Commons Sitting of 19 February 1997

Preamble
The House met at half-past Nine o'clock
PRAYERS
[MADAM SPEAKER in the Chair]

Further Education
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Coe.]
9.34 am
Mr. Greg Pope: I am grateful for the opportunity to raise this important issue. Most hon. Members probably attended a further education or sixth form college, or a sixth form in a school. As most of us have benefited from further education, it is only right, fair and proper that we should take an interest in the sector when it faces such difficulties.
Further education colleges play a vital role as centres of opportunity and learning. They add social and economic value to their communities. The 357 colleges in England and Wales educate more than 3 million students. I make no apologies for the remarks that I shall make on the situation in east Lancashire. I have received much correspondence, both from the college in my constituency and from those in neighbouring constituencies.
The crisis in further education adversely affects its students, lecturers and institutions. From the point of view of staff, incorporation has been nothing less than a disaster. It has led to worsening conditions of service and many redundancies. My local college, Accrington and Rossendale, is due to have its inspection report published early next month. Early signs are that it will get a good report, with staff awarded the highest praise and marks possible. Their reward will be further undermining, underfunding and redundancies. Across the sector, more than 10,000 jobs have been lost since incorporation in 1993.
There is a damaging dispute at my local college. It centres on the case of Mr. Pat Walsh, the senior union official in the National Association of Teachers in Further and Higher Education. He claims that he was sacked by the college because of his trade union activities. The college governing body claims that he was genuinely made redundant. NATFHE is balloting tomorrow for strike action. If it goes ahead, it will be at a damaging time for students in the run-up to public examinations. All that one can say with certainty about this fiasco is that, whatever the failings of the previous system—and there were failings—such disasters did not happen before the incorporation of colleges.
Some people in my constituency want to blame the governing body for the appalling state of affairs. I reject that. I want to lay the blame fairly and squarely where it belongs: at the door of the Minister, the Government and the Further Education Funding Council, which has created a severely flawed funding mechanism for colleges.
Mr. Peter L. Pike: Is it not true that in Lancashire—and, I am sure, in the rest of the country—
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there was better co-operation between colleges before incorporation? We did not get duplication and competition, and therefore had better use of resources. That has been damaged since incorporation.
Mr. Pope: My hon. Friend makes an important point. One problem is the tension between providers. Training and enterprise councils pull in one direction and colleges in another. Where is the co-ordination between education and training? There is very little co-ordination between the two. We now have the spectacle, as my hon. Friend said, of neighbouring colleges with mushrooming marketing budgets competing in the marketplace and offering very similar courses. They are fighting each other for the same students. It is ridiculous that, in our part of the world, Blackburn, Accrington and Rossendale, Burnley, and Nelson and Colne colleges offer similar courses, competing for the same students.
There is a democratic deficit in the sector. The Further Education Funding Council is yet another Government-appointed quango—a tame mouthpiece for the Government. There is a strong case for democratising the Further Education Funding Council's structure. Often, colleges have little or no accountability to the communities that they serve. I am not suggesting that the colleges should be returned to local education authority control—I do not think that anyone is suggesting that. However, there is a strong case for reforming college governing bodies, to increase openness and improve accountability to local communities.
Mr. Nigel Spearing: Does my hon. Friend acknowledge that there are colleges—Newham college of further education is one—where attempts are being made to meet the needs of the community by establishing close connections? Our concern is that there seems to disagreement among the three statutory bodies, perhaps even among the Treasury and the Department for Education and Employment, over the changes in the demand-led element, which have caused enormous problems in colleges that have been integrated into the community and are trying to meet community needs.
Mr. Pope: I am grateful to my hon. Friend, and I shall refer later to the fiasco of the demand-led element; catching up with the Government's flip-flops on that policy is quite an art form.
Ms Joan Walley: My hon. Friend referred to a fiasco. We are also concerned about the problem in Stoke-on-Trent college, where there has been a fiasco. Does he agree that we face a problem in terms of lack of accountability over the way in which the Further Education Funding Council was set up? Does he also agree that the National Audit Office report does not address accountability? When my hon. Friend further considers the problems faced by his college, despite the best efforts of its staff, will he also consider how we may address the problem of deficits across the country, including Stoke-on-Trent?
Mr. Pope: My hon. Friend makes an important point. The problems at Accrington and Rossendale college are replicated, almost exactly, at Stoke, Burnley and Nelson and Colne colleges and other colleges throughout the country. Early-day motion 452, which has attracted

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the signatures of more than 100 hon. Members representing every part of the country, shows that the problem is not specific to my college or my part of east Lancashire, but exists in every part of the country.
Mr. Peter Thurnham: I can confirm that the position in Bolton is extremely serious. The principal, Mr. Hogan, has written to me to say that he feels that the funding cuts are disastrous. The managing director of the focus training group, Mr. Heathcote, who has built up what I believe to be Britain's leading gymnastic training instruction course, says that to have such a sudden cut imposed with so little warning will have a desperate effect on the future of his business.
Mr. Pope: The hon. Gentleman also makes an important point, to which I shall refer later. In Bolton and in colleges throughout the country, as a result of Government action over the demand-led element, student numbers will decrease, courses will be cut, and people on continuing courses will be left high and dry without proper support, which is a disgrace.
When the colleges agreed with the Government that they would expand—it was a Government initiative to get the colleges to expand—it was also agreed that, if growth exceeded the FEFC targets, the excess would be funded at demand-led element rates. Under the Further and Higher Education Act 1992, students eligible under schedule 2 were to be funded by either core, marginal or demand-led element rates.
Now, colleges that have expanded at the behest of the Government are being penalised for having done so. Although the Government have belatedly and rather grudgingly accepted that they must pay the £84 million that colleges are owed for the rest of this academic year, the DLE is still to be abolished in the next academic year, 1997–98.
It is even harder for the colleges to accept that there was never any suggestion that the 1996–97 payments from the FEFC were insecure until they received the out-of-the-blue letter from the Minister on 28 January. The Government's hypocrisy is incredible: they have gone back on commitments that they made to the colleges; they have betrayed their own claims to be the party committed to expansion and diversity in further education; and they have disregarded the achievements that colleges have made as they strive to meet the national training and education targets laid down for them.
Mr. Stephen Timms: Has my hon. Friend seen the letter from the Secretary of State for Education and Employment to the hon. Member for Ribble Valley (Mr. Evans), dated 10 January, in which she reaffirmed the demand-led element of the funding formula, only for that element to be withdrawn two and a half weeks later?
Mr. Pope: It was withdrawn after two and a half weeks, and then there was another flip-flop in early February. It is interesting that the letter was sent to the hon. Member for Ribble Valley (Mr. Evans), many of whose constituents attend my local college who, sadly, is not in his place today.
The Government's behaviour has startled the principals, many of whom are long-serving principals of colleges. Recently, the principal of St. Mary's Roman Catholic sixth
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form college in Blackburn, an excellent institution with a fine academic record—a point unrelated to the fact that I was educated there—described the problem when he said that colleges that had exceeded the target were now being "savagely penalised". The principal of Accrington and Rossendale college said in a letter to me that the Government's actions were "unforgivable".
The fact that the Government will not be funding the DLE for the FEFC means that budgets of an already economically ruined sector will be thrown into further disrepair. I shall outline the track record of a Government who have been in office for 18 years. One in five colleges are in a weak financial position; one in five full-time teaching posts have been lost since 1993; and the further loss of the DLE funds will mean that more job losses are to come.
I understand that Nelson and Colne college, in the constituency of my hon. Friend the Member for Pendle (Mr. Prentice)—I am sure that he will want to raise the issue if he catches your eye, Mr. Deputy Speaker—has announced that 47 jobs might have to go in the coming year. In real terms, the 1996 budget removes £233.3 million from the sector for the period 1996–97 to 1999–2000.
The absence of DLE funding in the coming academic year means that up to 11 million funding units that it supports will not have funds for that year—that amounts to about 105,000 enrolments. Given that many of those institutions are already in a weak financial position, absorbing those costs will be hard. The only choice open to colleges will be to lower enrolments, which will go against the policy of expansion and diversity that they have been working so hard to succeed in over the past three to four years.
Many principals feel insulted that their institutions have had to present three-year business plans while the Government can make major funding changes and withdraw pension entitlements with practically no notice.
Mr. Paddy Tipping: Did my hon. Friend hear the "Today" programme this morning, on which it was suggested that there might be yet another flip-flop on pensions at 50? If that announcement can be made on "Today", why cannot the Minister tell the House the position now?
Mr. Pope: I heard that announcement on Radio 4; Ministers seem happier to announce changes of policy to the BBC than to the House of Commons. What the Government are doing over teachers' pensions is to saddle an incoming Labour Government with the problem rather than face it themselves in the run-up to the election—a squalid arrangement.
Major changes have been announced at very short notice. That means that much of the planning done by colleges is now worthless. Contractual agreements with companies mean that colleges have had to base their calculations on the DLE rates, which will be unavailable from September 1997. My local college, Accrington and Rossendale, has a successful collaboration with British Aerospace, a large employer in Lancashire, but the calculations that the college has made for contracts with, businesses and students are now rendered meaningless by the Government's actions. The nature of those changes in funding means that courses, especially those of a vocational nature, might end up being cut.
Mr. Barry Sheet-man: The experience on our side of the Pennines mirrors many of the same

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characteristics as that on my hon. Friend's side. We are seeing a parallel to what happened in higher education. Once there ceases to be a dynamic in higher education, the ability is lost to plan or even to enter into private finance initiative agreements, and that is now happening in further education, where there is no planning and no future for growth, experiment or innovation, because from now on there will be no growth.
Mr. Pope: That is absolutely right. We are witnessing the consequences of Ministers in the Department for Education and Employment having consistently, year on year on year, lost the argument with the Treasury in the spending round. All they are doing is shifting cuts round within their Department's budget. Two or three years ago, cuts were in the schools—teachers were laid off and there was a crisis; now the crisis is in higher and further education.
Mr. Robert G. Hughes: The hon. Gentleman is describing increased funding and increased activity in the sector as cuts. He is entitled to do so, but only if he tells us how much in his judgment—the shadow Chancellor, the right hon. Member for Dunfermline, East (Mr. Brown), is in America, so he will not hear—a Labour Government should give that sector.
Mr. Pope: It really is pathetic that, after 18 years, Conservative Members are unable to take any responsibility for the disaster that they have created. All they want to know is what a Labour Government would do. I am glad that the hon. Gentleman accepts that there will be a Labour Government and, in two months' time, he can ask my hon. Friends at Education and Employment questions. I have no intention of trying to foresee how in the next financial year we shall right the wrongs of the Conservative Government.
Mr. Jeff Rooker: The stupidity of the question that my hon. Friend has just been asked is explained by the fact that the demand-led element is not cash-limited. It is like asking us: to how many pensioners will a Labour Government pay a pension? The fact is, we shall pay pensions because they are demand-led by the number of pensioners. In this case, the DLE operates on exactly the same basis—it is not cash-limited, contrary to the spin that was put on it in the early days.
Mr. Pope: Not only is my hon. Friend right, but the hon. Member for Harrow, West (Mr. Hughes) is showing his ignorance of the system. Next month, the Further Education Funding Council will have to enter into funding arrangements for the next academic year, and it will do so on the basis that the DLE has been scrapped. It is therefore impossible for us to give a commitment on how we shall approach the DLE system in the next financial year, when we shall be in government. I should have thought that even the hon. Gentleman could grasp that.
The changes in funding mean that vocational courses are especially vulnerable and minority subjects, such as languages, may become entirely the preserve of the private sector. Student numbers will undoubtedly fall—an extraordinary U-turn in Government policy—and many of those could-have-been students will join the ranks of the unemployed, where they will be able to meet those who might have been their lecturers.
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How can colleges make sensible forward planning decisions when the Government seem to be capable of changing funding allocations almost at whim and without any proper consultation with colleges? Given that many further education courses are two years long, should not proper notice have been given to the colleges of changes of such enormity? Alternatively, could not the proposed changes have been phased in, instead of it being announced, first, that funding would simply disappear halfway through this academic year, and then that it would disappear at the end of the academic year? Is the truth that the Government do not care about the consequences of their actions for colleges and students?
This is a sector in crisis. Since 1990, student numbers have more than doubled, yet at the same time funds have decreased by 34 per cent. Thousands of jobs have gone and thousands of lecturers are still in dispute over their contracts of employment. Part-time lecturers are replacing full-time lecturers and, in some colleges—my local college being one example—all the part-time lecturers have been sacked on the last day of the academic year and told that they will be taken back only if they sign up with an agency.
Is that how we want to run a stable further education system? Unsurprisingly, morale is at rock bottom: a recent independent survey showed that 60 per cent. of lecturers are thinking of leaving the profession permanently. The real victims are students, who are trying to learn and better themselves in intolerable circumstances.
Faced with that crisis, the Minister has taken a leaf out of the Prime Minister's book. He has shown no leadership and no vision; he has dithered, and he and his colleagues bear a heavy responsibility for the sorry state of further education today.
9.55 am
Lady Olga Maitland: I welcome the opportunity to respond to the remarks of the hon. Member for Hyndburn (Mr. Pope). His language is, to put it mildly, intemperate—he uses words such as "sector in crisis" and "fiasco", refers to no planning and no future and says that people are insulted. We should be asking whether he is making a spending pledge—if he is, the taxpayer should be told. It is all very well for him to criticise, but he has not come up with any answers.
I do not believe that we have anything of which to be ashamed—in fact, we have a record of which we can be proud. We have changed the landscape in offering opportunities to young people, and the climate has changed dramatically for young men and women. It is not only those from educated middle-class homes who have benefited, but those from deprived or impoverished backgrounds who have been given opportunities that are second to none to lift themselves up. The social pattern across Britain has changed entirely as a result of the new educational opportunities that we have created.
I recall the remarks made by the right hon. Member for Dunfermline, East (Mr. Brown). He is factually wrong when he claims that 80 per cent. of children of unskilled parents leave school at 16 and make no further progress in education. The truth is that more than half the children of unskilled parents stay on in further education, becoming in the process professional people such as doctors, lawyers or accountants—even entering the House of Commons. That figure is changing all the time.

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We have created a culture in which aspirations to acquiring more skills, qualifications and training are the norm; where opportunities are available to all those who seek them; and where parents are more supportive than ever in encouraging their children to develop. That is the picture of further education today.
The net result is that our further education programme is bursting with activity. It is the normal right and expectation of young people to continue their education after school. One in three go on to further and higher education, compared with one in eight in 1979, when we had a Labour Government. To put it a different way, the number of students has risen to more than 1.3 million—an increase of over 320 per cent. in 25 years—and we now have the highest graduation rate of any country in the European Union except Denmark. All that is in great contrast to the picture painted by the hon. Member for Hyndburn.
Mr. Rooker: Does the hon. Lady realise that the figures that she is quoting relate not to further education but to higher education? There are more than 2 million students in higher education in addition to the million-plus in further education. Her lack of knowledge shows that she is simply reading from a central office brief.
Lady Olga Maitland: That was a good attempt. The truth is that we are looking at the breadth of education—it is hair splitting to claim that we are examining only further education. Young people today participate in all sorts of education—they do not stop at further education.
Mr. Spearing rose—
Lady Olga Maitland: I am sorry, but I must make some progress as many hon. Members wish to speak in the debate.
It is interesting to study a breakdown of student performance. Some 75 per cent. of 16 to 18-year-olds are in structured education and training. That is an increase on 1985, when the figure was only 56 per cent. In 1995, 69 per cent. of students gained qualifications at level 2 of GNVQ by age 19, compared with 46 per cent. in 1985. There have been record passes at GCSE and A-level. Last year, 44 per cent. of 15-year-olds achieved five or more good GCSE passes, compared with 23 per cent. who did not achieve any grades in 1979. Some 29 per cent. of students achieved two or more A-levels, compared with just 14 per cent. in 1979. Those figures tell us that further education is alive and well.
Mr. Spearing: Further to the comments of my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker), whatever the correctness of the hon. Lady's figures and her general view, does she agree that the conditions of funding for further education—as distinct from higher education—have changed in the past few days and have thrown the education funding pattern into organisational and financial chaos? That is what we are worried about. Will the hon. Lady admit that that is true?
Lady Olga Maitland: No, I will not. The truth is that further education funding is secure, and we are going great guns. We must judge the success of further education by the pupils' results. We must consider not
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just students' performance in further education, but what the next phase will be. Young people spend probably 15 years preparing for their first job, and our task is to ensure that the economic climate remains robust and strong enough to provide employment opportunities.
In an increasingly educated and competitive world, we must have a highly skilled and educated work force. It would be a cheap and mean trick to let students down and dash their great hopes and expectations by systematically ruining their chances of staying on at school. The Labour party's proposals would do just that. For a start, Labour would make it increasingly difficult for young people to stay on at school. The right hon. Member for Dunfermline, East has announced plans to withdraw child benefit for 16 to 18-year-olds. That £560 per year, or £1,120 over two years of essential learning, assists the poorest parents in particular. The proposal would crucify young people's chances of staying on in education, and they would be forced to work in menial or unskilled fields. It would be a tax on learning.
Mr. Sheerman: I am listening carefully to the hon. Lady, and much of her argument is extremely interesting. However, she has had no experience of publicly funded education. Many young people seek further and higher education opportunities. The Government have denied them those opportunities in the past few days, and have said, "We've got enough university graduates." What sort of opportunity growth is that?
Lady Olga Maitland: The biggest threat to children's educational opportunities is the imposition of a teenage tax, which would prevent them from staying on at school and taking advantage of further education. The row within the Labour party about the teenage tax has created a split between the right hon. Member for Dunfermline, East, who believes that it is a good idea to tax the teenagers, and the hon. Member for Islington, South and Finsbury (Mr. Smith), who says the opposite. The Child Poverty Action Group is totally opposed to the measure.
The proposed windfall tax on utilities would do nothing to assist young people: first, it is likely to be illegal; and, secondly, if it were introduced, it is doubtful that it would raise the anticipated £3 billion. For example, the decision by British Gas to reduce prices in order to benefit the consumer would wipe out the alleged "excess profits". There would be no honeypot. On 15 May last year, the right hon. Member for Dunfermline, East admitted that the windfall tax would raise only "hundreds of millions of pounds", and not the multi-billion figure that would be needed to fund Labour's spending plans.
In any case, that is a one-off measure that would not create new, real jobs for young people. It would be a stop-gap measure, designed to induce employers to take on new staff at a reduced rate for one year—and then what? People would be forced on to the dole. It is an example of Labour short-termism. I doubt that young people would see a penny of the proceeds of the windfall tax, as the Labour party has a list of IOUs and spending pledges totalling about £30 billion. The windfall tax would be rather like a rubber band: stretching three times around the world in order to support alleged Labour causes.
What about jobs, which are crucial when we consider further education? Centrally run, Government-sponsored schemes do not create work, as jobs cannot be sustained

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when the schemes have ended. Young people would be back where they started. Labour's Target 2000 is a sham: it would impose an extra tax on businesses, which they can ill afford to pay, with compulsory contributions to training. We should focus on creating a vibrant economy that provides the means and the wealth for employers to take on new staff, especially educated and highly skilled young people. Young people's employment chances would be destroyed by Labour's plans to sign up to the social chapter and the minimum wage.
Ms Walley: On a point of order, Mr. Deputy Speaker. Many Labour Members wish to speak about the issue of further education, and I wonder whether the hon. Lady's remarks are in order.
Mr. Deputy Speaker (Sir Geoffrey Lofthouse): It is a wide subject and, if I thought that the hon. Member for Sutton and Cheam (Lady Olga Maitland) was out of order, I would rule accordingly. However, I take the point that many hon. Members wish to speak in the debate.
Lady Olga Maitland: As I was saying, in a sober moment many Labour Members recognise that signing the social chapter would be a disaster for young people. The right hon. Member for Kingston upon Hull, East (Mr. Prescott) has admitted that such measures would cause a
"shakeout of jobs. Any fool can see that".
If we have any doubts, we should cast an eye on the countries of mainland Europe. Punitive taxation and burdens on employers mean that they cannot afford to employ young people.
Mr. Deputy Speaker: Order. The hon. Lady is ranging rather wide of the subject. Let us return to further education.
Lady Olga Maitland: With the greatest respect, Mr. Deputy Speaker, I am speaking about further education.
First, we must ensure that young people are able to take advantage of further education; and, secondly, graduates must be able to secure jobs. This country's economy must be structured in such a way as to ensure that their education is not wasted. The two points are related, and we cannot examine them in isolation. I think that the experiences of other European countries are very applicable when we talk about young people. For instance, youth unemployment in Spain is 42 per cent.—those young people are in despair.
Dr. John Marek: On a point of order, Mr. Deputy Speaker. The hon. Lady is reading from a central office brief. I can see it: it is typed out, and the hon. Lady is simply reading it.
Mr. Deputy Speaker: The hon. Member for Wrexham (Dr. Marek) knows full well that it is quite in order to refer to speaking notes. However, I remind the hon. Member for Sutton and Cheam that she is getting rather wide of the subject.
Lady Olga Maitland: I want to emphasise how important it is that young people's further education is not dashed by what happens to them afterwards. We do not
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want them to suffer the plight of their brothers and sisters in Italy, where 33 per cent. of young people are idle, in France, where 29 per cent. are desperate and unemployed, or in Germany, where unemployment overall is now 4.5 million—more than twice the level in the United Kingdom and increasing every day, further dashing young people's chances.
Job creation comes not from artificially induced, centrally created Government schemes, but from healthy, innovative economies free to operate in a climate that actively encourages development. It is hardly surprising that we are known as the enterprise centre of Europe.
Further education is a laudable aim. We must continue to invest in education, training and skills, but alone that cannot provide jobs. It merely allows young people to compete effectively in an increasingly tough market. We must ensure that young people get the rich rewards for which they have worked so hard throughout their schooling, their days at further education college and then at university. We have an obligation to ensure that they enter a financially sound world that can create and sustain real jobs, so that young people will be able to achieve their true potential on the basis of their earlier education.
10.10 am
Mr. Gordon Prentice: The speech that we have just heard scores one out of 10 for content. It was pathetic and ill informed. I shall address the subject on the Order Paper: the crisis in further education.
In my constituency, Nelson and Colne college is consulting on making 37 lecturers redundant and not filling 10 vacancies. There is a deep crisis in my local college, which is not some hick institution—it has a marvellous reputation. It achieved Investors in People status, and was the first in Lancashire to do so. In 1993, it was one of only three further education colleges to achieve the charter mark; the Prime Minister recognised that Nelson and Colne college was a fine institution.
The college was inspected by the Further Education Funding Council five months ago, in August 1996. The inspectors stated:
"Nelson and Colne College is a successful tertiary college in East Lancashire.… Governance and management are strong. Staff are well qualified. … Standards of teaching are generally high. Students work hard and make sound progress. Examination results are good."
In governance and management, the college rated grade 2, which is defined as
"provision in which the strengths clearly outweigh the weaknesses".
That is the background—a successful college whose board decided on 20 January to plunge it and the wider community into turmoil by announcing all those redundancies. I immediately contacted the college principal, Kath Belton, and had a meeting with her and her senior management. I asked why the decision had been taken. She replied that the college had to save £400,000. It had been operating a deficit, but that is no different from other colleges.
I consulted the annual report of the Further Education Funding Council, which was published only last month. It stated:
"The annual deficit incurred by the sector rose from £10m in 1993/4 to £101m in 1994/5 and stood at an estimated £119m in 1995/6."
The FEFC went on to say:
"A deficit of this order cannot be sustained for more than a few years."

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I want the Minister to comment on that when he winds up.
When I saw the principal at the end of January, I asked whether the FEFC had been consulted about the redundancies. To my astonishment, she said that it had not, and that the decision had been taken by the board. I am not entirely sure whether all members of the board knew the reasons behind the decision that they were invited to take on 20 January.
I suggested to Kath Belton and her senior managers, from a layperson's perspective, that getting rid of 37 lecturers and not filling 10 vacancies would have a devastating impact on the scope and quality of the education on offer. I could have been knocked down with a feather when she said that she did not think that the quality and scope of education provision would suffer.
I do not believe that, and people in my constituency and further afield do not believe it. The principal is making the best of a bad job. She has been put in an impossible position by the board's decision of 20 January, but it is incredible that a college could lose so many talented staff and continue to provide a high-quality education for the young people of my area. I do not believe it.
I raised the matter with the Under-Secretary of State for Education and Employment, the hon. Member for South-East Cambridgeshire (Mr. Paice), who told me at the beginning of this month, in typical Pontius Pilate fashion:
"It is for colleges in the further education sector such as Nelson and Coln college to manage their resources, including staff, as they see fit in the light of changing needs and circumstances."
I wrote to Professor Melville, the chief executive of the FEFC, expecting that he would have something to say about the matter. He replied:
"Individual college corporations must consider how they will best meet required efficiency gains. … The Council—
the FEFC—
"does not have a specific role in advising colleges on their management processes."
The Minister has no responsibility, the FEFC has no responsibility, so my college is left twisting in the wind.
I have read all the relevant documents from cover to cover—the National Audit Office report and the purple report from the FEFC. On page 94 of its annual report, the FEFC states that, as a priority, it monitors
"the financial health of the sector and of individual colleges"
and advises
"colleges on their financial planning and financial control systems".
It did not advise Nelson and Colne college. There has been no contact at all.
I shall be brief, as I know that many of my colleagues want to speak in this important debate. I asked the Minister what steps the Department would take
"to assist further education colleges running operating deficits"—
there are well over 200 such colleges around the country—
"to restore their financial health without jeopardising the quality and scope of the education offered".
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Only yesterday the Minister replied:
"Colleges are independent, autonomous bodies and are responsible for managing their own financial affairs. The Further Education Funding Council has effective arrangements in place for identifying colleges in financial difficulty and for working with them to recover their financial health."—[Official Report, 18 February 1997; Vol. 290, c. 455.]
That is what the Minister told me yesterday; it is moonshine.
This is not an academic debate—[Interruption]—nor is it a matter for levity. Nelson and Colne college is an excellent college. It has a charter mark and is central to the local community. All those who should be able to help my college have washed their hands of it. Unless something happens, and happens soon, my college will be devastated by the loss of all those skilled lecturers. I hope that, even at the eleventh hour, the Minister will be persuaded to intervene and save education in my constituency.
10.19 am
Mr. Robert G. Hughes: I apologise for the fact that I shall not be able to stay for the winding-up speeches. I am serving on not one Committee but two, at 10.30 am. I shall have to read the golden words of my hon. Friend the Minister in Hansard. I shall try to be brief, as many other hon. Members wish to speak.
Further education is very important to my constituents, as it is the only source of sixth-form education in Harrow. Harrow has three tertiary colleges and a sixth-form college, which is part of the FE sector.
I want to draw attention to the problems of St. Dominic's sixth-form college in Harrow-on-the-Hill, a remarkable college with a fine reputation. I am not exaggerating when I say that an enormous number of parents, whether they are Catholic or not—whether, indeed, they are Christian or not—want to send their children to St. Dominic's because they want them to receive sixth-form education rather than the education provided by the tertiary colleges in the rest of Harrow. St. Dominic's is very popular, and so it should be, given the quality of its teaching and pastoral care and the results that it achieves.
The college is uniquely placed. Being in Harrow-on-the-Hill, it is at the junction of the boroughs of Harrow, Ealing and Brent, and therefore draws people from quite a wide area. It is on a restricted site and needs to expand, but it is difficult for it to extend its existing buildings and increase student numbers, because local residents are worried about what that would mean in traffic terms, and about the domination of the expanded buildings. All that is understandable. The college had the option of buying an adjacent building on the main road, which would have enabled it to expand while taking traffic away from residential areas but, regrettably, that is no longer possible.
Along with the principal of St. Dominic's, Mr. John Lipscomb, I have corresponded with my hon. Friend the Minister, and we are grateful for the careful and concerned way in which he has examined the problems of the college. I feel, however, that there is a flaw in the legislation that established the otherwise tremendously successful FE sector.
When St. Dominic's and one or two other voluntary-aided colleges—of which there are a relatively small number—sought to expand, they were unable to borrow money on the strength of their existing buildings

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because it was not entirely clear who owned them. St. Dominic's did not own its buildings, they had never been owned by the local authority, and it turned out that the Catholic Education Service did not own them either. Getting together the money for expansion proved to be a real problem.
The Further Education Funding Council, at least in the London region, was not as helpful as it might have been. I think that it could have sorted the matter out, but suggesting that, if the present site is too restricted, the college should find another site makes no sense in north-west London. [Interruption.] The hon. Member for Newham, South (Mr. Spearing) laughs, but he knows how restricted space is in east London, and the situation is just as bad in north-west London. It simply was not possible to find another suitable site.
Catholic sixth-form education is highly prized in my constituency, and in surrounding constituencies. The present site is terrific for St. Dominic's, and I hope that my hon. Friend the Minister will look re-examine the legislation and the activities of the Further Education Funding Council in order to ensure that that college, and the small number of other voluntary-aided colleges elsewhere in the country, can continue to be successful. Catholic sixth-form education would be gravely missed by many people.
One of the reasons Labour will lose the next general election is that Labour Members always describe any set of problems—and of course there are problems, some of which were mentioned by the hon. Member for Pendle (Mr. Prentice)—as a crisis. They hope that, by doing so, they will gain some kudos among those who care about these matters, including those in the FE sector. They hope that people will say, "Whatever the present Government may be doing, at least we could rely on the Labour party."
It is not surprising that the hon. Member for Hyndburn (Mr. Pope) got so ratty when I merely asked him how much money an incoming Labour Government would give the FE sector. That is the point: as the hon. Gentleman was saying that more money was needed, mine was not an unreasonable question—or, as he put it, a stupid question. It was all laid out by the FE sector in its submission to the public expenditure survey in April 1996. It stated how much money it wanted. The question is simple: how much would an incoming Labour Government provide?
I think that the answer is this: either a Labour Government would provide money, which would mean that, once again, Labour was being financially imprudent and its much-vaunted views on taxation would be proved to be so much moonshine; or it would not provide the money, in which case the rest of the speech of the hon. Member for Hyndburn goes down the drain. If Labour is not going to provide that extra money, there is plainly no point in the hon. Gentleman's making the complaints that he has made.
The further education sector is tremendously successful. Hon. Members scoffed at my hon. Friend the Member for Sutton and Cheam (Lady Olga Maitland) when she spoke of the number of people in further education. I am getting nasty looks from the Whip, so I shall be as brief as I can be—rather briefer than one or two Opposition Members.
As I was saying, Opposition Members scoffed at my hon. Friend, and said that she must have obtained her figures from a Conservative central office brief. I do not
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know whether that is true, but the figures are confirmed in the submission from the further education colleges. Whether it was a central office brief or not, my hon. Friend was right, and those who scoffed were plainly wrong.
We are talking about a £3 billion operation which is highly successful, and has expanded tremendously since it was freed from the shackles of local government. All that we hear from Opposition Members are complaints. Of course there will be problems: that is inevitable when we are making massive changes in the sector, and trying to adapt it not just to increased pupil numbers but to a changing society and a new role. The Government are coping with those problems, however, and only this Government will keep those colleges free.
The hon. Member for Hyndburn made one prophetic observation. He spoke of the democratisation of the FE sector. That can mean only one thing. A Labour Government would return the colleges to the shackles of local authorities; they would bring in the councillors and the bureaucracy, exclude the business men and take the colleges out of the real world. As my hon. Friend the Member for Sutton and Cheam pointed out, the Labour party must deal with one point before the election. If it has the opportunity to impose a teenage tax, it knows, we know and our constituents know that many people will not be able to go to further education colleges.
FE colleges are a success story. They are expanding, improving and doing terrific work—but all the Labour party can do is sneer at the people who are doing that work.
10.29 am
Mr. Chris Davies: I congratulate the hon. Member for Hyndburn (Mr. Pope) on securing this debate.
The Government's ability to shoot themselves in the foot really does beggar belief. They have a success story for which they should be able to claim some credit. In practice, however, in the past few weeks alone they seem to have managed to alienate the principals of almost every further education college in the country. There was the announcement from the Further Education Funding Council, following receipt of communication from the Department for Education and Employment, that, from the beginning of 1997, funding for demand-led student enrolments was to be withdrawn just over a third of the way through the academic year. Just a couple of weeks later, that decision was turned around and the cut will not be made; the pain is simply being transferred to next year.
Colleges were left uncertain, and, naturally, all the people involved in their administration now feel mistrustful. They feel that the Government have not only broken their trust with them but proved themselves to be incompetent. In many ways that is a shame, because the Government's record is good. Even the hon. Member for Hyndburn said that the number of students at further education colleges had increased by 100 per cent. since 1990.
Although credit should be given where it is due, the Labour party has nothing to offer on this subject. As the hon. Member for Harrow, West (Mr. Hughes) said, the Labour party is pledging nothing for increased funding. Labour Members bleat about the crisis in further

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education. They wear their bleeding hearts and shed their crocodile tears, but Labour is not promising any additional finance to support further education in years to come.
The increase in student numbers has been achieved not simply through additional funding over the past years but through efficiency improvements made by the colleges themselves—11 per cent. only last year. In the academic year 1997–98, funding is expected to be some £40 million less than that expected two years ago. Less and less money is being provided per further education student.
I hope that the Government will recognise that all hon. Members want efficiency and the most efficient and effective use of money, but there is a danger that, far from following the philosophy of getting a quart out of a pint pot, the Government may risk spoiling the ship for a ha'p'orth of tar. The growth in student numbers over the past few years, although commendable, is still a great deal less than colleges want, and less than they have sought in their strategic plans.
Mr. Sheerman: In my constituency, we have three excellent FE colleges with a first-class reputation. The problem, as the hon. Gentleman and the Minister know, is that efficiency savings can be achieved for a certain period, but there is a critical point at which those savings affect quality. That is happening in higher education. It will now happen in further education. The crucial point is that efficiency savings can be made only for so long, and then quality starts to decline fast.
Mr. Davies: I entirely agree with the hon. Gentleman.
The Liberal Democrats have made it clear that we want more investment in education. I shall not go into the details at length today, but they involve the need to fund education out of general taxation. We seek a new levy on companies—a remissible training levy—to ensure that more money is put back into higher and further education. We also want to change the funding of students, particularly degree students in higher education, to make more money available to enable an expansion of student numbers.
Mr. Pope: The hon. Gentleman mentioned that the Liberal Democrats would increase taxation. That must be the fabled 1 p on income tax to fund education, which is supposed to provide a nursery place for every three and four-year-old, to reduce class sizes, and to clear up the backlog in school repairs. He now suggests that it will fund further education as well. It must be the biggest penny in the world.
Mr. Davies: When I voted last year and the year before against the cut in income tax, the hon. Member for Hyndburn was out in the Corridor having a smoke. I recognise the point that he makes. It is quite true that our pledge to increase taxation by 1p in the pound to invest in education is geared primarily towards education at the lower end, but some £600 million of the money that we would seek to raise would go into further higher education. I hope that that answers the hon. Gentleman's point—and rather more effectively than he dealt with a point raised by the hon. Member for Harrow, West.
Oldham sixth form college, which was established just a few years ago, has proved itself a great success in raising the staying-on rate of students and pupils
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throughout the borough. The half dozen or so representatives of my party who were on the council when the college was established had doubts about whether it was advisable to set it up and abolish all the school sixth forms at the same time.
Oldham sixth form college's success over the years has shown that those doubts were unfounded. The greater staying-on rates that have been achieved have been worth the sacrifice of school sixth forms. Raising the standard of education in boroughs such as Oldham—a borough that traditionally had low educational achievement—is crucial to the regeneration of industrial towns such as the one I represent.
According to the principal, Oldham sixth form college turned away 150 applicants last year, although they were quite capable of taking on the courses—and the number who will be turned away will probably increase because of the cuts that are likely to be made next year. It is likely that 200 or more people will be turned away next year. There is a great demand for places, but there is a danger that young people will miss out because opportunities will no longer be available to them. There is also a danger that they will not be able to take advantage of the education opportunities that should be available to every citizen.
Mr. Tipping: Does the hon. Gentleman agree that disadvantage and staying-on rates should be included as parameters for a new funding mechanism, which we must have next year, for places such as Oldham and for coalfield communities? Places that have an education deficit should get priority.
Mr. Davies: I agree. One of the priorities—I hope that the Minister will address this—should be targeting in college funding. There must be a difference between northern boroughs, coalfield communities and the like, where educational achievement has traditionally been low, and counties such as Surrey and Sussex, where the state of affairs is very different.
What colleges need above all is stability. They need clear plans for the medium and long term so that they can prepare their strategies for the future. If they are to achieve efficiency savings, it is necessary for them to have a clear idea of what funding they will have so that they can plan. I am tired of principals telling me, "We simply don't know where we are."
Secondly, the level of funding needs to be addressed. I have already touched on that. Thirdly, there is a need for targeting funding on colleges in less affluent parts of the country. Fourthly, there is a need for urgency in the process, especially as colleges are trying to plan for next year. At the moment, the FEFC is examining options for next year. That examination must be completed quickly so that principals can make their plans for next year as soon as possible.
Further education has been a success over the past few years. It is a success now. It is very important that steps are taken to ensure that it continue to be a success in the years to come.
10.38 am
Mr. Bryan Davies: We have had a most interesting debate, and I congratulate my hon. Friend the Member for Hyndburn (Mr. Pope) on initiating it, and on speaking so incisively about the issues facing the education sector.

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The hon. Members for Sutton and Cheam (Lady Olga Maitland) and for Harrow, West (Mr. Hughes) seemed to deny that there has been a crisis in further education, but this debate is taking place precisely because of the crisis for which the Minister is significantly responsible and which has occasioned deep demoralisation across further education. That is why I—exceptionally for a Front Bencher—tabled an early-day motion, which was signed by 100 hon. Members and which sought to call attention to the problems facing colleges in their constituencies. My hon. Friends the Members for Pendle (Mr. Prentice) and for Hyndburn reflected on the particular problems of colleges in their constituencies. Reference was also made to acute problems in Stoke-on-Trent and in a number of other colleges.
We should dispense with the absurdity of Conservative Members who say that we should account for how we would pay for the crisis. The Government said last November that it was time Labour identified how it would fund certain parts of the education budget, but at that time we knew nothing about the funding shortfall that has led to the recent crisis. As late as January, the Secretary of State said that all was well.
The further education sector told the Minister that there was a shortfall of £80 million on previous years, and that a bill of £80 million was building up for students taking courses in the current year. The simple fact is that the Department should put its own house in order, and the Minister should get a grip on the crisis that has developed in colleges. The further education sector is crucial to education and training for the nation.
Let us get the figures clear. The hon. Member for Sutton and Cheam has great difficulty differentiating between universities and further education colleges: the subject of the debate is further education. Her figures are incorrect, because there are 3.5 million students in further education, which is more than there are in school sixth forms and universities combined. That is why the sector is so important. It deals with the skills, competences and educational opportunities of which the country is most in need. It provides the platform from which people can move on to higher education, and can equip themselves for jobs in a world in which additional skills are required.
The naivety of the hon. Member for Littleborough and Saddleworth (Mr. Davies) is at times matched only by his honesty. His party had reservations about the hugely successful Oldham sixth form college in my constituency, to which I pay tribute for its successes in recent years. His naivety was adequately exposed by my hon. Friend the Member for Hyndburn. We are told that the 1p on income tax for education will cover every element of the education budget, which runs into billions of pounds, thus producing a penny that magnifies into astronomical figures. We do not expect the Liberal Democrats to be particularly strong on mathematics. However, we expect the Minister to answer the charge that we have made today.
Mr. Chris Davies: Did the hon. Gentleman not hear my response to the hon. Member for Hyndburn (Mr. Pope)? I pointed out that £600 million of that money would be geared to further and higher education.
Mr. Davies: The hon. Gentleman will have great difficulty making his sums add up. Every time the Liberal
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Democrats speak on education, the sector on which they speak attracts resources based on the 1 p increase in income tax.
I want the Minister to deal with the obvious point that is being made in the House today, which has been made in the many letters that we have all received from across the country, about the crisis facing individual colleges because of the Government's original indication that they were not prepared to fund the demand-led element. That crisis sent alarm bells ringing. It demoralised the sector, and its implications and consequences for colleges are profound.
I suppose that the Minister at least deserves congratulations, because he has succeeded in putting further education on the map. The silent service has suddenly become an extremely noisy advocate of the role it plays, and not before time. What a pity that it has had to do that because of the crisis that has emerged. We welcome the fact that, after pressure was put on the Government, a rapid U-turn took place. It was decided that it was scarcely reasonable to tell colleges that they could not be funded for students who were already enrolled and were taking courses.
I always think that it is best to move away from discussing areas of public service if I want to engage the full sympathies of Conservative Members. I emphasise, therefore, that many private providers of training that are linked to colleges would have faced bankruptcy and worse if the Government had seen through the original absurd proposition not to fund the demand-led element. However, that crisis persists. The Government have announced that they do not intend to make those funds available next year.
The Minister must surely realise that colleges are already committed to a certain number of students who are taking courses. He should also realise that colleges have been thrust into this position. They were told in February this year that the crucial engine of expansion on which they have been dependent for the past three years will not obtain next year. Significant areas of expansion have led to increased opportunities for students in their communities. Colleges already have commitments and plans for next year, which they are expected to honour until this extraordinary act by the Government intervened. The Minister has pulled the rug from under them at this late stage, which has created chaos.
Mr. Timms: I am pleased that my hon. Friend has drawn attention to this important matter. In Newham and similar areas, college expansions have been funded by regeneration grants from Europe, city challenge and elsewhere, and have been tied to funding for increased student places. If funding is no longer available for such expansion, the danger is that they will have to repay those regeneration grants.
Mr. Davies: I am grateful to my hon. Friend for pointing out that issue, which seriously affects a number of colleges. I hope that the Minister will also deal with that matter.
The Parliamentary Under-Secretary of State for Education and Employment (Mr. James Paice): I shall, if the hon. Gentleman sits down.
Mr. Davies: Indeed. I recognise the constraints on time, and I shall give the Minister the chance to respond to these points.

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The Labour party emphasises the significance of the further education sector. Two specific aspects of our policy will be of enormous support to the sector. First, our new deal sets out how we intend to fund, from windfall taxation of the utilities, jobs and training places for 250,000 unemployed people. Secondly, contrary to the mistaken impression that the hon. Member for Sutton and Cheam sought to create, our proposals for education attendance allowances—transferring child benefit to education attendance—will support students at the place where they enjoy their education. That is our priority. I expect the Minister to tell us that the Government have learnt some lessons from this sorry affair.
10.49 am
The Parliamentary Under-Secretary of State for Education and Employment (Mr. James Paice): As always, the hon. Member for Oldham, Central and Royton (Mr. Davies) omitted the crucial points. First, he omitted to tell us whether a Labour Government would reintroduce the non-cash-limited element of demand-led funding, which has been the centrepiece of this debate. The matter is about not cost but the principle of whether Labour would reintroduce it. Secondly, he reiterated the absurdity of the windfall tax apparently abolishing youth unemployment—a one-off measure paid for by a one-off tax.
It is nearly four years since further education and sixth form colleges left local authority control and were freed to become incorporated organisations. Their achievements have been formidable. Several hon. Members have described the exceptional growth, of which there is no doubt. Student numbers have grown by more than 30 per cent.
In opening the debate, the hon. Member for Hyndburn (Mr. Pope) referred to staff contracts and issues relating to the employment of staff, demonstrating that he seems more concerned about the numbers of staff than the students who are being taught. The staff "silver book" contract under which virtually all staff were employed at the time of incorporation—too many are still employed under it—stipulates a maximum of 21 hours a week teaching and 38 weeks' total work a year. I do not think that, in the last part of this century, such contracts can ensure that colleges efficiently use the staff they need.
Mr. Pope rose—
Mr. Paice: I cannot give way. I do not have time, because so many hon. Members spoke in the debate.
Since incorporation, the Government have increased resources to the further education sector, which now receives well over £3 billion a year. The sector will have noticed that, despite all their huffing and puffing today, the Opposition said nothing about providing any further direct funding.
The House may be aware that yesterday the Further Education Funding Council published a comprehensive set of performance indicators for the 1994–95 academic year, which has been placed in the Library. It contains a vast amount of information of both local and national application. It shows that the average achievement rate for students who completed their programmes was 71 per cent., which I am sure most colleagues would agree is not too bad.
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If one unpacks that figure, however, one finds a massive variation in colleges. Although part of the variation can be explained by circumstances, colleges with the lowest rates of achievement should at least be giving as much attention to raising them as they are to securing further increases in student numbers. To put that into perspective, the worst achievement rates in the general FE sector are considerably below 30 per cent., whereas the best are over 90 per cent.
I turn to the issue of demand-led expansion funding and the events of recent weeks. It is correct that, in the 1991 White Paper the Government undertook to meet the additional costs of colleges' expansion above agreed targets, which became known as "super-DLE" payments. No Opposition Member has said that, until the current financial year, those payments have never been called on because the costs of the demand-led element have been met by the shortfall in performance of other colleges, such that the overall FEFC budget has been sufficient to meet the total costs.
The unforeseen and unprecedented expansion in student numbers in the 1995–96 academic year changed that. Student numbers in full-time equivalents rose by 11 per cent. and, in that total, the number of FEFC-funded part-time students rose by no less than 37 per cent. Although the rate of full-time equivalent student growth has slowed a little, it is still forecast to be about 8 per cent.
The Further Education Funding Council wrote to the Government on 30 November, after the conclusion of the public expenditure round, to say that its demand for DLE payments would be £82 million in the current financial year. A few weeks later, we were advised that the additional costs in the next financial year to meet the growth above target in the spring and summer terms of this academic year would be another £84 million. So, in the space of six or seven weeks, we were told that DLE would require over two years at least £166 million—excluding the rest of the next academic year. Those are substantial sums to find, but, according to our undertaking, we found the £82 million shortfall for the current financial year from other departmental spending.
A Government decision not to pay the £84 million for the first two terms of the next financial year—the last two terms of the current academic year—was never made. It was extremely unfortunate that the colleges were led to believe by a letter from the Further Education Funding Council that that might be so. The Government never took such a decision, and have therefore not changed their position. When we were able to look more carefully at the figures and examine the matter, I was able to announce, as hon. Members have said, that we shall ensure that that £84 million is met. It is due to colleges, it is being incurred with students in place, it will be met, and the Government will meet the greater part of it.
I know that a number of colleges are concerned about what can be described as borderline cases—precisely, whether a contract was in existence and arrangements were made. I know that the FEFC is consulting colleges on the issues, and I understand that it is sending a letter today to all colleges to try to ensure that the precise details are clear. I should make it absolutely clear that students who are already engaged on a course should have nothing whatever to worry about. There is no question, as has been suggested, of stopping students who are engaged in courses.

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On a reasonable basis, we have met our obligations under the White Paper commitment. In the space of six weeks, we found an extra £150 million or so to honour our undertaking. That is a lot of money to find. I must tell Opposition Members that, even if funds are not cash limited, as those were not, they still have to be provided for in public expenditure plans within reasonable parameters of expectation. The sums that I have described could not by any means have been considered a reasonable expectation. We acted promptly to deal with the immediate issues, but rightly must also look at the future.
We are examining urgently with the FEFC measures to improve forecasting to ensure that such a problem does not arise again. Clearly, we did not have sufficient timely and precise signals. I said in my announcement on 5 February that we look to the council to meet all its future expenditure for the next academic year from its voted provision, which is in itself intended to provide for continued growth. I have also asked the FEFC to review the options open to it for the 1997–98 academic year in the light of my announcement and in consultation with colleges. I understand that it will be sending out a document shortly.
One particular issue that my right hon. Friend the Secretary of State and I have identified for urgent review is the practice of franchising by some FE colleges. The facts are quite striking. About a tenth of FE full-time equivalent students are in off-site franchised provision, and nearly three quarters of last year's unprecedented growth was due to franchising. I want to make it clear that I am not opposed in principle to franchising; it covers a wide range of courses and activities. Indeed, in my constituency, some excellent work is done where schools franchise from the local FE college. Franchising is, however, a matter of some controversy in the sector.
In its report on the FEFC a fortnight ago, the National Audit Office acknowledged the merits of franchising, but pointed out risks to the quality of provision and of the substitution of public funds for existing expenditure and training. The House will know that I have asked a working party to look into franchising urgently.
Two other issues have been raised, which I shall try to deal with quickly. The first is overall funding. As I have said, the Government have increased funding for the further education sector year on year. We have built in efficiency savings, but I remind the House that the National Audit Office report identified management as a key factor in financial health. The report makes it clear that poor financial health does not appear to depend on any sector-wide factors.
The other issue that has been raised is teachers' retirement. My right hon. Friend the Secretary of State will lay regulations before the House in one minute. There was no announcement on the radio this morning. I understand that there was a union representative. The regulations will defer the implementation of the proposals until 1 September, and will defer the reduction in the employer's contribution rate to 1 July.

Revenue Support Grant (Suffolk)
11 am
Mr. Richard Spring: Four Suffolk Members of Parliament applied to introduce this important debate. On behalf of all of us, I express my gratitude to you, Mr. Deputy Speaker, for allowing the debate to be initiated. Around me are my hon. Friends the Members for South Suffolk (Mr. Yeo) for Central Suffolk (Mr. Lord) and for Waveney (Mr. Porter). I particularly welcome the Secretary of State for the Environment, my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer), who will reply to the debate.
In the past 20 years, Suffolk has changed more than most counties, helped by increased trade with the continent of Europe. The population has grown appreciably, and so has the county's accessibility and prosperity. There has been a long-standing willingness for individuals of different political persuasions in local government to work together. The people of Suffolk have every expectation and every right to demand that their parliamentary and local government representatives work together on issues of importance to the county.
That viewpoint held sway until May 1993, when a Labour administration, with Liberal Democrat help, took control of county hall. Since then, the council has not only been the most incompetently led in the history of Suffolk, but has had as its hallmarks distortion, propaganda and arrogance, which have brought shame to the good name of Suffolk and have regrettably turned the administration into a laughing stock in Westminster and Whitehall.
I shall give the House a flavour of that by quoting an exchange of correspondence that I had with the leader of the council, Chris Mole. In a parliamentary written answer of 21 February 1995, my hon. Friend the Member for Hornchurch (Mr. Squire), on behalf of the Department for Education, said that local education authority expenditure on administration in Suffolk was 5 per cent., compared with a national figure of 4.5 per cent. The figure was well above that of any of the surrounding counties: 4.2 per cent. for Norfolk; 3.9 per cent. for Essex; and 3.7 per cent. for Cambridgeshire.
When challenged on that, Councillor Mole aggressively informed me that I was wrong and that, in my figure, I had included the cost of inspectors, education welfare officers, educational psychologists, special needs staff and many others. However, my view was confirmed by my hon. Friend the Minister in a letter on 19 April 1995. Sadly, but typically, no comment or apology was received from Councillor Mole.
Councillor Mole wrote to me:
"Dear Mr. Spring
Your incredulity at my factual responses to your misleading electioneering is only matched by my concern at your ignorance of the work of Suffolk County Council."
He helpfully continued:
"You may not have bothered to check your source, or you may believe that those staff fall into your pejorative definition of `bureaucrats'."
He was, of course, wrong. The mind-boggling arrogance of the council leader was brought out when he further wrote:
"Your reference to reductions in 'educational bureaucracy' making up for the shortfall in school's reserves reveals such a gross misunderstanding of the local management and financing of schools that I would prefer to assist you with a personal tutorial".

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That offensive offer was the nearest we have come to a serious offer from the county council of dialogue on financing or other matters.
The blunt truth is that the incoming Labour-Liberal administration made a clear, cynical decision to cut off all constructive contact with Suffolk's Conservative Members of Parliament and to use taxpayers' money to pursue, with an avalanche of press releases, a wholly unjustified vendetta against central Government and Suffolk's parliamentary representatives. The past four years have been a disgrace and a parody of fair and effective local government. By deliberate intent, fear and alarm has been spread among the residents of our county.
What are the facts? Has Suffolk been starved of Government resources? Has Suffolk been shortchanged by the taxpayer? Has the revenue support grant been cut? Not at all. As the House of Commons Library has confirmed, since 1992–93, Suffolk's overall standard spending assessment has risen by 11.7 per cent.—one third higher than the national figure.
I fully accept that local government, like central Government, has been required to show restraint. We cannot bequeath to our children an unsustainable debt burden. One has only to look across the channel to see what is happening to economies and employment prospects there. However, that is no basis for the propaganda outpourings from county hall and the distortions in the revenue support grant.
I shall give the House a flavour of what I mean. A banner headline in the Ipswich Evening Star of 25 January 1995 read, "Cuts Cuts Cuts". The article began:
"Hundreds of jobs throughout Suffolk are under threat as officials struggle to come to terms with Government cash cuts."
On 10 February, the Evening Star reported Councillor Duncan Macpherson, chairman of the county council education committee, speaking of teaching job losses, bigger class sizes and woefully inadequate money from central Government. That was a foretaste of what was to come.
On 14 February, a headline elsewhere read "Time to strike back at cuts". The article said:
"and what it means is that many of our most important services could be pared to the bone in 1995."
On 22 February, we had a headline "Jobs at risk as cuts bite", with Councillor Chris Mole talking about
"the comprehensive emasculation of local authorities inflicted by the Tories"
and alleging that 110 teachers' jobs were to go. None of that was worth the paper that it was written on.
The council produced a so-called information document entitled, "The Government's Funding Failure: Suffolk Schools and Suffolk Children. Their Bleak Future". It catalogued a sort of educational Armageddon, concluding with the sentence:
"A good education is at risk."
Never mind that, in every year since 1979, schools' budgets have grown in real terms. Do not let the truth get in the way of the argument.
I shall not disguise the real anxieties of parents, teachers and governors in response to this. We have all had constituents in our surgeries in a state of shock,
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fearing—as was the intention—that schools would close, teachers would be sacked and their children's education would suffer as services in the county imploded. The propaganda barrage continued unabated throughout the year.
What happened in practice? In the local government settlement of 1995–96, the county council received no cut in resourcing, but an increase of 3.5 per cent. Most crucially, however, the education SSA for 1995–96 was upped by 5.7 per cent. —£11.7 million. That was two and a half times the rate of inflation and nearly 20 per cent. more than the average SSA increase for English county councils.
I fully accept that, historically, Suffolk county council has spent above its education SSA. However, it is incomprehensible that the council spent only £8 million of the £11 million increase in its 1995–96 settlement. It chose to spend the money elsewhere. No proper or rational explanation has been forthcoming for that decision. As we have discovered, no matter what taxpayer-supported settlement is provided for Suffolk, it is branded as "inadequate". That has become a mantra.
By September 1996, the flagrantly disingenuous county council was at it again. Headlines screamed about cuts of £18 million. Shockingly, the county council invited school head teachers to prepare for a 5 per cent. cut in their budgets. Understandably, they were aghast. In west Suffolk, 134 teachers and head teachers publicly sent a fax of protest to my right hon. Friend the Secretary of State for Education and Employment. The accompanying newspaper headlines were cataclysmic. Hook, line and sinker, the stream of misinformation had been taken on board.
My hon. Friends and I repeatedly asked how the council had reached the figure of £18 million. We pressed for information, but not one shred of concrete evidence was produced. The figure was a total travesty. With exactly the same information, no other county council had been reckless enough to make such ludicrous projections.
Inevitably, bad news grabs the headlines. The barrage of mendacity continued, as reflected in the headline in the East Anglian Daily Times of 7 November 1996—
"Tax warning on education cash".
The county council was spreading fear like a forest fire. Later in November, we had the local government settlement. Did we get £18 million worth of cuts? Surprise, surprise, we did not. We saw an increased settlement of just under £10 million. What happened to the projected education cut of £10.9 million? The education SSA was increased by 4.2 per cent., or nearly £9 million.
How many trees were uselessly felled? How much airtime was wasted by the county council? Its shroud waving was once again been exposed for all to see. As the East Anglian Daily Times summed up in its leader on 28 November 1996:
"Suffolk appears to have been one of the very few councils to have jumped in with both feet and prematurely warned of cuts in jobs and services on the basis of what seems to have been pure guesswork from preliminary figures being bandied around in Whitehall."
The editorial concluded:
"Politics can be a messy business. If this time next year there is still a Labour/Liberal Democrat controlled Suffolk County Council and a Tory Government, the Council Leaders would do well not to cry wolf for a third time. The public and their own staff will not stand for it again."

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What has the county council done with the increased education SSA of £9 million? The shocking truth is that the council has decided to spend only £5 million. In addition to the £11 million in school reserves, the general LEA reserve fund is estimated at £5 million from 1 April 1997. There is also approximately £2 million of earmarked balances. Some £5 million that the Government intended for education in Suffolk has not been spent to that purpose.
As the chairman of the council's education committee has confirmed to me, whatever the SSA is, he and his council are so party politically prejudiced that they would describe it as totally inadequate. That is despite the fact that his party has explicitly accepted our levels of departmental spending within the overall Government control total, and no more is on offer. What a compliment to the Chancellor's good housekeeping.
During the past few appalling years of constant griping about funding, we have all been implicitly expected to hark back to some golden era of education in Suffolk. The truth could not be more different. In 1979, under Labour, the Suffolk pupil-teacher ratio in primary schools was 1:23.7—it is now 1:21.7. Similarly, the pupil-teacher ratio for secondary schools has improved from 1:18.1 to 1:16.4. The dramatic improvement in funding for education in Suffolk is fully illustrated by the rise in spending by two thirds per pupil, at both primary and secondary level, in real terms since the last Labour Government. That has been a huge commitment to our county by the taxpayer.
Mr. David Porter: Before my hon. Friend leaves the subject of education, will he consider the damage that has been done to parents' confidence in schools by the county council campaign? In my constituency, parents have received threatening letters from the LEA that say that, unless their children take their nursery vouchers to local authority schools, they will not be guaranteed places in the primary schools of their choice. Is that not another example of what my hon. Friend is talking about?
Mr. Spring: I am grateful to my hon. Friend for that valid point, and I hope to elaborate on it when I reach the subject of the handling of nursery vouchers by the county council. He is right to say that the fear and anxiety aroused by the council about nursery vouchers has undermined parents' confidence in the education of their children. That is an absolute disgrace.
One of the county council's most bizarre extravagances is its anti-poverty strategy. All my right hon. and hon. Friends in Suffolk, including myself, have done voluntary work and are completely committed to helping those in genuine need. If that is what the council's anti-poverty strategy is about, we would applaud it. It is not. It is a wheeze to spend taxpayers' money to curry electoral favour with certain groups and to create a new bureaucratic empire.
Suffolk's unemployment level is 5.4 per cent. That is below the national average, and less then half the European Union average. It is one of the lowest anywhere in the industrialised world. Such has been the pace of job creation in Suffolk in the past four years that we have seen a dramatic fall of 40 per cent. in unemployment. By any proper measurement of need—school meals, income support and other indices of deprivation—Suffolk is a
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quietly prosperous place. How does the county council define poverty? Incredibly, anybody who lives in a household that has less than half the national average household income is defined as living in poverty. That gives new meaning to the adage that the poor will always be with us. If household incomes were to soar or fall sharply, the number in poverty would change in tandem by that definition. The council does not provide any absolute definition of need or consumption: its definition is useless.
The Secretary of State for the Environment (Mr. John Gummer): My hon. Friend is not being entirely fair to Suffolk county council when he says that it has provided no absolute definition of poverty. It has provided a definition of poverty, and two of the criteria were lack of access to piped gas and not being connected to a mains sewer. I have neither of those, so I must be included in the council's definition of poverty.
Mr. Spring: I am grateful to my right hon. Friend for making that point. He illustrates the fact that the council's definition is based on urban areas. Suffolk is a predominantly rural county, where the county council has not the faintest idea about how thousands of its residents in rural areas live. That sums up the whole urban orientation of that council.
How is the money spent in Suffolk? It is spent on esoteric items such as a low-calorie cookbook and a sewing circle in Ipswich. A council that is supposedly starved of resources somehow spends £60,000 on a bus providing information, not books, on how libraries work, the revenue cost of which is £20,000 per annum. Yet I cannot get a footpath built in a rural village in my constituency, despite the fact that lives are under threat. It is a disgraceful misordering of priorities and the sort of politically correct nonsense characteristic of Labour inner-city authorities. It will change the circumstances of no one in real need but will simply provide a beanfeast for the county council press office and for councillors and officers attending conferences and workshops at taxpayers' expense.
The reason why education and the anti-poverty campaign are interconnected is both noteworthy and disturbing. Parents of young pre-school children in Suffolk may be forgiven for believing that the provision of taxpayer-funded nursery school facilities is based on a reasonably rational basis of need. In Suffolk, it is not. Children get their new nursery school place only if they happen to live in an area where the county council has deemed that such a school is warranted under its anti-poverty strategy.
What would happen if that principle were applied across education in the county? Would a new classroom, a new gymnasium or an extra teacher be made available only if, in its wisdom, the county council decided that socio-economic needs were the prime determinant? That is precisely the mumbo-jumbo that has destroyed the quality of education in places like Islington, Hackney and Lambeth, which drives parents to educate their children in entirely different areas.
We all welcome nursery provision, which the nursery voucher scheme will soon liberate. However, the enormous expansion of nursery schools initiated by Suffolk county council has put unreasonable pressure on

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existing school budgets and the funding of teachers' salaries. Before the last county council elections, the previous council sought to increase the number of new nursery schools by three a year. In the past four years, by contrast, both capital and running costs have soared, with seven new primary units this year.
The council cannot have it both ways. It is unacceptable to decline to spend the additional education SSA increases, yet shout for more; it is only fair to existing schools in Suffolk to have a proper balance in nursery provision. Through their budgets, existing schools are paying for that decision. My hon. Friends and the public will draw their own conclusions as to how the anti-poverty criteria have produced a clearly demonstrable bias in favour of nursery provision being located in Labour-controlled areas of the county.
So here we have it: forecasts of teacher sackings; cuts, cuts, cuts; and a massive increase in council tax. My hon. Friends will know that that particular scaremongering should be seen against a projected increase in Suffolk county council tax of only 4.1 per cent. So much for the gigantic increases in bills, that the county council told us we would face in April.
Mr. Michael Lord: My hon. Friend has dealt in detail with how parents and teachers have been frightened by the ridiculous proposition of severe cuts. Is there any evidence that the county council now appreciates that it was wrong? More importantly, has it taken steps to admit, to the people it so frightened, that it was wrong?
Mr. Spring: I am glad that my hon. Friend has raised that point. The best we had was what I imagine passed for an apology from the leader of the council, who said that the £18 million cut scaremongering campaign was a worst-case scenario.
Throughout all those events, something has obviously not been quite right—the propaganda barrage has been so totally over the top. In large measure, it has been about the terrible dissensions within the Labour party at county hall, and the uncritical passivity of the Liberal Democrats. We are witnessing the outbreak of a form of municipal fratricide between the leader of the council and the chairman of the education committee, like two aging comics fighting it out for top billing in the end-of-the-pier show. For what Councillors Mole and Macpherson want is to secure the crown of leading the Labour group after 1 May—some crown, some group! They will clearly do and say anything, no matter how distorted or misleading, to establish their macho credibility, and all of Suffolk pays the price for their mutual animosity and ambition. If the matter were not so serious, it would be laughable.
Suffolk county council has ill served the people of our county. Enough is enough. I hope that it is the final curtain call: goodbye and good riddance.
11.24 am
Mr. Jamie Cann: I apologise to you, Mr. Deputy Speaker and to the hon. Member for Bury St. Edmunds (Mr. Spring) for arriving late and missing the start of the debate. I did not intend to do so, and no discourtesy was meant.
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I shall now tackle the points made by the hon. Member for Bury St. Edmunds. First and crucially, the hon. Gentleman alleged that, under its Labour-Liberal Democrat leadership, Suffolk county council provoked anxieties and fears unnecessarily over the past year or so about the necessity for budget cuts for 1997–98. I should point out that all that the council did, as it has done in previous years and as it did when it was Conservative-controlled before 1994—indeed, as the council has always done since its inception in 1974—was to take the Government's forecast figures in the Red Book and apply them to its finances.
The leader of the council checked with the Secretary of State that the figures were the ones on which any responsible council must base its plans. They showed a 5 per cent. cut in the sum that the county council could spend in the coming year.
Mr. Gummer: Will the hon. Gentleman give way?
Mr. Cann: No.
During the year, I have protested about those figures, the county council has protested about what those figures mean, and all the committees have examined what a 5 per cent. cut would mean to the services that they deliver. Ultimately—goodness knows why—the Government decided not to continue with the figures that they had originally forecast. It was probably because of the publicity that the county council gave to how the cuts would affect services, because people such as me lobbied heavily in favour of the services in Suffolk, and because organisations, teachers, governors and head teachers throughout Suffolk lobbied and organised—
Mr. Gummer: Will the hon. Gentleman give way?
Mr. Cann: No, I shall not give way. I have only about 10 minutes and there is plenty of time for the Secretary of State to do his bit later.
We all fought to ensure that the Government figures would be changed, and they were. The only people in Suffolk who did not fight for Suffolk, for the county council, for the budget and for our services, were the five Conservative Members who represent Suffolk constituencies. The only time that they mention Suffolk is to have a go at Suffolk county council. The Secretary of State can snigger if he wishes; we in Suffolk are used to that.
The hon. Member for Bury St. Edmunds criticised Suffolk county council for its education service. Is he not aware that Suffolk is one of the few counties—indeed, I suspect, the only county in the country—not to have suffered even one opt-out school? I know that the Secretary of State knows that, because he has protested about it often enough.
Does the hon. Gentleman not know that there are more teachers and fewer administrators in Suffolk schools now than there were when Suffolk was Conservative-controlled in 1993? Clearly not. Is he aware that under local management of schools, Suffolk is one of the highest payers out to schools, because it is one of the authorities that keeps the least money in central education administration? Is he not proud of that record? He should be. Schools, parents and governors trust that council,

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which gives out more money to schools than any other authority. Why is the hon. Gentleman not proud of it? Why does he criticise it?
Is the hon. Gentleman not aware that, since 1994, when Labour took control—and the Liberal Democrats, too; I apologise to the hon. Member for Newbury (Mr. Rendel) for not mentioning them—the money that the Government give to Suffolk county council has been reduced by 3 per cent. in real terms, whereas between 1990 and 1994, when it was Conservative-controlled, the sum given was increased by 12 per cent.? What a strange set of figures.
Does the hon. Gentleman not know that £39 million, in real terms, has been taken from Suffolk over the past four years? He certainly has not protested about it. Of that sum, £12 million has been made up by efficiency savings within the council, but the rest has had to be found by making economies in its services.
Is the hon. Gentleman not aware that, during that period class sizes have increased in our primary schools, and that elements of the fire service have had to be cut? Was he not here three years ago when I stood in the Chamber arguing about the police budget in Suffolk, and managed to get £3 million put quietly back the following year? He could not even be bothered to turn up, and neither could the Secretary of State.
The hon. Gentleman should be careful what he says about anti-poverty strategies. I know that the Government keep altering the way in which we count unemployment. The last I heard, they had altered it 29 times since 1979—and every time they do, the figure goes down. That is strange enough, but there is one statistic that the hon. Member for Bury St. Edmunds really ought to understand.
I do not know exactly where in Suffolk the hon. Gentleman lives, but in my constituency, and I suspect in those of Conservative Suffolk Members too, one in five households have no income other than benefit. The Government can alter the figures, cheat and make headline announcements about unemployment being 1.8 million, but the fact is that in one in five households of working age in my constituency, nobody has a job.
If people live somewhere nice and leafy in a little village, they can try to pretend that that is not happening, but it is. Fear and anxiety live out there. They are not promoted by the county council; they are out there among our people, along with the lack of a feel-good factor. Over the past 18 years, that is what the Government have reduced this country to: insecurity, anxiety and fear.
That fear is not fear of the county council, of Ipswich council or, I suspect, of the local council in Bury St. Edmunds. Fear and insecurity are promoted by the Government as a matter of policy.
The hon. Member for Bury St. Edmunds talked about transport. However, the county council's transport strategy was agreed by the Department of Transport, and with the Government office for the eastern region and the transport people in Bedford. The policy being carried out is the policy that the Government told the county council to carry out.
The hon. Gentleman said that Suffolk county council was run by people from urban areas who do not understand rural areas. However, only 16 of about 60 councillors are from Ipswich—and I think that there are four from Bury St. Edmunds. There is a great swathe of
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people from the constituency of the hon. Member for South Suffolk (Mr. Yeo), although they are usually either Liberal or Labour, because there is hardly a Tory left. They all represent rural seats. Duncan MacPherson represents a rural seat. [Interruption.] Well, it is rural to me.
Suffolk is a rural county, so the people elected to the council come predominantly from rural areas. The fact that they are not all Tories now is another matter, and that is what Conservative Members should be concerned about, rather than criticising the council.
If the hon. Gentleman wants to talk about building, I can tell him that two nurseries are being built in Ipswich, one for the Britannia area and one for Sprites. Those nurseries are badly needed, and they will open in September. Well done, Suffolk county council. I have long held the view that the rural areas of Suffolk have been subsidised by the urban areas. Through his activities in the health service, the hon. Member for Bury St. Edmunds has tried to keep that subsidy going. I do not blame him for favouring his own constituency, but I know what he is up to.
For the first time in its history, Suffolk is now being run in the interests of the whole county, rather than in those of Conservative Members' constituencies. The hon. Gentleman will not know that in my constituency three primary schools that were built in 1935 as 10-year temporary structures are still being used as schools today. That is shameful, and it is one of the problems that the Labour and Liberal Democrat-controlled council is trying to put right.
Unfortunately, the Secretary of State—who, as I can see, is not interested in what I am saying—did not feel able to grant our capital challenge bid, which would have enabled the council to go ahead with a new school.
Four hon. Members applied for this Adjournment debate, but it was the hon. Member for Bury St. Edmunds who was successful. That was right, because he has been the most voluble critic of the county council. Yet he talks to us about dialogue. When Suffolk county council was Tory, I, as the Member for Ipswich, did not criticise the council in the press.
Mr. Tim Yeo: There was no need to.
Mr. Cann: I did not criticise it because there was dialogue. I went and talked to the council. That does not mean that I talked to the people who chaired the committees, because it was clear that they did what the officers told them to. That was always true of Suffolk under Tory rule. I used to speak to the chief officers, so there was a dialogue and I, as the local Member of Parliament, could get things done in connection with Suffolk county council.
In contrast, for the hon. Member for Bury St. Edmunds, the idea of dialogue is to slag off the county council on the front page of the East Anglian Daily Times, and then expect things to change. Is that dialogue? When the Minister of Agriculture, Fisheries and Food is fired, the hon. Gentleman ought to be promoted into his place, because clearly he has the same diplomatic skills.
Yesterday, the council's transport committee met. It contains Labour, Liberal Democrat and Conservative members, and one independent from Long Melford. We still have independents in Suffolk. The independent stood

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up and moved a vote of no confidence in the five Tory Members of Parliament for Suffolk. One of the Tories walked out of the room rather than vote against the motion, and the committee passed it by 16 votes to eight. My case rests.
11.39 am
Mr. Tim Yeo: I listened in vain for any syllable of condemnation, or even of apology, from the hon. Member for Ipswich (Mr. Cann) for the appalling record of Suffolk county council, which my hon. Friend the Member for Bury St. Edmunds (Mr. Spring) outlined. In 15 minutes, the hon. Gentleman demonstrated clearly to the House and, I hope, to the voters of Ipswich. how completely unfit he is to represent those voters here in Parliament.
I dare say that we shall find the same absence of condemnation when the hon. Member for North-West Durham (Ms Armstrong) speaks. I hope that she will clarify Labour's position on spending commitments. We have heard on many occasions from Suffolk county council that it needs to spend more. As far as I could tell from what the hon. Member for Ipswich said, he endorses those claims; but we know from the shadow Chancellor that no more money will be spent next year or the year after in the event that a Labour Government are elected.
I hope that, when the hon. Member for North-West Durham speaks, she will make it clear whether she endorses the view of the Suffolk county council Labour leader or that of the shadow Chancellor. That is a vital question for the House and for the voters of Suffolk, but it is also important in terms of what happens outside Suffolk, because what we have seen in Suffolk in the past four years an example of what Labour administration means in practice. It is not only an example: it is a salutary warning.
The council was elected in 1993, and is therefore what people would describe as a new Labour administration. Like many others, it is a new Labour administration that is slavishly propped up by the Liberal Democrat party. Once again, the Liberal Democrats in Suffolk have demonstrated beyond any possible doubt that a vote for the Liberal Democrat party anywhere in Suffolk has precisely the same effect as a vote for the Labour party—a message that I am sure the voters have taken on board.
I warmly congratulate my hon. Friend the Member for Bury St. Edmunds on securing the debate, and on his excellent and wide-ranging speech. His speech had only one shortcoming: he dealt far too gently and kindly with Suffolk county council: and his language had that moderation for which he has become famous in the county during the past few months, while he has so effectively exposed exactly what has been happening at county hall.
I entirely endorse everything that my hon. Friend said about education and especially about the appalling way in which Labour and its Liberal Democrat allies have, for entirely party political ends, played on the anxieties and fears of thousands of parents and children, and quite a number of teachers and staff, in my constituency.
I want to touch on three simple themes: first, how new Labour in Suffolk still means the old loony left in practice; secondly, how new Labour in Suffolk equals new sleaze, as the county council ruthlessly deprives rural areas of resources and pours huge subsidies into the
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Labour urban strongholds; and thirdly, how new Labour in Suffolk equals incompetence on a new and breathtaking scale.
The debate is about the revenue support grant for Suffolk county council. The Labour party's thesis throughout has been that money is tight. Labour would have us believe that teachers' jobs are at risk, that social services for vulnerable families are about to be cut and that the fire service will be virtually closed down.
Against that background of shroud waving and alleged lack of resources, let me ask a few questions. Which council has decided in the past four years to employ a full-time equal opportunities officer? Which council thinks that its staff should have extra time off during working hours to carry out trade union duties? Which council has a full-time Unison trade union official? Which council believes that the best way in which to tackle poverty is to pay councillors to attend extra meetings to discuss the anti-poverty strategy? Which council insists on using its own employees for maintenance work and refuses to give outside contractors a fair chance to compete? Which council uses council tax payers' money to fund the appointment of someone called a "black sexual health project worker"? Is it Islington, Lambeth, Southwark, or perhaps Liverpool in the 1980s? No, it is Suffolk county council under a Labour and Liberal Democrat administration; the same council that claims that the resources given to it by central Government are so grossly inadequate.
Will the hon. Member for North-West Durham confirm that each of the points that I have mentioned represents the priorities of new Labour throughout the country, or will she for the first time issue a ringing condemnation from the House of what her party is doing to the people of Suffolk?
The tragedy is that Suffolk is under a political leadership that is so ruthless, doctrinaire and dogmatic that the councillors' attitudes are even starting to affect the officers. In a Suffolk county council education department publication, printed and circulated at council tax payers' expense, a Suffolk county council official—not an elected councillor, but an official—described the Government as
"some manic stage manager"
who
"keeps changing the set and the scripts."
That officer went on to describe the local government review as "nonsense" and attacked privatisation as the cause of
"fragmentation at all levels of government".
My voters in South Suffolk who enjoy cheaper gas, a better telephone service and all the other improvements that privatisation has brought about, might think that it was worth a bit of "fragmentation". The council has so persuaded its senior officers to respond to its political agenda that they are using official publications, circulated at council tax payers' expense, to spout party political propaganda.
My second theme is the new Labour sleaze. Over the past three and a half years, Suffolk county council has systematically set out to starve rural areas of resources in order to reward its political allies in the towns with ever more expensive new toys. I reiterate that the county council's policies had the full and complete endorsement of the Liberal Democrat party in that matter.

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The thrust of the council's transport policy is based on that systematic discrimination against villages and the countryside; spending on roads in rural areas is cut so that the budget can be switched to pay for schemes in the towns. The budget for the footpaths that were mentioned by my hon. Friend the Member for Bury St. Edmunds has almost completely disappeared.
Perhaps the council believes that, if a Labour Government are elected, Parliament will immediately approve a statutory right to roam, and that, when everyone has a legal right to blunder across fields and gardens, through hedges and over ditches, footpaths will no longer be needed at all. I think that it is more likely that, as the council's committee chairmen ride around in their cars and claim their travel allowances, they simply do not recognise or even think about the crucial importance of footpaths in a county such as Suffolk.
Mr. Gummer: And bull bars.
Mr. Yeo: My right hon. Friend makes an important point, to which we would return if there were time.
It is not only transport policy that discriminates against the rural areas: charges have been introduced for school transport for over-16-year-olds, which is not a problem for residents in the middle of Ipswich but, my goodness, is a big issue in the rural heartlands where traditional Suffolk families are brought up.
My third and final theme is the sheer incompetence of Suffolk county council. It is not surprising, perhaps, that a council as doctrinaire as this—with such a highly political agenda—should also be incompetent, because such councils nearly always are. But it is worth emphasising just how taxpayers' money is being thrown away. Charitably, I shall select an example of when a project was chosen in a rural area—in Brantham, a small village in my constituency that is close to my home in East Bergholt.
The village was the site of a bizarre traffic experiment, introduced at a cost of £36,000, whereby the road was subject to barriers. They created a dangerous traffic flow, and near-misses and minor accidents became an almost daily occurrence. Pollution increased dramatically as cars slowed down, and my constituents could not get in and out of their driveways. The experiment was an unmitigated disaster from the day it was introduced, and everyone except the county council recognised it. The council did not recognise it because, with its typically arrogant disregard for public opinion and the merits of argument, it refused even to come and see the system in operation. A further £5,000 was wasted tinkering with the scheme, and finally—after almost two years—it was abandoned. The cost of removal amounted to a further £10,000, so over £50,000 in total was involved.
Suffolk county council has become a byword for incompetence, sleaze and political dogma. On 1 May, the voters of Suffolk will have a chance to put an end to all that. Also on 1 May, the voters of Britain will have a chance to avoid imposing the same fate on the whole country.
11.50 am
Mr. David Rendel: I am grateful for the chance to take part in today's debate. You will be aware, Mr. Deputy Speaker, that, unfortunately, there are no
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Liberal Democrat Members representing Suffolk yet, but it was quite clear from the anti-Liberal Democrat remarks of the hon. Member for South Suffolk (Mr. Yeo) that he at least expects his seat to fall to us next time round. That is the most likely result of the forthcoming general election in that constituency.
I wish to start by referring to some of the points made by the hon. Member for Bury St. Edmunds (Mr. Spring), including his declaration that he wished dialogue to take place between himself and the county council. He flashed before the House this morning a headline from his local paper, and among my papers this morning is a headline that says:
"Tory MPs declare war on council".
If the hon. Gentleman feels that that is the right way to start a dialogue, his electors may have a different idea.
Mr. Spring: The hon. Gentleman completely misses the point. There has been no dialogue for four years, and we—as Suffolk Members of Parliament—have had to put up with that. To criticise Suffolk Members a matter of weeks before the county council elections for rightly reacting with anger to what has gone on reflects an attitude of mind that is wholly inappropriate, and shows the hon. Gentleman's complete lack of understanding of the circumstances in Suffolk.
Mr. Rendel: That in no way answers the point I was making, which is that the hon. Gentleman's approach was no way to start dialogue. He mentioned, as did the hon. Member for South Suffolk, that there had been "scaremongering" by the county council. It is worth drawing the House's attention to three points. First, before the planning figures for what might happen to the council tax this year were produced by the county council, all the figures on which the council based its assumptions were checked with the Secretary of State and agreed by him. Secondly, the local auditors, Coopers and Lybrand, confirmed in a management letter that working out what the costs might be was a prudent and sensible way to plan the local council budget.
Mr. Lord: Does the hon. Gentleman accept that there is an enormous difference between paid officers doing their homework behind the scenes and looking at the various permutations that may exist, depending on the money that the council receives, and whipping up a huge amount of emotion and terrifying the whole education establishment of Suffolk?
Mr. Rendel: That intervention illustrates once again the way in which Conservatives like to plan—in back rooms, behind the scenes and without consulting the public. What a terrible way to perform. What a dereliction of their duty that they should try to hide from the public what might happen. They are trying not to give the public any right to take part in discussions about the future. It is absurd that they should try to plan in that way without involving the public, and it is quite the wrong way to act in government—whether it be at central or local level.
The third, and perhaps most telling, point—which concerns the so-called "scaremongering"—was that Conservative members of the council agreed with what was happening and that it was a prudent way to plan. Those members thought that this was the right way to look at what might happen to the budget in the year ahead. Are

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Conservative Members saying that their party colleagues on the county council were—to quote the hon. Member for Bury St. Edmunds—"crying wolf" and "scaremongering"? Conservative members of the council agreed to the plan.
The hon. Member for Bury St. Edmunds was not pleased that some of his local papers were turning against the Conservatives, which shows that the papers have been forced to conclude that what the county council was saying had a lot of sense behind it. All I can say is that, if he is worried about his local papers turning against the Conservatives for once, he should try being a Liberal Democrat. We know what it is like to have Tory-supporting newspapers saying the most awful nonsense about us, time after time. If he is worried that a Conservative-run paper—as I have no doubt it is—in his area has suddenly found that the truth is so clear that it has to complain about what is happening to local people under a Conservative Government, he should experience what is happening elsewhere.
I have one point of agreement with Conservative Members. It is true that Labour is promising no more, and shame on it for that. It is also true that, although Conservative party members may not want more money for local government, they do want—they have, as I have said before in the House, made it their official policy—the cap to be lifted. They are right, and it is to the shame of this Government that they have not gone along with their own members' requirement in the motion that was passed by the Conservative party conference.
I wish to refer to the council's efficiency, or lack of it. Since the new administration took over in Suffolk three or four years ago, there have been no less than £40 million-worth of cuts. Some of those, sadly and inevitably, have been real cuts in services, but a large proportion have been efficiency savings. There always will be some efficiency savings that any large organisation can make, year on year, and that has been done effectively by this administration.
If Conservative Members are now saying that the present county council is inefficient, how much more inefficient must the previous Conservative administration have been before those £40 million-worth of cuts were made? The Conservatives controlled Suffolk for more than 100 years, yet at the end of that period the new Liberal and Labour administration has been able to make massive efficiency savings over the short four years that it has been in power. I am delighted that Conservative Members are saying that the new administration is still inefficient, in so far as that must mean that they condemn out of hand the previous Conservative administration, which was rightly thrown out of office four years ago.
You may remember, Mr. Deputy Speaker—no one else does—that on the Order Paper the debate is entitled, "Revenue support grant for Suffolk county council". Conservative Members have barely mentioned the revenue support grant for the county council, for which the Government are responsible. They have been interested only in how the county council behaves and whether its policies are efficient and sensible. That is not the Government's responsibility. I do not know how the Secretary of State can be expected to reply on behalf of the county council. Had Conservative Members remarked
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on the revenue support grant, he could have replied because that is what he is responsible for, but he cannot be expected to reply on behalf of the county council.
The only time that the revenue support grant was mentioned was when the hon. Member for Bury St. Edmunds said how good it was and how well Suffolk and his constituents had done compared to other parts of the country. It is clear from his figures that his constituents have not done well compared with real cost increases. That was an interesting change from the way in which Tory Members have hitherto spoken in the House about the settlements in their areas.
Mr. Yeo: On a point of order, Mr. Deputy Speaker. Is it in order for an hon. Member from another part of the country, who as far as I know has not previously shown any interest in Suffolk, to take up so much time in the debate that my hon. Friends who represent Suffolk and who requested the debate will be denied the opportunity to speak?
Mr. Deputy Speaker (Sir Geoffrey Lofthouse): I can assure the hon. Gentleman that it is in order; otherwise, it would have been ruled out of order.
Mr. Rendel: Thank you, Mr. Deputy Speaker. The hon. Member for Bury St. Edmunds certainly said that the revenue support grant for Suffolk was good for his electorate. I should have thought that his electorate would have felt that their interests were best represented by their Members of Parliament coming to the House to fight for more Government money for Suffolk. That is what Members of Parliament for Suffolk, or at least those on the Conservative Benches, have so far failed to do.
If I lived in Suffolk and heard the debate today, with Conservative Members of Parliament for Suffolk failing to request a penny more from the Government in this debate and saying that, in spite of the £40 million in cuts in the past four years, the Government were doing well by Suffolk, I would make sure that I did not vote Tory at the next general election.
12.1 pm
Mr. Michael Lord: It is clear from the speech of the hon. Member for Newbury (Mr. Rendel) that he does not understand Suffolk. There is no doubt that Conservative Members of Parliament for Suffolk make out the strongest possible case for their constituents and their county. They just do not do so in the ridiculous, high-profile and propagandist way that the present administration is doing. The hon. Gentleman talks about cuts. As far as I am concerned, cuts mean that one does not get next year what one thought one ought to get. The general public tend to feel that cuts mean that they will not get next year what they got this, which is completely untrue—pick a figure, and if one does not get the figure one wants, it is described as a cut.
I shall be as brief as possible as this is a short debate. I am delighted that we have had this debate, but I speak almost more in sorrow than in anger. I am sorry about the way in which the relationship between Suffolk county council, the House and Conservative Members of Parliament representing Suffolk has deteriorated in recent years.
Central Government have always allocated budgets to local government. It has to be that way. The Chancellor has to be in control. One never knows what might happen

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to the national economy, and that has always been so. In the past, local authorities accepted the money that they were given—some years they got more and some years less—and got on with it. That was until Liverpool city council started to do ridiculous things a few years ago, and the Greater London council followed suit.
Sadly, that tendency seems to have spread and, since the Liberal and Labour administration took over in Suffolk, it also seems to have spread to our county, doing great damage to the county, to its standing here and in Whitehall, and certainly to the relationship with Conservative Members of Parliament, which had been good. I want that relationship to be repaired if possible, but I fear that it will not happen under the present administration.
I must make two points. The first is the way in which the education budget was treated this year. Despite what the hon. Member for Newbury, who speaks for the Liberal party, and the hon. Member for Ipswich (Mr. Cann) say, there is no doubt that a massive, unfair and grotesque campaign was mounted about the state of education this year. Primarily, it has had nothing to do with the amount of funding that Suffolk has received, but much more to do with pure propaganda on behalf of the councillors who are in charge.
Recently, I attended a meeting of teachers, parents and governors in Stowmarket. I went to talk to them about education and I thought that they would want to talk about the performance of our Suffolk schools, of streaming, selection, opting out or not opting out, of class sizes and of the drugs problem in Suffolk, which sadly is growing. I thought that they would want to discuss those things, but not a bit of it—all they wanted to talk about was more money, more money, more money. We all know that they are not going to get more money, whoever is in central Government. The Labour party will not give them more and that is for sure. I wanted to talk to them, not about money but about all the other issues involved. They did not want to talk about those, and I was surprised.
What saddened me most was the way in which a large number of the people in the audience seemed to have bought the story being sold by the chairman of the education committee. He was present at the meeting, slumped in his seat for three quarters of it, until he finally made his presence known and delivered a ridiculous party political broadcast on behalf of his party as the audience's eyes glazed over. What a farce, and how unfair.
Like all hon. Members, I try to keep in touch with my constituents, with their problems and with education. To go to such a meeting and to hear nothing other than, "Yah! Boo! Give us more money," was appalling. In fairness to the audience, it was because they had been so deceived by the administration and made so anxious about what might happen that they felt that that was the way to go about things. As we all know, the truth has proved different.
Obviously, everyone wants more money for every possible department. We understand that. We have problems with our hospitals in Suffolk and we want more money spent on roads—social services no doubt want more money. It is someone's responsibility to carve up that cake and it has to be done centrally in the House. It will be done that way whoever is the Chancellor of the Exchequer and whichever party is in power. If local
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government cannot behave more sensibly when it is given a fair distribution, we are on the rocky road to all sorts of problems.
My second point is on the balance between spending in rural and in urban areas. A quarter of Ipswich is in my constituency—I share the town with the hon. Member for Ipswich. We have a park-and-ride scheme along the Norwich road, and bus lanes have been put in to establish the scheme. An enormous sum is being spent on it—money that could be spent more sensibly in other parts of Ipswich or in rural areas. The scheme will prove a complete white elephant. A bus lane already goes right the way down the Norwich road, but I rarely see buses in it. All it has done is produce queues of cars.
At the Suffolk county council transport committee meeting yesterday, someone told me that it is not a park-and-ride scheme at all, but just a bus lane. That is news to me and to the Secretary of State for Transport. I suspect that it is also news to Ipswich borough council, because it thought that it was on the way to a park-and-ride scheme. I think that the county council has discovered that there will not be enough money for the park, so we are just going to get the ride. There are massive queues of people in cars because of the bus lanes. Those bus lanes are there so that people can leave their cars and get on the buses, but they have nowhere to leave their cars.
What a ridiculous scheme, and what a huge waste of money. Does that not sum up the incompetence of the county council, the difference between rural and urban projects and the fact that the council is incapable of getting its priorities right and looking after the interests of the people whose money it is spending?
As I am conscious that time is short, I will bring my remarks to a close simply by saying that I sincerely believe, with my hon. Friend the Member for Bury St. Edmunds (Mr. Spring), that the county council's performance has deteriorated hugely in the past few years. More important, its understanding of how to behave and communicate and of the relationship between it and the House has gone badly wrong. I believe that that will change only when we change the administration. I hope very much that on I May we will get this lot out and a Conservative administration back in county hall, so that we can get back to common sense and a decent deal for the people of Suffolk.
12.9 pm
Mr. David Porter: We have heard much about the county as a whole, but parts of Waveney in north Suffolk are different. Suffolk is a big and varied county. There is a Suffolk identity but there are distinctly different areas in Waveney that need to be highlighted.
For many years, we were covered by Norfolk, not Suffolk, ambulances. We are still part of the Norfolk and Waveney training and enterprise council. Most of my constituents listen to BBC Radio Norfolk rather than to Radio Suffolk. Most people go to the Norfolk, show, few to the Suffolk show. We often look to Norfolk but we are proud to be part of Suffolk. That is why I share some of the concern of my hon. Friends about how the county council has behaved in the past four years.
There is a remoteness about Ipswich and events there that alienates people in my part of Suffolk. There is a feeling that big brother knows best. That is illustrated

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graphically by the traffic exhibition in Bungay, which is as far as one can get in Suffolk from Ipswich. To solve a heavy lorry problem in Bungay, the county council proposed to route several hundred heavy goods vehicles a day through the villages of Flixton and Homersfield on a minor road. It was only after an outcry from the villagers that it reluctantly agreed to public consultation and an exhibition. That shows that big brother knows best unless people make a fuss and fight back.
We have spent much time talking about education—rightly, because it uses a lot of the taxpayers' money that the county council spends. I use the county's education in a big way; I have four children, all in local authority schools. It was as a parent that I first became alarmed by the circulars from schools, heads and, in some cases, governors. Later, my constituents alerted me as their Member of Parliament to the threats and scares about the alleged budget cuts. If the authors of the circulars had waited, they could have campaigned on the facts.
The hon. Member for Ipswich (Mr. Cann) said that the county council had always campaigned like that, regardless of who was in control. The difference is that, this time, heads and some school governors were publicly behind the campaign. It was that which alarmed parents. They believe their head teachers in the same way that patients believe doctors before they will believe the facts given by the Government.
Some years ago, when the scaremongering campaign started, I asked the Government what were the reserves in school funds in Suffolk. Suffolk had the fifth highest in the country. It is facts we need, not scaremongering, but that has been a hallmark of the county. That authority has urbanised the entire county council, placed kerbstones in most rural areas, and put a blanket 30 mph speed limit in villages. While 30 mph may be right for some villages, the blanket approach is wrong. Big brother knows best.
Finally, why does the county council think that it can run all the social services homes in Suffolk much better than the private sector, when the costings clearly show that the private sector delivers the best service? The administration of the county council has been a disaster; the sooner it goes, the better.
12.13 pm
Ms Hilary Armstrong: I shall be brief because the Secretary of State wants to speak. As it is his county, he wants to make a substantial contribution. I want to be fair and allow him to do so.
However, fairness has not been prevalent in the debate, and that has saddened me. It is our role to recognise that local government is the legitimate tier of government for education, social services and so on. Inevitably and rightly, local government is much closer to local ambitions and anxieties than we are. It has a job to do. It is our job to question and challenge, but we must recognise that councils are elected to do a job, and that we should support them in doing it.
I was concerned about the ignorance of some Conservative Members of where local government finance has gone in recent years. No Conservative Member—I say this particularly to the hon. Member for Central Suffolk (Mr. Lord)—mentioned the change in local government following the incredible mess left by the poll tax. That led to 80 per cent. of local government spending being determined by central Government. It
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hasnow led the Secretary of State to acknowledge that that is a ridiculous way to fund local government.
For the past two years, the Government have signalled that they wish to begin to put more of the burden on local council tax payers. That is why they made it clear in the Red Book after the Budget that, over the next three years, local government will be expected to raise an additional £4 billion to meet the requirements that the Government identify for local government spending.
It is no good hon. Members ranting about how local government sets its priorities. We allow it little latitude in setting them, as the hon. Member for Central Suffolk said. Most priorities are set in the House by the Secretary of State and approved by the House.
The debate on education has been interesting. The hon. Member for Bury St. Edmunds (Mr. Spring) wanted it both ways, but that is all right. I wondered whether he was really saying that the local authority should not prioritise or expand nursery education. I hope that he can reassure his constituents that he supports high-quality nursery education. All the evidence shows that that is the best way to ensure that children get the best start in education. The impact of nursery vouchers on the ability of local education authorities to ensure that all children get the opportunity of high-quality nursery education will in many counties be severe. It is no wonder that they are making sure that local people understand the importance of using nursery vouchers in local nursery classes.
I was asked some questions by the hon. Member for South Suffolk (Mr. Yeo). I, too, represent a largely rural constituency with limited urban occupation, so I have some knowledge of the problem of identifying how most effectively to support people in rural areas. He asked about our spending plans. I am sorry that he has not attended previous debates in which I have made clear our position on local government spending. If we win the next general election, we shall be left with levels of Government debt unprecedented since the war.
Given that, and given increasing pressure on inflation, we do not say that what the Government spend is adequate. We say that we are not prepared to put additional burdens on the British taxpayer. The tax burden on the ordinary British family is 3 per cent. higher than it was in 1979 as a result of the Government's incompetence. Therefore, we cannot expand the amount that we can do.
Other hon. Members have noted that all the county's transport policies are policies approved and supported by the Government. This year, Suffolk county council will spend £8 million more than the Government say that it should spend on education, yet Conservative Members complain. Over the past four years, Suffolk has spent £50 million more than the Government have said that it should. This year, education is the only service that is being protected; every other service is having to be cut to meet the limit.
It is up to all of us to ensure that local people receive the best services available. We must trust local government to decide its priorities. Local councils will be put to the test this year, just as we will, and the people of Suffolk will decide which party they want to guard their interests.
12.19 pm
The Secretary of State for the Environment (Mr. John Gummer): The most important way in which local authorities and Members of Parliament can work is together. I have always believed in that, and in the past I have been able to participate, with colleagues from other political parties, in discussions with the Government of the time on the issues affecting Suffolk.
I was surprised at the beginning of the new Labour-Liberal coalition when Suffolk county council told me that, in future, political bosses, not officials, would respond to all letters. I was told that I would not receive replies to letters on behalf of constituents, who would be contacted by the local authority. The Member of Parliament who had raised the case would ultimately receive a copy of letters that had been written to constituents. The council began to behave like any other county council only after I pointed out to it very firmly that its behaviour would have to be raised with the authorities of the House of Commons as being entirely inappropriate. That was a bad beginning for the relationship between Members of Parliament and the county council.
I can therefore excuse the hon. Member for Newbury (Mr. Rendel) for not understanding that the situation in Suffolk was different from that in any other council that I know. The council started with the intention of having no dialogue with Members of Parliament, which perhaps explains why I have received no request from it to bring its officials and members from all parties to lobby the Government, as other councils do. I have not received a request from the council to talk to its members. I have not received any requests from the county council except requests that were so party political that it was difficult to take them seriously.
I understand why the motion has been tabled today. It is not just a general criticism of a party structure with which my hon. Friends disagree, but a particular criticism of a specific county council which has behaved in an entirely unSuffolk-like way. It never happened with previous administrations, which always sought to act on an all-party basis over matters affecting the county. I was lucky enough to be able to work in that way, even with people who, as candidates, had fought me in previous elections.
The education standard spending assessment increase in Suffolk has been significant, as has the overall increase.
Mr. Cann: On a point of order, Madam Deputy Speaker. The right hon. Member for Suffolk, Coastal (Mr. Gummer) is in a strange position: he is the Secretary of State and, as such, I thought that he would respond to the debate. But he is also a Suffolk Member of Parliament. Are you quite clear about which role he is currently playing?
Madam Deputy Speaker (Dame Janet Fookes): I do not take responsibility for what an hon. Member says, whether he is a Secretary of State or the humblest of Back Benchers. All I am concerned about is whether the contribution is relevant to the subject in hand.
Mr. Gummer: Thank you, Madam Deputy Speaker.
Last year, Suffolk had an education SSA increase of 4.1 per cent., which compares with the shire county average of 3.5 per cent. It received more than the average; it did so in the context of an official Opposition party which says that it would not increase the amount of money available were it ever to gain power. Suffolk county council has therefore received significantly more of an agreed amount of money than its neighbours and significantly more than the average, which contrasts with a county-wide determination to have a 5 per cent. cut.
When I, as Secretary of State—
Mr. Cann: Will the right hon. Gentleman give way?
Mr. Gummer: No. The hon. Gentleman did not give way and I shall not give way.
When I, as Secretary of State, saw the situation, I told the county council that it could not possibly know what sort of settlement would be made, because I had not decided on it; I was still discussing it. When Opposition Members suggest that I agreed the county council figures, that is precisely the opposite of the truth. I told the county council directly and without question that no decisions about the figures had been made. The county council still insisted that there would be 5 per cent. cuts.
The results showed—as the council knew perfectly well that they would—an improvement in its position owing to the Government's determination to protect the education budget. Having said how desperate the cuts would be for education, the county council did not rush to spend the money on education in the previous year. It did not do so, although it was able to spend significant sums—above £10 million, and well up on what it had expected. It did not spend the money on education, but took some of it for other things.
I am surprised that my hon. Friends did not mention the proliferation of large placards throughout the constituency that have suburbanised the area. Every village has a large notice that not only states its name, but has yellow backing and three white bars. Many of the placards have the word "village" on them in case people do not realise that it is a village. All the placards were paid for out of the money—more than £2 million. The money did not need to be spent in that way; our schools could have done with it.
This is an urbanising county. The hon. Member for Ipswich (Mr. Cann) said that the chairman of the county council's education committee came from a country constituency. In fact, he represents the almost entirely built-up area of Stowmarket. The hon. Gentleman's knowledge of the county is the same as the Labour party's knowledge of county life—that is the problem that we face in the county of Suffolk.
The comments of the hon. Member for North-West Durham (Ms Armstrong) on nursery education were scandalous. She evidently supports the county council's policy of threatening parents and saying that, if they choose to use their vouchers anywhere other than in the county council's nursery schools, they will be less likely to be able to send their children to the primary schools of their choice. Such bribery is unacceptable in a free society.

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The incompetence of Suffolk county council can be clearly shown. In June 1996, Suffolk employed 21.3 staff per thousand of its population, compared with a shire county average of 19.3. The figure for Lincolnshire, a similar council, is 16.6 and for Norfolk, 19.3. Even Berkshire does better than Suffolk, with 21.3 staff per thousand of its population.
Opposition Members talk about a competent council administration. The fact of the matter is that the county council has suffered from the continuous internal strife between the chairman of the county council education committee and the leader of the council, and that is why there cannot be a common view among hon. Members on both sides of the House to bring to Ministers the concerns of Suffolk—there is not even a common view within the Labour party. The two of them fight like cat and dog and appear at all meetings together so as to ensure that neither says what he has promised not to say.
That makes Suffolk the one county that cannot be properly represented to Government—there is not the necessary dialogue. The dialogue was broken when the present administration came into power. I am sorry that we have had to have this debate, because I want to work with the county council and am prepared to do so under any administration—but it has to be prepared to work with me.

Incapacity Benefit
12.30 pm
Mr. Elfyn Llwyd: I am pleased to have secured parliamentary time to debate this issue, which will undoubtedly apply to thousands of people throughout the British Isles.
The best way of highlighting the problem is by describing the circumstances surrounding the case of my constituent, Mrs. Ann Weatherby of Brynhailog, Abertafol, Aberdyfi. In 1989, due to her having to retire on the ground of ill health, Mrs. Weatherby applied successfully for invalidity—now incapacity—benefit. She did not wish to relinquish her post as a headmistress, but she had no option but to do so because of her medical condition. In September 1992, she was informed that she would no longer qualify for incapacity benefit when she attained the age of 60—state retirement age—the following January.
I shall pause in Mrs. Weatherby's story for a minute or two to explain the background. The Government's reasoning for incapacity benefit is really an application of the principle of restitutio in integrum—in other words, it is an income replacement benefit that is designed to replace loss of income during working life, and the rate of benefit after state pension age is linked to pension entitlement as part of an interlocking system of contributory benefits.
Mrs. Weatherby's contract of employment and her conditions of service—the national conditions of service applicable to head teachers—would have allowed her to continue in employment until 65. This is therefore a clear case of discrimination which is embodied in United Kingdom law. It is also the crux of my argument, and it will assist us in our detailed consideration of the case and its ramifications if I refer to two recent authorities on this subject.
The two cases that bear directly on the facts of Mrs. Weatherby's case are those of Graham—which is reported in CS27/1991—and Thomas and others v. the Secretary of State for Social Security, which came before the European Court of Justice. At first instance, a social security commissioner ruled that a woman receiving invalidity benefit should not have her benefit reduced when she reached 60, because a man would not have his benefit reduced until he reached 65.
There is a body of European law that outlaws discrimination on the ground of sex. I refer briefly to council directive 79/7/EEC of 19 December 1978 on the progressive implementation of the principle of equal treatment for men and women in matters of social security. Article 4 states:
"The principle of equal treatment that there shall be no discrimination whatsoever on grounds of sex either directly, or indirectly by reference in particular to marital or family status in particular as concerns:
—the scope of the schemes and the conditions of access thereto, —the obligation to contribute and the calculation of contributions,
—the calculation of benefits including increases due in respect of a spouse and for dependants and the conditions governing the duration and retention of entitlement to benefits."

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However, in article 7(1), the directive allows member states to exclude from its scope the determination of pensionable age for the purpose of granting old-age and retirement pension
"and the possible consequences thereof for other benefits".
These are the most important words, because they seem to justify legal discrimination in this area.
The Thomas case went to the Court of Appeal, where it was held that the words
"and the possible consequences thereof for other benefits"
had to be construed strictly and in accordance with the Community principle of proportionality. Indeed, any derogation from the equality principle must remain within the limits of what was appropriate and necessary for achieving that aim.
In a case parallel with that of Thomas, a social security commissioner in the Graham case took an important view of the whole matter—interestingly, the commissioner concerned was called Skinner. He looked at the argument advanced by the Secretary of State in Thomas, which was reported in The Times on 22 August 1990. It was contended that Parliament had found it necessary to distinguish between people of working life and those not of working life by reference to the pattern of employment—the working patterns of men and women differ, with women tending to retire at 60 and men at 65—and that, until that pattern changed, income replacement benefit had to be tied to pensionable age. There was a link between the use of pensionable age in connection with retirement pension and its use in connection with other income replacement benefits.
The commissioner rejected that approach. He referred to the Court of Appeal judgment in Thomas in which, as I have said, the court held that the words
"and the possible consequences thereof for other benefits"
had to be construed strictly and in accordance with the Community principle of proportionality. The commissioner quoted from the judgment of Lord Justice Slade, who said:
"Construing the phrase 'and the possible consequences thereof for other benefits' strictly and in accordance with the principle of proportionality, I conclude that it gives Member States authority to prescribe or retain different age limits for men and women when defining the qualifications for entitlement to benefits other than old-age and retirement benefits only when this is a necessary consequence of their having defined the qualifications for entitlement to old-age or retirement benefits by reference to different age limits for men and women and only in a manner which is appropriate to meet this necessity."
The commissioner, rejecting the argument advanced on behalf of the assessing officer, said that he had difficulty accepting the concept of a deemed end of working life and that he could see no reason why invalidity benefit should have a different cut-off point for men and women. He went on to say:
"I have asked myself whether the fixing of pensionable ages—different ages for men and women—requires a special rule relating to invalidity pension which would also discriminate. I cannot see that such is a necessary consequence of Parliament having defined the qualifications for entitlement to retirement pension by reference to different age limits for men and women. I see no objective link … in my view it was not necessary to gear invalidity benefit to retirement age."
Finally, the commissioner went on to consider the issue of invalidity allowance. The claimant was awarded invalidity pension in April 1989 when she was 58 years
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old. It was argued on her behalf that, if a man had become incapable at the same age as the claimant, he would have been entitled to invalidity allowance. He would have been more than five years away from the pensionable age for men, which is 65, whereas the claimant was not more than five years away from the pensionable age for women, which is 60. The commissioner accepted that argument, and concluded that the claimant was also entitled to invalidity allowance payable at the lower rate.
The commissioner had originally adjourned the hearing of that case to await the outcome of the appeal by the Secretary of State from the decision of the Court of Appeal in Thomas. The Court of Appeal had heard five cases together, collectively known as Thomas. The Court of Appeal held that the discriminatory upper age limit is in breach of the directive on equal treatment in social security. It said that it was not a "possible consequence" of the setting of different pension ages for the granting of old-age or retirement pension and therefore did not escape the requirement that there should be no discrimination. Women were entitled to severe disablement allowance or incapacity allowance, as appropriate, in the same way that a man of the same age would be.
"Halsbury's Laws of England", from which Lord Justice Slade quoted in the Thomas case, states:
"The principle of proportionality requires that the means used to attain a given end should he no more than what is appropriate and necessary to attain that end; in other words, persons may be obliged only to make the least sacrifice consonant with achieving the objective sought.
In order to establish whether a principle of Community law is compatible with the principle of proportionality, it is necessary to establish whether the means it employs to achieve its aim correspond to the importance of the aim and whether those means are necessary in order to achieve it.
Whether a measure is disproportionate or not is not necessarily determined by reference to the individual position of any one particular group of operators. The principle of proportionality applies also to national measures."
In his judgment, Lord Justice Slade said:
"Thus, even apart from the inconclusive nature of the statistics placed before the court, the, as yet unknown, impact of the Barber decision was a further reason why the sex discrimination involved in sections 36(4)(d) and 37(5) could be justified by reference to the assumed working life of a woman as opposed to a man.
A general assumption of that kind, which took no account of individual circumstances and made without adequate factual basis, itself discriminated against women.
The onus had to fall on the secretary of state to show that the designation of different age limits for men and women, when defining the qualifications for entitlement to SDA and ICA, was a necessary consequence of Parliament's having defined the qualifications for entitlement to old-age and retirement benefits by reference to different age limits for men and women."
For the reasons that he had given earlier, his Lordship concluded that he did not think that that onus had been, or could be, discharged. Accordingly, the Secretary of State's appeal was dismissed.
The Secretary of State then appealed to the House of Lords, which in turn referred the case to the European Court of Justice for a preliminary ruling. That court eventually held in favour of the Secretary of State. It is interesting that the Government were able to put aside their disdain for, and distrust of, the European Court of Justice and apply to it in this case when they found it convenient to do so.
Whatever financial repercussions might result from changing the law, I believe that there is a moral imperative to do so. To put it another way: what price justice, fairness

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and decency? Surely there is not too high a price on those principles, which I think should be uppermost in the thinking of any Government Department—especially the Department of Social Security. How can any Government pay lip service to the principle of equality and stand by this iniquitous position?
The Minister may respond by telling me that matters of social security are outside the scope of the Sex Discrimination Act 1975, by virtue of section 51. I am fully aware of that fact. However, the EC directive to which I referred lays down certain minima that are expected of member states in awarding statutory social security benefits. I believe that the Thomas decision is unsatisfactory because it upholds sexual discrimination and, therefore, the law should be changed. I believe also that it is abhorrent that women should be treated so unfairly with the full sanction of the law.
In the case of my constituent, Mrs. Weatherby appealed the decision, and was initially successful in that her payment was restored in full. However, consequent on the Thomas decision, the position was reversed, and Mrs. Weatherby was told to appeal to a social security tribunal. She did so, and I appeared before a tribunal—unpaid—on her behalf on 28 January this year. Although we received a very sympathetic hearing, the tribunal considered itself bound by the Thomas decision and, therefore, could not find in my constituent's favour.
That is why I applied for the debate today. By highlighting this problem, I believe that we can initiate a serious debate that will lead to a change in the law. I am indebted to my constituent, Mrs. Weatherby, for her determination and perseverance and for her resolve to fight for a principle, despite the fact that she was unlikely to gain personally. I applaud her tireless efforts and her selfless attitude. The Equal Opportunities Commission and the National Association of Citizens Advice Bureaux have assisted me in highlighting the argument.
In opening this important debate, I said that I believed that the situation would affect thousands of women throughout the British Isles. This morning, I received a telephone call from a constituent of my hon. Friend the Member for Ceredigion and Pembroke, North (Mr. Dafis), Mrs. Morfidd Strange of Gelli Aur, Commins Coch, Aberystwyth, who told me about her situation. She was also a teacher who suffered extreme facial pain and was forced to retire early through ill health. When she was awarded incapacity benefit some years ago, the officer assured her that it would be paid until she was 65. Recently, and without warning, she received a letter saying that the benefit would cease when she attained the age of 60. Her weekly income from that source summarily dropped from £76.33 to £40.72. She also told me that she knew of at least three similar cases in the Aberystwyth area alone. Therefore, I conclude that the problem is widespread.
I am sure that we all believe in equal treatment for people of different sexes. I think that this situation is a glaring omission which must be put right. I invite the Minister to state today whether that area of policy will be reviewed. Failure to do so would condone unfairness and discrimination—which can never be the aim of any Government in any civilised society.
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This is only the start of the campaign, and I urge any future Labour Government to make a commitment to equal rights, such as evidenced by Labour's worthy campaign to secure greater female representation in the House. I believe that it is also incumbent on any future Labour Government to put that principle into practice and end this iniquitous and offensive discrimination, whatever the cost.
12.46 pm
The Parliamentary Under-Secretary of State for Social Security (Mr. Andrew Mitchell): The issue that we are debating concerns the rules for the payment of invalidity benefit to people over pension age. Until April 1995, invalidity benefit was the main social security provision for sick and disabled people who were incapable of work in the long term. Hon. Members will recall that we overhauled that benefit provision in April 1995 and replaced invalidity benefit with the new incapacity benefit.
I think that it is important to ensure that we do not lose sight of the background to that significant improvement. The rapid growth in recent years in both expenditure on invalidity benefit and in the number of people receiving it was beyond dispute. if left unchecked, spending on that benefit alone was forecast to reach £10 billion by the end of the century; yet there was no evidence of any deterioration in the health of the nation as a whole—no wonder concerns were growing that invalidity benefit might be going to people for whom it was never intended. No responsible Government could ignore those developments.
That is why we replaced invalidity benefit with incapacity benefit in April 1995. We have provided a more objective test of people's ability to work, to ensure that benefit is focused on those who are genuinely incapable. The changes ensure a fair system for people who are unable to work that is also fair to the taxpayer. These reforms are a major success, and are on course to reduce expenditure by £2.3 billion a year in the long term.
I pay tribute to the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) for the energy that he has devoted to pursuing this specific case, and I congratulate him on securing this Adjournment debate. His interest in these matters is such that my officials had no difficulty identifying the case that he wished to raise. I am grateful to him for confirming the specifics of that case, and I welcome the opportunity to debate the issue. Having examined Mrs. Weatherby's case, I am satisfied that her benefit claim has been handled correctly by the Benefits Agency. The hon. Gentleman may find it useful if I outline the background to the rules that have led to the decision in Mrs. Weatherby's case.
Under the invalidity benefit scheme that existed before the introduction of incapacity benefit in April 1995, payment of benefit could continue for up to five years beyond the state pension age. However, for people over pension age, the amount of benefit paid was based on the rate of retirement pension to which they would be entitled if they had claimed it instead. That meant that invalidity benefit changed to the pension rate, as the hon. Gentleman said, at the age of 60 for women and 65 for men.
Unlike invalidity benefit, the amount of retirement pension to which people are entitled depends on their overall national insurance contribution record throughout

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their working life. That is why people who chose to stay on invalidity benefit found that it went down after they reached pension age, if they had not paid enough national insurance contributions to qualify for a full-rate retirement pension. That is what happened in Mrs. Weatherby's case.
I should explain that that rule simply put such people in the same position as those who had been working immediately before reaching retirement age. That is clearly right, as to do otherwise would have placed pensioners who chose to remain on invalidity benefit at an unfair advantage over those receiving their retirement pension.
We have always believed that those rules complied with European equal treatment law. In particular, directive 79/7/EEC on equal treatment in social security specifically allows different pension ages for men and women, along with the possible consequences for other benefits. However, on 1 April 1992, as the hon. Gentleman mentioned, a social security commissioner decided that such different treatment of men and women was not permitted by the directive, and that invalidity benefit in payment to women should not be changed to the pension rate when they reached the age of 60.
The Secretary of State and the chief adjudication officer jointly appealed against the social security commissioner's decision to the Court of Appeal. As a result, the increased rate of invalidity benefit awarded to women after the age of 60 was suspended by the Secretary of State pending the outcome of the appeal and clarification of the law.
The Government acknowledged that, while the appeal was outstanding, this area of the law remained unsettled, and were sensitive to the concerns of the women affected. That is why we decided not to impose the suspension of the increased benefit in cases of hardship. Mrs. Weatherby was one of a number of women who were allowed to continue receiving the higher rate of benefit awarded as a result of the commissioner's decision, even though that decision remained the subject of an appeal.
In January 1994, the Court of Appeal decided to refer the case to the European Court of Justice for a preliminary ruling on questions of European law relevant to the case. The European Court of Justice delivered its ruling on 11 August 1995. That ruling fully supported the Government's position and confirmed that the linking of invalidity benefit rules to state pension age was permitted by European law.
The case was formally disposed of by the Court of Appeal in December 1995. By that time, invalidity benefit had been replaced by the new incapacity benefit, and those receiving it had transferred to the new benefit. Following the European Court's decision, the Benefits Agency undertook to review those cases where an increased amount of invalidity benefit was—as we now know—incorrectly awarded, following the commissioner's decision in April 1992.
Once those cases had been reviewed by an adjudication officer, in line with the court's decision, it followed that there was no longer any legal entitlement to the increased invalidity benefit. Accordingly, payments that were being made on the grounds of hardship automatically ceased.
I set out those points clearly to the hon. Gentleman, as that is precisely the position that applied to Mrs. Weatherby. I emphasise that the increased money paid to people in that position was based on a decision
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that was later held by the European Court to be incorrect. The money has therefore been overpaid. I can, however, reassure the hon. Gentleman that we will not take any action to recover those overpayments from his constituent or any others who were involved.
Mr. Llwyd: I appreciate the Minister's detailed response. It is a principle of social security law that, if the applicant has not fundamentally misled the agency, there is no ground for it to claim repayment, but I hear what the Minister says.
Mr. Mitchell: The hon. Gentleman is right in his interpretation of social security law. I stress that, in the circumstances, the money was overpaid, but that the Government will not seek to recover it.
The hon. Gentleman noted that the European Court ruled in Thomas that the different upper age limit breached European law. My response is that the Thomas case concerned non-contributory severe disablement allowance. The Graham case was decided by the European Court after the Thomas case, and the court held that the linking of contributory benefit to pension age was permitted by the European equal treatment directive.
Invalidity benefit and its replacement, incapacity benefit, are contributory benefits designed to replace earnings during periods of sickness. We believe that it is reasonable to limit or, as with incapacity benefit, to cease paying such a benefit when people reach an age where they are no longer required to work. Once a person has reached pension age, we believe that retirement pension or a benefit paid at the equivalent rate is appropriate.
Mr. Llwyd: The Minister is generous in giving way again. The point at issue in the Weatherby case and the other cases to which I referred is that, under the national conditions of service, teachers are entitled to work until age 65. The Minister referred to people being
"no longer required to work."
There is a requirement to work until 65. It is a choice, of course, but it is a standard condition of service in the teaching profession. That distinguishes those cases.
Mr. Mitchell: I understand the hon. Gentleman's point. Sadly, however, for whatever reason, his constituent was unable to work. That is the key fact that the law and the Department of Social Security should take into account.
Income-related benefits would remain available for people who subsequently found themselves without sufficient income or other resources. The Government have made additional sums available to poorer pensioners who have no means of support other than the state pension. That is to protect people, especially poorer pensioners, on low incomes.
Linking the payments of invalidity benefit to people who have reached pension age to the retirement pension rate was not a new rule. It operated under successive Governments and was a long-established principle in the national insurance system as a necessary consequence of the different retirement ages for men and women.
The European Court of Justice ruling has confirmed that the United Kingdom may retain those rules linked to pension age, but in the longer term, as I am sure hon. Members are aware, the state pension age for men and

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women will be equalised at age 65. The change will not be fully implemented until 2020, as it is being phased in gradually from 2010. When it is fully implemented, there will no longer be any difference in benefit provision for men and women. That meets, at least in part, the hon. Gentleman's concern about sex discrimination. Equalisation is the Government's policy and will be achieved by 2020.
Finally, I again congratulate the hon. Gentleman on securing the debate and on the diligence with which he has pursued the case of Mrs. Weatherby, his constituent, including attending a social security appeal tribunal. Clearly, he has well served his constituent. I hope that my remarks, which may not satisfy him in full, will explain to him and to the House why the Government reached the conclusion they did in the case of his constituent.

Social Services (East Sussex)
12.58 pm
Mr. Nigel Waterson: This debate is very timely, coming on the day after the county council's budget meeting, and also the day after publication of "Better Value for Money in Social Services", of which more later.
On any view, the budget in East Sussex has been a moving target again this year. Across the whole range of spending—including spending on social services—we have seen the Liberal Democrat administration indulge in its usual mixture of scaremongering, blatant party politicking, and plain ineptitude. The technique is to hype up a range of possible so-called cuts in spending in order to antagonise and worry the maximum number of interest groups and individuals. When they understandably react, an attempt is made to blame the wicked Government.
For education, for example, East Sussex was given a generous funding increase of £7 million this year, but we have seen the spectacle of local Liberal Democrat politicians and paid officers of the council warning schools of the possibility of a £1.2 million cut in their budgets. Indeed, at meetings of governors only just before half-term, head teachers were reporting on possible redundancies among teaching staff. Only during the half-term holiday did the Liberal Democrats choose to unveil their plans, and to accept that there would now be no cuts in schools budgets. What an appalling way to treat professional people, as well as governors and parents.
The story in social services is, if anything, even more dismal. In the past, I have often accused the Liberal Democrats of behaving as if they were in opposition, when they are actually running things, and this year is no exception. In the words of Councillor Michael Tunwell, leader of the Conservative group on the county council, we are in the realms of "virtual reality" budgets. I look forward to the restoration of a competent and sensible Conservative administration on 1 May.
Predictably, the Liberal Democrats try to blame inadequate central Government funding. What are the facts? The standard spending assessment for 1997–98, on which Government grants are based, is to increase by 3.5 per cent., which is a larger increase than has been received by any county. If we assume that the council will spend up to its capping limit, that means a total this year of £305.5 million.
The total resources available for personal social services will amount to £123,322,000 in the current year. That represents no less than an 81 per cent. rise in real terms since 1990–91, compared to an average of 68 per cent. for the whole of England. Even over last year, there was an 8 per cent. increase in cash terms. The total resources available for community care have risen by 100 per cent. in real terms since 199–91.
Some confusion has arisen because of the relationship between the special transitional grant and the SSA, and the switch from the one to the other. The STG was always intended to be temporary, as its name suggests. Also, we must see all those points against a background of dramatically increasing resources for personal social services.
Since 1994, all the new resources given to local authorities for their new community care responsibilities have been distributed according to the SSA formula.

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It follows that there is no difference between the amount that authorities receive when the additional funds are paid via the STG, and the amount they receive when it is transferred into their baseline resources and paid according to the SSAs. It is possible to identify a small difference in resources for 1994–95, but it is essentially a presentational rather than a real difference. This is a complex issue, and I imagine that my hon. Friend the Minister will want to expand on it.
Actual spending in East Sussex has swung wildly back and forth in recent years. An underspend of £3 million on community care became a £4.22 million overspend in the current year, with the forecast of an overspend of £7.3 million next year.
Mr. Charles Wardle: Is there not a disturbing contradiction between the misleading claim of the chairman of social services that the county is actively encouraging independent care bed provision by the private sector, and the legitimate complaint of the Registered Nursing Home Association that none of the Government-funded increase is being passed on to the private sector? Has not the director of social services admitted to my hon. Friend, and to other colleagues, that private care beds in East Sussex cost much less than beds in care homes run by the county council? He has not grasped the nettle, however.
May I point out to my hon. Friend, on behalf of my hon. Friend the Member for Hastings and Rye (Mrs. Lait)—who, being a Government Whip, is prevented from speaking by parliamentary rules—that the social services department in Lewes is refusing to meet the cost of referring patients to St Augustine's nursing home, thereby putting the management of St Michael's hospice in further jeopardy? Is that not a gross dereliction of responsibility?
Mr. Waterson: My hon. Friend is absolutely right. I intend to develop those points later in my speech, but let me say now that, even if the Government could be persuaded to give a few million extra pounds to East Sussex, there would be no guarantee that the money would find its way through the system to independent care home owners.
How wisely are these substantial sums being spent at present? East Sussex prides itself on hitting what it calls the Government's "target" for spending in the independent care sector. That, of course, is based on a false premise. The Government set a minimum figure of 85 per cent., but, as my right hon. Friend the Secretary of State has made clear:
"The local authority's primary role is as an enabler and commissioner of services."
Is it really sensible for this or any other council to insist on keeping its own part III accommodation going, when it is often aging and unsatisfactory compared with provision in the private sector?
It is clear from correspondence I had last year with Mr. Holbrook, the director of social services, that, at long last, the council has begun to consider seriously whether to transfer provision from the public to the private sector. According to figures that I have seen, there is a disparity of at least £150 per bed per week between what the council spends on its own homes and the amount spent in
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the private sector. Only last year, Mr. Holbrook accepted that there was a potential net saving of £2 million, which is almost certainly an underestimate.
In any event, that money could be immediately available to meet other pressing needs in my constituency and elsewhere. May we be told what plans the county council now has to transfer provision from one sector to the other? It is significant that there is no provision in the capital programme for upgrading the council's part III accommodation. Does that perhaps show a lack of commitment on the part of the current administration to keep the homes open for much longer? As recently as 11 February, Mr. Holbrook confirmed in a letter to me that the council was engaged in
"a reappraisal of the services which the County Council should continue to provide and a determination of those elements which are no longer needed."
Another issue is the cost of domiciliary care. I am told that, in the private sector, that can be provided at a cost of about £7 an hour, whereas in the public sector the cost is roughly double, at £14 or so. No wonder councils such as Kent—by no means a beacon of Conservative administration—contract out all their home visits, thus making significant savings.
The private care sector is a vital part of the local economy in Sussex. It is said to involve 10,000 jobs. I am indebted to Mr. Terry Fribbens of the East Sussex independent care group and his colleagues for pointing out to me the seriousness of the problem.
In my constituency, a number of homes have already gone out of business. We are told that the social services department is now operating a "one in, one out" policy. One distraught residential home owner contacted me a few days ago to say that he had been told by the department that it was freezing new referrals for at least two months. Stop-start policies of that kind can spell ruin, especially for small operators.
Sir Timothy Sainsbury: I think I am right in saying that the figures that my hon. Friend has just quoted are for East Sussex as now constituted. As he and my hon. Friend the Minister will know, the Labour-controlled unitary authority of Brighton and Hove will shortly be taken out of East Sussex. Is he aware that all the indications are that that local authority, if controlled by Labour as opposed to the Liberal Democrats—it is a matter of choice which is worse—is threatening to behave in exactly the same way as East Sussex in regard to care homes? That will have an equally damaging effect both on residents and on care home owners.
Mr. Waterson: I suspect that, in those circumstances, my right hon. Friend's worst fears will come to pass.
Sir Geoffrey Johnson Smith: I hope that my hon. Friend is also aware that Wealden contains the largest district authority in East Sussex, and that the value of residential homes—in terms of the employment they provide, as well as the services they give—are highly prized.
Mr. Waterson: My right hon. Friend is absolutely right.

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In a recent letter, Councillor Tutt, the chairman of social services, had this to say:
"Crudely this will mean a new client will not be provided with a service until the service to an existing client is terminated (usually on death). Inevitably the impact on the quality of life of people needing services, and on their carers, will be significant indeed. Legal challenges will doubtless materialise, and the businesses of a number of independent providers will be under very real threat."
On any view, those are pretty breathtaking admissions. Indeed, so lacking has financial discipline been under the present administration that, for the first time in living memory, officers of the council have had to take executive action, without prior reference to elected councillors, to try to bring the budget back under control. I hope that that point, among others, will not be lost on those who brought about a Liberal Democrat administration, either by voting for them, or more likely by simply staying at home on polling day.
Councillor Tutt goes on to say:
"Regrettably it will be impossible to avoid hospital bed blocking."
In addition to a self-imposed crisis in social services, East Sussex seems resigned to causing longer waiting lists in our local NHS.
I have long argued that one of the problems with social services in East Sussex is the council's mind set, which can be best summarised as "public sector good—private sector bad". Care home proprietors are incensed that the council, while freezing the weekly rates it pays them, will be adding to its overhead costs by allowing for a 2.5 per cent. rise in pay. On the other hand, the private sector will not be able to afford pay rises for staff, and in some cases will be looking at redundancies. That is not only wholly unfair, but makes no economic sense when the private sector is in a position to provide care that is at least as good as—if not better than—the public sector, and at significantly lower cost.
There are any number of examples of the strange priorities adopted by East Sussex. I have a letter from the National Association of Citizens Advice Bureaux, which expressed considerable concern about the budget proposals in East Sussex.
I was recently visited at my advice surgery by Mrs. Ho, of Communicare, who runs a successful psychiatric day centre. She had been told that her funding from social services is likely to be cut. All that that would achieve is a reduction in the number of days when she should open, with a knock-on effect on hospital admissions.
My hon. Friend the Member for Hastings and Rye, who is in her place, has passed me a letter from Mrs. Longbottom, one of her constituents. Mrs. Longbottom relates, as did my hon. Friend the Member for Bexhill and Battle (Mr. Wardle), that St. Augustine's nursing home has had to advise 10 of its residents that their contracts are being terminated. How many other examples are there around the county?
The net result of all this is that, despite the very substantial sums being channelled into social services in East Sussex by central Government, the funds are not being spent in the most sensible and cost-effective fashion, and residents of East Sussex will end up with a council tax that has increased by 9 per cent. in one year, or three times the rate of inflation—in other words, poorer
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services at greater cost. Perhaps that should be the Liberal Democrats' epitaph in East Sussex. Contrast that with the figure of £410, which was the equivalent band D tax level in the last year of a Conservative administration.
It is particularly timely, therefore, that, only yesterday, the Department of Health published "Better Value for Money in Social Services", which asks such pertinent questions as:
"Are we making deliberate, well informed decisions and priority choices about the development of our services?
Have we in place the appropriate tests to demonstrate that resources are being used to maximum effect?
What is the cost differential between placements in our own homes and residential care placements in private and voluntary homes? If our own homes' costs are higher, how do we justify the extra expense?"
With other colleagues, I eagerly await the forthcoming White Paper about the provision of social services. I do not know whether my hon. Friend the Minister is in a position to trail any of its likely proposals today. We already know that one issue that will be addressed is the relationship between social services departments' providing, commissioning and regulatory roles.
In East Sussex, the present administration at county hall is characterised by a lack of leadership, a sense of drift and an organisational nightmare. That means that, despite very substantial Government funding, there is a chronic inability to deliver the care that is needed when it is needed to the local people who need it.
1.14 pm
The Parliamentary Under-Secretary of State for Health (Mr. Simon Burns): I congratulate my hon. Friend the Member for Eastbourne (Mr. Waterson) on his success in securing this timely debate on funding for social services in East Sussex. He performs a singularly important function on behalf of his constituents by raising this issue today.
The importance of the issue and the concerns that it is causing people in East Sussex can best be demonstrated by the fact that my right hon. Friends the Members for Hove (Sir T. Sainsbury), for Wealden (Sir G. Johnson Smith), and my hon. Friends the Members for Bexhill and Battle (Mr. Wardle), for Brighton, Kemptown (Sir A. Bowden) and for Hastings and Rye (Mrs. Lait) are present today.
I know, not only from their interventions during the debate but from the way in which they have raised issues in their constituencies, at ministerial level and through the avenues that are open to them in the House, that they are as concerned for their constituents as my hon. Friend the Member for Eastbourne at what is going on, and the way in which a political party in this country is playing grubby political games with the most frail, vulnerable and elderly people in society.
It gives me no pleasure to say that I also have the misfortune—although, fortunately, not on the same scale as my hon. Friend—of having to face the tactics, the cheap ploys and the rather unpleasant soundbites of Liberal Democrats in my constituency. We all know the tactics, some of which were so eloquently described by my hon. Friend.
We know that Liberal Democrats have a handbook that advises their parliamentary candidates what to do. If local councillors see an issue on the agenda for which a popular

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decision will be taken, Liberal Democrats start a campaign calling for it, and, lo and behold, when the decision is taken, they claim the credit, even though they had little to do with it.
My hon. Friend highlighted what has become a despicable annual game for the Liberal Democrats in this country at this time of the year, in the run-up to the budget. They say, "Let's cause some scare stories. Of course, it won't be our fault—it's the Government's fault—so let's try to score some political points out of it." They then create stories of cuts here and cuts there. They say that there is a lack of funding, but that is not based on any reality or truth. They raise fears simply to try to win votes; then they place the blame for their own inadequacies and failings on someone else.
I should like to put that into perspective by setting the record straight. I make no apology for beginning my reply to my hon. Friend's speech by quoting some impressive statistics to underline the Government's commitment to funding social services fairly, so that the elderly, the frail and the vulnerable in our society get the best deal possible. That is what government is about: providing the funds for the best services, the best care, the best provision, so that the vulnerable and those who are often confused by the political rhetoric that is dredged out of the gutter by the Liberal Democrats, can have peace of mind and security, either in their own home through a domiciliary care package or in a residential or nursing home.
At the start of the 1970s, expenditure on social services in this country was just over £243 million per annum. That increased rapidly through the 1970s, 1980s and early 1990s, and spending is now more than four times more in real terms than it was in 1971–72. I think that all my hon. Friends will agree that that is an extraordinary record over such a sustained period.
East Sussex council alone has budgeted to spend more than £124 million on social services this year. That is £616 for every man, woman and child in that county. It is almost four times the level of net spending on personal social services by the county council 10 years ago, and more than double its net spending at the beginning of this decade. No area of the council's business has seen such a rapid expansion in its funding from central Government.
The Government have shown their commitment to people who need social care by the provision of almost £8 billion for personal social services in the forthcoming year nationwide. The amount provided for social services in East Sussex has increased from £56 million in 1990–91 to £123 million this year, which is an increase of 81 per cent. in real terms, and is noticeably above the national average increase of 69 per cent. in real terms.
The amount provided by Government for community care has grown from £41 million in 1990–91 to £101 million this year, which is an increase of 100 per cent. in real terms. In case the Liberal Democrats do not understand that, it is 100 per cent. over and above the rate
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of inflation during that period. Anyone who does not accept that that is a substantial increase is, quite frankly, living in cloud cuckoo land.
Mr. Charles Wardle: Is it not entirely predictable that not one Liberal Democrat is present to hear my hon. Friend's indictment of the party's performance in East Sussex?
Mr. Burns: As usual, my hon. Friend is extraordinarily perspicacious. He will probably have noted that, seven minutes into the debate, the hon. Member for Bolton, North-East (Mr. Thurnham) ambled into the Chamber, sat down and listened to the searing indictment made by my hon. Friend the Member for Eastbourne. He did not like what he heard, because he was ashamed of it, and he scuttled out fairly quickly afterwards.
It is worth pointing out that, when the Government provide a local authority with funding for personal social services, it is based on its standard spending assessment. It is up to local authorities, within their overall capping limits, to prioritise the services on which they want to concentrate more spending. A local authority can, if it wants, spend more on personal social services, education or some of the airy-fairy policies that are more akin to the demands and desires of the Liberal Democrats, even though they bear little resemblance to the desires of real people in the real world.
Mr. Waterson: Cycle paths.
Mr. Burns: My hon. Friend mentions cycle paths, and I can think of others.
In 1994–95, East Sussex county council underspent on its personal social services SSA by 1.2 per cent. In 1995–96, it spent over its SSA by just 1 per cent., and in 1996–97 it spent over its SSA by a mere 0.3 per cent. It is up to local councillors to take local decisions, but those figures seem small—there was even an underspend in 1994–95—given the crocodile tears they shed and the accusations, smears and scares they try to arouse in East Sussex.
The issue of special transitional grant is complicated, but let me try to put it into perspective. An SSA is set for personal social services, and above that there is the STG, which the Government introduced at the beginning of the community care programme. The STG provides additional money to fund the new community care programme and is ring-fenced, so that 85 per cent. must be spent in the thriving independent sector to protect it from the encroachment of a local authority. At the end of the year, that money goes into the baseline for the SSA, and the next year a further STG is ring-fenced.
That measure was introduced for four years, and I am sure that my hon. Friends will be delighted to know that our right hon. and learned Friend the Chancellor of the Exchequer has extended the provision for a further year from April 1997. That is important. In his speech to the Association of Directors of Social Services, my right hon. Friend the Secretary of State for Health said that we see the role of local authorities as enablers, and the private sector as the providers of the services that we need for our frail and elderly people.
Mr. Waterson: Is my hon. Friend aware that a great number of dedicated independent care providers in my

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constituency are raring to go? They can provide residential care, respite care, domiciliary care packages, day care and the whole gamut of social services provision, but their ambitions are being blocked by the rather old-fashioned attitude of East Sussex social services.
Mr. Burns: My hon. Friend is right. I pay tribute to the successful, dedicated and thriving private sector, not only in his constituency but in the constituencies of my other hon. Friends. He makes an important point. I commend to East Sussex county council the paper published yesterday, "Better Value for Money in Social Services". The council should study it carefully: the questions in each chapter are not difficult, so it will be able to understand them. Let us hope that it will come up with some constructive answers to enhance its performance in that area.
I am afraid that I must disappoint my hon. Friend, because I shall not be tempted to trail or leak the White Paper that my right hon. Friend will publish shortly. However, as a titbit and an inducement, I will say that the document will be extremely interesting and important. I strongly recommend that my hon. Friends read it, and that they ensure that their constituents are familiar with its contents, because it will be a good read.
My hon. Friend referred to bed blocking. I suspect that East Sussex social services have not made much of the extra funds to be spent on priority services next year to help with bed blocking. East Sussex health authority will receive £428,000, most of which is available to meet pressures arising from delayed discharge from hospital. Those funds are intended to be used to alleviate the most serious pressures and to focus on underlying problems, and they should bring long-term benefits to my hon. Friends' constituents.
In April 1997, East Sussex is to be reorganised. As my right hon. Friend the Member for Hove (Sir T. Sainsbury) mentioned, the Brighton and Hove area will become a unitary authority. I should like to say in passing that the Government have increased the provision for personal social services next year nationwide by a further 5 per
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cent., which brings the total resources up to £8 billion. Both East Sussex county council and the new authority of Brighton and Hove will benefit as a result of that increase.
I have a great deal of sympathy with my right hon. Friend and his constituents. I fear that his suspicions about the way in which the Labour local authority will run services may well prove correct.
I have sought to explain the vast amounts of money that have been made available for personal social services, but how that money is used to provide the best service is equally important. Social services departments are big business with large budgets. It is crucial that they obtain the best value for money to provide the best service.
It is telling that a local authority which complains that it does not have enough money to provide a service has advised me that the cost to a prospective elderly resident of an in-house placement in one of its homes is £355 a week, whereas the maximum cost of an independent residential sector place purchased by East Sussex is £203 a week. The difference is a staggering £152 a week, which has to be met by local council tax payers.
Last year, East Sussex had about 600 residents in its own homes. That represents a potential saving of almost £5 million, if my mathematics is correct. That high-cost difference is sadly not unique to East Sussex. When a local authority is complaining that it does not have enough money, I cannot understand how it can justify spending about £152 a person a week extra just by placing them in its own homes. There are similar problems with domiciliary care. By being competitive, the private sector can and will charge less, as well as incorporating its management costs into the overall charge.
I thank my hon. Friend the Member for Eastbourne once again for bringing this important debate to the House, and for representing the interests of his constituents against a local authority controlled by a party that has always been most comfortable when it is scrubbing around in the gutter with its scares and smears. I hope that all my right hon. and hon. Friends will use their undoubted talents to get the message across.
Madam Deputy Speaker (Dame Janet Fookes): We now move to the final topic this morning.

Farm and Countryside Enhancement (Northern Ireland)
1.30 pm
Mr. Eddie McGrady: I am grateful for the opportunity to raise this matter in the House. I thank the Minister, the right hon. Member for Westminster, North (Sir J. Wheeler), for attending the debate to respond on behalf of his ministerial colleague Baroness Denton, who is in charge of the Department of Agriculture in Northern Ireland.
The farm and countryside enhancement scheme is the most bizarre scheme that I have ever seen coming out of any Department in Northern Ireland. Its acronym is FACES; its result is bound to be red faces in the Department of Agriculture. The purpose of the scheme was to grant-aid for certain environmental improvements in the rural countryside of Northern Ireland, and, according to the press release, it
"provides an excellent opportunity for the farming community to contribute to the development of rural tourism, protect wildlife and preserve the Province's heritage."
The scheme is most unusual, because it was announced by press release on Monday 27 January and closed by press release at 5 pm on Thursday 30 January. The notice of closure appeared on the Friday, so the scheme commenced on 28 January, was ended by press release two days later, and lasted for three working days.
Advertisements inviting applications for the scheme first appeared on 1 February, two days after the scheme had closed. During the period, some of the agricultural offices throughout the six counties that open on a temporary or part-time basis were closed. Applications had to be made to the Department of Agriculture in Deny, so they could not possibly have arrived before the scheme was closed. There must have been an enormous courier service running from various parts of the north to the offices in Derry.
More strange and fundamental is the fact that qualification for this agricultural scheme is based on the incidence of terrorism. What that has to do with agricultural and environmental improvement must be beyond the ken of any sane man or woman.
Under the scheme, according to the press release, assistance would be provided in
"District Council areas which have suffered most from terrorist violence to encourage the adoption of environmentally sensitive countryside management and thereby maintain, improve and protect the landscape and habitat of the countryside."
Does that mean that, if one area has suffered more terrorist activity than its neighbour it can benefit from the agricultural grant scheme, but areas that have suffered less are cut out? Are we saying that communities that have striven over the past 25 years to keep terrorism at bay, keep the paramilitaries out of their communities and encourage good community relationships, should be penalised and completely excluded from the scheme? I do not think that there is any logic in that.
Funding for the scheme, which is not huge—I think that it is about £4.5 million—comes from the peace and reconciliation fund. I must ask once again whether landscape enhancement improves community relations. Does the improvement of wildlife habitats enhance community relations? I suppose that that depends on one's
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interpretation of wildlife in Northern Ireland. Does the improvement of water quality enhance reconciliation and peace in Northern Ireland?
The scheme is a ludicrous one of the first order. It includes such things as the preservation of traditional gates in fields and the thatching of houses, yet there are very few thatched houses in Northern Ireland. Such is the predication on which the scheme has been built.
Twelve of the 26 district councils have been totally excluded from the scheme. Is not that in itself an in-built injustice? They are excluded because they have not suffered sufficient terrorist incidents. Is not that a crazy basis on which to allocate public grant aid? How does one measure the incidence of terrorism? I do not want to enter a sickening argument, but I must ask whether one death in one district is equated with 10 knee-cappings in another, or found to be less worthy under the scheme? Getting into such areas is very peculiar.
My constituency is partly in and partly out of the scheme, but I hope that I am talking for the entire rural community in Northern Ireland that has been excluded by the manner and basis of the scheme. My home district of Down has suffered some of the greatest tragedies and massacres during the terrorism of the past 25 years, yet it has striven mightily against retaliation to retain good community relations, which is acknowledged. What is its reward? Exclusion from the scheme. There is no real justification for that.
The city of Belfast is included in this rural environmental improvement scheme, yet there is perhaps one farm in the entire environs of Belfast district council. There is, of course, a high incidence of terrorism. Is that a qualification for the improvement of ditches, water supplies and agricultural heritage in Belfast? Why does Belfast qualify but not other areas such as the conurbation of Craigavon and the extended urban sprawl of Lisburn, even though they include rural communities that can benefit? It is nonsense. I hope that the Minister will take cognisance of the facts.
I should like to prove my point. Many of the areas of highest deprivation are in the areas to which I have referred. The farmers who reside in some of the electoral wards of Down, such as Tollymore, are considered eligible for help under other schemes and are considered to have the highest level of deprivation.
No cognisance has been taken of the Robson statistics, which highlight the multiple nature of deprivation, and in every other respect are used as a basis on which to go forward by the peace and reconciliation fund—the very fund supplying grant aid under the rural scheme. The parts under both the old and new less-favoured areas qualify on the basis of special need, yet they are specifically excluded from the rural scheme.
I am asking the Minister to consider seriously the flaw in the decision on how the scheme should be administered, and the grave injustice that occurred as a consequence of the time frame. It is remarkable that 2,532 applications were made within that time frame, which was published on 28 January and closed at 5 pm two days later. I subscribe to the argument current in Northern Ireland that details were leaked before the announcement, and that certain people were made cognisant of what was going to happen. They took advantage of that, which meant that other applicants did not have a level playing field.

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It is obscene to use terrorism statistics as a basis for making an agricultural grant. I can think of no argument to justify that. It is also wrong and unjust that many areas are excluded from the scheme on that basis. That wrong is compounded by the manner in which the advertisements were made and withdrawn. The notice stating the closing date could not have been published until the next day. That administrative nightmare has caused grave injustices.
I have tried to address the issues honestly. My office and many others have been inundated with complaints about the injustice of what has happened under the scheme—the basis on which it was predicated, the manner in which it was administered, and the suggestion, believed by many, that there was foul play in that administration. That is why I call it the red faces scheme.
I ask the Minister to take on board five points to address to the Department of Agriculture for Northern Ireland. First, an inquiry is needed into the administration of the scheme. I am not looking for a full-blown judicial public inquiry, but the issue needs to be addressed seriously. Secondly, the late applicants should be admitted. Even with the 5 pm deadline on 30 January not notified, a further 1,612 applications were made that will not be considered. Thirdly, funding should be found in the near future to reopen the scheme, so as to address the injustice perpetrated on those who were given no information about the scheme and were not able to apply.
Fourthly, the basis on which the grant aid scheme for rural improvement is made should be amended sensibly. There can be no logic in basing it on terrorism. That is an obscene concept, which should never have been brought in. Fifthly, when the inquiry takes place, and if the scheme can be reopened, proper notice and advice should be given to all farmers in Northern Ireland, so that they have a reasonable opportunity to make a submission. They know that their success depends their submission and the funds available, but there should be an even playing field for every small farmer.
1.43 pm
The Minister of State, Northern Ireland Office (Sir John Wheeler): I congratulate the hon. Member for South Down (Mr. McGrady) on securing this debate and on the manner in which he has presented this important subject. I notice that the hon. Member for East Londonderry (Mr. Ross) is also in his place, and is taking an interest.
Before going into the details, I shall touch on the five points that the hon. Gentleman raised. He asked for an inquiry into the way in which the scheme was devised and set up. As he understands, that is a matter for my noble Friend, Baroness Denton of Wakefield. I shall certainly draw his remarks to her attention. The need for an inquiry depends on how the scheme was set up, which I shall deal with in a moment.
The hon. Gentleman also suggests the admission of late applicants. One of the difficulties, to which he has already alluded, is the fact that the scheme is inevitably limited by the amount of cash available. I am sure that he will wish to consider that. He suggests finding other sources of funding. Drawing an extra pound from me, as the Minister responsible for finance, is, alas, very difficult. Whether
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my noble Friend is able to find extra capacity in her tight budget is a matter for her. The hon. Gentleman also asked for proper advice and other matters to be considered.
To help the hon. Gentleman, I shall deal with some of the details of the scheme. The farm and countryside enhancement scheme was formulated by the Department of Agriculture for Northern Ireland as part of its portfolio of schemes under the European Union special support programme for peace and reconciliation. That programme was designed to help the areas of Northern Ireland that had suffered most from violence over the previous 25 years.
Herein lies the difficulty, which I think the hon. Gentleman will readily comprehend. He reproved the Government for the test of violence. It is not within the gift of the United Kingdom Government to change that requirement, because the scheme was devised under the European Union peace and reconciliation programme, which specifically targeted those areas that had suffered most from violence. That is a requirement of the peace scheme. The Government's hands are therefore tied: any scheme devised under that programme had to be targeted to meet that requirement.
The farm and countryside enhancement scheme was targeted on the basis of a unique violence indicator, which combined Royal Ulster Constabulary regional statistics on violence with a deprivation index. That was possible on a district council level, and, as a result, 14 district council areas became eligible for the scheme.
It is acknowledged that other district council areas, and areas within other district councils, have also suffered from violence. However, the programme has a specific targeting requirement, and it was not possible to open the scheme to the whole of Northern Ireland. The scheme is additional to the range of grants and subsidies available throughout Northern Ireland through a number of national and European funded programmes to support the farming community.
The hon. Gentleman mentioned that the scheme is known as FACES, although my face is not particularly red as I account for it. It provides financial incentives and training for farmers in countryside management, and has the overall objective of enhancing rural tourism through environmental improvement. Eligible farmers will be involved in landscape enhancement, protection and restoration of heritage features, water quality improvements, innovative agri-improvement projects and a rural training programme. Department of Agriculture officials will carry out a farm audit for each applicant and agree a plan of action. The financial incentives are attractive, at 60 to 80 per cent. grant rate, but considerable commitment is required from participating farmers in their role as custodians of the rural environment.
The hon. Member for South Down mentioned the publicity for the scheme, and its early closure. The scheme was opened on 27 January with a press release from my noble Friend Baroness Denton of Wakefield, who is Minister of Agriculture in Northern Ireland. The announcement followed a long period of scheme development, during which farming and environmental interest groups were extensively consulted. That consultation may have given rise to the rumour mill that gave advance notice of the scheme, but the views and many of the ideas put forward by those groups were included in the formulation of the scheme.

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As the hon. Gentleman told the House, the scheme was announced by the normal press release, which was followed by radio and television coverage on 28 and 29 January. Staff in the Department of Agriculture at all six county agricultural offices received 184 applications on 28 January, 897 on 29 January, and 1,451 on 30 January, giving a total of 2,532.
By 30 January, it was clear that the volume of applications could easily exhaust the available budget of £4.25 million. It was, unfortunately, necessary to close the scheme immediately and without notice. Any time extension would have created insurmountable financial difficulty for administration of the scheme, because it was limited by the amount of money that was available.
Some 740 further applications were received and date-stamped on 31 January, but it was made clear to applicants that the scheme had been closed. Given that 2,532 applications have already been received, it is highly unlikely that any of the 740 can be considered for assistance. I appreciate that many people will be disappointed that they have not been able to take advantage of the scheme. With a finite budget, that was unavoidable.
I assure the hon. Member that all applications will be carefully scrutinised by Department of Agriculture officials to ensure their authenticity and eligibility, and to ensure that there is no duplication with other schemes. Only plans that make a tangible contribution to the aims of the scheme, and which are completed satisfactorily, will be approved and funded by the scheme. The scheme will be closely and continuously monitored and evaluated.
While I acknowledge the disappointment felt by some, I am pleased by the uptake, and I look forward to seeing the results of the scheme for one of Northern Ireland's greatest assets—its rural environment.
Mr. McGrady: I appreciate that the Minister is trying to be helpful, but he has not addressed the injustice created by the situation. The scheme is predicated on terrorism. If that is the only criterion for the allocation of the resources for peace and reconciliation, the 12 additional district councils cannot qualify for that funding. The announcement was made on 28 January and the scheme closed on 30 January, and it was promoted by a lovely, glossy magazine. Within that time scale, how
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could that magazine be distributed and understood, and how could applications be made? Is the magazine now just waste paper? Who received it, and when?
Sir John Wheeler: I am grateful to the hon. Gentleman for his further points. Extensive consultation about the nature of the scheme was carried out by the Department of Agriculture, but he has rightly identified some of the shortcomings of the scheme. He also mentioned the leaflet that has been printed, published and distributed.
The hon. Gentleman called for an inquiry into the scheme. I undertake to draw his remarks to the attention of my noble Friend Baroness Denton, and I will seek to ensure that she inquires into the matter carefully.
The scheme was limited by cash, and it is always difficult to administer such schemes. There have to be some criteria that are understood publicly and to which people can respond with confidence. The Department of Agriculture, through its consultative arrangements, sought to achieve that, but the hon. Gentleman has a point about how the scheme was publicised by the press release and radio and television coverage.
I also understand the frustration that people felt when they realised that their applications would not be examined because they had not been made before the cut-off point. However, I cannot promise to reverse the scheme, because we have commitments to those who successfully applied.
I will invite my noble Friend Baroness Denton to consider the methodology used to set up the scheme and the lessons that can be learned to improve such schemes in the future. There may be implications for European peace and reconciliation funding which, by its nature, ties the hands of the United Kingdom Government. The Government are limited in their ability to spend that money, which originally came from the taxpayers of the United Kingdom, practically and sensibly for the benefit of the people of Northern Ireland in the special circumstances they face.
I take the hon. Member's comments seriously. They were honourably meant, and clearly presented. I will ensure that the matter is pursued in the way I have described.
It being two minutes to Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.
Sitting suspended, pursuant to Standing Order No. 10 (Wednesday sittings), till half-past Two o'clock.

Oral Answers to Questions
  TRADE AND INDUSTRY

    Sanctions (Libya)
    Mr. Dalyell: To ask the President of the Board of Trade what representations he has received from British firms about the effect on British industry of sanctions against Libya. [15021]
    The Minister for Competition and Consumer Affairs (Mr. John M. Taylor): We have had representations from various British firms involved in major projects and general trade with Libya, but they have not necessarily been directly related to the UN sanctions.
    Mr. Dalyell: Will the Minister take advantage of the presence in London today of Madeleine Albright to raise with her the basic issue—the cause of all the trouble—the UN sanctions, in the light of the fact that James T. Thurman, the forensic expert, is now accused by his own colleagues of fabricating forensic evidence? Should we not talk to the Americans about this?
    Mr. Taylor: The President of the Board of Trade has no plans to see the American Secretary of State in the immediate future but there are meetings with American diplomatic representatives from time to time. On the next occasion, the President will certainly bear in mind the points that the hon. Gentleman has made.
    Mr. John Marshall: Does my hon. Friend agree that Gaddafi's regime is one of the most evil in the world, and has sought to destabilise the middle east and attack western democracies? Should not we deny it the means of prosperity and the means of our own destruction?
    Mr. Taylor: I would certainly shortlist Gaddafi's regime as among the most wicked. As my hon. Friend knows, the United Kingdom has kept scrupulously to the United Nations position. The United Nations is not content with the American position, which goes further. We reject the United States' attempt to impose sanctions on its allies in respect of trade that is lawful in the eyes of the UN.

    Manufacturing Investment
    Mr. Connarty: To ask the President of the Board of Trade when he last met the Engineering Employers Federation to discuss manufacturing investment. [15022]
    The Minister for Small Business, Industry and Energy (Mr. Richard Page): Ministers at the DTI have frequent contact with the EEF to discuss a wide range of issues, including investment.
    Mr. Connarty: Does the Minister accept that the figures for the last quarter of 1996 published by the EEF show that investment in manufacturing industries was 16 per cent. lower than for the same quarter of 1995? Does he accept that we have still not returned to the investment figures for 1989 and 1990? Does he agree that
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    the Government have failed manufacturing and left it weak, undernourished and starved of adequate incentives for investment?
    Mr. Page: I wish that the hon. Gentleman would give a fuller picture. Why does he not say that the EEF expects record sales in 1997? Why does he not say that fixed investment, which is the key source of demand for engineering products, will rise by some 5 per cent? Why does he not quote the Confederation of British Industry, which says that manufacturing investment will rise by 8 per cent. this year and next? That is good news.
    Mr. Sykes: What does my hon. Friend think will happen to manufacturing investment if the right hon. Member for Sedgefield (Mr. Blair) ever has the reins of power? What does he think will happen to unemployment? Does he agree that we shall endure the agonising unemployment levels that are now splitting Germany apart? The right hon. Gentleman says that he will never be isolated in Europe; the German Chancellor will have him for breakfast.
    Mr. Page: My hon. Friend is right. We have only to consider the fact that manufacturing employment in this country has increased by 130,000 since the end of 1993, whereas unemployment in Germany now stands at 4.6 million. It is obvious which Government have the right policies.
    Dr. Howells: Does the Minister concede the fact that the skills shortages currently afflicting manufacturing industry in many areas of the country are a great restraint on investment in the future, and on any confidence that the manufacturing sector may have? When will he do something about that? Is it not a crime, given that so many young people who now languish on the dole could do with those skills and the appropriate education to staff up our manufacturing sector? When will the Minister do something to sort out that bunch of under-performers in the TECs and training centres in our colleges, who swap acronyms, jargon and conferences instead of getting on with the job of pumping some energy and motivation into job training and creation?
    Mr. Page: Far be it from me partially to agree with the hon. Gentleman—but I do. He happens to have omitted the fact that our manufacturing productivity has risen by 80 per cent. since 1979, and is going very much in the right direction. I agree, however, that we need engineering skills if we are to drive the country forward more effectively, which is why I am glad that in 1994 we launched the Action for Engineering initiative, which has several facets, one of which is to encourage the development of engineers and the spread of best practice. Add to that our encouragement of modern apprenticeships, and I think that we are doing the right things to reduce the skills gap that the hon. Gentleman correctly identified.
    Mr. Quentin Davies: How can placing a new discriminatory tax on any firm or sector have any consequence other than to depress investment in that firm or sector? Would not a windfall tax inevitably, as night follows day, reduce investment in the successful British

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    utilities that it would attack, thereby reducing those companies' growth prospects and capacity for wealth creation and employment generation in the future?
    Mr. Page: My hon. Friend is right. Since privatisation, BT has invested £29 billion. A windfall tax would not help that investment programme, but it would have an impact on shareholders, and eventually on prices and on the country's competitiveness.

    Regional Support
    Mr. Campbell-Savours: To ask the President of the Board of Trade what representations he has received from organisations in the northern and north-west regions on the levels of support available to help industry. [15024]
    The Minister for Industry (Mr. Greg Knight): I and other DTI Ministers regularly receive representations from organisations about the level of support available to help industry, including that in the northern and north-west regions.
    Mr. Campbell-Savours: What is the point of maintaining a regime of regional assistance to draw manufacturing industry from all over the world to set up new plant in areas such as west Cumbria when the Foreign Office, in the form of the Foreign Secretary, is saying that Britain should not enter a single currency, thus undermining the strategy of confidence-building designed to attract industry to the United Kingdom? Surely there is an inconsistency at the heart of government. Why do Ministers not get their act together, so as to avoid undermining the strategy on which the areas that many of us represent are utterly reliant?
    Mr. Knight: In January 1996, unemployment in the hon. Gentleman's area was 11.5 per cent. This year it is 10.4 per cent.—
    Mr. Campbell-Savours: I did not ask about that.
    Mr. Knight: I thought that the hon. Gentleman was about to stand up and welcome the fall in unemployment, which was caused partly by the success of the regional selective assistance scheme. What would damage British industry and destroy British jobs is implementation of the social chapter and the minimum wage.

    Science Base
    Mr. Evennett: To ask the President of the Board of Trade what measures his Department is taking to promote the United Kingdom's science base. [15025]
    The Minister for Science and Technology (Mr. Ian Taylor): The science budget has risen by 17 per cent. in real terms since 1986–87. My Department has a vigorous programme to promote the understanding of science and an appreciation of the importance of the science base in national competitiveness and quality of life. Key activities at the moment are the Year of Engineering Success and the next National Week of Science, starting on 14 March.
    Mr. Evennett: I congratulate my hon. Friend on maintaining the science budget for the forthcoming year,
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    despite the restraints on public expenditure, and on his work to promote science throughout the country. Has he any figures or evidence to show how well science is being taught and what developments are being made in our universities?
    Mr. Taylor: The teaching of science in our universities is crucial, and I have been heartened by the number of universities that I have visited that have demonstrated that teaching is alive and well and that the concept of scholarship is very much to the fore. We are probably the most cost-effective university research community in the world: 1 per cent. of the world's population producing 6 per cent. of the world's scientific research output, 8 per cent. of its publications and 9 per cent. of its citations.
    Mr. Ingram: The Minister's facts are interesting, but they fly in the face of reality. How does he answer the criticisms of companies such as SmithKline Beecham, which pointed out in a letter to me today that the United Kingdom is the only major Organisation for Economic Co-operation and Development country that is showing a fall in total research and development spend as a percentage of gross domestic product? Who should we believe is telling the truth: companies such as SmithKline Beecham, or the Minister?
    Mr. Taylor: I do not think that there is any doubt that I am telling the truth, because I am speaking in the House and giving the figures. I see that Opposition Members are kindly nodding in agreement with that statement. I would never criticise SmithKline Beecham, which is an important company in this country, but there are clearly differences of emphasis.
    I have talked to George Poste, the head of research at SmithKline Beecham, who acknowledges some of the difficulties that the company faces in ensuring that even its internal researchers keep up with the equipment demands faced by the pharmaceutical industry. It is inevitable that universities will face similar equipment demands. That is precisely why we targeted our research equipment exercise during the past year. We intend to do that again, bringing in £50 million this year, closely targeted on our best research universities, and SmithKline Beecham has been making a positive input into both the formulation and the delivery of those policies.
    Mr. Key: Does my hon. Friend agree that the science base in this country, in both the private and the public sector, is thriving, taking on the world, and beating it? Is he aware of the great success of the special health authority, the centre for applied microbiology and research at Porton Down, which in its new incarnation is taking on American companies and is second to none as an international operator in the field in which it dominates a large slice of world action?
    Mr. Taylor: I am happy to confirm my hon. Friend's comments, especially about microbiology. The importance of the microtechnologies in this country, including nanotechnology, which is of an order of dimension smaller, is well evidenced by the support that we give. A BBC 2 programme the other week gave the wrong figures: we have spent £135 million on nanotechnology in the past five years, and this year alone

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    we have injected a further £25 million into such schemes, including some by the Biotechnology and Biological Sciences Research Council.

    High-technology Sector
    Mrs. Anne Campbell: To ask the President of the Board of Trade if he will make a statement about support for newly established firms in the high-technology sector. [15026]
    Mr. Ian Taylor: My Department recognises the vital importance of such firms to the current and future competitiveness of the economy. We therefore support a range of measures to assist them to grow, including the small firms merit award for research and technology scheme and the provision of innovation and technology counsellors in business links, as well as initiatives to assist firms in specific industry sectors such as biotechnology.
    Mrs. Campbell: Does the Minister agree that, given that only 6 per cent. of the loans under the small firms loan guarantee scheme go to technology-based businesses, he should be working with the banks, as the Labour party is doing, to double the loans under the scheme by the end of the next Parliament?
    Mr. Taylor: I am happy to reassure the hon. Lady, who has kindly agreed with me, that I agree with her; but we will achieve that aim by the end of this Parliament, because we are in the process of inviting offers for the small loans guarantee scheme from other companies that are more familiar with dealing with high-tech companies.
    Only the weekend before last, Save British Science and my Department jointly sponsored a conference on bridging the funding gap, which had the venture capitalists talking animatedly with us about how we could encourage finance to go into the smaller companies. I assure the hon. Lady that the debate is alive and well and many of the policies are being applied.
    Mr. Batiste: Does my hon. Friend agree that companies setting up in increasingly important human genetic science need a clear ethical framework in which to operate? In view of yesterday's press conference by the Association of British Insurers, will he ask the new Human Genetics Advisory Commission to look at the implications of genetic testing for the insurance industry to see whether further guidelines should be published to encourage the acceptance of genetic screening, which is important to the future of public health?
    Mr. Taylor: I can announce to the House that the first full meeting of the Human Genetics Advisory Commission will be held next Thursday. It is an independent commission under the vice-chancellor of the university of Nottingham. It is up to the commission to set its agenda, but I would be extremely surprised if insurance was not one of the subjects that it covered early on. I welcome the announcement by the Association of British Insurers, in the sense that I want the debate to come into the public domain. Genetics is a great force for good in terms of our understanding of human disease and our ability to prevent it. I do not want there to be any misunderstandings about the involvement of insurance in genetics, and I want to encourage a wide public debate about it.

    Manufacturing Production
    Mr. Austin Mitchell: To ask the President of the Board of Trade if he will make a statement on the change in manufacturing production in the latest quarter relative to (a) the last quarter of 1973 and (b) the last quarter of 1989. [15027]
    The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Ian Lang): In the final quarter of 1996, manufacturing output reached a new high and was 2¼per cent. higher than in the final quarter of 1989 and 8 per cent. higher than in the final quarter of 1973. However, between 1973 and 1979 manufacturing output fell by 5 per cent.
    Mr. Mitchell: Is the Secretary of State worried that the increases in output since 1973 and 1989 are so pathetically small, as every other advanced industrial country has had a much bigger rate of increase during that period? Is it not even more worrying that we are at present supposed to be enjoying a boom, but manufacturing production increased by only 0.5 per cent. in 1996? Manufacturing firms are not investing because they have no confidence in the Government, and now—threatened with an overvalued pound—company reports are beginning to show losses and reduced profits. Does not that bode ill, as the worst effects will come through only in a few months' time?
    Mr. Lang: I do not think that the hon. Gentleman heard my earlier answer. Manufacturing output is now at an all-time high and this country is manufacturing and exporting more than ever before. The figure is up by 8 per cent. since 1973—and it would be a lot higher but for the fact that, under the last Labour Government, manufacturing did not rise at all, but fell by 5 per cent. We are going through not a boom, as the hon. Gentleman put it, but a period of sustained and sustainable growth which is spreading manufacturing employment—up by 125,000 in the past three years—and prosperity throughout the United Kingdom.
    Mr. Congdon: Does my right hon. Friend agree that improvements in manufacturing productivity have played a significant part in our economic success, particularly since 1992? Does he further agree that, if we were voluntarily to impose the burdens of the social chapter on our industry, we would experience the high levels of unemployment currently being borne by France and Germany, which we want no part of?
    Mr. Lang: My hon. Friend is absolutely right. Manufacturing productivity has increased dramatically since 1979, and the rate of growth in productivity has been the highest in the G7. We have been closing the gap with Germany and France, which widened under the last Labour Government. He is also absolutely right to say that imposing the European social model on our workplace would damage not just productivity, but output and growth in the economy. We would experience—as we did under the last Labour Government—a much less satisfactory manufacturing performance.
    Mr. Hoon: Is it not clear from the Secretary of State's answers that any longer-term consideration of Britain's

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    relative economic performance compared with our immediate EU competitors demonstrates the underlying weakness of the British economy under successive Conservative Governments? Does the right hon. Gentleman agree that, in terms of real gross domestic product growth since 1990, Britain lags behind the EU average and well behind the United States?
    Mr. Lang: The hon. Gentleman seems unaware of the fact that this country's economy is growing faster than those of the rest of Europe this year, and is expected to grow faster next. He may also be unaware that the volume of our exports has been growing faster than those of France and Germany since this Government came to power—as has productivity—and that the productivity gap widened under the last Labour Government. With exports doubled since 1979, and up by a third since this recovery began, the British economy is in better shape than any other economy in Europe.
    Mr. Garnier: Is my right hon. Friend aware that manufacturers in the east midlands, particularly in my constituency, are enjoying huge order books, both for long-term and short-term orders, and that their opposite numbers in the European Union are unable to employ people to do overtime because of the restrictions that are imposed there? Would he care to compare the miserable picture painted by Opposition Members with the good news that we hear day by day in our constituencies?
    Mr. Lang: My hon. and learned Friend is right. Nothing illustrates that fact better than the comparison of unemployment figures. In this country, unemployment has been falling for the past four years and now stands at 6.5 per cent, whereas in Europe it has been rising: in Germany, it is well over 11 per cent; in France, it is over 12 per cent; and, in Spain, it is over 20 per cent. That is the price that they are paying for the European social model.

    European Airbus
    Mr. Pike: To ask the President of the Board of Trade what estimate his Department has made of the percentage of total European Airbus production work currently undertaken in the United Kingdom. [15028]
    Mr. Greg Knight: The latest available figures from the European Commission, which include both aircraft and spacecraft production, show that in 1994 the UK's share of European Union aerospace production was 33 per cent.
    Mr. Pike: The Minister will recognise that Airbus, in particular, is important not only to the United Kingdom economy, British Aerospace and its contractors, but to the many people in this country who supply aerospace parts to the other European partners? That work is particularly crucial in Lancashire. Will he ensure that, in the restructuring at Airbus, the companies that are competing for work in Europe and the subcontractors to the other partners are not precluded from competing in the years ahead?
    Mr. Knight: I can certainly give the hon. Gentleman that assurance. He has raised an interesting and important issue. The restructuring of the Airbus consortium is
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    essential if it is to be able to compete in world markets. That is something that we are encouraging and pushing ahead.
    Mr. Atkins: Is not Airbus one of the smartest companies in the aerospace operation, and producing some of the best turned out aircraft, which sell around the world? Does my right hon. Friend recognise the importance of Airbus not only to the country, but to Lancashire in particular, in relation to British Aerospace, Lucas and Rolls-Royce, complemented by the Rolls-Royce factories in and around his constituency, which have recently done so much to obtain success on Airbus orders from, for example, the United Arab Emirates?
    Mr. Knight: My right hon. Friend is absolutely right. The British Government recognise—as do I—that Airbus is a world leader. We want it to continue to be one. Indeed, Rolls-Royce will play an important part in the future not only of Airbus, but of aircraft production throughout the world.
    Mr. Clapham: Is the Minister aware that, in 1993, the Trade and Industry Committee studied the British aerospace industry and recommended that the Government assess the research and technology requirements of the industry and support the national strategic technology acquisition plan? Since then, nothing has been done, and the research and development that was being carried out on undercarriages, for example, has gone to Canada. The industry has now put forward a new strategic plan, called the foresight plan. Will the Minister undertake to carry out an urgent inquiry and support the new plan? Is he prepared to take on board support for the new developments that are taking place in the aircraft industry and the idea of the research programme?
    Mr. Knight: I do not accept all of that. The hon. Gentleman said that nothing is being done, but that is not the case. Since 1979, we have given £1.25 billion in launch aid to the aerospace industry and maintained—we continue to maintain it—the civil aircraft research and demonstration programme, which is involved with research and development.
    The hon. Gentleman mentioned the foresight action programme, which is a suggestion by the industry that it should put forward £40 million and the Government should put forward an equal amount from public funds. That requires discussion across Government Departments. Those discussions have not yet been finalised. An announcement will be made in due course. The hon. Gentleman is wrong to say that nothing is being done. I hope that he will join me in noting the comments of the technology foresight defence and aerospace panel, which said that industry could and should do more about investment in this area.

    Exports
    Mr. Matthew Banks: To ask the President of the Board of Trade what recent measures his Department has taken to promote United Kingdom exports. [15029]
    Mr. Lang: Through the Overseas Trade Services organisation, my Department and the Foreign and

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    Commonwealth Office provide the best ever package of information, advice and practical assistance to British companies. I am glad to say that British exports now stand at an all-time record level.
    Mr. Banks: I thank my right hon. Friend for his reply. Will he confirm that the Government have put in place other substantial measures to help British exporters win contracts overseas? Does he agree that it is important that British diplomats abroad are concerned not only with good diplomacy, but with continuing to bat hard to help British companies win export orders, which secure British jobs at home?
    Mr. Lang: My hon. Friend is right. Foreign and Commonwealth Office staff are engaged in commercial work in overseas posts in 140 markets to help our exporters. My Department is also active, with many staff covering nearly 200 markets. Last year, we helped 10,000 individuals to go on overseas trade missions and 23,000 firms to take part in trade fairs.
    Mr. Barry Jones: Is not sterling hopelessly overvalued? What will the Government do about that? Why do they not move to help British industry?
    Mr. Lang: The hon. Gentleman seems to be unaware that British exports are at a record level and are generally expected to reach a higher record next year. Exports have doubled since the last Labour Government were in power in 1979; since 1979, they have been increasing at twice the rate at which they grew under Labour.
    Mr. Nicholas Winterton: While we all accept that the value of the pound influences the competitiveness of our exports, does not manufacturing industry want, when exporting, a stable economy, low inflation, low interest rates and a Government who understand industry? Is not that what my right hon. Friend can do to help our exporters, more than anything else? Is that not confirmed by the fact many overseas industrialists, including those in Europe, believe that Britain is the best place to come and do business?
    Mr. Lang: I agree with my hon. Friend. I am sure that his remarks will do more to help British industry than will those of the right hon. Member for Dunfermline, East (Mr. Brown), who, we are told, is in America talking Britain down.
    Mr. Shore: The Secretary of State is getting complacent. It is, I hope, true that our exports are at a record level, but are not our imports at a record level, too? Are we not running a trade deficit this year, as we have for the past six years?
    Mr. Lang: The right hon. Gentleman should be aware that many of our exports are re-exported imports and, as such, contain a substantial proportion of imports. Our current account is close to balance and at its strongest for a decade. Provided that we stick with the policies that are delivering that success, we have nothing to fear about our balance of payments.
    Mr. Lidington: Does my right hon. Friend agree that the appalling unemployment in Germany and France will
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    make life more difficult for British exporters who try to sell into those important markets? Would it not be the worst possible service to British exporters for a Government to seek to impose on Britain the job-destroying measures that have wrought such havoc on continental Europe?
    Mr. Lang: My hon. Friend is right. It is significant that Britain exports more per head than Japan, the United States, France or Germany. It is by keeping labour markets flexible and lightening the burden on business that we have been able to secure that result. The most damaging thing that could happen to our exporters would be for them to face the social chapter and the European social model that the Labour party wishes to impose.
    Mr. Bell: May I assure the House and those who watch this programme on their televisions that the future Labour Government will do as much as and more for our exports than the present Government. We will improve our export position and have a better position on our balance of payments and trade; we will show who is better able to govern the country.
    Will the President of the Board of Trade take the opportunity to congratulate the World Trade Organisation on the multilateral agreement to open the world's telecommunications market? Is that not the way for our future trading arrangements to proceed? Will he give as much support to the opening of negotiations on financial services that begin in March, which will also be of great benefit to our export community?
    Mr. Lang: I certainly share the sentiments expressed in the latter part of the hon. Gentleman's question. I congratulate those responsible on securing that extremely satisfactory result, for which the British Government have also worked hard over the past three years. It will be of immense value, with £20 billion—worth of additional business for this country. It is part of our free trade agenda, which, sadly, we do not share with the Labour party. On the question of the Labour party's prospects of producing a satisfactory environment for our exporters, I prefer to listen to the words of the Labour peer, Labour's economics guru, Lord Desai, who said in The Sun today:
    "Labour's biggest obstacle is the economy. It is in great shape. There is steady growth and low inflation. Compared to Germany and France, it looks the best economy in Europe."
    Mr. Dover: Will my right hon. Friend accept the grateful thanks of the construction industry, which pays tribute to the efforts of the export promoters—on secondment from the private sector—and to the able leadership shown by his team of Ministers in various trade missions around the world? Those efforts have led to billions of pounds of exports for the British construction industry and the highest volume of exports of bricks.
    Mr. Lang: I am grateful to my hon. Friend. In addition to the trade missions and trade fairs I mentioned earlier, last year 21,000 United Kingdom participants in overseas events were assisted. It remains my purpose and that of Ministers in my Department to continue to support the export effort in every way we can.

    Firework Safety
    Mr. Burden: To ask the President of the Board of Trade if he will make a statement on the progress of his review of firework safety regulations. [15030]
    Mr. John M. Taylor: As an initial response to the review, I introduced regulations in December that prohibit the supply of aerial shells to the public. I hope soon to be able to announce my overall response to my Department's discussion document.
    In the meantime, I should like to report that the total number of firework injuries in Great Britain last firework season was 1,233—a reduction of 19 per cent. on the previous year. I shall place those figures in the Library.
    Mr. Burden: I thank the Minister for having responded positively to repeated calls from the Opposition to introduce a ban on aerial shells. He mentioned a figure of about 1,200 injuries; those shells were responsible for two deaths in the past year. Is he aware that the temporary ban will be welcomed by reputable firework manufacturers, and that some on the fringes of the firework industry are seeking to get round the ban? What monitoring system has he put in place to ensure that the ban is effective? When will he introduce a national training scheme to ensure that aerial shells are available only to those certified competent to use them?
    Mr. Taylor: I did not respond to Labour when I took action at the end of last year; I responded to a thorough-going consultation that I initiated.
    Voluntary training has an important role to play in encouraging the safe use of fireworks. Trading standards officers will have my full support in their surveillance work.
    Sir Irvine Patnick: Many people present for this programme will recollect that it used to be called Question Time—1 do not know whether Labour Front Benchers have had a new idea. I come from the old school of sparklers and catherine wheels; the worst thing we had was bangers.
    Mr. Nicholas Winterton: It is a bit of a damp squib.
    Madam Speaker: Order. I want to hear the jokes, too, but I cannot.
    Sir Irvine Patnick: It is rare that one is heckled from one's own side of the House.
    I hope that, after the consultations, the enjoyment that some people have had in this theatre, programme or Chamber will not be stopped and that, through legislation, powers will be given to local authorities to control the sale of certain types of firework that should never have been imported into this country.
    Mr. Taylor: In the spirit of that question, I shall content myself by saying that, in my experience, sparklers can be more dangerous than bangers.

    Publicly Owned Utilities (Investment)
    Mr. Ian Bruce: To ask the President of the Board of Trade what assessment his Department has made of the amount of investment currently being made by the formerly publicly owned utilities. [15031]
    Mr. Page: Since privatisation, managers have been free to set investment at the levels needed to secure long-term benefits, while responding to competitive and regulatory pressures. That is contributing to a sharp increase in efficiency, to the benefit of consumers.
    Mr. Bruce: I thank my hon. Friend for that answer. Does he believe that the investment being made by the utilities is creating real British jobs in our economy? What does he think would happen if the Government of the day decided to take £10 billion out of that investment programme and put it into make-work schemes? Would that destroy those real jobs, as has happened around the world when those failed policies have been tried?
    Mr. Page: The Government firmly oppose a windfall tax on the grounds that it would be very hard to establish on a fair and non-hybrid basis. I have to tell my hon. Friend and the House that this is not a windfall tax—it is not free. It is an old-fashioned smash and grab—in modern parlance, a ram raid—and it will bring only higher prices for pensioners, while at the same time bringing them lower private pensions. It will be a double whammy.
    Mr. Battle: I remind the Minister that no less a body than the Institute of Directors has said that, in its view, the utilities have spare cash, and that the impact of any windfall tax would be insignificant. If he is satisfied with the levels of investment in the privatised utilities, will he explain why registered customer complaints against water companies have increased by nearly 90 per cent. and against the former British Gas by more than 100 per cent.? The Government's own former Energy Minister, within weeks of resigning, told the Select Committee on Trade and Industry that regulation needed overhauling because of high profits and lower service. What are the Government going to do about stopping service levels declining further—or can we expect only inaction as usual from the Government?
    Mr. Page: The hon. Gentleman obviously has no experience of business whatsoever. I remind him that, before privatisation, the taxpayer in this country had to put his hand in his pocket to subsidise those state activities; now those same state activities give £2.6 billion in corporation tax every year to the Exchequer. A heavy windfall tax will no doubt cause a dip in those figures—it will be a treble whammy. As regards the hon. Gentleman's remarks about standards of service, I refer him to what has happened with British Telecom—for example, 95 per cent. of phone boxes are in operation, whereas only 75 per cent. were in operation when the company was run by the state.
    Sir Roger Moate: Do not the shareholders of those companies include small investors, many pension funds and many foreign investors? Would not Labour's proposed windfall tax inflict serious damage not only on

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    all those investors, but on Britain's international reputation as a place to invest and that does not normally engage in retrospective legislation or selective, politically motivated taxation?
    Mr. Page: My hon. Friend makes a very important point. At present, this country is doing exceedingly well from inward investment. We are getting the lion's share of investment in the European Union—everyone is investing in this country. What a message the Labour party is sending to prospective inward investors: "Be careful if you invest in Britain, because we might impose a retrospective windfall tax upon you."

    Public Sector Research Establishments
    Mrs. Wise: To ask the President of the Board of Trade if he will make a statement of the Government's prior options review of public sector research establishments; and if he will list the cost of the exercise to (a) his Department and (b) the establishments concerned. [15032]
    Mr. Ian Taylor: My right hon. Friend the President of the Board of Trade announced the completion of the 1996 programme of reviews on 29 January 1997. The results will strengthen the country's science base. My Department incurred costs of about £75,000, and the overall cost of the reviews is estimated to be £1.5 million.
    Mrs. Wise: Why will the Minister not accept that the real cost is £4 million, including the examination of the royal observatories? How does he quantify the costs to the research establishments of damaged morale, insecurity and wasted energy? Why do the Government not accept that those public sector research establishments perform essentially public functions, such as the public health laboratories that protect us from epidemics? When will he realise that they must be relieved of the constant threat of privatisation for the sake of Tory dogma?
    Mr. Taylor: The hon. Lady is several weeks out of date with her information. I do not include the royal observatories, because they are not part of this year's research assessment review, so the costs are not applicable. I have told the House on more than one occasion that the excellence of the research conducted by those establishments goes without saying. Some establishments carry out research at international standards of quality, and are better than equivalent academic departments in universities.
    When £690 million of Government money is being spent by those establishments, however, I have a responsibility to determine whether it is being spent effectively. There is no question but that some establishments needed to re-examine their management structures and, in certain cases, they have found new freedom in the private sector. However, as the hon. Lady now knows, the bulk of them will remain essentially in the public sector, which is absolutely consistent with the excellence of the research being conducted.

    Social Chapter
    Mrs. Helen Jackson: To ask the President of the Board of Trade what proportion of British and
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    foreign firms operating in the United Kingdom currently conform to the employment standards set by the social chapter. [15033]
    Mr. Mark Robinson: To ask the President of the Board of Trade what recent representations he has received on the impact of United Kingdom adherence to the social chapter on United Kingdom industry. [15034]
    Mr. Lang: The social chapter is not in itself a set of employment standards. It is an open-ended mechanism that could be used to impose any number of damaging burdens on business. That is why British industry overwhelmingly shares our view that the social chapter would harm competitiveness and cost jobs.
    Mrs. Jackson: Is the Secretary of State aware that large, responsible companies in this country conform happily with the articles in the social chapter? For example, British Steel, which has a large plant in my constituency, believes that it has nothing to fear from the social chapter as it has long-established systems of consultation, with joint shop stewards committees and a works council. It is more than happy to continue those arrangements. Is it not a fact that the Secretary of State is on record as supporting company works councils? Is he not aware that the majority of prospective Tory voters support signing the social chapter? Is it not true that, when a Government cease to listen to either business or the public, they will soon be out of office?
    Mr. Lang: We do indeed listen to business. That is one of the reasons why we strongly oppose the possibility of placing social burdens on the British workplace that are handed down from the bureaucracy in Brussels. We oppose them, first, because we believe that those decisions should properly be taken in the workplace in this country; and, secondly, because the social chapter is not simply a finite list of impositions, but a mechanism through which innumerable further burdens could be passed down to British business. The social chapter would impose on Britain precisely those burdens that are so damaging to employment and prosperity in the countries of Europe.
    Mr. Robinson: I am sure that my right hon. Friend is aware that the Leader of the Opposition and the shadow Chancellor are giving the impression that it is possible to cherry-pick from the social chapter. Will my right hon. Friend tell the viewers that it is not like a "Masterchef" programme, that Ministers cannot behave like Loyd Grossman saying "Yahm, yahm", and that British workers will choke on the diet of the social chapter as they lose their jobs?
    Mr. Lang: My hon. Friend is right. Opposition Members do the public a great disservice when they pretend that they can pick and choose from the social chapter. A substantial number of measures would be decided under that chapter by qualified majority voting, and once we signed the social chapter, we would be unable to resist them. As my right hon. Friend the Prime Minister said, one signature on the social chapter could lead to half a million signatures on the dole.
    Mr. Harvey: If the social chapter is as shocking as the Minister and his faithful chorus make out, why is France,

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    which has signed up to it, attracting more inward investment than the UK? Why is Ford willing to divert production to countries that have signed up to it? Why can Toyota and Unilever anticipate circumstances in which they would divert investment to countries that are part of it? Is everyone out of step but the British Government? The social chapter is so bland in its terms, and all parties are committed to retaining unanimity on the majority of them. Why, then, is it so objectionable? Is it not a demon that the Tories have invented to frighten British voters?
    Mr. Lang: The hon. Gentleman is singularly ill informed. France does not have more inward investment than the United Kingdom. France enjoys around half the inward investment of the UK. The UK attracts more than 40 per cent. of all investment from Japan, Korea and the United States into Europe.
    Far from being isolated, the Government's view is shared by business organisations and business men all over Europe—for example, Ivano Spalanzani of the Confartigianato, who says:
    "In Italy, businesses should be allowed to follow the British system";
    or Dr. Harald Mahmile of the German-based BASF, who says:
    "It is only the British who tend to forget just how impressive they are";
    or Guus Broos, the head of a major Dutch business association, who says:
    "The British way is best."
    Mr. Clifton-Brown: Does my right hon. Friend agree that, if we were to join the social chapter, it would be a trojan horse for every politically correct social employment measure that might emanate from our socialist partners in the European Union, and that that would destroy all the competitiveness gains that we have made in the past two decades? That would be a disaster for the United Kingdom, and would involve us losing our veto over social employment measures.
    Mr. Lang: My hon. Friend is right. The contrast in unemployment levels is dramatic. In Germany last month half a million Germans lost their jobs in one month. That is why German business men are investing in this country rather than in Germany, and why German business organisations are calling on their Government to abandon the European social model that is so damaging to industry.
    Mrs. Beckett: Why does the Secretary of State go on repeating such nonsense? Did he not see an article by Stewart Steven in The Mail on Sunday this week, which described the Government's case on the social chapter as straightforward untruths, and accused them of comprehensively lying to the British people? How does the right hon. Gentleman square all the stuff that he has been reciting with Ford's decision to take investment from Britain to Spain and Germany, or with BMW's statement that our opt-out from the social chapter is irrelevant to its decision to invest in this country? Is not the biggest danger to 3.5 million British jobs the fact, as Toyota recently highlighted, that under this Government Britain seems increasingly likely to opt out of Europe?
    Mr. Lang: The right hon. Lady is completely wrong. Ford is not moving investment from Britain to Europe.
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    It has 30,000 employees in this country and has recently extensively extended its investment in the UK. It plans to invest £1 billion in this country between now and the end of the century. BMW has also invested heavily in the UK.
    What I am saying about the social chapter and the social model from Europe is the same as is being said by business leaders in Germany, the Netherlands, France, Belgium and Italy. In almost every country of Europe, the business community recognises the damage to jobs that is caused by the European social model. Only by resisting the Labour party's policies to impose it on us shall we sustain the success of our employment record and our creation of enterprise and jobs in this country.
    Lady Olga Maitland: Is my right hon. Friend aware that German businesses are desperate to escape the heavy add-on social costs of employing people, and are coming to this country? In the past year alone, 58 German companies came to the UK, and more will be coming. Is that not a lesson that we should learn—that to sign up to the social chapter would be death to jobs in the UK?
    Mr. Lang: My hon. Friend is absolutely right. That is why inward investment is coming to this country, not just from America, Japan and Korea but from within Europe, in record amounts.

    Manufacturing
    Mr. Sheerman: To ask the President of the Board of Trade if he will make a statement on trends in the balance of trade in manufactured goods. [15035]
    Mr. Greg Knight: The balance of trade in manufactured goods as a proportion of gross domestic product has remained broadly unchanged over the past four years.
    Mr. Sheerman: Does the Minister not understand that we must take a longer-term view of the British economy? Any fair-minded person who examines our track record since 1983 will see that since that time we—an industrial manufacturing nation to the core of our being—have had a deficit in manufactured trade, and the Chancellor himself predicts in the Red Book that in two years we will have a £10 billion deficit. Those of us who support British manufacturing industry and want it to thrive must not listen to glib quotations from a few foreign—or European—manufacturers. At home we have a dismal record of under-investment and under-achievement, and it is about time that we had a Government who ensured that the position was reversed.
    Mr. Knight: I do not recognise the picture that the hon. Gentleman paints. Under the present Government, total investment has risen six times faster than it did under the last Labour Government. Britain is and always has been a trading nation: we have about 1 per cent. of the world's population, yet we are the fifth largest trading nation in the world. Conservative Members are proud of that.

    Post Office
    Mr. Foulkes: To ask the President of the Board of Trade if he will make a statement on the future of the Post Office. [15036]
    Mr. Page: The Government's view on the future structure of the Post Office was set out in our Green

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    Paper, "The Future of Postal Services", published in June 1994, and in the statement of my right hon. Friend the then President of the Board of Trade to the House on 11 May 1995.
    Mr. Foulkes: May I give the Minister some helpful advice? Given that the vast majority of the British public are opposed to privatisation of the very profitable Post Office, and given that they also consider it one of the best public services—way ahead of gas, electricity and water—will the Minister now take action to prevent Tory Members from becoming an endangered species by ruling out the inclusion of Post Office privatisation in the Tory election manifesto?
    Mr. Page: The hon. Gentleman will have to await our manifesto and the Prime Minister's statement. He will have to control his natural impatience until then, but let me draw to his attention a document that has just emerged from the Communication Workers Union. In the Green Paper, the CWU seeks greater commercial freedom, and expresses a wish to move the Post Office more into the private sector than ever before. Is that the real break between the trade unions and the Labour party?
    Mr. David Shaw: Does my hon. Friend agree that the issue is not always, "Should we privatise, or should we retain in private ownership?"? The real issue is, "What is the best way in which to ensure that the post is delivered to our constituents on time?" If private ownership would achieve that better, and if as a result of that postmen would receive better salaries—and bonuses at the end of the year—perhaps both postmen and our constituents would prefer a change of ownership.
    Mr. Page: I fully accept that it is the customer who matters, not the system that is used. In order to help the customer, we have abolished restrictions on capital expenditure in the Post Office. Moreover, a new corporate planning process has been introduced, and we have been able to grant the Post Office significant new end-year flexibility. We have done all that in order to help the Post Office to provide the customer with a better service.
    Mr. Llwyd: That may be all very well, but does the Minister not agree that we have the best postal service in the world, or at least in the British Isles? Does he not recall the huge public support for the status quo that was evident in the last discussion about privatisation? Does he agree with the sentiment "If it ain't broke, why fix it?"?
    Mr. Page: Life moves on. Nothing can remain static. The recent decision by the Dutch post office—which has been privatised—to bid for the international express carrier TNT is a case in point. We must look to the future to ensure that Royal Mail can stay as No. 1, rather than remaining vitrified.

    Ministerial Visits (Hong Kong)
    Mr. Winnick: To ask the President of the Board of Trade what visits have been made by Ministers in his Department to Hong Kong to discuss business matters since 1992. [15037]
    Mr. Page: Since April 1992, there have been 10 visits by DTI Ministers to Hong Kong to pursue British commercial interests.
    Mr. Winnick: It is interesting that the Minister said "British commercial interests", which we all support, but what other business have Ministers been engaged in? In what way is the money from Hong Kong billionaires collected to help fund the Tory party? Is it done through his or some other Government Department? We would like to know, because the money is undoubtedly coming from very rich sources abroad to a British political party.
    Mr. Page: I am completely innocent on those matters and am unable to help the hon. Gentleman. I suggest that he directs his remarks to the chairman of our great party, who will be able to furnish him with the correct answers.
    I had hoped that the hon. Gentleman would talk about Hong Kong being the United Kingdom's second largest market in Asia and how important it is to British jobs, but obviously he is more interested in funding.

    Manufacturing Output
    Mr. Jim Cunningham: To ask the President of the Board of Trade if he will make a statement on the percentage change in manufacturing output for (a) 1996 over 1995 and (b) 1995 over 1994. [15039]
    Mr. Greg Knight: Manufacturing output was 2.2 per cent. higher in 1995 than in 1994. Last year it rose by a further 0.5 per cent. to reach its highest ever level. The CBI expects manufacturing output to grow by 3.4 per cent. this year.
    Mr. Cunningham: The Minister's answer paints a rosy picture, but is he aware that, according to the Office for National Statistics, capital investment is down 16 per cent. on last year? What does he have to say about that?
    Mr. Knight: I will tell the House what I have to say about that. Manufacturing output has risen by 10 per cent. since the recovery began, and manufacturing exports have risen by more than a third—to record levels—since the recovery began. The hon. Gentleman should welcome that.

    Balance of Payments
    Mr. Touhig: To ask the President of the Board of Trade if he will make a statement on the balance of payments current account. [15040]
    Mr. John M. Taylor: The balance of payments current account was close to balance during the first three quarters of 1996—the strongest performance for a decade.
    Mr. Touhig: But will not 1996 be the 11th consecutive year in which the balance of payments current account has been in deficit? The Treasury forecasts an even wider deficit in the next two years, giving Britain the longest run of balance of payments deficits for 130 years. Are the Government proud of that record?
    Mr. Taylor: The current account balance was strong in 1985–87, was weak in 1989–90, and is strong again now.

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    As I have said before, there have been only six years since 1946 in which there was a surplus in visible trade: 1956, 1958, 1971, 1980, 1981 and 1982. All those were years in which there was a Conservative Government.
    Mr. Stephen: Does my hon. Friend agree that a factor of great importance to British exporters is the value of the British pound? If the pound becomes too strong, it will be much more difficult for British exporters to win in foreign markets. Is there not a case, perhaps, for cutting interest rates to reduce the value of the pound?
    Mr. Taylor: That is properly a matter for my right hon. and learned Friend the Chancellor of the Exchequer.

    Social Chapter
    Mr. Simpson: To ask the President of the Board of Trade how many companies have indicated to the Government that they located in Britain because of the absence of social chapter obligations; and how many have said they would relocate elsewhere if Britain adopted the social chapter. [15041]
    Mr. John M. Taylor: Since 1992, more than 1,700 inward investment decisions, expected to create more than 130,000 new jobs, have been notified to the Invest in Britain Bureau. Our flexible labour market has been a key factor in that achievement.
    Mr. Simpson: Since my question was about how many firms said that they would not come here if we had the social chapter, and how many would leave if we adopted it, I presume that the answer that the Minister was looking for was, "None".
    Is not the more typical attitude of UK industry to share the views of Unilever and United Biscuits, which said that it would be counter-productive to exclude British workers from the provisions of the social chapter? Are the Government not embarrassed to set a benchmark in Europe in which Britain offers no employment rights, low employment protection, no parental leave and no consultation rights at all?
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    As the Government take their soap-opera policies into Europe, is not it appropriate for the citizens of the UK to ask that the Minister looks for something more inspirational than Ministers behaving badly as the model to which we aspire?
    Mr. Taylor: It is not for me to cross-examine international companies on their reasons for investing in this country. They may do so for many reasons. We have an established enterprise culture, good communications, a skilled work force, low interest rates and inflation and the English language. There are many reasons, and I am not referring to any one of them in particular, but I am claiming that it is a great success story.

    Regional Development
    Sir David Knox: To ask the President of the Board of Trade what is the value of grants allocated to recipients in England from the European regional development fund since its inception. [15042]
    Mr. Greg Knight: Of the £7.1 billion, in 1996 prices, allocated to England for the period up to 1999, £5.3 billion has already been earmarked for recipients.
    Sir David Knox: Does my right hon. Friend agree that those are considerable sums? Does he further agree that they play an important part in strengthening the British economy? Are the British people fully aware of the size of those grants and, if not, what steps is he taking to publicise them?
    Mr. Knight: May I, first, say to my hon. Friend that when I was in his constituency recently I was impressed by the buoyant mood of business men there. As he knows, his constituency qualifies under the part of the fund for the midlands uplands programme. I welcome the fact that some of that money will go to his constituency.
    The availability of those funds is fairly widely publicised, and from time to time we consult local authorities and others to see whether further measures need to be taken.

Points of Order
3.30 pm
Mr. Andrew Faulds: Would a point of order be in order, Madam Speaker?
Madam Speaker: It would not be a perfect day without a point of order from the hon. Gentleman.
Mr. Faulds: I appreciate your appreciation, Madam Speaker. A little earlier this afternoon, an hon. Gentleman on the other side referred to a statement being made to the viewers. That really is unacceptable in this ancient Chamber. Would it not be advisable that, when these occurrences take place, the hon. Member should make a requisite apology to the House? Would it not also, in addition, be advisable to consider the removal of these objectionable cameras, which give an extremely false impression of the House at work?
Madam Speaker: The original reference to the television came from an Opposition Front-Bench Member. I deprecate the reference that was made. Such behaviour is infectious, and it was referred to again by a Conservative Member. However, I have received an apology from the hon. Member for Middlesbrough (Mr. Bell), who seems to be itching to say something, and no doubt to apologise.
Mr. Stuart Bell: I apologise for referring to the cameras. All I can say is that it was a slip of the tongue under pressure.
Sir David Steel: On a wholly different point of order, Madam Speaker. You have always deprecated the release of information outside the House that ought properly to be given to hon. Members in the House. I want to draw your attention to my complaint about the proceedings of the Scottish Grand Committee, which met in Montrose on Monday. I tabled Question 2, which was about the local government funding formula imposed by the Scottish Office on local authorities. During that meeting, we expected and received from the Secretary of State for Scotland an announcement of a change in the capping formula. The change affects not only my constituency, but 15 local authorities.
Immediately the Secretary of State sat down, my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood) and I went next door to telephone our local authority to get its reaction. We informed it of the statement, only to be told that it already knew about the change, because it was mentioned in a local newspaper, which, it turned out, had received a fax from the two prospective Conservative candidates for our constituencies.
The seriousness of the complaint was such that I wrote to the Secretary of State about it. In his reply, he said that no discourtesy was intended and added:
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"My special adviser telephoned Scottish Conservative Central Office as soon as the Committee was informed."
If that is true, I have no objection. But the time was clearly on the fax, and it was sent before the Secretary of State had even risen to speak to the Scottish Grand Committee.
I find that absolutely intolerable. We are sent here as Members of Parliament to represent everybody in our constituencies. It is intolerable that Departments should release information in advance, not to the elected Members of Parliament but to prospective Conservative candidates. That is quite unacceptable.
Madam Speaker: I have read the correspondence with the Secretary of State for Scotland, which the right hon. Gentleman was good enough to send me. I have carefully examined that exchange of correspondence. As the House knows, I deplore any breaches of the convention that important information on public affairs should be made known to the House before it is released to anyone else. There was a deplorable lapse in this case and I look to the Secretary of State, as I do to all Ministers, to take particular care that that convention is observed at all times.
Mr. Tam Dalyell: I should like to raise a point of order, Madam Speaker, as I am also itching to say something. In his very courteous answer to Question 1 earlier, the Minister for Competition and Consumer Affairs said that Ministers in his Department were not particularly responsible for relations with Madeleine Albright in London. May I take it that that will be brought to the attention of Downing street and the Foreign Office, so that the question of Libyan sanctions can be brought to her attention?
The Minister for Competition and Consumer Affairs (Mr. John M. Taylor): Further to that point of order, Madam Speaker. I am not authorised to say more than I did earlier, but I shall certainly convey the hon. Gentleman's point of order to my right hon. Friend the President of the Board of Trade.

Points of Order
  BILL PRESENTED
    RIGHT TO WORK
    Sir Ralph Howell, supported by Mr. Frank Field, Mr. David Alton, Sir Wyn Roberts, Mr. David Howell, Sir Geoffrey Johnson Smith, Sir Rhodes Boyson, Mr. Michael Alison, Sir Anthony Grant, Mr. Hugh Dykes, Mr. Bob Dunn and Mr. Winston Churchill, presented a Bill to establish the right to work and to impose a duty on the Secretary of State to offer work instead of benefit to persons who would otherwise be without work in the United Kingdom; to establish a system of grants to certain parents; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 28 February, and to be printed [Bill 113].

School Intruders (Criminal Offence)
3.35 pm
Mr. Peter Butler: I beg to move,
That leave be given to bring in a Bill to create an arrestable offence of unlawful intrusion into designated educational premises.
A generation ago, when you, Madam Speaker, and I were at primary school, we worried about all sorts of things. I was lucky enough to attend Brooklands school in Stafford—an excellent school—where I worried about the work because I could not do it, games lessons because I could not do games and mostly about whether that awful milk would be frozen again. However, I never worried about security, and I do not believe that my parents did, either. That was then, and this is now. The world has changed and I am old enough to begin to regret that.
The Bill deals with the growing problem of school intruders, which has been highlighted by recent tragic events. The presence of intruders on school premises is always unsettling to children and staff, and can be extremely dangerous. At present, staff can only seek to persuade the intruder to leave, and the police, if they are good enough to attend, do not have the backing of criminal law to deal with the problem, unless the intruder has committed some further specific offence, such as frightening or terrifying people on the premises.
The current inadequate law covering such circumstances is found in section 40 of the Local Government (Miscellaneous Provisions) Act 1982. It covers only local authority and—now—grant-maintained schools and requires the intruder to commit some further offence on the premises, following which he can be removed from the premises by a policeman, but nothing more. He can only be escorted outside the school gates. He cannot be taken further away or prevented from walking straight back on to school premises, either immediately or as soon as the police have left the scene. He can be guilty of an offence that is dealt with only by means of a summons and carries a maximum fine of £50. That wholly unsatisfactory piece of legislation is no longer adequate to deal with the problem faced today by schools.
I take the view that school premises must be made more secure. The Bill would be a significant and practical step towards achieving that. I do not want, even if it were possible, 10 ft high fencing around schools and padlocked gates. I have seen it elsewhere and it does not create an atmosphere in which I want my children or any other children to be educated.
The Bill would return to head teachers control over school premises for which they are in many respects legally responsible, but over which they have inadequate legal powers. The police would have the power to attend and to remove intruders forthwith, securing the safety of the children and the staff. Our schools are currently wide open to ill intentioned intruders who create problems ranging from mere nuisance right up to seeking customers for drugs. Society should no longer have to tolerate that. The Bill would give schools a significant and important power to make them safer places for pupils and staff.
If I am given leave to have the Bill printed, it will consist of three clauses, the first stating simply, subject to the remainder of the Bill:
"Any person who, without lawful authority, enters onto or remains upon educational premises and who, having been asked to leave those premises by the head teacher or principal or someone
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acting on his behalf, either refuses to leave those premises or re-enters those premises within the period of 24 hours shall be guilty of an offence."
That offence would be arrestable, so that the police had a duty—or at least the power—to attend and to arrest and remove. It would carry a prison term not exceeding three months or a fine not exceeding £2,000. That is the least protection that we should offer our children and those who teach them.
The head teacher would be the key. If he refused to allow someone to remain on the premises, that person would have to leave. Failing that, the offence would be complete. We would not have to wait, as at present, until children are cowering in the corner of the classroom before anybody can do anything. We would not have to ask teachers to go out, unprotected by the law, to try to persuade dangerous, worrying or disturbed people—criminals, often—to leave the premises. The Bill would also apply in other circumstances.
I do not intend to give examples from my constituency, because it would be invidious to single out a school and worry the parents of the children at that school. However, I challenge any hon. Member who is doubtful about the need for the Bill to ask teachers and head teachers, "Have you had a problem with school intruders? Could you deal with it properly? Would you like the power to do so?" I suspect that all hon. Members on both sides have already done that. I think that they will have had the same answers that I have had.
I am grateful for the support that I have had from members of the Labour party and from Liberal Democrats.
Mr. Roy Beggs: And the Ulster Unionists.
Mr. Butler: I am very grateful to the hon. Gentleman for his support. Conservatives always hope to receive the support of the Ulster Unionists, but we cannot take it for granted.
Whom would the Bill catch? It would catch intruders. I have already referred to people looking for customers for drugs, but that is only one example. It would exclude from school premises all other people seeking to prey on children. It would deal with the regular problem of excluded pupils seeking to come back to school premises and create a nuisance, sometimes leading to criminal damage. Such people could be dealt with before they committed any further offence. It would also deal with parents who come on to school premises legitimately, but who intend then to work out a grudge against a teacher or the head teacher. It would also deal with people coming on to school premises out of school hours—a prevalent and increasing problem.
Whom would the Bill not catch? It would not catch the rambler or walker who was on school premises unknowingly. It would catch only those who were knowingly on premises that were clearly educational, designated under the relevant Act. It would also not catch any legitimate visitor.
Who wants the measures passed? I hope that all hon. Members present today are here to show their support. The Secondary Heads Association certainly wants it.

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I was told over the telephone yesterday to "go for it." The National Association of Head Teachers issued a press release that says:
"The NAHT considers it imperative that the provisions of this Bill are introduced. Of course it would not completely free schools from the problem of intruders, but the fact that it will be an offence to trespass would serve as a deterrent for many and enable the police to support schools more effectively than at present."
I believe that teachers, parents and pupils want the measure enacted. I have already invited any hon. Member who doubts that to ask their own teachers, parents and pupils. I hope that the House will also want to see the Bill enacted. Subject to the election, I hope to be here to see it become law by the time schools return for the next school year, in September 1997. I therefore seek leave to bring in my Bill.
Question put and agreed to.
Bill ordered to be brought in by Mr. Peter Butler, Mr. David Jamieson, Sir Jim Lester, Sir Donald Thompson, Mr. John Sykes, Mr. Matthew Banks, Mr. Nirj Joseph Deva, Mr. Den Dover and Mr. Nigel Evans.

School Intruders (Criminal Offence)

  SCHOOL INTRUDERS (CRIMINAL OFFENCE)
  Mr. Peter Butler accordingly presented a Bill to create an arrestable offence of unlawful intrusion into designated educational premises: And the same was read the First time; and ordered to be read a Second time upon Friday 28 February, and to be printed [Bill 111].
  Sir Donald Thompson: On a point of order, Madam Speaker. I do not wish to quarrel with your decision on the point of order made earlier by the right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel), but it has been the practice recently for hon. Members to obtain a Minister's statement from the Vote Office as soon as he stands up in the House and fax it to their friends. Consequently, those friends have the whole statement 10 or 15 minutes before the Minister sits down. I assume that that is not the practice that you are trying to end.
  Madam Speaker: No. The practice that I deprecate is a Minister giving information to Conservative central office or Conservative candidates before giving it to the Scottish Grand Committee. That is it in a nutshell.

Social Security
3.46 pm
The Secretary of State for Social Security (Mr. Peter Lilley): I beg to move,
That the draft Social Security Benefits Up-rating Order 1997, which was laid before this House on 31st January, be approved.
Madam Speaker: I understand that with this, it will be convenient to discuss the following motions:
That the draft Social Security (Contributions) (Re-rating and National Insurance Fund Payments) Order 1997, which was laid before this House on 31st January, be approved.
That the draft Social Security (Contributions) Amendment Regulations 1997, which were laid before this House on 10th February, be approved.
That the draft Guaranteed Minimum Pensions Increase Order 1997, which was laid before this House on 31st January, be approved.
That the draft Social Security (Incapacity for Work) (General) Amendment Regulations 1997, which were laid before this House on 31st January, be approved.
Mr. Lilley: The main order uprates nearly all benefits in line with inflation. It is the biggest spending decision that we take in the Department every year. Even with inflation at only just over 2 per cent., uprating benefits will cost £1.7 billion in the coming year. It is right and proper to uprate benefits, because that meets our commitment to the neediest in society.
I am proud that, despite the pressures on public spending, all basic benefits have been uprated every year since I have held office. Of course, it was not always so. Under the previous Labour Government, benefits were not uprated fully in 1976 for past inflation, and pensioners were robbed of £1 billion in today's money. Pensioners may therefore find a recent statement by the shadow Chancellor somewhat disturbing. In a speech last month, in which he spelled out his new, macho approach to public spending, he said:
"We will keep a tough grip on the cash totals of departmental spending … there cannot be an assumption that totals will be automatically adjusted upwards in the event of changes in inflation."
I wonder whether the hon. Member for Peckham (Ms Harman) can reassure pensioners and others about whether their benefits would be automatically adjusted upwards in the event of changes in inflation. I am happy to give her the opportunity to do so. Perhaps she will do so later, although I am not sure what value pensioners would put on an assurance from the hon. Lady, because she has changed her mind on everything, and her party's track record is not good. We shall wait and see.
The fall in unemployment since the previous election is another source of pride. Unemployment is down by more than a million since April 1992, and is now declining even faster. Expenditure on benefits for the unemployed is therefore falling, and is set to fall further. Expenditure on other groups has risen, but three quarters of the growth in spending in this Parliament has been on people who are elderly or disabled, or the long-term sick. Spending has grown on the elderly, because people who reach retirement age can now expect to live for two years longer than people who reached retirement age in 1979. People live longer under the Conservatives.

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Spending on disabled and long-term sick people has grown because we give more generous benefits. We are proud of the fact that we give four times more help to disabled and long-term sick people than did the previous Labour Government.
The two sides of the House have had their disagreements on analyses of past social security spending, but we can now both agree about future spending levels. In his speech on 20 January, the right hon. Member for Dunfermline, East (Mr. Brown) committed the Labour party to our planned expenditure levels, Department by Department and year by year. It was an amazing tribute to my right hon. Friend the Chief Secretary to the Treasury that the Opposition clearly believed that his figures were right to the last penny. It means that we can have a rational debate about how we should keep within those budgets, on which both sides of the House agree, and we can both be measured against the same yardstick.
I shall spell out the measures that we intend to take to keep within the published targets for my Department. It will be up to the Opposition to say whether they would implement those measures, or what other measures they would introduce to achieve the same savings. In total, the measures which I announced in the Budget debate just before Christmas, but for which we must legislate, will save nearly £300 million in the second year of the spending round, rising to £1 billion in the longer term. So either the hon. Member for Peckham must enact £1 billion-worth of my savings measures, every one of which she has condemned, or she must replace them with alternative measures that save as much. I think that she will find that, when the shadow Chancellor told her to keep within my budget, he was handing her a live grenade with the pin pulled out. We shall wait to see how she deals with it.
The largest of the changes that I announced was the proposal to equalise benefits for lone parents with those available to married couples. It will apply to new claimants only, who will receive the same family premiums and child benefit rate as couples. Existing lone parents will keep their present higher rates unchanged in cash terms. That equalisation is fair and, ultimately, it will save £500 million a year. It requires legislation, which we shall introduce early in the new Session.
I have written three times to the hon. Member for Peckham asking her a simple question: would she implement those changes to equalise benefits for lone parents with those for married couples? If she will not, and if she decides to pay £500 million more to lone parents than we plan, she can get it only by reducing benefits for married couples, for single people without children, for the disabled or the elderly, because they are the only other categories who receive benefits under our budget.
Let us have no pretence from the hon. Lady that she can conjure up £500 million of savings from expensive schemes designed to get lone parents back into work. It is socially desirable to get them back to work, especially from their point of view, and I welcome the fact that the Labour party has copied some aspects of our Parent Plus scheme. Imitation is the sincerest form of flattery, but we are frank enough to admit that it will probably cost money. We have budgeted some £20 million for the scheme.
We have studied similar schemes worldwide and know of no scheme that saves more money than it costs, including the Australian scheme, JET, which the Labour
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party claims as its inspiration. That scheme has been going since 1989 and has cost £40 million more than it has saved. That is calculated on the basis that everyone leaving the scheme for a job is counted as a saving in benefit terms, although similar schemes in New Zealand and elsewhere suggest that as many as 80 per cent. might have got jobs anyway. It is therefore simply cynical of the Opposition to pretend that they can bank on savings from that source.
We can all agree that the ideal way to curb social security spending is to get people out of unemployment and into jobs. Here, Britain's record over this Parliament has been outstandingly better than that of any major country in Europe. We have created more jobs than all the other major countries of Europe put together.
Mr. Roger Berry: Will the Secretary of State give way?
Mr. Lilley: I shall give the hon. Gentleman a chance to listen to a bit more before he takes part in the debate.
We have created more jobs than all the other major countries of Europe put together. We have a higher percentage of our population in work, and that is rising. We have a lower level of unemployment, and that is falling. So, for the best of reasons, expenditure on benefits for the unemployed is now falling in this country, and set to go on falling.
We have achieved that relative success by following a clear strategy—by creating a flexible labour market, deregulating, reducing taxes and cutting social costs on employers, so that our social on-costs add £15 to every £100 in pay, whereas in France on-costs are twice as high, at £31 for every £100 on the payroll, and in Germany they add £41 to every £100 on the payroll.
We are making work worth while, by paying in-work benefits to those with families and high rents to pay. Those policies are working. They are creating jobs, attracting inward investment and winning plaudits from foreign firms moving here. They are securing the ringing endorsement of objective bodies such as the Organisation for Economic Co-operation and Development and the International Monetary Fund.
In contrast, the Opposition's approach is clearly incredible. It is riven with glaring contradictions. Let me mention two. The Saturday before last, the Leader of the Opposition told his local government conference that a Labour Government would spend more on education, which he claimed would be financed by savings on social security achieved by Labour's scheme to get a quarter of a million young people into work.
Yet a week later the shadow Chancellor, in an interview in the Evening Standard, said in the clearest possible terms that, far from saving money, the scheme would cost a net £3 billion—[HON. MEMBERS: "No."] I shall quote his words:
"I estimate"—
[Interruption.] These are the words of the right hon. Member for Dunfermline, East, and Opposition Members would do well to listen to them:
"I estimate that to meet a commitment to create 250,000 jobs for young people will, over the course of a parliament, cost a minimum of £3 billion … I do not think anybody is in any doubt that a windfall levy will raise that sum of money."

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Either the scheme would save money or it would cost money. Either it would help the Leader of the Opposition pay for more spending on schools, or a minimum of a £3 billion tax on the utilities would be required to pay for it, as the shadow Chancellor admits. They cannot both be right. Which of the two does the hon. Member for Peckham support—her leader or her shadow Chancellor? Will the scheme save money or cost money?
It is no good suggesting that the £3 billion cost cited by the shadow Chancellor is a gross cost that would be offset by savings. If the savings exceeded the cost, there would be no need for an extra tax to finance the scheme. In connection with the Budget proposals that the Chancellor announced before Christmas, I negotiated with the Treasury a "spend to save" programme of anti-fraud measures that will save more than it costs—so we shall not need any extra taxes. It will help us in our task of bringing taxes down.
The simple truth is that the shadow Chancellor is, in that respect, right. The costs of such schemes invariably far exceed the benefit savings. The reason is simple. There is a large dead-weight cost. Last year, half of all those who would have been eligible for his £1,500 subsidy to help them back into work got jobs anyway. So the money spent subsidising them would be wasted.
Then there is a large substitution and displacement cost. Many employers would take on people eligible for the subsidy instead of others whom they might otherwise have taken on, and people in that second group would therefore find themselves unemployed and drawing benefit.
There is also a recycling cost: employers might not keep their subsidised recruits once the subsidy has run out, after only six months, so the net number of additional jobs is likely to be only a small fraction of those who receive the subsidy. I wish that that were not the case and that such schemes were cost-effective but, alas, all the evidence suggests that only narrowly targeted schemes create any extra jobs and that few, if any, result in net savings to the taxpayer.
Mr. Michael Stephen: If the money for those makework schemes is to be raised by a windfall tax, what is the likely effect on employment in the utilities to which the tax would apply?
Mr. Lilley: My hon. Friend makes a good point, which it is for the Opposition rather than for me to answer. I venture to suggest, however, that the effect would be negative and that there would be an adverse effect on employment in those industries, to add to the problems that I have already mentioned.
The Opposition's proposals have a second and equally glaring internal contradiction. They claim that reducing the cost of employment by giving employers a temporary £60-a-week subsidy would create extra jobs; yet they simultaneously claim that increasing the cost of employment, by the national minimum wage, not to mention European social costs, would not destroy jobs.
Either employers are sensitive to the costs of employing people, in which case the national minimum wage would be a disaster, or they are not, in which case the hope of reducing unemployment by job subsidy is an illusion. The Opposition cannot have it both ways.
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I am happy to come down on one side of the horns of the dilemma: the truth is that employers are indeed affected by the cost of employing people and that a national minimum wage, which would permanently raise costs and affect millions of people, would be bound to destroy far more jobs than could possibly be created by a temporary job subsidy of £60 a week that ends completely after six months and covers only a few hundred thousand people.
The more Labour claims that its job subsidies are likely to be effective, the more alarmed we should all be about the far greater impact of the minimum wage, the social chapter, the European social model and trade union power, which it proposes to restore.
The largest element in my budget is not expenditure on unemployment, but the cost of state pensions. We have taken steps to contain the future growth of state pensions and, equally important, we have successfully encouraged the bulk of people of working age to opt for occupational and personal pensions. Today, I have published the latest estimate of the value of United Kingdom pension funds, which has reached a record-breaking £650 billion.
That may be denigrated and sneered at by the Opposition, but it is something that Government Members are proud of. The assets held in pension funds rose by a massive £50 billion in 1995. That increase in a single year is more than the entire year's spending on health and social services. Only because we have encouraged people to save and invest in private pensions is the additional potency of private investment brought to bear in financing future pension needs in this country.
Mr. Jeremy Corbyn: Before the Secretary of State gets totally carried away on the subject of the privatisation of the pensions system, will he tell us what studies have been done by his Department into the amount that is being paid into private pension schemes by people in work, compared with the amount that they would have paid into a national insurance system if the state pension had been uprated properly in line with earnings, as it should have been, instead of the Government stealing so much money from pensioners?
Mr. Lilley: There are two aspects to that question. On whether state pensions should have been uprated in line with earnings, Labour Front Benchers—latecomers though they may be—agree that they should not; we welcome that agreement, although we understand that the bulk of Labour Back Benchers do not share in it. It would have cost the best part of £8.5 billion to uprate in line with earnings had we not changed the system.
The trouble with comparing the costs of the state system with those of private provision is that the state system does not involve any investment—and does not, therefore, receive the fruits of investment growth—whereas the private sector does. That is why it is advantageous, where possible, to get people to save and invest and to enjoy the fruits of investment. That is why we are proud of our success in encouraging the bulk of people to do so. Pension and life assurance assets now account for more than one third of net personal wealth in this country.
Mr. Bernard Jenkin: Is my right hon. Friend aware that, over the past two days, the Select

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Committee on Social Security has been hosting a Europewide conference on the comparison between funded and unfunded pension systems, which has looked at the hidden liabilities in European pension funds? It is evident—as all the other European parliamentarians attending the conference acknowledge—that the choices that we took during the 1980s, and those that we have taken since, to balance our hidden liabilities into the future, are choices that the others will have to make to stop their public finances falling into crisis.
Mr. Corbyn: On a point of order, Madam Speaker. Is it in order for the hon. Member for Colchester, North (Mr. Jenkin) to make an intervention on private pensions without saying that he is, or was, an adviser to the insurance company, Legal and General?
Madam Speaker: The Chair does not rule on interventions. If the hon. Gentleman were to rise to make a speech, I would expect him to declare an interest at the beginning, but I cannot rule that he has to make such a declaration on an intervention.
Mr. Jenkin: Further to that point of order, Madam Speaker. May I point out to the House that I have had no connection with Legal and General for more than a year?
Madam Speaker: I am obliged.
Mr. Lilley: I do not know whether the hon. Member for Islington, North (Mr. Corbyn) wants to intervene to apologise. The House will note his ungracious attempt to slur one of my hon. Friends, and I shall think twice about giving way to him in the future. [HON. MEMBERS: "Oh."] Opposition Front Benchers apparently approve of such behaviour, which tells us something about them.
Mr. Robert G. Hughes: Is there not collusion between Opposition Front Benchers on these matters? In the corresponding debate last year, my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) suggested that Labour would abandon its commitment to uprate pensions in line with earnings. When he did so, he was accused of peddling wild rumours from central office. We all know who was right.
Mr. Lilley: To respond to the important point raised by my hon. Friend the Member for Colchester, North (Mr. Jenkin), I welcome the Select Committee's conference, which I saw was attended by an impressive array of continental experts and parliamentarians. Officials from my Department, and other Departments, have been to the conference and will report to me on the views expressed, which could be very interesting. I know from the Franco-British Council conference on the subject of funded pensions that there is great interest and considerable admiration on the continent for our success in building up private pension provision on the back of solid state-guaranteed pensions for the future.
Britain's strong position was confirmed recently by a new report from the International Monetary Fund, which highlights our enviable position compared with other European pension systems. The IMF estimates that the ratio of public pension liabilities to gross domestic product is 5 per cent. in Britain, compared with 76 per cent. in Italy, 111 per cent. in Germany and 114 per cent.
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in France. The value of assets held in UK pension funds exceeds those of all other EU member states put together. We believe that we are better placed to provide decent pensions for our pensioners in the future.
Only 43 per cent. of those who retired in 1979 were in receipt of occupational pensions. Now, the figure is 63 per cent., and it is even higher among those who have retired recently. Some 5.6 million people are holders of appropriate personal pensions. Seventy-three per cent. of pensioners have income from investments and savings, compared with 62 per cent. in 1979, and their average total net incomes have gone up by 60 per cent. more than inflation since then. That is a track record of which we can be proud.
I must mention two other issues before drawing to a conclusion. First, I refer to a recent misleading statement made by the Leader of the Opposition, the shadow Chancellor and the hon. Member for Peckham, who is the shadow spokesman on social security. All of them have said that it is regrettable that we spend less on education than on unemployment. Where they get those figures, I do not know.
The Parliamentary Under-Secretary of State for Social Security (Mr. Andrew Mitchell): They make them up.
Mr. Lilley: Yes, they must do. I want to put the actual figures on the record. We spend £36 billion a year on education. The cost of all benefits to unemployed people is some £9 billion and falling. I hope that those hon. Members will correct the misleading statements that they have made when they come before the House.
Since the welfare state was established, the cost of social security has grown twice as fast as the economy. It has taken a rising share of national income and has been the main factor in driving up taxes and in the changes and burdens on business. Because of the reforms that we have introduced, it is now set to take a declining share of national income, leaving scope for lower taxes and setting us on a virtuous circle of lower taxes, a more dynamic economy, generating jobs and getting people off welfare and thus further reducing taxes. We have achieved that because our reforms are focusing help on those in need, cutting out fraud, getting people off welfare and into work and helping to drive up private pension provision for the future. Those are achievements of which we Conservatives can be proud.
By contrast, the Opposition have attacked virtually every reform that we have introduced and every proposal that they have made involves spending more. The simple truth is that the Opposition cannot be trusted to reform the welfare state, because they believe that they have a vested interest in the votes of those who depend on the money from the welfare state. The Opposition tried to do an about-turn on the issue and to pretend that they can both spend more and save at the same time. As a result, they are riven by the internal contradictions that I have spelt out. They claim that they will live within our budget, but refuse to implement or replace the £1 billion of savings that we have announced.
We shall want to hear from the hon. Member for Peckham whether she will implement the changes that we have announced but have yet to legislate for on lone parents, housing benefit, backdating and so forth, totalling the best part of £8 billion.

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The Opposition claim that their subsidies for employers will create jobs, and then deny that the burdens of the minimum wage, European social costs and restored union power will destroy jobs. They claim that their schemes will save money, but then admit that they will require £3 billion in extra taxation to finance them. Rarely has a party demonstrated as comprehensively as the Opposition its complete unfitness to govern. Let us make sure that it remains on the Opposition Benches and leaves the Conservative party to continue with the most successful reforms of the welfare state in Europe.
4.12 pm
Ms Harriet Harman: I will begin by setting out our position on today's business. I shall advise my right hon. and hon. Friends not to vote against the general uprating order, because, as the Secretary of State has said, it contains upratings in line with inflation, which are important to those who depend on benefits.
There are many aspects of the Government's approach, however, with which we profoundly disagree. The Government have delivered a double whammy—higher costs for the taxpayer and lower benefits for the claimant. Their failure is clear from their record on social security. Perhaps that is why the Secretary of State was so defensive today and spent nearly all his speech attacking our plans. Clearly, our plans are the only plans that he feels are worth discussing.
The Secretary of State is so defensive about his record that he dare not put it before the House. The fact is that the cost to the public purse is up, and life for those on benefits is harder. The Tories are hitting the taxpayer and hitting the poor. They have failed on welfare because they have failed on work. One in five households of people of working age, not including pensioner households, have no one in work. In our divided Britain, there is poverty from the cradle to the grave: one in three are born into poverty; one in five pensioners die in it.
As this Parliament draws to a close, this debate provides a good opportunity to review the Secretary of State's record. At the last general election, the Tories posed as the party that would cut taxes; this afternoon, Secretary of State said that they had cut taxes. Could he have been referring to the Government's 22 tax increases? They posed as the party that would cut taxes, but instead put them up. They also posed as the party that would cut the social security budget, but instead they increased it. Since he became Secretary of State, the social security budget has risen. It is £15 billion a year more than it was in 1992, and takes one pound in three of all Government spending.
When the Secretary of State is in the mood to admit the increased spending, he blames the elderly. Like the Under-Secretary of State, the hon. Member for Hertfordshire, North (Mr. Heald), he says that it is all the fault of our pensioners and that it is the Government's generosity: they are generous to a fault; the problem is demography, the aging population, more people with disabilities.
The right hon. Gentleman claims that it is generosity to the sick, the elderly and the disabled that has driven up the social security Bill, but it is not. More than half the increase, £8 billion extra a year, is a direct result of
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the growth of poverty and unemployment, which has led to the growth of income-related benefits. That is the price of Tory economic and social failure. It is not the elderly who push up the social security budget, but poverty.
Mr. Lilley: The hon. Lady keeps making that point. The problem is that she does not understand the figures. Her predecessors, the hon. Member for Islington, South and Finsbury (Mr. Smith) and the right hon. Member for Glasgow, Garscadden (Mr. Dewar), did their home work, discussed issues with my officials and got their facts right. I have great respect for them. If she wishes to be informed, I would be glad to help. Indeed, I am happy to give her a table with a breakdown of the £8 billion extra expenditure on income-related benefits that she equates with extra expenditure on unemployment.
Of that £8 billion, precisely £600 million goes on the unemployed. The rest goes on the elderly, the long-term sick and families. It goes, for example, on family credit and extra help for lone parents. The figures are all there; she can study them. The money does not go on the unemployed, and it is grossly misleading for her to suggest it. In particular, she does not seem to realise that people who get disability living allowance are automatically passported on to improved income-related benefits. They get £12.90 extra on the new lower rate of DLA, and that entitles them to an extra £20 a week of income-related benefits.
Ms Harman: That was the longest intervention on record. I am well aware of the Secretary of State's figures. He placed similar figures in the Library after Social Security questions.
The point at issue is clear. The Secretary of State tries to categorise, for example, the £10 billion of income support for lone mothers as a good thing because it is a family benefit. The Opposition say that £10 billion of income support for lone mothers, most of whom want to work, is not a sign of success, but of failure. It is why the social security budget has gone up. It has risen because of income support, housing benefit, council tax benefit and the economic inactivity of the one in five households of people of working age who are not in work. It is not acceptable for the Secretary of State to say that the increase in his budget is due to the growing number of elderly or the Government's generosity towards the elderly. That is an unrecognisable description.
Of the £14.8 billion by which the Secretary of State has increased the social security budget since 1992, only £1.6 billion of the extra is accounted for by pensions. It is not good enough for the Secretary of State to rely on patronising, sexist assertions that assume that women cannot understand figures. It is absolutely clear that there is an extra £8 billion in his budget as a direct result of the growth in poverty and unemployment.
It is not the elderly who are pushing up the social security budget, but poverty. It is not the disabled who are pushing up the social security budget, but unemployment—the one in five households of people of working age who are without work. They live on the breadline, and the taxpayer has to pick up the bill for those one in five households, which is why the taxpayer has seen his tax bill increase by the equivalent of 4p on the basic rate of income tax. It is to pay for poverty and unemployment which have increased since the right hon. Gentleman became Secretary of State.

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The more the Secretary of State spends on benefits for people who should be working, the less the Government invest in the future and in education. His failure has caused the social security budget to increase and its spending to crowd out the sort of public investment that people want. The £8 billion extra that he is spending on poverty and unemployment could have paid for more nursery places, more after-school clubs, more teachers, more books and more computers.
Mr. Matthew Banks: With no discourtesy to the hon. Lady, may I ask her about one point that she raised on the subject of war pensioners? Many of those who have war pensions, and who are young like me, get fed up with her crocodile tears. One reason the social security budget has blossomed is that the Government have encouraged so many people to apply for war pensions. If I had had £1 for every senior citizen in my constituency for whom I had got a war pension, I would be a wealthy young man.
Ms Harman: The bill for social security in this country has not blossomed, as the hon. Gentleman suggests, owing to the Government's generosity to war pensioners. In fact, the Government, behind the backs of war pensioners, tried to cut their pension and deny it to them.
The social security budget has risen owing to the one in five households of people of working age who are not working—the tax bill of the other four families has therefore risen. There is an extra £15 billion on the social security budget this year compared to when the right hon. Gentleman took over as Secretary of State; only £1.6 billion of that increase is accounted for by pensioners. I hope that he will not claim that the extra numbers of pensioners taking up income support is a sign of success, not poverty.
I have looked through the figures that the Secretary of State put in the Library after I first raised the issue. The various allocations that he has made to try to smear over the issue conceals everything and confuses no one.
Mr. Lilley: I am sure that the hon. Lady would not want to mislead the House. She has just said that only £1.6 billion of extra spending is on the elderly: in fact, £3.3 billion of the total £14.6 spending is on the elderly, and £7.5 billion is on the long-term sick and disabled. That gives a total of £10.8 billion, so three quarters of the total increase is spent on the elderly, the long-term sick and the disabled.
Ms Harman: I shall simply state the figures as they are once more. There is a total of £15 billion extra every year in the right hon. Gentleman's blossoming budget, comprising £0.7 billion extra on child benefit; £1.6 billion extra on pensions; £4.3 billion extra on incapacity and disablement; and the remaining £8.2 billion going on income support, unemployment benefit and all those people of working age who are not in work.
To be without work—to be in one of the one in five households where no one is working—is not only to be without a decent standing of living, but to live on the margins of our society. That sows the seeds of disillusion and despair. To be unemployed when young is to feel that one has been thrown on the scrap heap before one has even begun. The Government have failed the young
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unemployed: 500,000 people under 25 are unemployed, which is one in six of that age group. In some inner-city estates, half the people under 25 are out of work. In London, where my own constituency of Peckham is situated, 50 per cent. of young black men are officially registered as unemployed. That is why we say that there must be a windfall levy—a tax on the unfair and excess profits of the privatised utilities. We can use the money to break the vicious circle and get 250,000 young people who have been without work for six months off benefit and into proper work or training. When they reject that windfall levy, the Government reject all hope for the young unemployed.
We know that, the longer a person is out of work, the harder it is to get a job. The Government have failed the long-term unemployed—400,000 people have been jobless for more than two years and it costs the public purse £9,000 a year to keep someone trapped in unemployment. That is why we have argued for extra help for the long-term unemployed to get them into work—for a £75 a week national insurance holiday for employers who take on people who have been unemployed for more than two years; for a relaxation of the 16-hour rule to help the long-term unemployed to get the skills or educational qualifications they need to get the jobs that are available; and for a national minimum wage to help make work pay and enable people to move off benefit and into work.
Mr. David Shaw: Will the hon. Lady give way?
Ms Harman: I shall give way in a minute, but I must press on because the Secretary of State made a long intervention that was half as long again as his speech.
The real map of poverty and unemployment stretches far beyond the official unemployment statistics, which have been fiddled more than 30 times by the Government. Among the poorest families in Britain today are those who are hidden from view because they are not on the official unemployment statistics, especially lone mothers. There are I million lone mothers who are trapped on income support, living on around £100 a week. Two million children in families headed by lone mothers are being brought up on the breadline. They face life on benefit for years, and the taxpayer now faces a bill that has risen to £10 billion a year to support lone mothers and their children.
In the Secretary of State's accounts, that is a success—a blossoming of the social security budget—and he calls it family benefits. We call it those mothers who want to work being trapped on benefit at public expense—a sign of the Government's policy failure. In the uprating debate in February last year, the Secretary of State said that there were three steps he would take to halt the rising number of lone mothers on income support. He has failed on all three of those steps, and there are more lone mothers on income support, not fewer.
The Secretary of State has failed to get lone mothers off income support by making absent fathers pay. He has failed to help lone mothers into work. Although he has cut lone mothers' benefit, that has failed to reduce the divorce rate. The Secretary of State is absolutely right in his determination to make fathers pay for their children.
Every child has a right to receive the emotional and financial support of both parents, irrespective of where they live. However, the latest figures from the Child

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Support Agency show that it has failed: in the past three months, only 15 per cent. of absent fathers paid the full amount awarded. The Child Support Agency has been so badly administered that it has caused real hardship to some, and to many more it has provided an excuse to abdicate responsibility for their children.
Experience from around the world shows that it is difficult to make absent fathers pay under any system. It is an uphill battle. It is not a task from which we should shrink—far from it—but we must be realistic: we cannot leave the children of lone mothers in poverty and allow the benefits bill to increase every year while we wait for absent fathers to wake up to their responsibilities. It is vital that lone mothers are able to work to support themselves and their children.
Here, too, the Government have failed. While more married women are going out to work, fewer lone mothers are in the work force—yet they are the ones who most want and need to work. Lone mothers in Britain are less likely to be in work and more likely to be dependent on benefit than lone mothers anywhere else in Europe. In France, 82 per cent. of lone mothers are in work compared with only 41 per cent.—half as many—in Britain.
The problem is not just financial, with children being brought up on the breadline and the taxpayer facing a growing benefits bill. There is the deeper problem of children being brought up without seeing the world of work, and growing up with the expectation that life is about receiving benefit rather than going out to work.
Lone mothers want to work—especially when their youngest child begins full-time schooling. That is the time when most married women start to look for work. For the past 17 years, this Government—and this Secretary of State for the past five years—have told lone mothers, "Here's your income support. I'll send it to you every week, and come back when your youngest child is 16." That has been the Government's policy for the past 17 years.
Lone mothers do not want to depend on benefit, and it should not have to be like that. I recently conducted a small survey of lone mothers in my constituency, which backed up the national findings. For example, Sheryl is 29. She has two children, aged eight and three, she lives on her own and the children's father pays nothing. Before she had her children, she worked as an administrative assistant. She has been bringing up her children on income support for the past three years. She wants to work, but she cannot because she is unable to match working hours with school hours. She said:
"My youngest child starts full-time school in January and, once she's settled, I would like to go back to work. But I can't because of all the problems of after-school care, school holidays and teacher training days."
The story is the same throughout the country: lone mothers want to work not in spite of the fact that they are mothers, but because they are mothers. Like all mothers, they are driven to give their children a better life.
The Secretary of State does not understand that problem, and he has no policies to address it. Labour in government would take action to break down the barriers that prevent lone mothers moving off benefit and into work. We will invite lone mothers whose youngest child is in the second term of full-time education into job
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centres to receive advice on jobsearch and on training and child care. We will introduce a national child care strategy, with a network of after-school clubs to help lone mothers match school hours with working hours and make work pay.
Mr. Andrew Mitchell: We have done that.
Ms Harman: Only one child in 80 have an after-school place, and the waiting lists are enormous. [HON. MEMBERS: "Where will the money come from?"] The Minister claims that the Government have provided those places, but Conservative Members ask where the money will come from. Clearly, they are split on that issue.
Mr. Mitchell rose—
Ms Harman: I shall anticipate the hon. Gentleman's question, and he shall see whether I answer it correctly.
We have said that more money needs to be spent on after-school clubs. They can be financed through a combination of measures: the lottery, public-private partnerships, benefit transfers, and by charging mothers who can afford to pay. After-school clubs are important for lone mothers and are popular with all parents. What has been lacking is a glimmer of understanding on the Government's part that they should provide such a service.
We will use benefit transfer schemes as a springboard for lone mothers out of dependency and into work. We will have targets for training and enterprise councils to train lone mothers, especially on term-time courses.
We will have one-stop shops like that pioneered by my hon. Friend the Member for Cambridge (Mrs. Campbell), who was in her place earlier. Information technology and the Internet are used to bring all the information that lone mothers need on to an easy-to-use computer with a touch surface. The user touches the screen for information about local jobs, child care and training and how her benefits will be affected. All that information is pulled together to provide a one-stop service, so that lone mothers can be helped to get off benefit, get into work and find their way through the maze of conflicting information.
Mr. Hartley Booth: Are we to understand that it is official Labour policy for the lottery to fund social services?
Ms Harman: The hon. Gentleman does not understand. After-school clubs are not a social service. There is a big demand for them from parents. It is difficult for children to play out if they do not have a safe environment. Many mothers want to, and have to, work. After-school clubs are important for children to do homework, and possibly engage in other activities that have been squeezed out of the national curriculum, such as more music, art, drama and sport.
The lottery is well designed to provide resources for that, but it is not our only suggestion for financing. We have said that extra after-school club places can be financed through a combination of measures, which I set out. That has been supported by the Kids' Club Network. Until we raised the issue, it was not on the political agenda. When I mentioned after-school clubs, the

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Secretary of State did not even know what they were, and had to run off to the Secretary of State for Education and Employment to ask about them.
Mr. Andrew Mitchell: The hon. Lady is talking consummate nonsense. She knows perfectly well that there is nothing between the two sides of the House on after-school kiddies' clubs. The difference is that, over the past three years, we have created 80,000 places. We are committed to the scheme. In his Budget, my right hon. and learned Friend the Chancellor of the Exchequer put £24 million on the table to develop kiddies' clubs. How much money will the hon. Lady put on the table? Let us have a figure, instead of the re-announcement of Government policies and waffle that we get from the Opposition Front Bench.
Ms Harman: I welcome the signs that the Government have moved firmly on to our territory. They have recognised that they cannot defend a situation in which 1 million lone mothers are on income support, and the sole Government policy was to write to them from the Department of Social Security once every three years saying, "Are you still at that address? Are you still getting your income support okay?"
That was the Government's sole strategy for lone mothers. That is why 1 million of them are on benefit, 2 million children are on the breadline, and the taxpayer is picking up a bill for £10 billion every year. That is why we said that something must be done, and that we need a welfare-to-work approach. We offered a number of proposals, which I am outlining.
If the Government had ever recognised that lone mothers needed to work, they would not have simply have said, "Go away and come back when your youngest child is 16." If they understood the role that after-school clubs can play in helping lone mothers, we would not be faced with a situation in which only one in 80 children have access to an after-school club. If the Under-Secretary of State wants to assure me that he agrees with me about the policies that we have espoused and on which he has failed to act, he should vote Labour at the next election.
We will measure and report our progress with monthly figures. What the Government do is present the unemployment figures and say that unemployment is tumbling; what they never do is present monthly income support figures, showing that the number of people of working age who are not working is rising. The truth is that, in all his years as Secretary of State, all that the right hon. Gentleman has ever done is criticise lone mothers, and, of course, cut their benefits.
That brings me to the Secretary of State's third failed plan to reduce the number of lone mothers. Of course he has criticised lone mothers. Do we not all remember what he said at the Tory party conference? Of course he has cut lone mothers' benefits: that is evident. I hope that he will not even seek to deny that.
The Parliamentary Under-Secretary of State for Social Security (Mr. Oliver Heald): What did he say at the Tory party conference?
Ms Harman: We remember the Secretary of State's "little list." He stigmatised lone mothers and their children, saying, "There is something wrong with your
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family, so there must be something wrong with you," to the 2 million children of lone mothers. He has changed his tune, and to some extent I welcome that, but it does not change his record, as everyone knows.
Part of the Secretary of State's record is benefit cuts. Cuts in lone mothers' benefits make the poorest families poorer. In this uprating and in the further measures that the right hon. Gentleman proposes, he plans to cut lone mothers' income by £572 a year. He is not giving them any help so that they can obtain work; instead, they must suffer cuts in benefit.
The Secretary of State must know that, when women cease to be part of a couple and become lone mothers, they become worse off, not better off. Lone mothers are not advantaged; they are disadvantaged. They do not have their partners' income, or their partners' time. The Secretary of State's justification for cutting lone mothers' benefits, and making the poorest families poorer, is that it will deter couples from divorcing or separating; but benefit cuts for lone mothers do not make any couples stay together. Lone mothers are already worse off than married women, yet the divorce rate continues to rise.
Mr. David Willetts: If the hon. Lady does not support the Government's measures on benefit for single parents, and given that the shadow Chancellor has made it clear that, if she were in office, she would be obliged to stick to the Government's totals for social security expenditure, what other cuts does she propose?
Ms Harman: We have said that the way in which to stop what the hon. Member for Southport (Mr. Banks) described as the blossoming of the social security budget, and hence the increased burden on taxpayers, is not to shave the benefits of the poorest families year by year. It has been said that, although the hon. Gentleman has no common sense, he has two brains, so he will know that lone-mother families are the poorest. He clearly agrees with that.
We cannot deal with the problem of the rising social security bill simply by reducing the standard of living of the poorest families. What we must do is go with the grain of what they want to do—what married women are doing—which is to go out to work. That is why it is so shameful that the Government of whom the hon. Gentleman has been a part have adopted a policy of saying "Here is your income support. Collect it weekly, and go away until your youngest child is 16."
Our approach will not be to cut the social security budget by making the poorest poorer. We will employ a welfare-to-work strategy to ensure that those people can obtain work, so that we no longer see an increase, year after year, in the number of lone mothers who are on benefit because they cannot work.
The Minister for Social Security and Disabled People (Mr. Alistair Burt): Will the hon. Lady give way?
Ms Harman: No, I will not. I have answered the question.
The problem is that the Government have put the social security budget up. My right hon. Friend the Member for Dunfermline, East (Mr. Brown), the shadow Chancellor, is right to recognise the appalling state of public finances,

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to recognise that people have been hit by 22 Tory tax increases and to say that our priorities and our approach are different from those of the Government. Our approach is, as I have said, to employ a welfare-to-work strategy. That is why, as I said earlier, we will break the vicious circle by a windfall levy on the privatised utilities to fund a £3 billion welfare-to-work programme for the long-term and young unemployed.
In the debate on social security a year ago, the Secretary of State said that there were three ways in which he would stop the increase in income support for lone mothers. First, he would make fathers pay. He has failed. Secondly, he would get lone mothers to work. He has failed. Thirdly, he would deter people from becoming lone mothers, by ensuring that couples stay happily together by reducing the benefits for lone mothers. He reduced the benefits, but benefit cuts for lone mothers do not make couples stay together. Lone mothers are already worse off than married women, yet the divorce rate continues to rise.
Relationship breakdown is far more complex than a simple financial issue. Does the Secretary of State really think that couples will say to themselves, "Good heavens! The Secretary of State for Social Security has cut lone parent premium and one-parent benefit. Let's not break up. Let's stay together"? The world is not like that. That is why his strategy to reduce the number of lone mothers on income support has failed. Much as he may like to, he cannot regulate from Whitehall the relationships of men and women. What he could do but has failed to do is help lone mothers to do what they want to do—work.
After 17 years of criticism of benefit cuts, the Secretary of State has produced a leaflet, which he sent to all lone mothers on income support. I can see that he is leafing through his file, and that he has the second to latest version. I have the latest one. The most important thing that it does not say is where to go to find a job. The Government simply cannot understand that a maze of obstacles confronts women on income support who want to go to work. A one-stop-shop approach is needed, not one set of advice on benefits, another on work, another on training, and another on child care.
Undeterred, this afternoon I rang the hotline number on the leaflet, and spoke to Lee. He was courteous and polite, but explained that he cannot give any advice about an individual case. He certainly cannot give any advice about availability of jobs, training or child care, as that is nothing to do with the Department. However, he offered further leaflets on benefits.
If the Government's back-to-work strategy for lone mothers is to send them a leaflet and then have a hotline that offers them further leaflets, it will not succeed. It is very expensive. It cost £750,000 to get three columns in the Daily Mail to defend the Government's lamentable record. That is the wrong use of public money.
With our welfare-to-work strategy, we will, as my right hon. Friend the Leader of the Opposition set out, spend less on unemployment—mopping up the cost of Government failure. Then we will be able to spend more on education, investing in the future for success. The failure to get people off benefit and into work forces the benefits bill up, and the Government squeeze benefits:
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cuts in benefits for asylum seekers, cuts in benefits for war pensions, cuts in benefits for people who are not well enough to work, and cuts in housing benefit.
The Conservatives used to say, "Let the housing benefit bill take the strain." Now they have cut it. They also used to say that unemployment was a price worth paying. From October 1997, they propose that single people under 60, including widows who have lived all their lives with their husbands, will be forced to go into shared accommodation to claim housing benefit. How can the Secretary of State justify that? For the third year running, the Government have cut housing benefit for parents whose grown-up children still live with them. It is not always easy for an adult to live with his or her parents, particularly if he or she is without work. That cut simply makes it more difficult. How can the Secretary of State justify that?
One important way to curb the spiralling housing benefit bill would have been to take the tough action that Labour proposed on the Social Security Administration (Fraud) Bill. The Select Committee on Social Security estimates that one in every five pounds spent on housing benefit are wasted on fraud, but the Secretary of State refuses to implement our proposals for tougher measures.
We must at all times remain vigilant in the battle against fraud on the public purse, no matter where it is committed. Every pound wasted on fraud is a waste of taxpayers' money, which could go to those in need, and a waste of public support for the welfare state. Labour defends the welfare state, and we want to see it better defended against the abuse of fraud.
The changes in the uprating order fail to help our poorest pensioners. It is a scandal that, after a lifetime of work or caring for their family, pensioners are some of the poorest people in Britain today. Pensioners have been hit hard by the Government's policies. The Tories broke their promise and put VAT on gas and electricity. Up and down the country this winter, pensioners are having to choose between heating and eating. That is one reason why we will cut VAT on fuel to 5 per cent.
Almost 1 million pensioners fall through the net altogether. They are entitled to income support, but they do not claim it.
Mr. Matthew Banks: What about the environment?
Ms Harman: One of the shadow Chancellor's proposals for the windfall levy to help the young unemployed is an environment task force. One of its jobs could be to insulate the homes of elderly people. At one and the same time, that would give useful work to young people who are wasting on the dole, would cut pensioners' heating bills and would improve the environment.
Almost 1 million pensioners fall through the net altogether.
Sir Norman Fowler: I am sorry to interrupt the hon. Lady's flow. Will she tell us what Labour's policy is on uprating the basic pension, because Opposition Front-Bench Members declined to do so the last time we debated this subject? Is it true, and can it be confirmed, that the Labour party has now abandoned its long-standing pledge to uprate pensions in line with earnings?
Ms Harman: We have set out our policies clearly in our document "Security in Retirement", which was passed

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by our conference. We have said that pensioners are fed up with a Government who made promises that they did not keep, and who promised not to put VAT on gas and electricity and did so. We recognise that the public finances are in a very bad state due to the Government's incompetence.
We will only make promises that we can keep, which is why we have told pensioners that we will cut their fuel bills by reducing VAT on gas and electricity. We have said that we will keep the basic state pension as it is now, not means-tested, and that we will uprate it at least in line with prices. We have had to say that we will not promise to finance a commitment to increase it in line with earnings, not least because the Government have destroyed the public finances. We set that out very clearly in our document "Security in Retirement".
Almost 1 million pensioners fall through the net altogether. They are entitled to income support, but they do not claim it, and lose £14 a week on average. Of those pensioners, 800,000 are women living on their own. They have no state earnings related pension, no occupational pension and no savings: they have nothing.
The Government are making matters worse. The existing 35-page income support form is part of the reason why 1 million pensioners are deterred from claiming their entitlement. Under the misleading title, "Simplification of Procedures"—a document that was sneaked out at the time of the Budget—the Secretary of State announced that yet more obstacles will be put in the way of people who intend to claim income support, including pensioners. The Government are putting more responsibility on claimants for the correct completion of the form, and are requiring more evidence to support claims. The Secretary of State's proposals will deter thousands more pensioners from claiming the money to which they are entitled.
The Secretary of State says that the poorest pensioners do not claim the money to which they are entitled because they choose not to do so: they do not want it. The idea that 1 million pensioners choose to be on average £700 a year worse off is ridiculous. The truth is very different. The message to pensioners from the Government has been clear: "If you claim benefit, you are a scrounger; if you are a pensioner, you are a burden." One million proud pensioners have got that message loud and clear, do not claim their benefit, and suffer hardship as a result.
We argue that the proposals in the Government's Social Security Administration (Fraud) Bill for cross-matching local government and Government data between Departments should be used to get help to pensioners who do not claim their entitlement, yet the Government have refused to accept that. They are prepared to cross-match data to combat fraud, and we support that, but not to help the poorest-paid pensioners who are losing out.
Not only are the 1 million pensioners who do not receive the income support to which they are entitled worse off, but the Government have imposed VAT on fuel, cut in half the value of the state earnings-related pension scheme, and put pensioners in fear of having to sell their homes to pay for long-term care.
The Secretary of State has boasted again about second-tier pensions and occupational pensions, but the fact remains that 12 million people at work today have no occupational pension. Many of the 6 million people whom the Government encouraged to take out personal pensions, especially those on modest incomes, have found that such
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pensions eat up up to a third of their savings in charges. Many of those who came out of occupational schemes at the Government's urging have found that they are very much worse off, and have been missold personal pensions. Millions of people at work today face poverty in retirement.
The Secretary of State should spend less time lording it over everybody else in Europe, and a little more worrying about people at work today who do not have a proper second-tier pension, and who will therefore fall back on means-tested benefit and have a very low standard of living when they retire. That is why we need a new framework of value-for-money second-tier pensions that fits the changing world of work, where more women are working and there are more part-time workers and small employers. That is why we are proposing a new form of funded second-tier pensions for those who do not have access to an occupational pension, through our plans for a stakeholder pension.
We are also proposing to extend choice through our plans for a flexible decade of retirement. Over the past few years, the pattern of work has changed, and many people now want to retire early. If, at no cost to the public purse and without recourse to it later, people can draw their state pension early because they have shown that they have sufficient savings or an occupational pension, greater flexibility and choice can be provided. We must end the "one size fits all" approach to the welfare state.
The welfare state has an important role to play as part of an efficient economy and a just society. There have been huge social and economic changes since Beveridge created the welfare state in 1945, and they present great challenges. The welfare state can meet those challenges, but it needs to be modernised. It needs to move ahead of social and economic change, not lag behind it as the Government have allowed it to do, with lone mothers, for example; become flexible to respond to the diversity of people's lives, with regard to the age of retirement, for example; work alongside a dynamic economy, because the welfare state cannot ever be an alternative to work; be a force for social cohesion in our divided society; and provide a new balance of rights and responsibilities between individuals and the state. It needs a Labour Government, and the sooner the better.
4.58 pm
Mr. David Willetts: I should like to begin by citing some more figures on the balance of social security expenditure—the crucial point on which there have already been exchanges between my right hon. Friend the Secretary of State and his shadow, the hon. Member for Peckham (Ms Harman)—because the figures bear out absolutely what my right hon. Friend was saying.
Of the total social security budget, 44 per cent., £40 billion, goes on benefits for elderly people; 25 per cent., £23 billion, goes on benefits for sick and disabled people; and 19 per cent., £18 billion, goes on benefits to families. Benefits to unemployed people are a relatively modest £8.6 billion. Even adding in the further £4 billion of expenditure for which the Department for Education and Employment is responsible, expenditure on assistance for unemployment people is still overshadowed by all the other programmes that are central to the welfare state.
The Opposition are claiming that there is gold at the bottom of the garden in the form of some extraordinarily high level of benefits paid to unemployed people, out of

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which they can finance every expenditure programme that passes through their mind. No matter how successful we are in bringing down unemployment, the money spent on benefits for the unemployed, running at 9 per cent. of the social security budget, could not finance every pet programme that an Opposition spokesman wanted to introduce.
The other mechanism for financing the Opposition's pet programmes—the windfall tax—would be equally damaging to the economy. Sometimes, the situation is unclear—we are told on the one hand that measures will be self-financing and then on the other that they will be financed from the windfall tax. That is confusing. I would welcome an intervention from someone on the Opposition Front Bench to explain that confusion.
Mr. David Shaw: My hon. Friend has been complimented in the past on perhaps having more than one brain. Does it not require only one brain, or even perhaps half a brain, to understand—although Labour is not admitting this—that, if employers are to be subsidised to take on 250,000 young workers and encouraged to reduce their employment costs, they will, in all probability, get rid of 250,000 older people?
Mr. Willetts: I agree with my hon. Friend. That is what the Americans would call a no-brainer. That would be one of the effects.
I should like to contrast the range of measures that the Government have in place to help unemployed people into work with the measures advocated by the Opposition. There are two ways of helping unemployed people into work. One is by straightforward incentives. We have made massive improvements in incentives since 1979. The gap between the average incomes that someone could expect in work and out of work is now such that we can be confident that just about every family would be better off in work. That is a massive improvement on the mess of the social security system in 1979.
I welcome the ingenuity of the Department of Social Security in perpetually seeking further ways of ensuring that incentive effects work. We have helped people to carry on with some entitlement to housing benefit for a few days or weeks when they first get back to work. The back-to-work bonus is an incentive worth up to £1,000 for unemployed people getting back into work. There is a national insurance holiday for employers who take on someone who has been long-term unemployed. All those incentives are the right way to go with the grain of the labour market and help unemployed people back to work.
The second way—I am afraid that this is a rather cumbersome expression—is by much more active management of unemployed people. That means not ignoring them and simply allowing them to sign on every two or three weeks and leaving them alone in the interim, but actively managing and encouraging them, boosting their morale and helping them actively to seek work. That is what job clubs are about. They are extremely cost-effective. That is what restart interviews are for and one of the reasons why the pilots of project work in Medway and Humberside are already showing such good results. I welcome the fact that we are going to extend project work to 100,000 unemployed claimants.
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Training is oversold as a way of helping unemployed people back to work. Of course training is good if it increases what economists call the human capital of people who have been unemployed or in low-paid work, but it is not a panacea for unemployment. Training is often best deployed with people who are already in work—perhaps low-paid work. As the employer gets to know an employee's aptitudes, he can invest more money in raising their skills and helping them into better-paid employment with that firm.
Too often, training schemes aimed solely at the unemployed play a cruel trick on them. There is sad evidence from research that training schemes can increase an unemployed person's perception of the wage that he should command by more than they increase his skills and qualifications. Paradoxically, they can set him back in seeking work. That is one reason why Labour's much-vaunted attempts to expand training programmes to help unemployed people into work could well have perverse effects.
We recognise that sometimes, when unemployed people find their first jobs, they may be relatively low-paid. That is where family credit comes in. I am delighted to see my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) in his place, because family credit was brought in when he was Secretary of State for Social Services. Family credit addresses directly the problem of people in low-paid jobs whose family responsibilities are such that we cannot expect them to keep their families to a standard of living to be expected in a civilised society on their basic pay. Family credit, which now amounts to almost £2 billion a year, tops up their incomes.
One of the most depressing aspects of the Labour party's feeble attempts to defend its minimum wage policy is the way in which it systematically rubbishes family credit.
Ms Harman: We do not.
Mr. Willetts: The hon. Lady says that they do not, but Opposition spokesmen and the recent report from the Institute of Public Policy Research have said that family credit is an indiscriminate wage subsidy that unscrupulous employers use to hold down wages below the level at which they would otherwise be. We are told that the minimum wage will somehow achieve benefit savings by stopping that abuse of the benefit system by employers. That is one of the ways in which Labour claims that the minimum wage will save money.
The research shows how false that charge is. It shows that only 9 per cent. of employers are aware of the exact status of their employees and whether they would be able to claim family credit. We know that only 12 per cent. of those on family credit claim it for more than a year. Family credit is not an indiscriminate wage subsidy. It helps people starting back into work, perhaps in relatively low-paid jobs, who then move up to better-paid work. It goes with the grain of the labour market and is a much more effective way of helping people than the minimum wage.
Have Labour Members justified the minimum wage? They seem to imagine that employers will not mind paying the extra costs of employing someone with a minimum wage of £4 or £4.26 an hour. If employers will pay the higher wage, why does the Labour party also

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advocate a £75-a-week tax rebate for employers who take unemployed people into work? Presumably Labour Members believe that pricing people into work is effective in those circumstances. That is why they advocate the rebate. If the rebate helps to price people into work, why will the minimum wage not price people out of work? They cannot have it both ways.
Mr. Bernard Jenkin: I invite my hon. Friend to shed a little further light on the exchanges between my right hon. Friend the Secretary of State and the hon. Member for Peckham (Ms Harman) on the distribution of the increase of social security between unemployment-related poverty and other programmes. Is it not evident that the hon. Member for Peckham is including any growth in family credit as a negative factor—as part of the unemployment-related problem—rather than as a positive programme which is helping people back into the jobs market?
Mr. Willetts: My hon. Friend makes a very good point. To regard family credit, which supports people in work, as a cost of unemployment is perverse, even by the extraordinary accounting conventions that the Labour party seems to use.
We know from research done by the Institute for Fiscal Studies how badly targeted a minimum wage would be. Many of the people who would benefit from the minimum wage live in relatively affluent households. According to the IFS research, the most affluent third of households would gain bigger increases in their incomes from the minimum wage than the poorest third. The Labour party complains about growing divisions in the country, but it advocates a minimum wage that would benefit the most affluent households more than the poorest households. That is extraordinary and perverse.
Mr. David Shaw: I can give my hon. Friend an example of how the minimum wage creates jobs. Calais, which is just 22 miles from Dover, has a minimum wage, and unemployment there is so bad—it is double the Dover level—that French people rush across the English channel to get jobs.
Mr. Willetts: My hon. Friend is right. The Labour party's policies—the minimum wage and the social chapter—derive from its belief that such issues are better managed on the continent, but the evidence shows that exactly the opposite is true. The Labour party wants to copy policies that have delivered 4.5 million unemployed in Germany, more than 3 million unemployed in France and more than 2 million unemployed in Italy. In this country, with Conservative policies, we have fewer than 2 million unemployed, and falling. The Labour party's policy would be an extraordinary trick to play on the British people.
Mr. Berry: Can the hon. Gentleman name a year since 1979 in which unemployment, on the claimant count, has been lower than the level inherited by the Conservative Government?
Mr. Willetts: I cannot remember every year's unemployment figures since 1979 off the top of my head. It is the trend that is important, and we have a downward trend in unemployment. Our labour market reforms have made the falls possible and the policies that the Labour party advocates are driving up unemployment on the continent, so the message is clear.
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The Labour party says that it believes in the importance of education and training. It claims that the windfall tax will be used to finance measures to invest more in education and training. However, its policies would have the opposite effect. If the minimum wage were introduced at £4 or £4.26 an hour, what would happen to someone who has worked hard for an NVQ, some GCSEs or an A-level and who earns £4.50 an hour, such as a senior cook in an hotel? Alongside such a person, the assistant might earn £3 an hour.
The minimum wage would have one of two effects. One is that the unskilled worker in the kitchen would receive the same pay and the skilled cook would want the differential reinstated—that is a good old-fashioned expression from the 1970s that would come back if we ever had a Labour Government. The restoration of differentials would lead to an old-fashioned increase in wage costs that would drive up unemployment. That is why a minimum wage would cost 800,000 jobs at £4 an hour and more than 1 million jobs at £4.26 an hour.
Mr. Keith Mans: My hon. Friend has given an excellent example of the effect of a minimum wage. It is relevant to the north-west, especially in Fylde where the tourism industry is strong. The introduction of a minimum wage would cause huge unemployment, because the newly trained would not get jobs. There would be fewer jobs because the tourism industry would be less viable. The young—for example, university students in Lancaster—would not be able to get jobs and learn a trade.
Mr. Willetts: My hon. Friend is right. Important British industries, such as the tourism industry, would be significantly threatened by a minimum wage.
Mr. Booth: Will my hon. Friend give way?
Mr. Willetts: I shall give way in a moment. I first wish to impale the Labour party on the twin horns of a dilemma. The first horn is the restoration of differentials, which would cause a significant increase in unemployment—
Mr. David Shaw: And in strikes.
Mr. Willetts: Yes, strikes would increase as people demanded their differentials. However, if the Labour party claims that the minimum wage would not cause wage increases, it would be telling people not to bother to obtain qualifications or to stay on at college to be trained, because they would not get any more money if they did so. That is the second horn of the dilemma, and it is extraordinary hypocrisy for the Labour party to talk about its support for education and training.
Mr. Booth: Before my hon. Friend leaves the subject of the minimum wage, I remind him that the chairman of the Confederation of British Industry recently gave specific examples of factories in the north-east in which at least 50 per cent. of the work force would have to be put out of work, if the minimum wage were introduced at the levels proposed by the Labour party, because the work would be done in the far east.
Mr. Willetts: I agree with my hon. Friend. The gains that have made us a paradise for inward investment, as Jacques Delors put it, would be lost if we imposed the same social costs as they have on the continent.

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Strangely, the hon. Member for Peckham did not mention another Labour party policy that has implications for education and training, even though it is one of its few specific policies on social security. I refer to the means testing of child benefit for 16 to 18-year-olds, which would be an attack on people staying on at school to get an extra qualification. The electorate are entitled to know the details of the means test for child benefit for those children.
We are all familiar with the arguments about the Princess of Wales and other rich people getting child benefit, but the Labour party faces a practical problem: either it uses the means tests that already exist—the income support means test, for example—or it introduces a new one. In the first case, many families with modest incomes, for whom the decision of a child to stay on at school is financially significant, would lose child benefit. In the second case, the Labour party would have to spend large sums on a new means test, with a new administrative structure and new computer programmes, to take child benefit away from a relatively small section of the population. That is another policy that would do nothing to encourage education and training: it would have the opposite effect.
I accept that, when people get a job after a period of unemployment, or for the first time, they receive low pay; people do not necessarily start work on a high income. It is important to have an open and mobile society so that people can reasonably hope that, if they stick at their work, turn up at work punctually and get an extra qualification, they can look forward to promotion and rising income. All the evidence is that Great Britain is one of Europe's most successful societies in delivering rising incomes to people once they have their first foothold in the labour market.
According to a study by the Organisation for Economic Co-operation and Development, in Sweden, which is one of the models that the Labour party is supposed to admire, only 39 per cent. of under-25s enjoyed a significant increase in their incomes over a five-year period, whereas in Great Britain 62 per cent. of the same group enjoyed an increase in income. The poorest 10 per cent. in 1991 enjoyed, on average, a 25 per cent. increase in income in the following year.
Thanks to research commissioned by my right hon. Friend the Secretary of State for Social Security, we know that people who were in the bottom fifth of the earnings scale in 1979 enjoyed, over the following 15 years, an increase in their earnings of 42 per cent., much better than the 33 per cent. increase in incomes enjoyed by people in the top fifth of the earnings scale; thus, those who started in 1979 at the bottom of the earnings scale did better than average over the following 15 years.
All that paints a picture of a mobile and enterprising society. It is not a continental stakeholder society that believes in standardisation and regulation; it is a flexible labour market in which we aim to help people to get their first toehold in the labour market and, once they are there, through education, training and investment in their futures by their employers, to look forward to their incomes rising.
This country is seeing a transformation of the pensions regime. One change to which my right hon. Friend the Secretary of State referred—I cannot improve on what he
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said—is the shift towards funded provision and the extraordinary boom—which, we hear today, has reached £650 billion—in funded pensions. What a contrast with the unfunded pensions liabilities that will hold down the public finances and the balance sheets of private companies on the continent.
Another change is happening in the world of pensions. It is a change from defined benefit pensions to defined contribution pensions. Old-style, defined benefit occupational pensions may have been fine in the days when one joined a company and stayed in the same firm for 40 years, but with a more mobile economy and a flexible labour market, fewer people live that sort of life. Once people moved and started shifting around, those occupational pensions often treated people extremely roughly. That is why many more people instead want defined contribution schemes, which allow them to see a pot of funding accumulating in proportion to and in accordance with the contributions being made.
I am aware that, for some people, the administrative costs of taking out a personal pension on its own have been too great, which is why it is important to encourage good personal pensions that are a sensible compromise between traditional, occupational defined benefit schemes and completely individualised personal pensions.
I welcome the fact that, only the other week, we had a further announcement of more liberalisation of the regime for group personal pensions. I hope that what we heard is not the end of the matter, because the biggest obstacle to encouraging the private provision in which all Conservative Members believe—private provision for pensions and private insurance against the vagaries of life—is the regulatory burden faced by people trying to provide such financial services. If we are serious about wanting more people to take out more insurance cover and personal pension cover, saving for their retirement or for a rainy day, we must make it possible for people in the City of London and our other great financial centres to market those products effectively.
There is nothing more depressing than talking to a banker who says that the bank has an extraordinary amount of money sitting in interest-bearing deposit accounts because it does not believe that its customers know or are confident about what financial instrument, savings package or insurance product they should buy. I am afraid that regulation in the City of London has got out of hand. We are in danger, through over-regulation, of making it excessively difficult for the people whom we want to encourage to sell financial services around the country to do so effectively. To have a company like the Prudential, for which I have the greatest respect, being fined by City regulators seems to send out exactly the wrong signal. No useful purpose is served by such excessive and heavy-handed regulation.
We can be sure, however, that the way forward is by encouraging personal saving, personal pensions and personal insurance, not by the route to which the hon. Member for Peckham briefly referred when she, somewhat hesitantly, talked about a stakeholder pension scheme. I wanted to hear more about stakeholder pensions. We know where those exist—in Australia, where they are industrywide and involve representatives of the trade unions and employers' bodies, who run them along old-style, corporatist lines.

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If we are to have a modern economy for the 21st century, I should like to hear the Labour party define those industries. How are we to define an industry within which everybody is supposed to have an industrywide pension scheme? How would Richard Branson's business be defined if it were to participate in such a scheme? Will the Labour party go down the route recommended by the Chairman of the Social Security Select Committee, the hon. Member for Birkenhead (Mr. Field), who sadly is not with us today, but who has clearly advocated in the past that trade union representatives should sit on so-called "stakeholder corporations" to manage those pension funds?
If I were an elector thinking about the future of my pension and I had a choice between backing funded pensions that had already accumulated £650 billion of savings or, alternatively, backing a stakeholder pension in an industrywide scheme, partly managed by trade union bosses, I know what I would want for my future. I would know how my pension would be most secure. When it comes to both jobs and pensions, the Conservative party clearly has the agenda for the 21st century.
5.27 pm
Mr. Jeremy Corbyn: I suppose that this debate is an annual discussion of the issues surrounding the welfare state and its funding. The Secretary of State seems to take great pride in announcing inflation-level increases in benefits and assuming that everything is all right. Clearly, when he is driven here in his chauffeur-driven car, he does not see people begging around tube stations in London. Nor does he see people waking up under soggy blankets alongside the Thames, or broken-down people desperate to find enough money from somebody to buy themselves a cup of tea during the day.
Since 1979, the Government have presided over an enormous shift of wealth from the poor to the rich, and over the degradation of many people in our society. Poverty blights the lives of about a quarter of this country's population. The latest figures show that between 13 million and 14 million people in Britain live in poverty. That is a sixth of Europe's poor—24 per cent. of the population. Worse still, 4.3 million children are living in poverty—and they call this a Government of success. In 1979, 1.4 million children were living in poverty. That figure was not good, but it is less than one third of the present level.
The wealth of the poorest tenth of the population has been reduced by about 18 per cent., whereas the richest tenth are roughly two thirds better off than when the Tory Government were elected. We are now presiding over a massive shift of wealth from the very poor to the very rich. People in the middle have not felt more insecure or unhappy since before the second world war, because they see the destruction of services all around them. Taxes have regularly been reduced to make the rich better off, so services for the rest of the population have had to be severely cut.
If the 1978–79 income tax regime were in place today, a further £31.4 billion would be available. The top 10 per cent. of taxpayers have enjoyed a reduction in their
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income tax; indeed, they have received 48 per cent. of total tax cuts. We must seriously examine the issue of distribution between rich and poor within our society.
Mr. Patrick Nicholls: I am grateful to the hon. Gentleman for having the courage to bring socialism into the Chamber, when it has become so profoundly unpopular. How does he explain the fact that, despite his belief that there would be much more money available if the rich were taxed more—based, presumably, on the assumption that they would simply stay around to be taxed more—Treasury figures, which were first asked for by the hon. Member for Birkenhead (Mr. Field), show conclusively that, when we decrease tax rates on the rich, the rich as a whole end up paying more to the total tax take, therefore making a bigger contribution to helping the people whom the hon. Gentleman wants to help? Is not his problem the fact that he wants to hurt the rich more than he wants to help the poor?
Mr. Corbyn: I am not sure from which university one graduates with a degree in gobbledegook economics; perhaps the hon. Gentleman will tell us later. The simple fact is that his party, his Government and his philosophy aim to increase the power of the rich by reducing their tax burden. The knock-on effect is to cut public expenditure for the rest of society. That is why no houses are being built, hospitals are being closed, class sizes have increased and people are begging on the streets.
Visitors to this country who have not been here for 10 or 15 years find the situation shocking. They ask me, "Whatever has happened in London? Why are all these people homeless? Where have all these beggars come from?"
Mr. David Shaw: From Paris, via Eurotunnel.
Mr. Corbyn: Witty remarks by people such as the hon. Member for Dover (Mr. Shaw), who could not give a fig for the poor anyway, merely discredit him and his party even more, and show them up as what people know them to be and what they have always been—the party of division between rich and poor.
Mr. Nicholls: Now what is the answer?
Mr. Corbyn: The answer is a society seriously interested in caring for all its population, not just for those who can make a lot of money out of exploiting other people.
Mr. Nicholls: Will the hon. Gentleman give way?
Mr. Corbyn: No, not a second time, because I want to make a little progress.
Poverty affects every aspect of people's lives. In my constituency, registered unemployment is about 22 per cent. On some estates it is probably 50 per cent., and for young black people it is much higher. When we talk about life to people on income support who are trying to bring up children, we start to see an awful lot of other things.
Constant unemployment means low income for the household, no extras for the kids, poor-quality furniture, lack of entertainment and a pretty miserable existence. It means poor-quality food, undernourished children, short

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life expectancies and a constant burden on the health service, because, for reasons that we understand, poor people tend to be ill more often than rich people.
Mr. Shaw: I hope that the hon. Gentleman understands that there are Conservative Members, including me, who genuinely want to try to create more jobs in the economy. But surely he must realise that in his constituency there is no incentive for businesses and employers to move in. All over London, Labour boroughs have discouraged employers and moved them out, replacing them with high-rise blocks of flats into which they put benefit claimant after benefit claimant, because they want the Labour votes. Labour boroughs have gerrymandered instead of creating jobs and attracting employment into their areas.
Mr. Corbyn: My borough has a serious housing problem, which will be solved only by a programme of building and buying homes with affordable rents. The way in which the housing benefit system has been manipulated by the Tory Government over the past 15 years to subsidise extortionate rents charged by private landlords is outrageous.
I can give an example. Of two identical houses side by side, one is rented from the council at a weekly rent of about £55, which is paid by housing benefit because the family are unemployed. The family next door, who are also unemployed, rent privately what used to be a council home for £180 per week. That, too, is paid by housing benefit. Where is the sense in spending that public money on housing benefit, just to please a private landlord?
The council wants to solve the housing problem in the borough. I want to solve it, too. That can be done partly by better management of the property that we have, but, crucially, it can be done by the construction of new homes with affordable rents.
The housing benefit bill in this country is enormous. It does not help the individuals who receive it, because it was designed to help landlords who have benefited from deregulation.
Mr. Robert G. Hughes: The hon. Gentleman is making an important point. Of course I acknowledge that there are problems with housing benefit, but when he cited his example he made no allowance for debt charges on the house that is still in council ownership. Surely if one does that, not necessarily for that particular house but overall, it changes the figures substantially. The debt on a house that has been sold will have been paid off, because that is how the regulations work.
Mr. Corbyn: I realise that it is some time since the hon. Gentleman was a local councillor, and he may not have heard that the Department of the Environment has ring-fenced housing revenue accounts. The argument that council tenants are subsidised by the rest of the population is simply untrue. The issue is that a great deal of money is being made by private landlords for doing precisely nothing—and they are being subsidised by the state to do nothing. That is an abuse of public expenditure.
Mr. Hughes: We have had the joke, but what about the serious answer? Of course I know that housing revenue
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accounts are ring-fenced; I served on the Standing Committee on the legislation that brought that about, and I understand it well. The point is that there is still a debt charge on the house that the council has not sold. That has to be taken into account in the figures that the hon. Gentleman puts to the House. I realise that he is making a serious point, but the contrast between the two figures is not nearly as marked as he suggests.
Mr. Corbyn: The contrast is exactly what I said it was; I gave the figures. The ring fencing of the housing revenue account means that it has to bear the cost of debt charges on money borrowed over 60 years, as most local authority loans are, whereas a mortgage is usually taken out over 20, 25 or 30 years. That is the difference.
Public investment in good-quality housing is good for the people who live in it, and good for public expenditure as a whole. Spending money on housing benefit to prop up private landlords is not good. It is a crass waste of money, as the Government are at last beginning to recognise.
Mr. Andrew Mitchell: I always enjoy the hon. Gentleman's speeches, and I have great respect for the integrity that he brings to his side of the debate, especially as it makes his hon. Friends on the Front Bench squirm. Will he make something clear to the House? He has said that extra public expenditure is needed. Will he confirm that he is entirely happy with the Labour party's policy of living within the Government's overall spending totals, in the unlikely event of Labour ever being elected?
Mr. Corbyn: I have no idea, any more than any other Opposition Member, what the books will look like when we have won the general election on 1 May. But rest assured that I shall be here, campaigning for better housing for the poor in this country. Whether the Minister will be here as well is for the voters of Gedling to decide.
I shall now move on to the issue of health, and the link between poor health and poverty. The Department of Health now acknowledges that life expectancy for the poorest in our society has worsened. For some very poor people, it is almost as bad as it was in the 1940s.
There have been some interesting articles on the subject in the British Medical Journal. Infant mortality statistics show that death rates for first babies born into the poorest social class, class V, are 70 per cent. higher than in social class I, and that babies born to unemployed parents are almost twice as likely to die as those born to the wealthiest class.
The public health officer's report for Camden and Islington makes chilling reading. Infant mortality, life expectancy and the incidence of notifiable diseases are much worse than the national average. What is worse, the suicide rate for men has risen dramatically with the rise in unemployment and poverty in our society. There is a downside to the idea that all one needs to do is to give more money to the rich and let it trickle down to the poor. There is an increase in absolute poverty and deprivation.
The meanness of the Secretary of State's policy is apparent in many areas, one of which is the treatment of asylum seekers. An extremely small amount, compared with the Department's total budget, used to be spent on supporting people who were quite properly conducting an

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appeal against the refusal of benefits because they were asylum seekers. They lost those benefits and are living in desperate poverty.
The National Assistance Act 1948 ruling by the court means that local authorities have to support people who face destitution. I welcome that ruling, because it is one way of getting some food into the mouths of desperately hungry people who are fleeing from fear and oppression in another society, but by rights the Department of Social Security, not local authorities, should bear the cost.
Benefit rights for asylum seekers should be fully restored, so that the spirit of the 1948 legislation, to remove the fear of starvation, poverty and homelessness from everyone in our society, can be seen to be a reality. I hope that the Secretary of State will tell us that he is prepared to restore those rights.
Mr. Stephen: Does the hon. Gentleman accept that a genuine asylum seeker who claims asylum when he arrives does indeed receive benefits in the time that elapses before his case is decided, but that people who prove to an immigration officer that they are coming here as tourists or students, or on business, that they have tickets to get home at the end of their stay, and that they have the means to support themselves while here, do not get benefits, and nor should they?
Mr. Corbyn: The hon. Gentleman has slightly misunderstood the rules. If people arrive here and claim asylum, not at the port of entry but subsequently, they have difficulty in getting benefits. If they have applied for asylum and it has been denied, and they are quite properly pursuing an appeal, which is their right, they have no access to benefits while the appeal is being pursued, which can last for up to three years.
We have a large number of absolutely destitute people in our society because the Government are playing the racist card against people who are victims of terrible situations in other societies. Last week, some asylum seekers from the middle east described to me the torture, pain, horror and terror that they had experienced at the hands of the regime from which they had fled. Their asylum applications had been turned down, they had no benefits, and they were living on gifts from people in local churches or—
Mr. David Shaw: Not genuine asylum seekers.
Mr. Corbyn: The hon. Gentleman says from a sedentary position that they were not genuine asylum seekers, but how on earth can he say that? He did not interview them, and he does not know them.
Mr. Nicholls: Will the hon. Gentleman give way?
Mr. Corbyn: Hang on a minute.
The account of the torture of those people and their families deserves at least to be listened to and given serious consideration. They have quite properly exercised their right to appeal against the decision, but the problem is that they get no benefits while the appeal is being processed, which may take a very long time. It is
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disgraceful. It is equally disgraceful that people are on hunger strike in British prisons, yet the Home Office apparently could not give a sod.
Mr. Stephen: Will the hon. Gentleman give way?
Mr. Corbyn: No, I am not going to give way any more. I shall move on, because I know that other hon. Members want to speak in this debate, which is not only about asylum seekers.
The hon. Member for Havant (Mr. Willetts) and the Secretary of State spoke about pensions and the so-called pension reform that is being paraded around by the Government and any number of right-wing think tanks as a great success. The problem is that in 1980 the Government broke the link of the annual uprating of pensions with earnings, and switched it to prices.
In the late 1970s, pensions had been increasing as a proportion of average earnings and had reached about 24 per cent. by 1980; today, the figure is down to 13 per cent. and falling. Indeed, one of the Secretary of State's predecessors said that at this rate it would eventually become nugatory.
Many in the Conservative party think that it is right to cut the value of the state earnings-related pension scheme, to create an enormous market for private pensions, and to ignore the consequences, which are that many elderly people are living in desperate poverty with no access to anything other than the state pension and state benefits, many of which they do not claim for various reasons, and that people in middle age who are in work—especially if they change jobs frequently or have occasional periods of unemployment—cannot buy into any kind of occupational scheme. They could possibly buy into a private scheme, but the cost would be phenomenal.
Many people heading for retirement age have no security whatever, other than the state pension and the state benefits system. We are facing an increase in poverty among the elderly in 10 to 15 years' time, rather than the majority being better off, as the Government like to suggest.
I believe passionately in a universal welfare state, and I believe that state pensions should be linked to average earnings and should be sufficient to live on, as they are in most European countries. The notion that the social security system should provide both a safety net and a marketplace for the private pensions industry seems entirely wrong to me.
I support the principle of universal benefits, for several reasons. They are effective, as child benefit has demonstrated, and they are cheap to administer. For example, in 1994–95 administration expenditure on the means-tested targeted directive for the social fund—if ever there was a Tory measure, that was it—was £209 million, out of a total budget of £451 million. How on earth can spending 40 per cent. of the value of the entire benefit merely on making sure that people do not get it be justified?
That is the reality: we are spending huge amounts on making sure that people do not get their benefits. We must get away from the mentality of spending millions of pounds on administration to stop people getting benefits, when we see poverty and misery increasing all around us.
The welfare state is crucial and will dominate political debate in the coming years both here and throughout Europe. I am entirely familiar with the argument being

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made around Europe: we must cut corporate taxation, so benefits have to be cut to allow corporations to compete with the low-wage economies of the far east. That is the road to ruin and disaster. We should argue the case instead for a high level of provision under a universal benefit system.
It has been clearly demonstrated that if we continue on the present road we will increase the divisions in our society and increase poverty, and it will do nobody any good at all. To see what happens in societies that do not have welfare state provisions such as those that this country was once proud of, one need only look at the way in which the poor are treated in the worst states in the United States and in emergent industrial economies with a limited, if not almost non-existent, welfare state. The social division, misery and unemployment are apparent. It is time for us to change course and to consider protecting and, indeed, extending the welfare state.
Much has been made of employment. The best way of dealing with employment problems and to recognise the insecurity faced by people in work is to introduce a national minimum wage at a decent level. It is wrong that many people are forced by the jobseeker's allowance to take jobs at £1.50 or £2 an hour. If they refuse to do so, they may lose all benefits.
For example, a family on housing benefit and income support living in a private rented flat in London could pay as much as £100 to £150 a week for their flat, and their income support could be £60 or £70 a week depending on their circumstances. If a member of the family refuses a job—however low the wages—he loses housing benefit and other benefits. If he takes the job, the family will lose housing benefit just the same, and many people will be worse off in disgraceful low-paid jobs than they would be on benefit. The use of family credit as a prop to low wages and poor-quality employers is not the right way forward. It is time to change course and to get rid of the jobseeker's allowance. Instead, we must look to people's needs and the elimination of poverty within our society.
I recognise that time is moving on, and my final point deals with the way in which young people are treated in our society. Successive Secretaries of State for Social Security have been almost obsessed with cutting or restricting benefits for young people under 25. The most important change to the benefit system was the Social Security Act 1986, which came into effect in 1988 and was introduced by the right hon. Member for Sutton Coldfield (Sir N. Fowler) with the support of the right hon. Member for Huntingdon (Mr. Major), who is now the Prime Minister.
The main feature of the Act was an age-related system of benefit entitlement. Personal allowances to cover food, bills and other living expenses were generally no longer to be based on need, but instead on age. Young people under 25 received 80 per cent. of the income support that those aged over 25 could receive, while young people aged under 18 were eligible for only 60 per cent. I do not think that we should be treating young people in that way. Changes to board and lodging payments resulted in many people being forced to leave home, and led to them being worse off. The changes have been a major source of homelessness, and all that goes with it.
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Young people in London—having survived on less than £20 a week thanks to cuts in the housing benefit system—are living in a state of desperation; not for them expensive clothes, videos and holidays. It is time we changed course. I find it very depressing that the Secretary of State can claim credit for his administration of a social security system that costs a fortune to stop people getting benefits, while poverty, unemployment, misery, bad housing, bad health and shorter life expectancy among the poor increase. We should be more concerned with the needs of the poor than with the apparent threats of the very rich to leave this country if they are taxed at a level that they could well afford.
5.51 pm
Mr. Hartley Booth: The speech of the hon. Member for Islington, North (Mr. Corbyn) brought to mind the whole purpose of debates in this place. He and I last sat together in this Chamber agreeing about the need to deal with a particular group of handicapped children, and I am aware of his concern in that matter, but I know, and he knows perfectly well, that, politically, we disagree vehemently. I hope that the Gentleman will be fair and tell his local authority that, if it wants to help the unemployed and the homeless, it should deal with the 1,000 or more empty properties in the borough. Also, if he wishes to be fair about the minimum wage, he should accept that the freedom we have to pay the going market rate is a safety net in itself.
I can give the hon. Gentlemen a local example from north-east London. In 1983, a group of 18 people from Bangladesh were employed in Hackney, where I had the privilege of being a candidate. The case was well known to me at that time. These 18 people from Bangladesh had had an income there of 5 rupees a day, but were being paid in Hackney what the local Labour council believed to be derisory wages. Those 18 people were thrilled to have wages that were 10 times greater than those that they received in Bangladesh. However, they were all put out of work by local regulations which were the basis of the thoughts of the hon. Member for Islington, North. I hope that he will reflect on that—although he will not perhaps agree with me in the end.
On the first day I came to this place, I was told that the worst thing I could do was to think. I have to say that, during the speech of the hon. Member for Peckham (Ms Harman), I was thinking deeply about her extraordinary rapier thrust early on, that one in five of our people were unemployed. As one knows that there are 23 million were employed people in this country, she has taken the figure of 4 million to be the total number unemployed. She has used the labour force survey figures—not the Government's claimant count or the International Labour Organisation figures, which are slightly higher.
If one believes that more than 4 million people are unemployed, several questions arise which have social security implications and which need answers. If Labour comes to power, will it immediately say that twice the supposed number of people are unemployed? Would it admit that its rhetoric during debates before the election was true? Would it say that 4 million people were unemployed? Would it pay the 2 million people who do not receive unemployment benefit, and who do not receive any of the £8.6 billion spent on unemployment benefit last year? Will that figure be added to the unemployment bill? During the election campaign, we

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should say loudly that the figures used by the hon. Lady include the sick, prisoners and others who are not available for work but who, of course, would like to have work. That figure is bogus and should not be used.
Mr. Henry McLeish: I was reluctant to rise, but I feel I must defend my hon. Friend the Member for Peckham (Ms Harman). She said that one in five non-pensioner households had no one working in that household. She did not talk about 4 million, and the hon. Gentleman cannot deduce that figure from her comments. I raise this simply by way of clarification, so that, if he extends his remarks, he can start from the right premise.
Mr. Booth: I am grateful for that, but my point is made. Labour Members frequently refer to "4 million unemployed"—that is Labour's official stance. There are cost implications attached to such a statement and they cannot just make it.
I came here not to cross swords with either the hon. Member for Islington, North or the hon. Member for Peckham, but to think more widely about social security. I happen to believe that social security is based on a generalisation and, like all generalisations, it is part mythical. The generalisation is that the money to buy social services and to pay benefits is the source itself of social security. That is the handout mythology. Yes, we pay a lot of money and I hope to develop my argument to show how the amount has increased since 1948–49.
I wish to advance today an alternative principle—that we should have not a handout, but a hand-up philosophy. [HON. MEMBERS: "Ah!"] If Labour Front Benchers are in accord with this view, so be it. It may well be that there are like minds across the Chamber, but we do not need a handout society any more.
Labour Members often criticise and berate our views on individualism, saying that the individualism that we hold to be an important lever is nothing but selfishness. The Labour party may now share many of our Front-Bench principles, but if it were ever in government—God help us—and tried to implement our policies and, as the weeks went by, had to face the daily problems of government, it would fall back on its original principles. It would not respect the individual because it rejects that view. It believes in state solutions—the sort of solutions that are based on planning and entirely reject the individual contribution. Our social security system should be based on the individual and his dignity. It should also be based on the belief that an individual is responsible to his neighbour—the second commandment.
There is a great need for new ideas. I was moved by a visit to Halifax when I was researching urban regeneration policies. I met a man who told me, "I came from the poorest house I knew of in Lancashire during my childhood. My parents were never employed and we were so poor that we only had a skylight in one room of the accommodation and there was no carpet on the floor. We were grindingly poor, but I did not go out and steal and my parents did not teach me to go to the social security, because there was none at the time. They taught me to see life in terms of honest opportunities." Having made a fortune, he was giving it back. He had bought the derelict Crossley mill and split it up into several hundred units for young, start-up businesses.
At the mill, I met a 22-year-old man who had just bought his second printer. He had a little printing works and was employing his father, who had been unemployed
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for years, and was taking on his grandfather, who had been unemployed for a generation, that very week. The one thing that he had—it was not money, although he had been able to borrow the money for the machine, but he did not have social security benefits—was that self-same idea. He saw life in terms of opportunity. He was a man changed from within. My argument is that our social security system is not just about handing out money blindly, but about getting ideas to motivate people.
Another person who is seminal to my argument was a 28-year-old lady I met in Bristol, who, on the quotient of disabilities, had every kind of problem. She was from an ethnic background, coming from the Caribbean, a single mother and slightly disabled, and had been unemployed for eight years, but she had had an idea. Her one skill was cleaning and she thought that she could get a contract to clean buildings. She went to Full Employ—incidentally, I hope that that organisation will regenerate itself—which taught her how to start a small business. I met her eight months later, when she was employing two people and cleaning two tower blocks. That is the sort of regeneration of the individual from inside—outside the social security system—that I want. I hope that those two examples make my point adequately.
How do we progress? It is no use the Government preaching, and it is no use talking. We need action in the form of legislation. Legislation cannot tell people what ideas to think, but laws can promote conduct, and conduct can change culture and with that comes the flow of ideas. I shall give another example to prove the point that laws and the changes of laws dramatically affect culture.
I had the privilege of speaking at the Konrad Adenauer Stiftung in Hanover not so long ago, where I met the Prime Minister of Saxony. He told me that there had been a huge flow of his cousins—using the term broadly to mean people from east Germany—into Saxony in the preceding year and that they had been poverty-stricken. He had told his burgermeisters, "We have to help these people." They did. They poured out money for people from east Germany—jobs, money, homes and all the rest.
He said that now those same burgermeisters are waiting outside his room saying, "Look, we cannot use these cousins from the east"—the same race and group, the Germans. They were saying, "They have a problem. They come to work late in the morning, go home early in the afternoon and ask for twice or three times the welfare benefits." We have to look for radical reform in the next generation inside the individual and inside the dependency culture that is created by too many handouts.
I gave an example from abroad, but what about at home? In the past months, unemployment figures have fallen. The Department for Education and Employment has been advised that a large number of people—we do not know how many—who are no longer claiming benefit are being flushed out of the system because it has been discovered that they were claiming wrongly. In other words, fraud is being revealed. That is perhaps an example—we hope so of a sensible reform introduced by the Government here, which is changing the culture of those people for the better. It is so much better to be doing real work than to be doing fraudulent work or diddling the system.
I said that I would return to the figures, and I shall do so briefly. I have not brought as many figures to the Chamber as did my hon. Friend the Member for Havant (Mr. Willetts), but they are fascinating. In 1948–49,

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£0.6 billion was spent on social security, or 5 per cent. of gross domestic product. By 1979, that figure had grown to £16.9 billion, or nearly double the percentage of GDP at 9.7 per cent. By this year, it had grown to £93.3 billion, which is 13.2 per cent. of GDP. There has been a huge rise in the past 20 years: both Front-Bench spokesmen have agreed on that. Several policy thrusts must result from all this. We must target what we spend.
My right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) is present and may well intervene. In his 1987 reforms, he produced an excellent policy initiative of targeting those in most need. However, we also have to encourage individual dignity as a policy principle and we also need to spend less. We cannot afford to spend so much.
How do we do all that? We have to limit some of the demand-led amounts. We have to tell people that they are entitled to benefit, but that there is a limit. We have to help them by giving them ideas and training, even though that idea has been rejected, or at least, qualified. Training, education and new schools are important. We have to ensure that the sort of benefits that we give people fit what we can afford.
In some areas, benefits should be extended, for example for those with special needs. We get people through to the age of 18, but then they often fall off the end of the cliff. We need to attend to the adult employment of those people who, sadly, cannot enter the mainstream of employment. In that area, we must help voluntary organisations much more proactively.
I am guided by the view that no one is without some talent. We must tailor what we can do to the individual. The Government have an astonishing record on spending, have made an admirable effort to tackle fraud, and have achieved an excellent performance in targeting those most in need. They should now recognise that the dignity of the individual is enhanced not by giving people money but by seeking new ways and ideas to enhance people's talents.
The Government have advanced with foresight on private pension provision. I hope that that foresight, which is a quality peculiar to our Front-Bench team, will go further. The hon. Member for Peckham suggested that we had scored a damp double whammy. That is wrong; we have won a triple trophy. We have not only succeeded in giving greater help to the needy but have more people in work receiving more spending money for their pockets. We have the best peacetime Administration of the past 100 years.
6.10 pm
Ms Liz Lynne: There have been numerous changes to the social security system in recent years. While some have been minor, our social security system has taken a turn for the worse. Its administration has been centralised and become remote.
Benefit claimants face complicated new rules with, at times, little help to cope with them. A recent report by the National Association of Citizens Advice Bureaux called "Short Changed" highlights the harsh reality of some of the Department of Social Security changes. The drive for savings pays no attention to the needs of claimants. That is borne out by the cut in outreach services, which have
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been withdrawn in some areas. The national free benefits advice line has been closed and smaller benefit offices have been shut down.
Citizens advice bureaux say that contacting benefit offices by telephone is getting worse. Hon. Members have to contact the Benefits Agency on behalf of their constituents and find it difficult to get through and get answers to their queries about new benefits. Written communications are poor; in sonic cases, they seem to be getting poorer. In several cases in which I have written to the Benefits Agency on behalf of constituents, it has taken too long for me to get a reply. Constituents become worried.
People get letters telling them that they are to be denied benefits. They do not know why and they try to sort it out themselves at a benefit office, if they are lucky and have one to go to. Some claimants do not have one and will not be able to sort things out, so they come to my surgery desperate for help. They do not have any benefit to live on. More and more people face that predicament.
Because of staff shortages, many benefit offices tell people that they must go to an advice agency to get help filling the forms. They say, "We cannot help you; we do not have the time." Advice agencies such as citizens advice bureaux do not have the time or resources, either. They are overstretched. They do not get more money because so many changes have been brought in: incapacity benefit, jobseeker's allowance and the changes in forms and other difficulties. People turn up at advice bureaux that do not have the staff to cope with them. It is increasingly difficult for all advice agencies, because of cuts in Benefits Agency staff.
Claimants need face-to-face contact with someone at a benefit office. Between April and October 1996. 17 Benefits Agency public caller offices were closed and two had their hours reduced. Will the Minister say whether it is true that 17 more are to close in the next six months? If so, that is worrying for face-to-face contact with claimants.
It has been suggested that people could use the telephone if offices are closed. However, many people do not have telephones: 11 per cent. of claimants have no telephone at home. Such people have to go to telephone boxes. If they live in a rural area, there may be only one box. I know from my experience of trying to get through and waiting on the end of the telephone, how difficult it is. When those people wait, they have to put money in all the time. Often, there will be someone outside waiting. If a claimant is holding the line waiting for an answer to a query and not speaking, the person outside will tap on the door, wondering what is happening. It is not fair that offices should close when such claimants need face-to-face contact.
Claimants need explanations of letters and of how to fill in forms. It is difficult to do that without a benefit office to go to. There are also problems for people whose first language is not English. They need face-to-face contact, as do people with hearing or communication difficulties. It is difficult for people with hearing problems to get advice and help. They need a benefit office close by. They do not want to have to travel to another one simply because theirs has been shut. Lipreading is often the only way that such people can understand their claims.
Along with the changes and the closures of benefit offices, we have had harsh changes to social security tribunals. It is less likely that people will attend, or be

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represented at, hearings. Oral hearings are held now only if requested by a claimant within 10 days. Before the changes, I understand that people were told that they were entitled to an oral hearing. Now they must somehow find out that they are entitled and ask for one within 10 days.
The minimum period of notice of hearings has been cut from 10 days to seven. That is five working days. The seven days includes the weekend. That will be difficult for advice agencies. In many cases, they will not have time to prepare a case to take to a tribunal. It is therefore less likely that the decision will be overturned—and 44 per cent. of benefit cases that go to tribunals are won on appeal. It is unfair that a change in the system means that people cannot get oral hearings because they do not have time to prepare their appeals. What will happen in future to such people? We must address that problem.
Appeals are a cost to the DSS budget. Why does it not get it right in the first place? Why does it not ensure that enough staff are available, that forms are filled in correctly, and that it gets the adjudication right in the first place and so does not have to go to appeal? The appeal system costs a great deal of money.
In debating the regulations, we must, of course. consider benefit uprating, but we must also consider the hoops through which people must jump to get benefits in the first place. To name one group of people, the social security system fails pensioners: 1 million pensioners do not claim the income-related benefits to which they are entitled. I have often said in the House, and I say it again, that we need a publicity campaign to ensure that pensioners who are entitled to income-related benefits get them.
A few months ago, an old lady on basic state pension came to my advice surgery to thank me. She said, "I don't want to worry you, dear, but I am finding it difficult to manage and I don't know how to cope any more." I asked her what benefits she was receiving and she told me that she was getting her pension. I asked her what she meant by that, and she said that she was receiving the basic state pension that everyone receives. I asked her whether she was receiving income support or housing benefit; she was not getting anything, because she did not know that she had to claim for those benefits. She was paying for her rent and all her other expenses out of the basic state pension. It is no wonder that she could not manage; she had roughly £6 a week to live on after she had paid all her bills. She had been managing on that for years, because she did not know that she was entitled to those benefits.
That case was not an isolated incident. Several of my constituents who are pensioners come to see me and I tell them what they are entitled to—whether it is a war pension or something else. They suddenly realise that they might be able to live at long last—perhaps not as well as one would have hoped, but in much better conditions than they were living in.
We need a publicity campaign. The Government must mount a campaign to tell pensioners what they are entitled to. I know that the Government say that that is a waste of money and that they cannot afford it, but they have already wasted £180,000 on advertising the Child Support Agency in the Greater Manchester area. The advertisement was unnecessary and inaccurate. On 12 February, the Advertising Standards Authority ruled that the advertisement was wrong. It reads:
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"Dear Parent,
Even after you pay maintenance you will always have more income if you are in work. Please call."
The advertisement gives a Manchester number, but the advertisement is incorrect and the ASA has asked the Government not to make the claim again. If the ASA is asking the Government not to use the advertisement again, there must be something desperately wrong with it. If the Government can find £180,000 for a campaign in Greater Manchester alone, why cannot they find the money for a campaign to tell pensioners which income-related benefits they are entitled to? It is disgraceful.
These orders and regulations are not controversial and I know that we shall not divide the House on them tonight, but the ones introduced in the Budget were controversial. They included harsh new housing benefit rules and rules stating that people under 60 would have to find multiple-occupancy accommodation, or its equivalent in cost—a bed-sit. In future, if a 58-year-old is made redundant, he or she might have to leave the house in which they have lived all their life. Aged 58, that person will suddenly be told that, because he or she is a single person, they cannot live in that house any more and must move out because of the housing benefit changes. If the rent of the house is more than the multi-occupancy rent, that person will be asked to move out and find something cheaper. If they stay in the house, they will have to try to meet the cost from their income support.
Mr. Burt: Thank you.
Ms Lynne: The Minister nods his head and says, "Thank you." But the income support level is a basic subsistence level; claimants will not be able to afford a little extra to top up their rent. In some cases, claimants might need a lot of extra money to top up their rent.
The Government encouraged landlords to convert their houses into self-contained flats. What will the Government do now? Will they go to those same landlords and say, "Sony, we made a mistake. You must now reconvert your property from self-contained accommodation to a property with a bathroom and a kitchen that people must share"? Many people cannot share; many people are incapable of sharing. I know that the Minister is well aware of the fact that people with mental health problems will have great difficulty. I know that the proposal is currently before the Social Security Advisory Committee.
I sincerely hope that the Minister will decide that the rule is unfair and will penalise many people whom he would not want to penalise. I know that he is concerned about elderly people, disabled people and those with mental health problems. I hope that he will use his good offices to try to change those draconian rules.
We have heard about the changes for lone parents. The Social Security Advisory Committee is considering those changes. In April 1998, one-parent benefit and lone-parent premium will no longer be available for new claimants. Some 46 per cent. of lone parents are on an income of below £100 a week. One-parent benefit is an in-work benefit; it encourages people to find work. Surely we want to encourage people back to work. Family credit helps, but low-income benefit for one-parent families is important. It is a stepping stone on the road to employment and, in the long term, it cuts the social

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security bill. I am worried about the children. We are talking about taking money away from single parents, and the children will inevitably suffer—they will go deeper into poverty.
I shall now say a few words about the regulations dealing with incapacity benefit. I welcome the fact that exempt income is to rise from £45.50 to £46.50 for voluntary or therapeutic work of under 16 hours a week. I am, however, afraid that many people do not like to take such work because they are not sure of the rules and of what exactly is meant by therapeutic or voluntary work. They are desperately afraid that, if they take any sort of work, their benefits might be cut. The rules must be clarified, so that people are encouraged to take therapeutic work. Many people with ill health or disability want to get back into the work force and take up paid work.
Our benefits system does not adequately address the problem of people with partial incapacity. Last year, I asked a written parliamentary question about the percentage of those claiming incapacity benefit who were doing limited therapeutic or voluntary work. I was told by the Government that the figure was not available, as the cost of providing it was excessive. I do not see why that figure is not available. Surely, if we want to get people back to work—starting with therapeutic work—and cut the social security bill, we should find out how many were doing therapeutic work; we should target them and help them back into full-time work.
I am glad that the Government have backed down on some of their proposals for war pensioners—I do not know why they introduced those proposals in the first place. The Government still remain extremely stubborn about people with hearing loss. The Royal National Institute for the Deaf has said that the Government's proposals will mean that the war disablement pension is awarded only if there is an immediate hearing loss equivalent to that of someone in his 80s. If someone has a 50 decibel hearing loss, he will receive the award. But someone whose hearing loss is less than, for example, 45 decibels will still not receive the war pension—even if, when he gets older, his hearing deteriorates to 55 decibels. I believe that such people are entitled to it.
The Government said that they had new medical evidence. However, in a statement in the other place on 4 February 1997, the Minister of State, Lord Mackay of Ardbrecknish, said:
"My Lords, the open letter which I received from the medical experts concentrated very much on the question of my assertion that there had been a change in medical opinion. As I have explained, I now fully accept that their current view has been held for a long time."—[Official Report. House of Lords, 4 February 1997; Vol. 577, c. 1529.]
Fortunately, the Minister in the other place changed his mind and acknowledged that the opinion had been held for a long time. If that is so and if the Government are now saying that no new medical evidence has been brought forward, why have they not changed their mind on awarding war pensions to people with hearing loss? If there is no sign of new medical evidence, it would appear that the Government are simply being stubborn and dogmatic on the issue. These people have fought and have given their health for this country and they should be compensated by this country. It is just another example of the way in which the social security system is taking a turn for the worse.
6.29 pm
Mr. Patrick Nicholls: I did not agree with everything said by the hon. Member for Rochdale (Ms Lynne), which probably comes as a relief to her as it does to me, but she did highlight one especially important area to which I shall return—the position of those who are either on a retirement pension without any other form of income, or on a retirement pension plus income support.
As the debate unfolded, I was struck by its unusual quality. At one stage—much though I love this place—I thought that I would be able to go home early. I came in expecting the cut and thrust of social security debates of past years, but, lo and behold, we were greeted with an assurance at the outset—just to emphasise that the Conservatives set the policy and Labour then adopts it—that there would be no Division. I thought, "That's okay—presumably, we'll all go home early," but it has not worked out that way, and I have a feeling that it will not.
The result is that, instead of having to defend the Conservative position—it has already been conceded—it is legitimate for me to spend a moment or two examining, not the alternatives—it is accepted that there is no alternative to the Conservatives—but the glosses that have been added by Opposition Members.
That is why I so enjoyed the contribution of the hon. Member for Islington, North (Mr. Corbyn), and I say that without a trace of sarcasm. I debated with the hon. Gentleman over several years when we were both members of the Select Committee on Social Security—he thinks I am barking and I know that he is, but the one thing that one can say about him is that he is a man of principle. He brings the unfashionable notion of socialism into the Chamber and puts forward a prospectus for a way of life which, although completely and utterly nuts, is at least consistent. I suspect that, if we looked at his election addresses from every election that he has ever fought, we would see a man who is completely consistent.
It is worth while spending a few moments considering the hon. Gentleman's speech, because it was one of substance—no one would accuse the hon. Member for Peckham (Ms Harman) of having made a speech of substance, on this or any other occasion. His speech had some elements that caused some Labour Members to start twitching—it was like hearing those tunes of glory and sounds of battle in which Labour Members once passionately believed, but which have been Mandelsoned out of them.
The hon. Gentleman's key phrase was a statement that is breathtakingly wrong, but sometimes even Conservative Members let such remarks go by the board—presumably because there was so much wrong in the hon. Gentleman's speech that it was difficult to pick out a specific point. The highlight came when he said that the Conservative Government had given money to the rich. The silence among Opposition Members says something about Labour's house training, because when I have used that line in previous years, they have responded, "Oh, but you do give money to the rich." They do not do that now, having been properly stalinised.
The Conservative Government have never given anything to the rich. What they have done—and not before time—is allow the rich to keep more of their own money. When trying to work out how to look after the poorest members of our society, we must never forget

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that, when a taxpayer earns his money legally, he owns that money 100 per cent. and every single I per cent. deduction taken by the state takes away his money.
The idea that we are in some way giving to the rich—still a popular idea on the Labour Benches—does not accord with the truth. When I said that to the hon. Gentleman, his response was untypical—he had to use the elitist line, "I don't know what university you went to." I suppose that is what happens when one is called Jeremy. I did not go to university, so I cannot take part in an exchange like that.
However, I do know some things. I believe that, in 1986, the hon. Member for Birkenhead (Mr. Field) asked the Treasury what proportion of the total tax take was contributed by the top tax payers. One never knows with that hon. Gentleman, but it was such a mistake that I suspect it was done deliberately out of mischief. The answer he got was not one of which the hon. Member for Islington, North would approve—and where he comes from, if facts are disapproved of, they become non-facts—because it showed conclusively that, when tax rates are reduced, the total amount of tax paid by the rich goes up.
Those who have been raised to believe stalinist demonology will ask, "How can that be?" I can tell them how. If people are taxed so much that they end up paying 89 per cent. on earned income and 98 per cent. on unearned income; if an old lady who has the temerity to receive a little income from a building society is told that she has to pay a 15 per cent. investment income surcharge; and if a Government are so strapped for cash—as the Labour Government were in 1968—that they have a special top rate of tax on the higher band of 104 per cent., one starts to discover what people do when faced with taxation like that.
At the end of the day, the hon. Member for Islington, North is a toff, and he knows that the decent thing to do is to stay and pay your tax, but people do not do that, and they did not in the 1960s when we had that penal taxation system. So what do they do? They go abroad, which strikes a chord with recent events, given that we are about to chase popular composers abroad—we do not want them in this country any more. If they do not go abroad, they start to evade tax—or they employ people like me to help them to work out advantageous tax schemes, so it is not all bad.
Finally, what they usually do is stop working. During the 1960s, when I was an articled clerk, I tried to instruct a local barrister, and was asked by his clerk what day of the week the case was being heard. "Thursday," I replied, to which the response was, "Oh no, he doesn't work on a Thursday—surely you know that?" Being deferential, I apologised, put the phone down and went to ask one of the other clerks what was going on. I was told that the banister never worked on Thursdays or Fridays because he found it was not worth his while; he only worked on Mondays, Tuesdays and Wednesdays.
It is common ground on both sides of the House that, if we are looking for the money to spend on those who really do need help and those at the bottom of the heap who simply cannot look after themselves, we get that money in one of two ways. Either we do it the way the last Labour Government did it—by printing money or telephoning the International Monetary Fund and having it sent over by the planeload, which is not a particularly good idea, as it tends to put a party out of office for at
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least 18 years and probably longer—or we run the economy in such a way that wealth is generated and we ensure that we have a rate of tax that leaves those who are far more capable than I of earning huge sums of money with sufficient incentive to stay in the country and contribute the taxes that make caring a reality.
That is the way forward, yet there was not a single hint of that in the hon. Gentleman's speech. When he talked about giving money to the rich, and when he denied—although I suspect that he knows it is the truth—that the rich pay more when tax rates go down, it reminded me of Macaulay's comment on the reason the Puritans hated bear baiting: it was not because of the damage to the bear but because of the pleasure it gave to those watching. The hon. Gentleman's comments expressed that sort of feeling.
Running through the hon. Gentleman's speech was the single aspect in which his remarks chimed with those of the Labour Front Benchers: the debate about people living in poverty. One of the most bogus accusations from Labour Members—it really is a cheek—is one we hear every time we increase benefits. They say in the next breath, "But poverty is on the increase." They justify that by saying that, if anybody is on any form of assistance, that automatically means that they must be living in poverty.
By their own bizarre logic, the more they press for increased benefits, the more they produce a dependency culture. They tell people who are receiving a helping hand from the state that they are, in fact, living in poverty. The statistic that shows how daft that argument was quoted by the hon. Member for Islington, North—that 24 per cent. of the people in this country are living in poverty. That is patent and arrant nonsense, and the hon. Gentleman is so far down the left-wing path, he is probably one of the few people in the Chamber who did not realise that it is nonsense.
Mr. McLeish: I wish to explore the hon. Gentleman's claim that the 24 per cent. figure is arrant nonsense. Is he aware that figures published by the Department of Social Security for February 1996 show that 5.8 million people in Britain were claiming income support? The Prime Minister accepts that figure as representative of the poverty level in this country. If we add to it dependants and children, we have a total of about 10 million people who are solely dependent on income support. That amounts to about 20 per cent. of the population. Does he accept the figures provided by the Department?
Mr. Nicholls: The figures speak for themselves, which is why I cited them earlier. I am complaining about the assumption that people must be in poverty because they are in receipt of some form of state benefit. That assumption produces the nonsense that today people are just above the level of income support and are therefore not in poverty, but tomorrow, when a beneficent Government increases support and they are in receipt of income support, they are suddenly catapulted into poverty. That may be useful demonology that allows Labour Members to claim that a quarter of the population is living in poverty, but it does not reflect the real world and people's experiences.
I have devoted some time to the speech by the hon. Member for Islington, North because it merited some examination. The same could not be said for the speech

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by the hon. Member for Peckham (Ms Harman), which—even by her standards—was an extraordinarily lamentable effort. With stunning naivety, she continued to repeat figures after the Minister had passed her a piece of paper that proved that they were wrong. She then suggested that social services could be funded by the national lottery. One can only imagine what would have happened if we had made that proposal—we would have been derided initially and, in due course, the Opposition would have adopted our policy. Mercifully, it is a daft policy and we will not adopt it—so neither will Labour.
Even worse than the naivety of the hon. Lady's speech, was its sheer brazen cheek. I thought that she would not dare to mention the flexible decade of retirement, as that would be misleading and she would create a false impression of what might happen. However, she then referred to the flexible decade of retirement. Why? It is because it sounds marvellous. Many people would like to have the option of retiring at 60 rather than at 65. Yet what is the real situation?
When the hon. Lady was pressed on the matter, she accepted—as she was trying to be Torier than thou—that there could be no increase in taxation. In a letter to my right hon. Friend the Secretary of State, she said:
"We anticipate … a lower level of basic state pension".
She then said that she would have to contact the Government Actuary in order to find out exactly what that would mean. In an attempt to be helpful, the Government unearthed the figures for her. It is estimated that the basic pension would have to be reduced by about £20 a week for a single person and by about £37 a week for a couple. That amounts to a retirement tax of about £1,040 a year.
The hon. Lady did not mention that figure. She gave the impression to the outside world not that Labour is just as good as the Tories and would do everything that we do, but that Labour is even better—and she referred to the flexible decade of retirement in that context. One never knows with the hon. Member for Peckham whether it is cheek, naivety or an unattractive combination of the two, but I have to say that her performance was not particularly impressive.
Overall expenditure on social security is absolutely stunning: £15 per person, per day, and £93 billion per year. That is an extraordinary sum by anyone's standards. Even under this Government, the total social security budget was growing faster than the economy's ability to keep up with it. The process of slowing it down had to begin—that is all well and good. At least the latest set of Government reforms will cut about £6 billion from the budget by 2000. Thereafter, the savings should increase to about £15 billion per year.
Some people will say that that is outrageous, and that we should increase taxation for the rich so that we do not have to make savings of that magnitude. However, it is worth while considering who pays retirement pensions. Pensioners often assume that they are entitled to their pensions because they paid into the kitty—it is the problem of the funded and the unfunded schemes. In reality, there are not enough rich people to soak, even if they were prepared to stand around to be soaked.
About 89 per cent. of taxpayers in this country are basic rate taxpayers. Therefore, the moral obligation of maintaining our pensioners will be discharged by the
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working population: people who, for the most part, pay basic rate tax. The figures are quite interesting: about 3.8 workers support each pensioner at present, but it is estimated that the ratio will decrease to 2.2 workers per pensioner by 2010. It is perfectly obvious that, if we do not rein in social security spending, the burden will become impossible, and could not be shouldered by the working population. That is why it is so important for the Government to encourage people to have their own pensions, and to make it clear that they cannot be dependent on the state.
The hon. Member for Islington, North said that it would be nice if one could live on the retirement pension. It reminded me of the famous statement by the late Vic Feather, that he would not rest until everyone was earning above the national average wage. It is a great aspiration, but it does not stack up. The hon. Gentleman said that that is what occurs in Europe. The problem is that the Governments of Europe have, for the most part, not faced that consequence. In the not too distant future, they will have to deal with an increasingly greying population without proper pension provision.
That is why the single currency is a problem—people like me can always find a read across to the single currency, while remaining entirely in order. If we enter the single currency and our so-called European partners are faced with the reality of having to pay pensions, they would print money—their money, our money; it is common currency—and the inflationary effects would wreak havoc on pension funds in this country. Although the single currency may seem a rather esoteric and boring subject, pensioners up and down the land should ensure that they have a real stake in that debate.
The position is that about 90 per cent. of retirees have some form of pension other than the retirement pension. That is a good thing, which should continue. The Government can take a great deal of the credit for that situation, which makes us a leader in Europe and the envy of Europe. However, I am troubled by one point, about which I have received a great deal of anecdotal evidence. People do not usually come to my surgeries and say, "I am someone who …," but they do say, "I know someone who is living entirely on the retirement pension"—or, almost inevitably today, on that pension topped up with some form of income support.
There are other passported benefits in those circumstances, such as housing benefit, free prescription charges and the rest. However, I do not think that anyone would claim in this day and age that the retirement pension is a massive sum, as clearly it is not.
I have a question for my hon. Friend the Minister who will reply on behalf of the Government. I have not given him notice of my question, so I do not expect him to provide the figures now. However, I would be interested to know—if not tonight, perhaps by letter—whether the Government have any information about the number of retirees who are dependent solely on the retirement pension or on that pension plus income support. I have not been able to identify that figure through the Library. Do people in that position—it may be a sizeable number—suffer an exceptional degree of hardship? Ultimately, an indicator of a decent society is how we care for those who cannot care for themselves in their twilight years. We must examine that issue.
Ms Lynne: The hon. Gentleman obviously realises that 1 million pensioners are not claiming the income-related

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benefits to which they are entitled, so they receive only their basis state pension and do not get housing benefit. Does he agree that it is time that an advertising campaign was run to make sure that pensioners are aware of the income-related benefits to which they are entitled?
Mr. Nicholls: I am mostly with the hon. Lady, but we cannot assume that, simply because people are not claiming everything to which they are entitled, they must be living in poverty. I am not privy to whatever claims the Queen Mother makes on the state, for example, but it is just possible that she has not claimed anything other than her retirement pension. One wishes her well, and she is not living in poverty.
The figures need to be examined. I agree with the hon. Lady, and I am conceding no more than we have already conceded, that the Government spend considerable sums advertising the availability of state benefits. I remember—it is a long time ago, so it shows how long that has been going on—playing my part as a Minister in such advertising campaigns.
My final point may sound like an entirely local problem, but it has a national application. In the west country, we have been visited by people who sound as though they are fugitives from "Blue Peter," because they rejoice in the names of Melody, Happy and Swampy. They have spent much time underground, although they are not retired miners trying to relive the old days. They come from outside the area, and, for the most part, have no confidence in the democratic process as represented by environmental inquiries, unless the democratic process happens to accord with their views.
Those people believe that they can claim the benefit of a democratic system when it goes their way, and treat it with complete contempt when it does not. They descend on an area where for years local people have been hoping for a bypass, as it would transform the quality of their lives. There is no hon. Member with a rural seat, and possibly no hon. Member with an urban seat, who has not seen how a well defined and well judged bypass not only enhances the environment, but transforms the life of the local community.
Local people, who at long last have seen the A30 Feniton bypass becoming a reality, suddenly find that a group of people who, for the most part, hold their views in contempt and have taken no trouble to find out why local people wanted the bypass, put the state, in the form of the police and so on, to massive sums of public expenditure to remove them from below the ground.
So far, so good. One listens to such people on the wireless. To say that they do not grasp the argument does not impugn their sincerity. One might take a laissez-faire attitude and ask whether it matters that the police have to spend time getting rid of them. The answer is that it does matter, because it takes those policemen out of my constituency. The worst part is that it is done on state benefits.
I do not know whether there is a ministerial line with which my hon. Friend has been supplied or is about to be supplied. It will contain phrases such as, "Minister cannot be drawn on this. Minister does not have information about individual circumstances. Minister must be careful of confidentiality. Minister, if he is really pressed, can say that this information would be too expensive to obtain."
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There are two principal qualifications for Swampy, Melody, Happy and their friends: they must be available for work, and they must be actively seeking work. One is not actively seeking work 25 ft down under the putative Feniton bypass with a steel gate over one's head. That is in no way being available for work. If it is true—I say if, because I do not know for a fact—that initially social security officers were going out on site to hand over the benefits, that is an outrage.
If people want a thoroughly bizarre life style, if they want to live in the community while at the same time reserving to themselves the right to hold in contempt the procedures and principles of that community, in a democratic society they are entitled to do so, but they are not entitled to do so by living off the money that would otherwise go to look after the frail, the helpless and those who genuinely need a helping hand.
This may be a subject for correspondence, rather than being dealt with by my hon. Friend in the debate. If it turns out that people can behave like that when they are in no common-sense way available for work or actively seeking it, and if they are dependent on state benefits, that must stop.
6.54 pm
Mr. Alan Howarth: The hon. Member for Teignbridge (Mr. Nicholls) seems to believe that, if one privileges the wealthy, one will have what he calls a decent society. I believe that, until employers value those who work for them and until we design pathways that enable people to proceed from welfare to work, we will not have a wealthy society, and we certainly will not have a just society.
The Secretary of State claimed that the policies that we are debating are designed to encourage people to move into work, but I fear that in reality more people will live in anxiety and hardship, and that they will have little reward for taking up work; in some respects, they may find it harder to stay in work.
The Government propose to remove the 50 per cent. subsidy in housing benefit for the difference between a notional reference rent and the actual rent payable. They also propose to restrict housing benefit for single people under the age of 60 without children to single-room rent levels.
That policy will hit large numbers of people who are unemployed or disabled, carers looking after people in another household, widows, as my hon. Friend the Member for Peckham (Ms Harman) stressed, and people who are separated or divorced and do not have their children with them.
We know from a parliamentary answer that 430,000 people under 60 in single-person households are renting in the private sector, but only 70,000 of those are in single non-self-contained rooms. It follows, therefore, that some 360,000 people will be threatened by that policy and will experience apprehension, difficulty and a deterioration in the quality of their lives. Their homes represent their security, dignity and privacy, and the possibility of having some control over their lives.
It reflects a harshness and a lack of humane imagination that the Government are willing to deprive people in middle life, living by themselves on modest incomes, but probably making a valuable contribution to society in

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activities such as nursing, caring or teaching. Such people are to lose their homes. That is extraordinarily harsh. I hope that the Government are still prepared to think again.
Single people have fared worse than others in recent years. They are disadvantaged in the housing market. They wait for long periods, and may wait interminably, on waiting lists. They find it harder to service the cost of mortgages. The policy that the Government are introducing will ensure that single people stay in relative difficulty.
Relative poverty matters. The failure of the Conservative party to understand imaginatively how people feel about relative poverty and the widening inequalities that have become apparent may explain why there is such disillusionment with the Conservative party.
The policy previously applied to people under 25, restricting their housing benefit to cover only the cost of shared accommodation. The Government justify their extension of that to people under 60 on the grounds of consistency and fairness. Last year, however, when they sought to justify the reduction in housing benefit for single people under 25, they claimed that it was acceptable and appropriate because single people under 25 were in different circumstances in life—they were at a stage of life when they would have more flexibility. The Government cannot have it both ways, and shifting their ground in such a way constitutes a mockery.
Moreover, the Government are extending the policy up the age range to cover people aged between 25 and 60, without, as yet, having evaluated the impact on those under 25. I suspect that they felt impelled to go further because the existing policy had not helped their fiscal position as much as they had hoped. Even before seeing reports on the impact of the policy, however, we can be pretty sure that supply will fail to match demand: there simply will not be the amount of non-self-contained property available for rent that the policy assumes. Rents will rise, and the Government will receive little, if any, fiscal gain. They will merely have caused hardship.
Disabled people are likely to suffer particularly as a result of the restriction of housing benefit, because they may need more living space than others. They may need wheelchair-accessible homes, and space in which to store equipment. The Government should have considered that problem. As it is, they have dithered over the proposal to extend part M of the building regulations to private accommodation, although there are some very good models that they—along with local authorities and developers—could use. The "lifetime homes development" on the Woodlands estate, developed by the Rowntree Trust on the outskirts of York, shows that it is possible to produce beautifully designed housing that is accessible to disabled people—housing in which people can remain throughout their lives—at a minimal additional unit cost. The Government should give a lead, because there is currently an appalling shortage of accessible homes. There are about 80,000 at present, but there are 4.5 million people with mobility problems.
As things are now to be, disabled people will have to leave homes that they have had specially adapted, because they will no longer be able to afford the rents. A disabled facilities grant may have helped to pay for the adaptations, but apparently that money is to be written off. The policy
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means that fewer disabled people will be able to live independently, as they wish and ought to be helped to do, and it makes a mockery of the Government's professions in regard to care in the community. It makes one wonder why they introduced legislation to allow social services departments to make direct cash payments to disabled people so that they could manage their own personal and domestic assistance. If those people do not have the means to pay the rent, they will not be well placed to organise their households.
I believe that the policy is, if not in breach of the letter, certainly a violation of the spirit of the Disability Discrimination Act 1995. In effect, it constitutes an indirect discrimination, because it will exclude disabled people from renting in the private sector. The Government make some discretionary funds available to enable councils to provide help in certain limited circumstances, but even in that regard they have tightened the rules governing eligibility to benefit. Instead of talking of "vulnerable groups" who may be able to benefit from those discretionary funds, they talk of people being in "exceptional hardship".
The Government have not required information about the availability of those discretionary funds to be supplied to disabled people. They have not thought about helping people who may need assistance so that they can negotiate to obtain support. At the very least, there should be a clear instruction to those who administer housing benefit to ignore income from disability benefits that have been provided to cover expenses other than housing costs. I understand that no such instruction has been forthcoming so far.
The Government's housing benefit policies will also introduce new disincentives to work. If a person loses his job, the review of his housing benefit will be brought forward. The hon. Member for Havant (Mr. Willetts) mentioned that a person in those circumstances would be allowed to retain his previous level of housing benefit for 13 weeks, but thereafter there will be a review and the housing benefit will be cut. The new policy will be a real deterrent to people who might be minded to take temporary work or, perhaps, to try out some new kind of employment in an experimental way. It will deter those who are prepared to risk taking on a job that they realise may be insecure. Such people will feel less confident, because they will know that, if things do not work out, their housing benefit will be reduced sooner than it would have been otherwise.
The policy, then, discriminates against not only disabled people but the unemployed. It will be impoverishing, because people will lose not only their jobs but their homes. The ethos is that, the poorer people are, the less they should get.
The freezing of lone-parent benefits is a triumph of harsh moralism over humanity, and of dogma over realism. The Government's assertion that the social security system favours one-parent families does not stand up, and the common sense that tells us all that that is not so is supported by scrupulous research carried out by the Policy Studies Institute—the research of Berthoud and Ford, published in their paper "Relative Needs". In 1992, 78 per cent. of children in lone-parent families were living on or below income support levels, compared with only 18 per cent. in two-parent families. The Government's own publication "Households Below Average Income" tells us that lone parents constitute 11 per cent. of those

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in the bottom income decile, but only 6 per cent. of the population. There is clearly disproportionate poverty among lone parents under the existing social security system.
Reducing one-parent benefit will again reduce incentives to work. It is a non-means-tested benefit, which a lone parent is able to claim in full when in work. Far from being tilted in favour of lone-parent families, the benefits system is tilted against them in certain important respects. In the case of jobseeker's allowance and income support, the claimant's partner can work 24 hours a week, but a lone parent can work only 16 hours a week on income support. At the very least, the Secretary of State should suspend the changes until he has seen the results of further research. He has acknowledged that the research that has been done is not definitive or conclusive in all respects. Proper research should be carried out before he embarks on any reduction in benefits, or in the relative value of benefits for lone parents as opposed to couples.
That is particularly important, given all the evidence that income support is not sufficient to meet children's basic needs. The Child Poverty Action Group's publication "Cost of a Child" makes that abundantly clear. We need a strategy to assist lone parents to move into work. We need a reform of benefits, and, of course, we need the provision of affordable, good-quality child care. The Department's own research—contained in "Moving Off Income Support", by Shaw and others—shows that lack of child care is the real barrier preventing lone parents from going to work. A high proportion want to do so, properly and naturally, although some will feel that, during this phase in their lives, their first commitment should be to home and children. Many both want and need to work. Two thirds of them say that the cost of child care is the real problem that prevents them from achieving that.
Lone parents also face other problems. They are rather more liable to lack educational qualifications. Because of their situation, they are more likely to lack recent work experience, and they run into the difficulty that, as yet, all too few employers are family-friendly in their employment practices. Faced with all those difficulties, lone parents need imaginative policies to help them to get into work, to have higher incomes, to float their households off poverty, and also to increase their opportunities to participate in and to contribute to society.
The Government will say that the child care disregard in family credit is the solution to the problem, but only 25,000 lone parents benefit from it. The lowest-paid on the maximum family credit gain nothing from the disregard, as they cannot receive more than the maximum benefit. The disregard does not apply to children over 11. Often, lone parents cannot take advantage of the disregard because they are, understandably, required to use approved child care facilities, which often are not available in the hours when lone parents need them if they are looking to do shift work, or evening or weekend work. Much more thought and imagination need to go into assisting lone parents in that regard.
Lone parents who are unable to work more than 16 hours have no child care disregard at all on income support. The earnings disregard on income support has been frozen since 1988 at £15. It has been shown by the Department's research to be too low to offer any incentive for lone parents to try out work. As an early priority when resources can be found, the Government should raise that disregard to £25, bringing it into line with the disregard
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on housing benefit—the amount that working lone parents on housing benefit can earn before their benefit is reduced.
The Government should also redress another anomaly—this time to the disadvantage of couples—that they have created between lone parents and couples. Today, one in five households of working age in Britain have no one in work, as my hon. Friend the Member for Peckham reminded the House, and I share her anger about that. The £15 disregard for long-term claimant couples under 60 has been reduced by the Government to £10. Is that all that they can offer the one in five families who are out of work—to cut the amount that people can earn before they begin to lose benefit?
The entitlement for people who previously received invalidity benefit has been frozen for two years, so they are that much poorer because of inflation in that period. New claimants are on lower benefits, and the Government aim to save £3 billion by 2000. The Government have to recognise, however, that almost everyone in receipt of incapacity benefits has passed the all-work test. The Government cannot then claim that such people are the malingerers, the lead swingers, the workshy of their mythology, about which we heard so much when the Government introduced the incapacity benefit legislation.
The Government claim—the Secretary of State said it this afternoon—that they are focusing benefit on those who are genuinely unable to work. How can that be so if they are making reduced payments to those who have passed the all-work test and are demonstrably unable to work? Instead of removing entitlement and reducing incomes, they should concentrate on encouraging and helping incapacity benefit claimants to try out work.
That could be done, for example, by relaxing the linking rules, so that people can have more confidence to try out a new job, in the knowledge that if, for good reason, it does not work out, they will still be able to return within a reasonable time to their previous level of benefit. At the moment, they have only eight weeks in which to take that risk. That is not enough, particularly for disabled people, who are bound to find it harder to explore the job market, and face greater difficulties in finding work that is appropriate for them.
The Government should also, as the hon. Member for Rochdale (Ms Lynne) argued, be more generous in the provision that they allow for people to undertake therapeutic work. At minimal cost, such reforms could be introduced, and it would quickly save benefit expenditure.
The Secretary of State said that the Government are proud of the provision that they are making in social security, yet one cannot but feel that the Conservative party is resentful of the money that is spent in this way. Claimants are certainly made to feel unworthy, and are stigmatised. The vast extension of means-tested benefits—the proportion of the social security budget that now goes on means-tested benefits has doubled—means an extension not only of stigma but of poverty traps and a multiplication of disincentives.
The hon. Member for Havant claimed that the Government's policies have been scientifically designed—he offered to give a whole range of examples—to enable people better to get into work, but if the means-tested benefits proportion of the social security budget has been doubled, it is hardly likely that incentives to work have been improved and that it has been made easier for people to work.

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We need a constructive and generous vision of a modernised welfare state, but for that we shall have to wait for a Labour Government. I hope and trust that we shall not have to wait long.
7.16 pm
Sir Norman Fowler: I do not accept—neither, I am sure, do other Conservative Members—the criticism just uttered by the hon. Member for Stratford-on-Avon (Mr. Howarth), who was, after all, elected to the House as a Conservative Member of Parliament. In my view, if he wanted to have the authority to speak on behalf of his constituents, he should have called a by-election. Had he done so, of course, he would have been defeated. He has, I fear, no authority in the House.
I had not intended to catch your eye, Mr. Deputy Speaker, until I heard the fairly extraordinary speech of the hon. Member for Peckham (Ms Harman). It is a pity that she has just left the Chamber. It seemed that she exposed and set out quite a dramatic change on Labour's policy on social security in 1997 and, we assume, as far as the election.
When I last spoke on social security about a year ago, I raised the issue of the earnings uprating of pensions—a matter on which, at every election, when I was Secretary of State for Social Services, I was attacked by the Opposition. I was attacked in 1983 and 1987. I was told that the Government were being far too mean and were not showing sufficient regard to elderly people. In 1992, the same attack was deployed once more. When I suggested a year ago that the Labour party was in the process of changing its policy to the policy that the Government had pursued, I was accused of scaremongering.
Just in case the hon. Lady's words were not quite understood—she read out a formula that had no doubt been put before her by another member of the shadow Cabinet—I point out that she confirmed that the Labour party has abandoned its pledge on the earnings upratings of pensions. There is no question about that. It is one of the most massive U-turns in social policy that I can remember in the past 25 years. I now know why she has disappeared, but if another Labour Front Bencher wants to deny that I will happily give way. Labour Members know that their policy has changed. I do not understand why they do not come clean and admit it openly, so that the public know where they stand.
The debate, including the speech of the hon. Member for Peckham, has been fascinating and significant, because it has shown that the Labour party has come to our position on the uprating of the basic pension. It has also come to our way of thinking on the whole pensions area. That is what the hon. Lady's speech implied.
When I reformed pensions in 1985–86, I was fought all the way by the hon. Member for Oldham, West (Mr. Meacher)—I do not know what has happened to him—and others in the Labour party. I was told that the state earnings-related pension scheme was sacrosanct and could not be changed. We believed that the public wanted a pension that they could call their own, not just a pay-as-you-go scheme, such as the state earnings-related scheme, which is not a funded scheme. The public wanted
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a funded scheme of their own. We wanted to retain the basic pension, but we argued for an occupational or personal pension scheme as a second tier.
At that time, various things were wrong with occupational pension schemes, so we reformed them. Early leavers were a problem, for example. We also wanted to provide other options. Occupational pension schemes covered a vast number of people, but they had not increased over the years. We wanted to give the public the further option of a personal pension. We thought that that was right and sensible. Our policy has been followed and is held up as an example in other countries.
Mr. John Denham: Will the right hon. Gentleman give way?
Sir Norman Fowler: Let me finish this point.
The marketing of personal pensions occurred after I had left the Department, and was popular with the public. The concept of personal pensions was excellent and was widely supported.
Mr. Denham: Will the right hon. Gentleman take this opportunity to apologise to the House for the fact that millions of people are now having to have their pensions policies reviewed because of misselling? Was misselling part of the concept, or merely something that went disastrously wrong?
Sir Norman Fowler: The hon. Gentleman takes me on to the point that I was about to make. I do not defend the misselling of pensions. Companies missold those pensions: it was nothing to do with the Government. It is usually wrong to advise someone in an occupational scheme—
Mr. Denham rose—
Sir Norman Fowler: Before the hon. Gentleman intervenes again, he should let me finish my reply.
It is usually wrong to advise someone in an occupational scheme to move to a personal pension, for the simple reason that the employer makes a large contribution to an occupational scheme. When that advice has been given, it has often been wrong. There have not been millions of cases, but pensions have been missold.
The difference between that misselling and the mistakes that were made in the past on state pensions is that the problem of misselling is being put right. It is perhaps being put right slowly—too slowly, some may argue—but it is being put right, unlike the mistakes to which I shall refer in a moment.
Mr. Denham: Does the right hon. Gentleman feel no sense of embarrassment about the Government advertisements that showed, for example, someone upside down in a straitjacket promoting personal pensions and saying, "Now you are free to leave your employer's pension scheme"? Does he feel no embarrassment about the fact that the Government created the environment in which misselling took place?
Sir Norman Fowler: I do not feel embarrassed about that, or about giving the option of personal pensions to millions of people. If the hon. Gentleman is saying that

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some companies missold personal pensions, I agree with him. That is being put right. The worst scandal in pensions in the past 25 years had nothing to do with personal pensions: it was committed by a Labour Government. It was committed by Barbara Castle, and was a total fraud on pensioners and on the public at large.
When inflation was coming down, Barbara Castle changed the method of uprating: she went from the historic to the forecast. Guess what? In current money, that saved between £1 billion and £2 billion. That money has been lost to pensioners permanently. I invite the hon. Gentleman to return to the Dispatch Box and give us a pledge that when or if Labour is returned to power, he will restore that, £1.5 billion to pensioners. Is that Labour's policy? I hear no reply and I see no movement. apart from an embarrassed shuffle. He knows perfectly well that what I am saying is absolutely true.
Mr. Denham: Let us get the record straight. The basic state pension increased in value under the last Labour Government by 18 per cent. in real terms. That is the true record of the Labour Government.
Sir Norman Fowler: The hon. Gentleman has missed the point. I am well aware of the line taken in press releases issued by Transport house, Walworth road or wherever the Labour party is now. The Labour Government fiddled pensions. They made public spending savings of more than £1 billion. No one seriously disputes that—everyone knows that it is true. It is in Barbara Castle's autobiography, it is in Denis Healey's biography and it is a simple matter of common knowledge. The difference is that the difficulty over personal pensions is being put right, whereas that mistake has not been put right, and, to judge by the embarrassed silence among Opposition Front Benchers, it never will be put right.
It is a pity that the hon. Member for Rochdale (Ms Lynne) is no longer present. I hope that both Opposition parties will agree that the real lesson to be learned from the misselling of pensions is that the public need far better and more extensive independent advice on pensions. If we give more options, advice should go with them. There should also be advice from the Department of Social Security. I am concerned when people come to my advice surgery having made decisions about social security and pension benefits that are obviously wrong and not in their interests. The problem of how to advise the public should be re-examined, and much more should be done in the public and private sectors.
The debate is now on new ground. I am beginning to understand Labour's policies step by step: in each debate another veil is lifted. Despite the huffing and puffing of the hon. Member for Southampton, Itchen (Mr. Denham), Labour has no intention of abolishing personal pensions. When I was reforming the pension system, I would have preferred to scrap the state earnings-related pension scheme. Such a pay-as-you-go system simply creates a debt for future generations. I wanted a system that we could afford. Every analysis of pensions in Europe points to the British system as affordable compared with virtually every other European system. We must obviously meet the obligations that we have already
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made; there is no question of not doing so. In the future, however, I would move away from the pay-as-you-go, state earnings-related pension scheme.
Mr. Denham: When is the Secretary of State going to do that?
Sir Norman Fowler: Before the hon. Gentleman asks my right hon. Friend whether he will do that, I had better ask the hon. Gentleman the same question. I had assumed that traditional Labour party policy was to defend SERPS to the death. That is what Labour Members have been saying year after year. The hon. Member for Oldham, West certainly said that, and so did his successors.
The hon. Member for Peckham, however, said—I think that I took her words down accurately—that, if there were a Labour Government, they would want to introduce "a funded second-tier scheme". SERPS is of course not a funded scheme, so either we shall have SERPS as well as a state-funded scheme or Labour is also considering abolishing SERPS. The way in which the debate has gone is extraordinary. I am not entirely clear where the Opposition stand on SERPS. I frankly doubt very much whether they are very clear.
Mr. Denham: It is perfectly clear from all our policy documents that we will retain SERPS as an option for those who wish to remain in it.
Sir Norman Fowler: Does that apply to new entrants to SERPS?
Mr. Denham: Answer the question.
Sir Norman Fowler: Everyone will maintain SERPS for those who are already in it. No one would go back on the obligation. I am asking what future policy will be.
Mr. Denham: We will retain SERPS for those who wish to be members of it.
Sir Norman Fowler: I take that as an undertaking that SERPS will go on for ever more for those who wish to be in it. That can be the only interpretation of what the hon. Gentleman has said. Labour is therefore setting out not one, not two, but three state schemes: the basic pension scheme—which even Labour would not touchSERPS and a funded state scheme. Labour Members are getting into the most hopeless muddle on pensions, so I shall allow them to try to reconcile those differences.
I want to take up the point made by my hon. Friend the Member for Teignbridge (Mr. Nicholls), about which I hope there might be some agreement across the House. I say to my right hon. Friend the Secretary of State that I hope that we will take the opportunity to move forward on the second-tier scheme. I hope that we will change our policy in very much the way that I set out in the middle 1980s. I think that we have been given the green light for change and can honestly say that the teething troubles of personal pensions are over, that the system works and that the regulations are in place. I very much hope that we can therefore do the decent and sensible thing and get rid of the remnants of SERPS.
I also hope, as my hon. Friend the Member for Teignbridge said, that we can find a way of getting extra resources to people who are perhaps in their eighties or

985
even older and, through no fault of their own, since there was no occupational pension scheme for them to join, are living on the basic state pension. The system that I have set out in the past and advocate again is one of pension credit, which is very much like family credit and would add to the basic pension. It would obviously not apply to everybody. If someone has a perfectly adequate occupational pension, they will not be affected, but if they have not, they could receive extra income. It would apply to people who have not had the benefit of the occupational pension reforms that I hope are now a matter of common agreement across the Chamber. That is my specific plea to my right hon. Friend.
The general point that I want to make is more political. The Government have won the argument on pensions. I do not think that there is any doubt about that. When one listens to Opposition Members, one realises that we have won the argument. Indeed, I think that we have won the argument on social security generally. With the exception of the hon. Member for Islington. North (Mr. Corbyn)— who I think disagrees more with his own Front Benchers than he does with the Government—most people accept that family credit, for example, is a sensible, good way in which to get help to low-income families in work. It has helped substantially and, as the person who introduced it, I am delighted at the take-up.
I find the Opposition's stance on child benefit extraordinary. To withdraw child benefit from 16 to 18-year-olds is one of the most eccentric, silly and counter-productive policies that I have heard of in a very long time. If it goes ahead, I suspect that we would be the only country in the western world where no provision at all is made for that group of children and their parents either through the tax system or the social security system. I cannot imagine that that is precisely what Labour wants to propose, but it will undoubtedly be the impact and the effect of such a policy.
As child benefit took the place of a tax allowance, it would be extraordinary if it were abolished and nothing were put in its place. I do not understand the policy; I find it extraordinary. Surely it is a matter of common consent that the extra expense of children, which lies at the foundation of child benefit, does not suddenly end when children reach the age of 16. Indeed, one could argue pretty strongly that the expense of children rises radically between the ages of 16 and 18. I hope that we hear a defence of that policy. I may not have been listening closely enough to the hon. Member for Peckham, but I did not think that she did the argument justice. In fact, I am not sure that she dealt with it at all.
The Government will enter the forthcoming debates on social security in the strongest possible position. I pay tribute to my right hon. Friend the Secretary of State for creating the strongest possible position on social security. We have the strongest possible position on pensions. We have substantial achievements to our names. The Labour party will spend its time on the defensive, answering anxious questions—not least from its own supporters—on subjects ranging from pensions policy to child benefit. I have great and continuing interest in social security and
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pensions, but I am also a politician, so I am very much looking forward to the next few weeks and the debates to come.
7.38 pm
Mr. Roger Berry: I agree entirely with the last comment of the right hon. Member for Sutton Coldfield (Sir N. Fowler).
The Government have not explained why, as this Conservative Administration comes to an end, spending on poverty and unemployment is much greater than it was when it came into office. There are two possible reasons. One is that the Government might have been extremely generous with benefits, increasing unemployment benefit, increasing pensions in real terms and increasing other benefits. The only other possible explanation is that poverty and unemployment are greater than when the Government came into office.
I am glad that the hon. Member for Havant (Mr. Willetts) has come back to the Chamber. He described eloquently the Government's strategy to reduce unemployment benefit relative to average earnings. There was a clear Government policy that there would be no real increase in unemployment benefit. In relation to average earnings, the income of those dependent on unemployment-related benefits is worth a lot less in relation to average earnings than 20 years ago—about 50 per cent. less.
I note in passing that the justification given by the hon. Member for Havant was that that policy would encourage people to go to work. The Government's policy for tackling unemployment was to cut benefits. I intervened on the hon. Gentleman to ask whether he could name a year—just one year—since 1979 when unemployment, according to the Government's claimant count, had been lower than the figure that they inherited. I was surprised that the hon. Gentleman, who has been referred to as Mr. Two Brains by his close friends, could not think of one. It is possible that he does not realise that the reason that he could not think of a year is that there has not been a year since 1979 in which recorded unemployment has been lower than the level inherited by the Conservatives.
The Government have fiddled the definition 30-odd times. On all but one occasion, the change has reduced the figure. However, in not one year since 1979 has unemployment been lower than the level inherited. In most years, it has been between 2 million and 3 million—two or three times the level inherited from the last Labour Government. The staggering incompetence of the early 1980s that put unemployment up to 3 million for five years and the equally staggering incompetence in the early 1990s that again got unemployment back to 3 million merely confirm my point.
Mr. Burt: The hon. Gentleman tossed out a challenge to my hon. Friend the Member for Havant (Mr. Willetts) during his speech. Perhaps I could toss out a challenge to him: can he name one Labour Government that left office with unemployment lower than when they came to power?
Mr. Berry: As the Minister well knows, when the last Labour Government left office, unemployment was falling. My constituents in Kingswood would find it astonishing that Conservative Members are so complacent

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and self-satisfied about their performance on unemployment that they think that it is a bit of a joke that in not one year since 1979 has recorded unemployment been lower than the level inherited and that, for most of that time, unemployment has been between 2 million and 3 million. To get figures like that, we have to go back to the 1920s and 1930s, when similar policies were being pursued.
Mr. Bernard Jenkin: Will the hon. Gentleman give way?
Mr. Berry: I should like to progress, if I may.
The hon. Member for Havant has confirmed that it was Government policy to ensure that unemployment-related benefits fell way behind average earnings. The fact that that did not bring unemployment down suggests the obvious conclusion that some people are caught in the poverty trap with the highest effective marginal rate of tax in the country. If they were to take up employment and lost benefits, they would pay an effective marginal rate of tax of more than 100 per cent. Those are the high marginal rate taxpayers whom I am worried about. For most people, it is absurd and insulting to suggest, after the massive cuts in unemployment benefit in relation to average earnings, that unemployment has increased dramatically because people have had no incentive to work. They are not in jobs because the jobs have not been there.
We all know that the Government can hardly claim to have been generous on pensions. I enjoy reading books occasionally. I hope that other hon. Members are reading a book called "Sleaze". That interesting book gives an account of how much somebody spent to stay at the Paris Ritz for five days. That sum accords roughly with what pensioners living on the state pension receive in a year. State pensions are not particularly generous when compared with what some people are quite happy to spend—whoever picks up the bill—at the Paris Ritz. The Government have broken the pensions link with earnings and cut the value of the state earnings-related pension scheme.
Will the Government be leaving office spending more on poverty and unemployment because of improved benefits? Self-evidently, that is not the case. The bill is higher because poverty and unemployment are more widespread. We could spend all evening considering definitions of poverty. I have no intention of doing that. It is incontrovertible that inequality and relative poverty have increased dramatically under the Government.
Commentators commonly use the number of households living on an income after housing of less than half average income as an indicator. The proportion of the population in that position has trebled to one in four. We can quibble about whether that is a sensible definition of poverty, but there are probably not many hon. Members who live in that position. Few Conservative Members have probably ever been in that position. The fact that the number of people suffering from relative deprivation on that scale has trebled under the Conservatives should leave the Government far from complacent, as they have been this afternoon. The number of people dependent on means-tested benefits has doubled to one in six, and one pensioner in three are dependent on means-tested benefits.
My criticism of the comments of the hon. Member for Havant relate not only to issues that I have already covered. Unemployment has increased dramatically
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despite serious cuts in unemployment-related benefits. The hon. Gentleman argued that, as unemployment benefit is only a small proportion—about 10 per cent.—of the social security budget, reducing unemployment is not a significant way of saving money. He forgot to mention that unemployed people not only receive unemployment-related benefits, but pay less tax. Because they are poorer, they pay less income tax and less indirect tax.
The Treasury has confirmed time and again that the cost to the taxpayer of each unemployed person is about £10,000. Given that unemployment has been between 2 million and 3 million for most of the time under the Tories, we are talking about an annual cost to the Exchequer of between £20 billion and £30 billion. That is not peanuts—it is a substantial economic cost.
The problem is not just that such levels of unemployment cause enormous personal hardship, enormous social divisions, ill health, crime and all the rest, but that they generate a huge burden for the Treasury. For the hon. Member for Havant to imply that part of the problem with the social security budget and paying for decent benefits is not related to unemployment is absurd. That bill of between £20 billion to £30 billion each year is the reason why Labour Members believe that bringing down unemployment is a prerequisite for tackling the high level of social security spending. Any policy that significantly reduces unemployment will also bring savings for the taxpayer.
I am, unapologetically, a strong supporter of the windfall levy on the privatised utilities, which have made excess profits because of the Government's lax price-control regime. The majority of people believe that it is desirable to use that levy to fund employment, training and education programmes for young, unemployed people. If we get 750,000 young people off the dole, we would save on social security payments and such measures are the only way to meet the twin challenge of tackling unemployment and reducing the social security budget.
Clearly, the Conservatives regard allowing privatised utilities to retain excess profits as a higher priority than giving young people the opportunity of work, training and education. We do not, and, more importantly, nor do the majority of people in this country. The reason why spending on poverty and unemployment has increased under the Tories is not because they have been more generous. They never are. It is because unemployment and poverty are higher now than when the Tories came to office, and that is a good reason to ensure that they are removed from office as quickly as possible.
7.51 pm
Mr. Tim Smith: The hon. Member for Kingswood (Mr. Berry) conveniently overlooked the fact that any possible beneficial effect from extra resources for education and training from a so-called windfall tax would be outweighed by the costs that Labour would impose on employers—the minimum wage and the social chapter—which would destroy jobs. He also conveniently overlooked the fact that unemployment is now falling faster than at any time since the second world war when records began.
As a result of the Government's economic policies, unemployment is below 2 million and falling dramatically. That is having an effect on the social

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security budget, but the main reason for the huge increase in the budget in the past 18 years has nothing to do with the level of unemployment. It is largely due to demographic changes and a huge increase in the number of pensioners. People are, thankfully, living longer, and the cost of retirement pensions, which are contributory benefits, has risen substantially. The net result is that we are today being asked to approve a social security budget of £93 billion, or some 13 per cent. of gross national product.
My hon. Friend the Member for Finchley (Mr. Booth) told us what the social security budget was in 1948, when the present arrangements were introduced, and at various dates since. Until my right hon. Friend the Secretary of State for Social Security was appointed in 1992, the figures were rising. It is difficult to stop that happening, but we must try, because we cannot expect the working population to bear that huge cost. I pay tribute to my right hon. Friend the Secretary of State because he has found ways at the margin to reduce social security spending which, by 2000, will be worth some £6 billion and, in the long term, some £15 billion. All those changes have been opposed by Labour Members.
The Leader of the Opposition said recently that he wants to spend more money on education—few hon. Members would not like more resources devoted to our schools. He said that he would release money for education by cutting the welfare budget, because the shadow Chancellor has made it clear that there would be no increase in public spending if we were unfortunate enough ever to have a Labour Government. The Leader of the Opposition did not specify what he would reduce to increase spending on education, but Labour Members today have said the reductions in the orders are not acceptable and should be resisted, even though the reductions have already been built into the budget and will be implemented after the general election. That is not good enough, and people are entitled to ask where the money will come from.
The Government's record is outstanding, especially on pensioners, as my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) mentioned. Of course there are exceptions, but most pensioners are much better off today. Nearly 90 per cent. of pensioners retiring today have some other form of income apart from the basic state pension. Many have an occupational pension or an earnings-related, pension and some have investment income. The performance of those pensions in the past 18 years has transformed the position of pensioners and we are in a far stronger position than any other member of the European Union, especially in relation to any contingent liability.
My right hon. Friend the Member for Sutton Coldfield was right to say that—although we remain committed to the basic state pension, which is important—we should ask people to provide their second pension themselves. That is the way to ensure that we do not have massive public expenditure commitments in the future.
The establishment of the Benefits Agency as an executive agency in the Department of Social Security is another reform that has been beneficial. The hon. Member for Rochdale (Ms Lynne) was critical of the Benefits Agency, but I recall the situation some 10 or 12 years ago when customer service was not a priority for staff of
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social security offices. Today, the staff serve their customers well, they care about the recipients of benefits, and the service has improved. The performance targets for quality of service have sharpened up their approach. Of course there is always room for improvement, but the reform so far is welcome.
My right hon. Friend the Member for Sutton Coldfield mentioned the establishment of personal pensions. He was a little modest, because he introduced that reform, but I remember how controversial and radical that proposal was, and how much opposition to it came from the Labour party and others. Today, the situation is transformed and personal pensions are extremely popular, notwithstanding the misselling about which we have heard. Millions of people have pensions and they have a good idea of what their fund is worth. The funds are portable and people can work out what they will receive in the future.
We have made many radical changes and we are starting to live within our means in terms of the social security budget. I welcome the fact that more effort has been put into ensuring that benefits are paid only to those who are entitled to them. The National Audit Office recently published a report that qualified the national insurance fund account on that score. None the less, the figures are pretty good now. For example, unemployment benefit costs us £1,100 million a year and the National Audit Office found that the total level of mistakes made by the Department was less than 3 per cent. There is always room for improvement. Mistakes should be eliminated and fraud tackled. The record in that respect, too, is much better than it used to be.
The other side of the equation is contributions and the Contributions Agency. Just as it was sensible to have a Benefits Agency with the task of ensuring that benefits are paid efficiently to those entitled to them, so it is sensible to have, within the Department of Social Security, a separate agency with the job of collecting contributions. It is just as important as the collection of income tax by the Inland Revenue.
One matter that I wish to draw to the attention of my hon. Friend the Minister has concerned me for some time. It relates to schemes designed to avoid the payment of national insurance contributions. It seems astonishing that it is not possible to legislate, in the same way as we do for income tax, so that if someone is paid not in cash but in kind, he or she will still be subject to national insurance contributions. If someone is given by his or her employer as part of a remuneration package a benefit in kind, he or she is taxed on it. Nobody disputes the equity of that; it must be the sensible approach. It is all-encompassing and it is how income tax works.
However, when it comes to national insurance contributions, it is rather different. In an article in a magazine called the London Accountant dated December 1996 to January 1997, the author explains how to make a 20 per cent. tax saving through partly paying employees in supermarket vouchers. Supermarket vouchers are pretty close to cash. If somebody is given a voucher exchangeable at Tesco, Sainsbury or Asda, it resembles payment in cash. The article says:
"There does remain the possibility of achieving an effective 20 per cent. tax saving … by converting a proportion of an employee's cash salary entitlement into an entitlement to supermarket vouchers."

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In some areas, the Department has tightened up on that, and the author of the article refers to some of those. He says:
"Certain benefits, however, are liable to NIC as a result of special legislation."
He lists those as
"vouchers … denominated in, and exchangeable for, cash (eg. premium bonds);
commodities for which there is an organised market (eg. gold);
and
certain financial instruments (eg. gilts and unit trusts)."
So if employees are paid in those, employer and employees must pay national insurance contributions.
However, according to the author of the article, if an employer decides to pay his employees in supermarket vouchers and those are not part of the remuneration—an employer can simply say that they are not—the employer can simply reduce a package of, for example, £18,000 per annum to £17,000 with the addition of £1,000 in vouchers. He says that that is how the scheme works. I do not know whether what the author says is true, but a two-page article is devoted to it—[Interruption.] I am grateful that my hon. Friend the Minister is offering to look at it.
Instead of tackling each avoidance measure as it arises, the time has come to introduce a measure whereby it will not matter what scheme is used. Given that supermarket vouchers will be taxed as income, why could not the Department of Social Security introduce a similar measure whereby, no matter what the form of so-called "remuneration" was—supermarket vouchers or any other clever idea—it would be subject to national insurance contributions? It is time to put an end to those schemes. I have raised this general matter on a number of occasions and am concerned that we still have not tackled it.
Subject to my hon. Friend looking at that problem, as I know he will, I welcome the orders before us today and the increase in benefits. I pay tribute to my right hon. Friend the Secretary of State for the work that he has been doing to control the scale of the social security budget.
8.4 pm
Mrs. Anne Campbell: I am pleased that the debate about lone parents has now moved on to more positive ground—certainly more positive than that delineated by the Secretary of State some years ago, when he made a disgraceful speech to the Conservative party conference about his "little list". He emphasised the number of single women who allegedly had babies in order to get council flats and houses. That was a disgraceful attack.
Mr. Bernard Jenkin: Will the hon. Lady give way?
Mrs. Campbell: I shall not give way at this point. The hon. Gentleman can intervene later if he wishes.
Most lone parents do not want a handout; they would like a job. Since I was elected to the House, I have had a number of conversations with lone parents in my constituency, many of whom are desperate to get back into work, but feel that the system conspires against them. Many lone parents in my constituency are well qualified. I remember one in particular who had a degree in molecular biology and some years' experience of working in a
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professional environment. Her problem was not finding work—plenty of organisations wanted to employ her—but the fact that she could not find work that paid her enough to pay her child minder and be better off than she was on benefit. Yet the state was paying out four times more to her in benefits than it would have paid to subsidise her child minding expenses, to enable her to work.
That is a crazy way to organise the benefits system. It does not benefit women and their children, and it certainly benefits neither the state nor the taxpayer. At the same time as we are paying lone mothers to stay on benefit, my constituency is experiencing job skills shortages. Many lone parents are highly skilled. Not to use those skills is a disgrace, given that we are experiencing job skills shortages.
My hon. Friend the Member for Peckham (Ms Harman) has been doing sterling work in that respect. She has emphasised the disproportionate number of parents who depend on benefit in the United Kingdom. When we look at other countries, we realise that in Denmark, 38 per cent. of single mothers depend on benefit; in France, the figure is 37 per cent.; in Belgium, it is 38 per cent.; in Norway, it is 43 per cent.; and in Sweden it is 33 per cent. In the United Kingdom, however, the figure is a staggering 70 per cent. No wonder our benefits bill is so enormous. Benefit is paid out not just to people who want it, but to people who would prefer to have a job.
The Daycare Trust has just published an interesting leaflet in A4 format, which is convenient for Members of Parliament who do not have a vast amount of reading time. It has found that there are 800,000 latchkey children—children who go home after school to an empty house because their parents work and no affordable child care is available. Only two children in 100 have out-of-school child care places. My hon. Friend the Member for Peckham has emphasised the importance of out-of-school child care places and the crucial part that they play in helping lone parents and other parents to get back into useful employment.
When I was first elected nearly five years ago, I was so concerned about the problem that I called together several organisations in my constituency, some in the public sector, some in the voluntary sector and some in the private sector, to see whether there was anything that we could do as a local initiative.
We quickly decided that the lack of cheap nursery places was not the only problem, and that there were other factors that we might be able to deal with more easily. One critical factor for lone parents who wish to return to work is the lack of co-ordinated information. They need information on child care. That is available from social services or, in Cambridgeshire, from the under-eights advisers. They need information on jobs, and possibly on training. Again, that is available from different organisations. Parents also need to find out whether they would be better off in work than on benefit. That involves a visit to yet another organisation, the Benefits Agency.
Let us try to imagine what that is like for a lone parent with two children, who probably does not have her own transport and has to drag the children across a city such as Cambridge to the jobcentre, the Benefits Agency, social services, the further education college and wherever else she needs to go. It is obvious that the logistics and mechanics of that can become impossible.

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We decided to provide a co-ordinated information service, and that service, which is called Childcare Links, was launched on Monday by my hon. Friend the Member for Peckham. It is doing precisely the job that the Benefits Agency should have started doing years ago.
Childcare Links provides an Internet service, freely available on all Internet access points across the county. There are now 11 of those in libraries, offices and schools, and of course the service is available on home computers, too. It provides a series of interactive web pages that guide users through the different areas that must be co-ordinated by someone looking for a job.
Those pages include information on what qualifications are needed, what training may be applied for, and how to find suitable child care to fit in with any training or job that may be chosen. We have collected all the information on registered child care in Cambridgeshire, and parents will be able to search for nurseries, child minders, out-of-school clubs and much more.
In addition, the service provides signposts to other helpful agencies, such as the under-eights advisers, the benefits advice centre, the citizens advice bureau and careers guidance. We have also made available details of play, sports and leisure activities for children, so that parents can make full use of the wide range of activities on offer in Cambridgeshire.
In setting up the system, we had help from many organisations, including Cambridgeshire county council, Cambridge city council, and Greater Peterborough training and enterprise council, as well as Cambridgeshire TEC. A huge number of voluntary sector organisations also contributed. We had advice and help from the citizens advice bureau in Cambridge, Cambridge jobsearch, Cambridgeshire careers guidance, Cambridge women's resources centre, Cambridge university and many others. We also had huge support from several private organisations, most notably Andersen Consulting, which provided a superb piece of software. It is stunning, and user-friendly for people who may not be accustomed to accessing such technology.
I am pleased to report that, although the service was launched only on Monday, there are already 500 hits a day—that is, at least 500 accesses to the service every day. We have had some success already. Last week we managed to help a working mother whose children are at school in Saffron Walden, where half-term was last week. She wanted to find some child care in Cambridge, where she was working, and assumed that that would be difficult, because most of the half-term child care there would be arranged for this week, which is half-term in Cambridgeshire. I am pleased to say that she received help from the system, and quickly located a child care organisation that could help her.
Another example concerns an employee relocating from Sweden. If the service had not been available, he would almost certainly have had to wait until he arrived, to find the child care that he wanted, but by using the Internet service, he made arrangements from Sweden before he arrived, and his children are now happily settled in nursery schools in the Cambridge area.
The service is aimed primarily at lone parents. I was therefore somewhat surprised when I heard that the Benefits Agency's Parent Plus scheme would be piloted
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in Cambridge. I have been told that under that scheme, an organiser has just been appointed to search for information on child care in Cambridgeshire and make it available. Given that our service is already up and working, and has made information about all registered child care available on the Internet, and through citizens advice bureaux, council offices and libraries throughout the county, I find that extraordinary.
What we are doing has been described as a first-stop shop or as "simple government". I should like to think of it as a re-engineering exercise. Instead of thinking about the ways in which public and private sector organisations supply information to members of the public, we are turning the system on its head. We are thinking about the needs of a specific group of customers, and are using modern technology to supply what they need in the most simple and user-friendly manner.
That not only makes information more accessible and easier to use, but gives people more power over their own lives. It enables, it motivates and it means that things that previously seemed impossible are suddenly within one's grasp. I hope that the service will take off, and that we shall be able to expand it nationwide. We need a Government with the energy and vision to help that happen—qualities sadly lacking in the present Government. Let us hope that we shall soon have a Labour Government, who will do all they can to promote it.
I shall briefly pick up the point made by the hon. Member for Rochdale (Ms Lynne), who speaks for the Liberal Democrats, about pensioners who, although entitled to income support, do not receive it. About 1 million pensioners fall into that category. In many cases, the sums that people do not claim are quite large, and the average sum unclaimed is £14 a week.
Some such pensioners already claim council tax benefit, and the form used to claim it is almost identical to that used for claiming income support. Birmingham city council has an innovative scheme that makes good use of the information on that form. The computer system that assesses people for council tax benefit also assesses them for income support.
When pensioners make a claim for council tax benefit in Birmingham, the computer assesses the claims and sends them supplementary information on a piece of paper, telling them not only whether they are eligible for income support but, if appropriate, the weekly sum to which they would be entitled if they claimed it. The form then suggests that pensioners tick a box indicating whether they would like to claim. If the box is ticked, the information is sent on to the Benefits Agency, and the claim is made as simply as that.
Of course, that system would not benefit people who, although entitled to council tax benefit and income support, do not claim either. But if it were introduced throughout the country, it would enable us to catch many pensioners who do not claim the income support to which they are entitled.
The Government talk about take-up schemes, but they did not take up our suggestion that the data matching outlined in the Social Security Administration (Fraud) Bill could be used in a positive and beneficial way, to enable the new computer systems to identify pensioners who could claim income support but do not, and calculate their entitlement. With a minor tweaking of the system,

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we could provide such computer systems and eliminate at a stroke the pensioner poverty that the hon. Member for Rochdale described so well. The Government are not addressing the crucial matter of the rising number of pensioners who do not claim the benefits to which they are entitled. We should do all we can to eliminate pensioner poverty.
8.19 pm
Mr. Matthew Banks: The Labour party has come a long way in this Parliament: I recall that, several years ago, we would listen to the sharp wit of the right hon. Member for Glasgow, Garscadden (Mr. Dewar) or the dulcet tones of the hon. Member for Islington, South and Finsbury (Mr. Smith), and we would have one or more votes on the orders; now, the Labour party asks the usual channels for a full day's debate and can barely come up with one or two speakers. It is pathetic.
I do not do this often, but if I might presume to give my hon. Friend the Member for City of Chester (Mr. Brandreth) some advice as he sits quietly and attentively on the Front Bench, perhaps next year, when we are returned to office, when the usual channels on the Opposition side ask for a full day's debate, they might be asked a little more searchingly whether they will be able to come up with any speakers.
Almost in her opening sentence, the hon. Member for Peckham (Ms Harman) told us that we would not be having a vote tonight. In 1994, the Labour party told its Back Benchers not to vote, but about 50 or 60 of them did so. I believe that the hon. Member for Cambridge (Mrs. Campbell) was among them. The hon. Member for Kingswood (Mr. Berry) did not bother to stay on that occasion.
It is enormously sad when, in a debate such as this, on issues that are enormously important to the less well-off and the less fortunate in our society, so few Opposition Members seek to catch your eye, Madam Deputy Speaker, or stay throughout the debate.
I represent a seaside constituency that is possibly in the top 10 in the country for the proportion of elderly people, and senior citizens regularly come to me with problems such as those described by the hon. Member for Rochdale (Ms Lynne). I do not agree with everything she said, but I want to home in on her point about the importance of citizens advice bureaux. I pay tribute to Margaret Wilson, the manager of the bureau in Southport, and her colleagues, who do such a splendid job, as a result of which fewer people need to see me at my advice session than would otherwise be the case.
The hon. Members for Peckham and for Rochdale both said that we might not have a Division later, although some of us are far too cautious to rush away, but if the matters are not contentious, as the hon. Member for Rochdale suggested, why did she vote against one of the orders last year? This is not the first such debate that I have spoken in. Looking back in the Official Report over several years, I have noticed that, during a Division in 1994, I raised a point of order expressing disbelief that Opposition Members could vote against the annual uprating of social security benefits.
The hon. Member for Islington, North (Mr. Corbyn) got a little hot under the collar in suggesting that my hon. Friend the Member for Colchester, North (Mr. Jenkin) had some interest to declare. Of course my hon. Friend had,
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as always, acted perfectly properly. If I have an interest to declare, it is that I am in receipt of a social security benefit, and perhaps in a moment I might draw on my personal experiences to underline the point made by the hon. Members for Rochdale and for Peckham about the plight of war pensioners.
War pensioners are often somewhat abused in the political arena, and we see far too many crocodile tears. If we were to target resources away from another group to pay war pensioners more, it would not necessarily mean that we were targeting them on those in greatest need. War pensioners are not necessarily 65 or older; many are considerably younger than me.
My hon. Friend the Member for Havant (Mr. Willetts), who has had such an influence on Conservative thinking over the years, touched on the importance of younger people making private provision well in advance for their retirement. My hon. Friend the Member for Teignbridge (Mr. Nicholls) said that, at the moment, three to four people were paying taxes to cover the pensions of those in retirement, that early in the 21st century it would go down to about two to one, and that in the not-too-distant future far more people would be in retirement than in work paying taxes to look after them.
All too often, we hear constituents saying that they have paid their dues. It is difficult to explain to them that their national insurance contributions do not come anywhere near paying for the pensions they receive. It is therefore important for our younger constituents to think carefully about saving and contributing to private pension schemes.
I endorse the point made by my hon. Friend the Member for Havant about over-regulation in the City. We need a sensible and appropriate form of regulation in the pensions industry, but it should not be over-restrictive. In a previous career with Barclays bank, I came across people who had money—not necessarily a great deal—sitting around in accounts, that could have been better used, but they were frightened of the regulations, or found it difficult to make choices because of the complexity of the pensions industry.
We heard earlier about the enthusiasm with which the Labour party would like to impose a windfall tax, if it ever got the chance. Such a tax would affect not the so-called fat cats but many of our constituents on the most modest means, who would have to pay higher gas, electricity or water bills. It would affect those on the benefits that the orders will uprate.
The more we hear about a windfall tax, the less the public are fooled. The public are not fools; they know that somebody will have to pay, and that those with money—at the upper echelons, as was said earlier—will manage to avoid it. People much further down the scale—those we are trying to get out of the poverty trap—would be most affected.
It is important to target resources to help those in greatest need to get back to work. All too often, constituents say, "If only we could have a little bit more help. It really isn't worth my while taking a full-time job, because I'm going to lose this benefit or that money."
I pay tribute to the Government's efforts to boost family credit whenever possible, which has been such a valuable asset in helping people back to work. I believe that the most is given where the need is greatest. I hope that my hon. Friend the Minister will be able to tell us later how much support we are giving to how many people through family credit.

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It would be devastating if we had not just a windfall tax, but the ravages of the social chapter and the minimum wage, with all its difficulties of pay differentials. Some Opposition Members may want a minimum wage for all the best reasons, but I sometimes think from listening to them that it is merely the politics of envy. However, I will leave that to one side.
Under a minimum wage, those who received increases in their pay might not be those in work on the lowest pay rates. It is rather like arguing for council house sales receipts to be spent, but finding that those receipts are in places such as Malvern Hills district council—where there is not the greatest need to spend money on housing.
I represent a seaside resort, and I shall mention two issues to illustrate how the matters to which I have alluded would affect my constituency. As in other seaside resorts, we have slightly higher than average unemployment, and seasonal unemployment. Many people who are not originally from Southport drift in from the hinterland, and sometimes from hundreds of miles away—some people have come to my surgery from as far away as Kent. Recently, the single regeneration budget has provided an investment of £8.9 million—which has brought in a further £31 million from the private sector—to revamp the town centre, develop a sea wall, provide new housing and enable other regeneration plans to come to fruition.
On a subject close to my heart—it is one of which the Minister will be aware—the money will help us to undertake our review of local government so that we can become a county borough again. All this is intended to boost the local economy and local jobs. What would happen if we had a minimum wage and a windfall tax? They would decimate all the good work that we have achieved in this Parliament. We are trying to rebuild the tourist infrastructure in the town, but I am immensely worried that, under a Labour Government, there would be nothing for my constituents except greater unemployment.
In one of the seven wards in my constituency—those who know Southport know that that it is only seven miles long by one mile wide—there are 70 nursing homes. What would happen to low-paid workers if Labour came to power and implemented a minimum wage? It would decimate the number of jobs available. It is bad enough being ruled by the Labour party—aided and abetted by the Liberal Democrats—from Bootle, but it would be devastating if we had a Labour Government to go with it.
The hon. Member for Peckham said that people are having to sell their homes to provide care for themselves. In my local authority area, the Government have given extra money from emergency contingency reserves not just once, but twice to deal with what might be described as a unique problem of care for the elderly and bed blocking. But none of the money provided by the Government for those who have savings of £16,000 and under has been spent on the very people that the Government sought to help.
That underlines the fact that my authority—effectively run by the Labour party—has one of the worst records in the country in looking after the elderly. The hon. Lady was quite wrong to suggest that, as a result of Government policy, people have had to sell their homes.
It is important to continue to combat fraud. My hon. Friend the Member for Teignbridge referred to roads protesters, and I too believe that it is utterly disgraceful
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that people who are frankly not available for work may well be claiming benefit. I hope that my right hon. Friend the Secretary of State and other Ministers will continue to take initiatives to crack down on bogus claimants. In my constituency—which is predominantly elderly and middle-class—most people have little in the way of savings, but have worked hard all their lives and scrimped and saved for their retirement. Every pound we save by combating fraud is a pound that we must spend on those in the greatest need.
I return to the subject of war pensions. War pensioners seem to be almost flavour of the month with some Opposition politicians. During the recent by-election in Yorkshire, the Liberal Democrats ran a campaign targeted almost solely on war pensioners, and the hon. Member for Peckham said today that the Government were not doing enough for war pensioners. I am living proof of the fact that war pensioners are not all terribly old buffers—although some may be—or senior citizens of pensionable age.
War pensions are benefits given to people who have an injury of one kind or another. Opposition Members who seek to boost the benefit in real terms—by a figure that they have not yet told us—should realise that that will not necessarily put more money into the pockets of those who need it the most. In an earlier intervention, I suggested—in a tongue-in-cheek fashion—that, if I had a pound for every war pension I had gained for my constituents during this Parliament, I would be a fairly wealthy young man. One of my hon. Friends said that I am not a young man, but I am in comparison with him.
Boosting war pensions by giving people more money depending on their percentage of disability does not necessarily target people as well as I would like. I pay tribute to the Government on this matter. It is not a case of demand exceeding supply, as the Government have provided extra resources for tribunals to look after the enormous number of people who—as a result of the publicity given to war pensions by the Department of Social Security—have made an application.
I will not comment in detail on the issue of people with hearing impediments, although my hon. Friend the Minister for Social Security and Disabled People may think it appropriate to do so in winding up. However, it has been a great success for the Government's social security policy.
I have one constructive criticism on war pensions, and I believe that it has been addressed during this Parliament. On the day of the general election in 1983, I was evacuated to a military hospital. I watched the election results on television, and it was that night that I said to myself that, if I could not stay where I was, politics was what I would try to do. Some years later, Madam Deputy Speaker, you are stuck with me.
It took a long time for me to claim, be assessed and have the advantage of a 20 per cent. disability pension, and I received between £90 and £100 per month tax-free. If one compares my take-home pay with that of one of my constituents who may have next to nothing, one sees the difference.
I deprecate those hon. Members, whichever party they are from, who use war pensions to try to gain votes. Ex-service organisations and the Royal British Legion would not want politicians to continue do so. However, I pay that genuine tribute to the Government, because

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they have done a great deal to ensure that many people whose disability was not perhaps recognised early enough in their lives now have a war pension as a result of their injuries.
In the 1970s, under the last Labour Government, there was 27 per cent. inflation, the Government did not pay the Christmas bonus to senior citizens, and there was no new hospital for Southport because they had to cut the hospital building programme by a third—we had to wait for the election of a Conservative Government before we got our brand new district general hospital in Southport. Looking at the record, I have no doubt that the interests of my constituents will best be served by the re-election of this Conservative Government.
8.40 pm
Mr. Bernard Jenkin: I am grateful to have caught your eye, Madam Deputy Speaker. I confess that I had not intended to detain the House for long. I have a few, I hope, pithy things to say, but I feel that I have a responsibility to expand on the comments that I intended to make, because there has been such a paucity of speeches from Opposition Members. I do not unduly criticise them for failing to produce a lot of crocodile-tears speeches on the social security system, but I wonder what it means. I am interested in the speculation of my hon. Friend the Member for Southport (Mr. Banks) on their silence.
Could this be the reason? The age of reality seems to have dawned on certain Opposition Front Benchers, notably the right hon. Member for Dunfermline, East (Mr. Brown)—he is the ghost at this feast, because he instructed the Opposition social security team to stick to the spending plans set by this Government, but it is my guess that not many people, particularly in the Labour party, want to support the proposals of the ghost at the feast. For years, the Labour party has established itself on the principle that increased Government expenditure is the way to solve the ills of the nation. That has been the bedrock philosophy of the Labour party. Having that foundation stolen from under their feet has left many Opposition Members drifting in the ether. I regret that we could not hear from more Opposition Members with their drifting speeches this evening.
I take great pleasure in taking part in this debate and following my hon. Friend the Member for Southport. This budget is probably the most important issue that we ever discuss in the House, not simply because it is by far the biggest, but because we do not have a political system that enfranchises the poor—there are various definitions of the poor, including the bottom 20 per cent. and those on income support—as a pressure group. When we change benefits for poorer people, there are no riots in the streets, the trade unions do not rush to the barricades and there are no particular groups in the House that can sway large numbers on those issues. The poor of this country are the responsibility of every hon. Member, because each and every one of us represents a constituency in which the recipients of this budget live, so it is up to each and every one of us to represent the interests of our constituents as best we can in respect of this budget.
I never lose the opportunity to remind whatever audience I happen to be addressing, whether the House or elsewhere, of the background that we have to live with—the three numbers that stick in my mind when considering
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the growth of social security. When the Conservative Government of 1974 left office, social security expenditure represented 7.4 per cent. of gross domestic product; when we regained office in 1979, it had risen to 9 per cent.; and by the time the Social Security Select Committee dealt with the growth in social security expenditure in 1994, it had reached nearly 12.5 per cent. of GDP.
The great achievement of my right hon. Friend the Secretary of State during his tenure of office has been to begin to reverse that trend of inexorable growth. Even during Mrs. Thatcher's Administration, the trend rate of economic growth may have been about 2.2 per cent., but the trend rate of growth in social security expenditure was 3.3 per cent. We are stuck with that history.
It was my right hon. Friend the Secretary of State, in his famous Mais lecture, who burst open the problem of that structural growth in social security expenditure and forced it on to the political agenda, forcing hon. Members of all parties to discuss the issue and face the consequences of not doing anything about it. Only my right hon. Friend has been able to do something about it, and that is what we need to discuss today. His great achievement has been to reduce the rate of growth in social security expenditure to something that we can conceivably afford into the future—a rate that is below the trend rate of economic growth—so that we can look forward to that expenditure becoming a reducing proportion of GDP, and so that we can, as many Opposition Members have suggested, transfer expenditure to other priority programmes and to the general competitiveness of our economy.
One of the ironies of this debate is that new Labour grudgingly admires that achievement. The Labour party, or certainly the Front-Bench team, has switched its attack. The old attack was based on the gut reaction that we should spend more and that every problem should be dealt with by more money.
Mr. McLeish: You are spending more.
Mr. Jenkin: The hon. Gentleman has switched his attack. He says that we are spending too much. As I explained, that may be why so few of his colleagues are here to support him, because they do not agree with that policy. His attack is that we spend too much and that the growth in social expenditure that he aided and abetted during the Thatcher years has become an evil to be attacked. The Opposition have switched their attack the other way—we have not cut expenditure enough.
Even then, there is a fundamental inconsistency. Opposition Front Benchers are playing two tunes: one tune to try to reassure the electors that the next Labour Government—whenever they will be elected—will not need extra taxpayers' resources, and the other for their trade union supporters, their Back Benchers and the constituency Labour parties, telling them that more money will be available.
The policies that Labour espouses—for example, the minimum wage—will indirectly and directly increase social security expenditure by adding unemployed people to the dole queues. Welfare to work has been properly costed at more than £800 million and may return some people to work, but the net cost would be more than £440 million.

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It is a failure of understanding on the part of the Labour party if it thinks that there are easy stones to turn over to find self-financing schemes to get people back to work more readily and to reduce the social security burden. That is the Midas touch that Labour promises to bring to the social security budget. If it were easy, would not every western Government with a large welfare budget leap at its proposals? Experience shows that, where such experiments have been tried, they prove to be more difficult to achieve—and more rigorous, perhaps even more authoritarian—than Labour would have us believe.
Another Labour policy is abolition of the 16-hour rule. How nice it would be to allow people to work more than 16 hours a week and not confiscate their benefits, but that promise would cost another £875 million. Labour has failed to live up to that promise. The introduction of local discretion in social security policy is a desirable aim, but if introduced in isolation—as if it could ever be a revenue-neutral policy—the most conservative estimate is that it would cost another £410 million.
Most staggering of all is the proposal for a guaranteed minimum pension. All evening, Opposition speakers have railed against the evils of means testing, yet they want to introduce the most massive increase in means-tested benefits for pensioners that can be imagined, amounting to an annual expenditure increase of £2.2 billion. That is against the background of their opposition to every revenue-saving measure proposed by my right hon. Friend the Secretary of State during this Parliament. The idea that the Opposition—I am tempted to use that uncouth phrase, "that lot over there"—could he responsible guardians of the public purse when they offer a concoction of inconsistency, economic moonshine and downright dishonesty, is extraordinary.
Perhaps the greatest irony is the saga of the windfall profits tax. Let us explore its background. It is true that, early in the life of this succession of successful Conservative Governments, my right hon. Friend Lord Howe, the former Chancellor of the Exchequer, introduced a windfall profits tax on the banks. The background to that was a quantum change in the method of calculating interest, so that, overnight, the banks had a windfall gain in their profits. It was not actual cash coming into the banks but a change in bank regulation which suddenly and dramatically improved their balance sheets. Because it was a regulatory change, a windfall profits tax was justified. There is nothing of that nature with the proposed windfall profits tax on the privatised utilities, which lies in the background of this debate. At least a bank is a bank; there is argument about what constitutes a privatised utility.
Labour's friends in the former privatised companies are trying to wriggle out from the obligations that are to be put upon them. [Interruption.] It would be invidious to mention names in this place. There is also the question of what constitutes a windfall profit.
All our 33 privatisations have been opposed by Opposition Members, who said that they would not work. The right hon. Member for Glasgow, Garscadden (Mr. Dewar) told us that British Airways would be the pantomime horse of capitalism, but that turned out to be one of our most spectacularly successful privatisations. Their opposition continued right up to our latest
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privatisation, that of British Rail. We privatised Railtrack, created and sold the leasing companies, and introduced rolling stock companies and the passenger rail franchise companies. We are attacked by the Opposition not because it has not worked, as they forecast, but because it is too successful.
So successful and cash-generative have our privatisations been, and such are the quantum leaps in services to the customer that have been achieved, that the Opposition think that those companies are too profitable and they want to take the money away. It is ironic that the policies that they wish to fund if, God forbid, they are ever returned to government, and that they would have us believe would be the fruits of their efforts, are actually the fruits of our policies. That underlines how unsustainable is their philosophy of public spending and Government.
When the right hon. Member for Dunfermline, East (Mr. Brown) made a speech capping the spending ambitions of his fellow Front Benchers, my right hon. Friend the Prime Minister described it as the jackdaw speech. What a brilliant image that is. New Labour is stealing Conservative policies, but it is stealing them in the manner of a dumb animal picking up bright things because they seem attractive, to salt them away, not knowing their value.
There was a similar lack of understanding in the exchanges between my right hon. Friend the Secretary of State and the hon. Member for Peckham (Ms Harman). She is beginning to mouth the thinking of the Social Security Select Committee about the future of social security. There is a problem with the growth of means-tested benefits, and the Government are fully aware that the growth of means testing, particularly for those in or near to work, discourages work and discourages future pensioners from saving. However, the language of the debate has been created not by Labour Front Benchers but by the Social Security Select Committee and, in particular, by our much-loved and revered Chairman. He created the language; he invented the term "poverty trap" when he was director of the Child Poverty Action Group. He has enlarged the language of the corrosion of positive social virtues through the process of means testing. He is having some difficulties, as we all are, in going further than that.
It is not good enough for the hon. Member for Peckham simply to rail against the growth of means testing and then propose absolutely no solutions for dealing with it. In the background is the implication that there needs to be more general expenditure on welfare and more general benefits to do away with means-tested benefits. Any efforts that Conservatives have made—with the introduction of Parent Plus and family credit—to turn means-tested benefits into positive benefits that help people back into the labour market are immediately attacked by the Opposition as subsidies on low pay. There is no understanding of the problems or their solutions.
New Labour is new; it has changed, but it is still way behind the Conservatives. I have one or two differences with my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler). After the battles that he had about, for example, uprating pensions in line with prices or wages, I can understand his amazement that the new Labour party has been converted to the uprating of state pensions by prices and to the need for funded second-tier

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pensions. However, it is a little late for the Labour party to be converted, because the decisions needed to be made 10 years ago, and to keep being made.
It was the Labour party that fought the provisions of the Pensions Act 1995, which further reformed state earnings-related pension schemes to contain the future liability. The Labour party is still behind us, because, by talking about the introduction of stakeholder pensions, it harks back to the sort of state corporatism that the Social Security Select Committee saw in Singapore. I see that the hon. Member for Croydon, North-West (Mr. Wicks), who joined us on that trip, is in his place. The Labour party is harking back to the sort of state corporatism that the old colonial British Government left behind in Singapore in the 1950s.
When we asked the Labour party who set up the central provident fund system in Singapore, we were told that the Singapore Government inherited it from the colonial administration. Things have moved on since then; we do not want a paternalistic Government-controlled pensions system, whether funded or unfunded. We want a system in which individuals and families have personal control over the capital that they have invested for their future and their families.
To start suddenly talking about second-tier pensions half way through the 1990s—when half the working population has already had second-tier pensions, and been saving for them in occupational schemes for at least 100 years, in personal schemes for at least 50 years, and most particularly and more populously, for the past 10 years—after opposing opting out from SERPS for the past 10 years is extraordinary and inconsistent. I congratulate the Labour party on its progress. We should regard it as a delinquent child who is making unexpected progress, but let us not pretend that it is an adult political party capable of making adult political decisions as an adult Government. There is much more progress to be made.
The hon. Member for Peckham proffered her idea of stakeholder pensions as a second tier, but she is actually proposing a fourth tier. We already have three tiers: the first is the basic state pension, the second is the state earnings-related pension scheme, which can be commuted into a funded personal pension, and there is often a third tier in terms of voluntary savings for retirement. The Labour party now seems to be proposing a fourth tier.
I agree with my hon. Friend the Member for Havant (Mr. Willetts) that part of the origin of the misselling problem is the extraordinarily complex and excessive regulation of the private pensions market. By that, I mean not simply the regulation of salesmen's behaviour but regulation in its broadest sense: regulation creates a broad complexity of pensions products, and the tax system creates many extraordinary anomalies to encourage people to save.
If we are looking to the future, we need to join the great debate about funded and unfunded pensions and about hidden liabilities. We need to talk about the future of the welfare system in terms of a savings-based welfare system built on personal and family capital. That means jettisoning all ideas about moving over to the European social model based on collective state provision. It means turning our backs on that failed system, because a contract between generations is bound to fail as demographics change. It means moving the opposite direction to stakeholder welfare.
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I have one last thing to say tonight: watch the work of the Select Committee on Social Security. I hope that the framework of the debate in our report on savings for retirement, which should be produced before the end of this Parliament, will be the future and not the past, which is what the Labour party is offering us.
9.4 pm
Mr. Robert G. Hughes: I apologise for not having been present for the entire debate. I had to speak to a lobby in the Grand Committee Room, but I was here at the beginning and I heard the speech made by the Opposition spokesman, the hon. Member for Peckham (Ms Harman), which was curious to say the least. She fell into a particular trap.
As usual, wise things have been said by the hon. Member for Birkenhead (Mr. Field), who is the Chairman of the Select Committee on Social Security. He said that anyone who says that Labour's welfare objectives can be achieved without spending more either has something wrong with them or should not be trusted. I am not sure which of those is true of the hon. Member for Peckham, but plainly one of them must be, because she seemed to think that Labour could achieve its social objectives without increasing expenditure.
At least the hon. Lady hesitated before saying that, whereas her predecessor, the hon. Member for Islington, South and Finsbury (Mr. Smith), had no compunction. When asked whether Labour could achieve its plans without spending more money by my right hon. Friend the Secretary of State in last year's debate, he responded:
"Yes, and if the Secretary of State will contain himself for a few weeks, he will learn how we intend to go about it."—[Official Report, 20 February 1996; Vol. 272, c. 211.]
That was a year ago, yet we are still waiting.
We get bits and pieces, but no properly costed programme to carry out the objectives that Labour Members like to tell us about, not only in the Chamber but outside. They make promises and talk about how wonderful the one-off payments used to be, which leads people to believe that we will go back to one-off payments if there is a Labour Government. None of the plans is costed, nothing is clearly stated—they say one thing to one group and something else to another.
My right hon. Friend the Secretary of State was characteristically too generous to the Labour party when he spoke about its spending plans. He said that it would seek to contain expenditure across the whole range of Government spending within the current spending plans. However, over the period of the public expenditure survey round, those spending plans are predicated on about £9 billion of privatisation proceeds. The big question is, therefore, if a Labour Government are going to have to raise that money, what will they privatise?
We know—at least we think we know—that it will not be the Tote. Until the Labour party—which has opposed every single privatisation and every single agency being put out to the private sector—is able to come up with a list of things that a Labour Government would privatise, its spending plans have a huge hole in them, even at the current spending targets. Until Labour Members come clean on that, we will not know what they are talking about.
The theme of Labour Members' speeches that I have heard tonight is that the gap between rich and poor has increased more in Britain than in any other major

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developed country, which is a quote from the previous Labour spokesman on social security, the hon. Member for Islington, South and Finsbury. However, the facts simply do not bear out that assertion. We should look at what is really happening in Britain. That is not to say that there are no problems or that there are no people who are poor or who find life difficult, but there can be no doubt that the Conservative Government's actions have helped many poorer people to become richer.
The Government have a programme of major reforms and of targeting expenditure where it is needed, of helping those most in need—for instance, spending on vulnerable groups has increased by £1.5 billion a year since 1988—of improving the system of child benefit, of cracking down on fraud and of helping people into jobs. As my hon. Friend the Member for Colchester, North (Mr. Jenkin) has said, Labour Members have said not a word about the success of family credit. They did not mention the fact that we introduced it, and improved it in 1992, 1994 and 1995. That benefit has boosted the incomes of families with children, who are in work but who have low incomes. Almost 700,000 families now receive family credit, which is worth an average of £55 per week.
A moment ago, I asked what is really happening in Britain. I wonder whether Opposition Members would recognise the Britain that is described in the following terms. The average incomes of the poorest tenth of the population in 1991 had risen by nearly 50 per cent. in real terms by 1994. Do Opposition Members recognise that description of Britain under a Conservative Government? Do they recognise the fact that the poorest 10 per cent. of the population by income spend 14 per cent. more now than they did in 1979? Do Opposition Members deny that that is the situation in Britain today? Do they deny that less well-off people now have a higher standard of living than when Labour was in power? [Interruption.] I shall give way to the hon. Member for Tyne Bridge (Mr. Clelland) if he thinks that he knows his facts.
Of the 20 per cent. of the population with the lowest incomes, 85 per cent. now have a fridge-freezer compared with only 32 per cent. in 1979. Opposition Members may think that that is irrelevant, but it shows what changes have occurred. Some 75 per cent. of that group have central heating, compared with 40 per cent. in 1979. If the hon. Member for Tyne Bridge thinks that I am making up those figures, he should intervene and say so. They are the facts: this is what is happening in Britain today under a Conservative Government.
Most people are on low incomes for only a short period because our society is highly mobile. Opposition Members shake their heads, but they will not get to their feet and deny that that is happening in Britain today.
Mr. David Clelland: Tell the people outside; they do not believe it.
Mr. Hughes: That comment is characteristic of the hon. Gentleman. These are the facts. If he is confident that I am wrong, I challenge him to dispute my facts. We have a highly mobile society, which is also a meritocracy.
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Almost half of those on the lower tenth of incomes in 1991 had moved up to a higher income band by the following year. Do Opposition Members deny that fact?
Mr. Denham: They did not.
Mr. Hughes: The Institute for Fiscal Studies believes that it is true.
Madam Deputy Speaker (Dame Janet Fookes): Order. I do not think that the debate should proceed via answers to questions from sedentary positions.
Mr. Hughes: Although they will not come to the Dispatch Box and say so, Opposition Members deny that what I say is true. I have just quoted from the Institute for Fiscal Studies report of 1995, entitled "Poverty Dynamics in Great Britain". I think that people in this country would rather trust the IFS than Labour Front Benchers.
Less than 1 per cent. of men aged between 25 and 44 in 1978 stayed on unemployment, sickness or incapacity benefits between 1979 and 1993. About three quarters of men who leave their jobs find another job within a year. Listening to Labour Members, one would think, first, that long-term unemployment is a new phenomenon; and, secondly, that the same group of people remain unemployed year after year.
Finally, according to the 1996 Organisation for Economic Co-operation and Development study, "Employment Outlook", Britain enjoys more upward mobility among young workers than any from a sample of major western economies. Between 1986 and 1991, 62 per cent. of British under-25s moved up at least one band, as opposed to only 39 per cent. of young Swedes, whose social system new Labour would have us emulate.
That is what is going on in Britain. Our system has been improved and made affordable as a result of the heroic efforts of my right hon. Friend the Secretary of State. We have a system on which people can rely. All the Labour party can do is raise fears about its affordability, and raise people's hopes that somehow Labour would give them higher benefits. We know, as does Labour, that that is not true. Such deception by the Labour party will stop it ever having the opportunity to put its policies into practice.
9.15 pm
Mr. Henry McLeish: I am not sure that the debate reached the dizzy heights of being interesting, but it has been an important debate nevertheless. The highlight came when the hon. Member for Colchester, North (Mr. Jenkin) got rather excited and suggested that the jackdaw was an animal, but at that point there were pigs flying round the Chamber as well, so what is new in the Government's approach?
Never have I seen Conservative Members so concerned to speak about the Opposition's policies. The proximity of a general election that Labour will win may loom large in their plans. I hope so. They spent a great deal of time attacking us this evening, but they refused to defend their appalling record on social security, especially in recent years under the guardianship of the right hon. Member for St. Albans (Mr. Lilley).
It is important to consider the charges that we preferred against the Government. Social security is a cradle-to-grave issue that affects virtually every individual in the nation at some point in his or her life.

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It is useful to reflect on some of the comments made during the debate. I have never before heard my hon. Friend the Member for Islington, North (Mr. Corbyn) referred to as a toff. It is a pity that he was not present to hear that criticism.
My hon. Friend the Member for Stratford-on-Avon (Mr. Howarth) made an interesting point about the quality of service in the Department. I take the opportunity to praise one of the offices in my constituency. The lady—I am sure that I cannot use her name—has moved from being in charge of the benefits office in Kirkcaldy. She has been superb—courteous and effective, and the office that she managed provided efficient service. If every Department of State and every local government department were as effective as her office, less criticism would be levelled at public services throughout the nation.
I want to spend some time considering the issue that the Government do not want to talk about—poverty in modern Britain. The hon. Member for Teignbridge (Mr. Nicholls) suggested that the statistics on poverty were nonsense. I intervened at that point to suggest that one would describe the Government's statistics not as nonsense but as a worrying and sinister aspect of Britain as we approach the new millennium.
The Government put up no defence this evening. Over the past four years, an extra £15 billion has been spent on social security. The Government spend, spend, spend, but we have more poverty, more waste and more people living on the margins of society. The Government wax eloquent about the burdens facing the taxpayer, who pays more as a contribution to the social security budget.
We should put what the Government have been doing in context, and in doing so we should look at the past four years in particular. If the money involved had been not expenditure but investment, in a product that then materialised, we might have been debating that tonight; but, in a sense, all we have seen is a black hole. We can argue about the proportion of the budget that has been devoted to so-called family benefit, as against "failure benefit", "poverty benefit" or benefit for older people. [Interruption.] The Secretary of State says, from a sedentary position, "The facts are there; we are telling the truth." We can dispute the facts, but I think that it is important to look at the issue of poverty.
It was the Prime Minister who said, in an article in The Herald published on 4 March 1992,
"Some people are still not very well off, but poverty is measured by the Income Support level. This is the only way people measure poverty, the number of people above and below the Income Support level."
That was the start of the Prime Minister's embarkation on the idea of the classless society. Moreover, it was at about that time that the current Secretary of State took over at the Department of Social Security. At the Conservative party conference, on Wednesday 9 October 1996, he said:
"But for us dependency isn't just a waste of money: it's a waste of lives. It not only drains the public purse, it saps the human spirit. That is why we are determined to continue our welfare revolution—developing a new approach to get people back to work—taking tough choices to curb welfare's relentless growth."
The Secretary of State did not go on to explain why the social security budget was at an historically high level, and still growing, when he took over.
I think it important to identify two simple aspects of poverty. First, poverty is not just about money; in Britain, it means families and individuals experiencing social
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exclusion, welfare dependency, economic and long-term insecurity, community dislocation, detachment from the labour market and, critically—I hope that hon. Members on both sides of the House agree about this—the undermining of the self-worth of the individual. The catalyst in the creation of a productive and civilising society is the self-worth of every one of the 56 million people who live in the United Kingdom.
I said that poverty was not just about money; it is also not just about the poor. We are all involved. The recipients, or claimants, of benefit are obviously involved, but the taxpayer is playing an enormous role. One pound in three of public expenditure are now devoted to social security, and we have seen a remorseless increase over the past three or four years.
I have tried to underline the general importance of the issue, but I specifically want to confront the Government with the central charge that they are unaware, or else unwilling or unable to face up to their own statistics, which are contained in the quarterly reports on income support. We do not want to complicate life by talking about 50 per cent. of average household income or low pay at this stage.
Excluding those important considerations, let us dwell on income support. In February 1996, 5.8 million people were claiming income support. Let us recall what the Prime Minister said about the level of income support being something that could be used as a benchmark. That means that a population larger than that of Scotland is now claiming income support—and when we take into account dependants such as children and partners, the figure increases to nearly 10 million. Again, the Government, not I, worked out the ratio.
What does it mean in modern Britain for 10 million people—I exclude other definitions of poverty and low pay—to be on the breadline? What does that mean in a modern, civilised, prosperous society? It means all the things that I mentioned earlier, but it also confronts Governments, and it certainly confronts the Opposition. If we are to have a cohesive society in which fractures are healed, surely to goodness we must take account of nearly one in five of the population. Nearly 3 million children are being brought up in families whose income is, in fact, income support.
The central thrust of our charge this evening is that, in the past four years, there has been a spectacular explosion in costs and in the number of people claiming income support. Indeed, the Government's quarterly income support figures show that, between February 1992 and February 1996, a further 865 people claimed income support or entered poverty every working day. How can that be justified? I will give Ministers an opportunity to tell me, first, whether that figure is right—it is, and they know it—and, secondly, how they can justify the extraordinary explosion in the number of people marching to benefit offices day in and day out to receive girocheques.
We have been given the impression this evening that the number of unemployed people has gone down, but, in the four years to February 1996, every working day an extra 47 unemployed people claimed income support, an extra 140 pensioner claimants joined the poverty queue, and there were an additional 675 new claimants in terms of lone parents, the sick and the disabled. Those are chilling figures, and they come from the Department. [Interruption.]

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The Secretary of State—making an intelligent contribution from a sedentary position—asks what we will do about it. It would be useful to have a consensus in this country on the extent of the problem. As my hon. Friend the Member for Peckham (Ms Harman) suggested, it can start very soon indeed. We need only the prospect of an election victory and we will get on with the task of rebuilding Britain, especially the task of removing people from the exclusive category into which the Government have put them.
Mr. Bernard Jenkin: The hon. Gentleman recited a very good question from my right hon. Friend the Secretary of State. We all share the concern about the extent of means testing in the benefit system, but what will the hon. Gentleman do about it? Let us not retreat into tiresome little jibes at each other at this time of the evening.
Mr. McLeish: The hon. Gentleman cannot distinguish a bird from an animal, so I am not inclined to take many more criticisms like that.
The Conservatives' cheap jibe leads me to another criticism that I wish to make. We heard tonight that in one in five non-pensionable households no one works. That is modern Britain under the Conservatives. Let me quote another statistic. One in three of all households in Britain are on means-tested benefits. When we add up the catalogue of misery, it is clear that we will inherit a legacy of Britain on benefit, Britain on the breadline. As I said earlier, give us a chance and when the election comes we will start to get on with the problem.
I have other considerations for the Minister who will reply, because we have heard—[Interruption.] The Government may not like this, but I am afraid that they are going to get some more of it.
Let us look at the labour market, which is crucial. Again we heard claims that, over the past four years, under the present premiership, things have improved. Let us look at the reality. Between February 1992 and February 1996, the number of people claiming income support increased by 403,000. At the same time, the number—doctored 30 or 33 times, but what does it really matter?—of unemployed people, as measured by the civilian work force in work, went down by 390,000. The important point is that the number of people in work went down by 96,000.
Income support shoots ahead, unemployment goes down, through a variety of manipulative means, and the number of people working also goes down. When the Minister deals with that little conundrum, I should like him to explain what type of productive society we are living in, given that unemployment has gone down, and we know why; income support has gone up, and I think we know why; but we do not know why there are fewer jobs in Britain. The Government's suggestion that this country is the enterprise capital of Europe is humbug and hypocrisy, and it is quite worrying when so many people are trying to get back to work.
There is a clear dividing line between the Labour party and the Government. The price of failure is being borne by millions of citizens. Like us, they must yearn for a change. We need to return to a society in which the
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individual and his self-worth are paramount, and in which we can collectively as a nation start to put employment and education at the heart of the modernisation of the welfare state. We need a work ethic and a learning ethic. The learning ethic is the sound issue for the next millennium.
When we talk about taking costs from the welfare budget and investing that money in education, our proposals are derided. This is the old-fashioned Conservative party. It is not willing to accept that, unless we invest in those crucial areas, motivated by the learning ethic, we as a nation, whether a productive economy or a civilised country, will fail in the next millennium. The Government do not appreciate the reality.
We make the fundamental point that a successful and cohesive society goes hand in hand with a prosperous and successful economy. That is elementary. We must now take stock—to use another of the Prime Minister's famous phrases—of the calamitous mess into which the Government have got the labour market. If we acknowledge the two sets of statistics that I gave on the massive increase in poverty and dependency under the Government and the massive mess that they have made of the labour market, we can start to chart a way forward and to find solutions for the future.
An amazing development has taken place that is found nowhere else in the European Union or in other parts of the developed world. We have not only one welfare state in Britain, but three. In-work welfare is the new growth area. The Conservative party extols the virtues of family credit. There is clearly nothing wrong with family credit, but Conservative Members should appreciate that housing benefit, council tax benefit and family credit prop up low pay in the workplace. When we suggest a minimum wage, the Government find that horrible. The fact that there is minimum wage protection in 14 of the 15 European Union countries and in great swathes of the American economy, does not move them one iota.
There has been a massive extension of in-work welfare. The Government will not let people leave welfare and go into work, so £3 billion a year is spent on propping up low wages in the workplace. We want to do something about the cause and the cost of that, whereas the Government ignore the consequences and are unable to do anything about it.
The second welfare state is the out-of-work welfare state that we have had since Beveridge. Out-of-work welfare has grown, and we have witnessed the calamitous way in which it has been overseen by the Secretary of State for Social Security. We have in-work welfare and out-of-work welfare, but not content with ensnaring so many people into the welfare state, the Government have created a third one: it is called workfare, and it is neither work nor welfare. They are developing workfare as an alternative to their other policies.
If there is one word that sums up what the Government are about on social security it is "waste". We sat through a Committee considering the Social Security Administration (Fraud) Bill, and we made a number of suggestions.
Mr. Matthew Banks: Not one policy.
Mr. McLeish: Forgive me, Mr. Deputy Speaker, for ignoring the idle chat of Conservative Members.

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In Committee, we suggested ways of tackling landlord fraud, but when matters come a little close to friends of the Conservative party, Conservative Members recoil. We wanted a register; we partly got that. We wanted a landlord offence; we did not get that. We wanted to help to toughen up a Government who are high on rhetoric but soft on reality. Waste is the key issue that distinguishes the Conservative party from a modern Labour party. We think that waste is a scandal. It is an abuse and it shows contempt for taxpayers.
We were very constructive in Committee, tried again on Report and perhaps might still toughen up the legislation in another place. Waste in social security was matched earlier in this Administration by waste under the poll tax. We now have the edifying spectacle of a beef tax, which is costing the nation £3.5 billion. Waste is no stranger to the Government. At the end of the day, the election will be fought on the basis that the Government are not interested in linking welfare to work, in tackling waste or in helping the 600,000 young people aged under 24 who are the victims of failed economic policies.
I issue a final challenge to the Minister. The windfall levy has been attacked in this debate. We are seeking to invest it in Britain's future, but the Government have derided that. I hope that the Minister agrees that getting people off welfare and into work and giving 600,000 young people the opportunity to get into productive work, training and education is right. I fear that the Government will not respond to such a challenge, but in government we will.
9.36 pm
The Minister for Social Security and Disabled People (Mr. Alistair Burt): It is a pleasure to follow the hon. Member for Fife, Central (Mr. McLeish), who was known as a wily midfielder in his day and certainly showed his wiliness at the Dispatch Box, producing an effort well worthy of him that rescued to some degree the speech of the hon. Member for Peckham (Ms Harman). His speech was, however, a striking parallel with that of the hon. Lady's in that it contained no policies whatever of any decent substance. The only reference to beef was a sly one directed at the Government Benches—there was no beef in any policies that he might have proposed.
It was noticeable that, for most of his speech, the hon. Member for Fife, Central was supported solely on the Back Benches by the hon. Member for Rochdale (Ms Lynne) and his hon. Friend the Member for Stratford-on-Avon (Mr. Howarth), who was elected by thousands of Conservative votes. We find ourselves with a select audience, which is a shame because the speeches, especially those of Conservative Members, have been extremely good. It is of some disappointment that they have not been heard by a wider audience, which might have been so had the Opposition sought to challenge any of the orders and put anything to the test of a vote. However, they chose not to do so.
I shall do my best to answer the debate rather than follow the hon. Member for Fife, Central. However, I should like to thank him in passing for his comments on his Benefits Agency manager. It was kind and gracious of him. I am sure that his comments reflect the appreciation felt by the majority of us of those who work extremely
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hard on our behalf. I also thank my hon. Friend the Member for Southport (Mr. Banks) for expressing his appreciation of his citizens advice bureau manager.
Mr. McLeish: I hope that the comments will be passed through the ministerial team in the Department.
Mr. Burt: Yes, of course they will. I am again grateful to the hon. Gentleman.
The Opposition are supporting the measures that, from April, will increase benefit rates and therapeutic earning levels and revise national insurance rates. Opposition Members have in fact opposed all the measures that we have introduced in this Parliament to reform benefits, but the reforms have in some way contributed to allowing us the space for these upratings. I pay tribute to my right hon. Friend the Secretary of State. The number of comments made by my hon. Friends in appreciation of his handling of social security was noticeable, and I echo them.
My right hon. Friend reminded us that, in the 50 years since Beveridge, social security growth was 5 per cent. more than inflation. Thanks to our reforms, we have stabilised growth in social security to containable levels, even though there are pressures because the elderly are living longer and because of our support for the sick and disabled. That could be achieved only by the measures that we have taken in the past four Budgets. There now seems to be a consensus over the size of the budget, but it is disappointing that we had to get there on our own.
Consensus does not sit easily with some of the views that have been expressed tonight. There was a dispute across the Dispatch Box between my right hon. Friend the Secretary of State and the hon. Member for Peckham about the figures for growth in social security over the past few years. The figures are incontrovertible. I risk going over old ground, but the hon. Lady cannot make out that the majority of the increase in benefit expenditure has been caused by unemployment. The majority of the expenditure increases in the past few years have been related to the elderly and the long-term sick and disabled. Labour Members may see some form of black hole and think that there is an easy alternative way to look after our long-term sick and disabled and the elderly, but they never mention it.
The number of people in employment has increased from 24.4 million in 1979 to 25.8 million in the summer of last year. The figure is going higher still. The number of households with no one in work is a genuine issue. There has been an increase in the number of such households because of changes in the structure of society. There has been an increase in the number of single-adult households, including lone parents. Such households are less likely to include an earner than those with more adults.
The proportion of no-earner households in the United Kingdom is not radically different from that elsewhere—in Germany the figure is 15.5 per cent.; in France it is 16.5 per cent.; in Italy it is 17.2 per cent.; and in Spain it is 20.1 per cent. The growth in no-earner households is not just a United Kingdom phenomenon. The important question is what to do. Conservative Members are entitled to draw attention to the fact that the answers come from this side. All we get from the Opposition is criticism, but no decent answers to the difficult questions.

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The hon. Member for Peckham ducked the major challenge offered by my right hon. Friend the Secretary of State on the minimum wage. He pointed out the gross inconsistency in supporting a policy that subsidises employment to get people back to work but not recognising the impact on an employer of increasing labour costs through the minimum wage. The hon. Lady cannot have it both ways. If bringing an employer's labour costs down through subsidy improves his perception of taking on a worker, putting his labour costs up through the minimum wage must also impact on his perception.
That is not even a fair balance. The numbers to be thrown out of work by Labour's minimum wage far outweigh the amount of money that would be recycled through the scheme of taxing someone else £3 billion to put others back to work in the spaces that are left because of the sackings caused by the minimum wage. The policy is barmy. My right hon. Friend offered the hon. Lady the chance to explain the inconsistency, but she did not.
The hon. Lady's speech was also instructive on another important issue. She advanced her previous argument on pensions. My right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) made an exceptional contribution on pensions—a subject that he understands very well. He referred to the progress that has been made. I thought that important progress was made when the hon. Lady was dealing with Labour's plans for early retirement.
My right hon. Friend the Secretary of State smoked out some time ago the fact that if, under Labour's proposals, someone were to retire at the earliest possible age at no extra cost to the taxpayer, they would luxuriate in a pension for life £20 a week lower than the pension that they could expect if they retired at the earliest possible time under the current system, as most people do. That led to the question whether income-related benefits would be available to supplement a low pension.
The hon. Lady skated round that issue at the time, but she advanced her argument today when she said that there would be no extra cost to the system. Therefore, a person in that situation would not be eligible for income support. That is fascinating. Would people who are approaching retirement have to sign a pledge with the hon. Lady to say that they were willing to accept £20 less a week and that, if they fell on hard times, they would not seek access to the social security system in the future? Would that be a condition of taking early retirement? Is that what the hon. Lady means? Would people have to get permission from her to claim an early pension and then avoid falling on hard times, because she would not allow them access to income support? That was the clear implication of her remarks today.
In the future, pensioners run the risk of a pension that is £20 a week lower, and they would know that, if they fell on hard times under Labour, they would have no access to support from the social security system. I am not surprised that the hon. Member for Islington, North (Mr. Corbyn) is not in his place, because he would be spinning like a top if he understood the full implications of the hon. Member for Peckham's remarks this afternoon.
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The hon. Member for Peckham also mentioned lone parents.
Ms Harman: Lone mothers.
Mr. Burt: The hon. Lady mentioned lone parents, nine out of 10 of whom are lone mothers. I am anxious to put on record what my right hon. Friend the Secretary of State for Social Security said at our party conference in 1993. He mentioned areas of rising spending and said:
"The third main area of rising spending is on lone parents. But I am less concerned about the cost than the breakdown of families. There are now 1.3 million lone parents. Many find themselves lone parents against their will. Widows, divorced and separated people struggle alone, but often successfully, to bring their children up well. They deserve not blame but support."
We all echo those remarks, and they are not remembered often enough when my right hon. Friend's remarks about single parents are quoted.
Our work on lone parents is not a new area for us. I was interested in the comments made by the hon. Member for Cambridge (Mrs. Campbell) about her local scheme, and I would be grateful if she would keep us informed. We have worked on the problem of lone parents for some time, and we appreciate the differences with other countries which have more lone parents in work. Lone parents in other countries do not have the option of not needing to find work until their children are 16—they have to find work much earlier.
We have tried a number of schemes to put lone parents back to work, and the most successful is the family credit scheme. The hon. Member for Peckham did not mention that. She said that lone parents were left on benefit with no assistance to get back to work, but the family credit scheme has been outstandingly successful in getting lone parents back to work. It is one of the main reasons why some 300,000 lone parents now claim family credit at a cost of £1 billion. Since 1992, some 200,000 lone parents have left income support for family credit, and more will do so in the future.
We have worked on schemes with the National Council for One Parent Families for the past three years—the contract has been renewed—to research the work and training that will be most suitable for women who want to get back to work. My hon. Friend the Under-Secretary has studied that area and, together with my right hon. Friend the Secretary of State, has introduced Parent Plus, which will provide structured assistance in jobseeking and training for lone parents by way of a three-year pilot project.
Mr. Andrew Mitchell: The best scheme in the world.
Mr. Burt: As my hon. Friend says, it will be the best scheme in the world, because it is distilled from ideas from elsewhere and ideas that we have worked on for a long time.
Not only do we share a common desire to get lone parents back into work but, as has so often been the case in social security, it is we who have had the ideas, we who are putting them into practice and we who can create budgets that can deliver, unlike the Labour party, which simply makes pious promises.
The hon. Member for Islington, North made, as always, a significant speech. If the right hon. Member for Dunfermline, East (Mr. Brown) is one of the ghosts

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at this feast because of his contribution to social security, the hon. Member for Islington, North, along with the hon. Member for Leyton (Mr. Cohen), are also the ghosts, because they have spoken in the past of their belief in socialism; I have no doubt that their connection with the Opposition Front Bench is tenuous, to say the least.
The hon. Member for Islington, North went through the entire range of his concerns about poverty and other such matters but his sole solution was to tax the rich. As the hon. Gentleman knows, because I have debated with him for many years, there is not much between us in our determination to deal with matters such as poverty caused through lack of employment. As sponsor Minister for Manchester and Salford with responsibility for the city challenge projects in the north of England, I have seen the Government invest serious sums of money in a variety of areas where work has been hard to come by, in order to stimulate employment and improve social conditions in hard-hit communities.
That regeneration work has been among the most successful that the Government have accomplished, and the Prime Minister and others deserve great credit for putting money into those schemes and doing the job properly. However, having recognised that money alone is not enough, they have looked for good schemes and ways to help reduce the incidence of poverty.
As my hon. Friend the Member for Southport clearly said, the hon. Member for Islington, North and, to some extent, Opposition Front-Bench Members, have failed to see that poverty in the UK is not static. There is a great deal of mobility because people get jobs, have chances to improve their position and move up the income bracket with assistance and, above all, with the availability of jobs. Again, we return to the crucial contradiction in Labour policy. I do not understand how a group of people who have shared virtually every principle that they ever stood for but who cling desperately to at least one—the determination to get people into work—can have a minimum wage policy that is so contrary to that objective.
The Conservative party's determination to get people back into work is evidenced not just by the figures that show the reality of falling unemployment and rising employment but in our determination to resist the very policies that sound marvellous on the doorstep but would do such damage to working people. We are right to resist them vigorously.
My hon. Friend the Member for Finchley (Mr. Booth) had the right approach when he talked about people's attitude to employment and opportunities. He quoted the phrase that we need a hand-up society rather than a handout society. That is nothing new. He need not defer to the Labour party in terms of that phrase; we have all had it in mind as part of our policy for a long time. The only difference between us and the Labour party is that we achieve it. Our welfare-to-work, family credit and work incentive policies have done the job.
The hon. Member for Rochdale, surrounded by so many of her colleagues during the debate—[HON. MEMBERS: "Where were they?"]—put up a lone but brave battle on a number of different issues. I must correct her analysis on war pensions. The responses from those we have consulted on the proposal to simplify war pensions have been broadly welcoming.
The measures were greeted by the Royal British Legion with the words:
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"the decision on the changes has been most welcome and reassuring".
The British Limbless Ex-Service Men's Association said:
"we are extremely happy with the decisions reached by the Government".
The approach that we are now taking to war pensions in connection with noise-induced sensorineural hearing loss is sound. All those who have commented agree that the medical advice that we are now following is right. The Royal British Legion's medical advisers confirmed in their open letter that
"noise induced hearing loss and loss due to ageing are broadly additive".
We accept—
Mr. Denham rose—
Mr. Burt: May I finish the point?
We accept that the evidence on which our new advice is based has been available to the experts for some time. That means that the current advice should have been applied earlier. However, we shall honour existing awards, despite their lack of foundation, and no existing war pensioner will lose money as a result of the change of approach.
Ms Lynne rose—
Mr. Denham rose—
Mr. Burt: I shall give way to the hon. Lady first, as I mentioned her first.
Ms Lynne: How come that Lord Mackay of Ardbrecknish, in the other place, seemed to back-track on the idea of new medical evidence? He seemed to admit that no new medical evidence had been brought forward, yet people who had experienced hearing loss—not to the extent of an 80-year-old at present, but hearing loss that could deteriorate over the years—would not get their war pensions. Why did Lord Mackay say that?
Mr. Burt: The clarification offered by my right hon. and noble Friend in another place related to the medical evidence. We had originally been under the impression that the medical evidence that we were receiving was new. In fact, it had been available for some time, and we might have acted upon it sooner. My right hon. and noble Friend was clarifying the fact that we did not intend to go back on awards already made, and confirming the fact that the advice on which we are now working had been available for some time.
Mr. Denham: Will the Minister confirm that, according to the experts, there has been no change in the medical evidence not only for "some time", but for 30 years? Is not the truth that it was a convenient discovery of an alleged change that led to the change in policy designed to hit future war pension claims?
Mr. Burt: I think that the number of years is immaterial. The point is that the policy that we are following now is correct, and based on medical evidence. We have clarified the small detail that had been left open through recent arguments.

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My hon. Friend the Member for Havant (Mr. Willetts), in a good contribution, described in some detail the importance of work incentives. Again, we could supplement his comments in so many ways by examining our work incentive strategy since 1988. We have introduced a series of measures to ensure that people move from welfare into work—from the introduction of family credit to housing benefit earnings disregards, from national insurance contribution bonuses and contribution holidays for employers, to housing benefit run-ons. Those measures have been responsible for ensuring that people have moved from welfare into work. In the face of such evidence, it is extraordinary that Opposition Members seem so determined to go back on policies that have proved so successful.
My hon. Friend the Member for Teignbridge (Mr. Nicholls) made several points. In particular, we share with him a concern that those who claim benefits should be available for work. I assure him that the benefit claims of people who take part in protests are processed, in the same way as everyone else's, to ensure that they are indeed available for work.
I am grateful for the assistance of my hon. Friend the Member for Beaconsfield (Mr. Smith) in passing on further information about a loophole. We do much to ensure that loopholes are closed, but we are always grateful for new information about them.
My hon. Friend the Member for Colchester, North (Mr. Jenkin), in what was almost the final contribution of the debate, hit the nail on the head when he described the difference between the Government and the Opposition in terms of the two tunes that Labour like to sing. There is one tune down here, which is spread round by the right hon. Member for Dunfermline, East, and it is about Labour sticking to our spending and tax policies. There is a different tune for the poor and disadvantaged, which says that in some way the Labour party still represents some hope for them.
The truth is that the hope for those who want to see an improvement in people's conditions in this country no longer resides with the Labour party; the hope for people to improve their circumstances lies with those who are getting people back to work: the Conservative party and the Secretary of State with his policies on social security.
My right hon. Friend the Member for Sutton Coldfield said earlier that we had won the arguments both on pensions and on social security. He was so right. This is
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no longer a debate. We go through as an icebreaker, and Para Handy follows behind like a little tugboat trying to make something of it.
We can answer the challenges. Some years ago, the hon. Member for Islington, South and Finsbury (Mr. Smith) was sent away to think the unthinkable on social security. The truth is that, as on so many other matters, the Tories have got it right.
Question put and agreed to.
Resolved,
That the draft Social Security Benefits Up-rating Order 1997, which was laid before this House on 31st January, be approved.
MR. DEPUTY SPEAKER then put the remaining Questions required to be put at that hour.
Resolved,
That the draft Social Security (Contributions) (Re-rating and National Insurance Fund Payments) Order 1997, which was laid before this House on 31st January, be approved.
That the draft Social Security (Contributions) Amendment Regulations 1997, which were laid before this House on 10th February, be approved.
That the draft Guaranteed Minimum Pensions Increase Order 1997, which was laid before this House on 31st January, be approved.
That the draft Social Security (Incapacity for Work) (General) Amendment Regulations 1997, which were laid before this House on 31st January, be approved.—[Mr. Coe.]

Social Security

  MERCHANT SHIPPING AND MARITIME SECURITY BILL
  Ordered,
  That, during the proceedings on the Merchant Shipping and Maritime Security Bill, Standing Committee A shall have leave to sit twice on the first day on which it shall meet. —[Mr. Coe.]

  DATA PROTECTION
  Ordered,
  That Standing Order No. 14B (Proceedings under an Act or on European Community documents) shall not apply to the Motion in the name of Mr. Michael Jack relating to the salary of the Data Protection Registrar.—[Mr. Coe.]

  LIAISON COMMITTEE
  Ordered,
  That Sir Fergus Montgomery be discharged from the Liaison Committee and Mr. Bob Dunn be added to the Committee.—[Mr. Coe.]

NHS Prescriptions (Nutritional Supplements)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Anthony Coombs.]
10 pm
Mr. David Tredinnick: In January this year, the British Society for Allergy, Environmental and Nutritional Medicine wrote to my right hon. Friend the Secretary of State for Health saying:
"Your ministry is planning steps which may lead to the deaths of thousands of people in the UK, and to substantial avoidable suffering for many others."
That was a reference to the threat to more than 200 nutritional or vitamin supplements currently available on the national health service prescription list, which, it is alleged, the Department intends to remove.
I address the House as the long-standing treasurer of the all-party group on alternative and complementary medicine. As my hon. Friend the Minister will know, I have monitored and taken a great interest in such issues for the best part of a decade. The Department's proposal to blacklist more than 200 nutritional supplements, making it impossible for general practitioners to prescribe them on the national health service, would bring to more than 600 the total of supplements so blacklisted in the past three years.
That move would seriously damage the health of many ill people, and wastes an opportunity to reduce prescription costs and improve patient care. The proposal is the result of recommendations by the so-called Advisory Committee on Borderline Substances. In its submission, the committee stated that the products in question
"have more economic alternatives"
and
"have not demonstrated a therapeutic value".
I hope to demonstrate to the House tonight and to persuade my hon. Friend that those contentions are completely wrong. Members of the BSAENM are doctors, and they say that many patients will suffer greatly if those vitamins and nutritional supplements are removed from the list. One estimate puts the potential savings to the NHS from improved nutrition for hospital patients alone at £266 million a year. GPs who are members of the BSAENM report similar savings in their practices. I suggest to my hon. Friend that the removal of these products is a false economy, benefiting neither the patient, the Department of Health nor taxpayers.
My hon. Friend the Minister will be aware as he travels the country how many chemists and shops now stock all kinds of vitamin supplements. My constituency contains the headquarters of Holland and Barrett, which has a massive warehouse, with all kinds of vitamins and supplements readily available. But these have to be paid for, unless they are available on the NHS. By agreeing to the proposals, my hon. Friend runs the risk of removing the opportunity for less well-off people to be treated. I am certain that many in my constituency and my county of Leicestershire will suffer if the proposals are accepted.
I gave the Minister notice of more or less exactly what I intended to say, and I have briefed him on a number of points that I was seeking to raise. On behalf of the
1020
BSAENM, I have also sent him a case study that amply demonstrates the problems that could be caused by the removal of those vitamins from the list. The case concerns Mrs. B. S., a 72-year-old retired nurse. I will not go through the whole case, but she suffered from water retention, arthritis and hypertension, and was treated using supplements.
Eventually, her doctors recommended that she came off that treatment—although it was helping her—and she was put on powerful drugs. Those drugs apparently made her much worse, and she turned to her nutritional medical adviser, who put her on a course of magnesium injections and magnesium amino acid chelate. At the moment, the supplements are provided on the NHS—and this is the point.
She responded well to treatment and, from being at death's door, she found that her weight and blood pressure dropped and she was altogether better. Without the magnesium and other supplements, I respectfully submit that this lady would probably pass away—the advice that I have been given is that she may have lived for about three months at most. This is the gravity of the situation we face, and that is why I have sought to give these important issues an airing.
There are certain specific points to which I want the Minister to respond. The first is the time that those in the field of nutritional medicine have been given to consider the proposals. According to the Department, the recommendations were published ahead of time to allow an opportunity to comment on them. But the release date of 25 November last year allowed only 45 days—including Christmas and new year—for responses to be prepared and submitted.
That may sound like a long time, but, as we are talking about 200 preparations, it works out at one hour per preparation for the submission of a proposal to retain a product on the prescription list. That is an inadequate period for consultation.
My second point is that the advisory committee has recommended that the products listed have not demonstrated a therapeutic value, or have more economic alternatives. This is a highly contentious statement, and the document does not specify which of those justifications has been applied to each item on the list. However, since it is the clear intention to blacklist most, if not all, of the readily available nutritional supplements, the suggestion that more economic alternatives are available is untenable.
In preparing its response, the society surveyed many of its members. Ninety-six per cent. considered that nutritional supplementation was essential to their method of practice. It is those practitioners who will suffer, and at a time when more and more people are turning to alternative and complementary medicines because they do not feel that the medicine available—good and proven though it is—on the national health service through conventional preparations and doctors is adequate.
People are voting with their feet. I referred to the enormous number of shops that now sell the preparations. They include high street chemists, which would not have considered selling them five or 10 years ago. My hon. Friend is in danger of undermining the use of these important supplements for those people who are unable to pay and must get them on the national health service.

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Thirdly, the national health service executive says that other products will meet patients' clinical needs equally well. I have already referred to the lady who suffered from water retention and hypertension, who was put on magnesium. In that case, the magnesium was crucial, but it is one of the products listed in annex 2, along with 13 other magnesium or calcium and magnesium products. Not to coin an original phrase perhaps, but there is no alternative to that product—it is essential in the treatment of certain problems. There is no licensed multi-vitamin and mineral product with adequate potency for the treatment of those nutritional deficiencies.
The qualifications of the committees are another contentious issue—we come across this throughout the alternative and complementary medicine spectrum. The Advisory Committee on Borderline Substances has made the judgments, but it lacks the expertise to deal adequately with the issues. The practitioners with knowledge and experience of nutrition are simply not on that committee. Experts in the field need to be appointed to it. It is not good enough that committee members have some related experience. I suggest that the management of the committee should be modified to include medical practitioners with knowledge and experience of nutritional medicine.
My next and perhaps final point is that the Department contends that the selected list scheme has the aim of ensuring that all the real clinical needs of NHS patients can be met as economically as possible. That is such a contentious area. The national food survey in 1994 and the survey on the diets of British schoolchildren in 1986 stressed the need for certain minerals which are not necessarily readily available to the population in their diet, such as iron, zinc and magnesium. The survey of schoolchildren found that 95 per cent. of subjects had insufficient intakes of various minerals. Sometimes, it is necessary for those to be prescribed.
Doctors need that right, and it is good value, because, if people do not get them, they will become ill, and then they will become a burden on hospitals. It is a false economy to suggest that removing vitamins, which strengthen the immune system and the patients, and keep them out of expensive hospital care, is in the interests of the economy of the health service.
Another report, "Effective Nutritional Medicine", found that between 75 per cent. and 90 per cent. of cancers are attributable to environmental factors and can often be corrected—perhaps not cured—by nutritional medicines.
My final point concerns vitamin B6 and peripheral neuropathy. The issue is contentious, as my hon. Friend knows, because of the proposed removal of high doses of vitamin B6 from the list on the grounds that they are toxic. The society I mentioned submits that there is no evidence that toxicity begins at 50 mg a day for humans. Human evidence supports toxicity at 500 mg a day and upwards. There are various reports, as my hon. Friend knows, many of which date back a long time. The evidence is insufficient for the ban that is being canvassed. I encourage him to pause and reconsider this crucial issue.
I was looking at the Parliamentary Office of Science and Technology technical report in the Library on treating problem behaviour in children. Bad diet is one of the
1022
problems that causes such behavioural difficulties. Vitamins can often right that. There is an educational angle to the matter. If children have the right supplements to their diet, their behaviour improves, they become less disruptive, and they live better lives.
On the threat to 200 vitamin supplements, my hon. Friend the Minister should suspend consideration of proposals for blacklisting nutritional supplements. Many hundreds have been blacklisted already. Important supplements such as magnesium are threatened now. I ask him please to think again.
Secondly, I ask my hon. Friend to review the membership of the Advisory Committee on Borderline Substances with a view to appointing members with expertise in nutritional medicine and supplementation. The committee should at least give a fair hearing. Let us put judges in the court who understand the subject. At present, it is suspected that those who sit in judgment do not have sufficient expertise.
Thirdly, I ask my hon. Friend to consider retrospectively the position of supplements already blacklisted. Finally, I ask him further to consider the creation of a separate category of nutritional supplement that falls between those of licensed medicine and food supplement, with separate criteria and procedures, as outlined in previous correspondence. If he can respond positively to some of those points, he will improve the health and happiness of many people.
10.17 pm
The Minister for Health (Mr. Gerald Malone): Such is the attraction of the invitation of my hon. Friend the Member for Bosworth (Mr. Tredinnick) to improve by ministerial diktat the happiness and health of the nation that I might be tempted to accept, but I am not sure that it is within ministerial gift. However, I will try to help him. He has raised several important points with which I am happy to deal. I stand in need of some sort of nutritional supplement or form of medication to deal with my cold.
It may help my hon. Friend if I first set out the system. He said at the outset that supplements were being removed from lists of items that can be prescribed by doctors. That is not so, as will become clear as I explain the system. There is no NHS prescription list that says what products general practitioners can prescribe at NHS expense. The reverse is true: GPs are free to prescribe nutritional supplements or any other preparation for their patients unless they are included in the blacklist. The blacklist scores out some items that are available generally; it does not refer back to a list on which it has been decided to incorporate certain substances.
I shall give examples, which are extreme, but which illustrate the freedom of the medical profession. When I visited the prescription pricing agency in Newcastle, it had a number of interesting examples of items that GPs had prescribed. You, Mr. Deputy Speaker, might consider it unusual if, when you next visited your GP, he prescribed you a pint of Guinness, but it has been done—and done within the letter of the rules. Another example involved a prescription for a Christmas pudding.
The difficulty is that GPs who prescribe in that way must be prepared to justify challenges to their prescribing by the health authority . If the health authority decides that such items, or any other unlicensed products—be they

1023
dietary foods, supplements or toiletries—should not be regarded as a drug for reimbursement purposes, the GP must justify the issue of the prescription. If justification cannot be given, the GP may be asked to repay the cost.
It is different when a pattern begins to emerge of a consistent habit of prescribing, at a cost to the NHS, certain specific products. That is the point on which my hon. Friend has concentrated tonight. When the spending level of such products becomes significant, it is referred to the Advisory Committee on Borderline Substances for consideration.
The issue that my hon. Friend has raised relates to the recent public consultation on the addition of further items to the list of products that may not be prescribed at NHS expense. Those products included unlicensed dietary supplements. To understand the issue, it is important to emphasise the vital nature of the word "unlicensed"—it refers to a category of products that are separate from other products that have gained a licence, and are dealt with in a different way.
The list makes an important contribution—and has done for some years—to the Government's strategy to secure best value for money from the NHS drugs bill, and to secure the greatest benefit for patients. That is the point on which my hon. Friend wanted reassurance; he wanted to know that I had an open mind about what might constitute the greatest benefit to patients. I hope to say something helpful later.
The ACBS has an important role in our strategy, through its advice to Ministers on items that it considers should no longer be prescribable at NHS expense if it has not been demonstrated that they meet a therapeutic need in the community, or if they do not meet a need as economically as possible. If therapeutic value is in doubt, it is logical that the existence of alternatives is irrelevant.
The ACBS is aware that the Department's general advice is that most nutritional problems can be treated by dietary changes—that is the scheme's history. It was the view taken by the chief medical officer in the mid-1980s, when the scheme came into play; it is a view that still holds. I am sure that my hon. Friend and the House will agree that the supply of food—the best way to treat the deficiencies—to patients in the community is not a reasonable NHS function.
Not only does the ACBS consult the company involved before offering advice to Ministers, but there is a further period of consultation with interested bodies in advance of any final decision on changes. My hon. Friend mentioned the consultation period. I was of course concerned that there should be a proper period. I am not sure that the methodology employed by those who have lobbied on the matter—dividing the amount of time by the number of products—was necessarily accurate or the right method to use. But I can assure my hon. Friend that I was extremely concerned that there should be a proper period.
In fact, a longer period was allowed in view of the Christmas and new year holiday. I would point out that this is a consultation period that has precedent in previous and similar exercises, where the consultation period was deemed to be broadly satisfactory by all those participating.
Following the most recent such consultation, which began in November and did not end until 9 January, I carefully considered the comments made—indeed,
1024
I varied four of the original proposals put before me on the basis of the evidence gleaned from the consultation evidence. I assure my hon. Friend that time was provided, and that Ministers listened to what was said, leading to the original advice being changed as a result of the consultation.
I did consider the views of the society to which my hon. Friend referred, and also took account of the opinions of a whole range of learned societies that have a knowledge of these matters. Having been specifically consulted, many of them did not object to the proposals. For example, neither the Royal College of General Practitioners, nor the general medical services committee of the British Medical Association raised objections to the recommendations.
My hon. Friend specifically pressed me about the membership of the ACBS, and passed on others' suggestions that it lacks expertise on nutritional matters. That is not true. The committee consists of several people: my hon. Friend wanted reassurance that they had some involvement in nutrition, and I can tell him that the expertise of two of the members is specifically directed towards that field. Those members are Dr. Simon Allison, who is head of the nutrition team of the Queen's Medical Centre in Nottingham; and, in a practical and more down-to-earth way, Ms Julie Fenton, who is the chief dietician at Queen Mary's university hospital, who has great insight into the sort of cases described by my hon. Friend.
Whatever the recommendations of the ACBS, it is open to the producers of high-strength multi-vitamin and mineral preparations to apply for their products to be licensed as medicines. They would have to provide evidence of the product's safety, quality and efficacy for the specified indications, and if they did so, a marketing authorisation could be granted.
That answers my hon. Friend's other point regarding a special category. There is no need to have a special category, because the way forward for those who market these products, if they think that they are of substantive therapeutic value, is simply to put them through the licensing process. If the products can be proven to be of therapeutic value, they, like all other products, will get a license,0020and will fall automatically within a category which can be prescribed by doctors.
I have some knowledge of what are commonly referred to, albeit slightly pejoratively, as alternative medicines. If there is a growing body of evidence of efficacy, which those who either market these products or claim that they have a worth are able to marshal, they will have a right—as would anyone else who claimed that their product had a therapeutic effect—to go through the licensing system so that the products could be available. I therefore issue something of a challenge to my hon. Friend: if the evidence is brought forward, it will be considered in an open way, which is the usual way in which evidence is considered on matters that may provoke a therapeutic change for the best.
I looked at the case study to which my hon. Friend referred, and I would be happy to look at further details, if he can provide them. It set out what were claimed to

1025
be the facts of the matter, but I have to say that it was based substantially not on strong evidence, but on assertion. I should be happy to see better and further evidence—if such exists—to sustain the claims made for the product referred to in the study.
My hon. Friend referred to vitamin B6. To bring him up to date, I can tell him that officials from the Ministry of Agriculture, Fisheries and Food and the Department of Health are meeting interested parties to discuss certain recommendations that have been made. Those interested parties have also been invited to submit any relevant data
1026
they might have which demonstrates that vitamin B6 is safe and of use. All such data that are received will be considered in full. That is the right way forward—there are no closed minds. I hope that my hon. Friend will find that answer helpful.
At the end of the day, I cannot give my hon. Friend specific assurances on his four points asking me to make concessions. The system we have works well, and it protects the national health service in terms of cost. It is a fair and open system, and, on this occasion, it has worked, and worked well.
Question put and agreed to.
Adjourned accordingly at half-past Ten o'clock.