Income and Wealth Distribution

HC Deb 16 June 1988 vol 135 cc552-4

1. Mr. Tom Clarke

To ask the Chancellor of the Exchequer what is his policy on income and wealth distribution in the light of the Church of Scotland study entitled "Just Sharing", a copy of which has been sent to him.

The Chief Secretary to the Treasury (Mr. John Major)

The Government's policy is to create the conditions in which everybody can increase their incomes and acquire wealth.

Mr. Clarke

Is the Chancellor of the Exchequer not replying to this question himself because he knows that the facts revealed in "Just Sharing" show that there is a growing and worsening problem of poverty? Does the Minister accept that recent information has made it clear that the consequences for 300,000 children losing their school meals are quite dire? Will the Minister encourage the Chancellor of the Exchequer to set aside his complacency and respond to the pleas of the Churches and many others to give priority to the restoration of the £800 million that he raided from the social security budget, with dire consequences for the under-privileged?

Mr. Major

I cannot accept what the hon. Gentleman has said. As he is well aware, compensation for the loss of free school meals was included in family credit at the time of the reforms.

Mr. Forth

Is my right hon. Friend aware that the Scots already enjoy a disproportionate amount of the wealth of the United Kingdom? Is he further aware that, for example, health expenditure in Scotland is 25 per cent. per head higher than in England? Is he also aware that the Scots enjoy the second highest average earnings in the United Kingdom, apart from London and the south-east? Will he report those facts to the Church of Scotland when making his balanced response to its report?

Mr. Major

My hon. Friend makes his points entirely clearly and accurately. I am sure that the Church of Scotland will note his comments. It is the case that in its share of public expenditure and in its economic performance at the moment, Scotland is doing extremely well.

Mr. Worthington

Is it not disgraceful, given the Chancellor of the Exchequer's objectives of wanting all to share in the wealth of the country, that if someone with a wife and two children aged eight and 11 had an increase in income from £60 to £150 a week he would be able to retain only £12?

Mr. Major

As a result of my right hon. Friend's tax changes in this and previous Budgets it is undoubtedly the fact that at all levels of income there is a higher level of net disposable income than before my right hon. Friend became Chancellor of the Exchequer.

Mr. Gerald Howarth

Does my right hon. Friend agree that the question shows that the Opposition parties are utterly obsessed with the distribution of wealth, that they have no concern for the creation of wealth, and that all their policies are designed to destroy the creation of wealth?

Mr. Major

If one looks at the record it is clear that that has certainly been the practical effect of policies that the Opposition have put into practice when in government. The distribution of wealth is legitimately a matter for debate. It is regrettable that "Just Sharing" simply refers to the distribution of wealth, not to the creation of it.

Mr. Gordon Brown

Given the Government's complacent and so far wholly shameful response to the pleas of the Churches on poverty and social justice, will the Minister tell the Churches how he justifies a state charity social fund which transfers the responsibility or relieving poverty from Ministers to charities and voluntary organisations, while at the same time someone in the top 1 per cent. with an income above £50,000 a year has gained on average a total of £110,000 in tax cuts since 1979? Does he agree that the real motto of this Government is not, as they would like us to believe, "God helps those who help themselves", but, as Ministers know very well, "God helps those whom he has already helped" even at the expense of fairness to the rest of the community?

Mr. Major

The hon. Gentleman is misleading in a number of his remarks. Before we can share any wealth, it must be created. It is precisely because of our success in creating wealth in this country that this year we are spending about £481½ billion on social security benefits. With regard to the distribution of wealth, it is a matter of fact that the top 1 per cent. have a noticeably smaller share of the total wealth in this country today than a few years ago.

Mr. Burns

With regard to the study by the Church of Scotland, does my right hon. Friend accept that the Church should address itself to religious matters instead of interfering in the economy? Does he also accept that my right hon. Friend the Chancellor of the Exchequer is better trained and far more successful in handling that kind of thing than is the Church?

Mr. Major

I certainly echo the points that my hon. Friend has made about the success of my right hon. Friend the Chancellor of the Exchequer. It is a matter of record that "Just Sharing" concentrates substantially on distribution, although, of course, I must state that it is also concerned with ethical and moral questions.