemployed are at best static in absolute terms and are declining in relative terms. We have already been given some of the statistics, particularly those dealing with the unemployed and the long-term unemployed, by my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) and I shall not go over the details again.

Let me pinpoint what is happening in one area in my constituency, a valley 10 miles from the sea and blessed with a superb motorway, a fast rail service and a significant port at its mouth. Despite all those advantages, how are the people who have the benefit of the so-called handouts faring? In my time, I have seen all the pits closed. In my time, I have seen, almost at a stroke, over half the employment in the steelworks cut. In my constituency, hardly anything of significance has come to replace the lost jobs. In entire streets, even on the sea front, very few people are working. It is a hopeless situation and, to my great surprise, a hopelessness that has become accepted as a way of life.

Let me take the House for a moment to the valley where the pits used to be. This may help the House to understand a little of the dread of miners today when a pit is sentenced to be closed. I make no apology for having fought in my time to try to retain those pits, and to prophesying what lay ahead for the community. Detailed but unofficial sample surveys show that, in a part of that community today, 47 per cent. of male adults between 16 and 64 are not going out to work for some reason or other. This is because they are unemployed, disabled, sick or for some other reason. The figure for males between 16 and 24 is 62 per cent. Those are the figures in an area which has been denuded of employment through pit closures. The figures for women are more difficult to interpret, but are in the same league. One third of the children are living in homes where nobody is working. That is the reality of the state handouts about which the right hon. and learned Gentleman talks.

Mr. Nigel Spearing (Newham, South)

The Government do not know.

Mr. Morris

Long before the present difficulties, valley children were always at a disadvantage. Whenever they went to find jobs, they were jobs in the lowlands. The preference was always to choose those who lived nearer to the place of employment, because of poor transport and difficulties in getting to work. It is no wonder that tempers have been at boiling point in that valley since February, when parents became aware that the county council was minded, because of Government cuts, to withdraw free school transport, and did so, in an area with probably one of the highest percentages of free school meals in south Wales, if not in the country. Those are the state handouts about which the right hon. and learned Gentleman speaks so blithely. When all the Members representing west Glamorgan went to see the Secretary of State for Wales, he washed his hands of the whole affair. He thought that he could silence opposition by an unprecedented series of interruptions of one of my right hon. Friends.

That is a practical instance which demonstrates how right the right hon. Member for Cambridgeshire, South-East was—and I wrote telling him that I would quote him in my speech today—in referring to the perception of a Government indifferent to social problems. That sums it all up, and there is little to add.

As you know, Mr. Deputy Speaker, there have always been two nations, the nation of the "haves" and the nation of the "have-nots". In microcosm, they are there in one valley, in one street, even in one household. The widow, the single-parent family, the old and the disabled are in one nation. Then there are the employed—the able-bodied, the two-parent households—who are the "haves" to varying degrees.

My political beliefs are founded on the need to identify inequality wherever it is and in whatever form it is, and then to strive to correct and dent some of that inequality in our time. In my experience, the inequality between the "haves" and the "have-nots" is growing not only in my area but in many, if not all, parts of the country.

My constituency has become a disaster area. A few factories have been built, but nobody comes to the factories, even though they are at superb sites. Even if they were all filled, it would be a mere scratch on the surface of the problem.

Against that background of the hopelessness of an area, one sees how doubly hopeless it is for the disadvantaged to live there. At least the old and disabled in other areas can share the joys of seeing some of their children and grandchildren finding employment and climbing in the course of that employment. We cannot. It would be rash of the Government to persuade themselves that the fabric of society is not under strain. We rightly deplore the violence that we see on television screens night after night. The real cause for wonderment is that there is no greater and wider crime rate involving violence.

In 1980, my colleagues from all parties in the House who served on the Select Committee on Welsh Affairs prophesised gloom. In a unanimous report, they said: We are impressed by the conviction of some of our witnesses who stress the risks of serious social disorder if there were to be very high and chronic levels of unemployment, particularly among the young. I did not share the extent of the Committee's fears. I did not realise that the period without hope would be such a lengthy one and that Welsh unemployment at nearly 169,000 would be double what it was then and almost exceeds all the estimates at the time of the report.

A whole generation has grown up never having done a day's work. Some of them have already married and more inevitably will, and their condition is very different from that of so many in the 1930s. Now, they all have television sets. Night after night they see the good things of life being advertised, which are available to all—to all, that is, with money. Will that not inevitably put an increased strain on the very fabric of society? Will tantalising the young married unemployed man who is living on his "state handouts," and who may never have had a proper job, with the good things of our material age which he cannot afford to buy for his young wife and family stabilise or destabilise our society? The Minister may laugh—

Mr. Peter Rees

I do not want the right hon. and learned Gentleman to misunderstand me. I smiled wrily only because I heard him use the phrase "state handouts".

Mr. Morris

I was quoting the Minister, who used those words. He will rue the day that he said that, because it will be wrapped round his neck by every speaker in every debate in which he takes part. Those were his words, not mine, and he will regret ever having uttered them.

That is the road that we are treading—widening and widening the gap, and increasing and lengthening the period of hopelessness. Unhappily and tragically, youth unemployment is everywhere. However, the chances of obtaining a job are considerably higher in many other parts of the country. Perhaps we should all move. What would happen if 10 per cent. of the unemployed in my area and other areas of south Wales accepted the Prime Minister's advice and moved? What would happen if 20 per cent. of them moved? Would that not be a recipe for chaos?

Responsibility for the state that we are in lies heavily with the Government. It is not only a question of style, as the right hon. Member for Cambridgeshire, South-East sought to underline. It is much more than that; it is irresponsibility on a scale which none of us, when we began our political lives, could ever have imagined. It is a mixture of arrogance—as we have seen this afternoon—and complacency. That will be perceived more and more by the people. In the meantime, my constituents, and the weak, poor and disadvantaged everywhere can expect nothing—not even hope—from this Government.

5.42 pm

Mr. Peter Hordern (Horsham)

I followed the speech of the right hon. and learned Member for Aberavon (Mr. Morris) closely and with great sympathy. In my constituency, unemployment is probably about the lowest in the country and that contrasts markedly with the plight of his constituents, which he so movingly described.

However, the right hon. and learned Gentleman fairly said that the stark conditions in his constituency were due to reasons that were by no means new. Those conditions have not suddenly emerged because of this Government's actions, nor their failure to act. Indeed, the right hon. and learned Gentleman would be the first to acknowledge that under the Labour Administration in which he served the mining industry was being run down very quickly. Indeed, I think that it was being run down rather more quickly than it is being at present. Quite fairly, he pointed out that successive Governments have had a large measure of responsibility for the state of the economy and for unemployment.

The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) was not particularly original in what he had to say. He was reminded that, although he addressed, I believe, the Fabian Society in a Committee Room upstairs and spoke about the Labour party's compassion, people doubted its capacity. One could say that again. The right hon. Gentleman was a member of a Government who were quite clear in their policy of printing a lot of money in the hope of getting the economy moving, and of restraining the effects of inflation by a prices and incomes policy. If ever there was an old lag, it is the right hon. Gentleman.

We do not have to go back very far to discover who was responsible for the failure of those policies or for their culmination in the Clegg report, which hung like an albatross round the necks of my colleagues when they came to office. However, that was not the right hon. Gentleman's point. He said that, regardless of who was responsible for unemployment, there had been a relative deterioration in the fortunes of the well off and the poor. He endeavoured to produce some statistics to prove that.

I have looked up some statistics myself. I accept that if there is any justice in the right hon. Gentleman's case, he is right to draw it to our attention and to initiate a debate. However, in an intervention to him, I pointed out that the lowest decile—in terms of the proportion of gross weekly earnings—was fractionally lower now than in 1980, when the Labour party had just left office. The lowest quartile is at precisely the same level. Thus there is not much in that particular statistic. Today, 190,000 people receive mobility allowance as opposed to 165,000 at the time when the Labour Government left office.

But the most telling statistic of all involves the proportion of supplementary benefit to male average earnings. Above all, that statistic shows whether the Government have acted fairly and properly by the poorest in our community. In 1980, that proportion was 55 per cent. whereas the latest figure is 64 per cent. Whatever the right hon. Gentleman may say about the number of people in receipt of supplementary benefit, and whatever he may say about the cause being unemployment—we can all argue about who is responsible—that most important statistic shows that his charge cannot be sustained and is, indeed, quite false.

I shall not weary the House with other statistics. But whether one takes local authority expenditure on health and personal social services, education, the level of taxes on expenditure—where the ratio is almost exactly the same—the statistics do not support the arguments of the right hon. Member for Sparkbrook in any way. In short, the case has not been made, and I am surprised that the right hon. Gentleman should have initiated this debate. But then I should point out that I am no longer surprised by anything about the right hon. Gentleman.

As often happens with the Labour party, this debate is based on the politics of envy and spite. That is what it is all about. The Labour party's traditional base is moving away rapidly. If Labour Members do not understand that, they do not understand anything.

Mr. Campbell-Savours

Is the hon. Gentleman suggesting that to discuss poverty is to pursue envy?

Mr. Hordern

I am saying that to attribute poverty to the Government is the politics of envy. That is exactly my point.

The Labour party is curiously old fashioned in the way in which it treats the electorate. That is not doing it any good and, indeed, it will do it increasing harm. It thinks its natural constituency consists of those who work in manufacturing industry. Yet the number of people working in that sector is rapidly declining, and has been falling for the past 20 years. The number employed in manufacturing has fallen by 3 million during the past 20 years and now amounts to only 5.5 million, whereas the number of people employed in insurance, banking and finance, and particularly in the professional and scientific services, has increased markedly and rapidly. The number employed in professional and scientific services increased from 2.1 million to 3.7 million in the past 20 years. Controversy and arguments based upon the politics of envy are directed at an ever smaller audience. If members of the Labour party continue along that line, their audience will leave them and they will never be re-elected.

I hope that I have shown the House that the right hon. Member for Sparkbrook has not established any inequalities. I do not believe that the subject is a good subject for debate. However, there are reasons for concern, not about the relative levels of lack of opportunity or inequality, but about the absolute level of inequality here compared with other countries, and with our neighbours in particular.

Our education system does not provide the opportunity which young people have the right to expect in an increasingly competitive world. Not nearly enough engineering and scientific graduates are emerging. More importantly, our education system is failing to provide a literate and numerate working society for the future. This is a matter of great importance.

In the West Sussex authority, which has one of the best performances in education in the country, the figure for A, B and C passes at O-level in ordinary maths is 8 per cent. of all those who take the O-levels. The figure for A, B and C passes in French, German and Spanish is only 6 per cent. I see a real risk for the future in that low performance level in numeracy and literacy in other languages. Other countries in the European Community do not suffer from that low performance. I understand that only about 60 per cent. of those eligible to stay on after reaching school leaving age stay on in Britain compared with 90 per cent. in other European Community countries.

One can say that the responsibility belongs to education authorities, but I think that the Government must give a lead. The statistics are intolerable. The Government must give a lead in where they think that the country should go and try, by example and whatever other means necessary, to raise the level of competence among young people. To that extent, I believe that Britain is at a disadvantage.

The same is true of higher education. The hon. Member for Wolverhampton, North-East (Mrs. Short) tabled a question on 9 March 1983. She was told that full-time enrolments as a proportion of total population was, at the lowest level, 2.4 per cent. of that of all the major countries. The same applies to universities. The Government and the House must address themselves to the problem. If we are to compete in the increasingly technological world, we must have the human material to cope.

In health, too, I see a lack of initiative. I am thinking of successive Governments over a long time. I admire what my right hon. Friend the Secretary of State for Social Services is doing in setting up special bodies to examine various systems. Can hon. Members remember any time in the last few years when the Department of Health and Social Security has taken a real national initiative? Why is it that nearly all expenditure is devoted to curing and treating patients and hardly any to the prevention of disease? That does not happen in other countries. Insurance systems in the United States insist that one is not eligible unless one has regular check-ups and medical inspections. The same should apply here.

An example involves diabetics. Small reactive agents called dextrostix measure the sugar in the blood. They are convenient to carry around in the pocket. Such agents should be freely available to diabetics. The alternative is that a diabetic fails to control the condition and goes to hospital where treatment is exceptionally expensive. The dextrostix is available to hospitals but cannot be prescribed by general practitioners. The overall cost of the failure to measure the blood sugar must be great. There is a fault in the budgeting system about which the Ministry could do something.

We all applaud occupational pensions, but they involve a degree of inequity which should not be sustained any longer. I am talking about what happens when someone leaves a job and moves to other employment. When that happens, pension contributions are frozen and the added value cannot be transferred to the new employment. That smacks of a Victorian regime—the person who works for a company is the property of that company and the pension is given only if the person is of good behaviour and remains in the same job. We should encourage mobility between jobs.

I know that the system has changed slightly so that new contributions are made to provide some equalisation, but I should like any person to be able to take his pension with him when he changes job. We need a truly portable pension scheme. There is no reason why an occupational pension should be made the property of a company or employer rather than of the employee. I hope that the Government will address themselves to that problem. They are considering the matter. A change would be a great social advance.

My right hon. and learned Friend the Chief Secretary to the Treasury also mentioned the sale of council houses, which has done more for the Government and their political popularity than any other single measure. The Government could take other measures which would be equally popular. Portable pensions are an example. People should have a sense of being owners of capital and having a stake in our country.

I think that Aneurin Bevan said that Socialism was the language of priorities. It has not looked much like the language of priorities. It has looked more like the language of the deaf and the dumb and indescribable confusion, but the Conservative party and the Government must address themselves to the question of priorities. We must ask whether every item of public expenditure is of equal value or whether some things deserve more expenditure—for example, the prevention of disease.

I am not sure why we have a Forestry Commission, for instance. I do not understand why it is necessary for such distortion in tax relief for the investment income of pension funds. I cannot see the logic in allowing pension funds to store up a claim for the future instead of allowing funds to go freely from one form of goods and services to another in generating wealth. The investment income of pension funds is a source of income—

Mr. Allen McKay (Barnsley, West and Penistone)

On a point of order, Mr. Deputy Speaker. I have listened for about 15 minutes to what the hon. Gentleman has had to say, but I have failed to understand how his remarks contribute to a debate on the widening gap between the rich and the poor. I should be grateful if the hon. Gentleman would relate his remarks to that subject.

Mr. Deputy Speaker

I, too, have found it rather difficult to relate the hon. Gentleman's remarks about the transferability of pensions to the motion on the Order Paper. I hope that he will now address his remarks more closely to the motion.

Mr. Hordern

Of course, I shall be happy to do so. As you will know, Mr. Deputy Speaker, the transferability of pensions is at the very root of any inequality between the rich and the poor. I am grateful to the hon. Member for Barnsley, West and Penistone (Mr. McKay) for raising that point because it enables me to point out that during the first few minutes of my speech I demonstrated that there was no growing inequality. To appease the Whips and others on the Conservative Benches, I hope that I have been able to elaborate the argument substantially in other ways—

Mr. Deputy Speaker

Order. I hope that hon. Members do not enter the House and address it simply to please the Whips. A number of hon. Members are seeking to address the House.

Mr. Hordern

I would not dream of doing any such thing, Mr. Deputy Speaker. Much as I admire my hon. Friends in the Whips' Office, I would never deliberately do anything to please them.

The Government have many challenges ahead of them, and they must be met. But equally I am sure that the Opposition are bereft of ideas and have no contribution to make to this debate or, indeed, to any other debate in the House.

6.1 pm

Mr. Ian Wrigglesworth (Stockton, South)

Having listened to the speeches from the Opposition and Government Front Benches, and also to that of the hon. Member for Horsham (Mr. Hordern), I do not believe that there has been a very auspicious start to the debate. The speech of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) was a catalogue of the deficiencies of the Government. It was fine as far as it went, but it was entirely negative. I was waiting for the second half of the speech, giving an analysis of the problems and setting out possible solutions to them. That was not forthcoming, and it was a disappointing start to the debate. That was compounded by an even worse contribution from the Minister, who read out a speech which sounded like a party handout from Conservative Central Office.

I am pleased that the motion has been tabled, and I welcome the opportunity to debate this important subject. I wish that it was proving to be a rather more serious discussion, with less of the party claptrap that we have heard from the two Front Benches.

Two fundamental problems face the country and are the main causes of inequalities. We must have some modesty when we discuss these problems. The first problem is unemployment and how to deal with it. It is a bold person, either in this House or elsewhere, who says that he has a solution up his sleeve. Unemployment is a fundamental cause of poverty and inequality. There is a vicious spiral of increasing prosperity for those in work and a vicious spiral of declining prosperity for those out of work.

Associated with that is the question of how to bring about a growth in the economy that will help to alleviate some of the problems. I like to think that hon. Members on both sides of the House want to see a solution to poverty. The alliance view on how to begin to confront unemployment is well known. We believe that there is a case for expanding the economy at a steady rate over a number of years, so that we do not stoke up inflation. That expansion should be led by capital investment in schemes with a low import content and a high labour content, which will help to build up the wealth of the country. Both during the general election and since, alliance Members, together with other Members, the CBI and representatives of the construction industry, have put forward proposals which we want the Government to consider. It is the way to put the economy on a growth pattern.

The Government have been in office since 1979, and for the Minister to come here and talk about the success of the Government's economic policy during a debate on poverty and unemployment is an insult to the unemployed. The 3.5 million and more unemployed people throughout the country find that a hollow joke. We cannot begin to tackle the harsh poverty being suffered by many people unless we succeed in injecting growth into the economy and reducing unemployment.

I agree with the remarks of the right hon. and learned Member for Aberavon (Mr. Morris) about poverty being comparative. There were a few exchanges about the definition of poverty. The right hon. and learned Gentleman spoke about people's expectations being raised by advertising. During my studies in the northern region, I found that the most desperate misery was caused not because people did not have a house, food or clothing—which is the definition of poverty imposed by some Conservative Members—but by the comparative position of families—the fact that out-of-work parents cannot provide children with presents at Christmas in the same way as parents who work are able to do. They feel humiliated when they canot buy new and warm clothes for their children, but have to make do with second best. That is just as much poverty as not having a roof over one's head, which may be the definition of poverty in other countries with a lower level of income and less wealth than Britain. I accept the definition of the Low Pay Unit and the TUC, which is based on two thirds of the average earnings of a male manual worker. That is the right way to judge poverty.

The second difficulty is that there is no easy solution for dealing with the tax, benefits and poverty trap problems. Anyone who has studied the problem in depth will know that there is no easy solution to getting people out of the poverty trap and to raising income to a reasonable level. It is facile and misleading nonsense to suggest that there is an easy solution. The SDP spends a considerable amount of time studying the problem. It set up a working party under the chairmanship of a former Financial Secretary to the Treasury, Dick Taverne. As a result of an exhaustive study, it has put forward proposals for the introduction of a basic benefit that will bring together the tax and benefit system and thereby increase the income of the most poverty hit families in the country. They are not those on low pay, but large families who are entirely dependent on benefit for their income. We put forward a suggestion for bringing together some of the benefits and the tax system to try to help the most poverty stricken.

We wanted to deal with the problem of the poverty trap. We dealt with it to an extent, but we did not overcome it, because it was such an enormous problem. The hon. Member for Birkenhead (Mr. Field), who has studied these matters, has been critical of our proposal for that reason.

However, in a publication which he recently produced he supported the proposal, as does his party, for a statutory minimum wage. We find that an unsatisfactory way of dealing, first, with the real poverty that exists in society and, secondly, with the poverty trap.

I pay tribute to the hon. Gentleman for his honesty in dealing with this and other matters. He said that if we went to a statutory minimum wage of £100 a week, we should increase women's unemployment by 4.5 per cent., or by 405,000 jobs, and push up the general unemployment rate by 1.5 per cent. He went on to say that if the trade unions tried to establish differentials, the effect would be little short of disastrous. His honesty came through because he was rightly critical of the trade unions for constantly doing that and for not working as the trade unions do in many countries—for example, in Sweden—for the low paid.

The trade unions in Britain — I bear some responsibility, having worked for a white-collar union—have not fought hard enough for the low paid. There is no question but that they would seek to retain their differentials. The hon. Member for Birkenhead must accept that those are major difficulties. The Labour proposal for a statutory minimum wage is flawed massively by the increase in unemployment that it would bring about and by the even worse economic effects that it would have if, as is virtually certain, the trade unions sought to retain their differentials.

Mr. Frank Field (Birkenhead)

The point of the publication to which the hon. Gentleman referred was to draw attention to the difficulties so that they could be faced. The introduction of a minimum wage, without a whole series of other policies, could, but need not necessarily, be disastrous. I hope that at some stage we shall debate that issue. In the meantime, I take the hon. Gentleman back to his party's publication and its idea of a basic benefit. That faces us with the dilemma which most reforms present in the short run.

The SDP said that its aim was to increase significantly the income going to the poorest, but that it could not devise a scheme in the short run which achieved that aim without also significantly increasing the poverty trap. It is clear, therefore, that there is no panacea. There is no single answer. We must consider a whole range of policies. One of those policies may be a minimum wage, provided that we can get people to face the difficulties.

Mr. Wrigglesworth

I am grateful to the hon. Gentleman for confirming what I said about the need for the House, instead of indulging in the claptrap that we heard from the two Front Benches today, to deal honestly with the fact that there are major problems for anybody trying to confront and overcome the difficulties involved in this whole sphere. We did not in our publication suggest that the poverty trap would be increased in the way he suggests.

Mr. Field

I hope that everybody will now read the publication to which the hon. Gentleman refers. It explains that we could ease the poverty trap by having a gentle rate of withdrawal. The effect would be to pay benefit to people with incomes in excess of £14,000 a year. The alternative would be to concentrate on the very poorest in society, which would mean a high withdrawal rate, which would in turn go to the basis of the poverty trap. It would be wrong not to face that issue squarely.

Mr. Wrigglesworth

I appreciate the dilemma of which the hon. Gentleman speaks. We published a variety of tables showing the impact of the different scales and withdrawal rates and the effect that they would have on the poverty trap. We made a substantial proposal for the redistribution of money from married people, by doing away with the married man's tax allowance, to the poorest. On balance—that is how we must judge the various proposals—I have not yet seen a better scheme for dealing with the real poverty that exists in society. We look forward in that document to the time when we can go forward, with the computerisation of the Inland Revenue, to a more comprehensive scheme that would overcome some of the major problems.

I have drawn attention to what, in my view, are the two major issues of this debate: first, unemployment, and, secondly, how to change the tax and benefits system so as to overcome the real poverty that exists in society. I hope that the final speeches from the two Front Benches will provide some insight into how they see their party policies for dealing with these problems in the future and that we shall not have the silly slanging match, containing comparisons of records going back a decade or more, that we witnessed at the beginning of the debate.

6.17 pm

Mr. Nigel Forman (Carshalton and Wallington)

I regret that the Labour motion is little more than an example of the propensity of Opposition Members to go in for declarations aimed at the purposes of social engineering. I was particularly worried by this tendency as I listened to the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) because it was clear that he was interested in the idea of equality of outcome. That is either a hopeless objective because one knows of no society anywhere in the world, except perhaps Cambodia recently, where that has been achieved in any full sense without enormous human and social cost, or, if one only strives towards that objective, there are enormous transitional costs and distributional penalties which must be paid by the rest of society.

The motion talks of income distribution. It might conceivably be just to redistribute income and wealth in society more equally, though that would not be politically popular with the great majority of the British people, and that was underlined to some extent by the results of the last two general elections.

But, even if it were a more just direction in which to move, it would not be an efficient one because it would inevitably involve the redistribution of income and wealth on a scale and in a manner which would have to be done by much higher rates of direct taxation and national insurance contributions and probably more public borrowing as well. We know from bitter experience of the 1970s that that way lies the danger of hyper-inflation and economic disaster, from which the poor tend to suffer more than the well off, who can protect themselves.

If anyone has any doubts about my comments on the Labour party's record as opposed to its promises, let him consider the party's record on the distribution of income and the distribution of wealth. The figures show that in 1974–75 the top 10 per cent. of the income scale accounted for about 26.6 per cent. of total income. In 1978–79, the same top 10 per cent. accounted for about 26.1 per cent. of total income. It is clear that there was virtually no redistributive impact on income for the top 10 per cent. under the previous Labour Government. The same official figures show that in 1974–75 the bottom 10 per cent. accounted for 2.6 per cent. of total income and, in 1978–79, 2.4 per cent. If anything, there was a marginal deterioration.

Labour's record as distinct from its aspirations—I pay tribute to its aspirations—is not an especially happy one. During the six years of Labour Government from 1964 to 1970 the wealth of the top 20 per cent. rose slightly from 84.3 per cent. to 84.5 per cent. of the total. The share of wealth of the top 1 per cent.—the super-rich—increased during 1974–79 from 23 per cent. of total wealth to 24 per cent. The top 5 per cent., who are pretty rich by anyone's definition, increased their total wealth from 20 per cent. to 21 per cent.

We all need to be rather humble about the positions that we take on income and wealth. The Labour party has aspirations massively to redistribute, but the achievement of its aspirations has eluded it over many years. Neither on income nor on wealth is Labour's record impressive. It has not achieved in government what it has preached in opposition. It would be well for the country to heed the objectives stated by the Labour party and the transitional and distributional costs which would be involved if ever it had a chance again to seek to implement the policies that it now puts before the House.

Mr. Campbell-Savours

Does the hon. Gentleman accept that from mid-term in the previous Labour Government's period in office they had round their necks a deal with the Liberal party which prevented members of the Labour party who sought to introduce increases in capital transfer tax and other forms of taxation from realising their objective? That may well account for the minor differences in the statistics to which the hon. Gentleman referred. That will not happen again.

Mr. Forman

I understand the hon. Gentleman's argument. He and his more egalitarian friends in the Labour party were restrained to some extent by parliamentary arithmetic and because the Liberal party sought to exact a price for its continued support of what was an ineffective and unsuccessful Government. Even if the hon. Gentleman had been in a position to increase capital transfer tax, for example, his plans for redistribution would not have been realised. In the latest year for which we have figures—1983–84—all capital taxation yielded £1,280 million. Whatever one's objectives may be, a radical increase in capital taxation would not bring in such a tremendous sum to redistribute for other desirable social purposes. If we go in for massive redistribution of the sort that the hon. Gentleman believes in, it will be necessary to attack the super-rich, those who are especially well off in terms of wealth or income, and those in the middle income bracket who account for the mass of the population. However fine Labour's policies may sound on public platforms, they turn out to be electorally rather unpopular at general elections.

Before anyone says too much about poverty, I am sure that he has a duty to define what he means by the word. The problem has already been touched upon. Most definitions these days, unlike those at the time of the Beveridge report, are relative rather than absolute. Definitions of poverty have changed a good deal since those days. If we talk to the more elderly in the population, we hear them say that today's poor might have been considered by our fathers and grandfathers to be relatively well off and are certainly well off when compared with many in other parts of the world. We are sometimes rather too parochial in our consideration of poverty.

From a definitional point of view, there are many different forms of poverty. There is the obvious one, which is shortage of cash, but there are other manifestations including limited access to essential services or facilities, low personal horizons and a monochrome quality of life. All these shortcomings lead to various forms of poverty.

When discussing poverty, we are talking about changing perceptions of relative deprivation. If the problem is put in that way, a fair-minded individual will accept that the problem can never be solved in a final sense. As soon as we think that we are nearing the end of the race, someone always moves the finishing line. That is the characteristic of relative definitions of poverty.

The Child Poverty Action Group and other champions of the poor say that there are more than 7 million truly poor people in Britain. The right hon. Member for Sparkbrook claimed that there are about 7.8 million. These are people whose income is at, near or below the level of supplementary benefit. My hon. Friend the Member for Horsham (Mr. Hordern) put the problem in similar terms when he related supplementary benefit to the average industrial wage. This means that about one in eight of the population is truly poor. That is about the same ratio as that of unemployed to employed.

It is a matter of regret on the Conservative Benches that we have a society in which seven parts are relatively well off and one part is relatively badly off.

Mr. Tony Blair (Sedgefield)

Perhaps the hon. Gentleman will point to the section in the Government's amendment which draws attention to the one eighth who are in poverty and deplores their plight.

Mr. Forman

The amendment does not do so, but it was not drafted by me. It was drafted by others who are much more senior and wise than myself. I am not duty bound to defend every phrase in the amendment.

Given the division between the seven parts and the one part, it must be our objective to alleviate the conditions of the one part and preferably to provide those within it with more opportunities to escape from their relative poverty to join the relatively more prosperous section of the population.

It is worth asking ourselves, even in the form of a rhetorical question, "Who are the poor today?" before we seek to discuss ways in which we can most effectively help them. A large part of the poor are the elderly, especially those on state pensions, who form about half of those whom we are discussing. We must include also families with children, especially large families, and the 750,000 one-parent families.

Mr. Frank Field

The Labour party has tried in successive speeches to show that this is really a problem of large families. Is it not a basic fact that most poor families have only one or two children?

Mr. Forman

Statistically, the hon. Gentleman may be right, but there is no doubt that the problems in providing for the various needs of large families—child benefit goes some way towards meeting their financial needs— are still great. There are organisational and parenting problems. The analysis is not that easy, and money is not the sole aspect.

The new category about which we are concerned is the low paid in work, many of whom are paying tax and have little bargaining power to improve their financial position. It is a salutary sign of the difficulty of the poverty trap that about four fifths of those who claim family income supplement pay tax on their income.

The major category of the genuine poor must include the 3 million registered unemployed, especially the 1 million long-term unemployed. My hon. Friend the Member for Broxtowe (Mr. Lester) has tabled a worthwhile motion on the desirability of extending the long-term rate of supplementary benefit to the long-term unemployed.

An important category includes the sick, the handicapped and the disabled. I am glad to say that over the years the Goverment, in their actions and in the recent announcement by my right hon. Friend the Secretary of State for Social Services, have treated that category as well as can be expected within the limitation of the resources available. There is no doubt that special attention has been paid to heating allowances and the like to provide for the needs of those who are in special difficulty.

Those are the most notable categories of the poor. Clearly there are insufficient resources in the public sector to enable any Government to help all those categories to the extent that we would wish. We must seek to help them according to our scale of priorities to the extent that it is economically possible to do so.

Viscount Cranborne (Dorset, South)

I have listened with the keenest attention to my hon. Friend. Does he consider that one of the difficulties facing this country as the century progresses is the fact that an increasing proportion of the population, especially among the old, will fall into those categories? Perhaps our right hon. and hon. Friends on the Front Bench should consider more urgently than has been evident the impact of an increasingly aging population not only on public finance but on the welfare of the people in those categories.

Mr. Forman

My hon. Friend is right. I am confident that those are among the points that will be taken fully into account in the four reviews conducted by the DHSS. They were also touched on in the Green Paper on long-term trends in public spending. My hon. Friend was right to emphasise those points.

I believe that it behoves us all to state our priorities in these difficult matters. I have four priorities. The first priority, if we are to help those who are vulnerable and not so well off, must be to concentrate on getting the rate of inflation down to zero, or as near zero as we can get it, as soon as possible and then to have stable prices. I fervently believe that that would be the best single form of help that we could give to the poor and disadvantaged. In that respect, the Government's economic policy is absolutely right.

My second priority is to make further efforts to ensure that the take-up of the vast range of existing benefits, both means-tested and otherwise, is improved by publicity, greater simplicity and, above all, steps to eliminate any residual stigma in some people's minds about taking up benefits. It must worry the House that of those eligible for benefit only 70 per cent. take up supplementary benefit, only 70 per cent. take up rent and rate rebates and only 50 per cent. take up family income supplement. Improving take-up must be a major objective of my right hon. Friend the Secretary of State for Health and Social Security.

Mr. Tony Baldry (Banbury)

Does my hon. Friend accept the fact that people who do not take up benefits distort the total picture? Often people are perceived as poor, but they have not always taken up the benefits to which they are entitled. The community asks why people are so poor when, in fact, they have not availed themselves of the available help.

Mr. Forman

My hon. Friend is correct. He is endorsing and elaborating my point.

The third priority—my priorities are not listed in order of importance—is for the Government to pursue a steady course of raising personal tax thresholds every year for, say, the next three years; preferably on each occasion by about 5 per cent. more than the rate of inflation. I hope that in pursuing that policy in a way that is analogous to the policies that were introduced in the last Budget for the corporate sector we shall find a way of giving people the certainty that we are not intending to use what little is left of inflation as a disguise to bring more people into taxation and thereby to increase the available revenue.

I hope that, when considering raising tax allowances, the Government will bear in mind the importance of including the age allowance in the calculation. It was a matter of regret that the age allowance was neglected compared with the married man's allowance and the single allowance on the last occasion.

The fourth point I should like to make is that over the full period—

Mr. William Cash (Stafford)

Is it not true that this year 850,000 people have been taken out of tax? Should not my hon. Friend refer to that fact, not just to his recommendations for the next few years? Should he not refer also to what has been done in the Budget?

Mr. Forman

I am grateful to my hon. Friend for drawing attention to that positive aspect of the most recent Budget. I was taking all the good points of the Budget for granted. I intended going on constructively to suggest some areas in which we could progress further.

As we succeed in our economic policy and continue to achieve the economic growth to which my right hon. and learned Friend the Chief Secretary referred, it will be important in human and political terms to raise pensions in real terms when the resources are available. In 1979, at the beginning of the Government's term of office, my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin), when Secretary of State for Social Services, said that the Government were committed to ensuring that pensioners would share in the increasing prosperity. We should endorse that objective today.

Mr. Frank Field

I thought that the hon. Gentleman had moved to his last priority. His third priority was to increase the rate of the tax threshold in real terms, but he did not link that with the crucial need to increase child benefit at the same rate. Unless that is done, the hon. Gentleman would be advocating sabotaging one of the pledges made by the Conservative party during the 1979 and 1983 elections—to shift the burden of taxation from those with children to those who are childless.

Mr. Forman

I am pleased to say that the Government's record on child benefits has been to increase those benefits to the highest level in real terms that they have ever been. The hon. Gentleman knows that. There is no doubt that we cannot do everything in this area. One of the difficulties is that we must choose. I believe that the steady process of increasing tax allowances should be carried through further. In that way we can do most to help a wide range of people—those with families and single people.

There are more doubts than certainties in the longer term. Should we raise child benefits and one-parent benefit by substantial amounts? Should we finance that, as the hon. Member for Stockton, South (Mr. Wrigglesworth) said, by abolishing the married man's allowance? Should we try to bring child benefit into taxation in contradistinction to the original idea? Should we regard long-term unemployment as a tragic fact of modern life? Should we be fatalistic about it, and therefore seek to alleviate it financially by extending the long-term rate of supplementary benefit to the long-term unemployed at the cost of about £500 million? Should we seek to make a breach in the principle that one is either out of formal paid employment on a low level of social support or in formal paid employment at whatever is the going rate for the job that one has managed to get? In other words, will the time come when society demands that we offer useful paid work to the unemployed without the concomitant requirement that they lose their unemployment or supplementary benefit in consequence? As there are many worthwhile tasks to be performed in society, increasingly people will make those demands upon us.

Those are some of the many things about which I am not certain of the answers, any more than I am absolutely certain of the overwhelming advantages of the tax credit scheme, which I have supported for many years since Lord Barber suggested it in the early 1970s. The credits to cover all major social needs would be very expensive. That is clear. The cost would be between £10 billion and £20 billion. It would entail considerable tax burdens in income tax and national insurance on the rest of the community. However, if we had credits on a limited scale to cover only some social needs, they might turn out to be less supportive and socially useful—this is a paradox—than the present cat's cradle of benefits that are available in our complicated welfare state.

One has always to look at both cash and care, at provision and financial support. There is quite a lot of evidence to show that, for example, bus passes, school meals and National Health Service care delivered free at the point of use are valued more by many of our constituents than the possibility of having the equivalent of a voucher in their pockets—in other words, the cash with which to pay for the service.

The main dilemma in this difficult area is that if we are to achieve reasonable support for the unemployed in particular, which is the one group that I have most in mind, the level of pay or income of the lower paid has to be raised accordingly. To do so without the increase in productivity that is necessary for a competitive basis would raise costs and reduce competitiveness. That is the essential dilemma that we cannot get round.

Therefore, I hope that the Government will face up to some of the problems with honesty and compassion, and explain their policies as clearly as possible. They should explain not only our goals but the justification behind them. If we frame all our policies, both economic and social, with the interests of the poor and the dependent very much in mind, we will have faced up to our main responsibility, which is the cohesion of this country. The principle that has always been central to the Conservative party is that we believe in one nation.

6.44 pm

Mrs. Ann Clwyd (Cynon Valley)

Among the more pious commitments in the Treaty of Rome, which forms the basis of the European Economic Community, is the pledge of member states to reduce the gap between the rich and the poor. For some member states, that commitment seems to have been conveniently forgotten and quietly slipped under the mat.

In an EEC survey of European regions completed this year, south Wales is classified in the least prosperous grouping of Europe's 131 regions. The league table was made up by combining a measure of chronic unemployment trends with an index of output or gross domestic product. I intend to be very parochial. I believe it important that Conservative Members should be made aware of other regions in Britain outside the affluent southeast of England.

Wales is defined as one of the peripheral regions of the European Community. Geographically it is on the fringe, and it is also one of the poorest parts of the EEC, as the survey proved. The industrial areas of south Wales were placed among the least prosperous regions that make up one fifth of the Community's population. The rest of Wales just escaped inclusion in the same category.

The years since Britain joined the European Community have been traumatic for Wales. In 1972, unemployment was below 5 per cent., with fewer than 50,000 people out of work. The economy, based on the coal and steel industries in which more than 100,000 Welsh people worked, seemed healthy, and the future looked promising. The National Coal Board's "Plan for Coal", published in 1974, predicted a long-term prosperous future for the industry. But in the south Wales valleys collieries have continued to close, and there has been relatively little development of new mining capacity compared with other parts of the British coalfield. There are now 28 pits in operation, employing 20,000 men.

Until very recently the Welsh farming sector, largely dependent on dairy production and livestock, fared quite well, although only 2 per cent. of the 1 million strong Welsh work force earned their living in it. However, the introduction of quotas on milk production signals a difficult period ahead. Even with the inadequate British Government grants to farmers who leave the dairy sector, another part of the economy seems about to undergo a period of painful restructuring.

On top of the structural crisis in steel and coal, Wales has faced the effect of a devastating economic recession since 1979 and a heartless, uncaring Government. The Welsh unemployment rate, which stood at 7 per cent. when we were in government in 1979, is now 16.1 per cent. compared with the United Kingdom average of 13 per cent. and a rate of 11 per cent. in the European Community as a whole.

Any discussion of income and wealth in Wales must start from an examination of certain aspects of the Welsh economy. Perhaps the key fact from which to begin is the level of GDP in Wales per head of the population. Of the regions of the United Kingdom, only Northern Ireland has a lower figure. In the past 10 years, GDP in Wales has been consistently between 83 per cent. and 89 per cent. of the average for the United Kingdom. In addition to the low level of GDP per head, two other characteristics distinguish the economic situation from that in the rest of the United Kingdom. The first is lower rates of economic activity and the second is higher rates of unemployment.

In the post-war years the Welsh economy has been able to provide jobs for a smaller proportion of the population than have been provided in England or the United Kingdom as a whole. Some 15.2 per cent. are employed in primary industry compared with 3.1 per cent. in Great Britain. Those jobs are mainly in mining, showing a high dependence on the mining industry. There are also low economic activity rates, especially among older men and women. That implies that if activity rates were to approach the national average unemployment would be even higher than at present because low economic activity rates represent hidden unemployment. In the past 20 years unemployment in Wales has stayed consistently above the rate in Britain.

A study of incomes shows that Wales is an area of considerable deprivation relative to the rest of the United Kingdom or any of the English regions. If we look at a rather crude index such as an average weekly household income, we see that, of the regions of the United Kingdom, only Northern Ireland has a lower average household income than Wales. The situation is worse than it sounds because the average household size in Wales is larger than that of the United Kingdom, so a smaller household income has to be divided among more people.

With regard to income and wealth, Wales is one of the poorest and most deprived regions of the United Kingdom. Why are incomes in Wales so low? The crucial factor seems to be the low rate of economic activity, which means that fewer households have the benefit of a second income and more people in Wales depend for their standard of living on social security benefits, and therefore live in relative poverty, particularly under this Government.

The most obvious explanation for low rates of economic activity lies in the process of economic and industrial change and the failure of regional policy to make good more than a part of the loss, but two other factors are significant. First, the development of a European economy emphasises the geographically peripheral position of Wales. As the focus of economic activity has become European rather than imperial, Wales has emerged more clearly as a peripheral region a long way from where the action is.

Regional policies alone will not solve the economic problems of Wales. The first prerequisite of an effective attack on the problems of low economic activity, high unemployment and low incomes is an economic plan for Wales, for which economists have been calling since 1976. Demand for such a plan in Wales has grown to such an extent that it seems incredible that a positive, affirmative answer can be denied for much longer, but we perhaps underestimate the resilience of central Government in the face of regional pressure as there is little sign of such a plan. Nevertheless, an effort to organise ideas and develop a strategy must be a prerequisite of any serious attack on the economic problems of Wales and the growing gap between rich and poor.

Housing is central to any discussion of inequality. The housing in Wales is older than that of any other region, the oldest stock being in the urban areas and the valleys. That has substantial implications for Welsh housing policy and the housing investment required. In industrial south Wales the greatest concentration of older houses is in the older valley areas, notably the Rhondda, Cynon and Merthyr valleys.

Closely linked with the age of the housing stock is the proportion of dwellings lacking essential amenities such as an indoor toilet, fixed bath or shower and hot water. Wales is the worst region of Britain in this respect.

Thus, about one third of the population in Wales are either without accommodation at all or live in clearly inadequate accommodation. Geographical concentrations of particular housing problems are exacerbated by the increasing age of the housing stock and the Government's failure to devise and execute effective countermeasures.

The other aspect of deprivation in Wales relates to health, which has been worse in Wales than in other parts of Britain for at least 100 years. State intervention in the provision of health care in Britain is by no means just the product of the National Health Service Act 1946. On the contrary, the development of public health legislation is an essential feature of 19th century urban history. The significant feature of the 1946 Act, however, is that it is based on a principle quite distinct from that of earlier legislation—that access to adequate medical care should be available to all, irrespective of ability to pay for it.

Given the state's commitment to provide proper health services, inadequate access to health care has itself come to be seen as a test of social disadvantage. I repeat that health in Wales has been worse than in other parts of Britain for at least a century. In common with Britain as a whole, of course, there have been enormous improvements in average life expectancy and mortality rates in Wales. Nevertheless, in the early 1930s the death rate in Wales was 11 points higher than that for England and Wales as a whole and 40 years later, in the early 1970s, the disparity was almost exactly the same.

Even more instructive is the massive and persistent discrepancy between death rates for south-east England and for industrial south Wales. There is nothing in the statistics to suggest that the inception of the National Health Service has done much to reduce the inequalities in life expectancy. Is it envy to want people in all parts of Britain to have the same opportunity of life? I suggest that it is not envy but a reasonable expectation.

The general nature of resource allocation in the NHS was well summarised by Julian Tudor Hart in 1971, when he described the "inverse care law" as follows: In areas with most sickness and death general practitioners have more work, larger lists, less hospital support and inherit more clinically ineffective traditions of consultation than in the healthiest areas and hospital doctors shoulder heavier caseloads with less staff and equipment and more obsolete buildings and suffer recurrent crises in the availability of beds and replacement staff. These trends can be summed up as the inverse care law, the availability of good medical care tending to vary inversely with the needs of the population served. Moreover, those areas with the highest rates of sickness and death are also those that suffer most from unemployment, low family incomes, poor housing and other environmental conditions. The mining area that I represent and many others elsewhere in Wales, Scotland and north-east England are significantly disadvantaged in health terms. Health care provision is insufficient to fulfil the basic objectives of the NHS and that failure, in turn, contributes to the high levels of illness and death in those areas.

The picture that emerges is one of sharp and serious deprivation. Incomes per head in Wales are lower than in any region of England, on almost every count, the housing stock is worse than in England and at almost every age life expectancy is lower in Wales than in England. Those facts speak for themselves. To anyone with the time and energy to plough through the statistics, the shocking facts are all too plain.

Wales is not unique as an area of deprivation. Many areas in the north and north-west of England have similar problems. For too long particular regional needs have been obscured by the bland national perspectives of Whitehall and the south-east of England. It is time that full and proper attention was paid to the gross inequalities between different regions and a genuine attempt made to tackle removable ills.

6.58 pm

Mr Tony Baldry (Banbury)

One of the depressing aspects of debates of this kind is that the language used by the different parties makes dialogue almost impossible, so wide is the gulf between them. I was especially conscious of this during the opening speech of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley). I therefore wish to begin by explaining my concept of what we are trying to achieve in terms of social equality.

First, there should be a level below which no one can fall. The usual analogy of a net is an unhappy one, because a net may bulge and let one fall through. What we need is a level below which no one can fall. From that there should be a ladder up which people can climb. It should not matter if some people climb higher up the ladder and, in consequence, the distance between the people at the top and those at the bottom becomes greater. Indeed, the chances are that the higher people climb, the more wealth they will create for others.

The debate, therefore, is based on a false premise. The fact that the distance from the bottom to the top of the ladder is greater than it may have been at other times should not be regarded as inherently retrograde. If, as a community, we can ensure that there is a level below which no one can fall, and that the weakest are protected, the fact that some people do better than others should not be a cause for concern.

It is in the interests of the Opposition to create a mythical two-class system. Ever since I was at university, I have heard Labour speakers try to create class warfare and the two nations because those are necessary features of their self-fulfilling political philosophy. One cannot talk about class warfare unless one can generate distinctions between various groups, but no one in the community is helped by attempts to set one group against another.

I do not want to talk about that fake class warfare, or about the Opposition's politics of envy and greed. I want to consider in a positive manner how we can assist more people to climb the ladder and ensure that no one falls through the net.

No one would deny that one of the main factors contributing to poverty today is unemployment. However, I have listened to hon. Member after hon. Member from the Opposition Benches, and I have not heard many positive ideas about how to tackle unemployment and get people back to work.

In the Britain of tomorrow, there will be fewer jobs in the present main areas of employment. There will be an increasing amount of investment in those areas, no doubt, but there will not be large numbers of new jobs. The new jobs will be created when people set up small businesses or begin to work on a self-employed basis. There will also be an increasing amount of part-time work. Such trends must be encouraged. It is all very well for the hon. Member for Cynon Valley (Mrs. Clwyd) to laugh, but that is where the new jobs will be found.

Mr. Bell

Will the hon. Gentleman give way?

Mr. Baldry

I shall give way shortly.

We must do all that we can to encourage small businesses to grow. We shall not do that by increasing the tax burden on those who show enterprise and initiative. The philosophy of the Labour party will not help the small business man. According to the Labour party, those who are slightly better off than the majority should be clobbered.

Mr. Bell

Does the hon. Gentleman agree that Lord Lever, when he was Financial Secretary to the Treasury, did more for small businesses than the present Government have ever done?

Mr. Baldry

I disagree with the hon. Gentleman. More is now being done to encourage and foster small businesses in the present climate than has been done at any other time in our history. For the first time, we have realised how to do something positive about jobs.

Yesterday, I visited two factories in Bicester which show the way forward. The first, March Engineering, started by employing eight people. After eight years, it now employs 100 people. The company has grown every year. It makes high-performance racing cars for the United States. It has taken on, and beaten, the United States motor car industry. It produces high-technology, high-engineering motor cars for a specific market. They race on the Indianapolis circuit. Short-run jobs of a specific and specialised nature, in high-technology areas, are what we need to encourage in future.

The other company started six or seven years ago with three people in a barn in Thame. It now employs 10 people in quite a large unit, making showers for the disabled and other aids.

Mr. Bell

Seven jobs?

Mr. Baldry

The hon. Gentleman derides the idea of providing seven jobs, but that is the environment that we must foster. Unless we encourage the provision of seven jobs here and 10 there, we shall not get people back to work.

Opposition Members are always wringing their hands and trying to outdo each other with their descriptions of the misery and deprivation of their constituencies. The right hon. and learned Member for Aberavon (Mr. Morris) and the hon. Member for Cynon Valley gave a long catalogue of the deprivation that had hit their areas, but they did not have anything positive to say about what they had done to help. How many Labour Members have helped to set up enterprise agencies in their constituencies? How many are helping to create small businesses?

Mr. Geoffrey Lofthouse (Pontefract and Castleford)

The hon. Gentleman talks about creating seven jobs. Does he not realise that in constituencies such as mine, and in mining communities, jobs are being wiped out? In my constituency, about 2,000 Mobs have been lost in the glass industry and in mining at one swipe. Poverty is being created.

Mr. Baldry

No one underestimates the problems. We can all read the statistics. Certain industries have had to shed jobs in order to be competitive. However, it is no good sitting back and saying how tragic it is, or favouring the poorer parts of Britain against the wealthy areas. We must look to the future constructively. Jobs will be found and created in small businesses and in the new technologies. It will be not the state, but people with enterprise and initiative who will lead the way. We should encourage enterprise and initiative. We shall not do that by hacking the ladder halfway up. We shall not do it by encouraging people to invest money, to set up a business and suffer the teething troubles and then clobbering them hard with tax when they reach a certain stage. No one will respond to such an environment.

That is the proposition that the Labour party is putting forward. Every vibration from the Opposition Benches today has been about wanting to increase taxation and to penalise those who are succeeding in creating wealth in order somehow to benefit the poorer members of the community. But that policy will not help the poorer members of the community. The only way to tackle poverty is to tackle unemployment, and the only way to tackle unemployment is to create jobs. The people who will create the jobs are those with initiative. The Labour party has yet to say anything about encouraging initiative and enterprise.

The corollary to ensuring that the ladder is strong is that there must be a level below which no one can fall. In certain areas, perhaps, that level needs to be reconsidered. One of those areas is the rate of supplementary benefit for the long-term unemployed. My hon. Friend the Member for Broxtowe (Mr. Lester), myself and other hon. Members on both sides of the House have signed an early-day motion advocating that the long-term rate of supplementary benefit be extended to those in their 50s who are out of work. Such people will find it hardest to get back to work. Social justice requires that we do more to help them. A phenomenally large sum of money is not involved. It would cost about £70 million.

Ten years ago no one in Britain could use basic computer language. Today, twice as many school leavers can use computer language as are conversant in French. That is a measure of the progress that has been made. The sterile, negative and nihilist approach of Opposition Members has been matched by the constructive and positive approach of Conservative Members in regard to how we ensure a level below which no one can fall, how that can be achieved, and how to create jobs. It is no answer to say that the state must provide jobs for everyone. That is unrealistic. More people will be employed if we encourage initiative and enterprise. We shall not achieve that by setting one part of the community against another in fake class warfare. That might be fine at a Labour party management committee, but the House deserves something rather better.

7.11 pm

Mr. William O'Brien (Normanton)

The Opposition motion is one of the most important that we have debated for some time. The hon. Member for Banbury (Mr. Baldry) referred to the Labour party campaigning in regard to Britain's two societies. If he were to move north of Watford, he would find a different society. He also referred to job creation and what the Government had done in that regard. In west Yorkshire and the area represented by my hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse), jobs have been lost because of the tax burden that the Government have put on industry.

The motion is important, as it declares: That this House deplores the widening gap between the incomes of the rich and poor which has resulted from the Government's taxation and social policies". It also draws attention to the fact that at least two million British people are now subsisting at a standard of living lower than they had five years ago"— when the Tories came to power.

With the exception of the hon. Member for Carshalton and Wallington (Mr. Forman), all Conservative Members, and the hon. Member for Stockton, South (Mr. Wrigglesworth), have shied away from the real problem. The hon. Member for Carshalton and Wallington drew attention to the Government amendment and its shortcomings. To a considerable extent, he spoke in favour of the motion. If hon. Members were to address themselves to the real problem they would support the motion, and if Conservative Members had to speak with their hands on their hearts they would support the motion, because it addresses itself to the problems which many parts of the country have faced for the past five years.

The hon. Member for Stockton, South mentioned trade unions and said that they should be negotiating. He also said that the higher paid should be paying for the lower paid. That is a typical Social Democratic party approach. If the leader of the SDP had his way, more miners would be on the dole. The SDP is revealed in its true light when in one breath it says that it wants to increase unemployment in mining areas, and in another it criticises the level of unemployment. The SDP cannot face both ways. [HON. MEMBERS: "Oh yes it can."] Well, perhaps it can.

The Chief Secretary to the Treasury said much about many things, but did not deal with the problem. He drew attention to the fact that the Government refer to pensions and benefits as Government handouts. I should like to say on behalf of people who are not here to defend themselves that I take exception to the suggestion that benefits that are paid to the retired, the chronically sick, the disabled and the unemployed are Government handouts. I hope that such a suggestion will be withdrawn by the Minister in his winding-up speech, because such people receive benefits as of right.

I should like to quote from a background paper provided by the Library on the impact of the 1983 Budget, individual incomes and real income movement since 1979. It follows in detail how five example families have fared since 1979. It says: The first group of changes have been to the tax system. The 1979 budget cut higher rates of tax, raised allowances more than inflation and reduced the basic rate by 3 per cent. This helped all the households, but the most significant effect was on higher-rate taxpayers. The 1979 budget, however, also increased VAT and excise duties, and these fed through into higher prices which largely cancelled out the gains from direct taxation, except for the richest households. The 1980, 1981 and 1982 budgets, and now the 1983 budget, have all increased National Insurance contributions—by a total of 2½ per cent. In 1980, the reduced rate band of tax … was abolished, and in 1981 tax allowances were not indexed, both increasing the tax burden. All these increases have hit the poorest households proportionately more than the richer ones. That is what today's debate is all about. Conservative Members should read the document, because it makes it clear that people are suffering because of the Government's taxation changes.

The document gives five examples. The first refers to a person who earns £73 a week—as many people do in west Yorkshire. He is also eligible for family income supplement. The footnote, under the heading "Changes since 1979", states: This family benefited from wage rises well above inflation before 1981, but since then their living standards have fallen considerably, partly because wage rises have been less generous but mainly because of tax increases … and steep council house rent rises. In March 1983 they are 2 per cent. poorer than in March 1979. That document is in the Library for all hon. Members to read. The statistics were drawn up, not by members of the Labour party, but by people who serve the House.

Since the Government came to office they have done nothing but attack the living standards of those who are least able to look after themselves. They have attacked the unemployed, the aged, the chronically sick and disabled and the injured—in the latter case the Government withdrew the supplement to wages. I know people who are feeling the draught from reduced living standards. Poor people are becoming even poorer, especially in industrial areas. Therefore, I support the motion.

In my constituency there are groups of people who are suffering hardship because of the Government's policies. The group which stands out most are the widows. None of the Tory Members who have spoken has mentioned the plight of widows. Widows have no income other than the special widow's pension or the retirement pension. In support of and to substantiate my claim I shall quote from a report in the Library. On page 17 of the recent Department of Health and Social Security publication entitled "Population, Pensions Costs and Pensioners Incomes" it states that although the general position of pensioners has improved considerably in the last thirty years, many pensioners still have relatively low incomes. For most pensioners, for example, the NI basic pension is their largest single source of income (for a majority basic pension forms 60 per cent. or more of their total pre-tax income). One in five pensioners has income topped up by supplementary benefit, including a third of widows … About two-thirds of pensioner households receive housing benefit. The Chief Secretary said that the housing benefit scheme was in a shambles. All hon. Members will have received representations from their constituents about the problems that they have in understanding the scheme. I received a letter from a housing manager in the Wakefield metropolitan district area who said that, although a widow is a DHSS case, he cannot understand why she is not being considered for heating and water charges under the scheme. There are many other similar cases. The scheme is a shambles, and many people are worse off because of the way in which it is applied.

Mr. Lofthouse

Is my hon. Friend aware that the estimated cost of the administration of the housing benefit scheme when it was taken over by the Department of Health and Social Security was about £14 million? Is he further aware that in a recent answer to me the Minister said that the present estimated cost of administration was about £90 million? Does he agree that that is a disgrace and that the money should be put to better use?

Mr. O'Brien

My hon. Friend has further outlined the shambles of the housing benefit scheme. Contrary to saving money, which it was suggested it would do, it is costing money. In addition, people are being denied benefit because of the shambles.

Hon. Members should read the report to which I referred. It shows the problems facing pensioners and widows and says that 35 per cent. of widows are in receipt of supplementary benefit because their incomes are not sufficient to meet their needs. It is right that we should draw attention to that fact. Pensioners are getting a raw deal under the Government. In 1981 the Government dropped the link between basic pensions and earnings. If that had been maintained, a married couple on a pension would now be £3.50 a week better off. That link was established by the Labour Government to ensure that pensioners got a fair deal and that their standards were maintained. It ensured that pensioners did not fall into the poverty trap. The link maintained the standards of pension for people who had given a lifetime's work and prevented them from being denied full benefits.

If a person who has worked 34 or 40 years is made redundant at 61 or 62 because his company has closed down, he may receive a redundancy payment of more than £3,000, but he cannot draw any benefit because of it. He can draw neither unemployment benefit nor supplementary benefit until he spends his nest egg of £3,000. Many people have come to ask me about that matter. They may need the benefit of that capital at a later date, but they must spend it if they are to receive any form of benefit.

The Parliamentary Under-Secretary of State for Health and Social Security (Mr. Tony Newton)

I am sure that the hon. Gentleman would not wish to mislead anyone outside the House. What he has just said is true of supplementary benefit, but it is not true of unemployment benefit. The possession of capital would have no effect on unemployment benefit.

Mr. O'Brien

Will the Minister assure me that after 12 months someone who has more than £3,000 in the bank can continue to draw unemployment benefit?

Mr. Newton

I hope that I did not misinterpret the hon. Gentleman. He knows as well as I do that entitlement to unemployment benefit runs out after 12 months. What he said is true of anyone who depends only on supplementary benefit, but he implied that someone with more than £3,000 of capital would not be entitled to unemployment benefit. That is not correct.

Mr. O'Brien

If someone who retires at the age of 61 or 62, who still has four or five years to go before receiving the state pension, has a small capital sum of £3,000 or more, is the Minister saying that he is entitled to unemployment benefit for those few years? The Minister is now shaking his head. What I said was correct. He will receive no benefit after the first 12 months unless he reduces his capital to below £3,000.

Mrs. Edwina Currie (Derbyshire, South)

How much does the hon. Gentleman believe someone should be able to retain in the bank and still claim state benefit—£4,000, £10,000, £20,000 or £36,000?

Mr. O'Brien

The hon. Lady is suggesting that we should put a ceiling on the amount. I am saying that if a 62-year-old has £3,000 in his savings account, he is not overburdened with capital. If the Government and their supporters were honest, they would accept that it is unreasonable to ask someone to commit all his capital before he qualifies for benefit. It is all very well for the hon. Lady to say, "Put a figure on it." I suggest that someone should be able to live comfortably and retain his £3,000 or more until he receives the state pension. As the Minister says, that does not happen at present.

It is not just a lack of money that is crippling some of the poorer people in society. At Question Time today I asked the Prime Minister about a constituent who has been in need of surgery for some time. However, as there are no resources to guarantee hospital accommodation for the elderly and the sick, my constituent has had her appointment postponed four times. The chairman of the health authority wrote to me saying that from 1 April 1983 to 1 April 1984, 2,242 people were denied access to medical treatment because of a shortage of funds.

We must bridge the gap between the haves and the have-nots. Conservative Members should support the motion, if only for humanity's sake. We appeal to the Government to give special consideration to those in the greatest need. It is against that background that I ask the House to support the motion.

7.33 pm

Mrs. Edwina Currie (Derbyshire, South)

I shall speak about the motion in some detail, because the Opposition seem to be developing the curious habit of choosing subjects about which they are wrong. They will do so again this time next week when they talk about cuts in the National Health Service. We know that the Government have spent more on the National Health Service and on benefits than any previous Government.

The motion talks about the gap between the incomes of the rich and those of the poor, but it refers to gross incomes. [Interruption.] If Opposition Members would listen, since they have not been here for the entire debate, they might learn a few things. It might be worth putting on record the fact that for much of the debate there have been between six and 10 Labour Members present; and that at almost every stage they have been outnumbered by Conservative Members.

Mr. Bell

On a point of order, Mr. Deputy Speaker. When the debate began there were 36 Labour Members and seven independent Members present, and by the time my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) sat down there were 46 Labour Members in the Chamber.

Mr. Deputy Speaker (Mr. Ernest Armstrong)

Perhaps we should get back to the subject of the debate.

Mrs. Currie

I agree, Mr. Deputy Speaker. I did not raise this matter.

The House should be aware that the distribution of wealth in Britain has changed very much in the direction that Labour Members wish to see. The Diamond commission, which in 1975 reported on the distribution of income and wealth in Britain, said that in 1936 the most wealthy 1 per cent. of the population owned 56 per cent. of all marketable wealth. In 1971 that had dropped to 31 per cent., and by 1981 it had dropped to 23 per cent. The commission also said that, taking into account access to occupational and state pensions, the change is even more dramatic. We are all much wealthier because of our pension rights, and that is especially true at the middle and lower parts of the scale.

In 1971, the wealthiest 10 per cent. of the population accounted for 65 per cent. of all marketable wealth. But if one takes into account not only the passage of time but the accretion of their pension rights, the wealthiest 10 per cent. of the population now owns only 35 per cent. of all marketable wealth. They have gone from owning two thirds of wealth to owning one third. The relationship between the wealthiest and the less well off in society has changed for the better, and the gap has closed dramatically.

If Labour Members believe that we should disregard the rights of pensioners and future pensioners, I say only that 12 million people now have rights to occupational pensions and that the state pension, to which we are almost all entitled, accounts for an accumulated accrual of about £154 billion, which is substantially more than our public expenditure for one year.

Mr. Gordon Brown (Dunfermline, East)

Will the hon. Lady comment on the fact that Britain still has the most unequal distribution of wealth in Europe and that it has been the least successful economy?

Mrs. Currie

If the hon. Gentleman is saying that we can all do better, I agree with him. I want Britain to become richer and our rate of growth to be faster, which would mean that the accumulation of wealth would be quicker for all of us. A bigger cake is much easier to divide.

Inflation has a dramatic effect on the distribution of wealth. Labour Members have already mentioned what happens to someone's money that is stuck in the bank. The hon. Member for Normanton (Mr. O'Brien), who, like me, represents miners and retired miners, will know that under the present schemes miners will do very well when they retire. Inflation has a great effect on people's ability to save and to show some benefit from a lifetime of work, and this Government more than any other have shown how to control inflation.

The Labour party motion is deliberately misleading because it talks only about gross income. Its reference to an income of £18,000 without adding the words "before tax" is about as misleading as any proposition can be. The motion completely ignores the fact that our income tax system is intended to redistribute wealth. It is supposed to take money from the well off, or from people with incomes of more than £18,000, and give it to those with incomes at the bottom of the scale.

Unfortunately, there are few up-to-date figures for this. I deplore that, and I wish that the DHSS would collect more recent statistics—[HON. MEMBERS: "Oh."] I am on record as having said that almost every time that I have spoken in the House. In 1978–79, taking into account income from employment, income in kind, pensions and social security benefits, the top 1 per cent. of income earners accounted for 5.3 per cent. of income before tax and for only 3.9 per cent. of income after tax. The top 10 per cent. of income earners accounted for 26.1 per cent. of income before tax and 23.4 per cent. after tax. In other words, we have a redistributive system. The effect of the difference between gross and net income is to diminish the gap between rich and poor. That is what it is all about and we do it. As a result, the top 1 per cent. of income earners in Britain pay 36 per cent. of their income on average in tax, the top 10 per cent. pay 25 per cent., and so on down the scale. If that is not an active and effective redistributive system of the kind that the Labour party would seek to introduce if it did not exist, I do not know what is.

We can also have a look at absolute levels of standards of living. It is the failure of the Opposition to do so that is wrong. All the discussion that we have heard, particularly the statistics from the Library quoted by Labour Members, has all been a question of relative values. One of the ways of looking at absolute values—what we do with our money and how we live—is to have a look at the family expenditure survey. My right hon. and learned Friend the Chief Secretary referred to that briefly in his opening speech.

In 1969, 51 per cent. of the British people had access to a car. Some had more than one car, but not many. By 1982 that figure was 61 per cent. In 1969, 25 per cent. had central heating. That figure is now 63 per cent. Sixty-two per cent. used to have a washing machine; now it is 81 per cent. Thirty-two per cent. used to have a telephone; now it is 75 per cent. Most important of all, nearly everyone has a television set, and 77 per cent. of those television sets are colour. I accept that in a way having a television makes things worse because it introduces people all over the country to the cornflakes world of the happy family with G-Plan furniture and not everyone will achieve that.

Mr. John Powley (Norwich, South)

Will my hon. Lady Friend add to her list of commodities that are owned by the British people, thereby emphasising some of the wealth that has been created, by pointing out that we are the fastest growing country for the possession of video cassette recorders amongst a wide range of people in society today?

Mrs. Currie

Not only am I glad to add my hon. Friend to my list of hon. Friends; I also acknowledge that that is true. It might also be worth having a look at my region—to follow the example of the hon. Member for Cynon Valley (Mrs. Clwyd).

The east midlands turns out to be quite an interesting region in one or two ways. For example, I have discovered that the east midlands has the highest ownership of washing machines in the country—87.5 per cent. of all households there have a washing machine compared with only 74 per cent. in the south-east, and the mucky people in London, with only 65.9 per cent. That pattern is confirmed in a survey by the Severn-Trent water authority recently on the east midlands, interviewing some 4,800 householders, including a cross-section in Derbyshire. The authority wanted to find out what the future pattern of water usage in the area would be.

The survey showed that 36 per cent. of households in the region own a shower compared with only 15 per cent. seven years ago. Showers are also being used more frequently—on average 2.5 times a week per person instead of 1.5 times in 1977. Strangely enough, there has been no reported change in the frequency with which people take baths and the rate remains constant at an average of 1.5 times per week per person. Perhaps because of that change in our washing habits in the east midlands the local Derwent area has set up what the consumer relations adviser, Mr. Swain, has described as a watchdog body in order to check what is going on with water usage in the east midlands. I hope that they do not decide to watch my constituents making use of that water. It used to be said that we ought to have "mens sana in corpore sano" but we now have "corpus sanum in togo sano."

It was mentioned earlier that the standard of living of many people in work, especially the lower paid, has been suffering. In many ways that is only true if one looks at relativities. If one looks at absolute figures, it just is not so. The wage rate of the worst paid people in society—hourly-paid female manual labour—over the past 10 years has gone up 4.5 times. Among people such as myself—non-manual female labour—the pay rate has gone up five times. What we get for our money has improved dramatically. Ten years ago it took 37 minutes of that hourly-paid manual work to earn enough for a dozen eggs. Now it takes half that time. Ten years ago it took 61 minutes to buy a pound of bacon. Now it takes 38 minutes. The same is true even for more expensive items. Ten years ago it took 66 minutes to earn enough for a pound of best sirloin beef, of which we have a lot in Derbyshire. Now it takes only 52 minutes.

Mr. Robert N. Wareing (Liverpool, West Derby)

Provided that one has work.

Mrs. Currie

If it is true that the standard of living of many of those women has nevertheless not kept pace with inflation, I suggest it is because of the rising price of fuel which affects those households more than many. That is one reason why I for one passionately support the efforts of the Government and the NCB to modernise the coal industry and to ensure that the average cost of fuel that goes to our power stations is reduced.

One aspect of poverty which disturbs all of us is the way that people still drop out. We have a huge complex system of income support. It now costs some £39 billion—or will do this year after the uprating. On the day that the uprating was announced in the House on 11 June, when an additional £1.6 billion was added to that sum, in a debate that lasted 42 minutes, we managed to spend the extra at the rate of £600,000 per second of debate. Overall the DHSS spends over £100 million per day on pensions and benefits. One thing that we can all agree on in the House is that there is no shortage of cash and nobody in Britain should be poor with a budget of that size to play with.

Mr. Wareing

But they are in Liverpool.

Mrs. Currie

The hon. Gentleman should know that I lived in Liverpool for 18 years, and I am a frequent visitor.

The problem with the system is, first, as my hon. Friend the Member for Carshalton and Wallington (Mr. Forman) pointed out, that people are missed out. Only half of the people—the families with children in work—who qualify for family income supplement actually claim it. Only 70 per cent. of the people who could claim supplementary benefit and single parent benefit actually claim it. It gets worse. A recent survey by the University of York of families with disabled children shows that only between half and two thirds of those families who would qualify for attendance allowance—which is not only generous but tax free—were actually claiming it. It is also so crude a system that it overpays those who do not need it. Seventy-five per cent. of those receiving child benefit, including a number of us in the House, are well above supplementary benefit level before we get it.

I agree with every word of criticism that has been made about the relationship between benefits and tax. When the Beveridge report was introduced, a small proportion of the population received benefit and a small proportion of the population were taxpayers. Now nearly all of us are both. It is an insane merry-go-round that has us paying tax at high levels in order to pay benefits on which tax is then payable—and so on. Constituents of mine who are married with two children will have to pay £700 this year in order to receive their child benefit. However, it will not be £700 because that is what they will get in child benefit and they have to add another £100 for the cost of administration for the DHSS to pay it and the Inland Revenue to take it back. What is the point? The reviews introduced by my right hon. Friend are long overdue. I for one would rather give up the benefit, pay less tax and see the difference, which now goes to the goodly souls who work for the Department of Health and Social Security and the Inland Revenue go to something more useful.

I think that I speak for all my hon. Friends when I say that none of us on the Conservative Benches would dream of believing in equality. We do not believe in equality. We do not accept what has accurately been called the politics of envy, the philosophy that by destroying the good we benefit the worst. We do not. There should be a gap between the rich and the poor. It must be possible for people to feel that they can better themselves—for example, so that they can create businesses to provide employment for their fellow men. A redistributive system that is too heavy-handed—and I firmly believe that ours still is—which would do what the right hon. Member for Leeds, East (Mr. Healey) wanted to do, "squeezing the rich until the pips squeak", does not help the poor at all, because the talents of people who are high fliers are marketable on an international basis. All we do is lose people. They do as many of the people with whom I grew up in Liverpool have done, which is to leave the country.

We have to be sure that we close the gap, which we are doing, and improve the average so that we are all better off, and ensure that our worst off people are not destitute. Each effort at improvement simply exposes a different group that needs our help, and each item removed from the list of luxuries to the list of necessities, be it television, fridge or central heating, to my mind is evidence of the improving standard of living for us all.

The job of the Secretary of State is a thankless task. I wish him well in it, and I look forward to further improvement under future Conservative Governments.

7.51 pm

Mr. Frank Field (Birkenhead)

I am pleased to follow the hon. Member for Derbyshire, South (Mrs. Currie). Opposition Members would do well to pay a little more attention to what she says sometimes instead of responding in the way that they often do. I think that the hon. Lady is the first Conservative Member to address herself seriously to the motion, and to come out confidently to defend her party's position.

I wish to take Conservative Members back to the pre-1979 position when there was considerable confidence about what would be the result of widening the gap in this country between the rich and the poor. We were told that the rich would get richer and the gap would widen, but that in the process the standards of living of the poor would rise. It is interesting that no Conservative Member, apart from the hon. Lady, has had the courage to go back to the starting position of the huge and, I think, terrifying experiment that the Government have unleashed on the country since 1979. Those beliefs about making the rich richer in the hope that we would all benefit have certainly been the aim of Government policy, and I want to look at the result.

After five years of this strategy, can we honestly say that we see the poor better placed than they were in 1979? Do we see fewer poor people today than we saw in 1979? The opposite has happened, as the information that has been quoted today by both sides of the House demonstrates. Much of the information has been out of date, and we have no more up-to-date information of the numbers of the poor than we had in 1981. Approximately 8 million people are living on supplementary benefit, and around 2.5 million are living below that level. Thus, we have seen the number of poor increase. One reason is the massive increase in unemployment.

While unemployment has been a major recruiting sergeant for the army of the poor, there has been another disturbing trend. If we consider the poorest, those in work who have earned their poverty, they have been the fastest growing group under this Government. Let us examine the rhetoric and the promises in 1979 of what would happen if the gap between rich and poor were widened, and let us examine the reality. We have seen the gap widen, and the number of the poor, the poorest, and those who earned their poverty has increased. It is the opposite result from that which was promised. I therefore congratulate the hon. Member for Derbyshire, South on taking us back to first principles. Once again she has given her hon. Friends a lesson in how these debates should be approached. I only wish that more hon. Members would follow her example.

The parable of the mote and the beam came to my mind while listening to the debate. Most of us have accused our political opponents of errors, and then fallen into larger errors ourselves. No doubt I shall do the same. The biggest error in the debate had been for hon. Members to point to the confusions or simplifications in the speeches of their opponents, but then to go on to propose a panacea.

The hon. Member for Banbury (Mr. Baldry) drew the attention of the House to the crucial fact that there are something like 4 million or 5 million people who wish to work but cannot work, and that it is folly to pretend that any one solution can return us to full employment. But he went on to say that the only way in which we will return to full employment is to back small businesses. Although I think that it is wrong for Conservative Members to say that that is the only solution to our unemployment problems, it is equally foolish for us to say that small business has no part to play in a return to full employment. It will be one part of a total strategy.

Mr. Dalyell

On the question of the millions of unemployed, does my hon. Friend not think it strange that the right hon. Member for Cambridgeshire, South-West (Mr. Pym) should have written the book "The Politics of Consent", in which, at pages 128 and 170, he has a great deal to say about this subject, yet does not bother to turn up in the House, where there has been a great deal of publicity given to his book, to argue the case?

Mr. Field

I think that it is more than strange, but it is a lesson that quite a few hon. Members could learn. We sometimes think that it is more important to address audiences outside than to address the House. My hon. Friend is a notable exception to that rule. He pays proper court to the House of Commons by putting his arguments in the Chamber before putting them elsewhere.

As well as considering the debate about the widening gap between rich and poor and whether it has fulfilled the promises that the Conservative party said that it would fulfil in 1979, I wish to consider another gap, not because I wish to decry an examination of the increase in the living standards of the rich at the expense of the poor, but because there is another way to consider the divide in society. The gap is between those who have and those who do not have children. As well as promising us in 1979 that, by making the rich richer, we would improve the position of the poor, we were told that, by electing a Conservative Government in 1979 and in 1983, we would be electing a party that would put the family first. The Government have broken that pledge not only to poor families, but to rich families.

When the House considered the social security review statement the other week, I questioned the Secretary of State on this point. I drew attention to the fact—and on this I sympathise with him—that he and his colleagues had lost the battle with the Treasury in getting a large increase in child benefit to match the increase in tax allowances. The effect of not increasing child benefit at the same rate as tax allowances was to shift the tax burden from those without children to those with children. No Secretary of State worth his salt has any difficulty with a single question, and the right hon. Gentleman dealt quite neatly with that by comparing a two-year rather than a single year period. That was a fair point, because last year—by comparison with this year—the Secretary of State fought a good battle with the Treasury and obtained an increase in child benefit that was way above the rate of inflation.

Let us consider the record since 1979. It shows that the burden of taxation has shifted from those without children to those with children. That is why I disagreed so strongly with the list of priorities given by the hon. Member for Carshalton and Wallington (Mr. Forman). The hon. Gentleman advocated that the policies that the Government have already pursued, which have penalised those with children and benefited those without them, should be continued.

Mr. Forman

Is not it stretching the truth a little to make that point when it is well known that our record on child benefit is the best in real terms?

Mr. Field

I do not want in any way to decry the Government's record on child benefit. In real terms, child benefit has been maintained and slightly improved. However, it is less than fair of Conservative Members not to recognise the major input of funds by the previous Labour Government. I was critical of that Labour Government, but they did well in putting an additional £1.5 billion into the child benefit scheme. It can only be to the credit, however, of any Government if they maintain the real value of the benefit.

If we had maintained child benefit in line with tax allowances, we would have been talking about not a 35p but a £1.10 increase this year. It is no secret that the DHSS team fought hard for a much more substantial increase in child benefit than it obtained, but that the Treasury won. However, the Treasury win has meant a vetoing of the clear commitment on which the Conservative party fought the elections in 1979 and 1983 to further the interests of families at the expense of those without children.

The hon. Member for Carshalton and Wallington pointed us in the right direction when he said that we should be prepared to state our priorities. I have one priority, and it should be clear even to those hon. Members who have not been listening very carefully. My priority is to put money into the child benefit scheme. There are five major reasons why hon. Members on both sides of the Chamber should support a Government of any party who try to win the battle to increase the real value of child benefit.

First, child benefit is the most effective way of tackling family poverty. As most of the debate has centred on families in poverty—whether they are unemployed or single-parent families—that is a very important factor. There is no more effective weapon than the child benefit scheme.

Secondly, the hon. Member for Horsham (Mr. Hordern) thought it important to talk about exits from poverty and to look at our education system. But we also need to think about reforms that will help not only a few but the vast majority. To do that, we must change the welfare state from being a ceiling over the heads of the poor into a floor from which they can build towards their own freedom. If Conservative Members are serious about tackling the poverty trap and the problem of the incentive to work, they should back their DHSS Ministers against Treasury Ministers in fighting for much bigger increases in child benefit than have been obtained this year.

Thirdly, hon. Members on both sides of the House should support a big increase in child benefit because it is the best way of transferring incomes from men to women. Wherever one looks on the income scale, women are worse placed than men.

Mr. Barry Porter (Wirral, South)

indicated dissent.

Mr. Field

I always call the hon. Gentleman my hon. Friend, because he lives in my constituency and represents the next constituency. I shall report his comments from a sedentary position to his secretary. If we wish to narrow the gap between men and women, we must build on the child benefit scheme.

Mr. Powley

In many ways it is laudable to want increases in child benefit, and so on, but, in all conscience, the hon. Gentleman should tell us where the money is to come from and who is to provide it. There are several options. Will the hon. Gentleman please explain?

Mr. Field

I should like, first, to finish my list. Having listened to many speeches, I made a vow to try to limit my speech to 10 minutes. However, I shall try to answer that question as well.

The fourth reason for building on child benefit is that both sides of the House are committed to decreasing the relative tax burden on families. Now that we have abolished child tax allowances, we can do that only by building on the child benefit system.

My fifth reason should again obtain the support a hon. Members on both sides of the House. If we are concerned to have a springboard to freedom so that people can build their own little paradises without central bureaucracy putting its big sticky fingers in, child benefit is the benefit to go for.

Those are the five reasons why we should be interested in supporting the DHSS against the Treasury. That battle always goes on, but, sadly, it was lost this year. As a result, the Government have not fulfilled their clear pledge to lessen the tax burden on families with children.

The hon. Member for Norwich, South (Mr. Powley) said that I should explain where the money was to come from. I have tried to answer that question several times, but I shall not duck his main point. There is no easy solution, and the Prime Minister's saying that money does not grow on trees is right. Those who advocate taking from one group to give to another should say where the money is to come from. However, it is clear from what I have said that we should tax those without children more so that we can lessen the burden on those with children. In addition, since the 1979 Budget about £2.6 billion has gone to the richest 3 per cent. of the population in the form of tax reductions. That means that since then the very rich have seen an increase in income of about £8 billion. So there is still an enormous amount of loot among those at the top end of the income scale, and we should take from there.

Mr. Porter

I am obliged to my Member of Parliament for giving way. Without, I trust, affecting his chances of reselection, may I say that I am very glad that he is my Member of Parliament. Perhaps there should be some sort of means testing. For example, the amount of money now given to my dear secretary and wife by way of child benefit is totally unrealistic. I do not get any of it, and I am sure that she enjoys it tremendously. If there were a means test, I could deal with "her indoors" as I would wish to.

Mr. Field

It is because we do not want the hon. Gentleman to deal with his wife, and because we want the money to go to her so that he cannot get his mits on it, that we should support the present system. However, if I were to accept all the challenges made, I would have to speak for much longer than 10 minutes.

I cannot understand why the Conservative Benches are not packed, why there are not hon. Members who cannot wait to cheer their Government for widening the gap between rich and poor and why they still believe in what the Conservative party said in 1979 and 1983. Perhaps only one Conservative Member has made that case, because Conservative Members now see that the policy of making the rich richer in order to help the poor has not served the nation, least of all the poor, as we were told that it would.

8.9 pm

Mr. James Couchman (Gillingham)

It ill-behoves hon. Members to claim too close an acquaintance with poverty. Some of us may have spent a few months as impecunious students in the slums of Scotswood road, Newcastle. That was an uncomfortable experience and I am glad that I shall not have to repeat it. A few hon. Members aspire to the ranks of the wealthy, but few right hon. and hon. Members have suffered the poverty which, to our regret, afflicts too much of the population.

The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) subjected the House to a torrent of statistics without offering any comment on the long-term decline in our economy, under Governments of both political parties—a decline which has led to a terrifying shake-out of overmanned industries since 1978–79.

That decline took the form of an increasing lack of competitiveness in our traditional industries and the failure of both sides of industry to grasp the opportunities of the new technology. As a result, we have suffered more than most from the deep world recession and our unemployment has risen to its present unacceptable level.

Not only do the unemployed suffer from poverty, but the families of the unemployed certainly comprise a substantial proportion of those who suffer the greatest poverty. Some parts of the south-east have high unemployment levels. My constituency is in the south-east and the unemployment level in the area is 16.8 per cent.

Poverty takes two forms—poverty in the standard of living and poverty in the quality of life. The latter takes many forms. I regret that, apart from the hon. Member for Cynon Valley (Mrs. Clwyd), too few hon. Members have talked about poverty in the quality of life. If one is forced to live on the 15th floor of a tower block of flats with a permanently vandalised lift, one suffers a poor quality of life. Children who attend a school with disinterested teachers, plenty of vandalism and lashings of intimidation have a poor quality of life. If one is employed in a dreary mechanical, manual task which is more appropriate to a machine, one endures a poor quality of life. If one has no job, one certainly suffers a poor quality of life.

Quality of life is much more abstract than standard of living, but in my opinion it is just as important. I am disappointed that so few hon. Members today have discussed that aspect of poverty. Most of today's debate has focused on standard of living and, in particular, income support.

My right hon. and learned Friend the Chief Secretary spoke about some of the material improvements which the population have enjoyed. He rightly drew attention to the revolution in home ownership since 1979 as a result of the right-to-buy legislation. That incredible surge in home ownership has made a real contribution to an improvement in the quality of life.

My right hon. and learned Friend also spoke about the immense burden of the social security budget, which is set this year to rise to the fantastic figure of £39 billion. I am extremely concerned that this increasing burden, which has gone up by 25 per cent. in real terms since 1979, threatens any programme of improvement in the quality of life. The burden threatens improvements in housing, education, the National Health Service, industrial investment and the environment.

My right hon. Friend the Secretary of State for Social Services has set up a unique series of reviews of the social security system. It promises to be the most comprehensive and fundamental review of our welfare state since Beveridge. That welfare state has become hopelessly complex and its growing complexity has increased the potential for unfairness. Beveridge set out to write his historic report at about the time when I was born. I imagine that more than half the population have never known a time when the social security system did not provide the safety net of income support. We have a priceless opportunity when the review teams report to overhaul our social security system more thoroughly than at any time since Beveridge. I beg my right hon. Friend to grasp that opportunity and to seek to simplify the income support mechanism.

I am certain that the 16,000 paragraphs which prescribe the application of supplementary benefits are capable of substantial simplification without loss of fairness. Indeed, I am convinced that simplification would lead to greater fairness and to focusing more on those in genuine need. In that respect I agree with what my hon. Friend the Member for Derbyshire, South (Mrs. Currie) said about the insanity of offering benefits with one hand and taking them back through the tax system with the other. That we who enjoy a substantial income should be in receipt of child benefit—a most unfocused benefit—is nonsense. Our recent debate on housing benefit showed that we give benefit to those with substantial incomes. I am persuaded that simplification would lead to less abuse of a system which allows a minority to perpetrate massive fraudulent abuse.

I should have been happier if the brief to the review teams had offered a route to the consolidation of the income support mechanism into a tax credit or negative income tax system. Such a system would offer the only sure way out of the poverty trap.

The erstwhile chairman of the Supplementary Benefits Commission, Professor David Donnison, said: A comprehensive negative income tax or tax credit scheme provides the only certain way of ensuring a smooth transition from social security incomes to wages without confusion, anomaly or injustice. I hope that when the co-ordination of the various reviews takes place my hon. Friend the Minister for Social Security will be encouraged to confront the major fiscal problems which are said to militate against a consolidated tax and benefit system. I congratulate my right hon. Friend on his initiative in setting up the reviews. I hope that the aspiration to a fairer and simpler system will be realised so that the standard of living of those dependent on a social security income may be improved.

I am totally persuaded that the Government's policy of creating a climate in which our industry can become more competitive, and hence more prosperous, offers the best chance of realising the cherished aspirations for a better Health Service, greater resources for education and better housing. Only that greater national prosperity can improve the quality of life for the poor, as well as for the rest of us. The positive way of closing the gap between the rich and poor lies in raising the standard of living and the quality of life of the poor, not in trying to impoverish those who are more fortunate.

8.18 pm

Mr. Archy Kirkwood (Roxburgh and Berwickshire)

I listened with interest to the speech of the hon. Member for Gillingham (Mr. Couchman). I am struck by the geographical split between the contributions from Government Members and the contributions from Opposition Members. The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) made a philosophical speech. We have also had contributions from the hon. Member for Cynon Valley (Mrs. Clwyd), the right hon. and learned Member for Aberavon (Mr. Morris) and my hon. Friend the Member for Stockton, South (Mr. Wrigglesworth).

Each speech was different qualitatively from the speeches by Government Members because all Government Members who have spoken come from the south, with the honourable exception of the hon. Member for Derbyshire, South (Mrs. Currie). Hon. Members from the north of England and from Scotland encounter more of the deprivation about which we are talking today. That is a fact that must be accepted.

The hon. Member for Banbury (Mr. Baldry) talked about the need to expand small businesses. There is a geographical, economic and social disparity and a balance must be struck geographically as well as socially and financially. We have a political system that produces no Conservative Members of Parliament north of the Wash and no Opposition Members south of it. It is a defective system. Conservative Members make great play of tabling early-day motions about the long-term unemployed and supplementary benefit. If they came from such places as Liverpool and Cowdenbeath, they would queue at Ministers' doors to get action on supplementary benefit and the problems of the long-term unemployed.

Mr. Porter

I have not contributed to the debate, but if it is any comfort to the hon. Gentleman may I say that I come from an area not many miles from Liverpool which has an unemployment rate of more than 21 per cent.—which is higher than that in the city of Liverpool. When I intervened in the speech of the hon. Member for Birkenhead (Mr. Field), it was to make the point that it would be sensible to have a means test for child benefit. I agree with my hon. Friend the Member for Derbyshire, South (Mrs. Currie) that there should be a negative and simple tax system. It is wrong of the hon. Gentleman to suggest that Tory Members from the north do not take the same view as those from the south—we do.

Mr. Kirkwood

I accept that my remarks were a generalisation, but the point holds. Those of us from the north have a different outlook, but there are exceptions. I do not agree with the hon. Gentleman that child benefit should be means tested. Means testing accentuates and consolidates any gap between the financially disadvantaged and those who are not financially disadvantaged.

I am glad that the Opposition have chosen to raise this subject on a Supply day. It has been a useful debate, although it had a somewhat sticky start. The Chief Secretary made a thin speech—he must have thought that he was still in Committee on the Finance Bill at 4 o'clock in the morning, rather than in the House at 4 o'clock in the afternoon. However, the subject is worthy of debate.

The Opposition motion deplores the widening gap between the incomes of the rich and the poor, and that view has been substantiated not only during the debate but during the past five years of current affairs and political life. The motion notes the tax reductions for those with incomes of more than £18,000 a year. I accept that it is a gross figure of £18,000, and do not accept the complaint made by the hon. Member for Derbyshire, South. She was not being fair. The motion also calls upon the Government to change the pattern of income distribution.

There is nothing in the motion to which we can take exception, and I shall advise my hon. Friends to support it. However, there may have been differences between the alliance and the Labour party had its spokesman mentioned how to raise the revenue. We cannot debate the distribution of income without saying something about how the revenue will be raised. The right hon. Member for Sparkbrook was rather light on that aspect in his speech, although he showed his usual panache. We should also discuss the system used to distribute income. Generally speaking, we have no quarrel with the motion, which brings a timeous issue before the House.

The right hon. Member for Sparkbrook competently deployed arguments about the way in which the Government have helped the rich. They have in the Budget donated £835 million to measures to help the highest earners. For example, a change in the rate of stamp duty, the abolition of investment income surcharge — in complete contrast to their action on housing benefit—the abolition of capital transfer tax, direct income tax cuts and indirect income tax cuts. The overall position of the tax system confirms that the Government's position is weak.

Let us consider the other side of the coin and what the Government have done for the poor. Eight million people depend on supplementary benefit. From 1979 to 1981, 2,105 deaths could be attributed to hypothermia. That is a startling statistic. Three out of four families poor enough to qualify for family income supplement are subject to income tax. Since 1979, the number of families caught in the poverty trap has more than doubled. Average household expenditure of about £125 a week must be contrasted with basic supplementary benefit for the average family of less than £60 a week.

The gap between those who have and those who have not has much to do with unemployment. Last week, The Economist, under the heading, "Print no evil", claimed that the Government were trying to suppress an article written in the September issue of The Employment Outlook, published by the Organisation for Economic Development and Co-operation. The article was written by Mr. David Piachaud, a well-known and respected academic. His article reached the conclusion that unemployment causes real poverty, especially if it lasts for more than six months. If the Government are using their muscle within the OECD—which must pay attention to what member Governments say—they stand indicted not only for not keeping their statistics up to date, but for suppressing information that is not in their political interest. If that is true, it is quite ridiculous. I am sure that there are people not far from this place who, during the next 35 minutes, could tell the Minister whether that is true.

The number of long-term unemployed has increased to more than 1 million, which is 37 per cent. of the jobless total. They suffer real hardship and contribute to the widening gap between the advantaged and the disadvantaged. The Government should answer the charge in The Economist.

Although unemployment is a problem, we must also consider low-paid workers. I come from a characteristically low-paid area. I am very worried about the plans with which the Government are toying in relation to wages councils. For the workers in the agriculture, hotel and catering and hosiery outworker industries, any attempt to weaken the wages councils would be a retrograde step and would exacerbate the problem we are discussing.

I agree with the hon. Member for Birkenhead (Mr. Field) that, if we have money to spend, it should be spent on child benefit. I would also spend it on the elderly. The report of the Social Security Advisory Committee rightly pointed out that, although the Government are making great play of the fact that they will try to price-protect pensions, pensioners will never have the benefit of any element of growth in the economy. From time to time they should be given a consideration that takes them beyond price protection and gives them the benefit of some element of growth in the pensions increases.

Child benefit is the most obvious way forward. Money for that should be found by stimulating the economy. There are differences among the parties about the rights and wrongs of that, though most Opposition Members would be prepared to increase the public sector borrowing requirement and stimulate the economy by careful and sensible projects.

We regard that as a means of taking people out of unemployment and providing the budget with extra capacity which could be used for other purposes. But even if that were not done, I feel sure that if the case were put properly to the electors they would be prepared to pay extra to finance additional pensions and increased child benefit. That is a case which politicians should be prepared to make.

Those are some of the steps that we should take in the short term. If there were time, I would speak about the plight of single-parent families and the problems that can arise as a result of rural deprivation, especially when people are living on state pensions alone and are deprived of services.

Another matter that concerns me is the changed system by which child clothing grants are administered by education departments, which are subject to severe local authority constraints on expenditure. Kids in my constituency are sometimes kept off school for two weeks simply to justify to the local education authority that they have a need for clothing. In other words, we are reaching the stage when children's education is being sacrificed so that they can get clothing assistance. That is an absurd situation, and it is topical because people are now thinking about kitting out their children for the autumn term.

Some of the short-term problems that I have raised need Government attention immediately. Some of the longer-term ones—time does not permit me to go into them; for example we had an interesting exchange between my hon. Friend the Member for Stockton, South and the hon. Member for Birkenhead (Mr. Field) about tax credit systems and methods of overcoming the poverty trap—will, I hope, be included in the review that is being undertaken.

Beveridge said that there were three conditions for a good life: freedom from war and fear of war; freedom from want and fear of want; and freedom from idleness and fear of idleness enforced by unemployment. He added: We should regard want, disease, ignorance and squalor as common enemies of us all, not as enemies with whom each individual can make a separate peace, escaping himself to personal prosperity while leaving his fellows in their clutches. That is the meaning of social conscience—that one should refuse to make a separate peace with social evil. The Government stand charged with a lack of social conscience.

8.33 pm

Sir John Farr (Harborough)

Although this is an Opposition day, some important points have emerged from the debate which the Government will value and on which they will be anxious to take action. One was mentioned by my hon. Friend the Member for Carshalton and Wallington (Mr. Forman) when he spoke about the low take-up rate of some benefits available to pensioners and others in real need. Such matters must come down to a lack of communication. Somewhere along the line my hon. Friend the Minister must deal with the issue, because, as was said earlier, only 70 per cent. of rent and rate benefits are taken up, and other instances of a lack of take-up have been mentioned.

My hon. Friend the Member for Banbury (Mr. Baldry) spoke of what can be achieved when there is a rundown of industry in an area. He explained how steps can be taken to reverse trends. Indeed, he referred to two companies, one employing 100 and the other 10. Opposition Members may consider those to be small examples, but I can speak of the fantastic example of Corby. Heavy industry went out of the window about five years ago with what was thought to be the permanent unemployment of those concerned. In the years since Corby finished producing steel, with men with generations of heavy industry training behind them, there has been an amazing turn-round. Corby is now part of an enterprise zone. Nearly 4,000 new jobs have been created, and about 200 companies have been attracted to the enterprise zone. The examples which my hon. Friend the Member for Banbury gave can be followed by the older and traditional heavy industries which are likely to suffer in future.

Mr. Blair

Corby is an example not of entrepreneurs at work but of planning by the British Steel Corporation and by local trade unions, industries and the council to make good the gap left by heavy industry. It hardly bears out the point made by the hon. Member for Banbury (Mr. Baldry).

Sir John Farr

My point was simply that, with cooperation on all sides, it is possible to transform the scene. There has been good co-operation over the Corby new town between the local authority, the new development corporation and the Conservative Government of the day. It is a real success story. I invite hon. Members who are not familiar with the scene to go to Corby to see what can be achieved.

The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) avoided referring to the performance of the Labour Government in the 1970s. The Labour motion is full of criticism of what the Conservatives have not done or should do, but the most fraudulent action committed on any group of pensioners, perhaps anywhere in the world, was that committed by the Labour Government, of which the right hon. Member for Sparkbrook was a Member—I regret that he is not in his place—when they swindled old-age pensioners in 1975 out of £500 million a year, or about £1 billion at today's prices.

Let me remind the, House of what happened on that occasion. In 1975 the Labour Government changed the calculation system for the updating of benefits and pensions. They changed to the forecast system. By using that system, instead of the actual level of price increases—the system to which the Conservatives have since returned — about £500 million was taken from pensioners' entitlements. That makes insignificant the suggestion that the present Government have adjusted matters so that pensioners have lost out by about £60 million. The motion is fanciful, and I fully support the Government amendment.

In my constituency in Leicestershire we accept that Government plans are all right. We are all for returning to private ownership businesses that are in public ownership. We are in favour of the sale of council houses and the other proposals in the Conservative party manifesto. However, there are certain minimum improvements to the social life of everyone, wealthy or poor, that we demand. We are satisfied that the Government have continued to make improvements in the lot of the less well off, and we are pleased that the improvements have been maintained since the 1983 general election.

I was helped in winning my seat in the election because the previous Conservative Government had been able to show that their performance had been remarkable in the real things that matter and in producing a quality of life for the elderly and those in poor circumstances. Perhaps the most important factor for an elderly pensioner is to know that the pound in his pocket will be worth 100p tomorrow, that the currency is stable and that he can save effectively. That means an immeasurable amount to the elderly. Pensioners are grateful to the Government for being able to change the run-away rate of inflation of about 27 per cent. when they took office to the present stable rate of about 5 per cent. Indeed, we hope that, if anything, it will decline.

My constituents pay tribute to the Government for their ability in education. There are those who say that the Government are not spending enough on the various social services, but class sizes are at their lowest level—this was true at the general election—and there are more teachers per pupil than ever before. The same applies to the National Health Service, because there are more doctors and nurses, and other forms of NHS spending is increasing. I can assure the House that if it had been otherwise my constituents would not have supported the Conservative party at the 1983 general election and the country would not have returned the Prime Minister with such an emphatic majority.

In Leicestershire we have been lucky enough to have one of the few new hospitals to be built and opened this year. The Glenfield district general hospital has given great encouragement to people in Leicestershire. It is a visible sign to those in the Leicester area health authority, which is part of the Trent region and one of the most deprived areas in the country for hospital waiting lists generally, including operation waiting lists, that the Government have been intent on improving the quality of life since they took office in 1979.

My constituents are convinced that the Government's plans show that they are on the right road. It is clear that they intend to improve the quality of life for the poor and everyone else. Above all, the Government are seeking to remove whatever gulf there may be between different parts of the country. In the part of Leicestershire that I represent, talk of two classes or two sections of the country is valueless and not understood.

8.44 pm

Mr. Ron Leighton (Newham, North-East)

The charge against the Government is that they are damaging the country and rending society apart by creating two nations. Wealth has always been unevenly divided in Britain. Those at the top have always had too much and those at the bottom have always had too little. This disparity is being exacerbated. The gulf which divides the rich from the poor, the north from the south and east London from west London is being widened and deepened deliberately. What is called Thatcherism is creating a society which is divided against itself. The tragedy which has befallen us is costly in human terms. We see the misery of poverty, hardship and deprivation. We see despair and alienation in our constituencies. This is costly in social and economic terms. A nation which is divided and embittered can never be efficient, for it can never pull together. Distrust and friction will hold it back.

A perfect example of distrust and friction is the coal dispute. We have the spectacle of tens of thousands of nationally organised paramilitary police keeping large areas of the country under the equivalent of martial law. That is a fitting memorial to Thatcherism. I know of no other country in western Europe where anything comparable has taken place since the second world war. A country which is divided against itself can never be successful.

How can there be a sense of national purpose and a feeling that it is our country while the present grave disparities exist? Unfortunately, they are being made worse. Those on low pay are being pushed down further. Since 1979 some 4 million more have been pushed down to the poverty line, while those on high incomes are getting more. The Government promised to lower taxes, but so far only the rich have benefited from the record handouts. The rest of us are paying more taxes. Investment income surcharge was abolished in 1984. The top tax rate on investment income and earnings has been slashed and capital transfer tax has been neutered. About £3 billion per annum is being given away to the rich in tax concessions. About £12 billion has been given to the very rich since 1979. Only those on incomes of more than £18,000 a year have benefited.

The story is different for the rest of the nation. For example, VAT has been virtually doubled from 8 per cent. to 15 per cent. and it has even been placed on take-away food. Employees' national insurance contribution rates were increased in the 1980, 1981 and 1982 Budgets. The reduced rate of income tax of 25 per cent. on the first £750 was scrapped in 1980. The Government have forced up local authority rates by cutting the rate support grant. There have been punitive increases in prices and charges which have hit the less well off.

The House will be aware that gas prices have increased by 130 per cent., and what are they but a form of taxation? Electricity prices have increased by 88 per cent., and prescription charges have risen by 700 per cent. More than 1 million schoolchildren are receiving free school meals because their parents cannot afford to pay. A MORI poll that was conducted for the television series "Breadline Britain" revealed what poverty means. It showed that 3.25 million cannot afford to heal their homes adequately and that 4.3 million live in damp housing conditions. The results of the poll tell us that 3.4 million cannot afford new clothes, that 7 million cannot afford enough food, that 6 million have been in serious arrears with essential bills in the past year and that 10 million cannot afford to take a week's holiday.

The rich have benefited by about £12 billion since 1979 as a result of tax cuts, but the less well off pay more tax and the poor, as a result of the uprating of pensions and other long-term benefits by comparison with prices rather than earnings, and by the abolition of the earnings-related unemployment benefit, have lost about £6.7 billion since 1979. These are the Library's figures. We have had a redistribution of wealth, but it has been a redistribution from the poor to the wealthy.

The biggest disgrace is in the treatment of the unemployed, because they are the victims of Thatcherism. They and their families are badly hit, and the worst hit are the long-term unemployed. However long those people are out of work, they cannot claim the long-term rate of benefit that is open to all other claimants after one year. They are consigned to a paupers' ghetto. The impact of withdrawing earnings-related supplement has been severe. In 1979 unemployment benefit was 35 per cent. of average male earnings; it is now only 18 per cent. Not only have people's jobs been destroyed, but they are victimised and penalised. This must be an evil policy.

Other countries—civilised countries—do things differently. Recently, I took the Employment Select Committee to Denmark, where there has been 50 years of rule by the Danish Labour party. Denmark has its problems. There are unemployed people, but the unemployed receive 90 per cent. of their previous earnings for two and a half years, and after two and a half years they must be given a job. Every young person in Denmark is guaranteed a job, training or education until he is 18. There are no great disparities between the bottom and the top level of earnings. There is no such thing as low pay. There is a high level of education and a shared educational background. There is not the educational apartheid that we have, and as a result there is a strong sense of national identity, unity and cohesion—what a contrast with the wretched way in which we arrange matters in Britain.

While the poor have been pauperised, there has been a dramatic and breathtaking boom in pay at the top. An article in The Sunday Times refers to the big league bosses and contains details of the 60 directors whose salaries are in six figures. The article refers to the increase in their salaries from 1981 to 1983. Robin Wilmot had an increase in salary of 148 per cent. In 1983 his salary was £189,000 a year. Mr. Michael Hollingbery, the chairman of Comet, received a salary increase of 145 per cent. His salary was £194,000 a year. Mr. Ralph Halpern of Burton received an increase of 97 per cent. His salary was £199,000 a year. The salary of Sir Kenneth Corfield of STC was £201,000. Sir Peter Baxendell of Shell Transport received £202,000. He works also for S. Pearson and received £201,000 from that company. Tiny Rowland received £265,000 from Lonrho and £234,000 from Associated Newspapers. Mr. N. Stewart and Mr. B. Christopher of BSR between them received an increase of 434 per cent., giving them a salary of £497,000. That is how we treated the rich during a period when inflation was running at 17 per cent. Last year, Mr. Dick Giordono of BOC received a salary of £522,000.

Did they not do well? Are they not doing well? How do they justify one man taking so much from society? How do we justify one man receiving—I shall not say earning—more than 50 coal miners put together? At a time when British industry is performing badly, the directors are receiving more. As British industry is going down the drain, the directors are paying themselves more and more.

The most impudent and arrogant impositions are made when firms collapse and such people are dispensed with. We all remember Sir Campbell Fraser of CBI. He was a great one for lecturing us about wage restraint and incomes policy. In 1983 when he was the chairman of Dunlop, the company lost £167 million. It could not repay its loans and he had to go. It is amazing and breathtaking to learn that, after drawing a very high salary, Sir Campbell Fraser received £137,400 in compensation. He also received a Rolls-Royce, a company chauffeur and a Mayfair office. That happened after he had allowed his company to collapse. What hypocrisy it is for those people to preach incomes policy to us.

Sir Campbell Fraser was not the only one to prove that industrial failure pays. On 21 February 1984 The Times reported the annual report of the long-troubled Rank organisation, showing that four directors received £438,000 in compensation. On 10 March 1984 The Times reported that three directors of the William Press building group shared a golden handshake of £700,000. Admiral Sir John Teacher was made chairman of Playboy's operation in the United Kingdom. He lasted three months. How much does the House think he was paid for three months work, although I do not know whether one could call it "work"? He was paid £437,000.

John Brown, the troubled engineering firm, virtually went bust. It got rid of its chairman, who went out with £400,000. The former chairman of the Associated Communications Corporation received £560,000 to say goodbye. The directors of Marks and Spencer plc were each given cheap housing. These directors receive many other perks—school fees, club subscriptions and top hat pension schemes are paid. Mr. Bill Fieldhouse, the former chairman of Charrington Viyella and the printing firm Letraset, became a golden handshake millionaire.

Surely it is an affront and offensive that, while British industry is collapsing and the poor are being pushed down into low pay, those people get those enormous bounties. How are those salaries, perks and golden handshakes determined? As far as I know, those people just helped themselves. They vote each other huge increases on the basis of, "If you scratch my back, I will scratch yours."

I said that Sir Campbell Fraser was given a Rolls-Royce. Many of us know the leafy suburbs of London where the driveways are littered with Rolls-Royces and Jaguars. Who pays for them? How many are paid for out of taxed income? Very few indeed. They are paid for by our constituents when they buy products in the shops. When they buy a can of beans, ½p or 1p on each can goes to keep those people in the style to which they have become accustomed.

I could go on, but I intend to finish my speech at 9 pm, if not before, because I wish to hear what my colleagues have to say. In my borough of Newham, people are brought up in crummy housing, go to schools where they under-achieve, and when they leave school fewer than one in two gets a job; the rest go straight to the dole. Those who get work get dead-end jobs. It is an area of high housing stress. When people come to my advice bureau I have to say that a house for them cannot be guaranteed because we live in an area of high housing stress. However, in the property pages of The Sunday Times there is no shortage of houses. One can have a house or a nice flat tomorrow if one has £200,000, £300,000 or even £500,000. There are plenty of them.

Therefore, the gap between the rich and the poor is widening. It should be diminished. We badly need a civilised Government who will diminish the gap so that we can get to one nation.

9 pm

Mr. Lewis Stevens (Nuneaton)

I listened to the hon. Member for Newham, North-East (Mr. Leighton) with interest. He quoted the extremes of those who have very high incomes. However, I feel that Opposition Members have not faced the need to have differentials. One cannot have a society today in which people do not have significant differentials.

Many of our managers have been reputed over the years to be underpaid. One of the reasons for the decline in our manufacturing industry is said to be that engineering and allied sectors were never attractive enough, particularly compared with our European partners and America. People in management have been pushing and will push to increase differentials and wages. Time and again trade unions have wanted to keep differentials and push prices and wages up. They always want to be above their fellows and try to jump up the league. The automatic effect is that other people are pushed down.

It has been said that unemployment is one of the main instigators of the problems for the less well-off. We cannot walk away from that. However, it is a social problem as well. The Government, as Opposition Members will know from when they were in control, cannot merely wave a wand and say, "Do this", and unemployment stops. It is in the hands of those who control, invest, and work in industry and commerce. It is not simple to sort out the problem. Our economic policies have the best prospects for solving it.

One should consider how much people are prepared to think about those in less fortunate positions. A little thing called overtime is now increasing. How willingly would many people doing overtime and those in trade unions say, "Cut overtime and increase jobs. That will reduce some of the discrepancy in wealth."? That would not happen easily. When that idea is suggested in years ahead, those who do overtime will not easily accept it. Overtime is a small matter, but we must consider it.

The hon. Member for Newham, North-East said that the country is divided between north and south. I come from the midlands. We have an unemployment problem. Over the years there have been problems with pensioners and those on social security benefits. Not only the Government must consider social change. Trade unions, employers and educationlists have a large part to play. It is not just a matter of investing Government money and hoping that something useful will be done with it. We can look forward to some changes because of the Government's policies or how we distribute the finances that we have between social services and the various groups involved.

I welcome the announcement by the Secretary of State that certain aspects will be subject to inquiry and review. It is important to consider in detail how the money can best be used to achieve the economies that are possible. Expenditure has increased at a tremendous rate not just because of unemployment but because in some instances the Government have maintained spending ahead of that which was absolutely necessary to meet inflation. By reducing inflation and keeping it under control, however, the Government have provided for one group of people a protection that they did not have in the 1970s. I refer to pensioners on fixed incomes from company pensions and the like, who suffered disastrously between 1974 and 1979. Those people now have some respite.

I hope that Ministers will consider two aspects when studying the possibility of some redistribution of benefits. First, the long-term unemployed over the age of 50 are a very deserving case if the necessary money is available. Secondly, there is a case for looking each year at the £3,000 capital that people are allowed to have when applying for supplementary benefit. I believe that there has been an increase this year. Now that economic growth is developing, we must honour the promises that we made to pensioners, not just in relation to index-linking but in other respects so that they receive their share.

The Opposition have simply made the old claims about redistribution of wealth as though taking from one group and giving to another might actually work. Throughout all their periods of office—I hope that it will be a long time before such a misfortune occurs again—attempts of that kind were made. Those attempts were uncontrolled and did not work, with the result that the rich often became richer while the poor became poorer. Because they could not resist the pressure from trade unions and other interest groups, the Labour Government failed to help the situation then or the unemployment that followed.

The alliance spokesman said that poverty was relative, but the danger of that approach is that, having set a comparative figure, we constantly chase that level with a resulting leapfrog effect so that in seeking standardisation we may merely cause acceleration of benefit increases but a worsening of the general situation.

Despite Opposition criticism, I believe that the Conservatives have created a better prospect of fair play between rich and poor in this country than there has been for many years.

9.7 pm

Mr. Tony Blair (Sedgefield)

As many hon. Members have said, there is no easy solution to the problems of poverty. All too often, however, Conservatives use that as an excuse for doing nothing.

First, we must recognise the scale of the problem, as the right hon. Member for Chesham and Amersham (Sir I. Gilmour) did in his book "Britain Can Work", which referred to the massive reconstruction process needed to deal with poverty in this country.

Secondly, Governments have a duty to deal with poverty as a high priority, but nothing in the case argued for the Government by the Chief Secretary to the Treasury suggested any appreciation of those matters. He did not make a serious speech but merely meandered through an old Civil Service brief, so bored with the subject that he bothered to depart from the brief only once. In that one departure we saw a glimpse of what the Government really believe when we were told that social security payments were state handouts. The Minister made another interesting admission to which I shall return in a moment.

It is important to remember that what we are debating is not just a social problem but a Government policy. No one denies that deprivation exists on a massive scale, and the statistics have been quoted fully this afternoon. Nor can anyone deny that there is a widening gap between rich and poor. The most obvious statistical expression is that whereas about £2.9 billion has been given in tax handouts since 1979, about £2.7 billion has been cut from social security payments.

We should remember that the Government are headed by a Prime Minister who celebrated the right to be unequal. That was the ideological basis upon which the Government came to power, and the interesting admission made by the Chief Secretary when he opened the Government's case was this: he talked about the Labour party appealing to the poor and the worse off and said that we were appealing to a minority, which was perhaps why we were a minority party. In that lies a 'crucial problem. The Government are perfectly willing to appeal only to comfortable Britain, as David Shepherd recently called it, and the rest must go hang.

If we cannot convince the Government of the moral correctness of our case, let me at least try in the few minutes that I have to convince them of the dangerous route upon which they have embarked. Ultimately, a Government who are so careless of the inequality in our society are a threat to democracy. The Government have an entirely formal notion of democracy. They believe that if they are elected to power in Parliament they have a mandate to do whatever they wish, and that the rule of law encapsulates the entirety of democracy. Poverty may be a shame, or they may even be indifferent to it, but it is not fundamentally undemocratic.

The inequalities in our society, which the Government are perpetuating, are fundamentally undemocratic, and I disagree with their notion of democracy. There is a content as well as a form to democracy, and the content is that democracy is based on consent. The consent is people perceiving that they have a shared sense of community and that they can all participate in the wealth and benefits of society. It is not just a question of a safety net or a ladder of opportunity, as Conservative Members have said. It is not only one or two people who are suffering in this way; there are millions of them, and they constitute a sub-group of society. That is the danger.

If we have a recurrence of breakdowns in law and order, as we may have if poverty continues and deepens, it is useless to pray in aid the rule of law. When Disraeli wrote about two nations in "Sybil" in 1845, he was not just talking about the repugnance of poverty as a threat to the democracy that existed. "Sybil" was written against a background of Chartism and the industrial and social unrest of those times.

Many of the young unemployed in my constituency, who see no future for them, do not simply say that they will not vote for the Labour party; they do not intend to vote at all. They regard Parliament as a process irrelevant to their lives. That is the danger that we face, and we cannot be complacent about the matter. If those youngsters perceive that they cannot share the wealth and prosperity of society, they will reject its institutions. I do not want that to happen, but I believe that it might. They do not consider themselves as citizens of the state. They regard the state as the property of others, and they are simply a casualty of those people's neglect.

The Conservative party has written into its philosophy a notion of fear. I do not believe that fear will ever bring benefits, nor is fear necessary for incentives to work. But suppose fear does aid incentive. If there is fear without even hope, it will eventually turn from quiescence to anger, and people will turn from Parliament to the streets. That was seen many years ago. Thomas Carlyle put the dilemma facing a Parliament which does not meet the challenge of its times rather well when he talked about the then Parliament failing to learn how to deal with poverty. He said: If Parliament cannot learn it, what is to become of Parliament? Parliament with its privileges is strong, but necessity and the law of nature are stronger than it. But done, one way or another the thing must be". One way or another poverty must be solved. Let us solve it by democracy, as a triumph of democracy, rather than through democracy's destruction.

9.15 pm

Mr. John Powley (Norwich, South)

When I read the first line of the motion, the thought that immediately sprang to my mind was, "Here we go again. The Opposition are jealous of anybody who gets on in life." The speech of the hon. Member for Newham, North-East (Mr. Leighton) strengthened my conviction that jealousy lies behind the motion.

The Opposition are jealous of anybody who gets on and creates wealth for the less fortunate members of society. They are jealous of home owners. Their policy is clear: they want to build more council houses, and they do not want to sell council houses because they want to keep control of people's housing conditions. They do not want people to free themselves from state housing. Opposition Members are jealous of anybody who benefits from private education, because they do not like people who free themselves from the state education system. They are jealous of those who work hard to provide themselves with private health care, because they do not like people who free themselves from the state health service. They like to control everybody's health care and hospital waiting lists. They do not like people who free themselves from state employment. They are in favour of more nationalisation. But the wealth in industry is created by private industry, not by state industry. State industry is propped up by the taxpayer. The Opposition do not like people who own shares in private industry because they like the state to own industry and individuals to be subservient to the state.

We must decide how to improve the quality of life for everybody. There is no doubt that the more private owner-occupation there is, the better the housing accommodation is for everybody. That has been shown in practice. When we sell council houses to tenants who wish to buy them, we are helping to improve housing conditions for the less fortunate and for those who are and will always remain in local authority accommodation. The resources released from the sale of council houses are used to improve the conditions of those who live in poor accommodation.

Norwich council owns 25,000 houses. Some of them are in a poor state of repair and 600 are empty, yet it resists selling them. Other more enlightened local authorities which sell their houses have increased their resources and improved the quality of housing in their areas. They have therefore helped the less fortunate in housing provision. If the Labour party opposes that policy, it should be aware that it is repressing the housing standards of the less fortunate. If it changed its policy, it would help those for whom it purports to care.

Richness and poverty should not be measured solely in monetary terms. Someone who earns £20,000 a year can be poor in many respects, and a pensioner or someone on a fixed income can be extremely rich in terms of quality of life. I hope that the House will reject the motion and accept the Government's amendment.

9.20 pm

Mrs. Gwyneth Dunwoody (Crewe and Nantwich)

The Conservative Administration are a great proponent of the them and us theory of government. For the Prime Minister and her cohorts, "us" means anyone who earns more than £18,000 a year and for whom tax rates have consistently been lowered. "Them" is all of those dreadful indigent people who have committed the crime of being poor. They are the people whom the Financial Secretary to the Treasury told us are in receipt of state handouts. Perhaps I could remind him who those people are. There are 40 million people in Britain who receive state handouts and there are many people who live in households that receive one or more state benefit. They are not my figures but those of the Social Security Advisory Committee.

As far as I can see, the Financial Secretary thinks that anyone who is disabled, sick, unemployed or a pensioner is in receipt of largesse from him and his friends in the City. I find that deeply offensive. In order not to be in receipt of state handouts, as defined by the Financial Secretary, a person would have to be single and working. Perhaps I might remind him of the reality for many of the people whom we are supposed to look after. There are 1.8 million children who live in families, the head of the household of which is on supplementary benefit. When the Financial Secretary talks about what is really happening between the rich and the poor, why does he not ask the Secretary of State for Social Services to use some of the many inquiries that he is setting up to get some truly independent evidence of what happens to the people who must live on the utterly inadequate level of state benefit? What about people who do not claim benefits to which they are entitled? In 1981, £716 million of supplementary benefit was unclaimed. There was only a 70 per cent. take-up rate, and there was only a 50 per cent. take-up of family income supplement, which is a basic life-boat.

What efforts will the Government make to spend some of their money on encouraging proper take-up? If there were more use of those benefits, many children who live in intolerable poverty would at last be able to enjoy a decent standard of living. Throughout today's debate there has been an extraordinary air—I put it at its best—of unreality on the Conservative Benches. Not all Conservative Members are totally hypocritical. Some of them are aware that there is at present very real deprivation. However, what they have presented to us today gave the impression that there has been a consistent attempt to improve the standard of living of all the people of Great Britain.

Let us understand what the reality has been. It is not just in the simple administration of benefits that the Government have sought to deprive many people of their true standard of living. What has happened throughout the period of Tory Government has been a consistent attack, across the board, on some of the poorest families. There has been the fiasco of housing benefit. The local authorities tried to explain to the Government that if they were forced to set up what was in reality an enormous bureacratic bungle it would cost them a great deal of money. It has cost them £8.5 million. They also explained that they did not have sufficient time to set up the new machinery. They asked for enough leeway to enable them to produce an efficient system. However, they were told to put the system into operation irrespective of their wishes. They were told that it would simplify the administration of the social services.

What happened was that many people who had never been in debt in their lives found themselves not only many months in arrears but threatened with eviction through no fault of their own. Social service departments—many of them already grossly understaffed—have found themselves totally unable to deal with the details of all the individual cases, and increasing numbers of tenants have faced real problems.

The Government also used the housing benefit system to introduce more cuts by the back door. As many as 2,260,000 people lost benefit because of the scheme, and the delays in payment meant that, under the new and more complicated system, there were even greater losses. Under the existing system of housing benefits, 3,260,000 people will lose out, and those who will suffer most will be those whom the Government claim to support. For instance, 1,330,000 pensioners will have to make do on less money than they had under the old system. Over 1 million home owners—the people whom the Government are always claiming to support—will find it harder to keep up with the mortgage payments. Most hypocritical of all, a Conservative Government who claimed that the new system would not deepen the poverty trap or reduce the incentive to earn a better wage have done precisely that. Over half the cuts will be forced on the 1,160,000 people who are earning less than £20 week above the poverty line. In the case of housing benefit alone, for every extra pound that they earn they will lose 40p. With higher income tax, a typical family in the poverty trap will lose '79p of every extra pound earned. That is the incentive that the present Government offer to people to stand on their own two feet.

The Government understand what they are doing. The Under-Secretary of State for Health and Social Security has said in a written answer: The poverty trap is the consequence of the inevitable interaction between means-tested benefits and income relevant to them, tax and national insurance contributions. Estimates vary considerably about its practical effect on families; but the impact of any change in the component elements upon the extent and depth of the trap is carefully considered before decisions are reached. The complete elimination of the poverty trap would require either that means-tested benefit should no longer be available to families and individuals, or else an unacceptably high level of expenditure would have to be incurred".—[Official Report, 15 November 1982; Vol. 32, c. 61.] In other words, the Government know what they are doing whenever they change the existing rates and they must also be aware of the very real difficulties that will inevitably result.

I have been frightened a little—I use the word advisedly—by some of the speeches of Conservative Members tonight. The awful thing is that I believe some of them were sincere. Had they made speeches rather like that of the Chief Secretary which were manifestly something they thought they could get through quickly without too much damage, I should not have been so upset. But many Conservatives do not seem to understand the reality of long-term unemployment. They have no concept of what it is like to be frightened of not being able to pay the electricity bill. They do not seem to understand that a Government that forces up electricity prices—not because the electricity industry requires extra investment because it is now making indecently large profits and is positively embarrassed by the extent of the changes—is affecting the number of people who live through the winter.

Many old people now know that they will not be able to heat their homes properly in the coming year. The Government know that for the past three years the electricity board has put up fuel prices to such an extent that profits are way beyond what is necessary. The Government know that that is a direct tax. It is an indirect tax in theory but a direct tax on the quality of life of those most at risk. It is a tax on those who are chronically sick and old. The Government make no bones about the fact that that is the way they want the taxation system to go.

We have heard a great deal about small businesses tonight. When many of the small businesses in my constituency which are going out of business because of the imposition of VAT on take-away food complained through me to the Chief Secretary, they were told that that scheme was fully at one with the Government's attitude that there should be a move away from direct taxation to indirect taxation. The effect of that is plain to see.

Since the Government took office, they have sought to undermine the existing standard of living of the poorest people. We have already been told of the move that has taken place in terms of taxation. We know that the poverty trap is carrying more and more people down into its depths. We also know that the implementation of the new changes will increase that figure. This year the unemployed will see a cut of £17 million in November. After that, for every year, they will lose £8.5 million. That has been brought about because the new payment will only be introduced two years in arrears. A person on a weekly wage—a system that the Chancellor of the Exchequer cannot envisage—who loses his job will in future have nothing to live on in the second week of unemployment.

The family income supplement increases that have been announced will not be applicable to anyone who is already in receipt of benefit. They will only count for new people who are coming within the aegis of that grouping. Increasingly, although there has been a rise, no one who is receiving family income supplement on the first day of the new rates will get one penny. Most of all, the attack has been on the long-term poor. Roughly 2 million people have been on benefits for over one year. Those people will lose 50p or £1 a week.

To somebody who is already faced with real poverty, that can be described in simple terms. Last week in The Guardian there was an example of the reality of long-term unemployment, and this is not even a typical case. Conservative Members might like to know that this is a woman who has been out of work for nine years, a qualified teacher and someone who has a great deal to offer society as a whole. She describes it in these terms: Nine years of watching possessions wear out and not to be replaced … No matter how hard we try, we end up every winter in debt for fuel, which we painfully catch up during the summer months … Yet the expenses have been the same. As a result I have had weeks when I could not afford more than one meal daily. That is the reality of Mrs. Thatcher's Britain for someone with good qualifications and a good contribution to make to society as a whole.

The hon. Gentleman who will wind up has made it clear that he regards the provision of state services, whether in education or in the Health Service—and certainly in social services—as a total waste of the money of those in private enterprise who will earn the wealth of the country.

The system of taxation that the Government have brought in has set out to penalise those most in need. Not only has it divided north from south, but it has divided those who are in work and a group of young people who, in addition to seeing no future for themselves, are increasingly alienated from their families and from society. The price that we will pay for the Government's selfishness, their stupidity and their lack of imagination will be a society divided against itself. There is no way in which we can accept that great price. I ask all decent Conservative Members to show their independence tonight and to join us, because they know that ours is an accurate and true picture of 1984.

9.36 pm

The Minister for Social Security (Dr. Rhodes Boyson)

First, I remind the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) that when she talks about a teacher who has been out of work for nine years, according to my history, for four of those years a Labour Government were in power. I do not want to get involved in the details, but it is interesting that the poor who are suffering now must have suffered then, according to what she said.

Before I start to wind up the debate for the Government I wish to reply to what was said by the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood). I was accused at the last DHSS Question Time of having kept secret a report when in fact I had put it in the Library many days before and, indeed, had it in my hand. The Economist, from which the hon. Gentleman quoted, said that the Government were suppressing an economic report. I have had a check made, and I assure the House that there is no truth in the suggestion that the Government have attempted to suppress part of an OECD report on unemployment. It is up to the OECD to decide when it publishes. We have given our comments. I am glad to put the mind of the House at rest on that matter.

I deal now with the question of poverty. There is no doubt that there is a clear difference, which has been brought out in many speeches from both sides of the House, between absolute and relative poverty. I do not usually agree with Professor Townsend, but on relative poverty I go along with him when he says that it is the state where people cannot purchase the goods or engage in the activities which the majority take for granted. In other words, as long as society has people earning different amounts, there will always be some people at that level.

I am not saying, like the Bible, that the poor are always with us, but there will always be some relative poverty unless one has an egalitarian society, which Conservative Members do not want and which most of the voters who elect Opposition Members do not want. Unless one has an egalitarian society, there will always be some form of relative poverty; what Christopher Jenks, the American sociologist, called the inability to fit into a social group. To fit into a social group, one must have the means to take part in what it is doing.

Absolute poverty, as we understand it, which exists in certain parts of the world, as my hon. Friends have reminded the House—[Interruption.] This idea is from my own mind, and if Opposition Members listen it might pass into theirs.

Mr. Barry Sheerman (Huddersfield)

That is what worries us.

Dr. Boyson

If I were a Labour Member, I should be very worried. I am glad that I speak from this side of the House. Perhaps I may continue with our education session. Absolute poverty consists of a lack of food, shelter, and clothing, and sometimes a lack of light, and it exists in some parts of the world. I am sure that many Opposition Members are widely read and that they will have read Le Grand and Robinson's work entitled "The Economics of Social Problems". Those on the poverty line in the United States of America earn more than 50 times the average income of someone in India. That is what relative poverty is all about.—[Interruption.] I shall give Opposition Members a reading list afterwards if they want, as that might assist with their general education.

A most interesting book was published recently by Jowell and Airey entitled "British Social Attitudes". It shows that 67 per cent. of British people consider there to be no absolute poverty in Britain. Interestingly enough, fewer Labour voters than alliance voters believe that there is poverty. Apparently, the more people earn, the more they believe that poverty exists, presumably so that they can be pleased about the fact that it is not themselves who are poor.

The hon. Member for Newham, North-East (Mr. Leyton) referred to "Breadline Britain". I know that there is relative poverty in parts of Newham, and I am not complacent about that, but the interesting point which that programme suggested is that if someone does not have three things out of 24 he is poor. Those three things could be refrigerators, washing machines and carpets in all living rooms and bedrooms, whereas 50 years ago, or even 25 years ago, people merely aspired to have such things. That just shows how far we have moved under such terrible Conservative Governments, even with intermittent Labour Governments.

Conservative Members are not complacent. We all know the crushing sense of humiliation felt by a man who believes that he cannot give his family all that he would wish. We also know the concern of the pensioner who is saving to pay her winter heating bills. We know that there are some areas of high unemployment, where the prospects of school leavers are nothing like those in the south, where there is relative prosperity. We accept that high unemployment exists. Indeed, the hon. Member for Stockton, South (Mr. Wrigglesworth), my hon. Friend the Member for Gillingham (Mr. Couchman), the hon. Member for Cynon Valley (Mrs. Clywd)—I spoke at that by-election, but it did not seem to do much good—and the right hon. and learned Member for Aberavon (Mr. Morris) mentioned that critical point.

There is one thing missing from the Opposition's argument. They fail to recognise that there is a link between economic policy and social policy. One can divide the cake only when it has started to get bigger. What did the Labour Government of 1974 to 1979 do? They followed their usual policy of believing that anything could be solved by flinging money at it. That is what they did, and then, like good Socialists, they went with their begging bowl to the IMF. What happened then? I ask that gently, because I do not want to hurt Labour Members in any way. I know that they are busy at the moment, and one should not hurt them when they are busy. The Labour party slashed capital spending on health by 35 per cent. and suspended the Christmas bonus for pensioners. Indeed, I was grateful to be reminded earlier that it fiddled pensioners out of the equivalent of £1 billion in today's money by changing the method of uprating in 1976.

We cannot separate economic policy and social policy. Economic policy must have priority and must be right if genuine needs are to met, as we would all like. If we want to improve the conditions of the less well off, growing national prosperity is the answer. That is the lesson of history. Social policy begins with wealth creation, not wealth taxation.

Mr. Sheerman

When are the Government going to create wealth?

Dr. Boyson

This Government's policy of cutting taxes at all levels and on businesses provides the incentive to get the economy going.[Interruption.] The figures show that there was an increase of 3 per cent. in our GDP between 1982 and 1983. Opposition Members can read the figures in Hansard tomorrow. That will be a treat for them at breakfast. In this year's Budget we took 800,000 poorer earners out of tax. Surely we should be praised for that.

We in the Conservative party believe in an open, nonrestricted economy, in the equality of opportunity and in a rising standard of living for all our people—[HON. MEMBERS: "Reading."] I am reading. I wrote my speech, so it is very good. The Labour party has again been tempted by R. H. Tawney's so-called "equality of outcome". The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) is knowledgeable on the subject. I have a copy of what he said last August about equality of outcome. A policy of equality of outcome can be carried through only by total state coercion. It means turning one's back on increased wealth and prosperity. There is no means of combining the increase in wealth with a move to an egalitarian society. That would be a search in vain, as for the Holy Grail or the alchemist's stone of old, and it is just as likely not to be there. As Churchill said, we do not want equal sharing of misery, but we do want equal sharing of blessings for the good of all. We in the Conservative party want to offer as much prosperity as possible, leaving the door open for the gifted, the entrepreneur, the motivated and the hard-working. We believe that a rising tide lifts all boats at every level of society.

The selling of council houses has increased wealth. The Labour party would abolish that right, but people want to own their own homes. The Conservative Government have given people the right to buy. More than 1 million people now live in their own homes, thanks to the Conservative Government's policy of allowing the sale of council houses. That is an example of the genuine distribution of wealth. What a contrast it is with the bitter years under Labour, when fewer than 10,000 people a year were able to buy because of the Socialist opposition to their becoming owner-occupiers and achieving self-pride and everything that goes with that.

My right hon. and learned Friend the Chief Secretary talked about share ownership. People want a real stake in society. The Conservative Government are giving them that stake. Tens of thousands of employees own shares in the companies for which they work. The National Freight Corporation is a lesson for everyone. People who own shares feel that they are involved in wealth creation.

People want a real say in their future. Only a Conservative Government have given them that, for example, in our pensions policy. If Opposition Members do not like our pension plans when they are made known, they will be unpopular. The Conservative Government, by our pensions policy and other means, are giving people a real say in their future. Our plans to revise and encourage occupational pensions provision for millions of families represent the latest stage in the revolution to create genuine wider ownership, and will be welcomed by the majority of our people.

We have heard a lot from the Opposition about the take-home pay of the rich and the very rich. We have listened to their figures. We did not hear from Opposition Members that real take-home pay for those whose earnings have risen in line with the national average has increased at all income levels under this Government—by 8 per cent. for a married man, with a wife and two children, on half the national average wage; by 9 per cent. for the same man on the average wage; by 9.1 per cent. for the same man on one-and-a-half times the average wage; and by 10.2 per cent. for the same man earning twice the average wage. Tax reductions have not taken place only at the top. Tax allowances have increased by 6 or 7 per cent. more than inflation this year.

Some of my hon. Friends referred to inflation, which hits the poor far more than the rich. The poor do not have antiques, penny blacks and landed acres; they save in the piggy banks—the trustee banks and the building societies. There is no doubt that inflation of 110 per cent. between 1974 and 1979 hit the savings of the poor. The Government have brought down inflation, and all tribute for that to my right hon. and learned Friend the former Chancellor of the Exchequer, who is in the Chamber tonight. During the past three years inflation has been in single figures.

The poor put their money into the building societies. For the first time last year since the 1960s the rate of interest paid by building societies was more than the rate of inflation. Therefore, for the first time since the 1960s there was a real return on their money. That must have raised a cheer in many houses throughout the country—not in the big houses, but in the houses of those who wanted to save to buy presents or for their old age.

Listening to the debate, one would think that the Government had closed all the local DHSS offices. We have looked after the poorer members of our society. Expenditure on social security and health has risen from £23.8 billion in 1978–79 under the Labour Government, when it was 36 per cent. of public expenditure, to £50 billion last year, when it was 42 per cent. of public expenditure.

Mr. Ray Powell (Ogmore)

Give us the figures.

Dr. Boyson

I am giving the figures. I am glad that the hon. Gentleman is here—he must come more regularly to our debates when I am speaking. The real increase in expenditure on social benefits under this Government is 27 per cent. Increased expenditure on the unemployed is about £1.5 billion, with another £3 billion on social security supplementary benefit. An increase of 27 per cent. means that we have put the equivalent—[Interruption.] Let me add it up so that I get the figure right. We have put about £10 billion more into our expenditure in that area. We are now paying for 650,000 more pensioners.

The vast majority of benefits have risen. I recently gave the hon. Member for Birkenhead (Mr. Field) a list of the minor benefits that had been reduced. Let me give the House some figures so that Opposition Members can go home and feel secure tonight. They can sleep contentedly. Supplementary benefits are now 5 per cent. more in real terms than when we took office. We have put men from the age of 60 on long-term supplementary benefit. We have also put the poor on long-term benefit after one year. Pensions have risen by 83.6 per cent., while prices have risen by 76.4 per cent. Child benefit has risen to the highest level ever.

Mr. Gordon Brown

Will the Minister give the House a categorical assurance and an unconditional commitment that the Government have no plan to tax or means-test child benefit? Will he repeat the assurance given by the Prime Minister during the election campaign last June and tell the Tory Back Benchers that there are no plans to do that?

Dr. Boyson

There are no plans in the Department to tax child benefit.—[Interruption.] Opposition Members had better ask Treasury Ministers. My right hon. Friend the Secretary of State for Social Services made a statement before the last election about the taxing of child benefit. There has been no change of policy since then. [Interruption.] I should not care to commit the Labour party to anything; one can never tell what that lot would do if they regained power.

In 1978–79, £47 million was spent on the mobility allowance. It is £303 million now. Supplementary benefit single payments have gone up from £25 million to £145 million this year. The hon. Member for Crewe and Nantwich spoke about heating allowances. We are spending, in real terms, £140 million more than when the Conservatives came to power in 1979—[Interruption.] For the figures in detail, I could refer Opposition Members to my last speech in the House when I dealt with poverty and energy. We are now giving heating allowances to 1.6 million pensioners compared with 1.2 million in 1978.

I shall not give many more figures, because little time remains to me. In 1983–84 we spent £4 billion on the long-term sick and disabled—30 per cent. more in real terms than was spent in 1978–79. Thus, I refuse on behalf of the Government to do any apologising for what we are doing in terms of social benefits. Our record is there for all to see.

The history of the last 50 years in our society has been that of extending the luxuries of a privileged minority to become, first, the everyday conveniences and then even the necessities of a growing majority. Lord Harris of High Cross said in another place in 1981—[Interruption.] Opposition Members are frightened of what is coming, and I can understand their fear, but they are going to listen to it. He said that the lives of most people had been transformed in two generations from the world of fly-papers, of gas coppers, of black-leaded grates, of mangles, meat safes, boiled milk in the summer and acres of lino".—[Official Report, House of Lords, 29 April 1981; Vol. 419, c. 1194–95.] Some of us grew up under those conditions and remember what they meant. That situation has been transformed totally, but how? Under the Conservatives, between 1978 and 1983, the number of home owners went up from 54 to 60 per cent. They are not the rich. The rich already had their homes.

In the three years between 1979 and 1982, the number of households with some form of central heating increased by 5 per cent. to 60 per cent. They were not the rich. The rich already had central heating—[Interruption.]—which shows how we are spreading the benefits of our policies all along the way. Similarly, between 1979 and 1982, the number of those with a deep freezer increased by 11 per cent., from 40 to 51 per cent., about a quarter more. They were not the rich; the rich already had deep freezers.

I could continue the list, including washing machines and telephones. Between 1979 and 1982, the number of people with washing machines increased by 5 per cent. from 74 to 79 per cent. The number of people with telephones increased by 9 per cent. from 67 to 76 per cent. The number with colour television sets increased in those three years—under the Conservatives, who are supposed to be grinding the faces of the poor into the dust—by 11 per cent., from 66 to 77 per cent. The rich had their colour televisions before. All this progress has happened under the Conservatives, but one would not believe it when listening to Opposition Members.

We in the Conservative party have aims and ambitions for our people at least as high as those of any sections of the Opposition Benches, but ours are fixed in terms of a true understanding of human nature. We do not make plans that we cannot carry out. We take human nature for what it is and we provide incentives and enable people to know what they are doing.

Conservatives want a Britain in which, through the full development of the talents and motivation of all our people, there is an increasing standard of living, and in which over the next 10 or 20 years the luxuries of the rich become again the necessities of the less well off. Let the rising tide lift all our people. Let us have rising and fulfilled expectations and not the dull equality that is wanted by the Opposition. I invite my right hon. and hon. Friends to reject the motion.

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

The House divided: Ayes 171, Noes 257.

Division No. 386]	[10 pm
AYES
Adams, Allen (Paisley N)	Conlan, Bernard
Alton, David	Corbett, Robin
Anderson, Donald	Craigen, J. M.
Archer, Rt Hon Peter	Crowther, Stan
Ashley, Rt Hon Jack	Cunningham, Dr John
Ashton, Joe	Dalyell, Tam
Atkinson, N. (Tottenham)	Davies, Rt Hon Denzil (L'lli)
Banks, Tony (Newham NW)	Davies, Ronald (Caerphilly)
Barnett, Guy	Davis, Terry (B'ham, H'ge H'l)
Barron, Kevin	Deakins, Eric
Beckett, Mrs Margaret	Dewar, Donald
Beith, A. J.	Dixon, Donald
Bell, Stuart	Dobson, Frank
Benn, Tony	Dormand, Jack
Bennett, A. (Dent'n & Red'sh)	Douglas, Dick
Bermingham, Gerald	Dubs, Alfred
Blair, Anthony	Duffy, A. E. P.
Boothroyd, Miss Betty	Dunwoody, Hon Mrs G.
Boyes, Roland	Eastham, Ken
Bray, Dr Jeremy	Evans, John (St. Helens N)
Brown, Gordon (D'f'mline E)	Fatchett, Derek
Brown, N. (N'c'tle-u-Tyne E)	Faulds, Andrew
Brown, R. (N'c'tle-u-Tyne N)	Field, Frank (Birkenhead)
Brown, Ron (E'burgh, Leith)	Fields, T. (L'pool Broad Gn)
Caborn, Richard	Fisher, Mark
Callaghan, Rt Hon J.	Flannery, Martin
Callaghan, Jim (Heyw'd & M)	Foot, Rt Hon Michael
Campbell-Savours, Dale	Forrester, John
Carter-Jones, Lewis	Foster, Derek
Clark, Dr David (S Shields)	Fraser, J. (Norwood)
Clarke, Thomas	Freeson, Rt Hon Reginald
Clay, Robert	Freud, Clement
Clwyd, Mrs Ann	Garrett, W. E.
Cohen, Harry	George, Bruce

Godman, Dr Norman	Oakes, Rt Hon Gordon
Golding, John	O'Brien, William
Gould, Bryan	O'Neill, Martin
Hamilton, James (M'well N)	Owen, Rt Hon Dr David
Hamilton, W. W. (Central Fife)	Park, George
Hancock, Mr. Michael	Pavitt, Laurie
Harman, Ms Harriet	Pendry, Tom
Harrison, Rt Hon Walter	Penhaligon, David
Hart, Rt Hon Dame Judith	Pike, Peter
Hattersley, Rt Hon Roy	Powell, Raymond (Ogmore)
Haynes, Frank	Prescott, John
Heffer, Eric S.	Rees, Rt Hon M. (Leeds S)
Hogg, N. (C'nauld & Kilsyth)	Richardson, Ms Jo
Holland, Stuart (Vauxhall)	Roberts, Allan (Bootle)
Howell, Rt Hon D. (S'heath)	Roberts, Ernest (Hackney N)
Hughes, Dr. Mark (Durham)	Robertson, George
Hughes, Robert (Aberdeen N)	Robinson, G. (Coventry NW)
Hughes, Roy (Newport East)	Rooker, J. W.
Hughes, Simon (Southwark)	Ross, Ernest (Dundee W)
Janner, Hon Greville	Rowlands, Ted
John, Brynmor	Ryman, John
Jones, Barry (Alyn & Deeside)	Sedgemore, Brian
Kaufman, Rt Hon Gerald	Sheerman, Barry
Kilroy-Silk, Robert	Sheldon, Rt Hon R.
Kirkwood, Archy	Shore, Rt Hon Peter
Lamond, James	Skinner, Dennis
Leadbitter, Ted	Smith, C.(Isl'ton S & F'bury)
Leighton, Ronald	Smith, Rt Hon J. (M'kl'ds E)
Lewis, Ron (Carlisle)	Snape, Peter
Lewis, Terence (Worsley)	Soley, Clive
Litherland, Robert	Spearing, Nigel
Lloyd, Tony (Stretford)	Steel, Rt Hon David
Lofthouse, Geoffrey	Stewart, Rt Hon D. (W Isles)
McCartney, Hugh	Straw, Jack
McDonald, Dr Oonagh	Thomas, Dafydd (Merioneth)
McKay, Allen (Penistone)	Thompson, J. (Wansbeck)
McKelvey, William	Thorne, Stan (Preston)
Mackenzie, Rt Hon Gregor	Tinn, James
McNamara, Kevin	Torney, Tom
McTaggart, Robert	Wainwright, R.
Madden, Max	Wallace, James
Marek, Dr John	Wardell, Gareth (Gower)
Marshall, David (Shettleston)	Wareing, Robert
Martin, Michael	Weetch, Ken
Mason, Rt Hon Roy	Welsh, Michael
Maynard, Miss Joan	Williams, Rt Hon A.
Meacher, Michael	Winnick, David
Meadowcroft, Michael	Wrigglesworth, Ian
Michie, William	Young, David (Bolton SE)
Mikardo, Ian
Millan, Rt Hon Bruce	Tellers for the Ayes:
Morris, Rt Hon A. (W'shawe)	Mr. John Home Robertson and Mr. John McWilliam.
Morris, Rt Hon J. (Aberavon)
Nellist, David

NOES
Aitken, Jonathan	Boyson, Dr Rhodes
Alexander, Richard	Braine, Sir Bernard
Alison, Rt Hon Michael	Brandon-Bravo, Martin
Amery, Rt Hon Julian	Bright, Graham
Amess, David	Brinton, Tim
Arnold, Tom	Brooke, Hon Peter
Ashby, David	Brown, M. (Brigg & Cl'thpes)
Aspinwall, Jack	Browne, John
Atkins, Robert (South Ribble)	Bruinvels, Peter
Baker, Nicholas (N Dorset)	Bryan, Sir Paul
Baldry, Anthony	Buck, Sir Antony
Bellingham, Henry	Budgen, Nick
Bendall, Vivian	Burt, Alistair
Benyon, William	Carlisle, John (N Luton)
Berry, Sir Anthony	Carlisle, Kenneth (Lincoln)
Biffen, Rt Hon John	Carttiss, Michael
Biggs-Davison, Sir John	Cash, William
Body, Richard	Channon, Rt Hon Paul
Bonsor, Sir Nicholas	Chapman, Sydney
Boscawen, Hon Robert	Churchill, W. S.
Bottomley, Peter	Clark, Hon A. (Plym'th S'n)
Bottomley, Mrs Virginia	Clark, Dr Michael (Rochford)
Bowden, A. (Brighton K'to'n)	Clark, Sir W. (Croydon S)
Bowden, Gerald (Dulwich)	Clarke, Rt Hon K. (Rushcliffe)

Clegg, Sir Walter	Madel, David
Colvin, Michael	Major, John
Conway, Derek	Malone, Gerald
Coombs, Simon	Maples, John
Cope, John	Marland, Paul
Couchman, James	Marlow, Antony
Cranborne, Viscount	Marshall, Michael (Arundel)
Currie, Mrs Edwina	Mather, Carol
Dicks, Terry	Mawhinney, Dr Brian
Dorrell, Stephen	Maxwell-Hyslop, Robin
Douglas-Hamilton, Lord J.	Mellor, David
Dover, Den	Merchant, Piers
du Cann, Rt Hon Edward	Meyer, Sir Anthony
Dunn, Robert	Miller, Hal (B'grove)
Durant, Tony	Mills, Iain (Meriden)
Dykes, Hugh	Mills, Sir Peter (West Devon)
Edwards, Rt Hon N. (P'broke)	Miscampbell, Norman
Eggar, Tim	Mitchell, David (NW Hants)
Emery, Sir Peter	Moate, Roger
Evennett, David	Molyneaux, Rt Hon James
Eyre, Sir Reginald	Monro, Sir Hector
Fairbairn, Nicholas	Montgomery, Fergus
Fallon, Michael	Moore, John
Farr, Sir John	Morrison, Hon C. (Devizes)
Favell, Anthony	Moynihan, Hon C.
Fletcher, Alexander	Murphy, Christopher
Fookes, Miss Janet	Needham, Richard
Forman, Nigel	Nelson, Anthony
Forth, Eric	Newton, Tony
Fowler, Rt Hon Norman	Nicholls, Patrick
Fox, Marcus	Normanton, Tom
Franks, Cecil	Norris, Steven
Fraser, Peter (Angus East)	Onslow, Cranley
Gale, Roger	Oppenheim, Philip
Gilmour, Rt Hon Sir Ian	Oppenheim, Rt Hon Mrs S.
Glyn, Dr Alan	Ottaway, Richard
Goodhart, Sir Philip	Page, Richard (Herts SW)
Goodlad, Alastair	Parkinson, Rt Hon Cecil
Greenway, Harry	Parris, Matthew
Griffiths, E. (B'y St Edm'ds)	Patten, Christopher (Bath)
Hamilton, Hon A. (Epsom)	Patten, John (Oxford)
Hamilton, W. W. (Central Fife)	Pattie, Geoffrey
Hannam, John	Pawsey, James
Hargreaves, Kenneth	Peacock, Mrs Elizabeth
Haselhurst, Alan	Percival, Rt Hon Sir Ian
Hayes, J.	Porter, Barry
Hayhoe, Barney	Powell, Rt Hon J. E. (S Down)
Heddle, John	Powell, William (Corby)
Heseltine, Rt Hon Michael	Powley, John
Hicks, Robert	Prentice, Rt Hon Reg
Higgins, Rt Hon Terence L.	Price, Sir David
Hind, Kenneth	Prior, Rt Hon James
Holland, Sir Philip (Gedling)	Proctor, K. Harvey
Hordern, Peter	Raffan, Keith
Howard, Michael	Rathbone, Tim
Irving, Charles	Rees, Rt Hon Peter (Dover)
Johnson-Smith, Sir Geoffrey	Renton, Tim
Jones, Robert (W Herts)	Rhodes James, Robert
Jopling, Rt Hon Michael	Rhys Williams, Sir Brandon
King, Rt Hon Tom	Ridley, Rt Hon Nicholas
Knox, David	Ridsdale, Sir Julian
Lamont, Norman	Roberts, Wyn (Conwy)
Lang, Ian	Roe, Mrs Marion
Lawrence, Ivan	Ross, Wm. (Londonderry)
Lawson, Rt Hon Nigel	Rossi, Sir Hugh
Lennox-Boyd, Hon Mark	Rowe, Andrew
Lester, Jim	Rumbold, Mrs Angela
Lewis, Sir Kenneth (Stamf'd)	Ryder, Richard
Lightbown, David	Sackville, Hon Thomas
Lilley, Peter	Sainsbury, Hon Timothy
Lloyd, Ian (Havant)	Sayeed, Jonathan
Lloyd, Peter, (Fareham)	Shaw, Giles (Pudsey)
Lord, Michael	Shaw, Sir Michael (Scarb')
Luce, Richard	Shelton, William (Streatham)
Lyell, Nicholas	Shepherd, Richard (Aldridge)
McCrindle, Robert	Shersby, Michael
McCurley, Mrs Anna	Silvester, Fred
MacKay, Andrew (Berkshire)	Sims, Roger
McNair-Wilson, P. (New F'st)	Soames, Hon Nicholas
McQuarrie, Albert	Speed, Keith

Spencer, Derek	Waddington, David
Spicer, Jim (W Dorset)	Wakeham, Rt Hon John
Spicer, Michael (S Worcs)	Walden, George
Squire, Robin	Walker, Bill (T'side N)
Stanbrook, Ivor	Walker, Rt Hon P. (W'cester)
Stern, Michael	Waller, Gary
Stevens, Lewis (Nuneaton)	Ward, John
Stevens, Martin (Fulham)	Wardle, C. (Bexhill)
Stewart, Allan (Eastwood)	Warren, Kenneth
Stokes, John	Watson, John
Stradling Thomas, J.	Watts, John
Sumberg, David	Wells, Bowen (Hertford)
Taylor, John (Solihull)	Wells, Sir John (Maidstone)
Taylor, Teddy (S'end E)	Wheeler, John
Tebbit, Rt Hon Norman	Whitfield, John
Temple-Morris, Peter	Winterton, Mrs Ann
Terlezki, Stefan	Winterton, Nicholas
Thomas, Rt Hon Peter	Wolfson, Mark
Thompson, Donald (Calder V)	Wood, Timothy
Thompson, Patrick (N'ich N)	Woodcock, Michael
Thorne, Neil (Ilford S)	Yeo, Tim
Thurnham, Peter	Young, Sir George (Acton)
Tracey, Richard
Twinn, Dr Ian	Tellers for the Noes:
van Straubenzee, Sir W.	Mr. Michael Neubert and Mr. Douglas Hogg.
Vaughan, Sir Gerard

Question accordingly negatived.

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

The House divided: Ayes 256, Noes 169.

Division No. 387]	[10.12 pm
AYES
Aitken, Jonathan	Chapman, Sydney
Alexander, Richard	Churchill, W. S.
Alison, Rt Hon Michael	Clark, Hon A. (Plym'th S'n)
Amery, Rt Hon Julian	Clark, Dr Michael (Rochford)
Amess, David	Clark, Sir W. (Croydon S)
Arnold, Tom	Clarke, Rt Hon K. (Rushcliffe)
Ashby, David	Clegg, Sir Walter
Aspinwall, Jack	Colvin, Michael
Atkins, Rt Hon Sir H.	Conway, Derek
Baker, Nicholas (N Dorset)	Coombs, Simon
Baldry, Anthony	Cope, John
Bellingham, Henry	Couchman, James
Bendall, Vivian	Cranborne, Viscount
Benyon, William	Currie, Mrs Edwina
Berry, Sir Anthony	Dicks, Terry
Biffen, Rt Hon John	Dorrell, Stephen
Biggs-Davison, Sir John	Douglas-Hamilton, Lord J.
Body, Richard	Dover, Den
Bonsor, Sir Nicholas	du Cann, Rt Hon Edward
Boscawen, Hon Robert	Dunn, Robert
Bottomley, Peter	Durant, Tony
Bottomley, Mrs Virginia	Dykes, Hugh
Bowden, A. (Brighton K'to'n)	Edwards, Rt Hon N. (P'broke)
Bowden, Gerald (Dulwich)	Eggar, Tim
Boyson, Dr Rhodes	Emery, Sir Peter
Braine, Sir Bernard	Evennett, David
Brandon-Bravo, Martin	Eyre, Sir Reginald
Bright, Graham	Fairbairn, Nicholas
Brinton, Tim	Fallon, Michael
Brooke, Hon Peter	Farr, Sir John
Brown, M. (Brigg & Cl'thpes)	Favell, Anthony
Browne, John	Fletcher, Alexander
Bruinvels, Peter	Fookes, Miss Janet
Bryan, Sir Paul	Forman, Nigel
Buck, Sir Antony	Forth, Eric
Budgen, Nick	Fowler, Rt Hon Norman
Bulmer, Esmond	Fox, Marcus
Burt, Alistair	Franks, Cecil
Carlisle, John (N Luton)	Fraser, Peter (Angus East)
Carlisle, Kenneth (Lincoln)	Gale, Roger
Carttiss, Michael	Gilmour, Rt Hon Sir Ian
Cash, William	Glyn, Dr Alan
Channon, Rt Hon Paul	Goodhart, Sir Philip

Goodlad, Alastair	Parkinson, Rt Hon Cecil
Greenway, Harry	Parris, Matthew
Griffiths, E. (B'y St Edm'ds)	Patten, Christopher (Bath)
Hamilton, Hon A. (Epsom)	Patten, John (Oxford)
Hamilton, Neil (Tatton)	Pattie, Geoffrey
Hannam, John	Pawsey, James
Hargreaves, Kenneth	Peacock, Mrs Elizabeth
Haselhurst, Alan	Percival, Rt Hon Sir Ian
Hayes, J.	Porter, Barry
Hayhoe, Barney	Powell, Rt Hon J. E. (S Down)
Heddle, John	Powell, William (Corby)
Heseltine, Rt Hon Michael	Powley, John
Hicks, Robert	Prentice, Rt Hon Reg
Higgins, Rt Hon Terence L.	Price, Sir David
Hind, Kenneth	Prior, Rt Hon James
Hogg, Hon Douglas (Gr'th'm)	Proctor, K. Harvey
Holland, Sir Philip (Gedling)	Raffan, Keith
Hordern, Peter	Rathbone, Tim
Howard, Michael	Rees, Rt Hon Peter (Dover)
Irving, Charles	Renton, Tim
Johnson-Smith, Sir Geoffrey	Rhodes James, Robert
Jones, Robert (W Herts)	Rhys Williams, Sir Brandon
Jopling, Rt Hon Michael	Ridley, Rt Hon Nicholas
King, Rt Hon Tom	Ridsdale, Sir Julian
Knox, David	Roberts, Wyn (Conwy)
Lamont, Norman	Roe, Mrs Marion
Lang, Ian	Ross, Wm. (Londonderry)
Lawrence, Ivan	Rossi, Sir Hugh
Lawson, Rt Hon Nigel	Rowe, Andrew
Lennox-Boyd, Hon Mark	Rumbold, Mrs Angela
Lester, Jim	Ryder, Richard
Lewis, Sir Kenneth (Stamf'd)	Sackville, Hon Thomas
Lightbown, David	Sayeed, Jonathan
Lilley, Peter	Shaw, Giles (Pudsey)
Lloyd, Ian (Havant)	Shaw, Sir Michael (Scarb')
Lloyd, Peter, (Fareham)	Shelton, William (Streatham)
Lord, Michael	Shepherd, Richard (Aldridge)
Luce, Richard	Shersby, Michael
Lyell, Nicholas	Silvester, Fred
McCrindle, Robert	Sims, Roger
McCurley, Mrs Anna	Soames, Hon Nicholas
MacKay, Andrew (Berkshire)	Speed, Keith
McNair-Wilson, P. (New F'st)	Spencer, Derek
McQuarrie, Albert	Spicer, Jim (W Dorset)
Madel, David	Spicer, Michael (S Worcs)
Major, John	Squire, Robin
Maples, John	Stanbrook, Ivor
Marland, Paul	Stern, Michael
Marlow, Antony	Stevens, Lewis (Nuneaton)
Marshall, Michael (Arundel)	Stevens, Martin (Fulham)
Mather, Carol	Stewart, Allan (Eastwood)
Mawhinney, Dr Brian	Stokes, John
Maxwell-Hyslop, Robin	Stradling Thomas, J.
Mellor, David	Sumberg, David
Merchant, Piers	Taylor, John (Solihull)
Meyer, Sir Anthony	Taylor, Teddy (S'end E)
Miller, Hal (B'grove)	Tebbit, Rt Hon Norman
Mills, Iain (Meriden)	Temple-Morris, Peter
Mills, Sir Peter (West Devon)	Terlezki, Stefan
Miscampbell, Norman	Thomas, Rt Hon Peter
Mitchell, David (NW Hants)	Thompson, Donald (Calder V)
Moate, Roger	Thompson, Patrick (N'ich N)
Molyneaux, Rt Hon James	Thorne, Neil (Ilford S)
Monro, Sir Hector	Thurnham, Peter
Montgomery, Fergus	Tracey, Richard
Moore, John	Twinn, Dr Ian
Morrison, Hon C. (Devizes)	van Straubenzee, Sir W.
Moynihan, Hon C.	Vaughan, Sir Gerard
Murphy, Christopher	Waddington, David
Needham, Richard	Wakeham, Rt Hon John
Nelson, Anthony	Walden, George
Newton, Tony	Walker, Bill (T'side N)
Nicholls, Patrick	Walker, Rt Hon P. (W'cester)
Normanton, Tom	Waller, Gary
Norris, Steven	Ward, John
Onslow, Cranley	Wardle, C. (Bexhill)
Oppenheim, Philip	Warren, Kenneth
Oppenheim, Rt Hon Mrs S.	Watson, John
Ottaway, Richard	Watts, John
Page, Richard (Herts SW)	Wells, Bowen (Hertford)

Wells, Sir John (Maidstone)	Woodcock, Michael
Wheeler, John	Yeo, Tim
Whitfield, John	Young, Sir George (Acton)
Winterton, Mrs Ann
Winterton, Nicholas	Tellers for the Ayes:
Wolfson, Mark	Mr. Tim Sainsbury and Mr. Michael Neubert.
Wood, Timothy

NOES
Adams, Allen (Paisley N)	Harman, Ms Harriet
Alton, David	Harrison, Rt Hon Walter
Anderson, Donald	Hart, Rt Hon Dame Judith
Archer, Rt Hon Peter	Hattersley, Rt Hon Roy
Ashley, Rt Hon Jack	Heffer, Eric S.
Ashton, Joe	Hogg, N. (C'nauld & Kilsyth)
Atkinson, N. (Tottenham)	Holland, Stuart (Vauxhall)
Banks, Tony (Newham NW)	Home Robertson, John
Barnett, Guy	Howell, Rt Hon D. (S'heath)
Barron, Kevin	Hughes, Dr. Mark (Durham)
Beckett, Mrs Margaret	Hughes, Robert (Aberdeen N)
Beith, A. J.	Hughes, Roy (Newport East)
Bell, Stuart	Hughes, Simon (Southwark)
Benn, Tony	Janner, Hon Greville
Bennett, A. (Dent'n & Red'sh)	John, Brynmor
Bermingham, Gerald	Jones, Barry (Alyn & Deeside)
Blair, Anthony	Kaufman, Rt Hon Gerald
Boothroyd, Miss Betty	Kilroy-Silk, Robert
Boyes, Roland	Kirkwood, Archy
Bray, Dr Jeremy	Lamond, James
Brown, Gordon (D'f'mline E)	Leadbitter, Ted
Brown, N. (N'c'tle-u-Tyne E)	Leighton, Ronald
Brown, R. (N'c'tle-u-Tyne N)	Lewis, Ron (Carlisle)
Brown, Ron (E'burgh, Leith)	Lewis, Terence (Worsley)
Caborn, Richard	Litherland, Robert
Callaghan, Rt Hon J.	Lloyd, Tony (Stretford)
Callaghan, Jim (Heyw'd & M)	Lofthouse, Geoffrey
Carter-Jones, Lewis	McCartney, Hugh
Clark, Dr David (S Shields)	McDonald, Dr Oonagh
Clarke, Thomas	McKay, Allen (Penistone)
Clay, Robert	McKelvey, William
Clwyd, Mrs Ann	Mackenzie, Rt Hon Gregor
Cohen, Harry	McNamara, Kevin
Conlan, Bernard	McTaggart, Robert
Corbett, Robin	McWilliam, John
Craigen, J. M.	Madden, Max
Crowther, Stan	Marek, Dr John
Cunningham, Dr John	Marshall, David (Shettleston)
Dalyell, Tam	Martin, Michael
Davies, Ronald (Caerphilly)	Mason, Rt Hon Roy
Davis, Terry (B'ham, H'ge H'l)	Maynard, Miss Joan
Deakins, Eric	Meacher, Michael
Dewar, Donald	Meadowcroft, Michael
Dobson, Frank	Michie, William
Dormand, Jack	Mikardo, Ian
Douglas, Dick	Millan, Rt Hon Bruce
Dubs, Alfred	Morris, Rt Hon A. (W'shawe)
Duffy, A. E. P.	Morris, Rt Hon J. (Aberavon)
Dunwoody, Hon Mrs G.	Nellist, David
Eastham, Ken	Oakes, Rt Hon Gordon
Evans, John (St. Helens N)	O'Brien, William
Fatchett, Derek	O'Neill, Martin
Faulds, Andrew	Owen, Rt Hon Dr David
Field, Frank (Birkenhead)	Park, George
Fields, T. (L'pool Broad Gn)	Pavitt, Laurie
Fisher, Mark	Pendry, Tom
Flannery, Martin	Penhaligon, David
Foot, Rt Hon Michael	Pike, Peter
Forrester, John	Powell, Raymond (Ogmore)
Foster, Derek	Prescott, John
Fraser, J. (Norwood)	Rees, Rt Hon M. (Leeds S)
Freeson, Rt Hon Reginald	Richardson, Ms Jo
Freud, Clement	Roberts, Allan (Bootle)
Garrett, W. E.	Roberts, Ernest (Hackney N)
George, Bruce	Robertson, George
Godman, Dr Norman	Robinson, G. (Coventry NW)
Golding, John	Rooker, J. W.
Gould, Bryan	Ross, Ernest (Dundee W)
Hamilton, James (M'well N)	Rowlands, Ted
Hamilton, W. W. (Central Fife)	Ryman, John
Hancock, Mr. Michael	Sedgemore, Brian

Sheerman, Barry	Torney, Tom
Sheldon, Rt Hon R.	Wainwright, R.
Shore, Rt Hon Peter	Wallace, James
Skinner, Dennis	Wardell, Gareth (Gower)
Smith, C.(Isl'ton S & F'bury)	Wareing, Robert
Smith, Rt Hon J. (M'kl'ds E)	Weetch, Ken
Snape, Peter	Welsh, Michael
Soley, Clive	Williams, Rt Hon A.
Spearing, Nigel	Winnick, David
Steel, Rt Hon David	Wrigglesworth, Ian
Stewart, Rt Hon D. (W Isles)	Young, David (Bolton SE)
Straw, Jack
Thomas, Dafydd (Merioneth)	Tellers for the Noes:
Thompson, J. (Wansbeck)	Mr. Frank Haynes and Mr. Don Dixon.
Thorne, Stan (Preston)
Tinn, James

Question accordingly agreed to.

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

Resolved, That this House welcomes the continuing economic recovery and falling inflation, supports the Government's economic and social policies as the best means of encouraging enterprise and promoting prosperity throughout the community, and applauds the Government's commitment to the transfer of power and wealth from the State to the individual.