Commons Sitting of 3 April 1990

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]

PRIVATE BUSINESS
HEATHROW EXPRESS RAILWAY BILL [Lords]
Order for Second Reading read.
To be read a Second time on Thursday 19 April.

Oral Answers to Questions
  DEFENCE

    Foxhunter Radar
    Mr. Haynes: To ask the Secretary of State for Defence whether the Foxhunter radar is currently performing according to its original specifications.
    The Minister of State for Defence Procurement (Mr. Alan Clark): The Foxhunter programme is proceeding by way of staged improvements under a firm price contract. Radars to an agreed interim standard are already being fitted to the Tornado air defence variant. All radars will be brought up to the full technical standard, beginning next year.
    Mr. Haynes: I do not know what this lot are messing about at. They have been at it for a number of years and have spent millions of pounds, yet we do not have the proper radar for the defence of this nation. They should be here at the Bar, and Ministers should be charged with complicity.
    Mr. Clark: The hon. Gentleman did not ask a question. In so far as his statement meant anything, he was wholly incorrect. We are at great pains to ensure that the proper radar is regularly upgraded. The agreed interim standard radars have been fitted and radars to the full technical standard will start next year.
    Mr. Bill Walker: Does my hon. Friend agree that the air defence version of the Tornado, even equipped with its present radar, is a formidable piece of defence equipment and that when the radar is made to function properly, it will be the finest of its type anywhere?
    Mr. Clark: Of course, it is. The system in service, even with radar to the agreed interim standard, is enjoying a successful export demand.

    Tain Bombing Range
    Mr. Kennedy: To ask the Secretary of State for Defence if he will make a statement on progress towards a noise evaluation survey in the vicinity of Tain bombing range, Ross-shire.
    The Parliamentary Under-Secretary of State for Defence Procurement (Mr. Michael Neubert): The noise survey at RAF Tain is scheduled to begin on 7 May and will continue for two weeks. A meeting has been arranged between officials of my Department and Ross and Cromarty district council to discuss the survey in detail and to select the location of measurement sites.
    Mr. Kennedy: I thank the Minister for that reply. I must express some concern over the letter to me from the Minister of State for the Armed Forces some months ago. He said that this welcome and long overdue noise evaluation survey would take place, but I am concerned about the time scale that the Department seems to envisage. The Minister said that there will be a meeting. Is there now a revised time scale that may lead to decisions and, I hope, to grants for noise insulation being made earlier to the community? A recent example of the problem is Inver primary school in a village over which much low flying takes place. The infant pupils are housed in a Portakabin that has no sound-proofing, so the pupils suffer significant disruption from low-flying military jets. That has a detrimental educational effect and it terrifies the children.
    Mr. Neubert: The survey at Tain is being given a high priority amid an extensive programme to survey 40 military airfields. The proposal for the first survey in May should lead to a report being made in about spring next year. It takes time to evaluate the data accumulated by such surveys. I assure the hon. Gentleman that the survey will be prosecuted as fast as possible, although it depends, of course, on good flying weather.
    Mr. Ian Bruce: Will my hon. Friend say something about the general attitude of the Ministry of Defence to compensating people in the vicinity of bombing and gunnery ranges? There are sites all round the country, including Lulworth gunnery range in my constituency. The people understand the need for noise and explosions, but they are always concerned about damage to their property and about compensation from the Ministry of Defence.
    Mr. Neubert: Limited resources of staff and equipment are available to undertake surveys. The decision to undertake such a survey at Tain shows the Ministry's wish to relieve the impact of noise on local communities and, where appropriate, to pay compensation.

    Services (Premature Discharge)
    Mr. Hardy: To ask the Secretary of State for Defence how many individuals have applied for premature discharge from each of the services in the last six months.
    The Minister of State for the Armed Forces (Mr. Archie Hamilton): In the six months from August 1989 to January 1990 a total of 1,947 personnel from the Royal Navy and Royal Marines, 2,461 Army personnel and 2,974 Royal Air Force personnel applied to leave prematurely.
    Mr. Hardy: Does the Minister accept that two steps need to be taken urgently? First, to deal with the uncertainty in the services, we should embark on a serious and thorough defence review; secondly, we should recognise that the anger and anxiety about pay has been exacerbated by the odious poll tax, as service men realise that the private and the general will pay the same.
    Mr. Hamilton: I hear what the hon. Gentleman says, but we already survey the reasons why people leave early or have applied to do so. The main reasons are the effect on family life, the lack of job satisfaction and the expected prospects outside the services—the latter being all to do with the flourishing economy in which we live.
    Sir John Stokes: Will my hon. Friend arrange for commanding officers of the units in the forces to tell those serving under their command that there is still a worthwhile and vital job to be done in the armed service of the Crown, now and for many years hereafter?
    Mr. Hamilton: I shall certainly make sure that my hon. Friend's sentiments are transmitted to the officers in command of the services. A great effort is made, when service men say that they want to leave, to talk to them and find out their reasons for leaving, and to do all that we can to persuade them to stay.
    Mr. O'Neill: Does the Minister of State appreciate that when The Daily Telegraph, the day after the publication of the Defence White Paper, chooses as the subject of its leader the inescapable reality of the dissatisfaction in the ranks, there must be something seriously wrong with the morale, pay and conditions of the people who serve us? Can he do something about that quickly, provide decent pay and conditions and improve the morale of the forces on whom we depend?
    Mr. Hamilton: It is clearly accepted by the armed forces that we are dealing with the problems of the future; they know that we shall come forward with plans before long. One question that I am often asked when I visit the armed forces is whether there is a chance of a Labour Government coming to power, because they know that that would have a much more dramatic effect on their future than anything else.
    Sir William Clark: Will the review include the provision of, and help with, housing for service men who leave the service?
    Mr. Hamilton: As my hon. Friend knows, much work has been done on housing for service men. We have introduced a scheme under which houses will be put into a housing association, which will in turn make them available. Progress is being made on the scheme and I hope that we can build on it.

    SGL Defence Ltd.
    Mr. Douglas: To ask the Secretary of State for Defence what information his Department has available in relation to SGL Defence Ltd.; what is the number of meetings which he has had with representatives of this company; and what were the topics discussed.
    Mr. Alan Clark: I understand that SGL Defence Ltd. is a recently formed public relations company which intends to specialise in defence. Neither I nor my right hon. Friend have had meetings with anyone representing the company.
    Mr. Douglas: I am grateful for that reply, but is the Minister aware that the Chairman of the Select Committee on Defence is a consultant to that company? Although he may not be transgressing any of the House's arrangements, may I take it that every time the Select Committee has met since January, the Chairman has declared an interest in SGL Defence Ltd. to Front-Bench spokesmen and to the Department? If not, how should I take the letter sent to me today by the Minister in which he says that the public interest is being well served? If Ministers have not been aware of this association, how is the public interest being protected? Are Ministers being circumspect in the evidence that they give to the Select Committee and in the information that they give to the individual concerned?
    Mr. Clark: It is not for me to pass judgment on the conduct of the Chairman of the Committee or on the extent to which he is revealing or inadvertently concealing any interest. That is purely a matter for the House of Commons. All that I can tell the hon. Gentleman and the House is that at no time in any of the meetings that I and my right hon. Friend have had with the Chairman of the Committee has he lobbied or proselytised for anyone.
    Mr. Campbell-Savours: Is the Minister aware that the brochure for SGL Defence Ltd. says:
    "Our experience will greatly improve a company's capacity to influence operational requirements to win contracts in the face of national and international competition"?
    As it is wrong for a company that can make that statement to hire a Member of Parliament as a consultant, why does not the Minister condemn it now from the Dispatch Box?
    Mr. Clark: Such companies tend to overrate their ability to persuade Ministers. Decisions on defence procurement matters are taken primarily on the basis of value for money. I am always prepared to listen to hon. Members about their constituency interests, but I would not pay the slightest attention to an hon. Member, however distinguished and however distinguished his position in the House, in any other context.
    Sir Geoffrey Johnson Smith: On a point of order, Mr. Speaker. As these questions are House of Commons matters, is not it a matter for the Select Committee on Members' Interests, of which I am Chairman?
    Mr. Speaker: Absolutely so. I hope that when attacks of this nature are made on hon. Members, they are given notice.
    Mr. Douglas: On a point of order, Mr. Speaker.
    Mr. Speaker: What is the point of order?
    Mr. Douglas: With great respect, you, Mr. Speaker, above all others are well aware that I have pursued this matter through letters to you, to the Select Committee on Members' Interests and to the Committee of Selection. I gave notice to the hon. Member for Hampshire, East (Mr. Mates). The reason why he is not here is that he is spending £15,000 of public money on a trip abroad.

    FI5E Aircraft
    Mr. Flannery: To ask the Secretary of State for Defence what decisions have been taken on basing the FI5E aircraft in the United Kingdom.
    Mr. Archie Hamilton: None, Sir.
    Mr. Flannery: Despite that monosyllabic, negative answer, is not it a fact that the United States has surveyed RAF Bentwaters between Sizewell and Bradwell and that work will begin in June? Is not the FI5E—a new nuclear strike bomber—being planned at a time when east-west tension is falling and defence cuts are occurring in eastern Europe and the Soviet Union? Why do we need another bomber of that nature after all this time and when tension is decreasing? Who is ordering it and why?
    Mr. Hamilton: The United States air force may have surveyed the site with the intention of putting a simulator there. No decision has been taken to build the simulator and work will not start in June. That report is incorrect. Consideration is being given to the deployment of FI5Es at that site because we are looking to reallocate our resources in the light of flexible response, which has served us well in the past and, I am sure, will continue to do so.
    Mr. John Marshall: Does my hon. Friend notice a degree of hypocrisy in calls for value for money from well-known tax-dodgers in the Opposition?
    Mr. Speaker: Order. It is for the Minister to answer, but such questions do not lead to good relations in the Chamber.
    Mr. Hamilton: I do not wish to follow that sentiment too far, but hypocrisy is a problem that we have always found with Opposition Members.
    Mr. Speaker: Order. The Minister must withdraw that allegation.
    Mr. Hamilton: I withdraw it at once.

    German Unification
    Mr. Wigley: To ask the Secretary of State for Defence what discussions took place at the Anglo-German summit on 30 March on the effect of German reunification on British defence policy especially in terms of (a) land-based short-range nuclear missiles and (b) air-launched nuclear missiles.
    The Secretary of State for Defence (Mr. Tom King)rose—[Interruption.]
    Mr. Speaker: Order. Let us settle down.
    Mr. King: Our discussions confirm that there was full agreement between the British and Federal German Governments on the following: that a united Germany should remain in NATO; that allied forces should remain in Germany; and that NATO nuclear weapons should continue to be based there. Chancellor Kohl made clear at the press conference his belief in the need for the full protection of NATO for the territory of Germany.
    Mr. Wigley: As the range of the Lance missile is 110 km and as, at its narrowest point, East Germany is 160 km wide, does the Secretary of State accept that those weapons, if they remained in West German territory,
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    could be trained only on East Germany or Czechoslovakia? They would be of use further eastwards only if they were based in East German territory. Will the right hon. Gentleman comment on the report in The Guardian that the Government are now not insisting on renewing those weapons? Can he give an undertaking that they will be brought into the negotiations on removing nuclear missiles in Europe?
    Mr. King: The hon. Gentleman could not have heard the end of my reply. At the press conference following the Anglo-German summit Chancellor Kohl and the Prime Minister reaffirmed the need for nuclear weapons. In my answer I said that nuclear weapons should continue to be based in Germany. The hon. Gentleman will be aware that that matter was covered by the comprehensive concept agreed by the alliance in May 1989. Those matters do not need to be reviewed until 1992 and that is a sensible arrangement. Obviously these things must be worked out, but Chancellor Kohl has made it absolutely clear that he does not want Germany to be singularised in this respect. I have already quoted his belief in the need for the
    "full protection of NATO for the territory of Germany."
    Mr. Brazier: Does my right hon. Friend agree that those weapons play a particularly important political stabilising role vis-a-vis the unease on the other side of the iron curtain? As long as those weapons exist it will never be in anyone's interest to start a conventional war. It is no accident that we have had 45 years of peace in Europe while they have been around.
    Mr. King: In one sense, we have had 45 years of confrontation, which looks as though it is coming to an end. It is hoped that there will be a much more sensible and constructive relationship between east and west. If that is achieved and the more evil aspects of communism are defeated, as they have been throughout east European countries, one must ask why that will have happened without a shot being fired and without the millions of casualties that marked the two previous world wars. It must be because we stood by the policy of nuclear deterrence and flexible response which have proved triumphantly successful.
    Mr. Foot: Talking of defence prospects generally, as I suppose Ministers did at the summit, is the right hon. Gentleman aware that he has just achieved the astonishing feat, in 1990, of producing a defence White Paper which, as far as I can discover, does not make a single reference to the non-proliferation treaty and the Government's obligations under it? Does that mean that the Government have given up any duty to carry out the obligations that the country undertook when making that treaty?
    Mr. King: The right hon. Gentleman may wish to reflect on what he has said and consider in particular the matters that we included in the White Paper, well before the events at Heathrow last week. We warned specifically of the current dangers posed by some signatories to the non-proliferation treaty, who appear to have embarked on an attempt to achieve nuclear technology, and of the dangers of expansion of missile capability among no fewer than 11 developing countries. The right hon. Gentleman's response to all such dangers is that we should give up our defences for a start.
    Mr. Conway: Where does my right hon. Friend suppose that the nuclear missiles situated in Warsaw pact countries are pointed?
    Mr. King: It is significant that in the past year—Mr. Gorbachev's fifth year of office—the Soviet Union has deployed 450 new nuclear missiles. Although I believe that that is not a new policy, but an old one which has not yet been corrected and stopped, the missile threat is greater than it has ever been. We hope and believe strongly that the intention to use them is the least that it has ever been, but those weapons are a powerful reminder of the dangers from the present hardware of the Soviet Union.
    Mr. Menzies Campbell: Does the Minister accept that the rationale for short-range nuclear weapons is that the west might be willing to indulge in nuclear war fighting? In the light of the changes in eastern Europe, will the Minister explain the circumstances in which he thinks that might be possible? Is not it time to recognise the political reality—that by 1992 there will be no political will to accept the deployment of a follow-on to Lance in Germany—and should not the Government's policy be based on that?
    Mr. King: As I tried to make clear to the hon. Member for Caernarfon (Mr. Wigley), that is covered in the comprehensive concept and now needs to be worked out in conjunction with our allies in NATO. I hope that the hon. and learned Member for Fife, North-East (Mr. Campbell) will at least support me on that. That is what we shall now do. Contrary to all the press preamble that there would be a great breakdown and strong division of views, the press reports of the Anglo-German summit on Friday were correct: there was an understanding between the United Kingdon Government and the Federal Republic about the right way forward on defence and related issues.
    Mr. Dunn: Is not it time that Opposition Members were reminded that it is entirely because of the defence policies of this country and of our allies that changes in the east are occurring? But we should not make commitments to reduce our offensive and defensive capability until there is stability, political growth and freedom in the eastern bloc.
    Mr. King: I have great sympathy with my hon. Friend. The right hon. Member for Blaenau Gwent (Mr. Foot) fails to recognise that the position that he adopted, quite honourably, has been proved fundamentally wrong. We have been proved absolutely right in standing for strong defence, the nuclear deterrent and flexible response. The NATO Alliance policy has brought the chance of freedom and hope to millions of people. We should celebrate that fact today.

    Defence Procurement
    Mr. Duffy: To ask the Secretary of State for Defence what changes he is undertaking in defence procurement policy in the light of recent reports by the Public Accounts Committee and National Audit Office.
    Mr. Alan Clark: I am satisfied that the existing policy of competition and a taut commercial approach to contracting will continue to give us value for money.
    Mr. Duffy: Despite the Minister's satisfaction, will he confirm that the development of new weapons has brought about overspending of nearly £2 billion and that nine contracts worth £4 billion will be delivered up to five years'
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    late? Yet the Secretary of State for Defence assured the House in paragraph 302 of the "Statement on the Defence Estimates" that the policy pursued in recent years to provide for defence procurement on a cost-effective basis will be continued.
    Mr. Clark: Many wild figures are circulating and the £2 billion which the hon. Gentleman quoted was the figure given in an article by a Mr. David Hencke in The Guardian. Mr. Hencke formerly styled himself as social affairs correspondent, so I suppose that we should make allowances for any difficulties he may get into when he treads in the more complex world of defence procurement. However, there is no justification for throwing around figures of that size which do not make allowance for inflation.
    The report of the Comptroller and Auditor General stated:
    "None of the projects entering the statement for the first time in 1988 showed a variation in projected spend of 10 per cent. or more … The detrimental effects of older contracts would continue to be felt for some time".
    However, the Comptroller and Auditor General said that he expected to see the benefits of the Department's current procurement practice clearly reflected in future major project statements.
    Mr. Batiste: Does my hon. Friend agree that the changes which the Government have introduced in defence procurement over many years have resulted in better equipment, better value for money and better export potential? In that context, will he confirm that Vickers has now submitted the details of the second milestone test for the Challenger 2 tank? When will he be able to make an announcement about that?
    Mr. Clark: I shall be going to Vickers in the near future, and I expect that we shall have all the data we need to bring it forward in September.
    Mr. Rogers: The Minister is grossly unfair in his answer to my hon. Friend the Member for Sheffield, Attercliffe (Mr. Duffy). The newspaper reporter did not concoct the figures in the article—they came from information provided by the National Audit Office and the Public Accounts Committee.
    The Government have been in office for almost 11 years and they like to promote an image of efficiency and good management, yet one after another the procurement disasters continue to occur—Foxhunter, DROPS, ALARM, Tucano—with billions of pounds wasted. When will the Government acknowledge their incompetence and sack the chief of the Procurement Executive?
    Mr. Clark: I understand why the hon. Gentleman fails to mention any programmes that are effective and efficient and which run to time and to cost—Warrior and Skyguard are good examples. The hon. Gentleman will know, as will the hon. Member for Sheffield, Attercliffe (Mr Duffy), with his ministerial experience—that cost overruns are endemic to major weapons procurement, for the very good reason that throughout the development and production stages we have to take account of changes and progress in enemy systems and in counter-measures. It is not like a contract for a million pairs of boots; it is a race in which the parameters are constantly moving as technology advances.

    West Germany
    Mr. Cyril D. Townsend: To ask the Secretary of State for Defence if he will make a statement on the Government's policy towards the enhancement of short-range nuclear missiles in West Germany.
    Mr. Tom King: The Government are committed to the comprehensive concept agreed last May, when NATO reaffirmed the continued need for an appropriate mix of nuclear and conventional forces which need to be kept up to date as necessary.
    Mr. Townsend: Like my right hon. Friend the Secretary of State, I supported the concept of enhancement a year ago. Following the recent dramatic political events in eastern Europe, however, is it not perfectly obvious that such an approach is now finally and firmly finished? Would not my right hon. Friend be wise to take the advice of former Secretary-General of NATO, Lord Carrington, who said in November, "This chapter is over"?
    Mr. King: I do not think that I can add to what I have said in answer to earlier questions. My hon. Friend knows that the matter is well contained in the agreement with our allies in the comprehensive concept and agreed by Chancellor Kohl and the Prime Minister. The matter will have to be worked out in conjunction with our allies in NATO.
    Mr. John Evans: If the British Government insist that NATO should maintain short-range nuclear weapons in West Germany, what arguments will they use to deny the Soviet Union the right to have similar missiles in East Germany?
    Mr. King: One of the biggest mistakes is to compare the position of NATO, whose forces are in western Europe by the invitation of the sovereign nations concerned, with that of the Warsaw pact where the unwelcomeness of Soviet troops is becoming increasingly apparent in every one of the countries involved.

    Service Personnel
    Mr. Moss: To ask the Secretary of State for Defence what measures his Department is taking to retain trained service personnel.
    Mr. Archie Hamilton: We have introduced a wide range of measures to improve retention. We are looking particularly at ways in which disruption of family life can be reduced and at increasing job satisfaction through contracting out more mundane tasks. In addition, bonus schemes are to be introduced for certain groups of personnel from January 1991.
    Mr. Moss: Does the Minister agree that to retain trained personnel it is critically important to reassure them that they have a continuing and necessary role to play in the defence of our country? Would not their morale slump dramatically if we were ever to adopt the defence policy advocated by the Labour party?
    Mr. Hamilton: My hon. Friend is absolutely right. As I indicated in answer to earlier questions, there is a deep apprehension among the armed forces about the implications of Labour's defence policy—or what we have seen of it so far.
    Mr. Cryer: Would not it be a fillip for our armed forces if they were told that the Government's policy of mass extermination through the use of nuclear weapons was to be completely abandoned because, for once, Government had decided to support the United Nations nuclear non-proliferation treaty by cancelling Trident and supporting the 137 non-nuclear nations which also support the treaty on the basis that nuclear powers such as the United Kingdom will be getting rid of their nuclear weapons—a promise which the Government have continually betrayed?
    Mr. Hamilton: I know that the hon. Gentleman has held that view for a long time, in the teeth of the opposition of an almost overwhelming majority of people. In general, our service men are mindful of the fact that the Soviet Union remains a major nuclear power, and they are glad that Britain also has a nuclear deterrent. I am sure that they share my alarm at the fact that, despite the successes of the non-proliferation treaty, some countries are developing a nuclear capability. They, like me, would hate to face a future in which certain Third world countries had nuclear weapons while Britain had none.
    Mr. Allason: Members of the defence study group yesterday attended a long meeting on board HMS Norfolk. Some of us were struck by the number of chief petty officers who intended to leave that ship, despite the fact that it is the newest contribution to our naval defence forces. What steps does my hon. Friend intend to take to retain those very experienced men, who have some 15 years' experience behind them and who are the backbone of the Royal Navy?
    Mr. Hamilton: I have had similar reactions from senior naval petty officers. We are addressing a number of issues—for example, the review of allowances did not go down very well with the Royal Navy, and some of the worst aspects are now being reconsidered. We are also considering a number of other measures. We are mindful of the whole question of overstretch and the fact that people are working very hard and we are considering whether that could be wound down also.

    Defence Review
    Mr. Jack Thompson: To ask the Secretary of State for Defence what assessment he has made of the additional resources required to undertake a defence review.
    Mr. Tom King: As I told the House last month, we are examining options for change in the structure and deployment of our armed forces which will enable us to support and preserve the key elements of our defence provision in the light of changing international circumstances.
    Mr. Thompson: Does the right hon. Gentleman accept that the White Paper published this week gives no sign of any changes in defence policy? Does he agree that the Government need to catch up with a changing world in relation to defence issues and that the White Paper does nothing to restore confidence in the Government among military personnel and the defence industry?
    Mr. King: As I made clear in my main answer, we are considering options for change to determine where there may be opportunities for improvement and for adjusting

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    to the new position. In my introduction to the White Paper, I said that it was a time of great hope but also of great uncertainty. As I stand here today, the Soviet Union has just closed the border between Lithuania and Poland. It is only a week since certain equipment, clearly intended for nuclear weapons, was removed from an aircraft at Heathrow. I do not think that the House needs any reminding of the dangers and uncertainties that still exist.
    Sir Geoffrey Johnson Smith: I congratulate my right hon. Friend on the defence White Paper and I welcome his announcement of an inquiry into the various options which might be open to us, depending on a number of difficult factors—notably the outcome of the CFE talks in Vienna. Is he aware that there is no mention in the White Paper of what we believe to be a growing need for helicopters in the Army? Can he reassure the House that the Ministry of Defence has not lost interest in that? I also congratulate my right hon. Friend on the White Paper's photographic embellishments, which we attribute to his skills.
    Mr. King: Obviously, the provision of helicopters is a matter which we are dealing with in our options for change. I thank my hon. Friend for his remarks about our approach. We hope that there will be considerable scope for economies. We hope that there will also be an opportunity for what I would call a services dividend to help to improve the conditions and alleviate some of the problems of service personnel. I make no apology to the House for our approach, which is not to announce, as the Labour party did, a £5 billion slash in defence expenditure across the board, but seriously to consider our future commitments and the threats that we might face. We wish to ensure that the defence of Britain is properly secured at all times.
    Mr. O'Neill: Does the Secretary of State appreciate that if we are to give him any credit for his review of options we are surely entitled to know what options are being reviewed? Do they cover troop reductions and, if so, what form do these take? What is the status of forward defence when the right hon. Gentleman seems not to know what the forward orders ought to be? Can he tell us what he means by a review of options in respect of flexible response when there are virtually no longer any weapons below strategic nuclear weapons available for such a doctrine? Lastly, can he assure the House that when the review of options has been completed, there will be a supplementary White Paper to give us the true picture of the Government's intentions with regard to the defence of this country?
    Mr. King: I should make it clear that I do not associate the hon. Gentleman with the Labour party motion to cut defence expenditure. Although it was carried by a two to one majority by his party, I know that it was carried in the face of his opposition at that time. The points that the hon. Gentleman makes are perfectly fair. I wish to see how we can have a wider discussion of these options. I am giving thought to that, but I cannot say what the actual form or timing will be.
    Mr. Jack: Can my right hon. Friend confirm that it is still the policy and intention of his Department to purchase the European fighter aircraft for the RAF at the conclusion of the aircraft's development phase?
    Mr. King: I can confirm that to my hon. Friend—the German Defence Minister, Dr. Stoltenberg, and 1 issued precisely such a statement at our previous meeting before the Anglo-German summit on Friday.

    Maritime Measures
    Mrs. Fyfe: To ask the Secretary of State for Defence whether he has considered any proposals on maritime confidence-building measures.
    Mr. Archie Hamilton: The greatest threat to stability in Europe comes from land-based forces. NATO's substantial proposals, tabled in Vienna in March 1989, have therefore concentrated on those.
    Mrs. Fyfe: Does the Minister realise that this grudging response to the widespread concern about the lack of safety with regard to nuclear weapons at sea will concern the British public? Surely he realises that nuclear weapons at sea could cause a nuclear war, and when will he do something about it?
    Mr. Hamilton: The hon. Lady must realise that the Madrid mandate applied to maritime activities in terms which covered amphibious activities but did not cover other maritime activities.
    Mr. Boyes: Does the Minister recall that it had been argued by Ministers previously that the major obstacle to naval arms reduction talks was the growing Soviet submarine threat? To support that view, in the Defence Estimates 1988 we were told that the Soviets were producing a new submarine every six weeks; yet in yesterday's White Paper, at figure 2, we find that the number of Warsaw pact nuclear-powered submarines is now 85—four fewer than last year's estimate of 89. Now is undoubtedly an excellent time, in consultation with our NATO allies, to take up naval arms talks with a view to reducing naval forces, and the Secretary of State should press that view vigorously.
    Mr. Hamilton: The reduction in the number of Soviet submarines had more to do with the fact that redundant ones are being replaced by more modern ones in terms of capability. I doubt whether it means a reduction. As the hon. Gentleman well knows, it is not right to compare our naval forces with those of the Soviet Union because we depend on our naval forces in the Atlantic for reinforcements, while the Soviets can reinforce over land. So we are not comparing like with like.
    Mr. Speaker: Order. Last Thursday the hon. Member for Rutland and Melton (Mr. Latham) drew attention to discussions and undue noise just prior to Prime Minister's Question Time. This is very apparent today. I ask the House to listen to the Questions Time.

    East Germany
    Mr. Steinberg: To ask the Secretary of State for Defence what assessment he has made of the implications for United Kingdom defence policy of the result of the East German election.
    Mr. Tom King: We warmly welcome the holding of democratic elections in East Germany and hope that the changes there will enhance the security of all European

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    nations. The United Kingdom will continue to maintain its commitment to NATO, which provides the best guarantee of peace and security in Europe.
    Mr. Steinberg: As a result of the election in East Germany, does the Minister agree that it is inconceivable that Germans would nuke fellow Germans? In that respect, will he make certain that British policy is to reject the Lance and not to improve it any further?
    Mr. King: I am not sure whether the hon. Member was in the Chamber for the earlier questions on precisely this issue. He may be totally ignorant of the fact that we had the Anglo-German summit, when we had the pleasure of welcoming Chancellor Kohl who played such a signal part in the success of the centre right in the elections in East Germany, and in which my right hon. Friends the Prime Minister and the Chancellor reached such a clear agreement with him on these issues.

    European Fighter Aircraft
    Mr. Stern: To ask the Secretary of State for Defence if he will make a further statement on the progress of the European fighter aircraft.
    Mr. Alan Clark: Development is proceeding satisfactorily. More than 85 per cent of the contracts for the development phase have already been let.
    Mr. Stern: Will the Minister take this opportunity to reaffirm the Government's faith in this project, the engines for which are built in my constituency? Did he notice the start of a campaign of denigration against the project, which was apparent among the Opposition in the last Parliament, and has he noticed that a similar attempt to unsettle the work force is already starting?
    Mr. Clark: I deplore that. The Government are completely behind the project. That was confirmed as recently as last Friday when my right hon. Friend the Secretary of State met the German Defence Minister. We have no doubt whatever that the European fighter aircraft will be the dominant air superiority fighter in the year 2000.

  PRIME MINISTER

    Engagements
    Mr Viggers: To ask the Prime Minister if she will list her official engagements for Tuesday 3 April.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today. This evening I shall attend a state banquet in honour of the President of India.
    Mr. Viggers: I thank the Prime Minister for that reply. In the light of recent shocking acts of violence, does my right hon. Friend agree it is the duty of all responsible political leaders not only to express words but to take all actions open to them to influence others to obey the law in every respect?
    The Prime Minister: Yes, I agree with my hon. Friend. No one is above the law. We must all obey it. That is what
    1028
    the rule of law is. All responsible leaders should encourage every other person to obey the law and take the requisite action to do so.
    Mr. Kinnock: Is it not obvious to anyone who has observed the Prime Minister in recent days that she was rightly horrified by the injuries done to the public, the police and property last Saturday? Is it not equally clear, however, that she can barely conceal her delight at the diversion and uproar provided—[Interruption.] When it comes to extremists, the difference is that I fight them whereas the Prime Minister needs them.
    The Prime Minister: The right hon. Gentleman is talking nonsense on both counts. Yes, I was deeply concerned at the scenes. I am deeply concerned that it is not the first time that the police have been injured in upholding the rights of ordinary citizens. During the coal dispute, 1,392 police were injured and at Wapping, 572 police were injured. Perhaps the right hon. Gentleman would remember, before he makes such accusations, the scenes outside Grunwick, at the Stockport Messenger, at Warwick, at Wapping and the scenes we saw last week and which we all condemn.
    Mr. Kinnock: The Prime Minister exposes herself even more. By dredging through all those past acts, she demonstrates exactly the truth of what I said earlier. Those who affect to despise her policies most give the greatest comfort to the right hon. Lady, but she derides that comfort and encourages further uproar.
    The Prime Minister: Nonsense—the right hon. Gentleman is trying far too hard and not succeeding. Does he condemn the 28 or 30 Members on his own side who seek to break the law? What does he say to people who throughout the years in the Labour party have not always said that it was necessary to obey the law? The hon. member for Kingston upon Hull, East (Mr. Prescott), speaking about rate capping, said:
    "In the local authority situation do you obey the law or not obey the law? We don't have any firm principles in the party"—
    The Labour party—
    "of how we might deal with the problem".
    Mr. Soames: Would my right hon. Friend find time today to send a message to Mr. Mugabe to congratulate him on his re-election and on the considerable progress made in Zimbabwe in the past 10 years? Will she also express to Mr. Mugabe the great concern of a number of people in this country at the prospect of Zimbabwe sliding into a one-party state? Will she urge him to readopt the principles of the Lancaster house agreement which have so honourably served Zimbabwe in the past 10 years?
    The Prime Minister: Yes, of course we congratulate President Mugabe. As my hon. Friend points out, the principles on which the election were fought were very different from the principles in the Lancaster house constitutional agreement, but Mr. Mugabe upheld that during the appointed time for the entrenched clauses. I agree with my hon. Friend. It is very different when one has a one-party state. Obviously, those are the things that he is thinking of. May I also point out we help considerably in Zimbabwe as our armed forces train the Zimbabwe armed forces and the Mozambique armed forces to fight terrorism in that country.
    Mr. Patchett: To ask the Prime Minister if she will list her official engagements for Tuesday 3 April.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Patchett: We hope that the right hon. Lady is better briefed today than she was last Thursday. Can she now explain to the House why 42,000 student nurses on low incomes should be subject to the full rate of poll tax?
    The Prime Minister: The hon. Gentleman refers to 42,000 student nurses who are training and who receive a salary. Other student nurses who go on to Project 2000—which will very shortly be most student nurses—will receive a considerable bursary. Once they receive that bursary they will be treated as students and they will receive a rebate of 80 per cent. of the community charge. When nurses receive a salary during the course of their training they will be treated in exactly the same way as other young people who receive a salary in the course of their training. The hon. Gentleman might not like it, but that is the answer.
    Mr. Speller: To ask the Prime Minister if she will list her official engagements for Tuesday 3 April.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Speller: Does my right hon. Friend agree that because of the unexpected and unplanned size of the community charge throughout the country the most logical way to assist everyone of every type and class might be to transfer one large chunk of Government-sponsored money such as education or teachers' salaries from the community charge to the income tax budget?
    The Prime Minister: If we were to do that we might put a great deal of extra expenditure on to the taxpayer. Teachers' salaries might put 5p extra on to income tax without any guarantee of a reduction in the community charge because some local authorities would increase their expenditure and we would finish up with much higher income tax and the same community charge. First we must consider how to restrict extravagant spending by local authorities.
    Mr. Ashdown: Does the Prime Minister realise that on the crucial question of Britain's full membership of the European monetary system she now risks the same deadly uncertainty over Government policy which cost her a Chancellor of the Exchequer and Britain a plummeting pound and high inflation only a few months ago? Does she disagree with the Governor of the Bank of England and the Chancellor of the Exchequer, both of whom have recently said that the only obstacle that prevents Britain joining the exchange rate mechanism will be removed once high inflation is curbed?
    The Prime Minister: My right hon. Friend the Chancellor of the Exchequer has made it clear that we stand by the Madrid conditions—which the hon. Gentleman can read as they have been given in Parliament many times—that first, there is no hindrance to the free movement of capital around the Community—some hindrances still remain; Italy has not removed all controls—also that we should have clear freedom of movement for financial services and, further, that we carry out stage one of the Delors report and that we get inflation down to the
    1030
    middle of the European Community. When those conditions are fulfilled we shall join. Considerable progress has been made as other members of the Community are now following our example by getting rid of many of the controls on the movement of capital—a process which we completed years ago.
    Mr. Butterfill: To ask the Prime Minister if she will list her official engagements for Tuesday 3 April.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Butterfill: Will my right hon. Friend join me in condemning the statement by Mr. Andy Murphy on BBC television that as leader of the punk anarchist group Class War he thought that those who attacked the police on Saturday were justified in so doing and that they are working class heroes? Does my right hon. Friend share my concern that Mr. Murphy is apparently employed by the London borough of Hackney as a finance officer? Does she not think that he should be dismissed?
    The Prime Minister: All decent people find any such remarks utterly repugnant and support the police in their arduous task in the front line. Anyone who makes such a remark should have nothing to do with the democratic process because they must be flatly against it.
    Mr. Skinner: To ask the Prime Minister if she will list her official engagements for Tuesday 3 April.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Skinner: Is the Prime Minister aware that in 1979 the cost to the taxpayer of running Downing street was £1¼ million and that 10 years later that cost has soared by more than 400 per cent.—a bigger percentage increase in expenditure than any local authority in Britain—and that that does not even include the cost of the gates? Is not the fortress of Madam Ceausescu therefore a suitable case for poll tax capping?
    The Prime Minister: I thought that the hon. Gentleman was better at mathematics. If he will make his comparisons on the same basis, he will find that our running costs compare very favourably both with central Government and with local authorities. I am sorry that the hon. Gentleman would have preferred Downing street, which is an historic house, to be attacked and greatly damaged. Its repair would have cost much more than the gates.
    Mr. Atkinson: With regard to the situation in Lithuania, and now Estonia, does my right hon. Friend agree that the secret protocol of 1939 makes the Baltic states a very special case and that it would be both immoral and illegal to ignore their continued appeals for self-determination and independence? Will not the CSCE summit later this year be the appropriate forum in which to resolve that matter?
    The Prime Minister: I have indicated before in the House that this country never recognised the legality of the annexation of Lithuania, Latvia and Estonia into the Soviet Union. Thus, we have never had any representation in those states and we do not recognise the legality of their annexation now. The Helsinki accord recognised the boundaries in fact but not in law. Two countries have made clear their views about self-determination.

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    Nevertheless, it will be very wise to urge politicians in both Lithuania and Estonia, as well as in Moscow, to resolve their differences by dialogue and discussion. I am sure that that is in the interests of the countries concerned and ourselves.
    Mr. Home Robertson: To ask the Prime Minister if she will list her official engagements for Tuesday 3 April.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Home Robertson: Is the Prime Minister aware that one year's experience of the poll tax in Scotland makes it abundantly clear that no amount of time can heal the running sore of a tax which robs the poor to pay the rich? Does the right hon. Lady recall telling me in a parliamentary answer this time last year that I should
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    donate my unwanted and ill-gotten poll tax gains to charity? What does the right hon. Lady intend to do with the £1,500 that she will gain at the expense of the long-suffering people of London?
    The Prime Minister: I now pay community charge in two places. The hon. Gentleman may take it from me that I shall continue to be generous with the money that I have—[Interruption.]
    Mr. Speaker: Order. It is unfair to others in the House.
    The Prime Minister: Like the hon. Member for East Lothian (Mr. Home Robertson), I shall continue to be generous to the charities which I believe in and support with the moneys that I have, whether or not they are allowed for tax.

Community Charge Capping
3.30 pm
The Secretary of State for the Environment (Mr. Chris Patten): With permission, Mr. Speaker, I should like to make a statement about community charge capping in England.
Local authorities have now set their budgets and charges for 1990–91. Authorities' budgets total £35·8 billion. This is a 16 per cent. increase on 1989–90 and 9 per cent. above the figure for total standard spending of £32·8 billion which we provided in our settlement. Overall, charge payers are being asked to contribute about 30 per cent. more than domestic ratepayers in 1989–90, despite the fact that we increased central support to local authorities by 8·5 per cent.
It is deplorable that local authorities have chosen to budget at these levels, putting an unacceptable burden on local people. There is no justification for the level of charges which many authorities have in practice set. The average charge is £363 in England, ranging from a horrendous £573 in Labour-controlled Haringey to £148 in Conservative-controlled Wandsworth. It is little wonder that strong feelings have been expressed up and down the country about the level of many charges, and I can understand the feelings of outrage of a number of my hon. Friends when faced with the burdens that some authorities have chosen to impose on local people.
The simple fact is that high charges are the direct result of authorities' own budget decisions over the years. In time, I believe that the ballot box will bring greater prudence and realism—[Interruption.]—
Mr. Speaker: Order.
Mr. Patten:—to local spending decisions. That is the local accountability which is central to our new system of local government finance.
But Parliament has given me powers in the Local Government Finance Act 1988 to cap those authorities whose budgets are excessive and to require them to reduce their excessive plans. We have always recognised that in the early years of the new system the new accountability pressures would not be fully effective, and there may be a greater need for capping. After having carefully examined all the information available to me about local authorities' budgets, I have to tell the House that I have decided to exercise my capping powers for 1990–91.
Under the 1988 Act I can select authorities for charge capping if, in my opinion, their budgets are either excessive or represent an excessive increase over the previous year. I am not empowered to select any authority whose budget is below the statutory threshold of £15 million. For 1990–91, I have decided to select authorities whose budgets are in my opinion excessive in absolute terms.
Selection of authorities for capping has to be on the basis of general principles—[Laughter.]
Mr Speaker: Order.
Mr. Patten: I cannot pick and choose. I can adopt different principles for different classes of authority, but the principles should apply equally to all authorities within the same class. I have decided for 1990–91 to apply the same principles to all the classes of authority in the Act,
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except that, for inner London boroughs, I have decided to make a special allowance for overspending inherited from the Inner London education authority.
The best measure of the excessiveness of an authority's budget is an assessment of its overspend against its standard spending assessment. That overspend represents the sum by which its budget exceeds the amount that we consider it appropriate for the authority to spend to provide a standard level of service consistent with total standard spending of £32·8 billion. That is similar to the approach that we adopted when selecting authorities for rate capping, when we used the benchmark of overspend against grant-related expenditure.
The principles that I am adopting are as follows. First, for the purposes of capping I judge an authority's budget to be excessive if it exceeds its SSA by at least 12·5 per cent. and by at least £75 per adult. Secondly, an authority is designated for capping only where its overspend per adult above the 12·5 per cent. £75 per adult benchmark for excessiveness is at least £26 per adult. That is a £26 per adult de minimis provision to avoid requiring authorities to reduce their budgets for the sake of only a small reduction in the burden on their charge payers.
The special allowance that I am making for inherited ILEA overspend means that for inner-London boroughs I have deducted from each borough's budget, for the purposes of comparison with the SSA, the amount of its inner London education grant entitlement as set out in the special grant report approved by the House on 18 January —[Laughter.]
Mr. Speaker: Order. I do not think this a matter for hilarity.
Mr. Patten: By applying those principles to authorities' budgets for 1990–91, I am designating 20 authorities for capping. These are, in alphabetical order: Avon, Barnsley, Basildon—[HON. MEMBERS: "Labour."]—Brent—Mort. MEMBERS: "Labour."] That is not very surprising—[Interruption.]
Mr. Speaker: Order. I remind the House that we have a busy day ahead of us. This is a long statement with a great deal of detail. I ask the House to listen to it.
Mr. Patten: I will tell Opposition Members why it is not very surprising: I would have almost to reach No. 60 before I came to a Conservative authority. In alphabetical order, the authorities are: Avon, Barnsley, Basildon, Brent, Bristol, Calderdale, Camden—
Hon. Members: We cannot hear!
Mr. Speaker: Order. How can the House possibly hear what is going on—
Several Hon. Members rose—
Mr. Speaker: Sit down, please. I ask the House to give the Secretary of State a hearing. When there is so much baying going on, how can anyone hear?
Mr. Rhodri Morgan: On a point of order, Mr. Speaker. When the Secretary of State read out the list for the first time, he did not read out the word Barnsley. When he read it the second time, Barnsley was included.
Mr. Speaker: Order. So much baying was going on that the list was difficult for any hon. Member to hear. I suggest

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that, for the good order of the House, the Secretary of State should read out the list of local authorities again. I ask the House to listen to him in silence.
Mr. Patten: I shall give the House the list again: Avon —[HON. MEMBERS: "Labour."]; Barnsley—[HON. MEMBERS: "Labour."]; Basildon—[HON. MEMBERS: "Labour."]; Brent—[HON. MEMBERS: "Labour."]; Bristol—[HON. MEMBERS: "Labour."]; Calderdale—[HON. MEMBERS: "Labour."]; Camden—[HON. MEMBERS: "Labour."]; Derbyshire—[HON. MEMBERS: "Labour."]; Doncaster—[HON. MEMBERS: "Labour."]; Greenwich—[HON. MEMBERS: "Labour."]; Hammersmith and Fulham —[HON. MEMBERS: "Labour."]; Haringey—[HON. MEMBERS: "Labour."]; Hillingdon—[HON. MEMBERS: "Labour."]; Islington—[HON. MEMBERS: "Labour."]; North Tyneside— [HON. MEMBERS: "Labour."]; Rochdale [HON. MEMBERS: "Labour."]; Rotherham—[HON. MEMBERS: "Labour."]; St. Helens—[HON. MEMBERS: "Labour."]; Southwark—[HON. MEMBERS: "Labour."]; and Wigan—[HON. MEMBERS: "Labour."].
Mr. Speaker: Order. I ask the House to settle down. I must say again that we are under a timetable today and this is a long statement.
Mr. Patten: All those authorities are budgeting significantly in excess of their SSAs, both relative to the SSAs themselves and in terms of pounds per adult. For the information of the House, I am laying in the Library tables showing for all authorities how their budgets compare with their SSAs. Copies are available in the Vote Office.
I am not today designating Lambeth. That must give a great deal of pleasure to the Opposition. That council set a budget of over £305 million early in March. I understand that last Thursday, about three weeks after making that budget, it changed its mind, and set a new lower budget and a charge of £548. Under the statute, the council has seven days from then to supply me with the information that I need to take my decisions in relation to that authority. To date, it has not done so. When I receive the information, I shall apply the principles that I have determined for inner London boroughs to Lambeth's budget. If its budget is more than £284·2 million, on this basis, Lambeth would be capped.
Some of the overspends are spectacular by any standards. For Basildon, for example, it is 194 per cent. and £154 per adult above SSA. For Greenwich, it is 32 per cent. and £314 per adult above SSA, even after allowing for inner London education grant.
For each of the 20 authorities designated on the basis of my general principles, I am also proposing caps—that is, the levels to which we propose authorities should reduce their budgets. I have made available in the Vote Office and shall be printing in the Official Report a table showing for each designated authority the cap that I am proposing and the budget cuts implied by it. In each case, I am satisfied on the basis of all the information available to me that my proposals are reasonable and appropriate in all the circumstances of the individual authorities concerned. The reductions in the charge which would be implied by the caps range from around £100 in the case of Hammersmith and Fulham to about £30 in the case of St. Helens.
As required by statute, I am today notifying each authority that it has been designated for capping, the principles on the basis of which it has been designated and the amount of the cap that I propose. The authorities then
1036
have 28 days in which to tell me, if they wish, whether they accept the amount proposed. If they do not, they must suggest an alternative figure together with the reasons for it. In such circumstances, it is open to me to set the final cap at a higher, lower or, indeed, the same level as the one I proposed. If an authority does not accept my proposed cap, I have to set the cap by order, a draft of which must be approved by the House.
Once the final caps have been set, the authorities concerned have to set new, lower budgets reflecting their caps. These then feed through to new, lower charges for the charge payer. How long the process takes depends in part on how authorities react to the caps that I am proposing today, but I expect all authorities to have set new budgets by June or July, with new charges for charge payers following as soon as possible thereafter.
I must say this to the House: I would much rather not have had to use my capping powers. But Parliament has provided them to protect the charge payer against excessive spending, and it is clearly right that I should use them. I am satisfied that the authorities that I have selected are in this position and that their budgets should be reduced. My proposals will do just this to the benefit of over 4 million charge payers.
Mr. Bryan Gould: Does the Secretary of State recognise that his statement is a final admission of the failure of the poll tax? Has he not fatally undermined and discredited the only virtues ever claimed for the poll tax—that it would somehow be simple and would improve accountability? If accountability is the key, why could he not wait for the voters to pass judgment on 3 May?
The right hon. Gentleman's statement means that accountability has gone out of the window; all that we are left with is a search for scapegoats. Is it not a remarkable achievement—not to say a suspect achievement—to have concocted a list that miraculously excludes every single Tory authority? Have not the criteria been carefully, not to say tortuously, selected to produce a predetermined political outcome?
If the object really was to relieve hard-pressed poll tax payers, why are Tory councils such as Dartford and Leominster, in which bills have risen by 73 per cent., not on the list, while Haringey, at only 6 per cent., is included? Why is Tory Windsor and Maidenhead, with a poll tax bill of £449, excluded while Calderdale, at only £297, is caught? Why, if increased spending is the criterion, is Tory Berkshire, with an increase of 20·6 per cent., left out, while Brent, at 1·4 per cent., is on the list?
If the Secretary of State is really concerned to reduce excessively high poll tax bills, why does he not accept that bills right across the country are, on average, £85 above Government estimates; that there is no significant difference between Tory and Labour councils on that score; and that the problem arises from the serious miscalculations made by the Secretary of State, to which charge capping can be only a marginal and partisan response?
What estimate has the right hon. Gentleman made of the extra costs of sending out revised bills and recalculating rebates? What estimate has he made of the losses of income that charge-capped authorities will suffer through the impact on cash flow? What estimate has he made of the cuts that will be needed, not just to meet charge cap levels but to cover the extra costs and losses that charge capping will impose?

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How does the right hon. Gentleman explain that five authorities—Brent, Calderdale, Hammersmith, Haringey and Hillingdon—have been charge-capped to a point below their assumed charge? Why are councils that contribute to the safety net, such as Brent, Camden, Islington and Basildon, charge-capped, in some cases in circumstances in which they contribute more to the safety net than the margin by which they are charge-capped?
Does the Secretary of State accept that his statement and his charge capping will be universally regarded as a political fix, as a rigged list drawn up in a cynical and desperate last throw to salvage something from the wreckage? Is he not revealing just how disreputable the Government's current aims are? They have given up trying to make the poll tax work. They have given up trying to help the oppressed poll tax payers. Their sole and squalid aim now is to shift the blame for the whole poll tax fiasco for which they alone are responsible.
Mr. Patten: Perhaps in view of the stress that the hon. Gentleman placed on the selection of the criteria, I should take him and the House through the arguments for the criteria. I take it that the House will want me to do so reasonably patiently so that it knows exactly why we chose these criteria—[Interruption.]
Mr. Speaker: Order.
Mr. Brian SedgemoreGet the fraud squad in.
Mr. Speaker: Order. The Secretary of State was asked detailed questions and he must have a chance to answer them.
Mr. Patten: First, we had to take account, as the hon. Gentleman will be aware, of sections 100 to 102 of the Local Government Finance Act 1988. Secondly, we had to take account of legal precedents and the way in which rate capping was applied in the past. On that basis, we decided on the criteria that I announced. Just as in the past we used the grant distribution formula—the GRE—as the basis for rate capping, so it seemed perfectly reasonable to take the SSA as the basis for charge capping, since it is expenditure and bills above the SSA which represent excessive spending and charging.
There is a political point—[Laughter]—which the hon. Member for Dagenham (Mr. Gould) would do well to take into account. Labour shire counties are setting precepts about £82 over SSA while Conservative shire counties are setting precepts £25 above SSA. Labour shire districts are setting charges £47 above SSA while Conservative districts are setting charges £8 above SSA. Labour metropolitan districts are setting charges £94 above SSA while Conservative metropolitan districts are setting charges £21 above SSA. Labour London boroughs are setting charges —216 a head above SSA while Conservative boroughs are setting charges £3 above SSA. If the hon. Gentleman seeks an explanation of why there are no Conservative authorities on the list, it is in those figures.
The hon. Gentleman referred to several specific authorities and in doing so showed that he is not very familiar with local government finance. Dartford and Leominster cannot be included in the criteria because they have budgets below £15 million and are specifically excluded by the Local Government Finance Act 1988.
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The hon. Gentleman also failed to take account of Conservative authorities that are making contributions into the safety net and Labour authorities that are taking money out of the safety net. That makes rather a lot of difference to the figures that the hon. Gentleman used.
Let me come to costs. We reckon that the costs per authority will be about £200,000 per charging authority and that the total costs will be between £6 million and £7 million for all the authorities that we are charge-capping. I wish that the local authorities that set excessive spending levels had thought about that disruption before they set out on a course that penalises their charge payers.
I shall deal with the principle of accountability, to which the hon. Gentleman referred. On the "Today" programme last week—I am not sure whether the Leader of the Opposition or his hon. Friends are aware of this—the hon. Gentleman said:
"There must always be in extremis a reserve power to cap."
In the hon. Gentleman's view, there is no argument about principle. It is right that there should be a reserve power to cap. What I ask the hon. Gentleman—
Hon. Members: You should be answering.
Mr. Speaker: Order. Hon. Members should not carry on conversations or point, across the Chamber; that is very disorderly.
Mr. Patten: I take it that Opposition Members do not want me to make this point, because they have no answer to it.
What are the circumstances in which the reserve powers would be used? Would they be used in the case of Basildon which has spent 194 per cent. over SSA, or £154 per head? Is that in extremis? Would they be used in Greenwich, which has spent 31·8 per cent. over SSA, which is equivalent to £314 a head? Let the hon. Member for Dagenham tell us that those are circumstances in which he would use those reserve powers.
The hon. Member for Dagenham has once again forgotten that the purpose of my proposals is not to penalise councils, but to protect charge payers.
Mr. Robin Squire: Is my right hon. Friend aware that there will be widespread agreement that, in the circumstances of this year, the decision to cap a number of local authorities was inevitable and correct? Does he accept that the decision to limit that to a lower number of authorities than previously circulated is also wise? The response of the Labour party to my right hon. Friend's statement, its derision and humour, will be different from that of people living in the districts and council areas concerned. They will whole-heartedly welcome the relief that he has announced today to many community charge payers.
Mr. Patten: We hear a good deal about the alleged concern of Opposition Members about the impact on the charge payer. I imagine that they will be delighted that my proposals will, for example, help some pensioner households to the tune of £200 in some local authorities.
I accept what my hon. Friend said and I repeat the argument that I advanced earlier. If we had produced a list of nearly 60 local authorities, we might have caught a Conservative one, but the reason why Labour local authorities are on the list is that it is principally Labour local authorities which overspend and set excessive charges.
Mrs. Rosie Barnes: Bearing in mind the fact that the Government have always maintained that one of the major benefits of the community charge is an increase in local accountability, does the Secretary of State agree that his statement makes a mockery of that, particularly as many of the areas listed will hold elections in the near future when people can make their views known in the usual way?
Mr. Patten: I could not, as I am sure the hon. Lady will accept, have different criteria according to whether some local authorities had elections this year.
I am sure that the hon. Lady will have noticed that her borough of Greenwich is spending 31·8 per cent. over SSA, or £314 per adult. In circumstances in which the Association of London Authorities, a Labour organisation, is suggesting that Labour authorities should discuss whether they can get away with the highest possible charge, I believe that it is reasonable for us to use our powers this year.
Mrs. Edwina Currie: Does my right hon. Friend accept that his statement is very welcome in Derbyshire? I speak for my hon. Friends the Members for Derby, North (Mr. Knight) and for Derbyshire, West (Mr. McLoughlin) as well. Is my right hon. Friend aware that, in Derbyshire, school meals charges have not been increased since 1981 and home help services are completely free to everyone? Whether that is Labour party policy or not, it is sheer foolishness. Does my right hon. Friend agree that it should be possible to reduce net budgets in Derbyshire without damaging the central services?
Mr. Patten: I believe that my hon. Friend is entirely right in making that argument, and I have chosen the cap for Derbyshire with that very much in mind. I am aware, as is my hon. Friend, that Derbyshire is spending 25 per cent. over SSA or £157 per adult and that is causing considerable expense to my hon. Friend's constituents.
Mr. Martin Redmond: That statement was the most stupid, irresponsible one that we have ever heard. The Secretary of State may not be aware that the financial year for local authorities has already started. Will he confirm that he has had documentation from every authority on budgetary matters? Will he tell the authorities that he has capped, which schools, teachers and services they will lose?
Mr. Patten: I have no doubt that in the next few weeks there will be a parade of bleeding stumps in a number of local authorities. I believe strongly that the caps that I have proposed will enable local authorities to run their services at a reasonable level. I repeat the point which I made in my statement so that all local authorities and all hon. Members are aware of it: Labour or other authorities which disagree with the cap that I have proposed can, if they wish, make alternative suggestions. I then have to consider them, and we shall come back to the House to debate the issue here.
Mr. David Amess: Is my right hon. Friend aware that there will be widespread rejoicing in my constituency at his decision to cap our charge and give interim protection against the worst excesses of socialist overspending? He is the toast of Basildon. Does my right hon. Friend agree that with the local council being 194 per
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cent. over standard spending assessment it could easily make savings without affecting essential or sensible local services?
Mr. Patten: The whole House will be aware that Basildon's idea of prudent financing has meant that it has been capped in 1985–86, 1986–87, 1987–88 and 1988–89. Last year, Basildon proposed an increase in local rates of 57 per cent. It is budgeting at 194·3 per cent. over SSA or £154 per adult, which is wholly deplorable.
Mr. Allen McKay: It would appear that £10 million is to be taken away From Barnsley. Does the Secretary of State realise that, of that £10 million, £1·8 million is the extra cost of running the poll tax, £3 million is the extra cost of the police and fire services which were not previously there, and £5 million is the extra cost of grants? The local authority now has the choice of sacking teachers or doing away with all non-statutory education facilities. Does the Secretary of State realise that he has stopped the council trying to regenerate an area with 14·1 per cent. unemployment? Does he realise that this despised tax should be disposed of, rather than the people of that area being penalised? Does he realise that not only are the people groaning in despair at the poll tax but that they will now have to suffer the further consequences as the Government try to justify something about which they have made a terrible mistake?
Mr. Patten: I point out to the hon. Gentleman that a large number of his constituents will be pleased that their community charge will be reduced by £60—that is, more than £2 per week—for a pensioner household. Even—
Mr. Kevin McNamara: That is wrong—the Secretary of State should do his arithmetic.
Mr. Patten: Perhaps the hon. Gentleman will keep quiet. I said that for a pensioner couple it would be more than £2 per week.
Mr. McNamara: The Secretary of State did not say pensioner, he said household.
Mr. Patten: I have not changed what I said, and I think that—
Mr. Speaker: Order. It does not help if we have a dialogue between the Front Bench and Ministers. The Secretary of State is answering questions from a Back-Bench Member.
Mr. Patten: Even with the proposals that I have made, the cap would still mean that Barnsley was spending 17·7 per cent., or £118 per adult, more than SSA. Its original plans would have meant a 19·2 per cent. increase over the resealed GRE—the former formula. It is worth bearing that in mind.
Mr. Michael Stern: Is my right hon. Friend aware that his statement today will be received with rapture by all my constituents, no matter what their party affiliation? To underline the extent of the relief that he has given to Bristol and Avon, since he has capped two councils that affect my constituency, will he tell the House how much reduction he proposes for the citizens of Bristol and other parts of Avon?
Mr. Patten: My hon. Friend's constituents will be pleased to know that, as a result of our capping the

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expenditure proposals of Avon and Bristol, they will save £64: that is—I emphasise the point for the sake of the hon. Member for Liverpool, West Derby (Mr. Wareing)— over £120 for a pensioner couple.
Mr. Ronnie Fearn: Is it not a fact that because of this late announcement and the short time that they will have to produce the new billing caused by rate capping, many authorities will face a considerable extra cost on top of the poll tax itself? Many bills have already been drafted and will now have to be altered. Is it not also true that the Conservative Government have underestimated the power of the people and that the power of the people will come back to them at the next election?
Could not the Secretary of State have thought of a better system, such as local income tax based on the ability to pay—a system already proven in Sweden, Canada and other countries? Would not this have been a better system than the present shambles?
Mr. Patten: I think that I answered the question about costs fully in response to the hon. Member for Dagenham (Mr. Gould) when I said that we reckoned that the cost for each charging authority would be about £200,000 and that the total cost for all those which had been capped would be between £6 million and £7 million. That has been taken account of in my proposals on caps.
As for the hon. Gentleman's proposals on local government finance, I applaud him because at least his party has proposals on the future of local government finance; the proposals seem not to have acted like a magnet in attracting people to the party, but I commend the hon. Gentleman and his colleagues for their honesty. I note that we still await with interest and enthusiasm the proposals on local government finance from the official Opposition.
Mr. Bob Dunn: I congratulate the Secretary of State on his statement. Earlier, the House will have heard the hon. Member for Dagenham (Mr. Gould) refer to Dartford as a Conservative authority which in his view should be charge-capped. I resent his attack upon the people of Dartford. The only person who speaks for Dartford in this House is me. I also point out that there were wrong assumptions in the statement of the hon. Member for Dagenham: his figures are wrong and Dartford, because it falls below the threshold of £15 million, is ineligible for charge capping. I hope that the hon. Member for Dagenham will withdraw his slur on the people of Dartford.
Mr. Patten: My hon. Friend has put the record straight. I tried to do so myself in responding to the hon. Member for Dagenham who was unaware, when he put the question, of the provisions of the Local Government Finance Act 1988.
Mr. Harry Barnes: Is the Secretary of State aware that the hon. Member for Derbyshire, South (Mrs. Currie) will be £1,331 better off under the poll tax arrangements, even before the new capping arrangements come into force? This is a further windfall for her. Should we not have had something different—not the formula that we now have, which is gobbledegook, but a change in the original formula which messed up the grant in many areas, depending on their
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nature? If the area was mixed in class terms, if it was both a rural and an urban area, and if it had people moving in and out of it, it lost grant all along the line. That is what affected Derbyshire, not the nonsense talked by the hon. Member for Derbyshire, South.
Mr. Patten: Since, as I understand it, the hon. Gentleman has said that he will not pay the community charge, I am somewhat reluctant to answer his question—[HON. MEMBERS: "Why?"] If he carries out his decision, it will mean that, as a militant freeloader, he will oblige his constituents to pay higher bills. That does not seem to me to be very egalitarian, but perhaps it is what passes for socialism these days.
Mr. Matthew Carrington: Is my right hon. Friend aware that the citizens of Hammersmith and Fulham will be extremely grateful for his protection from their gambling, grossly overspending and immensely inefficient council? My right hon. Friend knows that the council has already potentially lost some £200 million on the money markets through its inefficiency. However, he may not know that that has pushed up its expenditure by 80 per cent. since 1986, even allowing for education. It has employed 1,000 additional people in the town hall, and that is before it takes on responsibility for education services. We are extremely grateful for my right hon. Friend's protection, which I trust will continue through future years.
Mr. Patten: I am sure that my hon. Friend's constituents will be pleased that their individual charges will go down by about £100. Even in the Labour party, Hammersmith and Fulham borough council is not a by-word for fiscal prudence. As my hon. Friend suggested, its spending plans were intended to rise by more than 21 per cent. on top of SSA, or £239 per charge payer.
Mr. Roger Stott: Is the Secretary of State aware that the metropolitan borough of Wigan is not a profligate or irresponsible authority? That was acknowledged—it is on the record—by the Under-Secretary of State when I led a delegation to meet him a couple of months ago. The right hon. Gentleman knows that Wigan has already lost £22 million in grant this year and is having a difficult time trying to run its services. Will he acknowledge that the poll tax that it has had to levy is necessary to sustain the level of services for which the councillors were elected? Is he aware that more than 100,000 letters have already been sent, and that the borough treasurer estimates that it will cost at least £500,000 to re-bill poll tax payers in the borough? Will he say—[Interruption.]
Mr. Speaker: Order. Briefly, please—
Mr. Stott: Mr. Speaker—
Mr. Speaker: Order. We are under a time pressure today.
Mr. Stott: I am aware of that.
Will the Secretary of State answer the question posed by my hon. Friend the Member for Dagenham (Mr. Gould) about authorities that are rate-capped and find it difficult to raise money on the money markets, but have to do so at very high interest rates? Can the right hon. Gentleman—
Mr. Speaker: Order. This is unfair to the hon. Gentleman's colleagues as I shall not be able to call all of them.
Mr. Stott: I very rarely ask questions in the House—
Mr. Speaker: Order. That does not matter. The hon. Gentleman is on equal footing with everyone else in the House. He must be fair to his colleagues.
Mr. Stott: I shall try to be fair to my colleagues, but I am raising an important matter.
What services in the metropolitan borough of Wigan will have to be cut when the budget is reduced by £10 million? How many teachers, how many housing associations, how many meals-on-wheels, how many social services will have to be cut?
Mr. Patten: I realise why the hon. Gentleman wants to put those points about his constituency so vigorously. However, I must point out to him that, as I understand it, Wigan council had reserves of almost £11·5 million at 1 April, of which it was planning to use £4 million in 1990–91. Against that background, and against some other figures that I shall give to the hon. Gentleman, I do not regard our proposed cap as unreasonable.
Wigan council was proposing to spend 13·1 per cent. over its 1989–90 budget. Our reduction in the charge of around £43 will, I think, be popular with his constituents. The total external finance which is going into Wigan in the coming year is £121·9 million. That represents £527 per adult. I repeat that, against that background, I have put forward proposals which are reasonable. But again I say that, if Wigan council wishes to make proposals for a different cap, we will listen to them and consider them and then we shall have to come back to the House and give it our views.
Several Hon. Members rose—
Mr. Speaker: Order. In fairness to all, I ask for single questions, please. That will be equally fair to hon. Members on all sides of the House.
Mr. Michael Shersby: Is my right hon. Friend aware that Hillingdon is not a Labour-controlled council, as Opposition Front-Bench Members seem to think, but a hung council? Will he tell the House by how much that council exceeds its SSA, what that means in terms of each individual and what the cap will be?
Mr. Patten: Hillingdon council was proposing to spend £151 million. That represented 20 per cent. over SSA, or £143 per adult over SSA. We are proposing a reduction of £9·3 million, with a cap, therefore, of £141·7 million. That would mean that charges would go down by around £53 a head.
Mr. Tony Benn: Is the Secretary of State aware that, last May, the people of Derbyshire, who know a great deal more about their own needs that he does, overwhelmingly re-elected the Labour majority there?
Mrs. Currie: And now they are regretting it.
Mr. Benn: And the hon. Lady has benefited greatly by the poll tax, as has been said.
Is the right hon. Gentleman aware that the poll tax, and now the capping, combined with the destruction of the Inner London education authority that began on the
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morning of 1 April, represent a far greater and more sustained threat to democracy in Britain than what occurred in Whitehall and the west end on Saturday?
Mr. Patten: I think that the right hon. Gentleman's observations and his casuistry on the question whether citizens should obey the law have gone well beyond even his own distant bounds. I think that many people in the House, observing the right hon. Gentleman's career, wish that he had followed the example that he so often suggests and chained himself to railings far distant long ago.
Mr. Phillip Oppenheim: Will my right hon. Friend accept that, while the right hon. Member for Chesterfield (Mr. Benn) may be well able to afford to pay the massive community charge levied by Derbyshire county council, many of my constituents who are above the rebate level are completely unable to pay the charge at the level at which it was to be levied, and that this announcement today that the council is to be charge-capped will give them at least some comfort? Will my right hon. Friend confirm that the county council will not have to cut a single teacher or policeman in order to meet these new spending figures?
Mr. Patten: I agree with my hon. Friend that the proposals that I have made should enable the Derbyshire county council to run its services at a reasonable level without disruption, as I said earlier. Derbyshire county council was proposing a 19·5 per cent. increase over its 1989–90 budget. The cap that I have proposed will reduce the community charge by around £56 a head. I think that that will be welcomed by my hon. Friend's constituents and by many other people in Derbyshire.
Mr. Gerald Bermingham (St. Helens, South): Will the Secretary of State concede that the whole of this capping exercise is on the basis that he got the SSAs correct? If he has made a mistake in that respect, is he prepared to admit that mistake subsequently and undo the damage that he has done today? Secondly, can he explain to the House why in St. Helens, where the overall expenditure this year has risen by only just over 7 per cent.—less than inflation—we should suddenly find that we are to be charge-capped to the tune of £30 a head? Could it just be that the SSAs are completely wrong in St. Helens, and that this whole matter is a complete disgrace?
Mr. Patten: The actual increase in spending in the coming year in St. Helens—
Mr. Bermingham: Answer the question.
Mr. Patten: The hon. Gentleman does not have the figures quite right. The figures are substantially in excess of that—[Horn. MEMBERS: "What are they?"]—16·1 per cent.—[Interruption.] If the St. Helens council has different figures or wishes to appeal against the figures that we have proposed, there is provision in the law for it to do so.
Even if one took not SSAs but GREs, the former system, all the local authorities that we have capped today would have been spending, to take the mean figure for all of them, 26 per cent. above the resealed GREs.
Mr. Donald Thompson: Will my right hon. Friend accept that ordinary citizens and businesses and industrial and manufacturing companies will be delighted—[Interruption]—that for the first time, local authorities are having to put up with the same restraints

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and constraints that those people and businesses have had to put up with through the imposition year after year of rates and community charges well above inflation?
Mr. Patten: My hon. Friend is wholly correct. Calderdale was planning to spend 20·9 per cent., or £160 per adult, over SSA. It is receiving in total external finance next year £81·9 million, which is £570 per adult. As a result of the decision that I have made today, charges in Calderdale will be cut by £52 or thereabouts.
Mr. Stan Crowther: Is the Minister aware that the only true criterion by which to judge the expenditure of any local authority is whether it is providing a service that meets the needs of the people it represents? How can the right hon. Gentleman, sitting in his office in Marsham street and drooling over his SSAs, claim to know more about that than the people who have been elected to do the job? It is hypocritical for the right hon. Gentleman to talk in the same statement about the ballot box and accountability and then personally to destroy the most basic principle of democracy.
Mr. Patten: The hon. Gentleman has not taken on board the point that the Labour party has no objection in principle to charge capping—[Interruption.] The hon. Member for Dagenham (Mr. Gould) said on the "Today" radio programme last week—and he repeated the statement—that the Labour party accepted that there was a case for charge capping. So the only issue is where one charge-caps, and I believe that for the hon. Gentleman's constituency and the other 19 authorities, we have taken a sensible decision, which in his constituency will save charge payers £39 each.
Mr. Richard Holt: Will my right hon. Friend accept that the euphoria of many of my hon. Friends whose authorities have been capped will not be reflected in Cleveland, where my long-suffering constituents in Middlesbrough do not meet the criteria—[Interruption.]—which is not surprising, because the whole basis of the SSA is flawed and without any meaning whatever? Until the Government get the SSA right, they will not get capping right. The answer must be not capping but annual elections, so that people vote for the money that is to be spent.
Mr. Patten: My hon. Friend has a strong point. If there had been county elections this spring, I do not believe that some county budgets would have been as large as some of them are likely to be. On my hon. Friend's point about SSAs, even under the GREs—had we used the past criteria—I am not sure that we would have caught the overspending in his authority, but I shall let him have a detailed reply on that point.
Mr. Chris Smith: The Secretary of State will be aware that the poll tax payers of Islington are being forced by him and by the Government to pay £42 each into the so-called safety net. That is more than he is proposing to remove by means of charge capping. What sort of crazy system is it that makes the Secretary of State charge-cap with one hand and force the poll tax up with the other?
Mr. Patten: The safety net contribution results from the fact that the hon. Gentleman's constituents each receive
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£1,150 in total external finance. That safety net contribution will end at the end of this year. I hope that the hon. Gentleman's constituents will get that money back.
Mr. Robert G. Hughes: Will my right hon. Friend confirm that those local authorities which he has today announced will be charge-capped will have to make some cuts in their budgets? For instance, many of them will have to cut out women's committees; some will have to stop monitoring the police and interfering in what they are doing; many will have to cut the excessive number of staff that they employ; some will have to cut back on waste, and—what is perhaps worse for Opposition Members—some will have to stop giving grants to politically motivated local bodies. If local authorities choose to make cuts in services are they not making a political decision and not a decision in favour of local people?
Mr. Patten: I am sure that my hon. Friend is right and that it will have gratified him, as it did me, that many local authorities will have been able to reduce their budgets without harm to charge payers, thanks to the democratic decision taken in Nicaragua.
Mr. John Fraser: Is the Secretary of State not struck by the double irony that capping breaches the principle of accountability and that there is no evidence from capping in the past that there is any political advantage in it to the Conservative party? Is he aware that, in Lambeth, we already have great difficulties in working out and paying housing benefit and rebates, and that, if demands go up in June, many people will be disqualified from obtaining rebates because they will not realise that it is necessary to apply for them before it is too late? Therefore, will he amend the law to allow rebates to be backdated to 1 April this year?
Mr. Patten: If we had to amend the law to take account of the administrative capacity of Lambeth, we would have to do a lot of legislating. I put forward arguments about Lambeth in my statement. I hope that Lambeth will take advantage of the arguments that I put forward and will now propose a budget that does not require it to be charge-capped.
Mr. Jerry Hayes: While I warmly welcome my right hon. Friend's statement, does he not accept that there is one glaring omission—the Labour-controlled district council of Harlow, which happens to be the highest spending council per head in the whole of the United Kingdom? It has been spending ratepayers' money with the gay abandon of a drunken sailor. Is it not a fact that it has reduced the charge to a still staggering £425 by eating into reserves, and selling the family silver? [AN HON. MEMBER: It is not excessive.] Someone says that it is not excessive. It is to my constituents. Is it because Harlow is below the £15 million ceiling, and if that is so, is it not time that the ceiling was reformed so that we could help my constituents and my ratepayers?
Mr. Patten: In Harlow, the budget next year will represent a figure 115·4 per cent. above the SSA, which is £113 a head. I know that my hon. Friend understands and regrets that, since the Harlow budget is under £15 million, we cannot introduce any proposals. Under the Local

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Government Finance Act 1988, I can increase the threshold, but I understand why my hon. Friend wants me to move in the other direction.
Mr. Peter Hardy: Does the Secretary of State accept that, over the past 11 years, Minister after Minister has visited Rotherham and acknowledged that it is an extremely efficient local authority? It has never been rate-capped or criticised, and despite facing enormous problems, its level of poll tax is about£below the national average. Given the problems confronting Rotherham, which the Secretary of State and many of his colleagues have witnessed over the past five or six years, does not the right hon. Gentleman agree that reducing Rotherham's capacity to work its way out of the crisis in which it has been placed by the Government will put it in an impossible position and one which will be seen as preposterous, unfair and, malicious by virtually every reasonable and intelligent citizen of our borough?
Mr. Patten: No. I do not accept the hon. Gentleman's observations. I repeat: we are prepared to consider alternative proposals from Rotherham. If Rotherham can make a convincing case, we will take account of it and bring it down to the House of Commons. Even with the proposals I have announced and with the application of the cap, Rotherham will still be spending 13·7 per cent., or £95 per adult, over SSA.
Mr. Speaker: Mrs. Gorman.
Several Hon. Members: What about us?
Mr. Speaker: The hon. Lady speaks as the Member of Parliament for a constituency in which an authority is being rate-capped.
Mrs. Teresa Gorman: I thank my right hon. Friend the Secretary of State on behalf—[Interruption.]
Mr. Martin Flannery: Three of them in a row.
Mr. Speaker: Order. Apart from anything else, let us have some chivalry.
Mrs. Gorman: I thank my right hon. Friend on behalf of my constituency for cutting Basildon's expenditure. Among that authority's extravagances in a £27 million budget—[Interruption.]—is a recently built theatre costing £12 million, which will have to be subsidised to the extent of £1 million per year. My constituents will be endlessly grateful to my right hon. Friend for his sensible measures.
Mr. Patten: I am grateful for what I think my hon. Friend the Member for Billericay (Mrs. Gorman) said, although I could not hear very much of her remarks. She will be aware that Basildon proposes a 30 per cent. increase in the coming year over its 1989–90 budget. It intends to spend 194 per cent. over SSA, or £154 per adult. That is a powerful argument for the decisions I announced today.
Mr. Simon Hughes: Is the Secretary of State aware that his reputation as an enlightened Minister has taken an enormous battering this afternoon? His predecessor, the right hon. Member for Cirencester and Tewksbury (Mr. Ridley), told the House last year, "We will have no more complicated formulae or muddled assessments. Everything will be straightforward, principled, and easy to understand." Can the Secretary of
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State pretend that that is the case? One week he sets standard spending assessments, the next he poll tax-caps at a different figure. One day he adopts local authority figures according to a principle used for setting rates last year, the next he changes them and implements total arbitrary figures for this year. Southwark's figure has been reduced by a greater amount than any other authority in the country, by £86 per person—even though many other authorities have considerably higher budgets.
Mr. Patten: My right hon. and hon. Friends—like the hon. Member for Southwark and Bermondsey (Mr. Hughes), no doubt—will be interested to learn that Southwark is receiving in external finance, in support through grant and contributions from the business rate, the sum of £173·9 million, which is equivalent to £1,053 per adult. That, put very simply—or in as enlightened a way as I can manage—is a lot of money. There is one very simple formula in Southwark which I think will please many of the hon. Gentleman's constituents: that is, that, thanks to the decisions which I have announced today, they will be saved £86 per head.
Mr. Tim Devlin: Although, under Labour control, Cleveland county council has always increased its rates considerably in excess of inflation, although for this year its Government grant has gone up by 21·7 per cent. and although it is now well over £75 per person in excess of the community charge which the Government forecast, Cleveland has not been capped. If the cap fits Labour-controlled Cleveland, why cannot Cleveland wear it?
Mr. Patten: The figures which my hon. Friend gave were correct. As he said, Cleveland has received a substantial amount of assistance from the Government. On the other hand, Cleveland does not come within the criteria which we set and which are very similar to those which were applied to rate capping, which we have had to take account of, because Cleveland's spending over SSA, large though it is, is only 10·4 per cent., or £85 per head. Both on percentage terms and because of the £26 de minimis provision, which is sensible, Cleveland has not come within the criteria. I can well understand my hon. Friend's concern about spending decisions taken by Cleveland and about the implications of those decisions for his constituents.
Mr. Lawrence Cunliffe: Will the Minister accept that it is absolute nonsense and a total myth to describe Wigan metropolitan borough as a high-spending authority? Its average spending is 5 per cent. less on more services, with the exception of secondary education, than every other metropolitan district. How does he reconcile the fact that spending in Wigan may be only £805 per head with the fact that it will be £1,436 for the Westminster woollies? Does he not realise that inadequate grants, inflation and Government decisions have put £170 per head on every Wigan poll tax payer? Does not he realise that the people of Wigan metropolitan district and Leigh will see this as another crude exercise in trickery and deception?
Mr. Patten: As I explained to the hon. Member for Wigan (Mr. Stott) earlier, there is an important point about reserves in Wigan which we have had to take account of in the decision on capping. Secondly, I should point out to the hon. Gentleman that Wigan proposes next

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year to spend 13·1 per cent. over its adjusted 1989–90 budget. Thirdly, even with capping, spending will still be 15·1 per cent. or£108 per adult over SSA.
Sir Giles Shaw: Will my right hon. Friend accept that there will be considerable disappointment in Leeds that no rate capping will occur on a community charge of £348, which is substantially in excess of the £297 set in Calderdale district? What does he propose to do about it?
Mr. Patten: I can understand my hon. Friend's concern that the local authority to which he has referred does not come within the criteria that I mentioned earlier. One of the considerations that I have to take into account is not only the present law but precedent and what has happened in the past. I believe that the criteria that I have announced are the most robust legally. [HON. MEMBERS: "Ah."] Of course. That is an important point to take account of. We have taken account of it before and I am sure—[Interruption.]
Mr. Eric Illsley: The Secretary of State is already aware that Barnsley metropolitan district council has complained of the indicators that have been used to assess its standard spending assessment. We are due to meet members of that authority with his right hon. Friend the Minister for Local Government and Inner Cities in May. Therefore, it seems rather premature to announce a devastating cap on Barnsley now. Surely the Secretary of State realises that those indicators in an area such as Barnsley—which still suffers from high unemployment and industrial problems because of the decline of the mining industry—are having a devastating effect. Is he not aware that six of the authorities listed in his schedule are in mining areas? Will he reconsider the indicators that he has used for areas such as Barnsley, which has a low population and low rateable values, because the effect of that cap will be—
Mr. Speaker: Order. Please be brief.
Mr. Patten: I assure the hon. Gentleman that we are prepared to consider any alternative proposals from Barnsley or other local authorities. As the hon. Gentleman's question was primarily about the grant distribution formula, I should point out to him that Barnsley was proposing to spend, even under the old formula—the rescaled grant-related expenditure—19·2 per cent. above target.
Several Hon. Members rose—
Mr. Speaker: Order. I must have regard for the subsequent business. [Interruption.] Order. I know the importance of this statement to all hon. Members, but I must balance that against the business on the Order Paper. I will allow questions to continue until 5 pm. I hope to be able by then to call everyone in that time, but I cannot do so if we have—as it were—Adjournment debates rather than questions.
Mr. David Madel: Will my right hon. Friend confirm that it would be perfectly possible to change the law between now and May 1991 to allow shire councils such as Bedfordshire to have elections for some of their county councillors? Otherwise—because
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we are a hung county council—there will be yet another year of overspending and a very high community charge. In order to give people the chance to use the ballot box, could we please have an early change in the law?
Mr. Patten: I understand my hon. Friend's argument. I know of his concern about spending decisions that have been taken in Bedfordshire, where the county is proposing to spend 9·1 per cent.—£64 per head—over standard spending assessment. It is also proposing a substantial year-on-year increase in its budget. That is of concern not only to my hon. Friend, but also to many of his constituents.
When examining the cyclical pattern of county council expenditure, many hon. Members will have seen the strong argument for annual elections. I am sure that that proposition will feature prominently in our subsequent debates on local government.
Mr. John Evans: Is the Secretary of State aware that his announcement today will cause chaos in the efficiently run metropolitan borough of St. Helens? Will he confirm that, when he met St. Helens councillors yesterday, he could not point to any item of overspending in their budget? Will he now accept that St. Helens councillors should be allowed to come to London to put their case to him? Can he point out to me now any item of excessive spending in their budget that he has discovered in the past 24 hours?
Mr. Patten: I did have a civil meeting with councillors in the hon. Gentleman's borough yesterday. It was mostly to discuss urban programme expenditure and other developments, such as the application for city grant for one project in St. Helens. At the end of my discussion, as we were examining the proposals for a technology park, the councillors gave me some figures for St. Helens, which I considered before my statement today. It will of course be entirely appropriate for St. Helens to make proposals, if it wishes to propose a different cap or a different level of expenditure.
Mr. Evans: Will you meet them?
Mr. Patten: They will certainly be met by one of the Department of the Environment Ministers.
Let me make another point that is relevant to the consideration of St. Helens' financial position: the council had financial reserves of £11 million at 1 April 1990, of which it plans to use £3 million in 1991. Therefore, there is £8 million still available. I was proposing a reduction of £3·9 million against that £8 million.
Mr. Harry Greenway: Does my right hon. Friend appreciate that there will be consternation in Labour-controlled Ealing that Ealing council has not been rate-capped, bearing in mind the historic rates increases and community charge increases in recent years? There was a 65 per cent. rate increase in 1987, a 32 per cent. increase last year and now what amounts in some cases to an equivalent of a 55 per cent. increase in rates this year. Will he re-examine his list to see if he cannot put Ealing council in it?
Mr. Patten: I am glad, in the light of what my hon. Friend has said, that I am not a charge payer or still a resident in Ealing, because I understand the financial implications of Ealing's own distinctive management style for those who live in that borough. Ealing will spend 11·9

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per cent. over SSA in the coming year—£115 over SSA per head. I am afraid that that means that the authority does not come within the criteria that I have announced, which I believe are reasonable and legally robust. I am afraid that on this occasion I must disappoint my hon. Friend.
Mr. Kevin Barron: The Secretary of State has told my hon. Friend the Member for Wentworth (Mr. Hardy), and my hon. Friend the Member for Rotherham (Mr. Crowther), who represents Rotherham borough council, that he is prepared to consider alternative proposals. Rotherham borough council has never had its expenditure capped before by the Government. The decision to limit its expenditure programmes and to cut on non-statutory services already represents alternative proposals—alternatives to what the council really wanted to do.
To take £7·9 million from that authority—as the right hon. Gentleman has done by his decision this afternoon —is to attack an already impoverished area that has no alternative but to rely for much of the time on non-statutory services from the local authority. For months, the Government have argued that the point of the tax was that the people who would have to pay it would decide whether a local authority was providing the services or not. Why are we not listening to the people?
Mr. Patten: As I was not able to point out earlier in response to another question about Rotherham, Rotherham is proposing to spend 12·9 per cent. over its adjusted 1989–90 budget. That is a substantial figure, and is one of the arguments for limiting its expenditure in the coming year. Even with the cap, it will still be spending l3·7 per cent.—£95 per adult—over SSA.
Let me add—not in response to the hon. Member for Rother Valley (Mr. Barron)—that it is extraordinary that, after all the fury and fuss from the hon. Member for Dagenham, he has not had the courtesy to stay here until the end of these exchanges.
Sir Peter Emery: My right hon. Friend talked about deplorably high expenditure and unjustified charges, but that does not apply only to authorities whose spending is massively higher than the SSA? It also applies to a number of authorities that have spent well over 12·5 per cent. more than last year. In my area, the charge is about £90 over the recommended Government figure. Will he appeal to county councils of that nature to re-examine their expenditure and see whether they could give a rebate —which they can do legally—halfway through the year to those hard-pressed community charge payers?
Mr. Patten: My hon. Friend's suggestion is extremely sensible. His county is seeking to increase its spending in the coming year by almost 15 per cent., and is seeking to raise its total income by more than 18 per cent. Those are figures that it will have to justify to its voters and charge payers in due course. I would have the greatest difficulty in justifying figures of that size.
Mr. Ian McCartney: Will the Secretary of State accept that the Parliamentary Under-Secretary of State recently admitted that Wigan gave better value for money in services, pound for pound, than Wandsworth borough council? Is it not a disgrace that Wigan's spending this year has increased by 6 per cent. when inflation is at 8 per cent., yet the Government have decided to poll-cap Wigan and to reduce an already beleaguered
1052
budget by £10 million? The Secretary of State owes it to Wigan council to offer it a meeting to advise it in which areas of services it is overspending and in which areas cuts should be made. It is outrageous that the Secretary of State should have made this crooked statement today. All the Secretary of State has been doing is part of a smear campaign against caring Labour local authorities which provide services for the people.
Mr. Patten: I have already referred to the position of Wigan's reserves and to the increase in spending that it has proposed for the coming year over the last year. The hon. Gentleman's constituents could do with much of the financial competence and prudence which have ensured that, in Wandsworth, the community charge is as low as it is.
Dame Elaine Kellett-Bowman: All sensible people will rejoice that my right hon. Friend has capped most of the robber barons who are in charge of Labour local authorities. Unfortunately, he has failed to cap the robber barons of Lancashire, who are spending £123 million more this year, which is 11·4 per cent. more than they should be spending and the equivalent of an additional £80·92 per person. Why do we not get them out of the woodwork and cap them to curb their expenditure?
Mr. Patten: Lancashire county council has decided to spend 11·4 per cent. over its SSA and £81 per adult. Lancashire falls—I can understand my hon. Friend's concern about this point—just outside the criteria. Nevertheless, I am sure that local people will wish to ask the county why it has chosen to spend at those high figures. Lancashire's spending is extremely high, and puts a substantial burden on community charge payers. In other districts, the local councils are sensible and more prudent. Lancashire county council has a great deal to answer for.
Mr. Jeremy Corbyn: Is the Secretary of State aware that the SSAs he has announced are in utterly cynical manipulation designed to allow him to punish inner-city authorities which are desperately trying to provide services? How would he justify to the people of my borough of Islington that on top of all the cuts in central Government spending towards that borough in the past 10 years, there should now be a further cut of £3·7 million? Will he tell me, so that I can pass on the information to Islington, exactly which element of social services, education or housing he would personally propose to take away from the people of a hard-pressed inner-city area?
Mrs. Gorman: Tell that to Wandsworth.
Mr. Patten: What is particularly cynical is affecting concern about the impact on charge payers of spending decisions while declining to say that one will pay the community charge, and therefore putting a larger bill on charge payers. That is really cynical. The hon. Gentleman's constituents will be receiving total external support of £1,150 a head. I am sure that the hon. Gentleman will be interested to know that £108 of the charge in Islington can be attributed to the unwinding of past creative accounting devices.
Mr. Tim Janman: In his statement, my right hon. Friend made great play of the atrocious overspending by Basildon district council. Is he aware that, in the

1053
neighbouring socialist republic of Thurrock, the Labour-controlled council is overspending by 85·4 per cent. and is overcharging my constituents by more than 350 per cent.? Does he agree that the £15 million floor level for council revenue budgets should be removed and that the excellent principles which my right hon. Friend has put into practice today in his statement should apply to local authorities with a revenue budget of less than £15 million? My local council could then come in for the same treatment that he has correctly administered to those councils he has announced today.
Mr. Patten: My hon. Friend's constituents are having to pay large bills. The charge set is £417, which is a result of the council spending 85·4 per cent. over SSA or £75. As my hon. Friend said, the council does not come within our criteria because its budget is less than £15 million. That threshold was set because the House felt that to have a lower threshold would mean that very small sums were involved in extra contributions per head. The House had obviously not thought very much about the impact of councils such as Thurrock on the charge payers' pockets. I am sure that we shall have an opportunity to return to this issue on a future occasion.
Miss Kate Hoey: I know that the Secretary of State is deeply unhappy today because he has been unable to poll-cap Lambeth council. I know that he is also unhappy that Lambeth's budget is well below the wild figures thrown around by him and by the Prime Minister. Is the Secretary of State aware that just yesterday, the London borough of Lambeth was given leave to appeal for a judicial review on the £7 million extra which it will have to bear for the revaluation of county hall, which has nothing to do with the individual poll tax payers who live in the borough? Will he tell us today that he will not consider Lambeth for any poll capping until we have had the result of that judicial review?
Mr. Patten: I know that a delegation from Lambeth council came to see my hon. Friend the Minister for Local Government and Inner Cities and that he made the position on that issue perfectly clear. The point came up in a debate a couple of months ago in the House. I have observed that, as we have talked about charge capping in the past few weeks, Lambeth's budget has come down and down, and as the media have pointed to the difference between the original proposals in Lambeth and what other local authorities in London have been able to do, the figure in Lambeth has come down and down. I very much hope that, now that Lambeth knows what it has to do to avoid my criteria, it will do that and come in with a budget that does not involve charge capping.
Mrs. Maureen Hicks: Would not my right hon. Friend agree that rate increases of up to 57 per cent. over the past 10 years and a present excessive community charge figure of £418, which is £150 over the Government's assessment for Wolverhampton, is the figure with which my long-suffering constituents have had to live? Is my right hon. Friend aware of the bitter disappointment that will be felt by my constituents today that he has not managed to come to their rescue—[Interruption.]
Mr. Speaker: Order.
Mrs. Hicks: The answers will be in the ballot box in time, but meanwhile, the bills drop through the doors and my constituents must find the money. Who will protect them?
Mr. Patten: I do understand the sense of bitterness that many of my hon. Friend's constituents will feel about the decisions taken by Wolverhampton council. Wolverhampton has increased its budget by 19·5 per cent. above the equivalent figure for 1989–90. The result is that there will be a charge of £395, which is the third highest increase of all the metropolitan districts. It is an outrageously high figure. I am sorry that, because of the criteria that we felt were most sensible, we have not been able to come to the help of my hon. Friend's constituents in the way that she would have liked. I very much hope that they will take the appropriate measure through the ballot bax.
Mr. Dave Nellist: Does the Secretary of State realise that the cuts in jobs and services —in schools, in old people's homes, in meals on wheels and in home helps—which are the real targets of today's announcement will drive hundreds of thousands of trade unionists who provide those services and local people who rely on them towards active opposition to the poll tax? Is he finally aware that given his acceptance of the poisoned chalice of his present job, he is living proof of the old adage, that those whom the gods would destroy, they first make mad?
Mr. Patten: I had not imagined that the hon. Gentleman would descend to cliché—or "clitch" as Ernie Bevin called it—in quite such a spectacular way. If the services to which he referred are so important, I am rather shocked that he has decided not to help pay for them.
Mr. Chris Butler: Does my right hon. Friend accept that scandalous overspending means that, in Warrington, we face a community charge that translates into a 52 per cent. increase in rates? There are no county council elections in Cheshire until 1993. What protection will my right hon. Friend afford the citizens of Warrington?
Mr. Patten: I know that my hon. Friend is extremely upset about the consequences of spending decisions taken by his county council. I understand his concern, and I know that he has made vigorous representations on behalf of his constituents. No one could have argued more strongly for a reasonable deal for his constituents than my hon. Friend. Nevertheless, I am sorry that we have had to disappoint him today and that the criteria do not cover his local authority, or take account of its considerable overspending. I hope that, in due course, my hon. Friend's constituents will vote for Conservative councillors, who will make more sensible spending decisions.
Mr. David Blunkett: I should like to give the Secretary of State the opportunity to withdraw a remark that he made earlier this afternoon. Replying to questions about the impact on children's education and the care of the elderly, he said that in the next few weeks there would be
"a parade of bleeding stumps."
Not only those in the hard-pressed coalfield communities of south Yorkshire but people across the country will object to language and imagery of that sort.

1055
The right hon. Gentleman, the Prime Minister and the chairman of the Conservative party have all accepted that the basis of this afternoon's statement—the standard spending assessments—are wholly discredited. He knows that they are flawed and he said so, and he promised his own Back Benchers, as he did in the House on 18 January, that they would be changed.
As a result of these spending assessments, however, councils are facing capping and cuts and, ridiculously, Calderdale is having enforced on it a poll tax of £242, £100 below the poll tax in the Prime Minister's Barnet constituency, £150 below that in the constituency of the right hon. Member for Mole Valley (Mr. Baker), and £200 below the poll tax in Epsom and Ewell and in Windsor and Maidenhead. Anyone with the slightest intelligence can see that all that has come out of this shoddy completion of 11 years of central muddle and interference are increased administrative chaos, increased costs, increased cuts and a total capitulation by an honourable man to the Prime Minister's will.
Mr. Patten: I should tell the hon. Gentleman, who has stayed until the end of these exchanges—
Mr. Clive Soley: That is cheap. My hon. Friend told you, Mr. Speaker, that he had to go.
Mr. Patten: The hon. Gentleman might know why, but if the hon. Member for Dagenham (Mr. Gould) had to go, he was not able to convey that information to me—[Interruption.] It is actually known that one can get messages to people on the Front Bench. I am sorry that the hon. Member for Dagenham could not stay.
The point that I made earlier, and I repeat it now, is that I believe that it should be perfectly possible for local authorities to run a reasonable level of effective services under the proposals that I have made this afternoon. But I anticipate a lot of scare stories; they have already started in my constituency, thus predating this afternoon's statement. They have nothing to do with sensible local government finance and everything to do with political scare tactics, of which we shall see a good deal in the coming weeks.
On the question of SSAs and GREs and the distribution formula, I have made it clear—the hon. Member for Sheffield, Brightside (Mr. Blunkett) would have criticised me strongly had I not—that we are prepared to consider fresh evidence on SSAs and the formula. But, even in the context of the GREs and the spending proposals made by the local authorities that I have decided to cap, the mean figure for the increase over resealed GREs among the authorities that I have mentioned was 26 per cent., so by any standards those authorities have been substantial overspenders.
When referring to a number of local authorities, the hon. Member for Brightside knows perfectly well—because he knows and understands a good deal about local government finance—[HON. MEMBERS: "More than you do."] It just goes to show that one should never try to be courteous or civil in the Chamber on an afternoon like this. As I was saying, the hon. Gentleman knows perfectly well that there are a number of authorities that are making substantial contributions to the safety net and to areas in which there are low rateable values, and other local authorities are taking money out of the safety net—
Mr. Tony Banks: Like Wandsworth.
Mr. Patten: That is why absolute levels of charge would have been an inadequate way of deciding on charge capping and would have led to considerable criticism by the Opposition—
Mr. Banks: It is a fiddle and you know it.
Mr. Patten: The hon. Member, from whom I am sorry not to have been able to hear this afternoon—
Mr. Banks: So am I.
Mr. Patten: —refers to Wandsworth, about which he has something of an obsession. He will therefore know that Wandsworth receives one of the lowest levels of grant in inner London, yet can still set a charge of £148.
Lastly, I must tell the hon. Member for Brightside, who understands the provisions of the law and what the process amounts to, that if local authorities do not accept the charge caps we have proposed, they can make their own proposals, which we must then statutorily consider. We shall carefully consider any alternative proposals put to us by local authorities.
Several Hon. Members rose—
Mr. Speaker: Order. I am sorry not to have been able to call all hon. Members who want to ask a question. I shall certainly bear them in mind when we next debate this matter or have questions on it.
Following is the table:
Local Authority demands and precepts 1990–91 compared with SSAs
Notes
The attached table shows the comparison between the demands and precepts set by local authorities in 1990–91 and their Standard Spending Assessments (SSAs). For charging authorities, the comparison is with the demand on the collection fund, ie it does not include parish precepts. For the precepting authorities shown, the comparison is with the aggregate of precepts issued by the authority.
Column 1: shows the SSA for each authority for 1990–91, calculated in accordance with the Distribution Report.
Column 2: shows the percentage by which the demand or the aggregate of precepts exceeds the SSA (column 1).
Column 3: shows the amount by which the demand or the aggregate of precepts exceeds the SSA (column 1) in £s per adult (using relevant population, as calculated in accordance with the Population Report).
No adjustment has been made in this table to budgets reported to the Department where the Secretary of State believes that they have not been calculated in accordance with section 95(4) of the Local Government Finance Act 1988. The figures for demands and precepts used in this table are the latest reported by the authorities to the Secretary of State.

Local authority demands and precepts 1990–91 compared with SSAs

Authority

Standard spending assessment

Overspend on SSA

Overspend on SSA

£ million

Percentage

£/adult

1

2

3

SHIRE COUNTIES

Avon

450·7

18·4

117

Bedfordshire

277·3

9·1

64

Berkshire

376·8

9·1

62

Buckinghamshire

325·0

5·7

39

Cambridgeshire

317·8

3·2

21

Cheshire

474·7

12·5

83

Cleveland

337·0

10·4

85

1057

Authority

Standard spending assessment

Overspend on SSA

Overspend on SSA

£ million

Percentage

£/adult

1

2

3

Cornwall

235·4

6·2

42

Cumbria

246·5

16·0

103

Derbyshire

448·6

25·0

157

Devon

486·1

7·8

50

Dorset

290·3

4·0

23

Durham

303·7

6·9

46

East Sussex

325·1

3·7

22

Essex

761·2

2·1

13

Gloucestershire

251·6

8·9

56

Hampshire

755·5

2·0

13

Hereford and Worcester

317·8

0·8

5

Hertfordshire

477·5

6·2

40

Humberside

465·8

11·7

83

Isle of Wight

63·0

11·9

76

Kent

769·1

-1·2

-8

Lancashire

743·0

11·4

81

Leicestershire

458·8

7·9

55

Lincolnshire

295·2

0·0

0

Norfolk

352·7

4·8

30

North Yorkshire

332·9

3·8

24

Northamptonshire

297·0

5·7

40

Northumberland

142·0

16·5

102

Nottinghamshire

514·9

11·5

78

Oxfordshire

252·0

15·5

96

Shropshire

208·7

5·4

37

Somerset

224·7

11·2

72

Staffordshire

498·5

5·5

35

Suffolk

295·5

7·8

49

Surrey

446·6

7·9

45

Warwickshire

226·4

10·3

64

West Sussex

323·5

-3·3

-20

Wiltshire

268·7

5·0

32

Local authority demands and precepts 1990–91 compared with SSAs

Authority

Standard spending assessment

Overspend on SSA

Overspend on SSA

£ million

Percentage

£/adult

1

2

3

SHIRE DISTRICTS

Avon

Bath

6·6

0·0

0

Bristol

32·7

96·3

108

Kingswood

5·1

-1·1

-1

Northavon

7·4

3·0

2

Wansdyke

4·2

-0·3

0

Woodspring

10·9

0·8

1

Bedfordshire

Luton

17·1

-7·4

-10

Mid Bedfordshire

6·1

-13·2

-10

North Bedfordshire

10·4

-4·2

-4

South Bedfordshire

6·6

-2·3

-2

Berkshire

Bracknell

6·2

-6·3

-6

Newbury

8·2

-20·8

-16

Reading

12·3

37·4

45

Slough

12·3

-43·3

-69

Windsor and Maidenhead

7·8

37·1

29

Wokingham

7·3

9·1

7

Buckinghamshire

Aylesbury Vale

9·6

-34·5

-30

Chiltern

4·2

-2·6

-2

Milton Keynes

13·9

37·8

42

South Bucks

3·1

-20·9

-14

Wycombe

9·5

19·2

15

Cambridgeshire

1058

Authority

Standard spending assessment

Overspend on SSA

Overspend on SSA

£ million

Percentage

£/adult

1

2

3

Cambridge

8·3

50·0

56

East Cambridgeshire

3·7

-15·5

-13

Fenland

5·3

-5·7

-5

Huntingdonshire

9·0

-55·5

-49

Peterborough

11·2

33·5

34

South Cambridgeshire

6·7

-47·4

-36

Cheshire

Chester

8·2

4·5

4

Congleton

4·2

14·1

10

Crewe and Nantwich

6·9

39·1

35

Ellesmere Port and Neston

5·5

30·3

28

Halton

8·7

17·4

17

Macclesfield

8·4

0·0

0

Vale Royal

6·4

10·0

8

Warrington

11·9

15·0

13

Local authority demands and precepts 1990–91 compared with SSAs

Authority

Standard spending assessment

Overspend on SSA

Overspend on SSA

£ million

Percentage

£/adult

1

2

3

Cleveland

Hartlepool

7·8

46·9

55

Langbaurgh-on-Tees

9·4

85·6

72

Middlesborough

13·6

63·6

84

Stockton-on-Tees

12·2

53·9

50

Cornwall

Caradon

4·4

3·8

3

Carrick

5·5

9·8

9

Kerrier

6·0

9·3

8

North Cornwall

5·0

-10·4

-9

Penwith

4·5

-15·0

-14

Restormel

5·5

-4·1

-3

Cumbria

Allerdale

6·2

2·4

2

Barrow in Furness

4·9

83·6

71

Carlisle

7·7

17·1

17

Copeland

4·5

55·2

45

Eden

3·1

-18·7

-17

South Lakeland

6·2

-3·3

-3

Derbyshire

Amber Valley

5·9

5·4

4

Bolsover

3·8

22·9

16

Chesterfield

5·9

37·1

28

Derby

19·0

-1·6

-2

Derbyshire Dales

4·2

-0·6

0

Erewash

6·3

22·0

17

High Peak

5·2

7·6

6

North East Derbyshire

4·5

36·5

22

South Derbyshire

4·1

9·9

7

Devon

East Devon

6·9

-1·9

-1

Exeter

7·7

10·9

11

Mid Devon

4·2

20·6

18

North Devon

5·8

4·0

4

Plymouth

23·0

0·0

0

South Hams

4·8

-8·1

-7

Teignbridge

6·8

31·4

26

Torbay

8·1

85·1

74

Torridge

3·5

9·0

8

West Devon

2·9

-5·4

-5

1059

Local authority demands and precepts 1990–91 compared with SSAs

Authority

Standard spending assessment

Overspend on SSA

Overspend on SSA

£ million

Percentage

£/adult

1

2

3

Dorset

Bournemouth

13·9

19·5

23

Christchurch

2·3

9·9

7

East Dorset

3·5

25·4

14

North Dorset

3·4

-37·0

-32

Poole

7·4

0·0

0

Purbeck

2·8

-30·0

-26

West Dorset

5·4

-6·0

-5

Weymouth and Portland

4·2

42·5

38

Durham

Chester-le-Street

2·7

69·4

45

Darlington

7·8

39·5

41

Derwentside

5·2

140·4

111

Durham

5·1

54·7

45

Easington

6·0

45·2

36

Sedgefield

5·4

56·2

45

Teesdale

1·8

-12·5

-11

Wear Valley

4·6

102·2

96

East Sussex

Brighton

14·4

39·3

52

Eastbourne

6·2

62·1

57

Hastings

7·9

42·4

54

Hove

9·3

-7·5

-10

Lewes

4·8

0·9

1

Rother

5·4

17·2

14

Wealden

7·6

3·8

3

Essex

Basildon

9·5

194·3

154

Braintree

7·0

13·6

11

Brentwood

3·6

108·5

72

Castle Point

4·6

54·6

38

Chelmsford

8·6

41·8

32

Colchester

9·4

0·0

0

Epping Forest

6·7

10·1

7

Harlow

5·5

115·4

113

Maldon

3·1

-4·1

-3

Rochford

3·8

38·7

26

Southend-on-Sea

14·0

39·3

45

Tendring

8·3

26·0

22

Thurrock

8·1

85·4

75

Uttlesford

3·8

-15·8

-12

Local authority demands and precepts 1990–91 compared with SSAs

Authority

Standard spending assessment

Overspend on SSA

Overspend on SSA

£ million

Percentage

£/adult

1

2

3

Gloucestershire

Cheltenham

6·7

10·7

10

Cotswold

4·7

17·7

15

Forest of Dean

4·7

-9·8

-3

Gloucester

7·1

8·6

9

—Stroud

6·1

46·5

35

Tewkesbury

4·7

-29·6

-21

Hampshire

Basingstoke and Deane

8·9

-10·7

-9

East Hampshire

5·7

22·2

17

Eastleigh

5·0

47·3

31

Fareham

5·1

17·6

12

Gosport

5·0

20·8

18

Hart

4·3

38·8

27

Havant

8·0

5·5

5

New Forest

9·9

-0·7

-1

Portsmouth

19·1

4·1

6

Rushmoor

5·7

6·6

7

1060

Authority

Standard spending assessment

Overspend on SSA

Overspend on SSA

£ million

Percentage

£/adult

1

2

3

Southampton

18·1

14·2

16

Test Valley

5·8

-11·2

-8

Winchester

5·7

7·3

6

Hereford and Worcester

Bromsgrove

4·5

7·4

5

Hereford

3·2

-7·4

-6

Leominister

3·0

-15·4

-15

Malvern Hills

5·3

21·2

17

Redditch

5·1

46·4

42

South Herefordshire

3·5

-30·3

-28

Worcester

5·4

29·0

26

Wychavon

5·7

0·6

0

Wyre Forest

5·5

45·6

35

Hertfordshire

Broxbourne

4·8

8·5

6

Dacorum

8·3

0·0

0

East Hertfordshire

6·5

9·0

7

Hertsmere

5·3

51·1

42

North Hertfordshire

7·0

13·4

11

St Albans

7·8

-2·3

-2

Stevenage

4·8

94·1

79

Three Rivers

4·3

26·7

20

Watford

6·9

22·7

28

Welwyn Hatfield

5·6

81·9

65

Local authority demands and precepts 1990–91 compared with SSAs

Authority

Standard spending assessment

Overspend on SSA

Overspend on SSA

£ million

Percentage

£/adult

1

2

3

Humberside

Beverley

5·6

9·9

6

Boothferry

4·7

-6·6

-6

Cleethorpes

4·6

50·4

45

East Yorkshire

5·1

43·0

33

Glanford

4·9

15·7

14

Great Grimsby

7·0

49·2

52

Holderness

3·0

33·3

25

Kingston upon Hull

25·1

26·8

35

Scunthorpe

4·4

58·3

56

Isle of Wight

Medina

5·4

-15·0

-14

South Wight

3·7

14·1

12

Kent

Ashford

6·3

2·1

2

Canterbury

8·8

26·7

25

Dartford

5·3

64·8

54

Dover

7·4

25·7

24

Gillingham

7·0

2·1

2

Gravesham

6·4

-5·2

-5

Maidstone

9·1

31·2

27

Rochester upon Medway

11·7

-42·6

-45

Sevenoaks

6·0

9·5

7

Shepway

6·5

65·1

61

Swale

7·7

41·9

38

Thanet

10·2

12·2

13

Tonbridge and Malling

5·8

50·1

38

Tunbridge Wells

6·6

10·8

9

Lancashire

Blackburn

15·2

24·9

40

Blackpool

13·4

36·3

41

Burnley

8·0

29·9

35

Chorley

5·5

-0·8

-1

Fylde

4·3

9·1

7

Hyndburn

6·3

29·3

31

1061

[]

Authority

Standard spending assessment

Overspend on SSA

Overspend on SSA

£ million

Percentage

£/adult

1

2

3

Lancaster

9·4

31·5

31

Pendle

6·7

40·7

44

Preston

13·2

8·1

11

Ribble Valley

2·8

6·6

5

Rossendale

4·3

66·3

59

South Ribble

5·2

16·1

11

West Lancashire

6·4

-0·1

0

Wyre

6·4

10·7

9

Local authority demands and precepts 1990–91 compared with SSAs

Authority

Standard spending assessment

Overspend on SSA

Overspend on SSA

£ million

Percentage

£/adult

1

2

3

Leicestershire

Blaby

4·0

-44·1

-28

Charnwood

7·9

-12·8

-10

Harborough

3·4

-5·3

-4

Hinckley and Bosworth

4·8

-6·0

-4

Leicester

36·6

38·3

69

Melton

2·4

-6·8

-5

North West Leicestershire

4·5

24·2

18

Oadby and Wigston

2·7

18·9

13

Rutland

2·1

-8·3

-7

Lincolnshire

Boston

3·9

2·0

2

East Lindsey

9·7

-5·6

-6

Lincoln

6·7

0·0

0

North Kesteven

4·8

-8·3

-6

South Holland

4·9

16·8

16

South Kesteven

6·9

-3·9

3

West Lindsey

5·0

0·4

0

Norfolk

Breckland

6·5

-14·1

-11

Broadland

5·2

-16·9

-11

Great Yarmouth

6·6

45·4

43

King's Lynn and West Norfolk

9·7

-19·1

-19

North Norfolk

6·6

-9·1

-8

Norwich

10·3

45·5

50

South Norfolk

5·6

-15·1

-11

Northamptonshire

Corby

4·0

16·3

16

Daventry

3·7

-10·6

-9

East Northamptonshire

4·0

-29·7

-24

Kettering

5·1

-4·0

-4

Northampton

13·9

14·0

15

South Northamptonshire

3·6

-33·0

-24

Wellingborough

4·5

-48·6

-44

Northumberland

Alnwick

2·1

11·1

10

Berwick-upon-Tweed

1·7

17·3

14

Blyth Valley

4·5

104·1

79

Castle Morpeth

2·9

30·1

23

Tynedale

3·4

25·2

20

Wansbeck

3·7

94·6

74

1062

Local authority demands and precepts 1990–91 compared with SSAs

Authority

Standard spending assessment

Overspend on SSA

Overspend on SSA

£ million

Percentage

£/adult

1

2

3

North Yorkshire

Craven

3·1

-3·5

-3

Hambleton

4·6

-3·7

-3

Harrogate

3·7

69·0

56

Richmondshire

3·3

-14·2

-14

Ryedale

4·9

10·5

7

Scarborough

7·4

31·2

29

Selby

6·0

-8·7

-8

York

8·0

24·0

24

Nottinghamshire

Ashfield

5·6

18·6

13

Bassetlaw

6·7

18·9

16

Broxtowe

5·8

3·8

3

Gedling

6·5

-0·4

0

Mansfield

6·0

55·2

43

Newark and Sherwood

7·1

-9·3

-8

Nottingham

29·4

11·1

16

Rushcliffe

5·4

-11·0

-8

Oxfordshire

Cherwell

7·6

-45·2

-41

Oxford

11·7

14·7

23

South Oxfordshire

7·4

-2·8

-2

Vale of White Horse

6·0

-47·3

-35

West Oxfordshire

5·8

-36·0

-31

Shropshire

Bridgnorth

3·1

-22·7

-18

North Shropshire

3·5

-11·8

-10

Oswestry

2·0

24·2

19

Shrewsbury and Atcham

5·3

9·7

7

South Shropshire

2·8

-7·2

-7

Wrekin

8·8

50·1

45

Somerset

Mendip

5·8

-3·2

-3

Sedgemoor

6·1

-0·3

0

South Somerset

8·7

5·3

4

Taunton Deane

5·9

-15·2

-12

West Somerset

2·3

-6·2

-6

Local authority demands and precepts 1990–91 compared with SSAs

Authority

Standard spending assessment

Overspend on SSA

Overspend on SSA

£ million

Percentage

£/adult

1

2

3

Staffordshire

Cannock Chase

5·6

39·3

33

East Staffordshire

7·2

5·0

5

Lichfield

5·0

-26·5

-19

Newcastle-under-Lyme

6·7

42·1

30

South Staffordshire

5·5

-38·5

-27

Stafford

7·1

-3·2

-3

Staffordshire Moorlands

5·7

7·6

6

Stoke-on-Trent

19·3

24·4

25

Tamworth

3·9

3·6

3

Suffolk

Babergh

4·9

-11·7

-10

Forest Heath

3·4

-12·7

-13

Ipswich

9·1

96·3

97

Mid Suffolk

5·0

-2·7

-2

St. Edmundsbury

5·6

-12·0

-10

Suffolk Coastal

6·8

31·8

28

Waveney

7·1

21·3

19

Surrey

Elmbridge

5·8

56·9

39

1063

Authority

Standard spending assessment

Overspend on SSA

Overspend on SSA

£ million

Percentage

£/adult

1

2

3

Epsom and Ewell

4·0

81·6

64

Guildford

8·1

-5·6

-5

Mole Valley

3·9

28·9

19

Reigate and Banstead

6·7

80·4

56

Runnymede

5·6

-67·7

-67

Spelthorne

5·2

13·5

10

Surrey Heath

4·5

10·8

8

Tandridge

4·3

37·4

28

Waverley

6·2

13·8

10

Woking

5·8

-17·3

-15

Warwickshire

North Warwickshire

3·3

66·7

48

Nuneaton and Bedworth

6·9

57·4

45

Rugby

5·8

-1·6

-1

Stratford on Avon

6·1

-3·7

-3

Warwick

7·5

-3·5

-3

West Sussex

Adur

3·1

106·4

72

Arun

8·0

30·3

25

Chichester

6·6

-0·1

0

Crawley

6·0

87·2

78

Horsham

6·4

-0·8

-1

Mid Sussex

6·3

17·9

12

Worthing

7·1

22·4

20

Wiltshire

Kennet

4·2

-26·9

-22

North Wiltshire

6·8

-9·3

-8

Salisbury

6·5

-17·7

-15

Thamesdown

11·8

18·8

17

West Wiltshire

5·9

22·6

17

Isles of Scilly

Isles of Scilly

2·0

-4·6

-60

Local authority demands and precepts 1990–91 compared with SSAs

Authority

Standard spending assessment

Overspend on SSA

Overspend on SSA

£ million

Percentage

£/adult

1

2

3

Police and Fire Authorities

Metropolitan Police

632·1

-1·0

-1

London Fire and CD Authority

191·7

4·5

2

Greater Manchester PA

114·1

5·5

3

Merseyside PA

76·8

5·7

4

South Yorkshire PA

48·9

2·6

1

Northumbria PA

58·1

6·6

4

West Midlands PA

112·3

2·4

1

West Yorkshire PA

86·5

9·9

6

Greater Manchester FCDA

54·3

2·3

1

Merseyside FCDA

36·5

3·5

1

South Yorkshire FCDA

22·6

23·7

5

Tyne and Wear FCDA

24·7

10·0

3

West Midlands FCDA

53·5

2·0

1

West Yorkshire FCDA

37·8

25·6

6

1064

Local authority demands and precepts 1990–91 compared with SSAs

Authority

Standard spending assessment

Overspend on SSA

Overspend on SSA

£ million

Percentage

£/adult

1

2

3

LONDON

Inner London

City of London

41·6

63·1

10,130

Camden

151·3

19·9

232

Greenwich

153·0

39·2

387

Hackney

205·5

14·8

233

Hammersmith and Fulham

132·4

26·6

297

Islington

158·2

19·8

251

Kensington and Chelsea

98·6

11·1

132

Lambeth

240·2

27·0

376

Lewisham

174·3

19·2

196

Southwark

193·2

24·8

290

Tower Hamlets

179·6

16·5

262

Wandsworth

202·7

3·8

38

Westminster

172·2

-7·4

-94

Outer London

Barking and Dagenham

89·1

11·6

95

Barnet

160·0

-1·9

-14

Bexley

116·3

1·6

11

Brent

214·8

16·1

178

Bromley

141·6

0·2

1

Croydon

190·1

-6·0

-48

Ealing

202·5

11·9

115

Enfield

159·7

2·5

21

Haringey

166·9

29·8

351

Harrow

115·8

-0·5

-4

Havering

117·3

8·9

59

Hillingdon

125·9

20·0

143

Hounslow

124·9

13·3

108

Kingston-upon-Thames

72·9

8·8

63

Merton

97·6

-4·0

-30

Newham

195·3

10·6

130

Redbridge

129·1

1·7

13

Richmond-upon-Thames

76·0

8·8

54

Sutton

88·2

12·4

85

Waltham Forest

160·7

11·5

115

Note: Arrangements to reflect the status of the City of London as a special authority mean that only part of the difference between its SSA and demand falls on chargepayers. No adjustment has been made to the demands of the City of London and Inner London boroughs for the overspend inherited from ILEA.

Local authority demands and precepts 1990–91 compared with SSAs

Authority

Standard spending assessment

Overspend on SSA

Overspend on SSA

£ million

Percentage

£/adult

1

2

3

METROPOLITAN DISTRICTS

Greater Manchester

Bolton

157·9

5·9

48

Bury

91·7

12·4

85

Manchester

340·6

3·9

46

Oldham

139·2

9·2

81

Rochdale

128·0

18·8

152

Salford

146·7

9·3

80

Stockport

148·2

13·7

93

Tameside

124·8

13·8

101

Trafford

121·9

-2·6

-20

Wigan

165·6

21·1

151

Merseyside

Knowsley

113·0

5·0

51

Liverpool

349·6

10·0

107

Sefton

158·0

11·4

82

St. Helens

109·1

16·2

130

Wirral

197·1

4·1

33

1065

[]

Authority

Standard spending assessment

Overspend on SSA

Overspend on SSA

£ million

Percentage

£/adult

1

2

3

South Yorkshire

Barnsley

112·1

26·6

178

Doncaster

158·6

19·9

144

Rotherham

138·5

19·5

134

Sheffield

289·5

12·4

85

Tyne and Wear

Gateshead

117·8

12·2

92

Newcastle upon Tyne

173·3

12·4

107

North Tyneside

109·2

18·8

136

South Tyneside

97·2

9·9

81

Sunderland

176·8

9·1

75

West Midlands

Birmingham

724·1

6·4

67

Coventry

190·1

11·2

97

Dudley

156·9

11·7

77

Sandwell

192·0

13·0

113

Solihull

103·7

6·3

43

Walsall

156·9

13·8

113

Wolverhampton

172·8

7·7

72

West Yorkshire

Bradford

315·7

3·0

30

Calderdale

109·9

20·9

160

Kirklees

219·0

14·9

117

Leeds

389·6

7·3

55

Wakefield

161·7

14·3

97

Community Charge Capping 1990–91

The table below shows the authorities which the Secretary of State is today designating for community charge limitation and the maximum amounts (ie "caps") which he is proposing.

Budget

Proposed

Reduction

£ million

cap

£ million

£ per adult

Avon

533·7

507·1

26·6

37

Barnsley

142·0

132·0

10·0

59

Basildon

27·9

23·7

4·2

35

Brent

249·3

241·7

7·6

39

Bristol

64·2

56·6

7·6

26

Calderdale

132·9

125·4

7·5

52

Camden

181·4

177·0

4·4

34

Derbyshire

560·6

520·6

40·0

56

Doncaster

190·1

178·5

11·6

53

Greenwich

213·0

203·0

10·0

65

Hammersmith and Fulham

167·5

155·8

11·7

99

Haringey

216·5

206·5

10·0

71

Hillingdon

151·0

141·7

9·3

53

Islington

189·5

185·8

3·7

30

North Tyneside

129·7

122·9

6·8

45

Rochdale

152·0

144·0

8·0

51

Rotherham

165·4

157·5

7·9

39

St. Helens

126·7

122·8

3·9

29

Southwark

241·0

226·9

14·1

86

Wigan

200·6

190·6

10·0

43

Note:
1. Reductions shown as £ per head of relevant population.

Business of the House
5.8 pm
The Lord President of the Council and Leader of the House of Commons (Sir Geoffrey Howe): With your permission, Mr. Speaker, I should like to make a statement about the rearrangement of business for tomorrow.
I am proposing that the business already announced for Wednesday 4 April—consideration of Lords amendments to the Education (Student Loans) Bill—should now be preceded by a timetable motion on the same business.
Mr. Bruce Grocott: That perfunctory statement means that, with their characteristic insensitivity, the Government are introducing another guillotine motion on a day when we are to hold a guillotined debate—necessarily delayed by the first statement—on the Social Security Bill.
Will the right hon. and learned Gentleman concede that, far from being exceptional motions used to deal with particularly complicated legislation, guillotines are now a normal method of conducting Government business? If the right hon. and learned Gentleman needs to bring in a guillotine motion on a Bill of only four clauses and five pages, guillotines will obviously become the order of the day for all Government legislation, which we would find wholly unacceptable. Why did the Leader of the House intend to bring in a guillotine on the Education (Student Loans) Bill in the middle of last week but then change his mind? Why has he chosen instead to bring it in at the last possible minute? This is not Government business management: it is crisis management.
Is not the real reason for the motion the fact that the right hon. and learned Gentleman is scared of his own Back Benchers and of the strength of the Lords amendments—especially those on housing benefit—and scared of allowing all these matters a full debate in the House? This is government by shambles.
Sir Geoffrey Howe: The hon. Gentleman has a total misconception of the position. Considering the nature of the business for tomorrow, it seems to be in the interests of both sides of the House—
Mr. Dennis Skinner: Only the Tories.
Sir Geoffrey Howe: It is sensible, as the Bill is to be considered for the last time, to have a reasonable amount of time allotted to consideration of the timetable motion and the amendments that the House will consider tomorrow afternoon. There should be ample time for that.
Mr. Simon Hughes: The Leader of the House should have thought again before introducing a guillotine motion on this measure. There are 17 Lords amendments. A significant number were moved by his noble Friends in the other place. There are only three matters of controversy, on one of which the Government have made a substantial concession—students who are disabled. That leaves two matters of controversy. Are the Government so frightened of the democratic decisions of this Parliament and so unable to argue their case persuasively that they cannot in a whole day use the proper procedures to debate two important matters, on which, across the parties, the other House defeated the Government—and rightly so?
Sir Geoffrey Howe: I am most grateful to the hon. Gentleman for so plainly making the case for the timetable motion that I propose. As he says, the overwhelming majority of the amendments are Government amendments produced in response to representations. He says that there are two matters of controversy. The timetable should allow ample time for their discussion.
Mr. Robert Rhodes James: Is my right hon. and learned Friend aware that the House of Lords spent three long days debating these matters at great length and with great knowledge? One wonders sometimes whether the Government believe in the House of Lords. As the hon. Member for Southwark and Bermondsey (Mr. Hughes) said, the Lords produced three amendments which are necessarily controversial. Surely they should be debated at considerable length. None of us wishes to delay the proceedings of the House. In organising the timetable motion, will my right hon. and learned Friend recollect that some of us care deeply about the future of higher education, and that he cannot guillotine that?
Sir Geoffrey Howe: My hon. Friend will understand that the intention of the legislation is to sustain higher education. For the reasons given by the hon. Member for Southwark and Bermondsey (Mr. Hughes), my hon. Friend will find that the time allotted for consideration will be quite sufficient for the matters of controversy.
Mr. Tam Dalyell: Will the Leader of the House reflect that there might be a case for a statement tomorrow on a matter that bothered Mr. Speaker greatly today? It was the matter raised by my hon. Friend the Member for Dunfermline, West (Mr. Douglas)—the position of the Chairman of the Procedure Committee in relation to the Chairman of the Select Committee on Defence?
Mr. Speaker: Order. That is a different matter. I am worried about lots of things.
Mr. Dalyell rose—
Mr. Speaker: Order. The leader of the House made a statement on guillotining the Bill tomorrow. The hon. Gentleman must find another opportunity to raise the other matter.
Mr. Dalyell: I am asking for a statement tomorrow on information from the Americans about the Chairman of the Select Committee on Defence.
Mr. Speaker: Order. This is a statement about the business tomorrow and the guillotine motion on the Students' Loan Bill. The hon. Gentleman must confine his questions to that.
Mr. Tony Banks: This is a business statement.
Mr. Speaker: Order.
Mr. Grocott: On a point of order, Mr. Speaker. This is a statement about tomorrow's business. My hon. Friend was raising an issue connected with tomorrow's business.
Mr. Speaker: Was he? I thought that he was raising a completely different matter.
Mr. Dalyell: Tomorrow's business should be preceded by a factual statement from a senior Minister on what the
1068
United States defence authorities and the Pentagon had to say about the activities of the hon. Member for Hampshire, East (Mr. Mates)—they were raised today, so I do it as a matter of urgency—in the Pentagon in connection with public relations firms on whose behalf he has been acting. There is a wide understanding that the Americans have complained bitterly to our Ministry of Defence about the pressuring and lobbying activities of the Chairman of a Select Committee of the House. Before we leave for the Easter recess, the matter should be cleared up one way or the other. It is a matter of the honour of the House.
Sir Geoffrey Howe: The timetable motion that I announced earlier will in no sense inhibit the time available for the discussion of other matters tomorrow. There was no reason for the hon. Gentleman to raise under cover of privilege the wide-ranging allegations that he has just made in his characteristic fashion.
Mr. John Marshall: In view of the widespread filibustering on Report, the guillotine will be widely welcomed. Will my right hon. and learned Friend confirm that, under the system of student loans, the level of student support in the United Kingdom will be more generous than that in any other country in the western world?
Sir Geoffrey Howe: My hon. Friend can make that valuable point tomorrow.
Mr. Banks: Is not this guillotine motion further evidence of the authoritarian nature of the Government, starting at No. 10 Downing street and now pervading the Benches opposite? As the guillotine motion is about saving time—which I assume the Government want to do, as well as killing debate—why does the Leader of the House not consider postponing the Easter recess so that we can debate the matter properly? The Easter recess already seems to me over-generous.
Sir Geoffrey Howe: The Easter recess was authorised by the House last week with some enthusiasm.
Mr. Richard Shepherd: When did we first start to guillotine Lords amendments? Is it not inappropriate to say to the second Chamber of a bicameral system that we do not want fully to list or understand the arguments adduced in the Lords' amendments?
Sir Geoffrey Howe: I am saying no such thing. The time available will suffice for the work in hand.
Mr. Win Griffiths: Will the Leader of the House reconsider the statement that he made this afternoon? As my hon. Friend the Member for The Wrekin (Mr. Grocott) has already said, this is a four-clause Bill with a fairly short schedule. In effect it simply says that a student loans scheme will be introduced. In Committee we did not cause any problems in dealing with the matter so I should have thought that it would be appropriate to allow full discussion of the Lords' amendments. There is no way that a full discussion can be allowed when, for example, on the housing benefit issue both my hon. Friend the Member for Leeds, West (Mr. Battle) and I have not had information about the number of students whose loss of housing benefit will be greater than the loan available to them under the scheme. It is pathetic that we have such a timetable for such a small Bill.
Sir Geoffrey Howe: The hon. Gentleman also makes my case. As he says, it is a small Bill. It has been considered in both Houses for 86 hours so far. As the hon. Member for Southwark and Bermondsey said, the time available tomorrow should suffice for the two or three outstanding issues.
Several Hon. Members rose
Mr. Speaker: Order. May I remind the House that we have a guillotined Bill today? The first Division takes place at 7 pm. Questions must be confined to this matter, please.
Sir Peter Emery: Would not my right hon. and learned Friend confirm that, rather than have a filibuster on one amendment which could take the House perhaps six, seven or eight hours, we shall have a reasonable time for all the amendments to be debated? Surely that is what the House would wish.
Sir Geoffrey Howe: I am grateful to my hon. Friend.
Mr. Harry Barnes: There has never been any problem with the Bill in the House. It went through Committee in an orderly fashion without a timetable. The same occurred on Report and Third Reading before the Bill went to another place. Now that it has returned with some amendments to be discussed—only two minor technical amendments came out of Committee and were adopted—and we have a chance to discuss the Bill reasonably, why is it to be cut short?
Sir Geoffrey Howe: There will be reasonable time for the amendments to be discussed.
Mr. Dennis Skinner: In view of the business statement, will it release enough time for the Prime Minister to tell us what action she will take against those Tory Members and Ministers who are supporting the law-breaking Fayed brothers and inciting others to break the law in the City of London?
Mr. Speaker: That is a mile wide of the statement.
Mr. Dick Douglas: May I, with great respect, ask the Leader of the House to remember his responsibilities to the House in general and not just his responsibilities to the Tory party? Notwithstanding the way in which he has organised business for tomorrow, as suggested by the timetable motion, why have we not had time before the Easter recess to have a statement from the Secretary of State for Scotland about capital offsets? We have been promised that statement again and again. With great respect, we have been extremely patient and peaceful in Scotland, although we are characterised as law-breakers. When will the Secretary of State for Scotland come here to make a statement to clear up the mess that the Government have got into?
Sir Geoffrey Howe: I take note of the hon. Gentleman's point.

Points of Order
5.20 pm
Mr. Roy Hattersley: On a point of order, Mr. Speaker.
I wish to raise a point of order concerning the proper conduct of Commons business and Members' rights. You
1070
will recall, Mr. Speaker, that, in the business statement last Thursday, the Leader of the House announced that the British Nationality (Hong Kong) Bill would have its Second Reading on Thursday 19 April. That Bill has not yet been published. It is available for publication, and I am advised that the printing is complete, but the Home Office tells me that it will not be published until, at the earliest, the beginning of public business tomorrow. At best, therefore, the Government will have withheld publication of the Bill until so late a date that only two sitting days, the last day of this Session and the first day of the next, are available for discussion and consultation between Members.
I understand very well that the Government do not want their own Back Benchers to discuss with each other the tactics by which they will oppose the Bill, but to provide the House with so little opportunity, two sitting days, to consider the content of so important a Bill is a denial of the basic rights of the House.
I therefore ask you, Mr. Speaker, whether there is any pressure that you can bring to bear on the Government to require the Bill to be made available to the House today? I emphasise that it is available: all that is necessary is for the Leader of the House, the Chief Whip or one of their satraps to make the necessary application to you. The Bill would then be at our disposal. I believe that that is not so much right as essential for the proper conduct of our affairs.
The Lord President of the Council and Leader of the House of Commons (Sir Geoffrey Howe): I am glad to be able to confirm that arrangements have been made for the Bill to be published tomorrow. It will be available for more than two full weeks before it comes back for debate in the House. I hope that the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) will find it ample to fill his holiday reading.
Mr. Robert Adley: On a point of order, Mr. Speaker. I wish to raise—
Mr. Hattersley rose—
Mr. Speaker: Mr. Adley first.
Mr. Adley: I wish to raise a point of order that relates directly to your responsibilities, Mr. Speaker, which refers to one of the Sessional Orders passed by the House that you placed before it on 21 November. That order read:
"That the Commissioner of Police of the Metropolis do take care that during the Session of Parliament the passages through the streets leading to this House be kept free and open and that no obstruction be permitted to hinder the passage of Members to and from this House".
It concluded:
"that the Serjeant at Arms attending this House do communicate this Order to the Commissioner aforesaid".
I assume that the Serjeant at Arms is ultimately responsible to you, Mr. Speaker, and carries out your instructions.
It is a fact, attested to by all hon. Members, that on many occasions—I am not talking about just today and it has nothing to do with demonstrations—an increasing number of coaches proliferate around Parliament square blocking the streets and preventing parking in and access to the House. That causes a serious disincentive to hon. Members in their attempts to reach this place on time. The powers of the traffic commissioners, emasculated under recent legislation, are partly responsible for the problem.

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Those coaches are not all foreign; most of them are British. It appears to me that coach operators demonstrate an arrogant disregard not only for other road users, but the Sessional Order. Surely the parked coaches are an abuse of the ruling of the House and such rule breaking is either being done in ignorance or deliberately. I ask you, Mr. Speaker, to request the Serjeant at Arms to invite the Commissioner of Police of the Metropolis to tell us what action he would like the House to take to deal with the problem.
Mr. Speaker: I understand that a substantial number of coaches convey visitors to Westminster. I believe that the Services Committee is looking into the question of traffic in Parliament square. The hon. Gentleman should ask that Committee to consider the parking of coaches as well.
Mr. Tony Banks: It is a matter for you.
Mr. Speaker: No, it is a matter for the Services Committee.
Mr. Adley: The order is in the name of the Serjeant at Arms. I ask you, Mr. Speaker, to ask the Serjeant at Arms to inquire what response he has received from the Commissioner of Police.
Mr. Speaker: This is a question for the police, but I shall look into it.
Mr. Tony Banks: Good man.
Mr. Max Madden: On a point of order, Mr. Speaker. I wonder whether I could ask you to reflect further on the point made by my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley)? The British Nationality (Hong Kong) Bill is extremely contentious and controversial legislation. The Bill was promised for today, but clearly it will not be available until tomorrow afternoon.
Originally, we were warned that Second Reading would take place during the week of 23 April. In last week's business statement, we were told that its Second Reading would take place on Thursday 19 April, the day after our return from the Easter recess. That means that there is inadequate time for all parties in this House to have collective consideration of the legislation.
I ask the Leader of the House to consider reverting to the original plan so that we can have its Second Reading during the week of 23 April. That would give reasonable additional time for all parties in the House to consider this important Bill.
Mr. Speaker: That is for the Leader of the House to decide, but the Bill has not yet been presented to the House, so it would not be possible to make it available today.
Mr. Richard Holt: On a point of order, Mr. Speaker.
Mr. Speaker: I must point out that we have a guillotine motion at 7 pm.
Mr. Holt: I am aware of that, and I am sure that the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) is equally aware of it.
My point of order relates to a matter directly under your control, Mr. Speaker, and as you intend to have a word with the Serjeant at Arms about another issue, I want to raise it now. Half an hour ago, when I went to my office, I found that members of the public were going to meetings on that Corridor. People are standing outside our Committee Rooms selling copies of Socialist Worker to those going in and out of them. Surely it is wrong and against all the rules of the House that such pamphlets are being sold inside this building.
Mr. Speaker: That is of course absolutely out of order, and I shall certainly get the Serjeant at Arms to look into that matter.
Mr. Dalyell: On a point of order, Mr. Speaker. I do not want to be pedantic, but could you reflect on the whole question of business statements and come to some ruling tomorrow? For greater accuracy, it is important to note that the Leader of the House said:
"With your permission, Mr. Speaker, I should like to make a statement about the re-arrangement of business for tomorrow"
If we are now not to be allowed to make other points pressing for statements is that not yet another erosion, unwitting in your case, Mr. Speaker, of Back Benchers' rights? We must be vigilant on that.
Before tomorrow, will you consider, Mr. Speaker, the issue that arose from Question 4—that is, the anger of the Americans towards one of our senior colleagues at his behaviour in the Pentagon? The Chairman of the Defence Select Committee should make a statement to the House, possibly a personal one, on the allegations now being widely made to the effect that he misused his position in pressing matters in relation to contracts in the Pentagon. It is bad enough that that is done in Whitehall, but to start doing it in other countries, in the Ministries of Defence of our allies, raises serious questions.
Mr. Speaker: Unfortunately, when the hon. Gentleman first raised this point of order, I stopped him, because I did not have the relevant extract from Erskine May to hand, but now a blinding light has struck me. I draw the hon. Gentleman's attention to page 297 where it states:
"The Speaker has ruled that when a narrow business statement is made, changing only one item of business, supplementary questions are confined to that item."
That is why I sought to stop the hon. Gentleman.

Leasehold Reform (Residents' Associations)
5.31 pm
Mr. Dudley Fishburn: I beg to move,
That leave be given to bring in a Bill to give residents' associations the right to appoint managing agents.
This is the second time in the 18 months that I have been in this House that I have sought to bring in a Bill on leasehold reform—I have had two skirmishes in a long campaign, which was spearheaded by my distinguished predecessor Sir Brandon Rhys Williams and which numbers among its battalions many hon. Members, building societies, the Law Commission and hundreds and thousands of leaseholders in London and elsewhere, who find the present state of the law bedraggled, shot through with anomalies and in need of reform.
The selling of residential flats on leasehold, the method by which London was developed in the 19th century, provides a singularly unsatisfactory form of home ownership for the tail end of the 20th century, let alone for the middle of the 21st century, when many of the leases, which are now being written, will finally lapse. No other country in Europe has such a system. Those countries that inherited English leasehold law—for example, the United States, Australia and Canada—have long since reformed or abandoned the practice.
Two reforms are necessary. First, we must be allowed to own individual flats on freehold. At present, the law does not permit it. Flat A, flat B, flat C in a residential block cannot each carry their own independent freehold ownership. By English law, each has to be on a lease, a diminishing asset that opens up a host of problems between leaseholder and freeholder. That is wrong. The Lord Chancellor is currently considering a system by which leaseholders could buy, with no compulsion—willing buyer meets willing seller at market price—their flats in perpetuity. For the first time, a flat could carry the same security as a freehold house. That was the substance of my first reforming Bill, last April. The system, called "commonhold", is well established in other countries. It was first floated in this country, interestingly enough, by the Grosvenor estate.
The essential problem with leasehold is not that it is just one way of providing residential blocks of flats, but that it is the only way under English law. Although someone might buy a 99-year lease on a property, the freeholder, whose residual interest is tiny, still maintains, in law, a disproportionately large amount of clout over the person whose home it actually is. That clout is being used in an increasingly disreputable way.
The problem is not with London's large traditional landlords. They are here to stay. They are a part of London's heritage, and think in terms of generations. Through huge swathes of London, however, there has grown up recently a different kind of landlord, whose time horizon is not 99 years, but rather the scope for profit in 99 weeks.
Few leaseholders will ever see, or know, their freeholders, who in my part of London are often either overseas investors or companies that are forever churning among themselves the legal documents of freehold.
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What leaseholders see, by contrast, are the often unreasonable demands and dictatorial behaviour of the managing agents. That is where my second reform, which I seek to introduce this afternoon, comes in.
I propose that residents associations, as recognised in the Landlord and Tenant Acts of 1985 and 1987, be allowed to appoint their own managing agents. The legal cog to permit that is to be found in part V, section 44 of the 1987 Act. There, the provision that landlords appoint managing agents after consulting leaseholders, should be, quite simply, reversed. Leaseholders should appoint them, after consulting the landlords. It is, after all, the resident leaseholders who pay the managing agents for their work and their fee. It is an old principle that he who pays the piper should call the tune—residents' power to residents associations.
Let us consider two recent cases from my post bag. The first is a block of flats on long leases off Kensington high street, where the freehold changes hands under the residents. A new management agent is appointed who, instead of charging the traditional fee of 15 per cent. on the work done, charges one of 77 per cent., which, after an outcry, has now come down—if that is the right word—to 42 per cent. The leaseholders are powerless, short of going to law.
Go to law is exactly what the residents of another block of flats—Oakwood court in the heart of Kensington—have had to do. This huge block has 182 flats on long leases—long, but not long enough. A property company, which does not own the freehold, controls under-leases that run for a few days longer than those of the residents. This allows the property company control over the service charges for the block, which amount to about £1 million a year. Who have they chosen as their managing agents? After an exhaustive assessment of the many such companies offering managing services in London, they have chosen, by chance, one that they just happen to own. That is because the law, as it now unsatisfactorily stands, allows the landlord to choose the managing agent, and does not give the residents a right of veto.
To a good freeholder—there are many—a managing agent's job is strictly neutral. The agent oversees the work that is a legal condition of the lease, and no financial advantage accrues to either side. That being the case, good freeholders mind little who appoints the managing agents. Legitimate work needs to be done, and is being paid for by the residents. This reform is about having the job done not on the cheap, but by those who must pay the bill, realise they must do so and live with the consequences.
The Department of the Environment is about to undertake what it calls a detailed evaluation study of the working of the Landlord and Tenant Act 1987. It will find that, where leaseholders are involved—rather than straight tenancies, which are a different matter not considered here—the law is in need of those two reforms. We should allow commonhold, through which leaseholders can buy their own individual flats on freehold, and permit leaseholders to name their own managing agents. Those are two reforms that this Government, who have done so much for home owners, need to undertake, and soon. Those are two reforms that have the added advantage of being both popular and, as far as Her Majesty's Treasury is concerned, free.
Question put and agreed to.
Bill ordered to be brought in by Mr. Dudley Fishburn, Mr. Matthew Carrington, Mr. Nigel Forman, Mr. Kenneth Hind, Mr. Chris Butler, Mr. Robin Squire, Mr. Gerald Bowden and Sir George Young.

Leasehold Reform (Residents' Associations)
  LEASEHOLD REFORM (RESIDENTS' ASSOCIATIONS)
  Mr. Dudley Fishburn accordingly presented a Bill to give residents' associations the right to appoint managing agents: And the same was read the First time; and ordered to be read a Second time upon Friday 6 July and to be printed. [Bill 118.]
Orders of the Day

  Social Security Bill
  [2ND ALLOTTED DAY]
  As amended, further considered.

  Social Security Bill
    New Clause 10

      REINSTATEMENT OF SEVERE DISABLEMENT ALLOWANCE ENTITLEMENT
      'Regulations shall provide that in any case where a person was in receipt of a Severe Disablement Allowance immediately before the commencement of a course of youth training and on ceasing that course fails to secure gainful employment the entitlement of that person to a Severe Disablement Allowance shall be automatically reinstated.'.—[Mr. Alfred Morris.]
      Brought up, and read the First time.
      5.38 pm
      Mr. Alfred Morris: I beg to move, That the clause be read a Second time.
      Time is now both very strictly and scandalously rationed, due to a guillotine made sharper by the timing of this afternoon's statement on the poll tax, even for a debate about severely disabled young people whose brave attempts to win the independence of gainful employment can result in reducing their incomes.
      The new clause is a particularly important one for young people who, while they have severe disabilities, also have abilities. It is strongly backed by the organisations that work to help them, including Barnardo's, Mencap and the Spastics Society. Those are all organisations for which there is high regard on both sides of the House and they insist that the new clause must be added to the Bill. Their concern is not with imagined difficulties which may occur if the Bill becomes law, but with the acute difficulties now of severely disabled young people who strive with exceptional effort, but often unsuccessfully through no fault of their own, to exchange the dependence of social security payments for the independence which goes with having a job and paying taxes.
      Barnardo's, in a letter to me yesterday about the new clause, underlines the importance of its purpose and describes it as removing a disincentive which actively discourages
      "young people with disabilities from entering YTS".
      Hon. Members of all parties who went to the recent "parents' forum" arranged here by Barnardo's will recall the very moving statements made by the mothers of young people with severe disabilities. They told us that, although they passionately want the opportunity to work, their sons and daughters have to face the loss of their severe disablement allowance if they enter youth training and then fail to find work. I am sure that they left all the hon. Members who heard them with the feeling that to withdraw SDA from young people who try so hard to triumph over severe handicap is a form of refined cruelty which Ministers must now urgently stop.
      The savings made by the Government from withdrawing SDA in cases where young people cannot find work when their training ends are very small compared with the £1·9 billion given in a single Budget to the richest 1 per cent. of taxpayers. The new clause is about removing a tax

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      on hope, that of young people most of whom, due to lack of employment opportunities, today go from school to scrap heap. All that severely disabled youngsters who receive training, and succeed as trainees, can possibly have today is hope.
      As the Minister knows, unemployment among disabled job seekers is more than twice as high as the current rate among able-bodied people. They are pushed to the back of the dole queue, which is still the longest queue in Britain and, as I have demonstrated to him in correspondence, are often made to sit up and beg from the social fund. The Government's own recent survey showed that only 31 per cent. of all disabled adults of working age are actually working compared with 69 per cent. of the population as a whole. The ratio for males was even worse: 33 per cent. compared with 78 per cent. Those findings shout of discrimination against disabled workers. Moreover, the earnings of disabled people who found work were substantially lower than those of non-disabled employees, and the same is true of parents of disabled children.
      Those are the bleak facts, known only too well by most disabled people, which face those for whom even trying to train and find work can invite the penalty of losing their severe disablement allowance. At a time when they often need more help, as we heard from parents at the meeting here at Westminster, they lose their SDA. Their reaction, as I know from speaking to many of the young people of whom I speak in this debate, is that their efforts to achieve financial independence are mocked by a system which piles handicap on handicap.
      They and their parents know full well that they can lose financially if any attempt at training or employment does not meet with immediate success. They will not automatically requalify for SDA, as provided for in the new clause, and the family is likely to be left substantially worse off. Under the present system, they have to undergo the complex procedure of reassessment and, even then, may lose a benefit of crucial importance to them. Faced with this, many parents and young people feel that attempting a youth training programme is too much to risk.
      Mr. Dafydd Wigley: Does the right hon. Gentleman agree that in treating disabled young people in this way the Government appear to be going in a different direction from that which was implicit in the White Paper "The Way Ahead", which appeared to encourage people to go on training and then to come back, and not to lose benefits as a result? Surely this is the opposite. That is why we need the new clause—to make sure that there is no discrimination against disabled people.
      Mr. Morris: I entirely agree with the hon. Member for Caernarfon (Mr. Wigley). His point is one to which I shall return after referring to some particular cases.
      Pat Nelson is a foster parent of twins, Nicky and Jackie, aged 18. Both have Down's syndrome and will soon leave school. In describing her fears, their foster parent writes:
      "The way the regulations stand at the moment, if Nicky and Jackie go on to a YTS or take a job, they cease to be eligible for their disability benefit. If that job or scheme fails, the benefit would not automatically be restored because they would have proved that they could work or take part in YTS."
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      Elspeth McLean, leader of the Barnardo's project aimed at providing youth training opportunities for young people with severe mental handicaps, has also come across this deterrent effect in her work. She tells me:
      "When I recruit young people for my scheme, parents often say to me 'of course we'd like our son or daughter to have the chance of a job or go on a scheme, but what if it goes wrong? Will they lose their disability benefit?' For many, especially those from low income families, this proves just too much."
      Noting that the cost of the new clause would be very small, the Spastics Society, in a message to right hon. and hon. Members timed for today's debate, says that my proposal is one of "rational change" and totally consistent with the Government's own proposals in their document "The Way Ahead", which was the point made by the hon. Member for Caernarfon. That being so, the rational change that we are seeking can be made by the House today by approving the new clause.
      The Spastics Society's statement to hon. Members goes on:
      "Current regulations impose a risk and act as a disincentive to young people who might otherwise take up training. This new clause ensures a safety net which would give them added confidence and encouragement to do so. Some of these young people may, as a result of their training, find paid employment which would enable them to come off social security benefits altogether."
      The Minister knows as well as I do that the Spastics Society is right. He knows, too, that the case work of Barnardo's, Mencap and the Spastics Society fully demonstrates the urgent need for the change. Their endorsement of the new clause is not inspired by any political motive. Their only concern is to help severely disabled young people who feel that today the odds are very heavily stacked against them, notwithstanding the enormous efforts they make to normalise their lives and to make the contribution of which they are capable to industry and to society. They are worthy not of unfair treatment, but of our admiration.
      I must warn the Government that disabled young people's insistence on better treatment will not go away. It will be pursued for as long as it takes to satisfy them and their parents that they are being fairly dealt with and that their efforts to gain more independence are no longer mocked by the social security system. The new clause will correct a cruel anomaly and I commend it to right hon. and hon. Members on both sides of the House.
      The Minister for Social Security (Mr. Nicholas Scott): It is a universal desire throughout the House that young people with disabilities be encouraged, if they are able, to take part in youth training schemes and to get themselves into employment. Perhaps I can make some general remarks at the outset before I come to deal with the new clause. There are a number of things which I believe are moving in the direction of encouraging precisely that development.
      When we are able to introduce the disability employment credit in 1992, it will be a very big encouragement for people suffering from a disability to take up work, knowing that if they eventually have to give up the work they will retain their underlying entitlement to the longer-term benefits, such as invalidity benefit, when they leave work, and the benefit itself will encourage and make it easier for them to get into employment.
      Secondly, I have no doubt that the impact of technology in the workplace, as well as in the domestic

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      environment, will make it possible for many people with disabilities, including youngsters, to get into employment and to hold down important jobs. The third factor is the simple movement of demography. Employers, in both the public and the private sectors, will need the skills of disabled people in the coming decades. They will have to learn to look behind the disabilities to find the abilities. That is important.
      The fourth factor that has impressed me during the time that I have held responsibility for the disabled is the sheer determination of increasing numbers of them, especially youngsters, to get into employment and to acquire the independence that that brings.
      In speaking to the new clause, I must first remind the House that severe disablement allowance is a benefit for people who are incapable of work. That is the basic definition. As I am sure all hon. Members appreciate, it is the non-contributory equivalent of invalidity benefit for people who have not paid the necessary national insurance contributions. Therefore, the primary medical qualifying condition—this is fundamental—is that the person must be incapable of work.
      As I understand the proposals in the new clause, SDA would become payable to people who were capable of work, on the ground that they had failed to find suitable employment. That would be an entirely new principle in the conditions for the benefit and would cut across the basic principles of the SDA scheme.
      Mr. Wigley: Does the Minister accept that, on all occasions, we should try to avoid typecasting people as incapable of work for ever more? People may have been incapable of work, and therefore rightly secured SDA, but nevertheless feel that there may be an opportunity to break out. If the opportunity arises for new training, and if that would benefit the person, surely the system should not militate against that by imposing a financial penalty on those trying to break out of typecasting.
      Mr. Scott: I understand the hon. Gentleman's point. My next few points will, I hope, show that the scheme is not quite so cut and dried as might be imagined from reading the new clause. There are existing arrangements to help former recipients of SDA. who are incapable of work at the time when they finish a YTS course or shortly thereafter, to acquire the right to benefit again. That comes under the so-called linking rules for this benefit and, indeed, for other benefits.
      If a person who was receiving SDA before starting a course of youth training is incapable of work at the end of that course, SDA can be reinstated immediately, because the claim links with earlier entitlement. I suppose that it is right to say that, if someone had successfully completed a YTS course, that would be prima facie evidence that they should be capable of work at the end of that course. However, it would still be open to an adjudication officer to decide that, despite the successful completion of that course, the person was incapable of work and immediately to reinstate the SDA to which the person was earlier entitled.
      Periods when a person is registered as unemployed count in the same way in linking claims. For example, if a former SDA recipient was registered as unemployed between the end of training and the time when incapacity for work began—someone might leave YTS, be unemployed and eventually be determined as incapable of
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      work—SDA could be reinstated immediately. There is also the provision which allows gaps when those conditions do not apply, perhaps when a person has been working. If such a gap is no longer than eight weeks, entitlement to SDA is not affected. There could be any number of such gaps, provided that none exceeded the eight-week period. For example, someone could try a series of jobs in an attempt to find something suitable, but provided that they decided that they were not suitable within the eight-week period, they would be entitled to SDA immediately. The effect of those arrangements is that a person who becomes incapable of work either at the end of youth training or, in some circumstances, some time afterwards, can have SDA reinstated without waiting for the usual 28 weeks.
      It would be a fundamental change to remove the principle of entitlement to SDA—namely, that somebody should be incapable of work. The scheme is more flexible than was suggested by the right hon. Member for Manchester, Wythenshawe (Mr. Morris). I hope that, in the light of what I have said, he will withdraw the new clause. If he does not, I shall have to advise the House to resist it.
      Mr. Morris: I am sorry that the Minister has not accepted what is widely believed to be a compelling case. There is no time now even to press such an important new clause to a Division, but I hope that it will be raised again in another place and carried.
      I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    New Clause 15

      INDEPENDENT LIVING FUND
      'In section 32 of the 1986 Act—
      (a) after subsection (2A) there shall be inserted the following subsection—
      "(2B) A payment of £30 million shall be made out of hat fund to the Independent Living Fund in the year ending on 31st March 1991 for the purpose of helping people with severe disabilities to live independently in their own homes.".
      (b) after subsection (6) there shall be inserted the following subsection—
      "(6A) The Secretary of State shall make a payment of £30 million into the Social Fund to enable the payment specified in subsection (2B) above to be made without reducing the amount of money available for the other purposes of the fund.".'—[Ms. Short.]
      Brought up, and read the First time.
      Mr. Alfred Morris: I beg to move, That the clause be read a Second time.
      The new clause is an attempt to ease the serious financial crisis of the independent living fund—
      Madam Deputy Speaker (Miss Betty Boothroyd): Order. I beg the pardon of the House. The new clause must be moved by one of the hon. Members whose names appear on the amendment paper.
      Ms. Clare Short: I move formally.
      Mr. Morris: As I said, the new clause attempts to ease the current serious financial crisis of the independent living fund. Again the time available to debate the new clause has been strictly rationed by the Government, but I must try both to explain its purpose and strongly to emphasise its importance to severely disabled people.

      1081
      As its name implies, the independent living fund works to help disabled people, even those with the most severe disabilities, to live their lives independently in their homes wherever that can be achieved. Many severely disabled people dread having to go into institutional care, which is fortunate for the taxpayer because the costs of such care are often much higher than for community care. The House needs no reminding that forcing people into institutions, against their will and against their best interests, can be self-defeating for the Government as well as inhumane.
      The independent living fund was created as a safety net after shocking disclosures about the effects on severely disabled people of the social security changes in April 1988. But the safety net is now holed and the hole will grow wider and deeper if the Government do not act urgently to make more resources available to the independent living fund. The present level of funding clearly does not meet the demands that have been revealed. Unless much more substantial and secure funding is provided, the independent living fund will shortly be unable to make any further awards. The result will be that institutional care becomes the only option for disabled people who, with appropriate help, are perfectly capable of living at home.
      At the launch of the independent living fund, the Minister said that additional money would be found for the fund if it became oversubscribed. As David Brindle of The Guardian first disclosed publicly, that manifestly is now the case, and I ask the Minister to accept the new clause and to do as he promised when the fund began its work. David Brindle wrote that, by the end of March:
      "the fund will be paying 4,500 people—three times the maximum number originally anticipated—at an annual cost of £15·2 million.
      There are an additional 1,500 cases approved and pending, representing an additional annual cost of almost £5·1 million, and 600 approvals a month are being added to this at a further annual cost of £2 million."
      6 pm
      As the Minister knows, the Disablement Income Group, which has done so much to sustain the Fund's work since its inception, is calling for the ILF to be fully funded by the Government in 1990–91. It is doing so because, until the new arrangements for community care start in April 1991, there is nowhere else that disabled people can go for help in covering their expenditure on personal care.
      I understand that applications for financial support are currently reaching the fund at a rate of 1,800 per month. Normally, one in three people meet the fund's strict criteria. Thus, a Government cash freeze will mean that, in every month of the next financial year, the fund will have to turn away 600 severely disabled people in need of vital assistance.
      Peter Large of DIG states:
      "We are dismayed by the threat to the Fund's existence because it has, until now, been such a success … The Fund's careful assessment of each applicant's individual requirements has revealed the true cost of community care for severely disabled people. And it is the extent of need that has [now] put the Fund's existence in jeopardy."
      Payments from the fund have kept families together, enabled severely disabled people living alone to stay in their own homes, made it possible for others to leave institutional care and provided essential cover for
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      hard-pressed relatives. The fund has made sound financial sense as well. For many severely disabled people, small amounts of cash have stood between them and an unwelcome move to institutional care, which is far more expensive to the taxpayer than the cost of maintaining the ILF.
      Peter Large also states:
      "When the Fund started we knew of severely disabled people existing on beans on toast in order to scrape together enough money to pay for the help they needed. We believed those days were over and that never again would it be necessary to put anyone in the position of having to choose between such basic necessities of life as food and personal support. Unfortunately, we were mistaken."
      What he is saying is that very soon the ILF will have to turn away some 650 to 700 "successful" applicants for help every month.
      Yet to tighten the fund's eligibility criteria, as the Minister must know, would involve rewriting the trust deeds. He knows as well. from the letter sent to him by Elizabeth Hoodless of Community Service Volunteers on 29 March in what very high regard the fund is held by her organisation as by many others who know of its work. It would be helpful to the House if the Minister could respond to that important letter when he speaks in this debate.
      Will the Minister also explain why Peter Large's letter for DIG to the Secretary of State for Health, although it was sent to the right hon. and learned Gentleman on 17 September last, has since been only acknowledged? When will the Secretary of State reply? As the right hon. Member for Chelsea (Mr. Scott) may know, the letter sent by DIG to his right hon. and learned Friend was of considerable importance in terms of trying to vouchsafe adequate community care for severely disabled people. Surely it deserves the courtesy of a considered reply.
      I give just one case, among scores of which I have details, with regard to the importance of the ILF's work. It is that of Jenny, aged 47, who has been cared for by her sister since her mother died 11 years ago. Jenny suffered severe brain damage in a road accident when she was 15, resulting in a high degree of mental handicap, and she needs constant supervision as well as help in all personal care. Her actual communication is limited to the most basic needs but she talks and demands attention incessantly. The strain of caring for her contributed to the break-up of her sister's marriage and probably to the latter's deteriorating health. Her sister now suffers from angina.
      Respite care for Jenny has not been an option since a disastrous experience two years ago which made her terrified of ever leaving home again and left her incontinent. Her sister would not countenance sending her away again, but she has been desperate for some sort of break from the responsibility. She would love to go back to her old part-time work and may well make use of some of the 25 hours a week care now paid for by the independent living fund to do so.
      That is the kind of case for which no further help may be available if the Minister is not prepared to accept our proposal in new clause 15. I most strongly urge him to do so at a time when, as he is fully aware, the poll tax is making life even more difficult for severely disabled people and their carers. He will recall that I gave details in the House on 24 January of cases in which families which include a severely disabled person will have to find as much as £756 a year more in poll tax than their current rates.

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      It would be very helpful to have some sort of response from the Government to the figures I was given by the Spinal Injuries Association. It and many other organisations of and for disabled people are deeply disquieted about the added problems that arise for disabled people from a tax which they regard as hideously unfair.
      There will be Tory Members who share my deep concern about the people who face further hardship if the ILF is not given the financial support that it now most urgently needs. I hope that they will not only make their concern clear to the Minister, but will support the new clause which I now commend to the House.
      Mr. Scott: The whole Government, of course, take the view that, where it is possible or appropriate, not just disabled people but the elderly and others who need help should have the opportunity to be supported within the community rather than have to go into institutional care. That is why my right hon. Friend the Secretary of State for Health is currently taking through proposals to enable that to happen increasingly from 1991 and for packages of care to be produced by local authorities to achieve that aim.
      I am sure that the right hon. Member for Manchester, Wythenshawe (Mr. Morris) did not mean to imply, although he mentioned a letter to which my right hon. Friend the Secretary of State for Health might not have replied, that the Government have not maintained constant and regular contact with the trustees of the ILF and, in particular, the trustees appointed by DIG and DIG Scotland. On a number of occasions, both formal and informal, I have met Mr. Peter Large and Miss Pauline Thompson and discussed these matters with them, and I have, of course, kept in regular contact with the chairman of the trustees of the ILF.
      Mr. Alfred Morris: I referred to the letter from Peter Large to the Secretary of State for Health in the debate today. He is very anxious to have a considered reply to a letter which, after all, was sent last September.
      Mr. Scott: I cannot recall seeing a copy of that letter but, since it was sent in September, that may not be surprising. Certainly I have had a number of conversations with Peter Large, Pauline Thompson and, obviously, Mrs. Tumim in the interim to discuss not just the matters that we are discussing tonight but other matters affecting the ILF.
      The new clause seeks a payment of £30 million for the ILF from the social fund. I recognise at the outset that this is a device—I do not use the word in a pejorative sense—to enable us to discuss an important matter. Obviously, this would not in practice be a sensible way of handling the flows of public money, and for that reason if for no other I would ask the House to reject the clause were it to be pressed to a Division. I appreciate the sentiment behind the proposal, and I hope that my remarks will go some way towards meeting the concern which the clause addresses.
      But first I wish to remind the House of the origins of the independent living fund and to pay the warmest tribute to the trustees—those appointed by the Secretary of State and those appointed by the disablement income group and DIG Scotland—who have operated the fund successfully. They have worked much harder than any of them envisaged when they took on the responsibilities of trustees of the ILF, and I pay them the warmest possible tribute.
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      The House will recall that the fund was established in 1988 with a five-year life following the abolition of the additional payments for domestic assistance which had been available to disabled people under supplementary benefit. We recognised that that left a very small group of the most severely disabled people whose needs might not be fully addressed by the disability premiums available under the new income support scheme.
      A separate fund, with cases examined individually by independent trustees, seemed to offer a way of directing help towards that group with a flexibility and sensitivity that would not be possible within the regulated social security system. As I said at the outset, many people—including perhaps Opposition Members—were sceptical when it was set up, but it has done a useful job in the intervening period.
      Our original provision for the independent living fund in 1989–90 was £5 million. That was more than doubled, to over £10 million, last year and has been more than doubled again, to £24 million, for the year just starting. There is no doubt that the fund has met its original objective of providing a way of directing individual help to those most in need. But I am afraid that it is also providing money in a wide variety of cases that were never contemplated when it was established. That is rapidly making it impossible for it to function in the way that was originally envisaged.
      It is proving not to be possible to provide detailed and individual consideration in a centralised scheme handling as many cases as the fund now handles. As a result, there is a growing danger that the fund will no longer be able to provide the necessary attention to the needs of the original target group. Indeed, handling the current volume of applications is already placing a burden on the trustees which it is unreasonable to ask them to carry.
      Because of the developing situation, I have been discussing the matter with the trustees, as I mentioned earlier, in an endeavour to find ways of reorganising the work of the fund so that those for whom the fund was established can receive the help they need.
      It is obviously necessary for those discussions to be placed in the context of the new arrangements for community care to be introduced from April 1991. Under those arrangements, local authorities will be devising care packages on an individual basis and in a way that clearly overlaps with the present role of the independent living fund.
      6.15 pm
      Once the new arrangements are in place, people seeking help should generally be able to look to local authorities, but we recognise that authorities will need time to develop the detailed assessments and complex care packages that will be required. We therefore could not expect them to take on the entire case load of the ILF in April 1991. There will have to be some phasing, with local authorities gradually taking on such cases. There will also need to be some limited short-term arrangements for new cases that arise during the evolutionary stage.
      The details will have to be discussed with the local authorities, but we shall obviously have to build in safeguards to prevent irresponsible authorities from placing an unwanted burden on the ILF. So we envisage some form of joint approach to these cases, with a revamped ILF, so to speak, providing only supplemental help from a clearly specified budget during the transitional phase.

      1085
      The way ahead now for me is to discuss with the trustees how the resources available to the fund can most effectively be used in the current year in a way which enables the fund to meet its original objectives and which provides a smooth transition to the appropriate arrangement after April 1991.
      Unfortunately—the right hon. Member for Wythenshawe alluded to this—the rapid growth in claims to which I referred means that provision in the fund for 1990–91 is already heavily committed to current beneficiaries and to those to whom offers of help have already been made. That leaves little scope for the implementation of the suggested changes to which I referred.
      I hope that we can reach agreement with the trustees on a sensible limiting of the scope of the fund, and in that case we shall be prepared to find the resources within our existing public expenditure programme to make a further £8 million available for the current year. That is an increase of a third in the current year allocation and a more than sixfold increase in the resources originally envisaged for the fund. I hope that the House will welcome that as an appropriate response to the concerns that have been voiced and, were the clause to be pressed to a Division, which I hope it will not, to reject it.
      Sir David Price: I thank my right hon. Friend for his reply, although a few problems remain outstanding. There is concern about the increase in the burden of cases placed on the fund. My right hon. Friend said that some of those cases were of a nature not envisaged when the fund was established. It would be helpful if he would explain how he thinks they should be handled. If they should not be handled by the fund, who should handle them, certainly in the interim?
      Who will handle the cases in the early days of the build-up of responsibility of the local authorities? It is not unfair to local authorities to say that some of them will be able to handle such cases more quickly and better than others. The professionalism needed to handle cases of this nature—many of which are extremely complicated and need much sensitivity and experience to handle—is not universal. It would be strange if it were. It is inevitable that there will be uneven provision in the early days. It is important that something like the fund should remain available in the carry-over period as a longstop. The fund was established in the first instance so that somewhere in the scheme of things there would be a longstop arrangement for really severe cases.
      I agree with my right hon. Friend that that should not be an excuse for reluctant local authorities putting an increased burden on the fund. It would be reassuring for all concerned if the fund remained in place for as long as is needed, and I beg my right hon. Friend in his discussions with the Treasury not to agree a terminal date yet, but to see how matters progress.
      Mr. Scott: I am grateful to my hon. Friend the Member for Eastleigh (Sir D. Price) for raising those two points. The answer to the first—about the type of cases that the fund has accepted and for which it has been paying—is that I am not betraying any confidences when I say that the fund has become aware that, as it has become more widely known, a number of local authorities which already have responsibility in this area to cope with the needs of disabled people, instead of meeting those responsibilities,
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      have sent people to the ILF, suggesting that they apply to that area simply to protect their own budgets. That has been a significant factor in the growth that has occurred in the case load of the ILF.
      My hon. Friend's second point was that, as we moved into the period after April 1991, with the new community care arrangements in place, inevitably some local authorities would do better than others and there would be, as he put it, an uneven implementation of the new arrangements. That is why I could not envisage the fund coming to an end in April 1991. I assure my hon. Friend that no terminal date has been agreed and that we shall have to see how implementation goes after April 1991.
      Mr. Alfred Morris: I hope that the Minister for Social Security will meet the trustees very soon. Meanwhile, I note his announcement of a further £8 million for the independent living fund, and I will not be pressing the new clause to a Division.
      Ms. Short: I beg leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    New Clause 16

      ACTIVELY SEEKING EMPLOYMENT
      'Sections 10 and 13 of the 1989 Act shall cease to have effect.'.—[Ms. Short.]
      Brought up, and read the First time.
      Ms. Short: I beg to move, That the clause be read a Second time.
      The intention of the new clause is to abolish the actively seeking work test introduced in the Social Security Act 1989.
      The way in which we have to proceed at great haste through the enormously important issues that we are debating tonight is a consequence of the undemocratic guillotine that the Government have imposed on the Bill. It brings the procedures of the House into disrepute and means that important issues cannot be properly debated and that hon. Members who wish to contribute cannot do so.
      The provision that individuals must prove, on a weekly basis, that they are actively seeking work or face the possibility of having their benefit taken away is deeply objectionable. It is part of the Government's long-term strategy to encourage low pay in our economy.
      Hon. Members should realise that, in the post-second world war benefit system, it has always been obligatory to take a job if one was available; no one has any argument with that. We agree that that is the right structure. However, what the Government did in the Social Security Act was intended to force people to accept jobs that are so low-paid that they might even be paid less than they previously received in benefit. We moved an amendment in Committee to ask that no one should be forced to accept a job which paid less than their benefit. The Government refused the amendment, so that is not the current provision.
      In 1979, the Government set out to positively encourage low-paid employment in our economy. They have taken a series of measures to remove protection from low-paid workers and measures that prevented employers from competing for tenders—particularly in the public sector—by cutting wages.

      1087
      The Government have been enormously successful—regrettably—in that strategy. There has been a massive growth in low-paid work in Britain since 1979. It is a truly shocking and alarming statistic, but 49 per cent. of people at work in Britain are now paid less than the Council of Europe's decency threshold—a standard laid down by the Council of Europe to measure low pay in member states.
      The overwhelming majority of low-paid workers in Britain are women. The Minister for Social Security, who has now left the Chamber, made it clear in debates on a previous Social Security Bill that the Government are not concerned about low pay for women. He said that that was not a worry, because many women were part of a two-income household. That is very interesting, and it says something about the Government's underlying attitude to women's work and to how women should be valued. Many women are not in two-income households. Some men and many women head single-parent families. They are trying to work and trying not to be dependent on benefits. They have to struggle to survive on low rates of pay.
      The low-pay economy that the Government have so successfully developed during the past 10 years is obviously bad for the individuals concerned. It is bad to have to work, to be creative and to try to be productive while struggling week by week to make ends meet. It is bad for our benefits system, because it means that an ever-growing number of people are claiming family credit, which means that the system is subsidising some of the worst employers—employers who pay bad wages. Lack of training, poor health and safety standards, lack of investment, poor quality jobs and a poor contributions to the economy go hand in hand with low pay.
      The positive encouragement of low pay means that the benefits system subsidises some of the worst, least economically efficient employers. The policy is also bad for the British economy, because an economy that seeks to go forward by encouraging low pay will not be successful. Employers who seek to compete by cutting wages and paying low wages do not train, do not invest, do not embrace new technology and are inefficient, and they cannot help the British economy to compete internationally.
      The actively seeking work provisions require individuals to show each week that they have been looking for a job. A constituent came to my last advice bureau a week ago. He worked for 20 years for a large manufacturing concern in Birmingham—so one can tell that he was a reliable, hard-working employee. He was thrown out of work in the massive recession that the Government generated in 1980–81, and he has been desperately seeking work ever since. He has been on a whole series of Government training schemes. There are many such men in the west midlands. They are in their fifties, and having worked all their lives, were thrown out of work in the recession and have lived between schemes and bits of low-paid work ever since.
      My constituent so desperately wanted work that he went on an employment training scheme, where he was not trained—he was ripped off. He had to work in dirty, bad conditions. He came to see me during the scheme and said that it was a rip-off but he would stay on in case there was a job at the end of it. He did not get a job, and someone else has been taken on, under the employment training scheme, to do the non-paid job that he so badly wanted. he came off ET and now he has been given a form. All such workers will he given a similar form. He has to fill out the
      1088
      form and prove each week that he is actively seeking work. He feels angry and humiliated, and there are a large number of people like him.
      Some 700 unemployment claimants each week have been given written warnings about their job-seeking activities in the first seven weeks after the implementation of the Social Security Act 1989. Nearly 600 of those people subsequently had their benefit suspended when their claims were referred to adjudication officers. Then there is an enormous gap in time when the individual concerned has no money, and the adjudication officers do not uphold all the cases that have been referred to them. My constituent is desperate, and is often forced to take appalling employment at appalling rates of pay, and that is the Government's intention.
      The Government's strategy is deeply wrong for the individuals affected by it. It is wrong positively to encourage low pay in the economy, which is what the Government are all about and what the Bill is all about. On top of that, it is an outrage to humiliate people by forcing them to show each week that they are seeking work. Many of them write letters but employers do not reply and so it is difficult to produce evidence.
      The actively seeking employment provision should never have been made. The clause seeks to withdraw it from the statute book.
      Mr. Andrew Rowe: I wholeheartedly agree with the hon. Member for Birmingham, Ladywood (Ms. Short) that it is extremely bad for an economy to be a low-wage economy. The hon. Lady is right to say that one characteristic of a company which sets out to pay the lowest possible wages is that it tries to avoid its training and investment responsibilities.
      However, I part company sharply with the hon. Lady when she says that it is Government policy to set up a low-wage economy. That is absolute nonsense. The Government's objective is and always has been an economy in which unit labour costs are falling because productivity is rising. Productivity rises on the back of investment, and investment last year was at a record level. The threat to those unit labour costs and to investment comes from inflation. It is essential that inflation is squeezed out or we shall be in real difficulties.
      Mr. Frank Field: The hon. Gentleman says that it is not the Government's aim to increase the number of low-paid workers. As their numbers have increased over the past 11 years, are we to conclude that that is another Government success or failure?
      6.30 pm
      Mr. Rowe: That is something of a Morton's fork, but I feel that I can, with one bound, be free. It is much easier to find better employment when one is already employed. That is a characteristic of the labour market. The large number of part-time and full-time jobs available to people with few qualifications provides them with an entry into the labour market which, in an increasingly technological society, they would otherwise find it exceedingly difficult to find.
      Mr. Field: The hon. Gentleman's argument would hold good if the number of low-paid workers was falling, but as it is increasing every year, it seems that people are not able

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      to use a low-paid job as a springboard into higher-paid employment but instead find themselves trapped in low-paid jobs.
      Mr. Rowe: One needs greater analysis of the number of people in low-paid jobs who stay in those jobs and of the other opportunities that they have to better themselves by training. Hitherto, training has always been seen as uniquely the employer's responsibility. It gives me hope for the future to detect a growing interest among employees in training in their own time, for their own improvement. That will secure a more prosperous future for us all.
      As to the availability for work test, I make the point that individuals working voluntarily for voluntary organisations are often relied upon to turn up on time to bathe an elderly person, take a child to school, or perform some other task. I believe that such people are still subject to the requirement to make themselves immediately available for work. There have been exchanges in the House about that in the past. I am a trustee of Community Service Volunteers, which is one of many organisations making use of volunteers for such work. Although the availability for work rule is accepted by volunteers working with organisations less structured than CSV, I should like an assurance that that requirement will be interpreted flexibly so that a client will not be left in the lurch by the need for his or her carer to turn up for work the very next day.
      How is availability for work defined? It is appropriate, particularly in cases such as that of the gentleman cited by the hon. Member for Ladywood, that it should be relatively streamlined and straightforward, but unemployment benefit offices are merging with jobcentres, so will the point be reached where arriving to collect unemployment benefit becomes, ipso facto, sufficient to meet the requirement to be available for work?
      We would do better to move eventually to a system of guaranteed minimum income, whereby benefit would not automatically be cut the moment one starts making a certain amount of money. At present, that is done on the side, but I should like that earning capacity to be made the subject of a declaration, when it would not have a stark knock-on effect on benefits.
      Ms. Short: One knows the hon. Gentleman to be a very honourable Member of this House. Will he say whether he has been invited by his Whip to filibuster so that we cannot debate child benefits properly?
      Mr. Rowe: I apologise if I have given the impression of filibustering. I thought that every one of my points was fresh. I believe that there has been a substantial fall in the number of households in which it is not worth members of the household going to work because they would receive less than they would from social benefits. Can my hon. Friend the Minister confirm that? If so, it is a strong measure of the success of the Government's policies.
      Mr. Allen McKay: I make the point briefly that it is difficult in an area such as mine, with unemployment at 14·1 per cent., to obtain even a low-paid job in the hope of eventually securing better paid employment.
      I ask the Minister to consider the problems in the mining industry, which have been the subject of attention
      1090
      from my right hon. Friend the Member for Manchester, Wythenshawe, (Mr. Morris), the Department of Employment, and others, in relation to workers who left the industry on the understanding that they had retired but who have now been caught up in the requirements of the restart scheme. Most cases have been admirably dealt with, but a small number of people receiving superannuated earnings do not fall within the same ambit of rulings. After 30 years in the mining industry, they find it rather distasteful, at their age, to be caught up in the restart scheme.
      Mr. Robert G. Hughes: It is a shame that more people do not want to speak on new clause 16, which is revealing of the Labour party's attitude.
      Mr. John Battle: Will the hon. Gentleman give way?
      Mr. Hughes: Presumably the hon. Gentleman's intervention relates to the vast amount that I have already said.
      Mr. Battle: The hon. Gentleman gives the impression that there can be a fair and open debate on new clause 16, but we are governed by the clock. I should have liked to address the House on new clauses 15 and 16, but I have been unable to do so because of the guillotine.
      Mr. Speaker: The hon. Member for Harrow, West (Mr. Hughes) has the right to make his speech. He has only just begun.
      Mr. Hughes: If the hon. Member for Leeds, West (Mr. Battle) will restrain himself from making pointless interventions, he may have an opportunity to contribute. The more he intervenes, the longer I shall take. I have several points to make, and I intend to make them.
      The Opposition's new clause would send entirely the wrong signal to people looking for work. A minority—who can say how many?—will be beguiled by the words of Opposition Front Bench spokesmen into believing that there is no need for them to seek work. The hon. Member for Birmingham, Ladywood (Ms. Short) suggested that people seeking work would only obtain jobs producing an income below the level of their existing benefits. That might occasionally be true, but it is not for responsible politicians to tell people, "If you are dissatisfied with your pay or working conditions, or find it too difficult to obtain employment, you can rely on state benefits—we do not want you to put yourself out."
      I am reminded by the hon. Lady of some of the experiences that one hears from people in the employment service. I wonder sometimes what sort of country I am living in when, for example, it is suggested that it is unreasonable for people in Tottenham, an unemployment black spot in London, to get on a bus and go to Hornsey to look for work. That is not an unreasonable distance, but the suggestion was described by an officer in Tottenham as fascist. It is an extraordinary contention that people should not be asked to travel a short distance to look for work.
      It is a measure of the irresponsibility of the Opposition that at a time when we are experiencing record growth—the number of people in work had increased to more than 26 million by September last year, an increase of 3·1 per cent. over the previous year—and demographic factors are contributing to the demand for labour, they should

      1091
      choose to send out such a negative and depressing message to the unemployed. The Opposition are saying, "Go home and wait for a job to materialise—we will call you if anything turns up."
      When I speak to employers in my constituency and in north London, I find that their difficulty is not sorting out applicants but finding anyone at all to fill the jobs. Whether they want skilled or unskilled workers, secretaries, cleaners, accountants or clerks, they cannot get staff. Although unemployment is low in my constituency, it is still significant. I find it difficult to accept that people who come to me for help cannot get jobs. Those people would be encouraged by the Opposition's proposal not to seek work.
      It is extraordinary that the Opposition should want to return to the position before October 1989, when the mere fact of a visit to a jobcentre was deemed sufficient to prove that a person was actively seeking work. We are entitled to ask for more than that. People should not only make themselves available at times when jobs are available, but should look at newspapers, attend interviews and, if necessary, attend training courses on how to fill job applications, how to conduct themselves at interview, and so on.
      The hon. Member for Ladywood spoke of jobs which paid less than benefit. Surely anyone who has ever been in employment or who has worked in a lower-paid job, as some of us on both sides of the House have at different times—
      Mr. Paul Flynn: You will soon be back selling double glazing.
      Mr. Hughes: It is interesting to note that the Labour party expects to win my constituency. I wish it the best of luck. I hope that it will concentrate its resources on my constituency, because it will do it no good.
      Everyone knows that the path to better wages in any job is by building up a record of employment. When people have a record of employment, sometimes they can move to better-paid jobs in the same organisation or to other organisations which are keen to obtain their skills. That is the essence of a skill shortage. Having done a job, however menial, and acquired skill, people can sell that skill to other employers.
      I wish to put two important questions to my hon. Friend the Minister. Is it right that the Opposition's proposal would add £100 million to unemployment benefit?
      Ms. Short: No, it is wrong.
      Mr. Hughes: My hon. Friend will confirm the figure; I would rather take my hon. Friend's word than the usually inaccurate estimates of the Opposition. If that figure is correct, it is surely not a responsible use of public money. The Opposition are always bleating about what public money should be spent on, but they have very little idea of what they would devote to certain areas.
      6.45 pm
      At the beginning of my speech I mentioned the signals being sent out. It would surely be irresponsible for people to follow the advice of the Opposition and for 50,000 to be added to the unemployed total. The Opposition are trying to build up unemployment as an issue when plainly it is
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      not. They are attempting to add 50,000 to the unemployed total merely to make the case that they have been trying to make for so long.
      The Opposition proposal is highly irresponsible. They want to return to the position where people do not actively have to seek work. I do not believe that that would find favour outside the House. I do not think that: my constituents would regard it as a responsible way for the Government to act. They would not wish my hon. Friend to have any truck with that nonsense.
      The Parliamentary Under-Secretary of State for Social Security (Mrs. Gillian Shephard): The provision about actively seeking work was debated at length in the Committee that considered the Social Security Bill in 1989. The hon. Member for Derby, South (Mrs. Beckett) agreed that the Minister for Social Security was "right to say that most people believe that the unemployed should seek work actively". The effect of the new clause would be to return to the position before October 1989 which absolved claimants from any clear responsibility to look for work.
      It is true that the requirement to be available for work would remain in the Social Security Act 1975 and a claimant would have to take some active steps to draw attention to his availability. But we would be back to the position where one simple step, such as attending a jobcentre, would be enough. There would be no requirement to make any further effort by looking in the newspapers, following up openings and seeking information from employers. The Government believe that that cannot be right for the taxpayer, employers and, indeed, for unemployed people themselves.
      The hon. Member for Birmingham, Ladywood (Ms. Short) made much of the point of the provision. She tried to accuse the Government of forcing people on to low pay. That is not its point; I must underline that.
      Mr. Battle: Since we debated last year's legislation, unemployment has risen in my constituency, and wages are going down from the figures that I quoted for the jobcentre in Bramley last year. That very jobcentre closed yesterday.
      Mrs. Shephard: The hon. Gentleman always makes strong points about his constituency interest.
      I hope to cover some of the points the hon. Gentleman made. The Government wish to motivate and encourage people to take positive steps back into the world of work. Of course, we recognise that we must help people as well. That goes some way to meeting the concerns felt by the hon. Gentleman. That is why we have introduced the biggest ever training programme—employment training—to equip the unemployed, in partnership with employers in the new training and enterprise councils, for the jobs that are available now and are crying out to be done. I agree with my hon. Friend the Member for Harrow, West (Mr. Hughes) that at a time of record growth in employment, with the number of people in work increasing to 26·4 million in September last year—demographic factors are contributing to the demand For labour—it is extraordinary that the Opposition should choose to send out such a negative and depressing message.
      During the passage of the Bill last year, the Opposition could at least plead that they wished to preserve their attitude until they had seen the regulations and been convinced that the new provisions would, as we assured

      1093
      the Committee, be applied flexibly and fairly. We now have the regulations: it is clear that they allow adjudication officers to take into account all the circumstances of a case in deciding whether a claimant has taken reasonable steps to find work.
      The evidence available to us is that people are being treated flexibly and fairly. From 9 October 1989 to 26 January 1990, 11,400 claimants were issued with warning letters for failing to seek work actively, and there is a rising trend in the number of claimants warned about inadequate job search. Most claimants have reacted positively; the employment service reports that an increased rate of entry into job clubs has been maintained, and it has had a number of reports attributing improvements in the number of people entering other training or employment programmes to the new provisions. About 15 per cent. of the claimants warned need to be referred to adjudication officers for consideration of disallowance, but early feedback suggests that there has been little criticism of the operation of the new arrangements. In short, the early signs are that the changes seem to have delivered the changes that we sought within the fair and flexible framework that the legislation provides.
      Obviously, we recognise that the skills and abilities and the physical or mental limitations of an unemployed person play an important part in his ability to find work. We want adjudication officers to take local labour market conditions and a person's work experience fully into account in deciding whether a claimant has taken reasonable steps to find work. That was stressed during the Bill's Committee stage last year. The workings of the regulations bear out the Government's emphasis on that point.
      We understand that the unemployed want to spend their time usefully by studying or by undertaking voluntary work. That was the point made by my hon. Friend the Member for Mid-Kent (Mr. Rowe). If he examines the regulations, he will see the arrangements to allow voluntary work to be taken into account by adjudication officers. The current legislation takes account of all those factors, and also enables the unemployed to engage in other socially desirable activities—for example, as lifeboat men or firemen—or, in the case of the blind, to attend a course of training in the use of guide dogs. Clearly, the Government have not forgotten people with special problems. My right hon. and learned Friend the Secretary of State for Employment is currently reviewing his Department's services for people with disabilities.
      The Government continue to believe that participating in socially useful activities for the benefit of oneself or others and actively seeking work are not mutually exclusive. It is right that the law should allow us to warn the small but significant minority of people who have previously given up looking for work that, unless they take reasonable steps to find it, they will no longer qualify for benefit. Obviously, we will continue to monitor the implementation of all the October 1989 changes. To put the matter into context, only 0·1 per cent. of all unemployed people have been referred to adjudication officers under the provisions since October 1989.
      The Government are encouraged that many people warned about inadequate job search have accepted the challenge, and that fuller use is being made of the services
      1094
      provided by the employment service to get more people back into work. The underlying strength of the economy has led to the creation of hundreds of thousands of new jobs; we want the unemployed to be encouraged and helped by the Government and by employers to take the initiative, and to seek out the job opportunities that are opening up.
      The changes that we made last October have been accepted by the vast majority of people, including the unemployed, as simply common sense. I have no hesitation in asking the House to reject the new clause.
      Question put and negatived.

    New Clause 20

      CHILD BENEFIT
      'In section 1 of the Child Benefit Act 1975, after subsection (2) there shall be inserted the following subsections—
      "(2A) Child benefit shall continue to be paid as in May 1987, and direct to the mother.
      (2B) In subsection (2A) above, 'as in May 1987' means at rates which have at least the same value as in May 1987 in relation to the general level of prices obtaining in Great Britain.".'.
      Brought up, and read the First time.
      Ms. Short: I beg to move, That the clause be read a Second time.
      The purpose of the new clause is to maintain child benefit in its current form, paid directly to the main carer—usually the mother—but to make good the amount lost in the freeze between April 1988–89 and April 1989–90 and to index-link the benefit thereafter.
      It is obvious that what we have just heard represented a deliberate attempt to prevent serious debate on child benefit. It illustrates the disgraceful way in which the Government have treated the Bill and the major issues that we sought to raise in the House. The Government are ashamed of their position on child benefit, and rightly so, because they are cutting the value of support for children throughout the country and enlarging the poverty trap for the low paid and for lone mothers.
      We know that the Ministers are not in charge of their Department and have to do as the Treasury tells them. We know that in the past, along with some of the more decent elements of their party, they have been great supporters of child benefit, but such is their lust to hang on to office in a collapsing Government that they now attempt to justify the outrageous policy of cutting child benefit and then cutting it again to bring the benefit into disrepute and allow it to wither away. That, clearly, is the strategy which underpins the Government's actions, and it is entirely in breach of the manifesto on which they fought the last election.
      It is impossible to place a different interpretation on the words on which each and every one of those Ministers fought the election. They said that child benefit would be paid "as now", and directly to the mother. "As now" must imply its value—it would be a joke to say that a benefit whose value had been reduced to almost nothing was being paid "as now". In cutting the benefit, the Government are breaking their faith with the electorate. They have been forced to guillotine the debate and to filibuster because they are so ashamed of what they have to say that they are not willing to say it to the House.

      1095
      If there were time, I should like to go into some of the details of the Secretary of State's justification for the last freeze in child benefit. It does not bear scrutiny. He said:
      "take-home pay for those on average male earnings has already increased on the past year by some £16 a week, and will have been further increased by up to £3 a week for the great majority of families as a result of this month's reduction in national insurance contributions—indeed, more where both partners are working. The introduction of independent taxation next April will bring further improvements for many".—(Official Report, 25 October 1989, Vol. 158, c. 842.]
      None of that stands up. First, independent taxation will not affect the majority of families with children. Secondly, increased male earnings do not necessarily go to mothers and their children, as a survey has shown. Thirdly, two-earner couples gain more from a general increase in gross earnings levels and reductions in national insurance contributions than do one-earner couples.
      The Government's position is indefensible. All the rhetoric from the Prime Minister and the Secretary of State about their new-found concern for lone parents in need of assistance to avoid the poverty trap is flatly contradicted by what they are doing to child benefit. Child benefit is the one benefit which helps low-paid workers —and, in particular, lone parents—to get off benefit and into work, because they take the benefit with them. The vast majority of lone parents live in poverty, as do their children. They are trapped in that condition because there are no jobs available which pay enough, because the Government have desperately, urgently and thoroughly encouraged low pay in the economy. The erosion of child benefit will increase the already rising proportion of lone-parent families trapped on benefit.
      I am sorry that a number of hon. Members have been deprived of the opportunity to speak—not least by the ignorant, stupid and ill-informed speech of the hon. Member for Harrow, West (Mr. Hughes) on the previous new clause. He was obviously dragged into the Chamber by the Whips to talk about something about which he knew nothing and to prevent serious debate by filibustering.
      Mr. Robert G. Hughes: Will the hon. Lady give way?
      Ms. Short: Certainly not—the hon. Gentleman would not do so—and I will not withdraw what I said either.
      Mr. Hughes: On a point of order, Mr. Deputy Speaker. I do not expect civility from the hon. Lady. However, I make speeches when I choose and not when anyone else asks me to, so her suggestion is outrageous.
      Mr. Deputy Speaker (Sir Paul Dean): That is a point for debate, not a point of order.
      The Secretary of State for Social Security (Mr. Tony Newton): The hon. Member for Birmingham, Ladywood (Ms. Short) should realise two things. First, had we wished to prevent her from raising the matter, it would have been easy. The fact that she has been able to raise the matter is a sign that her suggestions about my hon. Friends are unfounded. The House must have thought that what she just said about my hon. Friend the Member for Harrow, West (Mr. Hughes) was outside the conventions of this place. Secondly, I have manifestly not had the opportunity, despite having a substantial set of remarks, to make the speech that I would have wished to make in
      1096
      response to the hon. Lady. It seems sensible, therefore, for us to proceed to the Division that the hon. Lady evidently wishes to have.
      Mr. Charles Kennedy: Does the Secretary of State agree with the analysis of child benefit offered by the previous Secretary of State, the right hon. Member for Sutton Coldfield (Sir N. Fowler), in the Friday debate a few weeks ago—
      It being Seven o'clock, MR. DEPUTY SPEAKER proceeded, pursuant to the order [29 March], to put forthwith the Question already proposed from the Chair.
      The House divided: Ayes 211, Noes 305.

      Division No. 154]

      [7.00 pm

      AYES

      Abbott, Ms Diane

      Dunwoody, Hon Mrs Gwyneth

      Adams, Allen (Paisley N)

      Eadie, Alexander

      Allen, Graham

      Eastham, Ken

      Alton, David

      Evans, John (St Helens N)

      Archer, Rt Hon Peter

      Ewing, Harry (Falkirk E)

      Armstrong, Hilary

      Ewing, Mrs Margaret (Moray)

      Ashdown, Rt Hon Paddy

      Fatchett, Derek

      Ashton, Joe

      Fearn, Ronald

      Banks, Tony (Newham NW)

      Field, Frank (Birkenhead)

      Barnes, Harry (Derbyshire NE)

      Fields, Terry (L'pool B G'n)

      Barnes, Mrs Rosie (Greenwich)

      Fisher, Mark

      Barron, Kevin

      Flannery, Martin

      Battle, John

      Flynn, Paul

      Beckett, Margaret

      Foot, Rt Hon Michael

      Beggs, Roy

      Foster, Derek

      Beith, A. J.

      Foulkes, George

      Bell, Stuart

      Fraser, John

      Benn, Rt Hon Tony

      Fyfe, Maria

      Bennett, A. F. (D'nt'n & R'dish)

      Galloway, George

      Bermingham, Gerald

      Garrett, John (Norwich South)

      Blunkett, David

      Gilbert, Rt Hon Dr John

      Boateng, Paul

      Godman, Dr Norman A.

      Boyes, Roland

      Golding, Mrs Llin

      Bradley, Keith

      Gordon, Mildred

      Brown, Nicholas (Newcastle E)

      Gould, Bryan

      Brown, Ron (Edinburgh Leith)

      Griffiths, Nigel (Edinburgh S)

      Bruce, Malcolm (Gordon)

      Griffiths, Win (Bridgend)

      Buchan, Norman

      Grocott, Bruce

      Buckley, George J.

      Hardy, Peter

      Callaghan, Jim

      Hattersley, Rt Hon Roy

      Campbell, Menzies (Fife NE)

      Heal, Mrs Sylvia

      Campbell, Ron (Blyth Valley)

      Henderson, Doug

      Campbell-Savours, D. N.

      Hinchliffe, David

      Canavan, Dennis

      Hoey, Ms Kate (Vauxhall)

      Carlile, Alex (Mont'g)

      Hogg, N. (C'nauld & Kilsyth)

      Clark, Dr David (S Shields)

      Home Robertson, John

      Clarke, Tom (Monklands W)

      Hood, Jimmy

      Clay, Bob

      Howarth, George (Knowsley N)

      Clelland, David

      Howell, Rt Hon D. (S'heath)

      Clwyd, Mrs Ann

      Howells, Geraint

      Cohen, Harry

      Howells, Dr. Kim (Pontypridd)

      Cook, Frank (Stockton N)

      Hoyle, Doug

      Cook, Robin (Livingston)

      Hughes, John (Coventry NE)

      Corbett, Robin

      Hughes, Robert (Aberdeen N)

      Corbyn, Jeremy

      Hughes, Roy (Newport E)

      Cousins, Jim

      Hughes, Simon (Southwark)

      Crowther, Stan

      Ingram, Adam

      Cryer, Bob

      Janner, Greville

      Cummings, John

      Johnston, Sir Russell

      Cunliffe, Lawrence

      Jones, Barry (Alyn & Deeside)

      Dalyell, Tam

      Jones, Ieuan (Ynys Môn)

      Darling, Alistair

      Kaufman, Rt Hon Gerald

      Davies, Rt Hon Denzil (Llanelli)

      Kellett-Bowman, Dame Elaine

      Davies, Ron (Caerphilly)

      Kennedy, Charles

      Davis, Terry (B'ham Hodge H'l)

      Kilfedder, James

      Dixon, Don

      Kinnock, Rt Hon Neil

      Dobson, Frank

      Kirkwood, Archy

      Doran, Frank

      Lambie, David

      Douglas, Dick

      Lamond, James

      Duffy, A. E. P.

      Leighton, Ron

      Dunnachie, Jimmy

      Lestor, Joan (Eccles)

      1097

      Litherland, Robert

      Rooker, Jeff

      Lofthouse, Geoffrey

      Ross, Ernie (Dundee W)

      Loyden, Eddie

      Ross, William (Londonderry E)

      McAllion, John

      Rowlands, Ted

      McAvoy, Thomas

      Ruddock, Joan

      McCartney, Ian

      Salmond, Alex

      McKay, Allen (Barnsley West)

      Sedgemore, Brian

      McKelvey, William

      Sheerman, Barry

      McLeish, Henry

      Sheldon, Rt Hon Robert

      Maclennan, Robert

      Shore, Rt Hon Peter

      McNamara, Kevin

      Short, Clare

      Madden, Max

      Sillars, Jim

      Marek, Dr John

      Skinner, Dennis

      Marshall, Jim (Leicester S)

      Smith, Andrew (Oxford E)

      Martin, Michael J. (Springburn)

      Smith, C. (Isl'ton & F'bury)

      Martlew, Eric

      Smith, Rt Hon J. (Monk'ds E)

      Maxton, John

      Smith J.P. (Vale of Glam)

      Meacher, Michael

      Smyth, Rev Martin (Belfast S)

      Meale, Alan

      Snape, Peter

      Michael, Alun

      Soley, Clive

      Michie, Bill (Sheffield Heeley)

      Spearing, Nigel

      Michie, Mrs Ray (Arg'l & Bute)

      Steinberg, Gerry

      Moonie, Dr Lewis

      Stott, Roger

      Morley, Elliot

      Strang, Gavin

      Morris, Rt Hon A. (W'shawe)

      Straw, Jack

      Morris, Rt Hon J. (Aberavon)

      Taylor, Mrs Ann (Dewsbury)

      Mowlam, Marjorie

      Thompson, Jack (Wansbeck)

      Mullin, Chris

      Turner, Dennis

      Murphy, Paul

      Vaz, Keith

      Nellist, Dave

      Walkler, A Cecil (Belfast N)

      O'Brien, William

      Walley, Joan

      Orme, Rt Hon Stanley

      Wareing, Robert N.

      Owen, Rt Hon Dr David

      Watson, Mike (Glasgow, C)

      Patchett, Terry

      Welsh, Michael (Doncaster N)

      Pendry, Tom

      Wigley, Dafydd

      Pike, Peter L.

      Williams, Rt Hon Alan

      Powell, Ray (Ogmore)

      Williams, Alan W. (Carm'then)

      Prescott, John

      Wilson, Brian

      Primarolo, Dawn

      Winnick, David

      Quin, Ms Joyce

      Wise, Mrs Audrey

      Radice, Giles

      Wray, Jimmy

      Randall, Stuart

      Young, David (Bolton SE)

      Redmond, Martin

      Rees, Rt Hon Merlyn

      Tellers for the Ayes:

      Reid, Dr John

      Mr. Frank Haynes and

      Richardson, Jo

      Mr. Martyn Jones

      NOES

      Adley, Robert

      Bowden, Gerald (Dulwich)

      Aitken, Jonathan

      Bowis, John

      Alexander, Richard

      Boyson, Rt Hon Dr Sir Rhodes

      Alison, Rt Hon Michael

      Braine, Rt Hon Sir Bernard

      Allason, Rupert

      Brandon-Bravo, Martin

      Amery, Rt Hon Julian

      Brazier, Julian

      Amess, David

      Bright, Graham

      Amos, Alan

      Brown, Michael (Brigg & Cl't's)

      Arbuthnot, James

      Bruce, Ian (Dorset South)

      Arnold, Jacques (Gravesham)

      Buchanan-Smith, Rt Hon Alick

      Arnold, Tom (Hazel Grove)

      Buck, Sir Antony

      Ashby, David

      Budgen, Nicholas

      Aspinwall, Jack

      Burns, Simon

      Atkinson, David

      Burt, Alistair

      Baker, Rt Hon K. (Mole Valley)

      Butcher, John

      Baker, Nicholas (Dorset N)

      Butler, Chris

      Baldry, Tony

      Butterfill, John

      Banks, Robert (Harrogate)

      Carlisle, John, (Luton N)

      Batiste, Spencer

      Carlisle, Kenneth (Lincoln)

      Beaumont-Dark, Anthony

      Carrington, Matthew

      Bellingham, Henry

      Carttiss, Michael

      Bendall, Vivian

      Cash, William

      Benyon, W.

      Chapman, Sydney

      Bevan, David Gilroy

      Chope, Christopher

      Biffen, Rt Hon John

      Clark, Hon Alan (Plym'th S'n)

      Blaker, Rt Hon Sir Peter

      Clark, Dr Michael (Rochford)

      Body, Sir Richard

      Clark, Sir W. (Croydon S)

      Bonsor, Sir Nicholas

      Clarke, Rt Hon K. (Rushcliffe)

      Boscawen, Hon Robert

      Colvin, Michael

      Boswell, Tim

      Conway, Derek

      Bottomley, Peter

      Coombs, Anthony (Wyre F'rest)

      Bowden, A (Brighton K'pto'n)

      Coombs, Simon (Swindon)

      1098

      Cope, Rt Hon John

      Hughes, Robert G. (Harrow W)

      Couchman, James

      Hunt, David (Wirral W)

      Cran, James

      Hunter, Andrew

      Currie, Mrs Edwina

      Hurd, Rt Hon Douglas

      Curry, David

      Irvine, Michael

      Davies, Q. (Stamf'd & Spald'g)

      Irving, Sir Charles

      Davis, David (Boothferry)

      Jack, Michael

      Day, Stephen

      Jackson, Robert

      Devlin, Tim

      Janman, Tim

      Dickens, Geoffrey

      Jessel, Toby

      Dorrell, Stephen

      Johnson Smith, Sir Geoffrey

      Douglas-Hamilton, Lord James

      Jones, Gwilym (Cardiff N)

      Dover, Den

      Jones, Robert B (Herts W)

      Dunn, Bob

      Jopling, Rt Hon Michael

      Durant, Tony

      Key, Robert

      Dykes, Hugh

      King, Roger (B'ham N'thfield)

      Eggar, Tim

      King, Rt Hon Tom (Bridgwater)

      Emery, Sir Peter

      Kirkhope, Timothy

      Evans, David (Welwyn Hatf'd)

      Knapman, Roger

      Evennett, David

      Knignt, Greg (Derby North)

      Fallon, Michael

      Knight, Dame Jill (Edgbaston)

      Favell, Tony

      Knowles, Michael

      Fenner, Dame Peggy

      Lamont, Rt Hon Norman

      Field, Barry (Isle of Wight)

      Lang, Ian

      Fishburn, John Dudley

      Latham, Michael

      Fookes, Dame Janet

      Lawrence, Ivan

      Forman, Nigel

      Lee, John (Pendle)

      Forsyth, Michael (Stirling)

      Leigh, Edward (Gainsbor'gh)

      Forth, Eric

      Lennox-Boyd, Hon Work

      Fox, Sir Marcus

      Lightbown, David

      Franks, Cecil

      Lilley, Peter

      Freeman, Roger

      Lloyd, Sir Ian (Havant)

      French, Douglas

      Lloyd, Peter (Fareham)

      Fry, Peter

      Luce, Rt Hon Richard

      Gale, Roger

      McCrindle, Robert

      Gardiner, George

      Macfarlane, sir Neil

      Garel-Jones, Tristan

      MacGregor, Rt Hon John

      Gill, Christopher

      MacKay, Andrew (E Berkshire)

      Glyn, Dr Sir Alan

      Maclean, David

      Goodson-Wickes, Dr Charles

      McLoughlin, Patrick

      Gorman, Mrs Teresa

      McNair-Wilson, sir Michael

      Gow, Ian

      McNair-Wilson, sir Patrick

      Grant, Sir Anthony (CambsSW)

      Madel, David

      Greenway, Harry (Ealing N)

      Major, Rt Hon John

      Greenway, John (Ryedale)

      Malins, Humfrey

      Gregory, Conal

      Mans, Keith

      Griffiths, Sir Eldon (Bury St E')

      marland, Paul

      Griffiths, Peter (Portsmouth N)

      Marlow, Tony

      Grist, Ian

      MarShall, John (Hendon S)

      Ground, Patrick

      Martin, David (Portsmouth S)

      Grylls, Michael

      Maude, Hon Francis

      Gummer, Rt Hon John Selwyn

      Maxwell-Hyslop, Robin

      Hague, William

      Mayhew, Rt Hon Sir Patrick

      Hamilton, Hon Archie (Epsom)

      Mellor, David

      Hamilton, Neil (Tatton)

      Meyer, Sir Anthony

      Hampson, Dr Keith

      Miller, Sir Hal

      Hanley, Jeremy

      Mills, Iain

      Hannam, John

      Mitchell, Andrew (Gedling)

      Hargreaves, A. (B'ham H'll Gr')

      Mitchell, Sir David

      Hargreaves, Ken (Hyndburn)

      Montgomery, Sir Fergus

      Harris, David

      Moore, Rt Hon John

      Haselhurst, Alan

      Morris, M (N'hampton S)

      Hawkins, Christopher

      Morrison, Sir Charles

      Hayes, Jerry

      Morrison, Rt Hon P (Chester)

      Heathcoat-Amory, David

      Moss, Malcolm

      Heseltine, Rt Hon Michael

      Moynihan, Hon Colin

      Hicks, Mrs Maureen (Wolv' NE)

      Mudd, David

      Hicks, Robert (Cornwall SE)

      Neale, Gerrard

      Higgins, Rt Hon Terence L.

      Neubert, Michael

      Hill, James

      Newton, Rt Hon Tony

      Hind, Kenneth

      Nicholls, Patrick

      Hogg, Hon Douglas (Gr'th'm)

      Nicholson, David (Taunton)

      Holt, Richard

      Norris, Steve

      Hordern, Sir Peter

      Onslow, Rt Hon Cranley

      Howard, Rt Hon Michael

      Oppenheim, Phillip

      Howarth, Alan (Strat'd-on-A)

      Page, Richard

      Howarth, G. (Cannock & B'wd)

      Paice, James

      Howe, Rt Hon Sir Geoffrey

      parkinson, Rt Hon Cecil

      Howell, Rt Hon David (G'dford)

      Patnick, Irvine

      Howell, Ralph (North Norfolk)

      Patten, Rt Hon Chris (Bath)

      1099

      Patten, Rt Hon John

      Summerson, Hugo

      Pawsey, James

      Tapsell, Sir Peter

      Peacock, Mrs Elizabeth

      Taylor, Ian (Esher)

      Porter, David (Waveney)

      Taylor, John M (Solihull)

      Portillo, Michael

      Taylor, Teddy (S'end E)

      Price, Sir David

      Tebbit, Rt Hon Norman

      Raffan, Keith

      Temple-Morris, Peter

      Redwood, John

      Thompson, D. (Calder Valley)

      Renton, Rt Hon Tim

      Thompson, Patrick (Norwich N)

      Rhodes James, Robert

      Thornton, Malcolm

      Ridley, Rt Hon Nicholas

      Thurnham, Peter

      Rifkind, Rt Hon Malcolm

      Townend, John (Bridlington)

      Roberts, Wyn (Conwy)

      Tracey, Richard

      Roe, Mrs Marion

      Tredinnick, David

      Rost, Peter

      Trippier, David

      Rowe, Andrew

      Trotter, Neville

      Rumbold, Mrs Angela

      Twinn, Dr Ian

      Ryder, Richard

      Viggers, Peter

      Sainsbury, Hon Tim

      Waddington, Rt Hon David

      Scott, Rt Hon Nicholas

      Wakeham, Rt Hon John

      Shaw, David (Dover)

      Waldegrave, Rt Hon William

      Shaw, Sir Giles (Pudsey)

      Walker, Bill (T'side North)

      Shaw, Sir Michael (Scarb')

      Waller, Gary

      Shephard, Mrs G. (Norfolk SW)

      Ward, John

      Shersby, Michael

      Wardle, Charles (Bexhill)

      Sims, Roger

      Warren, Kenneth

      Skeet, Sir Trevor

      Watts, John

      Soames, Hon Nicholas

      Wells, Bowen

      Speed, Keith

      Wheeler, Sir John

      Speller, Tony

      Whitney, Ray

      Spicer, Sir Jim (Dorset W)

      Widdecombe, Ann

      Spicer, Michael (S Worcs)

      Wiggin, Jerry

      Squire, Robin

      Wilshire, David

      Stanbrook, Ivor

      Wolfson, Mark

      Stanley, Rt Hon Sir John

      Wood, Timothy

      Stern, Michael

      Woodcock, Dr. Mike

      Stevens, Lewis

      Yeo, Tim

      Stewart, Allan (Eastwood)

      Younger, Rt Hon George

      Stewart, Andy (Sherwood)

      Stewart, Rt Hon Ian (Herts N)

      Tellers for the Noes:

      Stokes, Sir John

      Mr. Alastair Goodlad and

      Stradling Thomas, Sir John

      Mr. Tom Sackville.

      Sumberg, David

      Question accordingly negatived.

    Clause 3

      REDUCED EARNINGS ALLOWANCE AND RETIREMENT ALLOWANCE
      Mr. Flynn: I beg to move amendment No. 6, in page 4, line 20, leave out clause 3.
      Mr. Deputy Speaker: With this it will be convenient to discuss Government amendment No. 64.
      7.15 pm
      Mr. Flynn: Clause 3 is at the heart of the Bill and seeks to extinguish entitlement to reduced earnings allowance. The amendment, by contrast, seeks to extinguish the clause.
      The clause represents an obvious cut in benefit. To introduce some of the Government's promised reforms —the disablement employment credit and the disablement allowances—the Government must first cut. They are robbing Peter to pay Peter. This follows the Treasury's edict, which has dominated the 11 years of Thatcher's misrule in social security—that any apparent improvement must be self-financing. To reward the disabled with long overdue benefits, they must first be robbed of existing benefits.
      Even on the Government's own figures, the abolition of reduced earnings allowance will reduce benefits paid to the
      1100
      victims of industrial accidents and diseases by £41 million in 1992–93, rising to £130 million in the year 2001–2 and to £150 million in the year 2025–26. These figures are almost certainly a gross underestimate because they are based on unrealistic assumptions of the rate of increase in earnings, but even if they are correct they represent a ferocious cut in the incomes of disabled people.
      Reduced earnings allowance is an important benefit in terms of the considerable numbers of people affected, of its great value and of the reason for which it is paid. It is received by 146,000 disabled people—a number that has scarcely changed in the past 20 years—so the Government are not obliterating a minor, arcane, anachronistic benefit payable only to a handful of people. It is important to remember that for more than half of those who receive it, it is their only compensation from the industrial injuries scheme.
      What is the value of the benefit? In theory, it varies with a loss of earning capacity, but as the maximum allowance for 1990–91 in £30·54, and the loss of earnings generally is far more than that, the maximum is payable in most cases. At least 120,000 people will lose more than £30 per week from the abolition of the REA.
      What is the purpose of the benefit? In 1948, our predecessors in this place wisely introduced the allowance, and their reasons for so doing are as compelling today as they were then. Loss of earnings is still specifically excluded from the factors taken into account in assessing entitlement to basic industrial disablement pensions. Since 1986, no disablement pension has been paid at all if a disability is less than 14 per cent., but even a relatively minor disability which does not qualify a person for disablement pension can result in a critical loss of earnings. The REA provides a modest but entirely justified level of compensation for that loss.
      In Committee, the Minister produced some eccentric counterfeit arguments to pretend that REA was both unnecessary and a duplication of other provision. He cited the extreme case of a man whose earnings had dropped from £350 per week to £300 per week, as though it was self-evident that such a person did not need REA. But if such a man is sufficiently disabled not to be able to return to a previous job and his earnings have fallen by £50 per week, REA of £30 is probably the only compensation to which he is entitled, so how can it possibly be argued that he does not need it?
      What about a man whose income was slashed not from £350 to £300, but from £250 to £200, or a woman whose earnings dropped from £200 to £150, or a man or a woman whose earnings may have dropped not by £50 per week but by £100 a week or even more? There are many such cases. Can it really be the Government's view that such people do not need the £30 allowance?
      The Minister also claimed that most REA recipients who cannot work receive invalidity benefits, which he described as an anomalous overlap—a phrase which occurs in the White Paper. If it is an overlap, it has not been regarded as one of any insignificance by anyone in the past 40 years. Is it an overlap? Invalidity benefit, including the highest rate of invalidity allowance, is only £56·90 a week in the current year. Even when allowances for a non-earning spouse and children are added to the total, it is still far below the average take-home pay of the average

      1101
      manual worker. There is no question of overcompensation for the loss of earnings. In the vast majority of cases, there is immense under-compensation. The £30 allowance fills only a small part of the gap.
      The only component of invalidity benefit which could conceivably be regarded as overlapping with REA is the earnings-related addition payable under the Social Security Pensions Act 1975, but that is to be abolished under clause 4. The argument that two benefits overlap may justify abolishing one of them, but it can never justify abolishing both. That would be an act of unbridled meanness, but that is what the Bill appears to do.
      Very little is left. The clause is a malign, crude attempt to save money by picking the pockets of those who have suffered the afflictions of industrial accidents and diseases. The defence that the cut is part of a package of measures to improve the lot of disabled people is false. The Government claim that it will increase spending on disability benefits up to the turn of the century, but that claim is almost certainly unjustified because of the Government's unrealistic assumptions about the increase in average earnings.
      Some disabled people will gain from some of the changes proposed in the White Paper when they come, but only a minority of those entitled to REA will qualify for the proposed new benefits. Those who cannot work will lose both REA and earnings-related invalidity benefit. Among those who can work, some may qualify for the means-tested disability employment credit, but that benefit is expected to reach only about 50,000 people in total. If as many as half those who now qualify for REA are reached, which is most unlikely, that would account for only one sixth of the present total of REA recipients.
      The unfairness of discriminating in this way against the victims of industrial injuries is all the greater because, until now, industrial injuries benefits have always been part of the national insurance scheme, financed out of contributions to the scheme and paid for by employers and employees. In Committee, the Minister invented a convenient theory that the benefits were non-contributory, so no breach of contract was involved in their abolition. He wrote to me on that subject and there is no point in re-running the argument, but if the Minister still adheres to the same view, he should have a quiet word with his statisticians. In their annual publication, "Social Security Statistics", they list industrial disablement benefit clearly under the heading "Contributory Benefits".
      The abolition of REA is almost the last stage in the process of dismantling the industrial injury benefit scheme. There might be some justification for that if the benefits were to be replaced by equally generous provision for all disabled people, regardless of the cause of disability, but that is not what the Government propose. On the contrary, they are engaged in a massive cost-cutting, cost-juggling exercise in recycling money, in which the victims of industrial accidents and diseases will be among the greatest losers.
      Mr. Scott: My first point was touched on by the hon. Member for Newport, West (Mr. Flynn). The provision that we have included in the Bill needs to be seen in the wider context of the Government's overall provision. What we have tried to do is to produce a package of measures that will significantly alter the balance of
      1102
      provision for disabled people within the overall provision. By 1992, when disability employment credit and disability allowance are in place, we shall have addressed the needs of the disabled population as a whole much more effectively. We shall be addressing in particular the needs of those among the disabled who suffer the most disabling of incapacities, particularly people who are disabled from birth or early in life who do not have the capacity to build up entitlement to contributory benefits.
      I make no secret of the fact that some of our proposals are specifically designed to redress the balance and direct resources to areas of greater need. The hon. Gentleman acknowledged that that was the approach that I took in Committee. The ending of entitlement to reduced earnings allowance for new claimants is a sensible measure which forms part of the overall strategy. I stress that the change relates to new entitlements. All existing REA entitlements will be preserved and uprated in future under the rules that apply now.
      The hon. Gentleman suggested that we were trying to abolish the industrial preference altogether. He is jumping the gun substantially. I have no intention of doing that. I cannot say that there will not be further changes in the industrial injuries benefit system or amendments to the industrial preference, but the clause is not part of a long-term strategy to remove that preference. Sensibly, we are adjusting the balance between different aspects of provision for disabled people.
      It is true that the preferences available to the industrially disabled are at present significant and go some way beyond the provisions available to other disabled people. What is more, the benefits are tax-free, non-contributory and generally payable in addition to other benefits, unless they are means-tested, in which case they would be partially disregarded. Furthermore, the benefits are payable whether or not the beneficiary is working. In consequence, someone who receives maximum industrial injuries benefits, along with invalidity benefit and mobility allowance, could have a net weekly income of over £250. That compares with take-home pay of £156 a week for a married man on average manual earnings.
      It is not surprising that industrial injuries benefit recipients are not only better off than comparable benefit recipients but, when looking at the population as a whole, are more likely to be found in the middle or upper parts of income distribution.
      Within the overall framework of industrial injuries provision, reduced earnings allowance may be paid where a person's earning capacity suffers as a direct result of an industrial accident or disease. However, a person does not have to be severely disabled to receive the allowance. Only 1 per cent. disablement is required to qualify. In the majority of cases, the least disabled benefit from that provision.
      I conclude by emphasising two points. First, I reiterate that present beneficiaries and new entitlements established before the Bill becomes law are protected. They will continue to receive REA as long as they fulfil the qualifying conditions and the benefit will be uprated on the same basis as now. I emphasise again that this is part of a wider consideration of the balance of provision among disabled people generally. All hon. Members who consider the matter fairly will look forward to 1992, when the disability allowance and disability employment credit are available. They will represent significant steps in meeting the needs of disabled people that have long been

      1103
      campaigned on but which we have not been able to meet. The clause is part of the way in which we shall introduce those two new benefits.
      Mr. Allen McKay: I wish to ask the Minister several specific questions about the reduced earnings allowance and other matters that I have raised before. I accept that existing beneficiaries will continue to qualify. That means that new claimants will not be able to receive reduced earnings allowance.
      Many people in industry, particularly my industry of mining, have, over the years, relied upon the reduced earnings allowance. I have persuaded people who were obviously unfit to continue their present work to take on lighter duties either on the surface of the colliery or underground. The availability of REA encouraged those people to leave the work of which they were no longer capable. Previously, many had attempted to carry on because they were worried about a reduction in their earnings. The onset of an industrial disease or the suffering of an industrial accident had a traumatic effect on households with on-going commitments as they realised that their earnings would be reduced. Sometimes such families fell into debt. Until that time, the worker felt that, to all intents and purposes, his working life would continue until he was 65.
      7.30 pm
      The Bill will take us back to the days before REA was available and it will encourage people to stay in work for which they are unfit. As a result, their injuries or industrial disease will worsen. The Bill is a step backwards. We do not know what 1992 will bring, but I know what the Bill will bring. The person injured or suffering from an industrial disease will henceforth ask himself whether he can afford to leave his work, given that that could cause problems at home. He will have to decide whether to continue in his present work in the certainty that his industrial disease or the injury that he sustained will worsen. If that happened, the cost to the social fund and to the welfare fund would he greater than REA in the long run as the need for care would be so much greater.
      A person in low-paid work does not pay so much towards his retirement as he would were he in high-technology work. The fact that REA carried on in retirement until the age of 70 compensated for the loss of superannuation and works pension as a result of injury or disease. That allowance encouraged people to leave work for which they were unfit and to have a better, and probably longer life. It also ensured that the effect of the loss of earnings was cushioned until the age of 70. It is important to reconsider the Bill in the light of those arguments.
      It is one thing to look to the future and another to say that existing beneficiaries will not be affected. There is a gap that could cover a lot of people in and out of work. We should fill that gap.
      Mr. Frank Haynes: I have to make a contribution now, because it is obvious that the Government are taking us back to the 1930s. [HON. MEMBERS: "No."] Oh, yes. I listened to what the Minister had to say and he knows how far my age group goes back. I well remember the bad old days in the mining industry to which my hon. Friend the Member for Barnsley, West and
      1104
      Penistone (Mr. McKay) referred. I remember the serious injuries and diseases from which miners suffered. My hon. Friend was also right to talk about a reduction in earnings.
      Who do the Government think they are kidding? We have been around a long time. It was under a Conservative Government that all the problems first occurred in the mining industry. That happened when I was young. The Minister is not helping to make things any better.
      Many people will be shoved on to the scrap heap because they cannot carry out their normal work. The Government are not helping people who suffer an industrial accident or from an industrial disease. They are clobbering such people. I know that the Minister is trying to kid me; he has done it before and is doing it again tonight. I warn him that the workers out there will not like it. The Minister and the Prime Minister have told us that many such workers voted Conservative last time. They will have second thoughts because of the Bill, never mind the poll tax.
      I am not satisfied with what the Minister had to say. Never mind the benefits the Minister described, which he believes will encourage workers to leave unsuitable work. Those workers will be chucked on the scrap heap and they will be unable to find another job anywhere else, because no one will be prepared to take them on. People who have suffered an industrial accident or caught a serious industrial disease should be properly looked after by us. It is a high time that the Government rethought their policy on this. We shall do that for them when we are over there on the Government Benches. After the next election we will put things right, make no mistake about it. Perhaps the Minister will not be here to see it happen.
      Mr. John Marshall: The hon. Gentleman will not be here.
      Mr. Haynes: That is true; I am retiring at the next election. The Parliamentary Private Secretary is opening his mouth behind the Minister when he should be keeping quiet. He is making snide remarks at me, but I have already announced my retirement. I note that the hon. Gentleman has just nipped off to get some advice for the Minister.
      I shall not be here after the next election because I belong to a particular age group, but I shall keep my eye on this place, there is no doubt about that. I shall keep my eye on how these Tories react in Opposition when the Labour Government do all kinds of marvellous things.
      Mr. Marshall indicated dissent.
      Mr. Haynes: I note the hon. Gentleman is shaking his head. Does he want to make an intervention? Apparently not. The hon. Gentleman is busy shaking his head and making snide remarks to the Minister instead of getting up and being honest with himself and the House.
      The hon. Member for Hendon, South (Mr. Marshall) has heard how I feel about the Bill, following what the Minister said. I am not pleased with what he said, nor am I pleased with him. He should have used a different tone and said different things. Most of my colleagues now in the Chamber were employed at one time in heavy industry. We know what it is all about. I bet the Minister has never had a shovel in his hand.
      Mr. Scott: I have.
      Mr. Haynes: He probably used it to make a fire, but I am talking about real work and a No. 10 shovel. That shovel is as big as a table top.
      Some of the poor lads in the mining industry all those years ago suffered under the coal owners and the Minister and the Government are trying to take the mining industry back to those times with all their legislation. We do not accept the Bill.
      If the Minister is on the Opposition Benches after the next election he will see what we will do in the interests of poor people who cannot help themselves, particularly those who have given a lifetime to industry and who are seriously hurt or who catch a serious industrial disease as a result. We will help those people and we shall not scratch round for a copper or two like the Government. We will treat them properly and pay them what they are entitled to receive. Those people have made their contribution to our economy so that we might enjoy the benefits. They must be looked after properly, but the Minister has not offered such help tonight. I felt that I had to tell him that.
      Mr. Scott: I thank the hon. Member for Ashfield (Mr. Haynes) for his journey down memory lane. We are all disappointed that he will not be here after the next election. I do not know whether he saw Black Adder last night, or was it the night before—
      Mr. Haynes: On a point of order, Mr. Deputy Speaker. What the Minister has just said is not true. If I were to stand at the next election he would want me to lose my seat. He should be honest about it.
      Mr. Scott: Obviously, I retain my partisan approach to the political struggle, but in terms of personal affection and admiration, I shall be sorry to see the hon. Gentleman go. I wonder whether his ghost will come back to haunt us and his vibrant tones resound across the Chamber. Certainly, he will be with us in our imagination.
      The hon. Gentleman caricatured the Government's approach to these problems. He knows as well as I do that while this Government have been in office, benefits for the long-term sick and disabled have almost doubled in real terms—£4 billion extra has been put into provision for them—and that we are continuing to provide £500 million a year for the industrially injured under the special scheme designed for them. Therefore, nobody is neglecting them, but, as I tried to say in my earlier intervention, we are trying to adjust the scheme to make better provision across the range of people who suffer from disabilities.
      The hon. Member for Barnsley, West and Penistone (Mr. McKay) asked me two specific questions, one of which involved retirement allowance. People may be entitled to invalidity allowance on top of invalidity pension. Those who do not receive invalidity benefit, but qualify for severe disablement allowance, will be entitled to the new age-related addition, included in the Social Security Bill, which increases payments to them. Any provision in retirement must be seen against the general improvement in the standard of living of pensioners overall during the past 10 years.
      The total net income of pensioners has increased by 31 per cent. during this Government. Anyone who goes out and about knows that there has been, on average—I emphasise, as my right hon. Friend the Secretary of State said, that we acknowledge that this is an average— significant improvement in the standard of living and net income of pensioners while we have been in office. We
      1106
      want that to continue and particularly wish to address the needs of pensioners who have been unable to gain access to that increase in their standard of living or net income. We have done that by producing special packages to meet their needs.
      Mr. Kennedy: I wish to make a small point, one that has often been made in this place. When the Minister talks about real net increases in pensioners' income, he must remember that it has to be set in the context of the break in the link with earnings and the massive difficulties that that has caused over the years. He talked about us going round the country and listening to what pensioners were saying. I am sure that they would not deny any of the increases that they have been given, but they were rightly riled about the fundamental break which has devalued all the other additions that the Government have made.
      Mr. Scott: I do not want to drift out of order by entering a more general debate on the standard of living of those in retirement.
      Mr. Kennedy: The Minister introduced the issue.
      Mr. Scott: Indeed I did. The point of the hon. Member for Barnsley, West and Penistone should be seen against the background of the general improvement in living standards which nobody can deny. The standard of living should not be seen just against the state retirement pension, which the hon. Member for Ross, Cromarty and Skye mentioned. It should be seen against the spread of occupational pensions and the increased income for pensioners from savings in recent years. All those factors have contributed to the overall increase in pensioners' living standards. We should not forget that when we discuss this issue.
      Mr. Allen McKay: There are a number of flaws in the Minister's argument. We could disagree about the real level of pensions, but that is another argument. My argument was that reduced earnings allowance also made up for the loss of earning capacity and pension benefits. Irrespective of whether the Minister argues that living standards should be seen against that background, those people's incomes have been reduced. Occupational pensions are based on a person's last 12 months' earnings, which will be reduced if reduced earnings allowance is abolished. The occupational pensions will be based on a reduced earning capacity and will not take into account the addition of hardship allowance or reduced earnings allowance, as the Government prefer to call it. They need increased benefits to make up for the loss of earnings.
      7.45 pm
      Mr. Scott: I acknowledge that new cases will be unable to receive reduced earnings allowance, but a casual reading of the hon. Gentleman's contribution might suggest that we are taking away present entitlements from those entitled to reduced earnings allowance. As I said earlier, not only entitlements gained up to the present, but those gained before the Bill receives Royal Assent, will be preserved.
      I take seriously the hon. Gentleman's other point, but I hope that I can persuade him that it is not as relevant as he suggested. I appreciate the argument. When my right hon. Friend the Secretary of State and I met the Industrial Injuries Advisory Council, which represents the Trades Union Congress, the Confederation of British Industry

      1107
      and other experts, the point was made that somebody in a particular job might contract a condition which, if he continued in that occupation, would endanger his long-term health. In that case, he could be moved to another job in the company and receive REA to top up his income. When we pressed for evidence that that was a problem, the only evidence that we received was anecdotal. There was no real evidence to show that that was a major problem.
      The vast majority of REA recipients are not in work in the first place and therefore would not be covered by that provision. There may be the odd case, but I do not think that the provision of REA is likely to be a decisive factor when an employee decides whether to leave his job and find something less arduous which does not leave him open to the conditions that led to his contracting a particular disease.
      Even with high earnings, if disability is assessed at 14 per cent. or more, disablement benefit is payable. The hon. Gentleman knows a lot about the mining industry and I highly respect his knowledge. For the three major respiratory diseases common in the mining industry, and one or two others, disablement benefit does not have the 14 per cent. cut-off point, but is payable right down to the 1 per cent. scale. Notwithstanding the fact that disablement benefit is paid as a form of compensation, it is surely right to recognise that, in comparisons of pre and post-accident earnings, disablement benefit makes a contribution to people's income.
      Therefore, I still stand by the Government's decision that clause 3 is an important part of a package of measures that will enable us, once we have introduced the two new benefits, to make much better provision and tilt the balance towards those who in recent years have been neglected by the provision —for example, those disabled from birth or early in life. This is a necessary part of that package.
      Mr. Flynn: Traditionally, for the purposes of paying this benefit, a distinction was made between those suffering industrial injuries or diseases, and those suffering problems from birth—who had been short-changed by nature—because for so long those who suffered industrial disease were normally the breadwinners in the family. We now know that there is an equally compelling case to provide similar benefits for others who have never worked. That is accepted as a normal, civilising advance which can be seen in almost every country in Europe which try to help disabled people in that way. Sadly, the Government believe that the only way of achieving this is to give to the severely disabled by cutting the allowances to those who are slightly disabled.
      While my hon. Friend the Member for Ashfield (Mr. Haynes) reminded us of the past—we are all aware of the crippling diseases contracted as an unwanted bonus by many people in mining and other industries—it is not reasonable to suggest that this is over or done with; in the new industries, even more crippling and sinister diseases are emerging. We heard recently of the 500 cases of radiation exposure, unknown and unsuspected in workers in the nuclear industry. There was a programme on "Scottish Eye" about the silicon industry, where again unsuspected problems are arising and unexpected diseases appearing.
      I can remember vividly when I started out on my career in laboratories how many of the reagents that we used
      1108
      were regarded as benign, such as benzine and carbon tetrachloride; we splashed them about and used them for degreasants and so on. We now know that these reagents are viciously carcinogenic and that in consequence there is a short life for those who work in laboratories.
      The justification for this REA continues. It is a bleak indictment of the Government that, after this long period of trying to introduce proper allowances for the disabled —the five years of waiting for the reports to start and the five years waiting for them to be published—the Government have promised that they will help the disabled, they have trailed the news, they have announced it and re-announced it, and now we find that it is only to come in at the expense of other disabled people.
      We would like to press this tonight, but we are aware of the other problems. On second thoughts, another bolt of lightning has struck me and, because of the force of the arguments, we would like to press this to a division.
      Question put, That the amendment be made:—
      The House divided: Ayes 186, Noes 262.

      Division No. 155]

      [7.51 pm

      AYES

      Abbott, Ms Diane

      Eadie, Alexander

      Adams, Allen (Paisley N)

      Eastham, Ken

      Allen, Graham

      Evans, John (St Helens N)

      Archer, Rt Hon Peter

      Ewing, Harry (Falkirk E)

      Armstrong, Hilary

      Ewing, Mrs Margaret (Moray)

      Ashton, Joe

      Fatchett, Derek

      Banks, Tony (Newham NW)

      Fearn, Ronald

      Barnes, Harry (Derbyshire NE)

      Field, Frank (Birkenhead)

      Barron, Kevin

      Fields, Terry (L'pool B G'n)

      Beckett, Margaret

      Fisher, Mark

      Beggs, Roy

      Flannery, Martin

      Bell, Stuart

      Flynn, Paul

      Bennett, A. F. (D'nt'n & R'dish)

      Foot, Rt Hon Michael

      Bermingham, Gerald

      Foster, Derek

      Bidwell, Sydney

      Foulkes, George

      Blunkett, David

      Fraser, John

      Boyes, Roland

      Fyfe, Maria

      Bradley, Keith

      Galloway, George

      Brown, Nicholas (Newcastle E)

      Gilbert, Rt Hon Dr John

      Bruce, Malcolm (Gordon)

      Godman, Dr Norman A.

      Buchan, Norman

      Golding, Mrs Llin

      Buckley, George J.

      Gordon, Mildred

      Callaghan, Jim

      Gould, Bryan

      Campbell, Menzies (Fife NE)

      Griffiths, Nigel (Edinburgh S)

      Campbell, Ron (Blyth Valley)

      Griffiths, Win (Bridgend)

      Campbell-Savours, D. N.

      Hardy, Peter

      Canavan, Dennis

      Heal, Mrs Sylvia

      Carlile, Alex (Mont'g)

      Henderson, Doug

      Clark, Dr David (S Shields)

      Hinchliffe, David

      Clarke, Tom (Monklands W)

      Hoey, Ms Kate (Vauxhall)

      Clay, Bob

      Home Robertson, John

      Clelland, David

      Hood, Jimmy

      Clwyd, Mrs Ann

      Howarth, George (Knowsley N)

      Cohen, Harry

      Howell, Rt Hon D. (S'heath)

      Cook, Frank (Stockton N)

      Howells, Geraint

      Cook, Robin (Livingston)

      Howells, Dr. Kim (Pontypridd)

      Corbett, Robin

      Hoyle, Doug

      Cousins, Jim

      Hughes, John (Coventry NE)

      Crowther, Stan

      Hughes, Robert (Aberdeen N)

      Cryer, Bob

      Hughes, Simon (Southwark)

      Cummings, John

      Ingram, Adam

      Cunliffe, Lawrence

      Johnston, Sir Russell

      Dalyell, Tam

      Jones, Barry (Alyn & Deeside)

      Darling, Alistair

      Jones, Martyn (Clwyd S W)

      Davies, Rt Hon Denzil (Llanelli)

      Kaufman, Rt Hon Gerald

      Davies, Ron (Caerphilly)

      Kennedy, Charles

      Davis, Terry (B'ham Hodge H'l)

      Kilfedder, James

      Dixon, Don

      Kirkwood, Archy

      Doran, Frank

      Lambie, David

      Duffy, A. E. P.

      Lamond, James

      Dunnachie, Jimmy

      Leighton, Ron

      Dunwoody, Hon Mrs Gwyneth

      Litherland, Robert

      1109

      Livingstone, Ken

      Rees, Rt Hon Merlyn

      Lofthouse, Geoffrey

      Reid, Dr John

      Loyden, Eddie

      Richardson, Jo

      McAllion, John

      Rooker, Jeff

      McAvoy, Thomas

      Ross, Ernie (Dundee W)

      McCartney, Ian

      Ross, William (Londonderry E)

      McKay, Allen (Barnsley West)

      Rowlands, Ted

      McKelvey, William

      Ruddock, Joan

      McLeish, Henry

      Salmond, Alex

      Maclennan, Robert

      Sedgemore, Brian

      McNamara, Kevin

      Sheerman, Barry

      Madden, Max

      Sheldon, Rt Hon Robert

      Marek, Dr John

      Shore, Rt Hon Peter

      Marshall, Jim (Leicester S)

      Short, clare

      Martin, Michael J. (Springburn)

      Skinner, Dennis

      Martlew, Eric

      Smith, Andrew (Oxford E)

      Maxton, John

      Smith, Rt Hon J. (Monk'ds E)

      Meacher, Michael

      Smith, J.P. (Vale of Glam)

      Meale, Alan

      Soley, Clive

      Michael, Alun

      Spearing, Nigel

      Michie, Bill (Sheffield Heeley)

      Steinberg, Gerry

      Michie, Mrs Ray (Arg'l & Bute)

      Stott, Roger

      Moonie, Dr Lewis

      Strang, Gavin

      Morgan, Rhodri

      Taylor, Mrs Ann (Dewsbury)

      Morley, Elliot

      Thompson, Jack (Wansbeck)

      Morris, Rt Hon A. (W'shawe)

      Turner, Dennis

      Morris, Rt Hon J. (Aberavon)

      Vaz, Keith

      Mowlam, Marjorie

      Walker, A. Cecil (Belfast N)

      Mullin, Chris

      Walley, Joan

      Nellist, Dave

      Watson, Mike (Glasgow, C)

      O'Brien, William

      Welsh, Michael (Doncaster N)

      O'Neill, Martin

      Wigley, Dafydd

      Orme, Rt Hon Stanley

      Williams, Rt Hon Alan

      Patchett, Terry

      Williams, Alan W. (Carm'then)

      Pendry, Tom

      Wilson, Brian

      Pike, Peter L.

      Winnick, David

      Powell, Ray (Ogmore)

      Wise, Mrs Audrey

      Prescott, John

      Wray, Jimmy

      Primarolo, Dawn

      Young, David (Bolton SE)

      Quin, Ms Joyce

      Radice, Giles

      Tellers for the Ayes:

      Randall, Stuart

      Mr. Frank Hayes and

      Redmond, Martin

      Mr. Robert N. Wareing.

      NOES

      Adley, Robert

      Bright, Graham

      Aitken, Jonathan

      Brown, Michael (Brigg & cl't's)

      Alexander, Richard

      Bruce, Ian (Dorset South)

      Alison, Rt Hon Michael

      Buchanan-Smith, Rt Hon Alick

      Allason, Rupert

      Buck, Sir Antony

      Amery, Rt Hon Julian

      Budgen, Nicholas

      Amess, David

      Burns, Simon

      Amos, Alan

      Burt, Alistair

      Arbuthnot, James

      Butcher, John

      Arnold, Jacques (Gravesham)

      Butler, Chris

      Arnold, Tom (Hazel Grove)

      Butterfill, John

      Ashby, David

      Carlisle, Kenneth (Lincoln)

      Aspinwall, Jack

      Carrington, Matthew

      Atkinson, David

      Carttiss, Michael

      Baker, Rt Hon K. (Mole Valley)

      Cash, William

      Baldry, Tony

      Chapman, Sydney

      Banks, Robert (Harrogate)

      Chope, Christopher

      Batiste, Spencer

      Clark, Hon Alan (Plym'th S'n)

      Beaumont-Dark, Anthony

      Clark, Dr Michael (Rochford)

      Bellingham, Henry

      Clark, Sir W. (Croydon S)

      Bendall, Vivian

      Conway, Derek

      Benyon, W.

      Coombs, Anthony (Wyre F'rest)

      Bevan, David Gilroy

      Coombs, Simon (Swindon)

      Biffen, Rt Hon John

      Cope, Rt Hon John

      Blaker, Rt Hon Sir Peter

      Couchman, James

      Body, Sir Richard

      Cran, James

      Bonsor, Sir Nicholas

      Currie, Mrs Edwina

      Boscawen, Hon Robert

      Curry, David

      Boswell, Tim

      Davies, Q. (Stamf'd & Spald'g)

      Bowden, A (Brighton K'pto'n)

      Davis, David (Boothferry)

      Bowden, Gerald (Dulwich)

      Day, Stephen

      Bowis, John

      Devlin, Tim

      Braine, Rt Hon Sir Bernard

      Dickens, Geoffrey

      Brandon-Bravo, Martin

      Dorrell, Stephen

      Brazier, Julian

      Douglas-Hamilton, Lord James

      1110

      Dover, Den

      McCrindle, Robert

      Durant, Tony

      MacGregor, Rt Hon John

      Eggar, Tim

      MacKay, Andrew (E Berkshire)

      Evans, David (Welwyn Hatf'd)

      Maclean, David

      Evennett, David

      McLoughlin, Patrick

      Fallon, Michael

      McNair-Wilson, Sir Michael

      Favell, Tony

      McNair-Wilson, Sir Patrick

      Fenner, Dame Peggy

      Madel, David

      Field, Barry (Isle of Wight)

      Malins, Humfrey

      Fishburn, John Dudley

      Mans, Keith

      Fookes, Dame Janet

      Marland, Paul

      Forman, Nigel

      Marlow, Tony

      Forsyth, Michael (Stirling)

      Marshall, John (Hendon S)

      Forth, Eric

      Martin, David (Portsmouth S)

      Fox, Sir Marcus

      Maude, Hon Francis

      Freeman, Roger

      Maxwell-Hyslop, Robin

      French, Douglas

      Mayhew, Rt Hon sir Patrick

      Gale, Roger

      Mellor, David

      Garel-Jones, Tristan

      Meyer, Sir Anthony

      Gill, Christopher

      Miller, Sir Hal

      Glyn, Dr Sir Alan

      Mills, Iain

      Goodlad, Alastair

      Mitchell, Andrew (Gedling)

      Goodson-Wickes, Dr Charles

      Mitchell, Sir David

      Gorman, Mrs Teresa

      Montgomery, Sir Fergus

      Gow, Ian

      Moore, Rt Hon John

      Grant, Sir Anthony (CambsSW)

      Morrison, Sir Charles

      Greenway, Harry (Ealing N)

      Morrison, Rt Hon P (Chester)

      Greenway, John (Ryedale)

      Moss, Malcolm

      Griffiths, Sir Eldon (Bury St E')

      Moynihan, Hon Colin

      Griffiths, Peter (Portsmouth N)

      Neubert, Michael

      Grist, Ian

      Newton, Rt Hon Tony

      Ground, Patrick

      Nicholls, Patrick

      Grylls, Michael

      Nicholson, David (Taunton)

      Gummer, Rt Hon John Selwyn

      Onslow, Rt Hon Cranley

      Hague, William

      Oppenheim, Phillip

      Hamilton, Hon Archie (Epsom)

      Paice, James

      Hamilton, Neil (Tatton)

      Patnick, Irvine

      Hampson, Dr Keith

      Patten, Rt Hon John

      Hanley, Jeremy

      Pawsey, James

      Hannam, John

      Peacock, Mrs Elizabeth

      Hargreaves, A. (B'ham H'll Gr')

      Porter, Barry (Wirral S)

      Hargreaves, Ken (Hyndburn)

      Porter, David (Waveney)

      Harris, David

      Portillo, Michael

      Haselhurst, Alan

      Price, Sir David

      Hayes, Jerry

      Raffan, Keith

      Heathcoat-Amory, David

      Raison, Rt Hon Timothy

      Hicks, Robert (Cornwall SE)

      Renton, Rt Hon Tim

      Higgins, Rt Hon Terence L.

      Rifkind, Rt Hon Malcolm

      Hill, James

      Roberts, Wyn (Conwy)

      Hind, Kenneth

      Roe, Mrs Marion

      Hogg, Hon Douglas (Gr'th'm)

      Rost, Peter

      Holt, Richard

      Rowe, Andrew

      Hordern, Sir Peter

      Rumbold, Mrs Angela

      Howarth, Alan (Strat'd-on-A)

      Scott, Rt Hon Nicholas

      Howarth, G. (Cannock & B'wd)

      Shaw, David (Dover)

      Hughes, Robert G. (Harrow W)

      Shaw, Sir Giles (Pudsey)

      Hunt, David (Wirral W)

      Shaw, Sir Michael (Scarb')

      Hunter, Andrew

      Shephard, Mrs G. (Norfolk SW)

      Irving, Sir Charles

      Shersby, Michael

      Jack, Michael

      Sims, Roger

      Janman, Tim

      Skeet, Sir Trevor

      Jessel, Toby

      Smith, Tim (Beaconsfield)

      Johnson Smith, Sir Geoffrey

      Soames, Hon Nicholas

      Jones, Gwilym (Cardiff N)

      Speed, Keith

      Jones, Robert B (Herts W)

      Spicer, Michael (S Worcs)

      Kellett-Bowman, Dame Elaine

      Squire, Robin

      Key, Robert

      Stanbrook, Ivor

      King, Rt Hon Tom (Bridgwater)

      Stanley, Rt Hon Sir John

      Kirkhope, Timothy

      Stern, Michael

      Knapman, Roger

      Stevens, Lewis

      Knight, Greg (Derby North)

      Stewart, Allan (Eastwood)

      Knight, Dame Jill (Edgbaston)

      Stewart, Andy (Sherwood)

      Lang, Ian

      Stokes, Sir John

      Latham, Michael

      Stradling Thomas, Sir John

      Lawrence, Ivan

      Sumberg, David

      Leigh, Edward (Gainsbor'gh)

      Summerson, Hugo

      Lennox-Boyd, Hon Mark

      Taylor, Ian (Esher)

      Lloyd, Sir Ian (Havant)

      Taylor, John M (Solihull)

      Lloyd, Peter (Fareham)

      Taylor, Teddy (S'end E)

      Luce, Rt Hon Richard

      Tebbit, Rt Hon Norman

      1111

      Temple-Morris, Peter

      Warren, Kenneth

      Thompson, D. (Calder Valley)

      Watts, John

      Thompson, Patrick (Norwich N)

      Wells, Bowen

      Thurnham, Peter

      Wheeler, Sir John

      Townend, John (Bridlington)

      Whitney, Ray

      Townsend, Cyril D. (B'heath)

      Widdecombe, Ann

      Tracey, Richard

      Wiggin, Jerry

      Tredinnick, David

      Wilshire, David

      Trippier, David

      Winterton, Mrs Ann

      Trotter, Neville

      Winterton, Nicholas

      Twinn, Dr Ian

      Wolfson, Mark

      Viggers, Peter

      Wood, Timothy

      Wakeham, Rt Hon John

      Woodcock, Dr. Mike

      Waldegrave, Rt Hon William

      Young, Sir George (Acton)

      Walker, Bill (T'side North)

      Waller, Gary

      Tellers for the Noes:

      Ward, John

      Mr. David Lightbown and

      Wardle, Charles (Bexhill)

      Mr. Nicholas Baker.

      Question accordingly negatived.
      Amendment made: No. 64, in page 5, line 28, leave out "'and' and insert "'or'.—[Mr. Scott.]

    Clause 4

      COMPUTATION OF ADDITIONAL PENSION FOR PURPOSES OF INVALIDITY PENSION ETC.
      Mr. Flynn: I beg to move amendment No. 7, in page 5, line 33, leave out clause 4.
      Clause 4 proposes to abolish the earnings-related invalidity pension provided under the Social Security Pensions Act 1975. The White Paper "The Way Ahead" deliberately concealed the true extent of the losses that the long-term sick will suffer. It admits that by the end of the century, 10 years from now, they will be losing £350 million a year—money that the White Paper claims will be spent on other benefits for the sick and the disabled. However, it says nothing about the enormously greater losses that will build up over 20 or 30 years—and those are legitimate advance periods for the consideration of social security.
      The truth about those losses emerged only in reply to parliamentary questions. The Minister was forced to admit that, by the year 2025–26, the long-term sick would be losing not only £350 million a year but £1,825 million —more than five times as much. Some of that will be replaced by means-tested benefits, but the net loss will be £1,300 million. According to the Government's figures, only a quarter of that additional sum will be used to pay for the other changes in disability benefits. The other quarters will be a straight cut in spending on the long-term sick and disabled.
      It is hard to know how the Government can possibly justify that cut. Exposed before us is the gulf between reality and rhetoric. Even Ministers have not had the gall to suggest that invalidity benefit is too generous in relation to the needs of the long-term sick. The basic rate for the coming year is only £46·90, to which is added an age-related allowance varying from nil to a maximum of £10 a week. The earnings-related pension scheme, when it is fully mature, will add less than 20 per cent. of an individual's earnings, so that, even in the next century, very few people will receive more than half their previous earnings during long-term sickness.
      It should be remembered that those benefit levels were not inherited, in the mythology of the Conservative party, from a profligate Labour Government. What is being cut now is a system that has already suffered a great deal. It is all that is left after the savage cuts already inflicted by the
      1112
      Government. The basic benefit has been frozen since 1980, when the link with average earnings was broken. The earnings-related addition was cut by more than one third by the Social Security Act 1986. The Opposition tabled an amendment to that aimed specifically at mitigating its effects on the value of earnings-related invalidity benefit. The then Under-Secretary, who now rejoices in the role of Chancellor of the Exchequer, gave the reply:
      "The proposals that we have put forward are reasonable, affordable and fair as between pensioner, taxpayer and national insurance payer."—[Official Report, Standing Committee B; 25 February 1986, c. 401.]
      The Minister was asked in Committee why, if they were affordable then, they are not affordable now. If they were fair between pensioner, taxpayer and national insurance payer three years ago, why has the position changed? There was no answer from the Minister, but the change is the fact that the Minister is looking for money and is scratching around everywhere to fund the Government's much-vaunted new scheme to help the disabled. That is what has suddenly transformed the position.
      The Government have produced another argument for the massive reduction in benefits for the long-term sick —the growth of long-term occupational sick pay schemes. The evidence on which they base that is a weighty report by IFF Research Ltd. and published by the Department in 1988.
      The report contains a great deal of information, from which the Government have selected one figure to support their case. It is that the coverage of long-term occupational sick pay schemes has risen to nearly 60 per cent. In Committee I quoted, I believe, nearly every conclusion in that report. I was rather unfairly accused by the Minister of quoting selectively because, having re-read the report, I still can find no other conclusions. I will not repeat them all tonight.
      The 60 per cent. coverage does not mean that six out of 10 people suffering from long-term illness receive sick pay from their employers—far from it. The IFF Research report shows that only 4 per cent. of private sector firms in hazardous industries—construction, mining and quarrying—have a long-term sick pay scheme, and another 3 per cent. say that they might make discretionary payments if the employees are lucky. The other 93 per cent. accept no responsibility at all for long-term sickness.
      The report also shows that over one third of the schemes exclude recent employees, generally for the first six to 12 months, when accidents are most likely to occur, and 43 per cent. of large firms' sick pay schemes exclude manual workers altogether. Even for those theoretically covered, entitlement to long-term sick pay often depends on the cause of sickness. There is a great deal of picking and choosing in this matter and a very wide range of exclusions, ranging from drug or alcohol abuse to sporting injuries.
      When long-term sick pay is paid, it is limited in both its amount and its duration, and only 12 per cent. of schemes provide full basic pay. Even in the public sector, which has been the pacemaker in this field, as in so many others, two out of three schemes have a time limit on them. It may indeed be true that 60 per cent. of employees work for employers with some kind of long-term sick pay arrangement, but it seems very clear that most of the 60 per cent., if they fall sick, will get no long-term sick pay at all. The rest may get something, depending on the reason for their illness.
      Dame Elaine Kellett-Bowman: Is the hon. Gentleman saying that people who have deliberately misused themselves by drug or alcohol abuse ought to be getting that sort of thing from their employers?
      Mr. Flynn: I am saying that there should be universal benefits. That has been the principle behind the social security system in this country and in every other country. One could equally argue, and I think that it has been argued in some barbarous circles, that people who are ill as a result of drug abuse should not be treated, although we make different judgments for acceptable drugs, such as alcohol and cigarettes. We have a pension scheme, and we are not in a position to make judgments on how people fell into ill health. That would be treading on very dangerous ground. We need a highly effective scheme, which must cover those who are in it for all eventualities.
      The case I quoted showed one of the defects of many occupational schemes, but the hon. Lady is unfair if she is considering that rather than all the others. We know that the occupational schemes are inferior in many ways, and I quoted a long list. We certainly cannot make a judgment on people because of the way in which they acquired their illness. I believe that hon. Members of all parties would find that an intolerable course of action.
      So, while it may be true that 60 per cent. of employees work for employers with some kind of long-term sick pay arrangement, it seems clear that most of that 60 per cent., if they fall sick, will get no long-term sick pay at all. The rest may get something, depending on the reason for the illness, but it will not be any substitute for the invalidity benefit that they will lose if clause 4 is enacted.
      We are arguing that there is now a universal benefit that is paid without prejudice, and the excuse being given for withdrawing it is that occupational pay schemes are widespread. The occupational pay schemes are woefully inadequate in many directions.
      8.15 pm
      Mr. Scott: The amendment would delete clause 4. The hon. Member for Newport, West (Mr. Flynn) sought to argue that the Government proposals to curtail entitlement to additional pension with invalidity benefit after 1991 should not be proceeded with despite the fact that, as I explained in Committee more than once, they form an important part of our package for the new provision for disabled people in our society.
      I acknowledge, of course, that if the savings are projected into the next century they look pretty massive, but by the time one gets there all sorts of other arguments will no doubt have entered into the dispute across the Floor of the House. It is undeniable also that those savings, having been acquired through this provision, which I shall justify in a moment, will give whoever has my job at that time some scope for manoeuvre. Certainly, within the economy overall, there will be room for manoeuvre and for the redeployment of those sums of money.
      Unless I misheard the hon. Gentleman, he suggested that in some way the Government were intending to cut the overall provision in the area of disability. He knows as well as I do that every year from now to the end of the century there will be extra resources above those previously announced in this area, peaking at some £300 million. In my judgment, the extra money will be put into this provision in a much better structured and balanced manner than at the moment.
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      The hon. Gentleman gave quite a lot of figures and I will begin my response by giving a few of my own. Since 1979 the number of people entitled to invalidity benefit has almost doubled—from 600,000 to just under 1·2 million —and expenditure has risen in cash terms from £840 million to £3·8 billion. Moreover, if we take spending over the whole range of social security benefits payable to the long-term sick and disabled, as I said on the earlier amendment, it has increased by some £4 billion in real terms. That is a pretty substantial record and the whole house should recognise that. We can all speculate about what has led to the tremendous increase in the take-up of invalidity benefit over that period, but this is not perhaps the time to go into that, unless other hon. Members wish to intervene and make a point.
      On invalidity benefit, the current average payment of additional pension is £9 a week, with a maximum of some £41 a week. As I said in Committee, this costs some £450 million a year and it is estimated that, if we went on in the same way, by 1998 the average weekly payment of additional pension would rise to £21 a week, with a maximum of £84, and the annual cost would rise to a staggering £1·6 billion. All this is on top of the basic invalidity pension and the invalidity allowance.
      So, in considering the future structure of benefits available for the disabled, we needed to consider whether continued expenditure on this scale was a sensible use of available resources when set against other priorities in provision for disabled people. Our conclusion was that it was not, for two main reasons.
      First—I apologise to the House for repeating this, but I must emphasise it very strongly and I believe it personally very strongly—a major aim in the proposals set out in our paper, "The Way Ahead", is to provide more help for those disabled at birth or early in life. The whole House ought to agree with that objective. If we allowed additional pension to grow as alarmingly as I have outlined, we would be further widening the gap between those who have been able to work and those who have not.
      Secondly, as the hon. Member for Newport, West agreed, occupational sick pay cover is growing. I agree with him that it is uneven at present, but nobody can doubt that its coverage is extending at a steady rate. Coverage has tripled in the last 15 years, and there was no dispute about that in Committee.
      As I emphasised in Committee, the tighter employment situation in which we shall find ourselves in the coming few decades will make employers more willing to offer packages including provision for long-term sickness and disability to attract people into their work forces. Indeed, that will put extra bargaining weapons in the hands of trade unions negotiating packages for their members in large-scale enterprises. They should find it easier to negotiate this type of provision because in the coming years there will be great competition for skills. We can therefore look forward to seeing that uneven provision evened out and further extended in the years ahead, and that will be a good development.
      Those are the two main reasons which led us to make our proposals in "The Way Ahead" for the curtailment of additional pension for invalidity benefit and the introduction as a consequence of the two new benefits—the disability allowance and the disability employment credit. They will make for better balanced provision in future.

      1115
      The clause does not affect existing rights to additional pension. All the rights built up in the years up to and including the 1990–91 tax year will be preserved, whenever the claim for invalidity pension is made, however far in the future that may be. Moreover, such additional pension will continue to be subject to revaluation uprating in exactly the same way as at present.
      That all means that, even with the provisions in clause 4, the cost of additional pension will still grow from the present £450 million to £1·3 billion in the next 10 years. The provisions in clause 4 are consistent with the Government's overall strategy for future provision for disabled people. I urge the House to reject the amendment.
      Mr. Battle: The Minister put a gloss on his remarks to emphasise the positive side of what the Government are doing. His phrase "uneven development" may be nearer the truth. On the economic side, his analysis suggests that there will be competition for much-needed skills in the work force in future, but at the same time there could continue to develop—it is developing now—a low-wage economy, with more part-time, temporary and low-paid work. Let us be clear that there is uneven development in the employment sector.
      The Minister said that there had been an alarming growth in the degree of invalidity pension. Let us remember that the basic benefit has been frozen since 1980, when the link with average earnings was broken. The earnings-related addition was cut by over a third by the Social Security Act 1986, so the Government cannot claim a gloriously progressive record on this issue.
      We have waited a long time for the publication of "The Way Ahead." We had to press to get it, having been told that it would represent a proper survey of the needs of the long-term sick and disabled. We now have the proposals in the new integrated package, which appear to be fine. But part of the Government's strategy seems to involve deciding on a strategy, putting it to the Treasury and then resolving—if they discover that it will cost Government Departments, in particular the Department of Social Security, too much—to look to local authorities as a means of funding that package. That has happened in the past—for example, with housing benefit—and many would say that the social fund notion has involved shifting expenditure to the local level.
      The Minister said that local authorities would be putting this package together in conjunction with the Government. On this of all days, we must wonder whether it will turn out to be a capped budget to prevent local expenses from escalating, the whole thing being partly controlled from the centre.
      Mr. Scott: I fear that I may be losing the thread of the hon. Gentleman's argument. Is he talking about the community care arrangements? He cannot be talking about the additional pension when referring to local arrangements. Or is he perhaps referring to my previous remarks about the independent living fund?
      Mr. Battle: I am questioning the whole structure of the scheme being planned by the Government. The ILF comes into it, but I am particularly concerned with disability benefit because the Minister said that there could be a gap before the introduction of the new benefit for disabled people. We must be sure that whatever emerges during that time will be adequate. Will the cost be borne by local authorities, controlled from the centre—like housing
      1116
      benefit, which is then repaid—or will there be a different budgeting arrangement? At present, central Government control the budget for benefits. I foresee a time when the integration of disabled benefit will mean the burden being pushed to the local level. In other words, local authorities could be expected to pick up the tab, thereby saving central Government the cost.
      Clause 4 enables the Government to make savings. "The Way Ahead" concealed the extent to which the long-term sick would suffer as a result—
      Mr. Scott: I interrupt the hon. Gentleman in the hope that I can help him while his line of argument is fresh in my mind. There is no intention that the general run of disability benefits should be provided other than centrally, but obviously there are elements of provision, of which community care is one, where a local judgment is likely to be more flexible and responsive to the needs of individuals than any centrally run system could be. But to suggest that we are pushing it off on to local authorities cannot be right.
      A clear part of the commitment to community care policies is not only that the Department in which I am a Minister will transfer the reserves that are saved on the existing provision for residential care from our budget, and from our assumptions for an uprated budget—those will be transferred year by year via the Department of Health, presumably through the Department of the Environment, to local authorities so that they have the resources—but that the Secretary of State for Health will be seeking to provide extra resources to enable those policies for care in the community to operate effectively. So long as that provision is properly made and that transfer of resources is properly done—I am confident that that will happen—those decisions are better made at a local level than centrally.
      Mr. Battle: I am grateful to the Minister for that intervention and I take it in good faith that that is his intention. We support the assessment of need being made locally, but we wish to be assured that the necessary funds will be underwritten. After all, a few hours ago in the Chamber the Secretary of State for the Environment capped the budgets of local authorities so that they could not meet their assessed needs.
      Dame Elaine Kellett-Bowman: Excess needs, not assessed needs.
      Mr. Battle: I am grateful to the hon. Lady for that clarification. When the standard spending assessment was fixed for my city, we needed a meeting with the Secretary of State because the figure was reduced by the Government, as they had not taken into account the needs outlined at local level. In other words, the assessment at local level was overridden by the Government.
      We must be assured that the funds will be available. The Minister said that resources from his Department and from the Department of Health would be transferred to local authorities. I hope that the right hon. Gentleman will not be saying at some future date that local authority budgets will be capped in such a way that they will not be able to provide for the needs that have been assessed locally.
      Otherwise, we feel that, as has happened with local housing, the service level and the policy of providing service will pass to local government but resources to fulfil those commitments will not be given, so the local

      1117
      authorities cannot undertake the job. That would be a most cynical move, in this area of all areas. Therefore, I welcome the comments that the Minister has made in his intervention, but I hope that his colleagues in other Departments will be able to give such clear assurances.
      8.30 pm
      Mr. Flynn: The answer that the Minister gave was unsatisfactory. He again made a point, as he did in Committee, about how much extra spending will take place. He took me to task for suggesting that there would be a decrease. As the Minister knows, it is difficult to make an objective judgment about what will happen in future. Our reason for suggesting that there would be a decrease was the Government's unrealistic assumption about the growth of wages. It all depends who has the most accurate crystal ball that will give us the clearest picture of the future.
      We suggest that what destroys the Government's case about extra spending is their ludicrous proposal that average earnings will increase by a mere couple of per cent. We shall continue to disagree with the Government on those issues and about what is likely to happen in the future. The purpose of tabling the last two amendments was to underline that the Government are not increasing spending on the disabled. They are recycling the money spent on the disabled just as much as they are ring-fencing housing payments to tenants on council estates.
      The Government's philosophy is that, if there has to be an increase, there must be a complementary decrease in spending somewhere else. Today, we are trying to expose what is taking place to the House. We are trying to show that this is not an act of generosity. We are an aging population and we are more aware of disability than ever before. The disabled are keenly aware of all the awards and allowances that are made.
      As the Minister said, we could talk at great length about why there has been an increase in the amount of money claimed by the disabled. We all welcome that increase without any reservations. However, we are looking forward to a more ambitious and generous reaction from the Government. We did not expect them to come up with this Bill. Although the Bill contains good things that we could welcome, we hope that those good things will be financed by new money and not by taking money from people with other problems.
      Mr. Scott: As the hon. Member for Newport, West (Mr. Flynn) knows, public expenditure figures are published on a three-year cycle. It is already clear that we will have extra provision above the public expenditure survey three-year period for the long-term sick and disabled. I said earlier in the debate that extra resources will be put in in each and every year to the end of the century. Looking beyond that, one is moving into crystal ball territory.
      Extra resources are being committed and the Government's commitment and their record on providing extra resources for the disabled far exceeds that of previous Governments. We can be proud of what we are doing for the long-term sick and disabled in this country.
      Mr. Flynn: I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Clause 5

      LATE CLAIMS FOR WIDOW'S BENEFIT WHERE DEATH IS DIFFICULT TO ESTABLISH
      Amendment made: No. 24, in page 6, line 42, leave out 'that section' and insert
      'the section 165AA of that Act inserted by section [Retrospective effect of section 165A of the principal Act] above'.—[Mr. Scott.]
      Mrs. Gillian Shephard: I beg to move Amendment No. 68, in page 6, line 47, leave out 'his'.
      Madam Deputy Speaker: With this it will be convenient to take Government Amendments Nos. 69 to 74.
      Mrs. Shephard: All these amendments fulfil a commitment that we gave in Committee. In this group of amendments, we undertook to see if the already beneficial provision proposed in clause 5 in Committee for widows could be extended to widows' invalidity pensions. I am happy to say that we have been able to do so.
      To deal briefly with the background to the provision, we have been conscious of the difficulties faced by widows who, because of circumstances beyond their control, make a late claim for widow's benefit and then find themselves caught by the existing 12 months limitation on payment of arrears.
      The type of case we have in mind—fortunately, there is a small number of such cases—is where the widow's claim is delayed more than 12 months because her husband has disappeared and there is a lengthy delay in the discovery of his body; or if his body is not found, when she has to rely instead on the presumption of death provisions. Such cases are fortunately rare, but they do exist; we felt it right and proper to make special provision for them, and we did so in the Bill. The clause provides that there shall be no limitation on the payment of arrears of widow's benefit where a claim which is late is made within 12 months of: the date on which the widow first knew of her husband's death, where his body has been found; or the date on which the adjudication authority gives a determination of presumption of death where no body has been found.
      Also, because some of these women will be of pensionable age, the clause as drafted lifts the normal 12 months on review of earlier decisions awarding benefit. So that a woman receiving the married woman's lower rate of category B retirement pension, who establishes belatedly that she is in fact a widow, can have her pension reviewed to the higher rate appropriate to a widow, back to the date of widowhood.
      I come now to the purpose of the proposed amendments. They extend the provision to two further benefits—thus going further than the commitment we gave in Committee.
      First, we propose extending it to cover widows invalidity pension under section 15 of the Pensions Act. This is an alternative route to IVP for a widow who, although she is incapable of work when widowed, does not qualify on her own contributions. That was a specific matter of debate in Committee. It enables her to get invalidity benefit, exceptionally by using her late husband's contribution record—and would benefit the widow who was too young for a widow's pension at all or who perhaps has only a low rate of widow's pension

      1119
      because of her age when widowed. It would also benefit a widow whose late husband's contribution record entitled her to a higher rate of invalidity pension than her own record.
      Secondly, a widow who remains incapable of work until pensionable age and who does not qualify for a category A retirement pension on her own contributions in the normal way can, exceptionally, become entitled on her late husband's contributions. Again, such cases are rare, but we accept the logic of extending that beneficial provision for women who are widowed in that particularly horrible way, to widows' invalidity pension and to the consequential retirement pension where appropriate.
      These amendments extend a beneficial measure to more widows. I commend them to the House.
      Question put and agreed to.
      Amendments made: No. 69, in, page 7, line 9, leave out from
      'for' to 'by' in line 10 and insert 'any of the widowhood benefits, that is to say—

      (i) widow's benefit,

      (ii) an invalidity pension under section 15 of the Pensions Act, or

      (iii) a Category A retirement pension by virtue of subsection (5) of that section,

      was made or treated as made in respect of the death'.
      No. 70, in page 7, line 14, leave out 'widow's' and insert 'a widowhood'.
      No. 71, in page 7, line 35, leave out 'widow's' and insert 'a widowhood'.
      No. 72, in page 7, line 43, leave out 'widow's' and insert 'widowhood'.
      No. 73, in page 8, line 6, after 'benefit', insert—
      'any invalidity pension under section 15 of the Pensions Act'.
      No. 74, in page 8, line 10, leave out from 'for' to end of line 12 and insert—
      'a widowhood benefit, within the meaning of section 165B below, which is made or treated as made by virtue of that section.'.—[Mr. Scott.]

    Clause 7

      THE PENSIONS OMBUDSMAN
      Mrs. Gillian Shephard: I beg to move amendment No. 36, in page 8, line 30, at end insert—
      '(2) In the Tribunals and Inquiries Act 1971—
      (a)in paragraph 23 of Schedule 1 (certain tribunals concerned with pensions to be under the general supervision of the Council) there shall be added at the end of the second column—
      "(e) the Pensions Ombudsman established under Part IVA of the Social Security Pensions Act 1975 (c. 60) in respect of his functions under or by virtue of section 59C(2) of that Act."; and
      (b) in section 8(2) (which specifies the paragraph numbers of the tribunals which are excepted from the requirement of concurrence to the removal of members) after "22" there shall be inserted "23(e)".'.
      Madam Deputy Speaker: With this it will be convenient to discuss the following amendments: Government amendments Nos. 50 to 52 and 38.
      Amendment No. 9, in page 22, line 43, after 'year,'insert—
      'which may include a report on any case or cases in which he has made an investigation,'.
      Government amendments Nos. 39 to 43, 53, 54, 44 to 46, 55, 47, 79, 50, 48, 80 and 81, 49 and 57.
      Mrs. Shephard: This group of amendments also covers matters that were the subject of promises in Committee.
      The effect of amendment No. 36 will be to include the pensions ombudsman in schedule 1 to the Tribunals and Inquiries Act 1971. That would mean that the council on tribunals would supervise that part of the ombudsman's jurisdiction which deals with the determination of the disputes of fact or law.
      The effect of amendment No. 44 would be to enable the council on tribunals to be consulted about the rules governing that part of the ombudsman's jurisdiction which considers cases of maladministration. Amendments Nos. 45 an 46 are consequential on that.
      The effect of amendment No. 38 is to bring the pensions ombudsman into line with powers already available to the Health Service commissioner, for example. It will provide the ombudsman with the power to delegate certain of his functions other than the determination of a dispute or complaint to his staff. That provision will allow the ombudsman's staff to require information or documents from those who hold them, and to examine witnesses on behalf of the ombudsman. The ombudsman would then weigh up the evidence available and reach a determination.
      Amendments Nos. 39 and 42 deal with a matter that I promised in Committee to consider. Their effect will be to provide for the extension of the Ombudsman's jurisdiction to cover employers and such other persons or bodies as are concerned with occupational and personal pension schemes, as well as the trustees or managers of a scheme.
      Amendment No. 39 also provides that the Ombudsman could investigate cases that arise before this legislation has taken effect. Although the rights of scheme members are most dependent on the trustees or managers of a scheme, employers clearly have a role to play in the operation of schemes. Membership may arise out of the contract of employment, and of course the employer generally contributes to the scheme and collects the members' contributions. The employer is also likely to be involved when a bulk transfer takes place or when a scheme is wound up. This is to ensure that the pensions ombudsman covers bodies such as insurance companies when they are acting both as managers and as agents of the trustees or managers.
      The effect of amendment No. 41 will be to widen the definition of an authorised complainant to include people who believe that they are entitled to be a member of a scheme but have been denied membership. Amendment No. 40 is consequential. Amendment No. 43 will clarify that a scheme member includes any person who is or has been in pensionable service under the scheme, and that those people will therefore be entitled to approach the pensions ombudsman.
      Amendments Nos. 47 and 48, and 79 to 81, are minor legal amendments to do with appeals and with enforcing the ombudsman's determination in Scotland. The effect of amendment No. 49 is to give the pensions ombudsman the power to publish reports of individual cases he has investigated in whatever way he sees fit, if he thinks it would be appropriate for him to do so.
      In Committee, I promised to consider the publication of case reports by the ombudsman. As I explained, we do not believe that the ombudsman should be required to publish details of all his investigations, but he should have the power to publish details of particular cases where he feels it is of particular significance. In other words, it is over to him. The ombudsman may wish to publish reports

      1121
      of cases of general interest, with the details of individual complaints anonymised. That provision therefore extends the ombudsman's powers of publication to reflect that intention, and protects him from the law of defamation.
      Opposition amendment No. 9 would duplicate the intention of our amendment, giving the ombudsman the power to include details of individual cases in his annual report if he wished to do so. I therefore invite the Opposition to withdraw amendment No. 9.
      Amendments Nos. 50 to 57 deal with the extension of those provisions to cover Northern Ireland directly. Under the Northern Ireland Act 1973, pensions are a transferred matter on which a devolved Northern Ireland administration may legislate. However, as occupational or personal pension schemes are usually offered on a United Kingdom basis, it is deemed practicable for the registrar of ocupational and personal pension schemes and the pensions ombudsman to be appointed on a United Kingdom-wide basis. Therefore, the appointment of those officers—but not their functions—becomes a matter for the Secretary of State for Social Security. I remind the House that the OPB itself is United Kingdomwide. Amendments Nos. 51 to 57 are technical amendments consequential on amendment No. 50. I commend them all the House.
      Amendment agreed to.

    Clause 8

      REGISTRATION OF OCCUPATIONAL AND PERSONAL PENSION SCHEMES
      Mrs. Shephard: I beg to move amendment No. 37, in page 10, line 13, at end insert—
      '(6A) The Secretary of State may direct the registrar to submit to him, in such form and at such intervals as may be specified in the direction, such statistical and other reports as the Secretary of State may require; and the Secretary of State may determine at his discretion whether or not to publish a report submitted to him under this subsection.'.
      This amendment will require the registrar to submit to the Secretary of State such reports as he may request and to give the Secretary of State power to publish those reports if he wishes to do so. In Committee, I accepted the principle of an Opposition amendment based on previous legislation and that it would be useful for the Secretary of State to have a power to ask the registrar for statistical and other reports and to publish them if he sees fit. We undertook to bring forward our own provision to achieve that. I commend the amendment to the House.
      Amendment agreed to.

    Clause 9

      MISCELLANEOUS AMENDMENTS RELATING TO PENSIONS
      8.45 pm
      Mr. Flynn: I beg to move amendment No. 13, in page 10, line 39, at end insert—
      '(3) In sections 3 and 7 of the 1986 Act. for the words "April 1993", wherever they occur, there shall be substituted the words "April 1991".'.
      I thank the Minister for Social Security and the Under-Secretary of State for generously examining the arguments presented in Committee. A large number of
      1122
      amendments have been given the proper consideration that they fully deserved and have been adopted. The Bill will not be tolerable as a consequence, but it will be better.
      Sadly, there will be no great degree of agreement on this amendment, which concerns a matter of great importance. I refer to a growing scandal which has resulted in a great many people being misled by actions which have flowed from Government legislation.
      The effect of amendment No. 13 will be that the 2 per cent. inducement to persuade people to leave SERPS and take out personal pensions will cease in April 1991 instead of continuing for another two years. There are many reasons for wanting to terminate the abuse of which I speak at the earliest possible date.
      It is grossly unfair that the majority of national insurance fund contributors should have to bear the cost of a bribe payable to a minority. The fact that the minority is much larger in numbers than the Government bargained for means that the cost of the bribe is also much greater —as is the unfairness to those who have not taken it.
      It was expected that the scheme would be in surplus by £5 million for the year, but in fact it is in deficit to the tune of nearly £1 billion. That is because of the greater take-up of the bribe, which has distorted the choice between the state scheme and occupational schemes on the one hand, and so-called personal and money purchase schemes on the other. Instead of making a rational choice based on a sober assessment of the long-term implications for their pension rights, the public have been subjected to unscrupulous advertising campaigns based on the suggestion that one can get something for nothing by signing up for a "personal" pension. The outspoken criticism of those sales methods by the regulatory body LAUTRO has had little effect—as the disgraceful posters displayed in branches of the Midland Bank demonstrate.
      I could have cited many advertisements, including one asking, "Are you a SERPS?" However, the Midland Bank has about the most disgraceful record. Its methods are not only misleading but grossly, cynically and deliberately dishonest. In a frantic rush to grab its share of the lucrative personal pensions market, even a body as reputable as a national bank has produced advertisements which are wickedly deceitful. Every branch of the Midland Bank that I have visited displays the following notice prominently:
      "How often does the Government give you something? Up to £5,250 could be yours, to invest in your Midland Personal Pension Plan. Only if you act by the 5th April 1990. Plus income tax relief to boost your contributions."
      Its meaning could not be clearer—that the Government will give individuals £5,250 to invest in a personal pension, with added tax relief. Rarely have so many lies been concentrated in so few words. The Government's "gift" includes £1,242 of the individual's own national insurance contributions plus £2,359 employers' contribution, those sums being transferred to the personal pensions scheme instead of earning pension rights in the state scheme.
      The whole of that large sum comes from the employer and the employee, but it is advertised as a gift. Then there is the extra £1,242 which is paid into the personal plan as a bribe to induce as many people as possible to opt out of the state scheme. That looks like a gift until one realises that the money is taken from the national insurance fund and that the fund is being plundered in order to finance personal pension schemes. The fund is being damaged. The deficit this year is calculated at £1·5 billion.

      1123
      All the Figures that I have given add up to £4,843, not the £5,250 in the advertisement. Where does the other £407 come from? It consists of the tax relief on the contributions to the personal pension scheme. Let us look at it again. The Midland bank poster says that the Government will give the person £5,250 plus income tax relief. Is not that a con? I put that question to the Midland bank, who said, "No, you can get extra tax relief if you pay additional contributions to the scheme." The poster says nothing about extra tax relief. Of course, there is no extra tax relief for someone taking out a basic, rebate-only personal pension scheme, as most people would.
      As for the £5,250 gift itself, that applies only to earnings of at least £350 a week from now until April 1993, and depends on payments being made into a personal pension scheme for the whole of that period. The poster, which is fairly typical of those published by respectable organisations, gives no warning that, even with the Government gifts, the state pension remains a far better buy for most people than a personal pension. If it takes such dishonesty to market a product, however one looks at it, one can be fairly sure that the product is hardly worth buying.
      We have a welter of other information coming in too. Not only has LAUTRO condemned the advertising but an assessment has been made by an independent group of consultants called PIRC, Pension Investment Research Consultants. We were told yesterday by the Secretary of State that 3·6 million people have taken out these schemes. On the previous figure of 3 million, PIRC is convinced that 1 million will lose because they have not taken out pension schemes but saving schemes. According to the independent group, those people will have poor pensions at the end of the day, and they will be deprived of the benefits of the state scheme.
      We are concerned about who will advise those people when the loss leader no longer has an effect and they have to come back into the state scheme. It has become increasingly clear that the Financial Services Act 1986, which was intended to guarantee that pension scheme salesmen offered the best advice to customers, has failed to achieve that aim. On the one hand, so-called independent financial advisers have been selling schemes on a commission basis, which makes them anything but independent, while, on the other, tied agents of insurance companies are forbidden to recommend the schemes of any company other than the company which pays them.
      Some insurance companies are resorting to indiscriminate mail shots which exclude the possibility of independent advice. There is clearly no case for bribing people to succumb to commercial pressures. The result is that many people are paying into schemes, against their best interests, even when on certain assumptions a personal scheme appears to be a better buy than the state scheme in the short run. The Government's own figures show that within a few years it will pay them to go back into the state scheme.
      Yesterday I received a parliamentary answer to a question which I had asked about how much was spent by the Government on advertising SERPS. The answer was predictable: nothing has been spent because it is nobody's responsibility to sell the superior state scheme. The 3·6 million people to whom I have referred are being pushed out of the state scheme because the state does not want the responsibility of dealing with them in future. Because of what it would cost the country, they are being pushed into inferior schemes. The consequences will come home to
      1124
      roost. A scandal will emerge when many people, many in their 40s and 50s, discover that their pension is hardly worth having.
      The decision of whether to continue paying into a personal pension scheme should be taken annually as the balance of advantage changes from year to year. In making the decision, people should not be influenced by the promise of something for nothing which might mean that they continued paying into a scheme when it is no longer in their interests to do so.
      The amendment proposes April 1991 for the ending of the bribe for two reasons. First, by the time the Bill becomes law several months of the 1990–91 tax year will already have passed; secondly, the burden falls on the national insurance fund a year in arrears, so the bribe for 1990–91 will be paid in 1991–92. That happy year will be the last year of a Tory Government. From 1992 on, a Labour Government will need to put the finances of the national insurance fund on a proper footing so that we can make a start on the creation of what the country really wants—the new social insurance system set out in Labour's policy review.
      Mr. Haynes: I realise only too well what the Government are about. The right hon. Member for Sutton Coldfield (Sir N. Fowler) fiddled about with SERPS and interfered with the scheme which was running in the interests of the workers who contributed to it. I contributed to it before I came to this place. The right hon. Gentleman would not listen to the points that were made to him, so we have to have the argument all over again.
      As I said earlier at Question Time about the defence team, this lot too should be summoned to the Bar and dealt with because of what they have done. The Minister can take that grin off his face; this is a serious matter. If the Minister had been in the United States, he would be in Alcatraz. He would deserve that; there would be no one there but himself unless he had his two colleagues with him.
      Yesterday, I asked a question to which I got a very unsatisfactory answer from the Secretary of State. He need not shake his head. Yesterday he responded to my supplementary question by asking a question. He did not answer my question. Mr. Speaker would not let me back in to answer the question that he asked. What the Government are doing is a racket. All they are doing once again is feeding the pockets of the rich. They do so in many other ways, and here they are, doing it again. It is a scandal. I support the amendment, because it is necessary. I will never change my mind about what the Government are doing to pensions.
      The Government are robbing people. They talk about protecting the taxpayer, but they are pouring taxpayers' money into the pockets of a few rich people. The Secretary of State was not here earlier; let me tell him that we will put matters right when we are in government. Although I shall not be here after the next general election, I shall be watching on television, and then the Government will be sorry for what they did.
      Mrs. Gillian Shephard: I wish that the hon. Member for Ashfield (Mr. Haynes) would not exhort other hon. Members not to smile when he has a big grin all over his own face. I am sorry to tell him that it is very disarming.
      Perhaps I can correct some of the assumptions that were over-colourfully expressed by the hon. Member for

      1125
      Newport, West (Mr. Flynn). First, he said that the cost of the incentive is being borne by the minority; that is not the case. Only about 30 per cent. of people in full-time employment are not in either an occupational or a personal pension scheme. The majority are taking advantage of the contracted-out rebate.
      Secondly, it is not the case that the national insurance fund has been either bankrupted or plundered. The fund still has a healthy balance, which is twice the recommended level. The great success of personal pensions—[Interruption.] I am sorry that Opposition Members do not support them—is just one reason why the revenue going into the fund has dropped. Another reason is the restructuring of national insurance contributions introduced last October which has been widely welcomed throughout the country. Arrangements are made in the Bill to correct the balance in the national insurance fund, as Opposition Members—
      It being Nine o'clock, MADAM DEPUTY SPEAKER proceeded, pursuant to the Order [28 March], to put forthwith the Question already proposed from the Chair.
      The House divided: Ayes 195, Noes 283.

      Division No. 156]

      [9.00 pm

      AYES

      Abbott, Ms Diane

      Cunliffe, Lawrence

      Adams, Allen (Paisley N)

      Dalyell, Tam

      Allen, Graham

      Darling, Alistair

      Archer, Rt Hon Peter

      Davies, Rt Hon Denzil (Llanelli)

      Armstrong, Hilary

      Davies, Ron (Caerphilly)

      Ashton, Joe

      Davis, Terry (B'ham Hodge H'l)

      Banks, Tony (Newham NW)

      Dixon, Don

      Barnes, Harry (Derbyshire NE)

      Dobson, Frank

      Barron, Kevin

      Doran, Frank

      Battle, John

      Duffy, A. E. P.

      Beckett, Margaret

      Dunnachie, Jimmy

      Beith, A. J.

      Dunwoody, Hon Mrs Gwyneth

      Bell, Stuart

      Eadie, Alexander

      Bennett, A. F. (D'nt'n & R'dish)

      Evans, John (St Helens N)

      Bermingham, Gerald

      Ewing, Harry (Falkirk E)

      Bidwell, Sydney

      Ewing, Mrs Margaret (Moray)

      Blair, Tony

      Fatchett, Derek

      Blunkett, David

      Fearn, Ronald

      Boateng, Paul

      Field, Frank (Birkenhead)

      Boyes, Roland

      Fields, Terry (L'pool B G'n)

      Bradley, Keith

      Fisher, Mark

      Bray, Dr Jeremy

      Flannery, Martin

      Brown, Gordon (D'mline E)

      Flynn, Paul

      Brown, Nicholas (Newcastle E)

      Foot, Rt Hon Michael

      Brown, Ron (Edinburgh Leith)

      Foster, Derek

      Bruce, Malcolm (Gordon)

      Foulkes, George

      Buchan, Norman

      Fraser, John

      Buckley, George J.

      Fyfe, Maria

      Callaghan, Jim

      Galloway, George

      Campbell, Menzies (Fife NE)

      Gilbert, Rt Hon Dr John

      Campbell, Ron (Blyth Valley)

      Godman, Dr Norman A.

      Campbell-Savours, D. N.

      Gordon, Mildred

      Canavan, Dennis

      Gould, Bryan

      Carlile, Alex (Mont'g)

      Griffiths, Nigel (Edinburgh S)

      Clark, Dr David (S Shields)

      Griffiths, Win (Bridgend)

      Clarke, Tom (Monklands W)

      Grocott, Bruce

      Clay, Bob

      Hardy, Peter

      Clelland, David

      Harman, Ms Harriet

      Clwyd, Mrs Ann

      Haynes, Frank

      Cohen, Harry

      Heal, Mrs Sylvia

      Cook, Frank (Stockton N)

      Henderson, Doug

      Cook, Robin (Livingston)

      Hinchliffe, David

      Corbett, Robin

      Hoey, Ms Kate (Vauxhall)

      Cousins, Jim

      Hogg, N. (C'nauld & Kilsyth)

      Crowther, Stan

      Home Robertson, John

      Cryer, Bob

      Hood, Jimmy

      Cummings, John

      Howarth, George (Knowsley N)

      1126

      Howell, Rt Hon D. (S'heath)

      Powell, Ray (Ogmore)

      Howells, Geraint

      Prescott, John

      Howells, Dr. Kim (Pontypridd)

      Primarolo, Dawn

      Hoyle, Doug

      Quin, Ms Joyce

      Hughes, John (Coventry NE)

      Radice, Giles

      Hughes, Robert (Aberdeen N)

      Randall, Stuart

      Ingram, Adam

      Redmond, Martin

      Johnston, Sir Russell

      Rees, Rt Hon Merlyn

      Jones, Barry (Alyn & Deeside)

      Reid, Dr John

      Jones, leuan (Ynys Môn)

      Richardson, Jo

      Jones, Martyn (Clwyd S W)

      Rooker, Jeff

      Kaufman, Rt Hon Gerald

      Ross, Ernie (Dundee W)

      Kennedy, Charles

      Rowlands, Ted

      Kilfedder, James

      Ruddock, Joan

      Kirkwood, Archy

      Sedgemore, Brian

      Lambie, David

      Sheerman, Barry

      Lamond, James

      Sheldon, Rt Hon Robert

      Leighton, Ron

      Shore, Rt Hon Peter

      Litherland, Robert

      Short, Clare

      Lofthouse, Geoffrey

      Skinner, Dennis

      Loyden, Eddie

      Smith, Andrew (Oxford E)

      McAllion, John

      Smith, C. (Isl'ton & F'bury)

      McAvoy, Thomas

      Smith, Rt Hon J. (Monk'ds E)

      McCartney, Ian

      Smith, J.P. (Vale of Glam)

      McKay, Allen (Barnsley West)

      Snape, Peter

      McKelvey, William

      Soley, Clive

      McLeish, Henry

      Spearing, Nigel

      Maclennan, Robert

      Steinberg, Gerry

      McNamara, Kevin

      Stott, Roger

      Madden, Max

      Strang, Gavin

      Marek, Dr John

      Straw, Jack

      Marshall, Jim (Leicester S)

      Taylor, Mrs Ann (Dewsbury)

      Martin, Michael J. (Springburn)

      Thompson, Jack (Wansbeck)

      Martlew, Eric

      Turner, Dennis

      Maxton, John

      Vaz, Keith

      Meacher, Michael

      Walley, Joan

      Meale, Alan

      Wardell, Gareth (Gower)

      Michael, Alun

      Wareing, Robert N.

      Michie, Bill (Sheffield Heeley)

      Watson, Mike (Glasgow, C)

      Michie, Mrs Ray (Arg'l & Bute)

      Welsh, Michael (Doncaster N)

      Moonie, Dr Lewis

      Wigley, Dafydd

      Morgan, Rhodri

      Williams, Rt Hon Alan

      Morley, Elliot

      Williams, Alan W. (Carm'then)

      Morris, Rt Hon A. (W'shawe)

      Wilson, Brian

      Morris, Rt Hon J. (Aberavon)

      Winnick, David

      Mowlam, Marjorie

      Wise, Mrs Audrey

      Mullin, Chris

      Wray, Jimmy

      Nellist, Dave

      Young, David (Bolton SE)

      O'Brien, William

      O'Neill, Martin

      Tellers for the Ayes:

      Orme, Rt Hon Stanley

      Mrs. Llin Golding and

      Pendry, Tom

      Mr. Ken Eastham

      Pike, Peter L.

      NOES

      Adley, Robert

      Blaker, Rt Hon Sir Peter

      Aitken, Jonathan

      Body, Sir Richard

      Alexander, Richard

      Bonsor, Sir Nicholas

      Alison, Rt Hon Michael

      Boscawen, Hon Robert

      Allason, Rupert

      Boswell, Tim

      Amery, Rt Hon Julian

      Bowden, A (Brighton K'pto'n)

      Amess, David

      Bowden, Gerald (Dulwich)

      Amos, Alan

      Bowis, John

      Arbuthnot, James

      Braine, Rt Hon Sir Bernard

      Arnold, Jacques (Gravesham)

      Brandon-Bravo, Martin

      Arnold, Tom (Hazel Grove)

      Brazier, Julian

      Ashby, David

      Bright, Graham

      Aspinwall, Jack

      Brown, Michael (Brigg & Cl't's)

      Atkinson, David

      Bruce, Ian (Dorset South)

      Baker, Rt Hon K. (Mole Valley)

      Buchanan-Smith, Rt Hon Alick

      Baker, Nicholas (Dorset N)

      Budgen, Nicholas

      Baldry, Tony

      Burns, Simon

      Banks, Robert (Harrogate)

      Burt, Alistair

      Batiste, Spencer

      Butcher, John

      Beaumont-Dark, Anthony

      Butler, Chris

      Bellingham, Henry

      Butterfill, John

      Bendall, Vivian

      Carlisle, John, (Luton N)

      Benyon, W.

      Carlisle, Kenneth (Lincoln)

      Bevan, David Gilroy

      Carrington, Matthew

      Biffen, Rt Hon John

      Carttiss, Michael

      1127

      Cash, William

      Howarth, G. (Cannock & B'wd)

      Chapman, Sydney

      Howe, Rt Hon Sir Geoffrey

      Chope, Christopher

      Hughes, Robert G. (Harrow W)

      Clark, Hon Alan (Plym'th S'n)

      Hunt, David (Wirral W)

      Clark, Dr Michael (Rochford)

      Hunter, Andrew

      Clark, Sir W. (Croydon S)

      Irvine, Michael

      Clarke, Rt Hon K. (Rushcliffe)

      Irvine, Sir Charles

      Colvin, Michael

      Jack, Michael

      Conway, Derek

      Janman, Tim

      Coombs, Anthony (Wyre F'rest)

      Jessel, Toby

      Coombs, Simon (Swindon)

      Johnson Smith, Sir Geoffrey

      Cope, Rt Hon John

      Jones, Gwilym (Cardiff N)

      Cormack, Patrick

      Jones, Robert B (Herts W)

      Couchman, James

      Jopling, Rt Hon Michael

      Gran, James

      Kellett-Bowman, Dame Elaine

      Critchley, Julian

      Key, Robert

      Currie, Mrs Edwina

      King, Rt Hon Tom (Bridgwater)

      Curry, David

      Kirkhope, Timothy

      Davies, Q. (Stamf'd & Spald'g)

      Knapman, Roger

      Davis, David (Boothferry)

      Knight, Greg (Derby North)

      Day, Stephen

      Knight, Dame Jill (Edgbaston)

      Devlin, Tim

      Lang, Ian

      Dickens, Geoffrey

      Latham, Michael

      Dorrell, Stephen

      Lawrence, Ivan

      Douglas-Hamilton, Lord James

      Leigh, Edward (Gainsbor'gh)

      Dover, Den

      Lennox-Boyd, Hon Mark

      Evans, David (Welwyn Hatf'd)

      Lester, Jim (Broxtowe)

      Evennett, David

      Lloyd, Sir Ian (Havant)

      Fallon, Michael

      Lloyd, Peter (Fareham)

      Favell, Tony

      Luce, Rt Hon Richard

      Fenner, Dame Peggy

      McCrindle, Robert

      Field, Barry (Isle of Wight)

      Macfarlane, Sir Neil

      Fishburn, John Dudley

      MacGregor, Rt Hon John

      Fookes, Dame Janet

      MacKay, Andrew (E Berkshire)

      Forsyth, Michael (Stirling)

      Maclean, David

      Forth, Eric

      McLoughlin, Patrick

      Fox, Sir Marcus

      McNair-Wilson, Sir Michael

      Freeman, Roger

      McNair-Wilson, Sir Patrick

      French, Douglas

      Madel, David

      Gale, Roger

      Malins, Humfrey

      Gardiner, George

      mans, Keith

      Garel-Jones, Tristan

      Marland, Paul

      Gill, Christopher

      Marlow, Tony

      Gilmour, Rt Hon Sir Ian

      Marshall, John (Hendon S)

      Glyn, Dr Sir Alan

      Martin, David (Portsmouth S)

      Goodlad, Alastair

      Maude, Hon Francis

      Goodson-Wickes, Dr Charles

      Maxwell-Hyslop, Robin

      Gorman, Mrs Teresa

      Mayhew, Rt Hon Sir Patrick

      Gow, Ian

      Mellor, David

      Grant, Sir Anthony (CambsSW)

      Meyer, sir Anthony

      Greenway, Harry (Ealing N)

      Miller, Sir Hal

      Greenway, John (Ryedale)

      Mills, Iain

      Gregory, Conal

      Mitchell, Andrew (Gedling)

      Griffiths, Sir Eldon (Bury St E')

      Mitchell, sir David

      Griffiths, Peter (Portsmouth N)

      Montgomery, Sir Fergus

      Grist, Ian

      Moore, Rt Hon John

      Ground, Patrick

      Morris, M (N'hampton S)

      Grylls, Michael

      Morrison, Sir Charles

      Gummer, Rt Hon John Selwyn

      Morrison, Rt Hon P (Chester)

      Hague, William

      Moss, Malcolm

      Hamilton, Hon Archie (Epsom)

      Moynihan, Hon Colin

      Hamilton, Neil (Tatton)

      Neale, Gerrard

      Hampson, Dr Keith

      Neubert, Michael

      Hanley, Jeremy

      Newton, Rt Hon Tony

      Hannam, John

      Nicholls, Patrick

      Hargreaves, A. (B'ham H'll Gr')

      Nicholson, David (Taunton)

      Hargreaves, Ken (Hyndburn)

      Norris, Steve

      Harris, David

      Onslow, Rt Hon Cranley

      Haselhurst, Alan

      Oppenheim, Phillip

      Hawkins, Christopher

      Paice, James

      Hayes, Jerry

      Patnick, Irvine

      Heathcoat-Amory, David

      Patten, Rt Hon John

      Hicks, Robert (Cornwall SE)

      Pawsey, James

      Higgins, Rt Hon Terence L.

      Peacock, Mrs Elizabeth

      Hill, James

      Porter, Barry (Wirral S)

      Hind, Kenneth

      Porter, David (Waveney)

      Hogg, Hon Douglas (Gr'th'm)

      Portillo, Michael

      Holt, Richard

      Price, Sir David

      Hordern, Sir Peter

      Raffan, Keith

      Howarth, Alan (Strat'd-on-A)

      Raison, Rt Hon Timothy

      1128

      Renton, Rt Hon Tim

      Tebbit, Rt Hon Norman

      Rhodes James, Robert

      Temple-Morris, Peter

      Rifkind, Rt Hon Malcolm

      Thompson, D. (Calder Valley)

      Roberts, Wyn (Conwy)

      Thompson, Patrick (Norwich N)

      Roe, Mrs Marion

      Thurnham, Peter

      Rost, Peter

      Townend, John (Bridlington)

      Rowe, Andrew

      Townsend, Cyril D. (B'heath)

      Rumbold, Mrs Angela

      Tracey, Richard

      Ryder, Richard

      Tredinnick, David

      Sackville, Hon Tom

      Trippier, David

      Scott, Rt Hon Nicholas

      Trotter, Neville

      Shaw, David (Dover)

      Twinn, Dr Ian

      Shaw, Sir Giles (Pudsey)

      Viggers, Peter

      Shaw, Sir Michael (Scarb')

      Wakeham, Rt Hon John

      Shephard, Mrs G. (Norfolk SW)

      Waldegrave, Rt Hon William

      Shersby, Michael

      Walker, Bill (T'side North)

      Sims, Roger

      Waller, Gary

      Skeet, Sir Trevor

      Ward, John

      Smith, Tim (Beaconsfield)

      Wardle, Charles (Bexhill)

      Soames, Hon Nicholas

      Warren, Kenneth

      Speed, Keith

      Watts, John

      Speller, Tony

      Wells, Bowen

      Spicer, Michael (S Worcs)

      Wheeler, Sir John

      Squire, Robin

      Whitney, Ray

      Stanbrook, Ivor

      Widdecombe, Ann

      Stanley, Rt Hon Sir John

      Wiggin, Jerry

      Steen, Anthony

      Wilshire, David

      Stern, Michael

      Winterton, Mrs Ann

      Stevens, Lewis

      Winterton, Nicholas

      Stewart, Allan (Eastwood)

      Wolfson, Mark

      Stewart, Andy (Sherwood)

      Wood, Timothy

      Stokes, Sir John

      Woodcock, Dr. Mike

      Stradling Thomas, Sir John

      Yeo, Tim

      Sumberg, David

      Young, Sir George (Acton)

      Summerson, Hugo

      Tapsell, Sir Peter

      Tellers for the Noes:

      Taylor, Ian (Esher)

      Mr. Tony Durant and

      Taylor, John M (Solihull)

      Mr. David Lightbown.

      Taylor, Teddy (S'end E)

      Question accordingly negatived.

    New Schedule

      'INSERTION OF SCHEDULE 3A TO THE PENSIONS ACT
      "SCHEDULE 3A
      ANNUAL INCREASE IN RATE OF CERTAIN OCCUPATIONAL PENSIONS
      Interpretation
      1. In this Schedule—
      "annual rate", in relation to a pension or the later or earlier service component of a pension, means the annual rate of the pension or component. as previously increased under the rules of the scheme or this Schedule;
      "the appointed day" means the day on which this Schedule and section 58A of this Act come into force;
      "the appropriate percentage", in relation to an increase in the annual rate of a pension or a component of a pension, means the percentage specified in the last revaluation order made before the increase is to take effect as the revaluation percentage for the last revaluation period of twelve months;
      "earlier service component" means so much (if any) of the annual rate of the pension as is attributable to pensionable service before the appointed day;
      "later service component" means so much (if any) of the annual rate of the pension as is attributable to pensionable service on or after the appointed day;
      "pension" does not include—

      (a) a guaranteed minimum pension or any increase in such a pension under section 37A above; or

      (b) any money purchase benefit;

      "pensionable service" has the meaning given by paragraph 3 of Schedule 16 to the 1973 Act;

      1129
      "qualifying scheme" means a scheme to which section 58A of this Act applies;
      "revaluation order", "revaluation percentage" and "revaluation period" shall be construed in accordance with section 52A above.
      Annual increase of later service component
      2.—(1) If, apart from this Schedule, the annual rate of a pension under a qualifying scheme would not be increased as mentioned in section 58A(1)(b) of this Act, the annual rate of its later service component shall be increased annually by an amount equal to the appropriate percentage of the annual rate of that component as applicable immediately before the increase takes effect.
      (2) The first increase by virtue of this paragraph in the rate of a pension shall take effect before the expiration of the period of twelve months beginning with the commencement of the pension and subsequent increases shall take effect at intervals of not more than twelve months thereafter.
      (3) This paragraph is subject to paragraphs 4 to 6 below. Annual increase of earlier service component where scheme is in surplus
      3.—(1) If on any valuation day the value of a qualifying scheme's assets, as determined in accordance with regulations, exceeds the value of its liabilities, as so determined, the amount of the excess (the "valuation surplus") shall be applied in accordance with the following provisions of this paragraph in providing for annual increases, up to the aggregate referred to in sub-paragraph (6) below, in the annual rate of the earlier service component of each pension under the scheme that would not, apart from this Schedule, be increased as mentioned in section 58A(1)(b) of this Act.
      (2) The amount of each annual increase to be provided in pursuance of this paragraph in consequence of a valuation surplus shall be an amount equal to the appropriate percentage of the annual rate of the earlier service component of the pension in question as applicable immediately before that annual increase takes effect.
      (3) The days which are "valuation days" for the purposes of this paragraph are—

      (a) the appointed day, except in a case where regulations otherwise provide; and

      (b) each subsequent day as at which the assets and liabilities of the scheme in question are valued for any purpose.

      (4) Where, in consequence of a valuation surplus, this paragraph requires provision to be made for annual increases in the annual rate of the earlier service component of a pension, the first of those increases shall take effect before the expiration of the period of twelve months beginning with the later of—

      (a) the valuation day as at which the valuation was made which disclosed the valuation surplus; or

      (b) the commencement of the pension;
      and subsequent increases shall take effect at intervals of not more than twelve months thereafter.

      (5) In any case where—

      (a) a valuation of the assets and liabilities of a qualifying scheme discloses a valuation surplus, but

      (b) the amount of the surplus is insufficient to provide in full for the annual increases otherwise required by this paragraph in pensions under the scheme,

      the valuation surplus shall be applied in providing for the increases so required, but only at the percentage rate that would apply year by year in relation to those increases if, for the maximum percentage of 5 per cent. specified in section 52A(9)(a) above, there were substituted such lower percentage as represents the greatest maximum percentage by reference to which the valuation surplus is sufficient to provide for annual increases in the earlier service component of the pensions in question.
      (6) If a valuation surplus is disclosed on a valuation at any time when either

      (a) in consequence of one or more prevous valuation surpluses, provision has already been made
      for the
      1130
      annual rate of the earlier service component of every pension under the scheme which is required to be increased under this paragraph to be so increased annually in the aggregate by at least the appropriate percentage of that rate, or

      (b) the application of part only of the valuation surplus would be sufficient to secure that result,

      this paragraph does not require that valuation surplus or, as the case may be, the remaining part of it, to be applied in the provision of increases under this paragraph.
      (7) The power to make regulations conferred by sub-paragraph (1) above includes power to provide that the value of the scheme's assets or liabilities is to be calculated and verified—

      (a) in such manner as may, in the particular case, be approved—

      (i) by a prescribed person;

      (ii) by a person with prescribed professional qualifications or experience; or

      (iii) by a person approved by the Secretary of State;

      (b) in accordance with guidance prepared by a prescribed body;

      (c) in accordance with prescribed principles and requirements; or

      (d) in accordance with principles determined by the person who performs the duties of calculation and verification.

      (8) This paragraph is subject to paragraphs 4 to 6 below. Proportional increases where first period is less than 12 months
      4.—(1) Where a pension commenced to be paid less than twelve months before the the date on hich its first increase under paragraph 2 above is to take effect, the amount of that first increase shall be determinied by the application of the formula—
      M x I
      12
      where—
      M is the number of months, rounded to the nearest whole month, in the period beginning with the commencement of the pension and ending immediately before that date; and
      I is the amount of the increase that would have been required by that paragraph, apart from this sub-paragraph.
      (2) This paragraph shall apply in relation to the first increase of a pension by virtue of paragraph 3 above in consequence of each successive valuation surplus as it applies in relation to the first increase of a pension under paragraph 2 above.
      Restriction on increases where member is under 55
      5.—(1) No increase under paragraph 2 or 3 above is required to be paid to or for a member of a scheme whose pension has commenced but who has not attained the age of 55 at the time when the increase takes effect, unless—

      (a) he is permanently incapacitated by mental or physical infirmity from engaging in regular full-time employment, or

      (b) he has retired on account of mental or physical infirmity from the office or employment in respect of which, or on retirement from which, the pension is payable.

      in which case the pension shall be payable at the annual rate at which it would have been payable apart from this sub-paragraph.
      (2) The rules of a scheme may provide that if, in a case where a pension has been paid to or for a member under the age of 55 at an increased rate in consequence of paragraph (a) or (b) of subsection (1) above, the member—

      (a) ceases to suffer from the infirmity in question before he attains the age of 55, but

      (b) continues to be entitled to the pension,

      any increases subsequently taking effect under paragraph 2 or 3 above in the annual rate of the pension shall not be paid or shall not be paid in full.
      (3) In any case where—

      (a) by virtue only of sub-paragraph (1) or (2) above, increases are not being paid to or for a member, but

      (b) the member attains the age of 55 or, in a case falling with sub-paragraph (2) above, again satisfies the conditions set out in paragraph (a) or (b) of sub-paragraph (1) above,

      his pension shall thereupon become payable at the annual rate at which it would have been payable apart from sub-paragraph (1) or (2) above.
      Regulations
      6.—(1) The Secretary of State may by regulations direct that section 58A and this Schedule shall have effect, in such cases as he may specify in the regulations, subject to such modifications as he may specify.
      (2) In sub-paragraph (1) above "modification", without prejudice to the generality of that sub-paragraph, includes addition, omission and amendment.
      Overriding effect of the increase provisions
      7. The provisions of section 58A of this Act, this Schedule and any regulations made under it override any provision of a qualifying scheme, other than a protected provision (within the meaning of paragraph 7 of Schedule lA to this Act), to the extent that it conflicts with them.".'.—[Mr. Newton.]
      Brought up, read the First and Second times.
      MADAM DEPUTY SPEAKER then proceeded, pursuant to the Order [28 March], to put forthwith the Question, That the new schedule be added to the Bill.
      Question agreed to.
      Schedule accordingly added to the Bill.
      Madam DEPUTY SPEAKER then proceeded to put forthwith the Question on the remaining amendments, moved by a Member of the Government, of which notice had been given, to that part of the Bill to be concluded at Nine o'clock.

    Schedule 2

      THE PENSIONS OMBUDSMAN
      Amendments made: No. 43, in page 23, line 37, after 'person', insert—
      '(a) who is or has been in pensionable service under the scheme, as defined in paragraph 3 of Schedule 16 to the 1973 Act or paragraph 3 of Schedule 3 to the Social Security Pensions (Northern Ireland) Order 1975, or
      (b)'.
      No. 53, in page 23, line 39, at end insert—
      'or under Article 2(5) of the Social Security Pensions (Northern Ireland) (S.I. 1975/1503 (N.I. 15)) Order 1975 as a member in relation to the scheme for the purposes of Part IV or V of that Order;
      "Northern Ireland public service pension scheme" means a public service pension scheme, within the meaning of Article 2(2) of that Order;'.
      No. 52, in page 22, line 20, after 'Act', insert
      'or any corresponding legislation having effect in Northern Ireland'.
      No. 38, in page 22, line 31, at end insert
      'and any function of the Pensions Ombudsman, other than the determination of complaints made and disputes referred under this Part of this Act, may be performed by any member of that staff who is authorised for that purpose by the Pensions Ombudsman.'.
      No. 39, in page 23, line 11, at end insert—
      '(2(A) The Secretary of State may by regulations provide that, subject to any modifications or exceptions specified in the regulations, this Part of this Act shall apply in relation to—
      1132

      (a) the employer in relation to any description or category of employment to which an occupational pension scheme relates or has related; or

      (b) any prescribed person or body of persons concerned with the financing or administration of, or the provision of benefits under, any occupational or personal pension scheme,

      as it applies in relation to the trustees or managers of such a scheme.
      (2B) The Pensions Ombudsman may investigate a complaint or dispute notwithstanding that it arose, or relates to a matter which arose, before the coming into force of this Part of this Act.'.
      No 40, in page 23, line 31, at end insert '(i)'.
      No 41, in page 23, line 34, after first 'person' insert ';or
      (ii) whether a person who claims to be entitled to become a member of the scheme is so entitled,',
      No 42, in page 23, line 35, at end insert—
      "'employer", in relation to a pension scheme, includes a person—

      (a) who is or has been an employer in relation to the scheme, or

      (b) who is or has been treated under section 66(3) below as an employer in relation to the scheme for the purposes of Part III or IV of this Act, or under Article 2(4) of the Social Security Pensions (Northern Ireland) Order 1975 as an employer in relation to the scheme for the purposes of Part IV or V of that Order;'.

      No. 54, in page 23, line 41, after 'scheme', insert
      'or a Northern Ireland public service pension scheme'.
      No. 44, in page 25, line 34, leave out from 'making' to end of line 36 and insert
      'and investigation of complaints under this Part of this Act.
      (2A) Subsection (2) above is without prejudice to the powers conferred by section 10 of the Tribunal and Inquiries Act 1971 to make rules with respect to the procedure which is to be followed in connection with the reference and investigation of disputes under this Part of this Act'.
      No. 45, in page 25, line 37, after 'rules', insert
      'referred to in subsections (2) and (2A) above'.
      No. 46, in page 25, line 38, leave out 'such an investigation' and insert
      'an investigation under this Part of this Act'.
      No. 55, in page 25, line 44, after Ace, insert
      'or under any corresponding legislation having effect in Northern Ireland'.
      No. 47, in page 26, line 23, leave out
      'by way of case stated'.
      No. 79, in page 26, line 29, at end insert—
      '(9) Subsections (4) and (5) above shall be construed, in their application to Scotland, as if contempt of court were in Scots law categorised as an offence.'.
      No. 56, in page 26, line 39, after 'Act', insert
      'or under any corresponding legislation having effect in Northern Ireland'.
      No. 48, in page 27, line 1, leave out
      'by way of case stated'.
      No. 80, in page 27, line 7, after 'enforceable', insert—'
      (a) in England and Wales,'.
      No. 81, in page 27, line 8, at end insert ';
      and
      (b) in Scotland, by the sheriff, as if it were a judgment or order of the sheriff and whether or not the sheriff could himself have granted such judgment or order.'.
      No. 49, in page 27, line 8, at end insert—
      '(6) If the Pensions Ombudsman considers it appropriate to do so in any particular case, he may publish in such form and manner as he thinks fit a report of any investigation under this Part of this Act and of the result of that investigation.
      (7) For the purposes of the law of defamation, the publication of any matter by the Pensions Ombudsman—

      (a) in submitting or publishing a report under section 59B(6) or subsection (6) above, or

      1133

      (b) in sending to any person a statement under subsection (1) above or a direction under subsection (2) above,

      shall be absolutely privileged.'.—[Mr. Newton.]

    Schedule 3

      OCCUPATIONAL AND PERSONAL PENSION SCHEMES
      Amendments made: No. 75, in page 27, line 39, after 'manager', insert or the trustee,'.
      No. 76, in page 28, line 3, after 'employer', insert 'or of the scheme'.
      No. 75, in page 30, line 4, at end insert
      'and to be so paid in priority to all other claims falling to be met out of the scheme's resources.'.
      No. 23, in page 31, line 1, leave out to line 7 on page 32 and insert—
      'Employer to make good deficiencies on winding up
      2. The following section shall be inserted into the Pensions Act after the section 58A inserted by section [Annual increase of certain occupational pensions] above.'.
      No. 58, in page 34, line 42, leave out 'pensionable' and insert 'normal pension'.
      No. 59, in page 36, line 10, leave out paragraph (d) and insert—
      '(d) where the scheme provides that part of the earner's pension shall accrue after the termination of employment date by reason of employment after that date, the later earnings addition.".'
      No. 60, in page 36, line 18, leave out
      'on which he attained pensionable age'
      and insert
      'after his termination of employment date'.
      No. 61, in page 36, line 38, leave out paragraph (d) and insert—
      '(d) where the scheme provides that part of the widow's pension shall accrue after the termination of employment date by reason of the earner's employment after that date, the later earnings addition.".'.
      No. 62, in page 36, line 46, leave out
      'on which he attained pensionable age'
      and insert
      'after his termination of employment date'.
      No. 78, in page 38, line 4, leave out '(d)' and insert '(e)'.
      No. 57, in page 39, line 30, at end insert—
      'Extension of certain pension scheme provisions to Northern Ireland
      11A. In section 68(4) of the Pensions Act (provisions which extend to Northern Ireland) for the words "Section 57 of this Act extends" there shall be substituted the words "The following provisions of this Act, namely, sections 57, 59B, other than subsections (4) and (5)(b), and 59K(1), (2), other than paragraph (a)(ii), (3), (4) and (8) extend".'.—[Mr. Newton.]

    Schedule 5

      MINOR AND CONSEQUENTIAL AMENDMENTS
      Amendments made: No. 67, in page 43, line 38, at end
      insert—
      'Regulations relating to industrial injuries and diseases
      3A.—(1) In section 76 of the principal Act, after subsection (4) (power to make regulations for determining, among other things, the time at which a person is to be treated as having developed a prescribed injury or disease) there shall be inserted-
      "(4A) Notwithstanding any other provision of this Act, the power conferred by subsection (4)(a) above includes power to provide that the time at which a person shall be treated as having developed a prescribed disease or injury shall be the
      1134
      date on which he first makes a claim which results in the payment of benefit by virtue of this Chapter in respect of that disease or injury."
      (2) In section 77 of that Act, at the end of subsection (2) (power to modify provisions relating to disablement benefit and its administration) there shall be added the words—"and for the purposes of this subsection the provisions of this Act which relate to the administration of disablement benefit or reduced earnings allowance shall be taken to include section 165A and any provision which relates to the administration of both the benefit in question and other benefits."
      (3) Regulations 6(2)(c), 25 and 36 of the Social Security (Industrial Injuries) (Prescribed Diseases) Regulations 1985 (onset of occupational deafness and time for claiming in respect of occupational deafness or occupational asthma), and any former regulations which they directly or indirectly re-enact with or without amendment, shall be taken to be, and always to have been, validly made.'.
      No. 85, in page 44, line 29, at end insert—
      'Restrictions on entitlement to benefit in certain cases of error'
      5A.—(1) In section 104 of the principal Act (reviews), after the subsection (6) inserted by section 5(3) of this Act, there shall be inserted—
      "(7) Section 165C below shall apply in relation to a review under this section of a decision on the ground that it was erroneous in point of law in any case where the claim in question was made or treated as made as mentioned in subsection (1)(b) of that section as it applies in relation to a claim so made or treated as made.
      (2) After the section 165B of that Act inserted by section 5(2) of this Act there shall be inserted the following section—
      "Restrictions on entitlement to benefit in certain cases of error
      165C.—(1) This section applies where—

      (a) on the determination of a Commissioner or the court (the "relevant determination"), a decision made by an adjudicating authority is found to have been erroneous in point of law; and

      (b) a claim for benefit is or has been made or treated as made (whether by the same or any other claimant and whether for the same or some other benefit and whether before or after the relevant determination) which, in consequence of the relevant determination, falls to be determined otherwise than it would have been determined had it been required to be determined in acordance with the erroneous decision.

      (2) Where this section applies, the claimant in relation to the claim mentioned in subsection (1)(b) above shall not be entitled to the benefit in question—

      (a) if it is a widow's payment, in respect of a death occurring before the relevant date, or

      (b) if it is any other benefit, in respect of any period before the relevant date, notwithstanding anything in section 165A(2) above.

      (3) In this section—
      "adjudicating authority" means an adjudication officer, a social security appeal tribunal or a medical appeal tribunal;
      "the court" means the High Court, the Court of Appeal, the Court of Session, the House of Lords or the Court of Justice of the European Community;
      "the relevant date" means whichever is the later of—

      (a) the date on which the relevant determination was made; and

      (b) the day falling twelve months before the date on which the claim is made or treated as made.".'.

      No. 88, in page 48, line 36 at end insert—
      'Mobility allowance for certain persons eligible for invalid
      carriages: pre-consolidation amendment.
      10A. The amendments of paragraph (a) of section 13(3) of the Social Security (Miscellaneous Provisons) Act 1977 by the National Health Service Act 1977 and the National Health Service (Scotland) Act 1978 shall be deemed never to have been made and that paragraphs shall accordingly have effect and be deemed at all times to have had effect as originally enacted.'.—[Mr. Newton.]

    Schedule 6

      REPEALS
      Amendments made: No. 83, in page 54, line 3 at end insert—

      '1977 c.49.

      National Health Service Act 1977

      In Schedule 15, para-graph 71

      1978 c.29

      National Health Service (Scotland) Act 1978.

      In Schedule 16, para-graph 44.'.

      No. 26, in page 54, line 12, Column 6, at end insert—
      'Section 32(4).'.
      No. 87, in page 54, line 15 column 3, at beginning insert—
      'In section 33(10A), the word "and" immediately preceding paragraph (e).'.— [Mr. Newton.]
      Order for Third Reading read.— [Queen's Consent, on behalf of the Crown, signified].
      9.14 pm
      Mr. Newton: I beg to move, That the Bill be now read the Third time.
      We have the opportunity for only a short debate, so I shall be brief and shall not deny others the opportunity to speak, particularly those who served on what I am told was a good-natured but demanding Standing Committee.
      As Bills go, even perhaps as Social Security Bills go, this Bill is not large. The last one on which I served was the Social Security Act 1986—or the reform Act, as I would call it, although I am not sure that the hon. Member for Oldham, West (Mr. Meacher) would accept that
      description. Nevertheless, the Bill's importance is considerable and has grown during its further consideration in the House last week and this week, with the new clauses that have been added on occupational pensions and lone parents.
      The Bill has three strategic objectives, with which I think that both sides of the House agree, even if there are differences of opinion—sometimes substantial—as to how those objectives should be pursued. First, the Bill contributes to the development of what we believe to be a structure of benefits for disabled people which is both more coherent and more sustainable in the long term, while bringing the prospects of early additional help to the terminally ill through the removal of the six-month qualifying period for attendance allowance and improving the position of many thousands of people in receipt of severe disablement allowance. Those legislative changes should be seen alongside the other improvements being made almost at this very moment through the uprating that is taking place this week and next and other changes later this year which will help almost 500,000 long-term sick and disabled people and their carers at an additional cost of some £100 million.
      1136
      Secondly, the Bill contains several changes designed to strengthen the arrangements for the maintenance of lone parents and their children, In particular, it makes such maintenance more effective as a basis on which the lone parent who wishes to do so can move from benefit into employment. That, too, should be seen alongside what is being done either in the current uprating or later this year to make real improvements in benefits both for lone parents and for many other low-income families with children.
      Dame Elaine Kellett-Bowman: Does my right hon. Friend share with me—I doubt whether he does, but I would like him to do so—the view that it is easier for a lone parent to move into employment if the family allowance is uprated in line with inflation?
      Mr. Newton: I noticed that my hon. Friend was in the Chamber earlier. No doubt she would have made that point if there had been more extensive debate on child benefit, and I note her view. I also note that if maintenance payments could be effectively enforced, they would make an even greater contribution than the allowance that my hon. Friend is worried about.
      Thirdly, and certainly not least, the Bill makes significant further improvements to the framework of occupational pensions by providing greater protection in various ways, including the introduction of an important measure of inflation-proofing for rights derived from future service and making a similar degree of inflation-proofing the first call on scheme surpluses when such surpluses exist. The context in this respect is the growing success of the Government's policies to promote occupational and personal provision, building upon the foundations of the basic state pension.
      I have outlined the main themes of the Bill, although it contains many other useful measures. The Bill is useful and worth while, and it will advance our provision for many who deserve and need our help. I commend it to the House.
      9.19 pm
      Ms. Short: Although some of the Bill's contents are acceptable to us, we believe that it should not receive its Third Reading because of the nature of the majority of its contents and, more importantly, because of what it fails to contain.
      The guillotine that the Government introduced on Report, before there had been any debate on the Bill, was designed to prevent proper debate of many important questions that should be dealt with but which are not contained in the Bill. It is important to put the Bill in its proper context. This is the 12th Social Security Bill that the Government have introduced. The effect of the cumulative changes in social security benefits and in our tax system has been a massive redistribution of resources from those with least to those with most.
      Dame Elaine Kellett-Bowman: Not true.
      Ms. Short: It is absolutely true. Although I agree with the hon. Lady about child benefit, even though she called it family allowance, she should recognise that the figures are shocking. The Government should be deeply ashamed of them.
      In 11 years the Government have taken £6·6 billion from the bottom half of our population. Of that sum £5·6

      1137
      billion has gone to the richest 10 per cent. and £4·8 billion has gone to the top 5 per cent. The Bill is part of that process. The Government deliberately set out on that policy and such are its cumulative effects which they have achieved by stealth.
      One of the disgraceful things that has made people poorer was the break in the link between the state pension and earnings. The hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) has referred to that. A fantastic amount of money has already been taken away from pensioners, thus excluding them from the benefits of economic growth. According to Library figures, a pensioner couple has lost £20 a week as a result of deliberate Government policies and a single pensioner has lost £12.
      Mr. David Nicholson: Does the hon. Lady accept that the Labour Government of 1974-79 did not always keep their pledges and that their performance when running the economy and the pathetic increase in the standard of living of those in employment meant that it was no great achievement to attempt to keep pensions in line with earnings?
      Ms. Short: I know that the hon. Gentleman is blustering because he is shocked by the true figures. He has not made a telling point. The cumulative figures are clear and demonstrate a deliberate massive redistribution from those with least to those who do not need more. That is what has happened as a result of 12 Social Security Bills and changes in taxation. The hon. Gentleman has made a broad, ill-informed remark about the performance of the economy in the 1970s at a time when our economy is in deep difficulty. The Government thought that they could get faster economic growth out of greater inequality. A lot of people have been hurt. Their economic experiment has failed and that is why the Government are in such grave difficulties.
      Mr. Peter L. Pike: I agree with my hon. Friend that pensioners have already suffered as a result of Government legislation. We should also consider their plight as a result of the community charge. In the case of a couple when one person is still working and even when their income is just over the limit at which one begins to pay the community charge, the working partner must pay the community charge of the retired partner. Money will be taken off pensioners once again.
      Ms. Short: My hon. Friend is right. The Government have deceived pensioners by their ill-thought-out so-called concession made in the Budget. They said to pensioners with some savings that they would give them lots of money, but they did not tell them the true story. Many, many pensioners with some savings believe that they will receive some relief, but because the Government falsely attribute a higher rate of return on their savings, many of them will be deceived and bitterly disappointed. Their suffering will be in addition to that described by my hon. Friend.
      I was trying to list some of the factors in the cumulative, massive redistribution from those in need to those without need which has made our country so unequal and bitterly divided and the Government so unpopular with the electorate.
      1138
      I mentioned what the Government have done with state pensions. The erosion of the value of child benefit is another serious matter. Due to the way in which the debate was squeezed today, we were unable to challenge the Government to tell us the truth. Everyone who considers these issues believes that the Government are trying to allow child benefit to wither away. The hon. Member for Lancaster is right: that would be disastrous particularly for lone parents or people on low incomes who are on benefits and want to get off them. High child benefit will help people to make that transition; the erosion of child benefit traps them into poverty. It also deprives women of income. Giving the money to mothers ensures that it is spent on children.
      There are all sorts of other issues which should have been included in the Bill and which we would like to have discussed. The removal of young people's right to benefit has enlarged the enormous and shameful growth of homelessness across the land. It shames everyone, whatever their political views. Young people, often those who grew up in care and do not have relatives to fall back on when they get into difficulty, are living on our streets and are not entitled to benefit. They are unable to get a step up and get on with life because of what the Government have done to the benefits system.
      The truth is that, after 11 years of Thatcherite rule, our country is deeply, bitterly and unhappily divided. There is enormous public unease about the degree to which it is divided. It is interesting that Conservative Members think that the Thatcherite experiment has led to a change of political values in Britain. But the annual survey of British social attitudes shows that cumulatively, over every year, people in Britain have become less and less happy with the Thatcherite project, more and more worried about how deeply divided our country is and more and more willing to pay a little more tax if that is what is required to look after pensioners and the sick. The people of this country do not support the experiment and its consequences.
      The experiment has been enormously costly. We lived through a period of the good luck of oil becoming available. It could have given us the chance to restructure our economy and invest in the long term. Instead, it was wasted on an experiment, using materialism, greed, selfishness and inequality as an economic engine, which has failed and hurt many people.
      The Bill contains some provisions that we welcome, and in which we take a pride. In Committee the Minister of State was honest and good enough to give the Opposition credit for some of the good factors in the Bill. He said that they were the results of democracy and of previous Social Security Bills when the Opposition had argued a case which was unassailable—if I may use a word that has probably changed its meaning given recent developments in the Conservative party.
      The change in attendance allowance for the terminally ill who are unlikely to survive the six-month waiting period is, of course, welcome. We made that clear in Committee. We worry that the allowance does not extend to cover elderly people who might need it because they have had a severe stroke. The Government are so worried about spending money that they have excluded elderly people from the value of such benefits, but we welcome the provision as far as it goes. The Government must have credit for it, but we also take some credit.
      We are deeply unhappy with the disability package about which the Government attempt to boast.

      1139
      Conservative Members do not have to take our word for that; they can consult any of the disability organisations and find out that they are deeply and savagely critical of that package. They criticise the fact that they were not properly consulted and the duplicity underlining it.
      The pretence is that lots of new money has been found to help disabled people. But more has been clawed back than has been provided. Money has been taken away from disabled people to put forward a package that helps some, but takes away from other disabled people. It is a cosmetic package, not an enlargement of resources to look after people with disabilities and help them to be independent and self-reliant, as many of them wish to be.
      We welcome some of the improvements in the Bill that relate to occupational and private pensions. We are glad that there is to be an ombudsman. We decided in Committee that we could not possibly call it an "ombudsperson"—it would be too odd a word, although my hon. Friend the Member for Newport, West (Mr. Flynn) suggested "ombudsk vinne" which is apparently "person" in the right language, Norwegian.
      We also welcome the limited protection against the erosion of the value of pensions with inflation, but we do not understand why the Government did not go as far as we wanted in enlarging the powers of the ombudsman and setting alongside them a tribunal that could deal much more happily with complaints from pensioners, thus avoiding the enormous problem and cost of having to go to the High Court to settle questions of trusteeship. There could have been a much leaner and more efficient system that would have protected pensioners much better.
      On protection against inflation, of course we welcome the 5 per cent. protection for early leavers and the Government's late decision to protect everyone where there are surpluses, up to 5 per cent. But we do not understand why the Government cannot go as far as our amendment in Committee and say that, when there are surpluses, there will be full protection against inflation.
      As we are all living longer and might be talking about a 20-year retirement span, people get poorer as they get older when there is no protection against inflation. If there is a surplus, it is the most reasonable thing in the world to have protection, not up to 5 per cent. but up to the level of inflation. That is what Opposition Members argued in Committee. It is another unassailable case, and I do not understand why the Government could not accept it.
      We also welcome the provisions to encourage energy conservation. They fall oddly in this Bill, but there they are. They are limited to people on low incomes. They are welcome as far as they go, but in our view they do not go far enough. Energy conservation is one of the most important policies available to a country such as ours, and it benefits everyone—the planet, people's heating bills and so on. Such a policy is absolutely beneficial and means that we do not have to rely on nuclear power, with all its pollution and waste that people dread. Nuclear power is being proved more and more to harm the health of those who work in the industry and their children. It is firm Labour party policy to go very much further.
      The country is raging with anger at the injustice of the poll tax, but that injustice comes on top of an even bigger redistribution from those with least to those with the most; but it has been done cumulatively and by stealth, so there has never been a moment when the people could show
      1140
      their rage as they are showing it about the poll tax. I refer to cumulative effects of the changes in social security and taxation system.
      It is pretty clear to all of us that the Government have had it and that their economic experiment in the glorification of greed, selfishness and inequality is coming to an end. The British people do not like it and they want no more of it. We look forward greatly to the defeat of the Government and to the introduction of our own social security legislation, which will create a much more just settlement in our country. It will protect those who are in need and create pathways out of poverty for people trapped on benefits, instead of making bigger and bigger poverty traps such as the present system provides.
      To hon. Members on the Government Benches—sometimes they worry me because they seem to read nothing—I say that it is all set out in our policy review. We will take power, implement the policy review and bring about a more just, more equal and economically more efficient society, and we look forward to doing so.
      9.34 pm
      Sir George Young: It would be a tragedy if the House were to adopt the advice of the hon. Member for Birmingham, Ladywood (Ms. Short) and deny the Bill a Third Reading. That would deny the real help that the Bill provides for many thousands of people who are looking forward to that help. I listened with interest to what the hon. Lady said about the redistribution of wealth and also to what she said about greed. I found it impossible to relate what she was saying to the Bill. Far from redistributing wealth from the less well-off to the rich, the Bill does the opposite. Even if we accepted the premise from which she started, which I do not, it would not lead us to the conclusion that the Bill should be rejected.
      Despite the recent controversy about the Bill—the debate on the guillotine and on the new clauses—the bulk of the Bill has been non-controversial. The Committee stage was broadly harmonious—
      Ms. Short: How do you know?
      Sir George Young: The hon. Lady has conceded as much in our debates on the Floor of the House.
      The vast majority of measures in the Bill are non-controversial and have been welcomed by hon. Members on both sides of the House. They should reach the statute book as soon as possible.
      The hon. Lady mentioned the help for the terminally ill; more than 50,000 people will benefit from that. Does she really want to deny them that help by voting down the Bill? There is the extension of the severe disablement allowance, with an additional £10 a week for more than 250,000 people. Does she want to deny them that help? There is the introduction—
      Mr. Jimmy Wray: Will the hon. Gentleman give way?
      Sir George Young: I hope that the hon. Gentleman will allow me to continue; that may allow him the opportunity to make his speech, whereas if I give way, it may deny him that opportunity.
      As more and more people invest larger sums in personal pensions, it must be right to provide better protection to that investment by extending the ombudsman principle to

      1141
      personal pensions—a system that has been tried and proved in so many other aspects of our society. I also welcome the protection for early leavers. Mobility is important in furthering the development of the economy and we want people to move from one job to another. The current arrangements act as a disincentive to national mobility, which is very much in the country's interests, and I welcome the proposed protection.
      I commend the Government for listening as the Bill has passed through its stages. They listened to the argument about rules for self-investment and dropped that part of the Bill at an early stage. Last week, they listened to the argument about income support for those in residential and nursing homes. They listened to the argument about the independent living fund and have found an additional £8 million for that. The Budget changes—which are social security changes—on the capital limits reflected a listening Government who were conscious of what was expected. There have been further changes on the surpluses, which have also been broadly welcomed, and further help for lone parents.
      It was a good Bill when it started, and it became better as it went through its stages. I find the reforms sensible—reflecting changes in society—realistic and prudent. I hope that the House will give it a Third Reading.
      9.37 pm
      Mr. Rhodri Morgan: I am grateful for the opportunity to speak on Third Reading. I shall confine my brief remarks to clause 10, which deals with energy efficiency in low-income households. I could make the same points about that as my hon. Friend the Member for Birmingham, Ladywood (Ms. Short) made in her philosophical remarks on the deficiencies of the Bill in general. The Bill divides society into three groups: the very rich, who will clearly benefit; the generality of society—the middle 70 per cent.; and the 20 to 30 per cent. welfare-dependent group at the bottom. We are only too familiar with that group, having studied what has gone wrong with American society during the past 10 to 20 years—yet the Government seem intent upon repeating that experiment in Britain.
      Let us consider what this Bill does for energy efficiency in the context of the general question of how we handle the entire energy question. The Government intend to use the less well-off for target practice with a scheme that had virtually collapsed when they thought that they had a reduction in the unemployment statistics sufficient to bring forward new regulations and criteria for putting people on to the community insulation project schemes—the ET rule. This was known as the extra tenner rule in the community at large.
      It was extremely unattractive to the bulk of the people under 25 who had previously volunteered to go on to the old community programme rules and were involved in community insulation work under community programme rules.
      It was not that unemployment declined; it was that the unattractiveness of the ET rule meant that the under-25 group no longer wished to go on to the schemes, which eventually collapsed under the present Government. They are trying to revive them now, and obviously we do not criticise that, but in the 18 months in which they allowed
      1142
      these schemes to collapse, they received innumerable warnings, not only from Opposition Members but also from the organisations involved in the work—those on whom the Government are now depending to revive the work—that things were going very badly indeed, with a drop of 60 per cent. or more in the work of draught-proofing and installing loft insulation in the homes of the less well-off on local authority estates, old terraced property, and so on.
      While bringing this Bill forward, the Government are also doing a great deal to damage the possibility of the less well-off to afford heat. While this Bill has been in Committee, we have seen our major public utilities which provide the raw energy used to heat homes increase prices by very large amounts indeed. Gas has gone up by 7·7 per cent. even though there has been no increase in the production cost, and electricity has gone up for the domestic consumer by an average of 9 per cent., but with a loaded increase in the areas in which there are more low-income families.
      In my own region, south Wales, which has one of the lowest family incomes in the country, the price to domestic consumers is to rise by 12·9 per cent. in the year that started last week. Furthermore, we have already been promised by the Government that in the coming years prices will rise not by the retail price index minus X, as we were promised at the time of the electricity privatisation legislation, but by RPI plus X. So the minus of privatisation has become a plus. If we have average inflation this year, that will be about 9 per cent., so the increase will be another 11·5 per cent., and that will apply to the following year as well. In south Wales, we know now from the Government's announcement that, in three years, the price of electricity will rise by about 50 per cent., while in the better-off parts of the country, the best calculation that we can make is that it will rise by some 25 per cent.
      That is the damage that the Government are doing to the less well-off in society at the same time as they are pretending to do something for them in this Bill. They are creating a three-tier society. We understand now that they intend to enable the rich who apply for shares in the privatised electricity companies to have a rebate of 10 per cent. on their electricity bills. That is outright discrimination in pricing electricity. What good will that do the pensioner?
      This Bill is not only completely inadequate from the point of energy conservation but, together with other measures such as the rises in electricity prices and a proposed concession to shareholders, highly divisive. It is completely inadequate from the energy conservation point of view, because it is an example of this Government talking green but acting blue.
      9.43 pm
      Mr. John Greenway: I am grateful for the opportunity to contribute briefly to this short debate before the House rises for Easter. Not having had an opportunity of taking much part in the deliberations on the Social Security Bill, I have looked at some of the issues with keen interest, because issues relating to social security and how we should look after the poorest in our society are probably the most challenging of all the matters that come before the House and are of great concern to those of us who profess Christian values.

      1143
      One cannot always support everything that the Government propose. About three weeks ago in the House, along with right hon. and hon. Friends, I found that I had to vote against the Government on the clause relating to income support in another Bill. I am delighted to report that that matter has largely been put right in this measure. In any event, just because some of us are occasionally unhappy with a detail of social security policy does not mean that secretly we are unhappy with the rest. Far from it, and that is why I was anxious to contribute to the debate.
      I went into my village church last Sunday morning with a heavy heart. We had seen on television the disgraceful scenes in the west end of London on Saturday. The weekend press was not kind to the Government or our leader and, it being my turn to read the lesson, I took encouragement —[Interruption.] This is not a party political matter. I took great encouragement from some words from Philippians chapter 2, given in the New English Bible translation as:
      "Look to each other's interest and not merely your own."
      There is no greater commendation from any authority about how we as politicians should reflect on how we care for the weakest in society.
      I shall support the Bill at this stage, as I have throughout its passage, with enthusiasm, for two reasons. The first is that it is packed full of good provisions for which many of us have been asking for some time. I recall taking part in a debate late at night towards the end of the summer when I asked the Minister of State to produce in the autumn a package of measures for the disabled. One might have been forgiven at that time for doubting that he would do that, but I then urged hon. Members to consider his work on behalf of the disabled, and it is a fitting tribute to that work that such measures are included in the Bill.
      Mr. Ian McCartney rose—
      Mr. Greenway: I will not give way. It is a short debate and other hon. Members wish to take part.
      I must declare my interest in the pensions industry. In a few letters to the Secretary of State at an early stage of the Bill, I said that I could not support the provision for self-administered pension schemes and, as my hon. Friend the Member for Ealing, Acton (Sir G. Young) rightly pointed out, that provision has been dropped. We now have some valuable additions to our pensions legislation.
      Much is happening in the whole sphere of social security for which the Government can take credit. I find deeply distasteful much of what is said purely for party advantage about the care and compassion issue. No political party has a monopoly—[Interruption.]—on care for the weakest in society.
      The second and more important reason why I support the Bill with enthusiasm is that the Government are providing more money by way of social security than have any previous Government. We are now paying £1 billion a week in social security, at a time when more people are at work in Britain than ever before. I regret that the hon. Member for Birmingham, Ladywood (Ms. Short) said that she felt unable to support the Bill. Anyone in doubt about the Government's committment to look after the weakest in society need only consider some of the measures that have been introduced. Anybody doing that will support the Bill with enthusiasm.
      9.48 pm
      Mr. Battle: I am attempting to ask the title of the Bill that we shall be sending to another place. The measure that we considered in Committee comprised 18 clauses and 6 schedules. This Bill is quite different. Although it has provisions concerned with disability, disablement allowance, reduced earnings allowance, pensions and so on, some of which we welcome, we found on Report that the Bill grew like Topsy, with new matter being introduced. Had we had time properly to discuss the provisions that greatly concerned us, the Chancellor's beneficence might have proved not all that it was claimed to be.
      Similarly, there were the changes that were forced on the Goverment as a result of their ill-advised introduction of the social fund. The High Court overruled the Goverment and they had to come back and tack a clause on to the Bill, and the same thing happened with their residential care provisions.
      If we had had a full debate and it had not been guillotined, we might have got further. We might have been able to consider whether there is absolute protection against eviction of old people from homes. I am not sure that the Bill goes far enough to cover that or to cover their care and maintenance. Substantial new policies have been tacked on to the Bill. It almost seems to be a new Bill. We have not had a chance properly to debate it on the Floor of the House because of the guillotine.
      Earlier this evening, Conservative Members asked why Opposition Members did not want to debate the Bill. Some of us did want to talk about the clauses that dealt with pensioners' incomes. Some of us wanted to point out that, as a percentage of average earnings per year since 1979, pensioners' incomes, particularly those living on the state pension alone, have gone down. We did not have a chance.
      The child benefit debate lasted 13 minutes. We could not discuss why the Government have frozen child benefit for the past three years and why they seem likely to do the same again.
      A clause was tabled in my name which might have some topical significance. It concerned the families of people locked away in prison. Those families suffer because their benefits are taken away. They have to pay twice. I would have liked time to speak about the actively seeking work clause, which was included in another Bill that we opposed but which was nevertheless enacted.
      Although the Minister says that not many cases have been reported, in my constituency, wage rates advertised in job centre windows are going down. Jobs that were on offer at £1·30 or £1·20 an hour last year are now down below £1 an hour. People are forced to accept those wages or be told that they can have no benefit.
      All that is taking place against a background of rising unemployment. If the Minister and the Secretary of State care to have another glance at the Government Actuary's report on benefit upratings in the Vote Office, which was published in January, they will find that it makes it plain—as does no document other than the Red Book—that unemployment in the financial year starting this April will rise. Within the Actuary's report there is an estimate of the reduction in contributions to the national insurance fund as a result of the increase in unemployment. Those reductions will mean cuts in other social security benefits, and in pensions during the coming 12 months.

      1145
      The Chancellor, appearing on "On the Record", was asked how the Government could win, bearing in mind the present rate of inflation. He said that it should be remembered that, when unemployment was high, they won. He was saying that the Government are once again prepared to use the weapon of unemployment to bring down inflation. The unemployed are politically expendable.
      My hon. Friend the Member for Oldham, West (Mr. Meacher) has often spelled out the facts and figures about how income and wealth have been redistributed from the poor to the rich. They have been taken from the benefits system and redistributed to the richest people, not least by the tax cuts Budget of 1988. The final act in the redistribution of wealth from the poor to the rich is the poll tax.
      The Government are already proposing another social security Bill next year. I am certain that, before then, the Government will introduce an additional transitional relief scheme when they realise how hard the poll tax has hit people—just as they did when the Social Security Act 1988 started to bite into housing benefit. On that occasion, the Minister was back at the Dispatch Box introducing transitional relief to ensure that pensioners, the disabled and those on low incomes would receive protection. The same will happen when poll tax starts to bite.
      This is not the Bill we set out with, and I do not believe that it is the Bill we should commit tonight to be considered by another place. I suggest to the Government that, rather than turn the Bill into a holdall for their other policy mistakes, they should rethink it.
      9.54 pm
      Mr. Scott: In commending the Bill to the House for a Third Reading, I may say that I am glad that the hon. Member for Birmingham, Ladywood (Ms. Short) was willing to accord it at least the status of a curate's egg, believing it to be good in parts. I take a more flattering view of it, and I was surprised that the hon. Lady devoted so much of her speech not to the Bill's contents but to two tangential issues—pension incomes and child benefit.
      The arguments on pensioners' incomes have been well trodden across the Floor of the House. Opposition Members tend to concentrate on the value of the state pension, but we believe that what matters is the money that is in the pockets of pensioners. I freely acknowledge that, in part due to the maturing of SERPS but also because of the greater growth of occupational pensions, and because savings are increasingly contributing to pensioners' standard of living—
      Ms. Short: Because of high interest rates.
      Mr. Scott: Only partly. The factors I mentioned are all contributing to the high standard of living enjoyed by those living in retirement. It is manifest that pensioners are enjoying a higher standard of living now than in the past. We know that some have not shared in that, and we have taken special steps to give them help.
      As to child benefit, I repeat my remark during Question Time yesterday that there is no policy of allowing it to wither on the vine. Each year, the Government decide whether it is more sensible to spend small amounts of the resources available to us spread thinly across the board, or
      1146
      to concentrate larger amounts on people who really need the most help. The fact that we have chosen to do the latter for the past three years does not mean—
      Mr. Wray: Will the Minister allow me to intervene? Why is he misleading the House? He talks as though the Bill is giving people something, whereas it actually takes something away from them. The Bill is really about gaining money for the Government. The Minister talks about spending £230 million on the disabled, but he does not mention that the provisions of clause 2 will gain £15 million for the Government in the first year and £50 million every year thereafter. In the first 20 years of the 21st century, the Government will gain £l billion annually. Why does not the Minister tell the House that?
      Mr. Scott: I am sorry that I gave way to the hon. Gentleman. I thought that he intended to make a short, specific point.
      I was grateful for the support of my hon. Friend the Member for Ealing, Acton (Sir G. Young), who clearly illustrated the damage that would be done in the unlikely event that the Opposition were able to prevent the Bill from being committed for consideration by another place. I was grateful for his acknowledgement that my right hon. Friend the Secretary of State and my hon. Friend the Under-Secretary, and I hope myself, have listened to points made during the Bill's progress by those outside the House as well as by right hon. and hon. Members.
      The hon. Member for Cardiff, West (Mr. Morgan) was critical of the new insulation grants scheme. The Government have a good record on energy conservation, but we aim at achieving more, and the fresh approach taken by the Bill will help. My hon. Friend the Member for Ryedale (Mr. Greenway) expressed the view, which I reinforce, that economic success should be the engine for producing a more compassionate society able to give more to help the needy. I am glad that, with my hon. Friend's acknowledged expertise in occupational pensions, he felt able to welcome the Bill's provisions.
      I contrast our measured and deliberate strategy with the Opposition's policies. I am minded to wonder whether the right hon. and learned Member for Monklands, East (Mr. Smith) or the hon. Member for Derby, South (Mrs. Beckett) has been following carefully the proceedings on the Bill, either in Committee or on the Floor of the House, because consistently the Opposition have moved amendments which would commit them to more and more public expenditure if and when they ever return to office. We have added up the commitments which would result from their amendments, and they come out at about £1·5 billion. Any future Labour Government would rapidly find themselves on the same path as the Labour Government in which Lord Barnett was Chief Secretary to the Treasury, who spent their first two years in office spending money they did not have.
      I am particularly proud that we have managed to put together a disability package—
      It being Ten o'clock, MADAM DEPUTY SPEAKER proceeded, pursuant to the Order [28 March], to put forthwith the Question already proposed from the Chair.
      The House divided: Ayes 293, Noes 205.

      Division No. 157]

      [10.00 pm

      AYES

      Adley, Robert

      Alexander, Richard

      Aitken, Jonathan

      Alison, Rt Hon Michael

      1147

      Allason, Rupert

      Fookes, Dame Janet

      Amery, Rt Hon Julian

      Forman, Nigel

      Amess, David

      Forsyth, Michael (Stirling)

      Amos, Alan

      Forth, Eric

      Arbuthnot, James

      Fox, Sir Marcus

      Arnold, Jacques (Gravesham)

      Freeman, Roger

      Arnold, Tom (Hazel Grove)

      French, Douglas

      Ashby, David

      Fry, Peter

      Aspinwall, Jack

      Gale, Roger

      Atkinson, David

      Gardiner, George

      Baker, Rt Hon K. (Mole Valley)

      Garel-Jones, Tristan

      Baker, Nicholas (Dorset N)

      Gill, Christopher

      Baldry, Tony

      Gilmour, Rt Hon Sir Ian

      Banks, Robert (Harrogate)

      Glyn, Dr Sir Alan

      Batiste, Spencer

      Goodlad, Alastair

      Bellingham, Henry

      Goodson-Wickes, Dr Charles

      Bendall, Vivian

      Gorman, Mrs Teresa

      Benyon, W.

      Gow, Ian

      Bevan, David Gilroy

      Grant, Sir Anthony (CambsSW)

      Biffen, Rt Hon John

      Greenway, Harry (Ealing N)

      Blaker, Rt Hon Sir Peter

      Greenway, John (Ryedale)

      Body, Sir Richard

      Gregory, Conal

      Bonsor, Sir Nicholas

      Griffiths, Sir Eldon (Bury St E')

      Boscawen, Hon Robert

      Griffiths, Peter (Portsmouth N)

      Boswell, Tim

      Grist, Ian

      Bowden, A (Brighton K'pto'n)

      Ground, Patrick

      Bowden, Gerald (Dulwich)

      Grylls, Michael

      Bowis, John

      Gummer, Rt Hon John Selwyn

      Braine, Rt Hon Sir Bernard

      Hague, William

      Brandon-Bravo, Martin

      Hamilton, Hon Archie (Epsom)

      Brazier, Julian

      Hamilton, Neil (Tatton)

      Bright, Graham

      Hampson, Dr Keith

      Brown, Michael (Brigg & Cl't's)

      Hanley, Jeremy

      Bruce, Ian (Dorset South)

      Hannam, John

      Buchanan-Smith, Rt Hon Alick

      Hargreaves, A. (Bham H'll Gr')

      Buck, Sir Antony

      Hargreaves, Ken (Hyndburn)

      Budgen, Nicholas

      Harris, David

      Burns, Simon

      Haselhurst, Alan

      Burt, Alistair

      Hawkins, Christopher

      Butcher, John

      Heathcoat-Amory, David

      Butler, Chris

      Hicks, Mrs Maureen (Wolv' NE)

      Butterfill, John

      Hicks, Robert (Cornwall SE)

      Carlisle, John, (Luton N)

      Higgins, Rt Hon Terence L.

      Carlisle, Kenneth (Lincoln)

      Hill, James

      Carrington, Matthew

      Hind, Kenneth

      Carttiss, Michael

      Hogg, Hon Douglas (Gr'th'm)

      Cash, William

      Holt, Richard

      Chapman, Sydney

      Hordern, Sir Peter

      Chope, Christopher

      Howarth, Alan (Strat'd-on-A)

      Clark, Hon Alan (Plym'th S'n)

      Howarth, G. (Cannock & B'wd)

      Clark, Dr Michael (Rochford)

      Howe, Rt Hon Sir Geoffrey

      Clark, Sir W. (Croydon S)

      Hughes, Robert G. (Harrow W)

      Clarke, Rt Hon K. (Rushcliffe)

      Hunt, David (Wirral W)

      Colvin, Michael

      Hunter, Andrew

      Conway, Derek

      Irvine, Michael

      Coombs, Anthony (Wyre F'rest)

      Irving, Sir Charles

      Coombs, Simon (Swindon)

      Jack, Michael

      Cope, Rt Hon John

      Janman, Tim

      Cormack, Patrick

      Jessel, Toby

      Couchman, James

      Johnson Smith, Sir Geoffrey

      Cran, James

      Jones, Gwilym (Cardiff N)

      Critchley, Julian

      Jones, Robert B (Herts W)

      Currie, Mrs Edwina

      Jopling, Rt Hon Michael

      Curry, David

      Kellet-Bowman, Dame Elaine

      Davies, Q. (Stamf'd & Spald'g)

      Key, Robert

      Davis, David (Booth ferry)

      King, Roger (B'ham N'thfield)

      Day, Stephen

      King, Rt Hon Tom (Bridgwater)

      Devlin, Tim

      Kirkhope, Timothy

      Dickens, Geoffrey

      Knapman, Roger

      Dorrell, Stephen

      Knight, Greg (Derby North)

      Douglas-Hamilton, Lord James

      Knight, Dame Jill (Edgbaston)

      Dover, Den

      Lang, Ian

      Emery, Sir Peter

      Latham, Michael

      Evans, David (Welwyn Hatf'd)

      Lawrence, Ivan

      Evennett, David

      Lee, John (Pendle)

      Fallon, Michael

      Leigh, Edward (Gainsbor'gh)

      Favell, Tony

      Lennox-Boyd, Hon Mark

      Fenner, Dame Peggy

      Lester, Jim (Broxtowe)

      Field, Barry (Isle of Wight)

      Lightbown, David

      Fishburn, John Dudley

      Lilley, Peter

      1148

      Lloyd, Sir Ian (Havant)

      Sainsbury, Hon Tim

      Lloyd, Peter (Fareham)

      Scott, Rt Hon Nicholas

      Luce, Rt Hon Richard

      Shaw, David (Dover)

      McCrindle, Robert

      Shaw, Sir Giles (Pudsey)

      Macfarlane, Sir Neil

      Shaw, Sir Michael (Scarb)

      MacGregor, Rt Hon John

      Shephard, Mrs G. (Norfolk SW)

      MacKay, Andrew (E Berkshire)

      Shersby, Michael

      Maclean, David

      Sims, Roger

      McLoughlin, Patrick

      Skeet, Sir Trevor

      McNair-Wilson, Sir Michael

      Smith, Tim (Beaconsfield)

      McNair-Wilson, Sir Patrick

      Soames, Hon Nicholas

      Madel, David

      Speller, Tony

      Malins, Humfrey

      Spicer, Michael (S Worcs)

      Mans, Keith

      Squire, Robin

      Marland, Paul

      Stanbrook, Ivor

      Marlow, Tony

      Stanley, Rt Hon Sir John

      Marshall, John (Hendon S)

      Steen, Anthony

      Martin, David (Portsmouth S)

      Stern, Michael

      Maude, Hon Francis

      Stevens, Lewis

      Maxwell-Hyslop, Robin

      Stewart, Allan (Eastwood)

      Mayhew, Rt Hon Sir Patrick

      Stewart, Andy (Sherwood)

      Mellor, David

      Stokes, Sir John

      Meyer, Sir Anthony

      Stradling Thomas, Sir John

      Miller, Sir Hal

      Sumberg, David

      Mills, Iain

      Summerson, Hugo

      Mitchell, Andrew (Gedling)

      Tapsell, Sir Peter

      Mitchell, Sir David

      Taylor, Ian (Esher)

      Montgomery, Sir Fergus

      Taylor, Teddy (S'end E)

      Moore, Rt Hon John

      Tebbit, Rt Hon Norman

      Morris, M (N'hampton S)

      Temple-Morris, Peter

      Morrison, Sir Charles

      Thompson, D. (Calder Valley)

      Morrison, Rt Hon P (Chester)

      Thompson, Patrick (Norwich N)

      Moss, Malcolm

      Thornton, Malcolm

      Moynihan, Hon Colin

      Thurnham, Peter

      Neale, Gerrard

      Townend, John (Bridlington)

      Neubert, Michael

      Townsend, Cyril D. (B'heath)

      Newton, Rt Hon Tony

      Tracey, Richard

      Nicholls, Patrick

      Tredinnick, David

      Nicholson, David (Taunton)

      Trippier, David

      Norris, Steve

      Trotter, Neville

      Onslow, Rt Hon Cranley

      Twinn, Dr Ian

      Oppenheim, Phillip

      Wakeham, Rt Hon John

      Paice, James

      Waldegrave, Rt Hon William

      Parkinson, Rt Hon Cecil

      Walker, Bill (T'side North)

      Patnick, Irvine

      Waller, Gary

      Patten. Rt Hon Chris (Bath)

      Ward, John

      Patten, Rt Hon John

      Wardle, Charles (Bexhill)

      Pawsey, James

      Warren, Kenneth

      Peacock, Mrs Elizabeth

      Watts, John

      Porter, Barry (Wirral S)

      Wells, Bowen

      Porter, David (Waveney)

      Wheeler, Sir John

      Portillo, Michael

      Whitney, Ray

      Price, Sir David

      Widdecombe, Ann

      Raffan, Keith

      Wiggin, Jerry

      Raison, Rt Hon Timothy

      Wilshire, David

      Redwood, John

      Winterton, Mrs Ann

      Renton, Rt Hon Tim

      Winterton, Nicholas

      Rhodes James, Robert

      Wolfson, Mark

      Ridley, Rt Hon Nicholas

      Wood, Timothy

      Rifkind, Rt Hon Malcolm

      Woodcock, Dr. Mike

      Roberts, Wyn (Conwy)

      Yeo, Tim

      Roe, Mrs Marion

      Young, Sir George (Acton)

      Rost, Peter

      Rowe, Andrew

      Tellers for the Ayes:

      Rumbold, Mrs Angela

      Mr. Tony Durant and

      Ryder, Richard

      Mr. John M. Taylor.

      Sackville, Hon Tom

      NOES

      Abbott, Ms Diane

      Beggs, Roy

      Adams, Allen (Paisley N)

      Beith, A. J.

      Allen, Graham

      Bell, Stuart

      Archer, Rt Hon Peter

      Benn, Rt Hon Tony

      Armstrong, Hilary

      Bennett, A. F. (D'nt'n & R'dish)

      Ashton, Joe

      Bermingham, Gerald

      Barnes, Harry (Derbyshire NE)

      Bidwell, Sydney

      Barnes, Mrs Rosie (Greenwich)

      Blair, Tony

      Barron, Kevin

      Blunkett, David

      Battle, John

      Boateng, Paul

      Beckett, Margaret

      Boyes, Roland

      1149

      Bradley, Keith

      Fisher, Mark

      Bray, Dr Jeremy

      Flannery, Martin

      Brown, Gordon (D'mline E)

      Flynn, Paul

      Brown, Nicholas (Newcastle E)

      Foot, Rt Hon Michael

      Brown, Ron (Edinburgh Leith)

      Foster, derek

      Bruce, Malcolm (Gordon)

      Foulkes, George

      Buchan, Norman

      Fraser, John

      Buckley, George J.

      Fyfe, Maria

      Callaghan, Jim

      Garrett, John (Norwich South)

      Campbell, Menzies (Fife NE)

      Gilbert, Rt Hon Dr John

      Campbell, Ron (Blyth Valley)

      Godman, Dr Norman A.

      Canavan, Dennis

      Golding, Mrs Llin

      Carlile, Alex (Mont'g)

      Gordon, Mildred

      Clark, Dr David (S Shields)

      Gould, Bryan

      Clarke, Tom (Monklands W)

      Griffiths, Nigel (Edinburgh S)

      Clay, Bob

      Griffiths, Win (Bridgend)

      Clelland, David

      Grocott, Bruce

      Clwyd, Mrs Ann

      Hardy, Peter

      Cohen, Harry

      Harman, Ms Harriet

      Cook, Frank (Stockton N)

      Hattersley, Rt Hon Roy

      Cook, Robin (Livingston)

      Heal, Mrs Sylvia

      Corbett, Robin

      Henderson, Doug

      Corbyn, Jeremy

      Hinchliffe, David

      Cousins, Jim

      Hoey, Ms Kate (Vauxhall)

      Crowther, Stan

      Hogg, N. (C'nauld & Kilsyth)

      Cryer, Bob

      Home Robertson, John

      Cummings, John

      Hood, Jimmy

      Cunliffe, Lawrence

      Howarth, George (Knowsley N)

      Dalyell, Tam

      Howell, Rt Hon D. (S'heath)

      Darling, Alistair

      Howells, Geraint

      Davies, Rt Hon Denzil (Llanelli)

      Howells, Dr. Kim (Pontypridd)

      Davies, Ron (Caerphilly)

      Hoyle, Doug

      Davis, Terry (B'ham Hodge H'l)

      Hughes, John (Coventry NE)

      Dixon, Don

      Hughes, Robert (Aberdeen N)

      Dobson, Frank

      Hughes, Roy (Newport E)

      Doran, Frank

      Hughes, Simon (Southwark)

      Duffy, A. E. P.

      Ingram, Adam

      Dunnachie, Jimmy

      Johnston, Sir Russell

      Dunwoody, Hon Mrs Gwyneth

      Jones, Barry (Alyn & Deeside)

      Eadie, Alexander

      Jones, Martyn (Clwyd S W)

      Eastham, Ken

      Kaufman, Rt Hon Gerald

      Evans, John (St Helens N)

      Kennedy, Charles

      Ewing, Harry (Falkirk E)

      Kilfedder, James

      Ewing, Mrs Margaret (Moray)

      Kirkwood, Archy

      Fatchett, Derek

      Lambie, David

      Fearn, Ronald

      Lamond, James

      Field, Frank (Birkenhead)

      Leighton, Ron

      Fields, Terry (L'pool B G'n)

      Lewis, Terry

      1150

      Litherland, Robert

      Richardson, Jo

      Lofthouse, Geoffrey

      Rooker, Jeff

      Loyden, Eddie

      Ross, Ernie (Dundee W)

      McAllion, John

      Ross, William (Londonderry E)

      McAvoy, Thomas

      Rowlands, Ted

      McCartney, Ian

      Ruddock, Joan

      McKay, Allen (Barnsley West)

      Sedgemore, Brian

      McKelvey, William

      Sheerman, Barry

      McLeish, Henry

      Sheldon, Rt Hon Robert

      McNamara, Kevin

      Shore, Rt Hon Peter

      Madden, Max

      Short, Clare

      Marek, Dr John

      Skinner, Dennis

      Marshall, Jim (Leicester S)

      Smith, Andrew (Oxford E)

      Martin, Michael J. (Springburn)

      Smith, C. (Isl'ton & F'bury)

      Martlew, Eric

      Smith, Rt Hon J. (Monk'ds E)

      Maxton, John

      Smith, J. P. (Vale of Glam)

      Meacher, Michael

      Snape, Peter

      Meale, Alan

      Soley, Clive

      Michael, Alun

      Spearing, Nigel

      Michie, Bill (Sheffield Heeley)

      Steingberg, Gerry

      Michie, Mrs Ray (Arg'l & Bute)

      Stott, Roger

      Moonie, Dr Lewis

      Strang, Gavin

      Morgan, Rhodri

      Straw, Jack

      Morley, Elliot

      Taylor, Mrs Ann (Dewsbury)

      Morris, Rt Hon A. (W'shawe)

      Taylor, Rt Hon J. D. (S'ford)

      Morris, Rt Hon J. (Aberavon)

      Thompson, Jack (Wansbeck)

      Mowlam, Marjorie

      Turner, Dennis

      Mullin, Chris

      Vaz, Keith

      Murphy, Paul

      Walker, A. Cecil (Belfast N)

      Nellist, Dave

      Walley, Joan

      O'Brien, William

      Wardell, Gareth (Gower)

      O'Neill, Martin

      Watson, Mike (Glasgow, C)

      Orme, Rt Hon Stanley

      Welsh, Michael (Doncaster N)

      Patchett, Terry

      Wigley, Dafydd

      Pendry, Tom

      Williams, Rt Hon Alan

      Pike, Peter L.

      Williams, Alan W. (Carm'then)

      Powell, Ray (Ogmore)

      Wilson, Brian

      Prescott, John

      Winnick, David

      Primarolo, Dawn

      Wise, Mrs Audrey

      Quin, Ms Joyce

      Wray, Jimmy

      Radice, Giles

      Young, David (Bolton SE)

      Randall, Stuart

      Redmond, Martin

      Tellers for the Noes:

      Rees, Rt Hon Merlyn

      Mr, Frank Haynes and

      Reid, Dr John

      Mr. Robert N. Wareing

      Question accordingly agreed to.
      Bill read the Third time, and passed.

Prescription Charges
10.14 pm
Mr. Robin Cook: I beg to move,
That an humble Address be presented to Her Majesty, praying that the National Health Service (Charges for Drugs and Appliances) Amendment Regulations 1990 (S.I., 1990, No. 537), dated 8th March 1990, a copy of which was laid before this House on 9th March, be annulled.
This will be a short debate, as it is based on a prayer and must finish by 11.30 pm. Indeed, it will be so short that the House will remember that I have made speeches longer than this whole debate. In opening the debate, I shall confine myself to the central proposal— [Interruption.]
Madam Deputy Speaker (Miss Betty Boothroyd): Order. The House is attempting to hear the hon. Member for Livingston (Mr. Cook), who is moving the prayer.
Mr. Cook: You disappoint me, Madam Deputy Speaker. I had hoped that I had stimulated unusual interest in my speech.
As 1 was saying, I shall confine myself to the central proposal of the regulation, which is that, if the regulation is carried by the House, it will increase prescription charges by 9 per cent.—in a year in which the Government have based the funding of the National Health Service on the assumption that inflation will be 5 per cent. If the regulation is carried, prescription charges will be £3·05. That figure is so large that Conservative Members may have difficulty remembering what it was when they took office. To assist them, I remind them that in 1979, when they inherited office from the last Labour Government, prescription charges were 20p. My hon. Friends will have no similar difficulty in recalling what the Daily Mail said in that year, when we warned that the Conservatives might double prescription charges—it called the warning "another Labour lie".
I must confess to my hon. Friends that the Daily Mail had a point, as we had failed to warn the nation of the full shock in store for patients in the NHS. If the latest increase is put in place, prescription charges will be 1,425 per cent. higher than when Labour left office.
Mr. Andrew Rowe: Will the hon. Gentleman remind me, as I have forgotten, what proportion of National Health Service patients pay prescription charges?
Mr. Cook: One quarter of those who claim prescriptions pay the prescription charge. If the hon. Gentleman will allow me, I will deal with that point at some length in the course of my remarks. I very much hope that I shall have his attention when I come to that aspect. If that is a factor in the hon. Gentleman's thinking, we may be able to persuade him with reason to join us in the Lobby.
To put the increase in perspective, in 1979 one could get three prescriptions for the price of one packet of cigarettes. After this regulation is in place, one will need to club together the price of almost two packets of cigarettes to pay for one prescription. That relative price movement provides an awkward footnote to the Government's health strategy.
It would be bad enough if the new prescription charge merely covered the cost of the drugs that it purchased, but
1152
we have arrived at the stage when prescription charges will exceed the cost of a large number of the prescriptions that they pay for.
Mr. John Marshall: Will the hon. Gentleman give way?
Mr. Cook: I will give way, but as we have to conclude by 11.30, this had better be the last time.
Mr. Marshall: The hon. Gentleman is taking us down memory lane. Will he confirm that the Labour party promised in 1974 to get rid of prescription charges but did not do so?
Mr. Cook: I fully admit that the last Labour Government had their failings. If the hon. Gentleman's concern is that we failed to get rid of prescription charges, I happily offer him a compromise: we shall withdraw any commitment to getting rid of prescription charges if he will join us in the Lobby to vote for a prescription charge of 20p as opposed to the Government's proposal for a charge of £3·05. To complain that the last Labour Government left charges at 20p hardly seems a logical or rational argument for increasing the charges to £3·05.
To return to the point that I was about to make, arising from a highly contemporary parliamentary answer, the Minister of State admitted only last month that one third of all prescriptions dispensed have a drug content costing less than the face value of the prescription charge. They are the more common drugs, amounting to more than a third of the total number of prescriptions. Forty-five million prescriptions are being dispensed every year on a prescription charge which renders a profit to the Secretary of State. The National Pharmaceutical Association has furnished me with a full page listing common drugs which can be bought over the counter at a cheaper price than they can be obtained on prescription. Is that what Conservative Members want to achieve? Is it part of their strategy of commercialising health care to encourage patients to dose themselves rather than to seek a prescription on qualified medical advice?
Over the years, as we have debated the matter, I have become familiar with the defence that the hon. Member for Mid-Kent (Mr. Rowe) has already advanced. It is that the exemption from prescription charges is so wide that there is no real problem. The reason why the proportion of people who are exempt from prescription charges is so high is that the majority of prescriptions are for pensioners and children, who are automatically exempt. The majority of prescriptions to adults under the age of retirement are not exempt.
For example, people with chronic illnesses, who represent a large number of those who require prescriptions, are not exempt. They may have conditions which require repeated prescriptions, and those repeated prescriptions may well be expensive, but such people have no automatic exemption. There is no exemption for people who suffer from cystic fibrosis, asthma, Parkinson's disease, multiple sclerosis or schizophrenia.
Each of those diseases has been brought to the attention of the Government by organisations representing people who suffer from them and the people who care for those who suffer from them. Repeatedly over the years the Government have refused to widen the exemption to cover them. All the conditions that I have mentioned automatically and unavoidably lower the sufferer's

1153
capacity to earn. They all require medication—perhaps two or three prescriptions a week—but there is no exemption for sufferers from them unless they pass the income test.
That brings me to the income test as the basis for exemption. A feature of the Government with which my hon. Friends will be familiar is that means tests keep getting meaner. I am indebted to my hon. Friend the Member for Burnley (Mr. Pike) for winkling out of the Minister of State the fact that the number of people eligible for free prescriptions on grounds of income fell by half a million last year. That is the result of the changes made in April 1988. Changes were made to the income test for free prescriptions without any statement to Parliament or debate in the House. As a result of the changes, only 3·4 million adults in Britain, out of the whole population under retirement age, qualify for free prescriptions on the grounds of low income. The rest have to pay, unless they fall into one of the other small exempt categories.
One group of people who have increasingly become liable to pay the full prescription charge are those in receipt of invalidity benefits. Since the changes in 1988, many of those people found that they lost the exemption that they had on the grounds of low income, not because their income rose in real terms but because the threshold fell in real terms. The problem for them is that, once they are carried £1 over the income threshold, they lose all their exemption. By definition, if someone is on invalidity benefit, the chances are that they require regular prescriptions—perhaps two or three a week. But even if they require two or three prescriptions a week, the moment they go £1 over the income limit they are expected to find £9 to pay the face value of the prescription. That is a serious reduction in the standard of living for a household living on perhaps £70 or £80 per week.
I have seen the correspondence between one such person on invalidity benefit and the Minister's office. The correspondent wrote complaining that, following the change in the income test, he had not been able to afford five prescriptions that he had needed in the previous month because he could not spare the necessary £14 out of his tight budget. The reply from the Minister of State's office—I exempt the present Minister of State from blame, as the letter came from her predecessor's office—was masterly in its incomprehension of what life is like on a hand-to-mouth existence in which one has to count every penny. The reply, if you please, advised the correspondent that it would be cheaper for him to make a bulk purchase by buying a season ticket for the prescriptions. As the correspondent pointed out in his letter to me in rather blunter terms than I can share with the House, if he could not budget to find £14 to pay for the prescription charges how did the Minister imagine that he would find £40 to buy the annual certificate in the first place?
Every week, pharmacists are confronted with patients who have been given three prescriptions and ask the pharmacist to advise them which ones they really need because they cannot afford all three. I find it curious that Conservative Members keep denying that charges have that effect. After all, every Conservative Member believes in market forces—it is a condition of membership of the modern Conservative party. They know that market forces
1154
work by the price signal, so it is an article of faith that if prices go up, demand must go down. That is certainly what has happened with eye tests.
This week marks the end of the first year since charges were introduced for eye tests. Every survey—there have been many—concludes that charges have been accompanied by a 30 per cent. drop in eye tests—3·5 million fewer eye tests have been performed, so 3·5 million people have been put off by the new price signal of a tenner a test.
Mr. David Winnick: That is damaging to health.
Mr. Cook: The Secretary of the Association of Optometrists shares my hon. Friend's belief as he observed on Monday, that 200,000 people have been missed who might have serious eye conditions which would have been detected if they had come forward for a test, as they would have done last year. He said:
"I think it is inevitable that people will go blind as a result of charging."
The deterrent that we have seen in the case of charges for eye tests can also be witnessed in the case of prescription charges. The Government's own figures show that prescriptions that are not exempt, those prescriptions for which there is a charge, fell from 107 million in 1979—I have already reminded the House that the charge then was 20p—to 70 million in 1988. That is a reduction of about a third. That drop is all the more remarkable given that, in the same period, those prescriptions which are exempt continued to rise.
The York Centre for Health Economics has made the reasonable estimate that, if prescriptions for which people have to pay had continued to increase at the same trend growth rate as those which are exempt, the number of prescriptions for which people are currently paying would be double the current level. In other words, half the demand for prescriptions has been suppressed by the current level of prescription charges.
Ironically, in the very month in which the Government have announced the latest increase, the Institute for Fiscal Studies released a study which concluded:
"The entire fall in the number of charged prescriptions could be accounted for by the increase in the real level of the prescription charge"—
an entire fall of one third in real terms.
The Institute for Fiscal Studies is not alone in its judgment. The latest increase has been condemned by the Royal Pharmaceutical Society, the National Pharmaceutical Association and the British Medical Association—the very organisations which speak for pharmacists and for general practitioners. They are the people who see the effect of prescription charges on their patients. They know that it is a tax on the sick and they find it repugnant that the people who are most sick have to pay most. There can be no justification for the latest increase.
The House began its proceedings after Question Time today with a ministerial statement on capping local authority poll taxes. I invite the House to conclude the day's work by joining me in the Lobby to cap the Government's own poll tax.
10.30 pm
Mr. John Marshall: Whenever the House talks about prescription charges, we have a debate that is little better than a charade, because it is full of cant

1155
from Opposition Members. If we consider the history of prescription charges in this country, we must remember that a Labour Government first took upon themselves the power to impose prescription charges. We must remember that in 1964 Lord Wilson won the election on the promise that he would get rid of prescription charges. He did for three years, but then Lord Jenkins reintroduced them in 1968. In 1974, Lord Wilson was at it again; he promised to get rid of prescription charges.
It is no use the hon. Member for Livingston (Mr. Cook) saying that prescription charges were merely 20p at the end of his term of office. The integrity of election promises is at issue. It is surely wrong and cynical—
Mr. Cook: I am delighted at the hon. Gentleman's observation about the integrity of election pledges. May I invite him to consider two issues to which he must address his mind in the context of this debate? First, will he show my hon. Friends and me where, in the Conservative manifesto in 1987, there was a commitment to introduce charges for eye tests or dental examinations? Will he cast light on how it was that before—[Interruption.] The hon. Gentleman may seek guidance, but he will not find a reference in the manifesto.
Secondly, will the hon. Gentleman cast light on how it was that the Conservative party could assure the country in 1979 that it had no intention of doubling prescription charges when it increased them fifteenfold?
Mr. Marshall: We made a commitment in 1979 to improve the quality of the Health Service, which is what we have done. Those prescription charges are part of that improvement. Those who vote against prescription charges tonight are voting against an income for the Health Service of more than £200 million.
Dame Jill Knight: I wonder whether my hon. Friend noted with the same interest as I did the fact that, in all the remarks of the hon. Member for Livingston tonight, not once did he say what cuts he would impose on the Health Service to meet the drugs bill.
Mr. Marshall: My hon. Friend is right. The choice facing the country is simply whether we want—
Mr. Jeremy Corbyn rose—
Mr. Marshall: I have given way twice, and I am trying to answer my hon. Friend. When I have done so, I shall give way to the hon. Gentleman.
The choice facing the country is simple: do we want a better Health Service for those who are ill or do we want free drugs for people who can afford to pay for them? The Labour party must say how many nurses it would get rid of, how many fewer hip replacements and how many fewer heart transplants there would be if its views were to prevail.
Mr. Corbyn: I shall take the hon. Gentleman back to 1979. Will he tell us exactly what the pledge was in that Conservative election campaign? I seem to remember very well that there was a pledge not to increase prescription charges. That has clearly been broken. The argument then was just as valid as it is today: by increasing prescription charges, one increases the cost for those who can least afford it because they are ill at the time.
Mr. Marshall: I well remember 1979 because that was when the hon. Member for Islington, North (Mr. Corbyn)
1156
was causing chaos throughout north London by persuading refuse collectors not to collect refuse, indulging in a series of strikes and disrupting education in the London borough of Haringey, where schools were closed for several weeks.
As for the hon. Gentleman's talk of an alleged election promise, no promise was made in 1979 not to increase prescription charges. A specific promise was made in 1974, however, which the Labour party refused to honour. It is perhaps significant that we have not heard from the Labour party tonight what its policy is. Is it the policy of the 1989 Labour party conference, which was to get rid of prescription charges, or is it a fact that its latest policy review fails to mention the subject at all? I suspect that Labour Members have realised that no one will believe any promises they make in respect of prescription charges.
Mr. Robin Cook rose—
Mr. Marshall: I have given way three times.
Mr. Cook: If the hon. Gentleman will ask these questions, he must expect them to be answered. The answer is perfectly straightforward. Our commitment, as a first priority, is to abolish the charge for eye tests, and that will go; secondly, we will abolish the charge for dental examinations, and that will go; then we will make what progress we can within resources in reducing the prescription charge. There will certainly be no increase. If there is no increase, it will mean that the prescription charge will decline with inflation. Of course, under the next Labour Government, inflation will be so low that that will not be satisfactory, so I assure my hon. Friends that I shall seek to make real cuts in the value of the prescription charge.
Mr. Marshall: That has been a valuable little exercise: we have managed to smoke out from the Labour party spokesman on health the fact that a future Labour Government would retain prescription charges. The commitment to reduce them is so "pie in the sky" that we know it will not happen. To be told that a future Labour Government will reduce the rate of inflation, when under the previous one inflation increased within 12 months to 25 per cent. and the average rate of inflation was twice the rate under this Government, is pure "pie in the sky" economics.
There are widespread exemptions for these charges, and we should look at them in relation to the total drugs bill. We have been told that they are going up by 8·9 per cent. in the current year. What we were not told by the hon. Member for Livingston was that the drugs bill is estimated to go up by 13 per cent. this year, so that prescription charges will be meeting a smaller percentage of the total drugs bill.
We should also look at the size of the drugs bill, which in the current financial year will be £2·4 billion. I should have thought that a system of charges raising less than 10 per cent. of the total drugs bill is not at all unreasonable. The charges are not paid by the needy, as the hon. Member for Islington, North (Mr. Corbyn) said, because there are widespread exemptions covering a very large number of people.
I believe that the charges are reasonable. I believe that the opposition to them is full of cant and humbug and pays no attention to what the Labour Government did.
10.37 pm
Mr. Charles Kennedy: I am not going to follow the hon. Member for Hendon, South (Mr. Marshall), particularly on his line of argument, although I would say that perhaps the best—or perhaps not the best but the most worrying—thing that could be said about his speech is that he actually sounds as if he believes it. It strikes me that we have had a recurrence of debates at about this hour of the evening, when Ministers from the Department of Health or the Department of Social Security are frequently lambasted from their own Back Benches on a variety of issues, but when there will be one loner, one loyalist, who will stand up and read the brief, either from Smith square or the Whips Office.
I wonder, when the hon. Member speaks, how it is that the Whips allocate these things. It must be on a "short straw" basis, the choice of who has to make the speech defending a policy which, to judge by the expressions on the faces of other hon. Members on the Government Benches, particularly those interested in health issues, is fairly indefensible. I suspect that, within the parliamentary Conservative party, it works rather like a reverse example of how one loses a driving licence—by accumulating points over time. The more of this kind of speech one makes, the more one accumulates points; one does not lose one's licence at the end—one is given a knighthood for services to the state. So I wish the hon. Gentleman well in his endeavours.
Let us just deal with the reality of this. One thing struck me when this year's increase in prescription charge was announced. It is a worrying fact, which reflects the longevity of the Government and, alongside that longevity, the extent to which the public have become much less interested over the years in increases in these charges. For slightly more than a decade, we have become used to way-above-the-odds increases in prescription charges that, even compared with when I entered the House in 1983, are no longer as big and as dramatic a story in the media—[AN HON. MEMBER: "They should be."] They certainly should, but they are not. That is a sad reflection of an almost weary acceptance among reporters. They feel that it is the same old story again of the Government putting up prescription charges above the level of inflation, even though inflation is well beyond what was anticipated in the current financial year.
In addition, that group in society who are most dependent upon prescriptions—the categories referred to by the hon. Member for Livingston (Mr. Cook)—are all too often the same strata of strained financial cross-sections who have the weakest voice, not only on prescription charges but on housing and social security policies. Therefore, we are right to debate these matters on each and every occasion they arise, so that we can give voice to the reality that we hear in our constituency surgeries. I cannot believe that Conservative Members do not hear it also, because they certainly appear to be hearing all the complaints about the poll tax. They have somewhat selective hearing when it comes to social security issues in general and health policies in particular.
The hon. Member for Livingston also referred to eye test charges and the deregulation in that category of the Health Service, with the resultant serious problems. During the past few months, my party, through a
1158
questionnaire, has polled the opinions of almost 2,000 opticians throughout England, Wales and Scotland. The results have been in line with what the professional associations have found—that there has been about a 30 per cent. drop in the number of people seeking eye tests. Almost as high a number—28 per cent.—of opticians feel that there is a question mark against their financial liability if the changes introduced last year are not reversed.
We now have a contrast. A year ago, when Lords amendments were debated on the Floor of the House, the Government majority was slashed to single figures or at least the low teens. They sought to overcome the amendments on dental and optical tests imposed in another place. I took the trouble to read the Hansard of the exchanges during that debate, including the remarks of the Minister and the Secretary of State. They offered the same assurances that they are now offering on prescription charges—that they would not have a detrimental effect, that there would be sufficient exemptions, that it was scaremongering by the Opposition, that there was no need to upset people, and so on.
The evidence since then is overwhelming and disastrous. First, the changes make nonsense of public health preventive medicine policy. Secondly, they must raise legitimate anxieties about public safety. With a 30 per cent. drop in eye tests, how many people are now behind the wheel of a vehicle on our roads who, had they had an eye test during the past 12 months, would be wearing glasses and would therefore be safer drivers? They also make nonsense of transport policy and public safety on our highways, which should be an arm of government into which the Department of Health has an input.
Thirdly, the Government are carrying out a survey of opticians and are due to publish the results in May. Surprise, surprise, I have been looking at some of the detailed comments that the professional associations have made, and we should take with a pinch of salt any findings in the Government's collection of statistics that apparently give the lie to the most recent surveys. I say that because the questions are loaded. They are loaded to avoid the public's giving the kind of answers that would give an accurate reflection of this attitude to eye tests.
I will give one example. One of the questions asked is: "Have you had an eye test since Christmas?" They do not say since the beginning of the year, or in the last three months. MORI has been asked to advise on the efficacy of using the word "Christmas" and it says, as an organisation of experienced opinion pollsters, that that is a deliberately vague term in that it stretches the bounderies of recollection back as far as November, and that it does not line up with the kind of dates over which the Government have been promising that they would be able to give accurate figures.
Secondly, the pollsters ask the public not if they had to pay but what kind of eye test they had. They say: "Did you have a National Health Service eye test, or did you pay for an eye test?" Again, they are trying to confuse the public by the questions they are asking.
I sent the Secretary of State a copy of the questions which we circulated throughout Britain, and a copy of the responses. I think he will find that they are far more accurate and honest. Given that the results produced from nearly 2,000 opticians approached directly are completely in line with the figures discovered as a result of the

1159
professional bodies carrying out their surveys, if the Government figures are far removed from those, it is because their supposed survey has been rigged.
In comparison with what we were assured over dental and optical charges 12 months ago and the disastrous downturn since, one can have no confidence whatsover in the Goverment's latest hike in prescription charges, because any assurances that they can offer are likely to prove too low, not least when we hear the kind of assurances drafted from Smith square for Back Benchers which immediately preceded my own contribution.
10.47 pm
Mr. Roger Sims (Chiselhurst): This debate, as the hon.
Member for Ross, Cromarty and Skye (Mr. Kennedy) implied, is an annual event that takes on something of a ritual quality, not least with the Pavlovian response from Members on the Opposition Front Bench. These are entirely predictable, although certainly more enjoyable from the lips of the hon. Member for Livingston (Mr. Cook) than from some of his predecessors.
I assure the hon. Member for Ross, Cromarty and Skye that I am not a pressed man but very much a volunteer, as I hope my hon. Friend the Member for Sheffield, Hallam (Mr. Patnick) can confirm. Indeed, I am no party hack on this or any other issue.
Mr. Kennedy: Having served on a number of Committees with the hon. Gentleman, I would never accuse him of that. I think that is why he tends to stand further way from the Treasury Bench.
Mr. Sims: I am grateful for that compliment from the hon. Gentleman, as no doubt the hon. Member for Livingston is for the one that I just paid him.
As the subject has been mentioned, I remind the House that I believe that it was wrong for the Government to impose charges for eye tests and teeth checks, and spoke and voted accordingly. I believe that the evidence that we have already heard in the debate this evening, when it has had more time to emerge, will prove the case, but time will tell.
Having established my position on that, I am bound to say that I think it entirely reasonable that those who can afford to do so should make a contribution towards the cost of prescriptions. After all, more than half the population are within the exempt categories and only one quarter of prescriptions are charged for. We are talking of £3 or so per item, although with the use of the so-called season ticket facility the average cost reduces. However, I sometimes wonder whether people are as aware of this facility as they should be and whether it might usefully be given more publicity.
I was interested that the hon. Member for Livingston made a comparison with the cost of a couple of packets of cigarettes. Is it unreasonable to expect people to pay for a prescription what they pay for a couple of packets of cigarettes or a round of drinks in the pub, although they probably pay a good deal more for a round of drinks?
Another comparison might be with the items on a normal shopping list at the chemist. People expect to pay £2 or £3 for cough mixture, aspirins, sticking plasters and many other items to be found in the average bathroom cabinet. Is it unreasonable to ask people who can afford it
1160
to pay £3 for a prescription?
If Opposition Members are really against it, they must answer the questions posed by my hon. Friend the Member for Hendon, South (Mr. Marshall). The Department estimates that this increase we are discussing will provide the NHS with £13 million. What alternative method of raising money for the NHS do Opposition Members have? Should it come from increased taxes? Or would they prefer cuts to be made in NHS expenditure to protect those with means from having to pay a little more for their prescriptions? If that is their view, it is a curious socialist philosophy.
Were Labour Members to follow through their party conference policy and abolish prescription charges, they would have to find about £170 million, if my calculations are right. There would have to be huge NHS cuts to find that sort of money. The Government proposal is reasonable and reflects the higher cost of pharmaceutical services in the NHS.
10.52 pm
Mr. David Hinchliffe: We must discover the real reason why, yet again, the Government wish to increase prescription charges. After all, the Conservatives have increased them every year snce they came to power in 1979.
Conservative Members have offered only one reason for the increase—that of raising money for the NHS. Compared with the overall NHS budget, the extra cash that this increase would raise—£13 million—is chickenfeed.
The Government have had huge sums at their disposal, but have invested them otherwise than in the NHS In a recent short debate on the Consolidated Fund Bill, I pointed out that the Conservatives had raised about £50 billion through selling public assets—the family silver—and a further £83 billion from North sea oil. No previous Government have had such enormous resources at their disposal from which to make a larger contribution to the NHS. Yet today we are discussing a mere —13 million, which will penalise the poor and the sick. It is disgraceful.
I believe that there are other reasons why the Government wish to increase prescription charges. They may wish, for example, to establish financial disincentives so that people will think twice before obtaining the drugs that they require. Is that the reason why the Government are bringing forward increased charges?
My hon. Friend the Member for Livingston (Mr. Cook) mentioned the report by York university, which is well worth studying. A number of points raised by that report give us cause for concern. We are worried about the implications of increased prescription charges, because the York report said that
"increasing prescription charges may … be reducing as opposed to enhancing the use of primary care resources."
The Government must be aware of that problem. They are affecting the way in which general practitioners operate, and the way that primary care can assist the patient.
The Government must also be aware of the huge reduction in the take-up rate for prescription since charges were introduced. Some 107 million were cashed in 1979. The figure was down to 70 million by 1988. We should all be concerned about the implications of that for the patients involved.

1161
be valued and will be used rather than flushed down the toilet or the drain? Do the Government feel that if something is paid for it is more valued? I have been waiting to hear the Government's justification from the Government benches for another huge increase in prescription charges, but frankly no reason has been given.
The real reasons relate to the Government's wider political objectives for the National Health Service. The Under-Secretary of State for Health knows my view of the scenario because he heard it last week and the week before. He heard it in the Standing Committee on the National Health Service and Community Care Bill. He understands my view of the Government's actions. I feel that I need to repeat it again and again because I genuinely believe that the Government's policies are part of an overall plan to transform the National Health Service into something quite different.
The Government have made a deliberate attempt to undermine public confidence in the National Health Service during their time in office—for example, by the way in which they have continued to underfund the service. Year in and year out since 1982, the National Association of Health Authorities report has indicated massive underfunding of the Health Service.
The Government have deliberately provoked industrial disputes within the National Health Service. The nurses' dispute and the ambulance crews' dispute were inflamed deliberately by the Government and in particular by the Front Bench and the Secretary of State for Health. The Government have attempted to try to convince people that we can no longer afford a state National Health Service and that we need to consider alternatives to the service that we have been fortunate enough to have since the 1940s.
Those Government policies are part of an overall plan to prepare for something very different. The Government have deliberately attempted to create a public expectation that one now has to pay for the health care which has been freely available in this country since the inception of the National Health Service. What other justification can there be for the provisions in the Health and Medicines Act 1988 for eyesight checks that the hon. Member for Chislehurst (Mr. Sims) mentioned?
My hon. Friend the Member for Livingston cited some appalling figures tonight—3·5 million fewer eye sight checks have occurred as a result of the charge. That number of people would otherwise have gone for those checks. What other justification can there be for charges for dental checks? Charges for hospital parking will be a disincentive for people to attend hospital or to visit relatives in hospital. What other justification can there be for the huge jump in prescription charges?
The measure relates to wider issues than just another huge increase in prescription charges. I was fortunate to have been born shortly after the inception of the National Health Service, so I never knew about doctors' bills—but I have read about them and I have been told about them. It is fitting that my right hon. Friend the Member for Blaenau Gwent (Mr. Foot) is here tonight as I have read the volumes that he wrote about Nye Bevan and learnt from those and from other publications about the reality before the inception of National Health Service.
In the past week, the reality of the situation that we may face has been brought home to me. One of my constituents
1162
is facing a bill for £6,000 for private health treatment which she cannot afford to pay. The medical insurance company which she thought would cover those expenses has told her, "Sorry, but because of a technicality you are not covered" and she is being sued for £6,000. That sort of thing should have gone out of the window in 1948, on the introduction of the National Health Service.
The real reason behind this measure is the Tory policy of turning the Health Service into a commercialised, pay-as-you-go, American-style health care system. Anyone who believes in the NHS should today and in any future debate vote solidly against the Government in defence of the Health Service of this country.
11 pm
Mr. Anthony Coombs: I agree with the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) about how remarkably little coverage there has been of this measure in the national press. In the Library, I failed to find one mention of it in any national English newspaper. Unlike the hon. Gentleman, I do not think that that is the result of apathy, but that newspaper commentators and the majority of the public accept that there is nothing wrong in asking people who can afford to pay prescription charges to make some contribution— albeit not an economical contribution—and so provide the Health Service with substantial additional revenue at a time when the drugs budget is rising rapidly.
It is easy to caricature prescription fees as a charge on the sick, as was said by the hon. Member for Leeds, West (Mr. Battle), and to claim that they deter people from seeking proper medical treatment. That may be good political hyperbole, but the majority of the public reject it as totally divorced from reality.
The reality is that the Opposition recognise the strength of the argument for prescription charges. Although Labour abolished charges in 1965, they reintroduced them three years later, at a 25 per cent. higher level. In 1974, Labour promised to abolish prescription charges but failed to do so during their subsequent four years in government. Last year, Labour's national conference voted to abolish charges, but the shadow Chief Secretary to the Treasury must be concerned that prescription charges raise £212 million—the equivalent of budgets for six or seven health authorities of reasonable size. The total amount raised by all Health Service charges, many of which Labour introduced after the war, is £1,020 million annually, which even Opposition Members, in their saner moments, would regard as a significant contribution to NHS funding.
Most people accept that it is a sensible, progressive and sane proposition that people who are able to contribute to prescription costs, and have sufficient income, should do so. The charges involved can hardly be regarded as regressive. Of a total of 335 million prescriptions, no fewer than 260 million are provided free of charge. The number of prescriptions per person has risen by about one tenth since 1977, the amount spent on the drugs budget per se has risen from £550 million in 1979 to £2·4 billion, and the drugs budget is rising significantly faster than increases in charges.
Despite that background, the exemptions that the Government have allowed, which account for a higher proportion of the total drugs budget, have increased over the past 10 years. In addition to children under 16, all

1163
pensioners, people on income support or family credit, expectant mothers and mothers who have had a child within the previous 12 months, in 1982 the Conservative Government allowed a further extension to include mothers who have had the appalling experience of having a stillborn child within the previous 12 months, between 1983 and 1985 they made further exemptions for medical conditions, and in 1988—a fact that has not been mentioned by the Opposition or by my hon. Friends—they extended exemption to students under 19 who are in full-time education.
It is scarcely surprising that, with 55 per cent. of the population and a far greater proportion of those needing prescriptions being exempt, the changes are met with understanding and, indeed, a deafening silence by the newspapers which might be expected to oppose them.
The hon. Member for Livingston (Mr. Cook) mentioned the Institute of Fiscal Studies and an article in its February magazine. It is not surprising that research shows that the increase in charges of some five times in real terms over the past 10 years has not resulted in any decrease in the number of prescriptions. Indeed, between 1979 and 1987 the number rose by 11 per cent. The hon. Gentleman said that the Institute of Fiscal Studies showed that the number of paid prescriptions declined from 107 million to 70 million between 1979 and 1988 and that this showed that the increase in prescription charges had reduced the number of people who were prepared to pay for prescriptions. That may be a significant determinant. Indeed, the Institute of Fiscal Studies argued that.
The Institute of Fiscal Studies also argued that many people who would no longer pay for prescriptions realised, as a result of prescription charges going up, that they had a statutory right to free prescriptions and, far from stopping taking out prescriptions, more of them went to their doctors to get the free prescriptions to which they were entitled. Instead of increased charges leading to a decline in the total number of prescriptions given out by doctors, they had the opposite effect.
The Institute of Fiscal Studies has showed that increasing prescription charges can have a beneficial effect on take-up and on preventive health care. The hon. Member for Livingston was not prepared to elaborate on that when he discussed the report. For that reason and the other reasons that I have outlined, I shall support the regulations and oppose the Opposition prayer.
11.9 pm
Mr. Ian McCartney: Earlier today we debated the poll tax capping legislation. My local authority will be capped for increasing its expenditure by 6 per cent.; after 11 years of Conservative government, we now find ourselves debating a 1,000 per cent. increase in prescription charges. As my hon. Friend the Member for Burnley (Mr. Pike) pointed out to me earlier, this, too, is a kind of poll tax. Conservative Members have provided no more than a tissue of excuses for the attempt to privatise medical care and introduce market forces that underlies the Government's proposals.
Mr. Peter L. Pike: Like the poll tax, this tax on health will affect most seriously those whose housing and working conditions are worst: their health will suffer most.
Mr. McCartney: My hon. Friend is absolutely right. The introduction of charges will cause the cronically ill to ask doctors to delete items from multiple prescriptions, or to abandon their prescriptions altogether.
Opposition Members have said a good deal about the general implications of the proposals; I refer specifically to the problems of women who cannot afford to pay multiple prescription charges. I am currently dealing with the case of a constituent of my late colleague Allan Roberts, who was the Member for Bootle. Because she could not afford the three-part hormone replacement therapy package, a growth of hair now covers her face and she lives almost as a hermit. She was recently sent to a consultant dermatologist in Liverpool, who has written to me that the case is one of the worst that she has seen. Because of cuts, however, she cannot begin to treat the patient for nine to 12 months, although the patient is deemed to he in the emergency category. She has advised the patient that, if she is prepared to pay, treatment can begin at the same hospital 24 hours after an appointment has been made.
I have already written to the Minister about the case, so I shall not go into detail now, but it illustrates graphically the disincentive that multiple prescription charges will introduce: people will be discouraged from either embarking on or continuing treatment.
Conservative Members have simply parroted their speeches. I think that the hon. Member for Hendon, South (Mr. Marshall) must have left his speech on his seat, and the hon. Member for Wyre Forest (Mr. Coombs) must have picked it up and read out pages 3, 4 and 5. Perhaps another hon. Member will read the concluding passages. The hon. Member for Hendon, South spoke of raising resources for the National Health Service, but he did not mention the Government's proposal to provide £40 million in tax relief for private medical insurance in the current financial year. I trust that one of the first steps that the Labour Government will take will be to remove that relief, and pump the money back into the NHS, so that people need not pay prescription charges.
Mr. John Marshall: Will the hon. Gentleman give way?
Mr. McCartney: The hon. Gentleman has had ample opportunity to put his case. He has been out of the Chamber since then—for medicinal purposes., I understand.
The issue at stake is this: how can we establish preventive medicine within the confines of the NHS and ensure that multiple prescriptions are effective for preventive and treatment purposes? The Minister owes it to the House to explain clearly why the Government have failed on the 15 occasions when prescription charges have been raised to do anything to protect those who require multiple prescriptions. That affects women in the main and there is growing evidence that the lives of many women who go without hormone replacement treatment become an abject misery. Far more expensive hospital treatment may be needed later in their lives, whereas, if the treatment had been carried out through the prescription service, much of the pain would have been relieved and much of the expense of in-hospital treatment would not have been incurred by the National Health Service.
These dangerous increases run even against the Government's concept of value for money. The proposals are not value for money for the National Health Service in terms of their long-term effect on people's health. I know

1165
that the Minister is desperate to speak tonight to explain why it is in the interests of the nation's health once again to increase prescription charges.
Why, when the Select Committee on Social Services is in the process of analysing in detail the effect on uptake of the introduction of eye test charges, are the Government attempting to influence public opinion to their way of thinking? All the evidence so far suggests that there has been a substantial and growing decline in the number of people using the service. In some areas, the drop is not 30 per cent. or 40 per cent., but 60 per cent. and above. Most of them are areas of social deprivation and high unemployment, with a high incidence of child deaths and a high mortality rate. Yet the Government, with their warped way of seeking to influence public opinion, are trying to suggest that the charges are not having the effect that the evidence before the Select Committee suggests.
I hope that the Minister will make two promises tonight: first, to put all the independent evidence from the current investigations about eye tests before the Select Committee so that we can check and verify it, and, secondly, to amend the regulations next year, if not this year, to allow some relief for people, especially women going through hormone treatment, who must have multiple prescriptions.
11.17 pm
The Parliamentary Under-Secretary of State for Health (Mr. Roger Freeman): The House owes a debt of gratitude to my hon. Friends the Members for Birmingham, Edgbaston (Dame J. Knight) and for Hendon, South (Mr. Marshall). They have performed a valuable function in drawing out of the hon. Member for Livingston (Mr. Cook) a commitment—a Front-Bench commitment, I assume—that a Labour Government would freeze the prescription charge in monetary terms. He gave that commitment clearly. In the coming year, they would remove £13 million from the National Health Service. Freezing the charge is an irrational way of targeting resources on those who most need assistance and a very inefficient way in which to proceed.
The House would have expected a more reasoned argument from the hon. Gentleman, perhaps indicating certain categories of those receiving prescriptions on whom he wished to concentrate resources. Instead, we had an argument based more on political symbolism than reality. It is convenient for an Opposition Front-Bench spokesman to spend money by forgoing increases in charges without, as my hon. Friend the Member for Hendon, South so clearly put it, explaining precisely where the resources were to come from.
That adds a further £13 million to the cost of the hon. Gentleman's two previous commitments—to end compulsory competitive tendering, which will lose the NHS £100 million, and to end, in view of the Labour party's evident hostility to them, private practice and income generation, losing another £100 million to the NHS.
Mr. Sims: Can my hon. Friend reconcile the apparent commitment to freeze prescription charges with the commitment of the Labour party conference to abolish them altogether?
Mr. Freeman: I am grateful to my hon. Friend. I was taking the words of the hon. Member for Livingston at face value as a Front Bench commitment, but my hon. Friend is right to draw attention to the Labour party's commitment, which would lose the Health Service about £180 million—the revenue from charges, which contribute about 8 per cent. of the total cost of the drugs budget.
Mr. Tom Clarke: The Minister paid glowing tribute to his hon. Friend the Member for Hendon, South (Mr. Marshall). Given that he referred to a drugs budget increase of 13 per cent., how can the Minister justify an element for inflation of a mere 5 per cent.?
Mr. Freeman: I was coming to that very point. It is reasonable to increase prescription charges from 1 April 1990 by 25p, from £2.80 to £3.05. The 8.9 per cent. increase cited by the hon. Member for Livingston compares with the 10 per cent. increase in resources going into the NHS in the coming year—amounting to about £30 billion in the United Kingdom.
The hon. Member for Livingston referred to the rate of increase in the total drugs bill during the past few years. Certainly, the average monetary increase has been about 13 per cent. We believe that those who can afford to pay should contribute, by way of an increase in the charges, a reasonable proportion of the cost of the drugs bill, bearing in mind that increase. Our proposals for indicative drug budgeting are intended not to reduce the real cost of the drugs budget but to bring some moderating downward pressure on the rate of its growth.
We understand that the real cost of drugs must increase each year, to pay for new techniques in the NHS and for an aging population, so the drugs bill is rising at 13 per cent. in monetary terms; set against that, the increase of just under 9 per cent. in prescription charges is reasonable. I have already said that only 8 per cent. of the total cost of our drugs budget is recovered by way of charges. That total was £2·2 billion in 1988–89, and it is forecast to rise further in the coming year.
The proportion of the average cost of drugs prescribed that prescription charges recover is also relatively modest. For prescriptions for which there is a charge, the charge covers only 36 per cent. of the average cost of the prescription. The hon. Member for Livingston selectively referred to drug costs, but I am taking the total cost of the prescription, which rightly includes all the other costs of preparation and dispensing. The plain fact is that charges amount to only one third of the total cost of prescriptions.
As my hon. Friend the Member for Chislehurst (Mr. Sims) said, the increased resources available to the NHS in the coming year are of the order of £12 million to £13 million. The hon. Member for Wakefield (Mr. Hinchliffe) called that chickenfeed, following the hon. Member for Livingston, who said that he would forgo that increase. I invite the House to consider what £13 million amounts to per district health authority— [Interruption.]—including that of the hon. Member for Crewe and Nantwich (Mrs. Dunwoody). It amounts to some £65,000 in the coming year alone. That is the increase that would be forgone. It is equal to five qualified nurses for every district health authority. I put it to the hon. Member for Wakefield that those sums are not chickenfeed.
Mr. Hinchliffe: I should be grateful if the Minister would put my comments into their full context. I said that

1167
the money was chickenfeed in the context of the overall NHS budget. I am sure that the Minister would agree with that.
Mr. Freeman: The hon. Gentleman is ducking the issue. The total sum of £13 million, just under 9 per cent. in the coming year—I shall come on to deal with waivers of prescription charges which make the system fair—and £65,000 on average per health authority, which is equal to five qualified nurses, are real numbers which make a real difference.
We have a generous system of waivers for prescription charges. The hon. Member for Livingston rightly said that some 75 per cent. of all items dispensed are free. The exempt categories include those on low incomes, pensioners, children under the age of 16, students under the age of 19, and expectant and nursing mothers. It is a generous range of exemptions, amounting to three quarters of all prescriptions.
Mr. Tom Clarke: So why bother with the rest?
Mr. Freeman: We bother about the £180 million collected from the other 25 per cent. because it is a significant sum for the National Health Service. It is ploughed back into patient care and it is contributed by those who can afford to make the payment. By waiving those charges—as an act of political symbolism, I suspect—the hon. Gentleman would lose the NHS real funds of £180 million, which is equivalent to £1 million per district health authority.
Mr. Robin Cook: The Minister lays heavy stress on the revenue to the NHS from the charges. If that is the sole argument that he can adduce in defence of the increase, where does his argument stop? If raising revenue for the NHS is the only concern, why not introduce charges for seeing a GP? Why stop at prescription charges? We must surely grasp the fact that we are debating the fundamental principle that people should pay for the NHS not at the moment when they are sick, but when they are well.
Mr. Freeman: The hon. Gentleman carefully did not subscribe to the view of his party that prescription charges should be abolished. He carefully said from the Front Bench that in his judgment the charge should remain at £3·05 and not be increased further. I will give way to the hon. Gentleman if he wishes to correct me.
Mr. Cook: The Minister is creating a problem for a future Labour Government. Every time the Government increase the prescription charge, they increase the cost of abolishing it, as the Minister well understands. I said that in the first instance there would be no further increase in real terms and that we would seek to reduce the prescription charge as resources permitted. [Laughter.] I do not see what hon. Members find funny about that. We have made an explicit commitment that the first priority will be to abolish the charge for eye tests. The second will be to abolish the charge for dental examinations. The third will be to make what progress we can to reduce the prescription charge. If the Minister is worried about the cost of that, he should join us in the Lobby today and vote against his increase, which will merely increase the cost of abolition.
Mr. Freeman: The hon. Gentleman is changing his tune—[HON. MEMBERS: "No."] He has clearly redefined the commitment from the Labour Front Bench. He is now
1168
saying from the Front Bench that the Labour party would not increase the prescription in real terms. Perhaps he will clarify the position.
Mr. Cook: If the Minister is in any doubt, I am glad to repeat the commitment. We shall not increase the prescription charge and we shall seek real reductions in it. I would also like to achieve cash reductions.
Mr. Freeman: We strongly believe that the proposals are fair, reasonable and prudent. I invite the House to throw out the prayer and support the regulations.
It being half-past Eleven o'clock, MR. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 15 (Prayers against statutory instruments, &c. (negative procedure)).
The House divided: Ayes 197, Noes 278.

Division No. 158]

[11.29 pm

AYES

Abbott, Ms Diane

Doran, Frank

Adams, Allen (Paisley N)

Dunnachie, Jimmy

Allen, Graham

Dunwoody, Hon Mrs Gwyneth

Archer, Rt Hon Peter

Eadie, Alexander

Armstrong, Hilary

Evans, John (St Helens N)

Ashton, Joe

Ewing, Harry (Falkirk E)

Banks, Tony (Newham NW)

Ewing, Mrs Margaret (Moray)

Barnes, Harry (Derbyshire NE)

Fatchett, Derek

Barron, Kevin

Field, Frank (Birkenhead)

Battle, John

Fields, Terry (L'pool B G'n)

Beckett, Margaret

Fisher, Mark

Beggs, Roy

Flannery, Martin

Beith, A. J.

Foot, Rt Hon Michael

Bell, Stuart

Foster, Derek

Benn, Rt Hon Tony

Foulkes, George

Bennett, A. F. (D'nt'n & R'dish)

Fraser, John

Bermingham, Gerald

Fyfe, Maria

Bidwell, Sydney

Garrett, John (Norwich South)

Blair, Tony

Gilbert, Rt Hon Dr John

Blunkett, David

Godman, Dr Norman A.

Boateng, Paul

Golding, Mrs Llin

Boyes, Roland

Gordon, Mildred

Bradley, Keith

Gould, Bryan

Bray, Dr Jeremy

Griffiths, Nigel (Edinburgh 5)

Brown, Gordon (D'mline E)

Griffiths, Win (Bridgend)

Brown, Nicholas (Newcastle E)

Grocott, Bruce

Brown, Ron (Edinburgh Leith)

Hardy, Peter

Bruce, Malcolm (Gordon)

Harman, Ms Harriet

Buchan, Norman

Healey, Rt Hon Denis

Buckley, George J.

Henderson, Doug

Callaghan, Jim

Hinchliffe, David

Campbell, Menzies (Fife NE)

Hoey, Ms Kate (Vauxhall)

Campbell, Ron (Blyth Valley)

Hogg, N. (C'nauld & Kilsyth)

Campbell-Savours, D. N.

Home Robertson, John

Canavan, Dennis

Hood, Jimmy

Clark, Dr David (S Shields)

Howarth, George (Knowsley N)

Clarke, Tom (Monklands W)

Howells, Geraint

Clay, Bob

Howells, Dr. Kim (Pontypridd)

Clelland, David

Hoyle, Doug

Clwyd, Mrs Ann

Hughes, John (Coventry NE)

Cohen, Harry

Hughes, Robert (Aberdeen N)

Cook, Frank (Stockton N)

Hughes, Roy (Newport E)

Cook, Robin (Livingston)

Ingram, Adam

Corbett, Robin

Johnston, Sir Russell

Corbyn, Jeremy

Jones, Barry (Alyn & Deeside)

Cousins, Jim

Jones, Martyn (Clwyd S W)

Crowther, Stan

Kaufman, Rt Hon Gerald

Cryer, Bob

Kennedy, Charles

Cummings, John

Kilfedder, James

Cunliffe, Lawrence

Kirkwood, Archy

Dalyell, Tam

Lambie, David

Darling, Alistair

Lamond, James

Davies, Rt Hon Denzil (Llanelli)

Leighton, Ron

Davies, Ron (Caerphilly)

Litherland, Robert

Davis, Terry (B'ham Hodge H'l)

Livingstone, Ken

Dixon, Don

Livsey, Richard

Dobson, Frank

Lofthouse, Geoffrey

1169

Loyden, Eddie

Rooker, Jeff

McAllion, John

Ross, Ernie (Dundee W)

McAvoy, Thomas

Ross,William (Londonderry E)

McCartney, Ian

Rowlands, Ted

McKay, Allen (Barnsley West)

Ruddock, Joan

McKelvey, William

Sedgemore, Brian

McLeish, Henry

Sheldon, Rt Hon Robert

McNamara, Kevin

Short, Clare

Madden, Max

Skinner, Dennis

Marek, Dr John

Smith, Andrew (Oxford E)

Marshall, Jim (Leicester S)

Smith, C. (Isl'ton & F'bury)

Martin, Michael J. (Springburn)

Smith, Rt Hon J. (Monk'ds E)

Martlew, Eric

Smith, J. P. (Vale of Glam)

Maxton, John

Snape, Peter

Meacher, Michael

Soley, Clive

Meale, Alan

Spearing, Nigel

Michael, Alun

Steel, Rt Hon Sir David

Michie, Bill (Sheffield Heeley)

Steinberg, Gerry

Michie, Mrs Ray (Arg'l & Bute)

Strang, Gavin

Moonie, Dr Lewis

Straw, Jack

Morgan, Rhodri

Taylor, Mrs Ann (Dewsbury)

Morley, Elliot

Taylor, Matthew (Truro)

Morris, Rt Hon A. (W'shawe)

Thompson, Jack (Wansbeck)

Morris, Rt Hon J. (Aberavon)

Turner, Dennis

Mowlam, Marjorie

Vaz, Keith

Mullin, Chris

Walker, A. Cecil (Belfasr N)

Murphy, Paul

Walley, Joan

Nellist, Dave

Wareing, Robert N.

O'Brien, William

Watson, Mike (Glasgow, C)

O'Neill, Martin

Welsh, Michael (Doncaster N)

Orme, Rt Hon Stanley

Wigley, Dafydd

Patchett, Terry

Williams, Rt Hon Alan

Pendry, Tom

Williams, Alan W.(Carm'then)

Pike, Peter L.

Wilson, Brian

Powell, Ray (Ogmore)

Winnick, David

Prescott, John

Wise, Mrs Audrey

Primarolo, Dawn

Worthington, Tony

Quin, Ms Joyce

Wray, Jimmy

Radice, Giles

Young, David (Bolton SE)

Randall, Stuart

Redmond, Martin

Tellers for the Ayes:

Rees, Rt Hon Merlyn

Mr. Frank Hayes and

Reid, Dr John

Mr. Ken Eastham.

Richardson, Jo

NOES

Adley, Robert

Buck, Sir Antony

Aitken, Jonathan

Budgen, Nicholas

Alexander, Richard

Burns, Simon

Alison, Rt Hon Michael

Burt, Alistair

Allason, Rupert

Butler, Chris

Amess, David

Butterfill, John

Amos, Alan

Carlisle, John, (Luton N)

Arbuthnot, James

Carrington, Matthew

Arnold, Jacques (Gravesham)

Carttiss, Michael

Arnold, Tom (Hazel Grove)

Chapman, Sydney

Ashby, David

Chope, Christopher

Baker, Nicholas (Dorset N)

Clark, Hon Alan (Plym'th S'n)

Baldry, Tony

Clark, Dr Michael (Rochford)

Banks, Robert (Harrogate)

Clark, Sir W. (Croydon S)

Batiste, Spencer

Clarke, Rt Hon K. (Rushcliffe)

Beaumont-Dark, Anthony

Conway, Derek

Bellingham, Henry

Coombs, Anthony (Wyre F'rest)

Bendall, Vivian

Coombs, Simon (SWindon)

Bevan, David Gilroy

Cope, Rt Hon John

Biffen, Rt Hon John

Cran, James

Blaker, Rt Hon Sir Peter

Currie, Mrs Edwina

Body, Sir Richard

Curry, David

Bonsor, Sir Nicholas

Davies, Q. (Stamf'd & Spald'g)

Boscawen, Hon Robert

Davis, David (Boothferry)

Boswell, Tim

Day, Stephen

Bowden, A (Brighton K'pto'n)

Dorrell, Stephen

Bowden, Gerald (Dulwich)

Douglas-Hamilton, Lord James

Bowls, John

Dover, Den

Braine, Rt Hon Sir Bernard

Durant, Tony

Brandon-Bravo, Martin

Eggar, Tim

Brazier, Julian

Emery, Sir Peter

Bright, Graham

Evans, David (Welwyn Hatf'd)

Brown, Michael (Brigg & Cl't's)

Evennett, David

Bruce, Ian (Dorset South)

Fenner, Dame Peggy

1170

Field, Barry (Isle of Wight)

Leigh, edward (Gainsbor'gh)

Fishburn, John Dudley

Lennox-Boyd, Hon Mark

Fookes, Dame Janet

Lester, Jim (Broxtowe)

Forman, Nigel

Lightbown, David

Forsyth, Michael (Stirling)

Lilley, Peter

Forth, Eric

Lloyd, Sir Ian (Havant)

Fox, Sir Marcus

Lloyd, Peter (Fareham)

Freeman, Roger

Luce, Rt Hon Richard

French, Douglas

Macfarlane, Sir Neil

Fry, Peter

MacGregor, Rt Hon John

Gale, Roger

Mackay, Andrew (E Berkshire)

Gardiner, George

Maclean, David

Garel-Jones, Tristan

McNair-Wilson, Sir Michael

Gill, Christopher

McNair-Wilson, Sir Patrick

Gilmour, Rt Hon Sir Ian

Madel, David

Glyn, Dr Sir Alan

Malins, Humfrey

Goodlad, Alastair

Mans, Keith

Goodson-Wickes, Dr Charles

Marland, Paul

Gorman, Mrs Teresa

Marlow, Tony

Gow, Ian

Marshall, John (Hendon S)

Grant, Sir Anthony (CambsSW)

Martin, David (Portsmouth S)

Greenway, Harry (Ealing N)

Maude, Hon Francis

Greenway, John (Ryedale)

Maxwell-Hyslop, Robin

Gregory, Conal

Mayhew, Rt Hon Sir, Patrick

Griffiths, Sir Eldon (Bury St E')

Mellor, David

Griffiths, Peter (Portsmouth N)

Meyer, Sir Anthony

Grist, Ian

Miller, Sir Hal

Ground, Patrick

Mills, Iain

Grylls, Michael

Mitchell, Andrew (Gedling)

Gummer, Rt Hon John Selwyn

Mitchell, Sir David

Hague, William

Montgomery, Sir Fergus

Hamilton, Hon Archie (Epsom)

Moore, Rt Hon John

Hamilton, Neil (Tatton)

Morris, M (N'hampton S)

Hampson, Dr Keith

Morrison, Rt Hon P (Chester)

Hanley, Jeremy

Moss, Malcolm

Hannam, John

Moynihan, Hon Colin

Hargreaves, A. (B'ham H'll Gr')

Neale, Gerrard

Hargreaves, Ken (Hyndburn)

Neubert, Michael

Harris, David

Nicholls, Patrick

Haselhurst, Alan

Nicholson, David (Taunton)

Hawkins, Christopher

Norris, Steve

Hayes, Jerry

Onslow, Rt Hon Cranley

Heathcoat-Amory, David

Oppenheim, Phillip

Hicks, Mrs Maureen (Wolv' NE)

Parkinson, Rt Hon Cecil

Higgins, Rt Hon Terence L.

Patnick, Irvine

Hill, James

Patten, Rt Hon Chris (Bath)

Hind, Kenneth

Patten, Rt Hon John

Hogg, Hon Douglas (Gr'th'm)

Peacock, Mrs Elizabeth

Holt, Richard

Porter, Barry (Wirral S)

Hordern, Sir Peter

Porter, David (Waveney)

Howarth, Alan (Strat'd-on-A)

Portillo, Michael

Howarth, G. (Cannock & B'wd)

Price, Sir, David

Howe, Rt Hon Sir Geoffrey

Raffan, Keith

Howell, Rt Hon David (G'dford)

Raison, Rt Hon Timothy

Hughes, Robert G. (Harrow W)

Redwood, John

Hunt, David (Wirral W)

Renton, Rt Hon Tim

Hunt, Sir John (Ravensbourne)

Rhodes James, Robert

Hunter, Andrew

Ridley, Rt Hon Nicholas

Irvine, Michael

Rifkind, Rt Hon Malcolm

Irving, Sir Charles

Roberts, Wyn (Conwy).

Jack, Michael

Roe, Mrs Marion

Jackson, Robert

Rost, Peter

Janman, Tim

Rowe, Andrew

Jessel, Toby

Rumbold, Mrs Angela

Johnson Smith, Sir Geoffrey

Ryder, Richard

Jones, Gwilym (Cardiff N)

Sackville, Hon Tom

Jones, Robert B (Harts W)

Sainsbury, Hon Tim

Jopling, Rt Hon Michael

Shaw, David (Dover)

Key, Robert

Shaw, Sir Giles (Pudsey)

King, Roger (B'ham N'thfield)

Shaw, Sir Michael (Scarb')

King, Rt Hon Tom (Bridgwater)

Shephard, Mrs G. (Norfolk SW)

Kirkhope, Timothy

Shersby, Michael

Knapman, Roger

Sims, Roger

Knight, Greg (Derby North)

Smith, Tim (Beaconsfield)

Knight, Dame Jill (Edgbaston)

Soames, Hon Nicholas

Knox, David

Speller, Tony

Lang, Ian

Spicer, Sir Jim (Dorset W)

Latham, Michael

Spicer, Michael (S Worcs)

Lawrence, Ivan

Squire, Robin

Lee, John (Pendle)

Stanbrook, Ivor

1171

Stanley, Rt Hon Sir John

Viggers, Peter

Steen, Anthony

Wakeham, Rt Hon John

Stern, Michael

Waldegrave, Rt Hon William

Stevens, Lewis

Walker, Bill (T'Side North)

Stewart, Allan (Eastwood)

Waller, Gary

Stewart, Andy (Sherwood)

ward, John

Stewart, Rt Hon Ian (Herts N)

Wardle, Charles (Bexhill)

Stokes, Sir John

Warren, Kenneth

Stradling Thomas, Sir John

Watts, John

Sumberg, David

Wells, bowen

Summerson, Hugo

Wheeler, Sir John

Tapsell, Sir Peter

Whitney, Ray

Taylor, Ian (Esher)

Widdecombe, Ann

Taylor, Teddy (S'end E)

Wiggin, Jerry

Tebbit, Rt Hon Norman

Wilshire, David

Temple-Morris, Peter

Winterton, Mrs Ann

Thompson, D. (Calder Valley)

Winterton, Nicholas

Thompson, Patrick (Norwich N)

Wolfson, Mark

Thornton, Malcolm

Wood, Timothy

Thurnham, Peter

Woodcock, Dr. Mike

Townend, John (Bridlington)

Yeo, Tim

Townsend, Cyril D. (B'heath)

Young, Sir George (Acton)

Tredinnick, David

Trippier, David

Tellers for the Noes:

Trotter, Neville

Mr. Kenneth Carlisle and

Twinn, Dr Ian

Mr. John M. Taylor

Question accordingly negatived.

MEMBERS' INTERESTS
Ordered,
That Mr. John Bowis and Mr. Ernie Ross be discharged from the Select Committee on Members' Interests and Mr. David Evans and Mr. George Howarth be added to the Committee.—[Mr. Durant.]

PETITIONS

  Orange Grove Farm
  11.41 pm
  Mr. Harry Barnes: This petition is from one of my constituents who is due to lose her and her husband's home by the action of bailiffs. She has fought many court cases and lost them, often on her own, in a desperate attempt to keep her husband from news that could seriously harm him. Time has caught up with her and she has only this House to which to appeal.
  The petition states:
  To the honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled. The Humble Petition of Mrs. Evelyn May Mason, Orange Grove Farm, 1, Handley Lane, Clay Cross, Chesterfield, Derbyshire, showeth she and her husband are to have bailiffs sent to their home to take possession of their property on 12th April 1990, that this will have a serious adverse effect upon the health and well-being of her Husband as shown by medical evidence, That the loss of their home is excessive and unreasonable restraint for the minor amounts that were initially allegedly outstanding to Rice and Co., Solicitors, Saltergate, Chesterfield.
  Wherefore your petitioner prays that your Honourable House will take measures to prevent bailiffs from entering and taking over the home of Herself and her Husband.
  And your petitioner, as in duty bound, will ever pray etc.
  It is signed by Mrs. Mason.
  To lie upon the Table.

Human Embryos
11.43 pm
Mr. A. J. Beith: I have the honour to present a petition from the parishioners of St. Aidan's church, Seahouses, Northumberland. The petitioners affirm that the newly fertilised human embryo is a living human, and pray that the House of Commons will take immediate steps to enact legislation forbidding any procedure that involves the purchase, sale, discarding or freezing of human embryos, their use as sources of transplant tissue or as subjects for research or experiment—unless that is done solely for the benefit of the embryo concerned—and all forms of trans-species fertilisation. The petition has also been signed in the same terms by members of the Alnwick branch of the Catholic Women's
League.
I support the petitioners in their desire that the House should enact legislation to prevent the use of embryos for research, and I look forward to the opportunity so to vote, now that the House is to have a day dedicated to the subject in the near future.
To lie upon the Table.
11.44 pm
Mr. Keith Vaz: I wish to present a petition which was presented to me after a meeting at my local parish church, St. Joseph's, on Sunday, which was attended by 170 local parishioners, including priests. The petition is presented on behalf of Mrs. Jacoba Cornelius Slee, 3 Davett Close, Leicester, Monsignor O'Down, the Vicar General of Leicestershire and 785 other signatories.
It reads as follows:
To the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled: The Humble Petition of members of St. Joseph's, the Sacred Heart and Our Lady's churches, Leicester, and the members of Leicester, East constituency, sheweth that we affirm that the newly fertilised human embryo is a real, living human being. THEREFORE, WE ELCOME the statement in the report of the committee of inquiry into human fertilisation and embryology, the Warnock report, that "the status of the embryo is a matter of fundamental principle which should be enshrined in legislation", and its recommendation that the embryo of the human species should be afforded protection in law; AND THEREFORE WE OPPOSE all such practices as are recommended in the report which discriminate against the embryo or violate his or her human dignity and right to life.
WHEREFORE YOUR PETITIONERS PRAY that the House of Commons will take immediate steps to enact legislation which (a) forbids any procedure that involves purchase or sale of human embryos, the discarding or freezing of human embryos, their use as sources of transplant tissue or as subjects for research or experiment (unless this is done coley for the benefit of the embryo concerned); and (b) forbids all forms of trans-species fertilisation.
And your petitioners, as in duty bound, will for ever pray, etc.
To lie upon the Table.

Local Government Finance
11.46 pm
Mr. Elliot Morley: This petition was organised by a Mrs. Robinson of 36 Firs avenue, Ashfield in Scunthorpe, and it deals with the issue of the poll tax and how it affects people who are at home with no income, in particular, married women. Mrs.

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Robinson attracted 437 signatures from many people, mainly women, who feel aggrieved that the poll tax is an unfair system of taxation. Even though it is meant to be based on individuals, it is people in their position with no income who are expected to pay 100 per cent. of the charge. I very much sympathise with Mrs. Robinson and the many who organised the petition.
The petition reads:
To the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled.
The humble petition of the people of Scunthorpe sheweth
That the introduction of the poll tax (community charge) is objectionable to those people, many married women, who are at home with no income of their own, yet are expected to pay 100 per cent. of the poll tax if their partners are working, even though this was supposed to be a tax on individuals.
Wherefore your Petitioners pray that your honourable House will replace this unfair and unworkable tax with one which recognises ability to pay and is based on a simpler and fairer system.
And your Petitioners, as in duty bound, will every pray.
To lie upon the Table.

Out-patient Services (Cheshire)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Tony Durant.]
11.47 pm
Mr. Doug Hoyle: I should like to thank the Parliamentary Under-Secretary of State who has stayed to reply to this Adjournment debate, because he has had a wearying evening up to now and a long day; but I assure him that it is a matter of great concern to the people of Warrington and Cheshire because it concerns the out-patient services provided in Warrington and Cheshire.
During the ambulance dispute, the managers ordered cuts in non-emergency out-patient services. As a result, the number of vehicles available for out-patient services in Warrington was reduced from 10 to three. I must refute right away the statement made on behalf of health service managers by Hugh Lamont of the Merseyside regional health authority, who alleged that these cuts were made because ambulance crews refused to provide out-patient services. I read from a press release of the Warrington health authority, which is signed by Mike Shannon, the unit general manager of the district general hospital, about the industrial action in the ambulance service:
"In order to maintain the emergency ambulance service it is now necessary to reduce the non-emergency workload ambulance staff. As from Tuesday 10th October 1989 there will be no outpatient transport available to walking patients. The inconvenience that this will cause is very much regretted, but the reduction in this service is necessary to sustain the emergency service … The geriatric day hospital of the general hospital and the elderly severely mentally day patient unit of Winwick hospital are not affected."
That action was taken by the management. Indeed, the press release recognised the inconvenience that the reduction would cause.
It is therefore surprising that, far from beginning to increase provision, the management are trying to maintain the position that applied in Cheshire generally and in Warrington in particular. They have reduced the number of vehicles for out-patient services from 10 to three, despite the discomfort that that would cause, and which was recognised by Mr. Shannon in the press release.
Evidence of that is shown in a memo from Mr. M. J. Lloyd, divisional commander control, Cheshire ambulance service. He said:
"At a meeting with the D.H.A. representatives of all Cheshire districts today, the following level of P.T.S. provision was insisted on. It will therefore be actioned from Monday 12 March 1990—no increase in the level of provision that has been operative during the national dispute."
I have already referred to the severe cuts in Warrington and in Cheshire generally. Mr. Lloyd also said:
"In operation requests for transport must always be met with a negative response, it is then up to the person requesting to medically justify the request. Any problems regarding this should result in the person requesting being directed to the relevant unit general manager."
I cite that document as evidence that the Cheshire ambulance service and, indeed, district health authorities throughout Cheshire, are trying to keep provision at the skeleton level that applied during the national dispute. That has already caused many protests from organisations in Warrington and Cheshire generally.
Those cuts were made without consultation with anyone, and certainly without observing the statutory duty to consult the community health councils. I wish to quote a letter sent on 23 March to Mr. Rae, the district general

1175
manager of Warrington health authority, from Mrs. Roylance of Warrington community health council. She said:
"The committee is extremely concerned that the decisions referred to … have been implemented without consultation."
She goes on to say:
"The CHC questions the basis on which the instructions were issued: (i) the reduction in the level of service represents `a significant variation in the provision of service' on which the CHC has a statutory right to be consulted."
That consultation did not take place. Indeed, in a final paragraph, Mrs. Roylance says:
"The Chairman and members of the Council are deeply concerned that the CHC's statutory right to be consulted has been ignored and they request the resumption, without delay, of the level of ambulance service available in Warrington prior to the national dispute, pending the outcome of formal consultation."
It is quite evident that this has upset all the members of the community health council. They make the point that they were not consulted at all in relation to this.
What has happened in Warrington and in Cheshire in relation to out-patient provision—or the lack of it—is, I suggest, a breach of the Government guideline in health circular HC(78)45, which says:
"Ambulance services are required to provide or arrange the provision of suitable transport, free of charge, normally to the nearest hospital or treatment centre with hospital based facilities, where the necessary treatment can be obtained, to NHS convalescent homes, dentists' surgeries or Artificial Limb Appliance and Assessment Centres for any patient (emergency or non-emergency) who is considered by a doctor, dentist or midwife to be medically unfit to travel by any other means."
The words "by a doctor, dentist or midwife" are very important in the context of the rest of what I have to say in relation to this matter.
I now have to quote from a press release, again issued by Mr. Mike Shannon, who, I remind the Minister, is not a clinical practitioner but the unit general manager of Warrington health authority. He says—this was issued on 28 March—
"As we know, the recent industrial dispute within the ambulance service has now ended, and great efforts are now being made to reinstate an appropriate service as quickly as possible.
This is being done, but strictly in accordance with the long-established rules within the Health Service that ambulances are not white taxis"—
whatever Mr. Shannon means by white taxis; I presume he means that a taxi service was being provided, rather than an ambulance service—
"but can be authorised only on medical grounds."
If Mr. Shannon, in referring to a white taxi service, is claiming that the service has been abused and ambulances have been ordered on other than medical grounds, he gives no examples.
The unit general manager has no right to question in this way the clinical judgment of doctors, dentists and midwives. Now, of course, ambulances will be allowed not on medical grounds but on the whim of the unit general manager. In his reply to Mrs. Roylance he claims that these services are strictly in accordance with NHS rules, but they are not. He goes on to say:
"Ambulance services are authorised by clinical staff."
So far, so good, but then he says:
"If there is a dispute between the requester and the ambulance staff, I am called upon to arbitrate."
The unit general manager may have many worthy and endearing qualities, but why should he be called upon to
1176
arbitrate when a clinical judgment has been made? He is saying, in effect, "I shall have the final say as to whether a service shall be provided."
The result of this arbitrary action is that those who are least able to speak up for themselves are the most affected, in Warrington and the rest of Cheshire. I am of course referring to the sick, elderly, infirm and disabled. It is having a devastating effect on those people.
I do not have time to cite the many examples that I have. So I will give two, as reported in the Warrington Guardian of 30 March. In the first case, that newspaper wrote:
"Hospital staff said … that out-patient services have … been minimised to stretcher cases only. One out-patient, who has just had his right leg amputated, was told he is not eligible for transport and must continue making his own way to hospital. The 71-year-old ex-serviceman, secretary of Culcheth Royal British Legion, told the Guardian: 'I have just been fitted with an artificial leg and have to visit a physiotherapist every week to learn how to use it. I also make regular visits to the Artificial Limb and Appliance Centre in Liverpool and am continually having to depend on friends. This is a very desperate situation.'".
Clearly, such a man is covered by the guidelines and should have been provided with transport.
In the second case, the paper wrote:
"Another woman aged 72 was refused an ambulance to have an artificial leg fitted in Liverpool. She had no friends or relatives to help, and was forced to cancel the appointment and manage without."
Nobody—least of all the Minister, knowing him as I do—would try to justify that state of affairs or what is happening to the out-patient vehicle service in Cheshire and particularly in Warrington. How ill does a person have to be to qualify for an out-patient vehicle in the area? Why are those concerned not abiding by the guidelines, particularly when, it seems, the decision no longer rests with the members of the clinical profession but with accountants and faceless bureaucrats, such as the unit general manager? They should be obliged to live up to the guidelines laid down by the Department.
We must not forget the effect that all this will have on jobs. The non-emergency ambulance staff, because of the reduced number of vehicles in Cheshire, are not Fully deployed, even if they are fully paid. If those members of staff are not being deployed, redundancies are bound to result. Indeed, as many as 60 drivers in Cheshire could be made redundant, and nine of them will be in Warrington.
During the ambulance dispute, half the non-qualified ambulance staff were put on temporary contracts. Their services will be dispensed with as soon as the management finds it convenient to take that step. Penny-pinching of this kind must not take place at the expense of the sick and those in need. The cuts should cease immediately, and I hope the Minister will announce that from tonight, full out-patient transport services will be restored.
12.4 am
The Parliamentary Under-Secretary of State for Health (Mr. Roger Freeman): I am grateful to the hon. Member for Warrington, North (Mr. Hoyle) for the kind remarks which he made at the outset of this brief debate. The hon. Gentleman thanked me for staying. I am always pleased to reply to debates that he initiates, but the hon. Gentleman is the only person present who has any choice in the matter. You, Mr. Deputy Speaker, and the only other person present in the Chamber apart from myself—my

1177
hon. Friend the Member for Reading, West (Mr. Durant) —have no choice in the matter. Nevertheless, I am grateful for the hon. Gentleman's remarks.
The hon. Member for Warrington, North concentrated on out-patient ambulance services and upon the consequences for the patient of the changes that I shall describe in a moment, rather than the consequences upon the unions. He was fair to do that, and I shall therefore concentrate on the consequences for patients.
Since 1982, the Chester health authority has managed a single ambulance service for all five district health authorities in Cheshire—Chester, Crewe, Halton, Macclesfield and Warrington. It has run that service efficiently, and has introduced diesel vehicles, paramedic training and cardiac care training. A lot more needs to be done, but the authority is to be congratulated on the start that it has made.
As with all other ambulance services throughout the country, there are two fairly distinct aspects to the service. The first and most important is the need to respond promptly to accidents and emergencies—or 999 calls—to meet doctors' requests for urgent admissions and to move patients who need to be transferred from one hospital to another. These can, quite literally, be a matter of life and death, and it is entirely right that the utmost priority should be given to that side of the service. Recent events have underlined the importance that the public attach to the accident and emergency service. The other aspect is the routine transportation of outpatients to and from hospital or treatment centres. That is clearly the service which the hon. Member is most concerned about.
When we talk of routine cases, we have to distinguish between patients who have a medical dependency, such as oxygen therapy or who may need to be lifted in and out of their homes—those are clinically necessary services which are provided by the Cheshire ambulance service—and those patients who simply need a transport service to and from hospital. I say "simply", but of course that transport service is important, particularly for those people who need some form of public transport because they do not possess a car, or because it is to far to walk to and from the hospital.
In the examples which I have cited, where there is a clear clinical necessity, the service is clearly needed and will continue to be provided. However, the social need for transport is not a function of the ambulance service.
The hon. Gentleman has pressed me to define what is meant by clinically necessary services in his health authority and, most importantly, who defines what those services should be.
Before the ambulance dispute, I am told, the Cheshire service had 37 ambulances available as emergency ambulances but very often only between 12 and 14 were available, as quite a number—clearly the majority—were being used for non-accident and non-emergency work. Clearly that was unsatisfactory, because the accident and emergency service can, and I understand in some cases did, suffer.
Now the fleet of ambulances in Cheshire has been modernised. Some 20 ambulances are dedicated to accident and emergency work and there are some 22 other vehicles for non-accident and non-emergency work. I am told that those mainly comprise 10 to 12-seater vehicles.
1178
The numbers will grow marginally in the future to some 22 ambulances dedicated to emergency work and some 24 for non-emergency work.
A new system has been introduced for financing the ambulance service in Cheshire from 1 April this year. The proposals were under consideration before the dispute began but are only now being introduced.
The amount retained at the Chester headquarters for the accident and emergency service proper is some £4 million for 1990–91, and approximately £1·2 million has been allocated to the five districts. They will use that sum to purchase non-accident and emergency services either centrally from the Cheshire ambulance service—I have indicated the vehicles that could be available—or locally. The key requirement still is that the services provided must be clinically necessary.
Locally, there will be patient transport managers in the districts, to assess the needs for non-accident and emergency work—always concentrating on the clinical need for such services.
The hon. Gentleman asked the perfectly fair question: to what extent is authority delegated to those managers for making clinical judgments? I do not expect them to make clinical judgments. That is not their function. The responsibility for making the decision as to whether or not a patient is, for clinical or medical reasons, in need of transport rests with the medical staff, not the managers—who are there to manage the service and to match resources against clinical need.
It may help if I explain the reasoning behind the proposals. Until recently, during the day there have been about 37 ambulances theoretically available as a maximum for accident and emergency duties, but only one third of those could really be called on if needed. The other two thirds have been engaged on routine duties such as planned admissions to hospital or carrying out-patients to and from treatment centres. Not only has that reduced the number of vehicles available for emergencies, but it has been wasteful of resources to deploy fully trained and equipped crews on duties that could easily be carried out by personnel with less training, in simpler vehicles.
While Cheshire has managed overall to meet the minimum times laid down nationally for responding to an accident or emergency call, the position at individual stations has often been dangerously near, or actually below, the mark. This has put a considerable strain on the service. At night, at weekends, and during the "quiet hours", the level of emergency cover has stood at only 17 ambulances. Taking into account the geographical spread of Cheshire and the network of motorways that intersperses the county, that is very sparse cover.
Demand has sometimes meant that even ambulances reserved for accident and emergency duties have been called upon to deal with planned journeys involving patients discharged from, or being admitted to, hospital. It is for these reasons that the working party studying the needs of the Cheshire ambulance service has recommended a two-tier service. That does not mean a first and second-class service. The proposal is for a distinct accident and emergency service with the very latest equipment and with staff trained to the highest level, able to perform a range of life-saving techniques—and, it must be said, with more dedicated vehicles.
The non-emergency ambulance service will continue to transport patients with a medical need as determined by a clinician. That service, as organised by Chester for the

1179
county of Cheshire, will be available to the districts. They will have freedom either to purchase services from Chester or to make their own local decisions.
There may be patients who can make their own way to and from hospital but who find difficulty meeting the cost of travel. They can apply for help with these costs and should ask the hospital about this. The Department of health leaflet H11, "NHS Hospital Travel Costs", explains who can claim help with fares incurred travelling to and from hospital and how the scheme works. There is also a Cheshire dial-a-ride service for registered disabled.
That is our mechanism for providing help in a social context for those who cannot afford the full costs of travelling to or from hospital.
Mr. Hoyle: The dial-a-ride service does not provide that, nor was it set up to do so. Its purpose is to provide vehicles, not for travel to hospital, but for disabled and other people who need to go shopping and so on. There cannot be help from that service, because it is already stretched to the limit.
Mr. Freeman: I am grateful to the hon. Gentleman; I stand corrected. The record will show that it is a service available within the community and not to and from hospital. I am not familiar with the service, but doubtless next time I am in Cheshire I shall make detailed inquiries about it.
I should make it clear that geriatric day care attendances, with which there were, I understand, some problems during the recent dispute, will be given priority, as will other cases which in the light of individual circumstances merit special attention. I am talking now about the non-accident and emergency services. The intention is to use the available resources to best effect and to make sure that those who really need the service obtain it—that is, those with a clinical need—as promptly as possible.
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The working party has also recommended that ambulance stations provide more flexible and appropriate cover throughout the country. It has recommended that there should be a redistribution of resources to provide 22 emergency ambulances during the day and 20 at night. This will improve cover in the Crewe, Ellsmere Port, Malpas and Warrington areas. These recommendations are aimed at strengthening the accident and emergency service and providing overall a service more tailored to the needs of the people who use it.
Mr. Hoyle: There are two points I should like the Minister to explain. Why was there no consultation with anyone, and particularly with the community health council? I am willing to give the Minister a copy of the document. How can he say all these things when Mr. Lloyd, divisional commander, control, says plainly that there has been no increase in the level of provision operative during the national dispute?
Mr. Freeman: I do not know to which document the hon Gentleman is referring. I look forward to receiving a copy from him. I shall certainly look into the point about consultation procedure. I shall also send copies of the Official Report to region and district for additional comment.
As I understand it, this is a reorganised service which concentrates the resources on accident and emergency and which does not diminish the proper service which should be provided for those who have a clinical need for transportation. It means, perhaps, that those with no clinical need who were using the service will no longer be able to do so. I believe that it concentrates resources where they are most needed in the hon. Gentleman's constituency. I think that is best, not only for his constituents but for the Health Service as a whole.
Question put and agreed to.
Adjourned accordingly at seventeen minutes past Twelve o'clock midnight.