§ 2. Mr. Nicholas Bennett
To ask the Chancellor of the Exchequer what was the growth of real personal disposable income for the latest full year for which figures are available.
§ The Paymaster General (Mr. Peter Brooke)
Real personal disposable income is estimated to have grown by 5 per cent. in 1988.
§ Mr. Bennett
I thank my right hon. Friend for his reply. Can he confirm that under the Government real disposable 353 income has risen by about one third, partly as a result of the Government's tax-cutting policies, and has he any calculation of the effect on real disposable personal income if Labour's policies were put into effect?
§ Mr. Brooke
My hon. Friend's first point is correct, in the context of the real take-home pay of a married man with two children who is on male average earnings. As for the second point, we know so little about Labour's policies that any observation of mine would be purely speculative—which strikes me as an appropriate adjective to apply to the policies.
§ Ms. Short
Does the Minister agree that not everyone has received a 5 per cent. increase as there has been enormous inequality in its distribution? Is he aware that the worst-paid 20 per cent. in society are increasingly worse off and we are becoming a more unequal society? Does that not concern him? Does he not think that the Government ought to look at the provisions made right across Europe for some national minimum wage rather than allowing inequality to grow in Britain?
§ Mr. Brooke
The hon. Lady is not well informed in the first part of her question. Perhaps she should put in a little more research in future. As to the second part of her question, that proposal is contained in the social charter, on which the Conservative party looks forward to vigorous debate.
§ Mr. John Marshall
Does my right hon. Friend agree that minimum wage legislation would create unemployment in this country? Does he further agree that the percentage of gross domestic product being spent on the elderly is higher in Britain than in 10 of the other Community countries?
§ Dr. Marek
The Paymaster General will know that in calculating real personal disposable income, interest paid to savers is offset by mortgage interest paid to building societies. Does he accept that generally speaking the saver with £30,000 in a building society is not the same person who has to borrow £30,000 to finance the purchase of a house? Will he now admit how much real personal disposable income has been lost in the past year by the man or woman with an average mortgage?
§ Mr. Brooke
The hon. Member for Wrexham (Dr. Marek) is broadly speaking correct in his surmise about the unlikelihood of coincidence. As to the second part of his question, he knows very well that the policy pursued by my right hon. Friend the Chancellor to bring down inflation is directed specifically to that aim and my right hon. Friend has said that when inflation visibly comes down, interest rates will follow.