Expenditure Cuts and the Public Services

HL Deb 08 April 1981 vol 419 cc530-612

Lord Wells-Pestell rose to call attention to the effects of Her Majesty's Government's expenditure cuts on those in the community who depend on Government aid and local authority services; and to move for Papers.

The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper. My contribution this afternoon will take the form of a plea to the Back-Benchers on the Government side of the House. I do not think that anything that I am able to say this afternoon will make any impression whatsoever upon the Government Front Bench. We have been through this matter many times before and, as your Lordships know, the Government are resistant to change and are very dogmatic so far as their beliefs are concerned. I do not hold that against them; I accept it. I want to try to discuss with noble Lords behind the Government Front Bench various matters which I feel are of supreme importance to the community.

During the past few years the Government have introduced three Budgets and two social security Bills, as well as a considerable amount of other legislation that has imposed hardship on a large section of the community who are already finding it difficult to make ends meet and to maintain a reasonable standard of living. The purpose of the debate is to encourage noble Lords opposite to take a look with me at the situation which the Government have created for those people who are already impoverished. We on this side of the House have been appalled by the apparent indifference of noble Lords opposite to the effects of Government policy on some of the groups in the community. Let me be quite frank here. At first we were amazed that so much social legislation should go through without noble Lords opposite objecting, or, as in the case of the two social security Bills, with few Government supporters being present in the Chamber, as though the two Bills had little or no significance.

From being amazed we became appalled by, and indeed very early on we became angry about, the insensitivity of noble Lords opposite to what the Government were doing. We cannot accept that all noble Lords opposite are as indifferent as they appear to be to the legislation which has been passed in this House, and we believe that if they had really thought of the implications of much of that legislation they would have had something to say.

We recognise—and I do not say this facetiously—that most noble Lords opposite start off with a serious handicap in as much as their mode of living may lead them through the highways and byways but never, with very few exceptions, into the back streets where the ordinary people live. One must see how some people live, the conditions under which they live, before one is able to understand their problems. Not for one moment am I suggesting that my remark applies to the noble Baroness, Lady Faithfull. I shall have quite a lot to say about the views of the Association of Directors of Social Services—and the noble Baroness was at one time a very distinguished director of social services. I shall be intrigued to see how the noble Baroness defends the Government in a variety of ways, if she is to be so misguided as to do that.

We are prepared to think that the seeming indifference is due to noble Lords being uninformed, misinformed, or ill-informed, and the object of today's debate is to inform them of the true situation. We all need to remember, and to take, the advice of Mr. St. John-Stevas, who said: Man is a human being before he is an economic unit". I say with the greatest respect that had we remembered that advice, some of the legislation that has gone through this House in the last two years could not possibly have been accepted. I also wish to remind your Lordships of what Mr. Jim Prior remarked the same weekend: We must have care and understanding for the victims of the recession".

We had a very long and interesting debate on unemployment two or three months ago. But how many of us can put ourselves in the position of an unemployed person, with, or without, a wife and family? Some noble Lords on this side of the House can speak from personal experience in this respect, and some of us from the experience of very close relatives at the present time. We do not seem to realise that one of the most soul-destroying things in our society is prolonged unemployment. It does not only demoralise the individual, who feels that he has been thrown on the scrap-heap and that nobody wants him: his children know that their father is apparently not able to provide for them.

Those of your Lordships who saw the Observer last Sunday will have seen an article headed, Tragedies of the men who prefer death to the dole". There was the description of one particular case of a young man of 17 who died after jumping from a railway bridge near his home on to a 25,000-volt power cable. He had left school some time previously, and was unable to get a job. The coroner said: He was a conscientious young man, who had perhaps become the victim of the economic climate". The article then went on to give a series of similar instances; and there is a very high increase in the suicide rate resulting from unemployment.

The Social Security (No. 2) Bill, as your Lordships know, did a number of things which we on this side of the House felt to be absolutely appalling, and yet there was only one noble Lord opposite, on the Benches behind the Front Bench, who raised any question at all about it and, I think, in fact came into the Lobby with us. I quote from what the noble Baroness, Lady Young, said in your Lordships' House on 2nd June during the Second Reading of the Social Security (No. 2) Bill. She said this (vol. 409, col. 1111): I turn now to the specific measures in the Bill. Clause 1 amends the up-rating provisions of the Social Security Act 1975, to enable the amount of the increase in certain specified benefits to be less, by up to 5 per cent. of the current benefit, than the amount necessary to restore their value". She went on to say: This means an increase of 11.5 per cent. instead of 16.5 per cent. from November 1980". She went on to say further: The benefits concerned are unemployment benefit, sickness benefit, maternity allowance", and so on. It is quite appalling that we should have allowed something that is going to reduce the unemployment benefit by 5 per cent. to pass through both Houses of Parliament, and yet from my recollection there was not a single objection coming from noble Lords opposite.

I want to discuss this in a reasonable frame of mind with noble Lords opposite, because I believe that, as we on this side know, the people behind us can very often alter the intentions of a Government, and this matter is one of the things that concerns us very much indeed. I propose to leave the details of the effects of the Government cuts, so far as they affect the personal social services, to my noble friends behind me. I merely want to draw the outline and leave them to fill in the details. I will be quite frank. I approach my task with some slight reservation. I, like most, if not all, noble Lords was brought up not to take advantage of another's misfortune, in the belief that one should never hit a man when he is down— and I believe that the Tory Government and the Tory Party are certainly down at the present moment. In fact, I would think that they have reached a new low in the judgment of many people.

Never in history have 364 academic economists felt moved to join together to complain about a Government's handling of affairs. Is it a laughing matter? I am glad that noble Lords are amused by it. Can anybody remember 364 academics complaining about the way the Government are managing the economy? Can anybody remember when the Churches of all denominations have banded together to criticise the Government in their treatment of people? I believe the procession which took place in a part of England was led by eight bishops. I cannot ever remember eight bishops leading a deputation. It seems that unless we come to grips with this problem we are likely to have it demonstrated in a violent way on our streets; that is, unless we face up to what is happening to a large section of the community at the present time, who are finding it difficult to make ends meet.

It is said that the Prime Minister cannot trust some of the members of her Cabinet, and it is reported that a prominent Tory MP said—and I quote for the benefit of noble Lords opposite who did not see it: Conservative supporters should be alerted that a determined effort is being made by a minority of Tories at Westminster to undermine Margaret Thatcher and to secure her replacement as Party Leader". That is after two years, my Lords! This, presumably, is the feeling of a number of members of the Conservative Party in respect of their leader. It would appear that both Mr. Walker and Mr. St. John-Stevas have doubts about the Government's policy, and I understand that Mr. Pym has joined the Tory Reform Group. If the Prime Minister is not for turning, can someone persuade her to be for learning? Because I believe that the Prime Minister and those who support her need to inform themselves as to what is really happening.

She said recently, when she was trying to re-write the scriptures at St. Lawrence Jewry—and I quote: Creating wealth is a Christian obligation". So far as I know, there is no such obligation placed on a Christian, but as I see and understand Christianity there is an obligation to distribute wealth fairly, and this is something that the Government have not done. Everyone will recall that immediately after assuming office the Government reduced taxation by about £4,500 million. The poorest 10 per cent. of the people in this country got just 2 per cent. of that money, while the richest 7 per cent. received 34 per cent. I know that noble Lords on the Front Bench opposite will say, "Ah!—but when we came in we did not realise the financial state of the country. We had made this promise during the election, and we were duty bound to carry it out". Only a stupid, short-sighted Government would have parted with £4,500 million in those circumstances. I wonder whether I dare suggest that the banner at the next Tory party conference should be: Lay not up for yourselves treasures upon earth, for where your treasure is there will your heart be also". That seems to some of us to personify the situation at the present moment.

As I said earlier, I do not believe that the majority of noble Lords opposite understand how millions of our people have to struggle to make ends meet. I am sure that the noble Baroness, Lady Young, and the noble Lord, Lord Cullen, will endeavour to put up a strong defence of the actions that the Government have taken. If I may be presumptuous—and I know that the noble Baroness will not mind my saying this—they will tell us that it is all a matter of money, that the Government have done their best on the limited amount of money available and that things are not nearly as bad as I and my noble friends on this side of the House try to make them out to be.

There would have been no need for this debate if the Government had not mismanaged £4,500 million on tax reductions, given in the main to people earning £10,000 a year or more, the people who, in my submission, did not need it; because if a person cannot manage on £200 a week there is something radically wrong with the individual. On 28th October 1978, the present Secretary of State said: Local authorities' welfare services must concentrate on the areas of greater need, the very old, the severely disabled, the mentally handicapped, the mentally ill and on the children's services". We all know what happened to them! I have a report—and I am sure that the noble Baroness, Lady Faithfull, has seen it and therefore will not be able to say that I am wrong—that has been issued by the Association of Directors of Social Services, in which they say that there have been cuts in residential care for children, in residential care for the elderly, residential care for the physically handicapped, residential care for the mentally handicapped, residential care for the mentally ill and for other people who need residential care.

There have been cuts affecting children boarding out and certainly there have been severe cuts on Meals-on-Wheels, on holidays for the elderly, on travel concessions and on Shelter housing. Day nurseries have suffered and pre-school play groups have also suffered badly. But also there have suffered—and this is important—the day centres for the elderly, the one place (as I can say from some experience in Oxford) that elderly people like to go to first thing in the morning and come home from as late as they possibly can, because there they meet other people, there they live and only live to go there the next day.

Day centres for the physically handicapped and for the mentally ill and the multi-purpose day centres have suffered severe cuts and, in some instances, closures. Also, social workers and specialist social workers have been disposed of in some areas. Grants to voluntary bodies who work among the deprived have suffered; and so has training and maintenance of buildings and furniture which I am not bothered about. We know what has happened to all those groups as a result of the Government cuts in local authority resources and income by substantially reducing the rate support grant. I do not think that there is time to discuss the rate support grant. It undoubtedly represents a threat to democracy when the Government step in and begin to tell the local authorities how much money they can spend and in which direction they can spend it. It is a threat to local government in this country, as three noble Lords have said recently.

I feel that we shall be told that things are not as bad as we make them out to be and that the curtailment of local authority services is the fault of the local autho- rities and not of the Government. This is an argument which has been advanced by the Government: "It is not our fault but that of the local authorities". But the local authorities have had their rate support grant reduced by £100 million—I am taking all of them. As they are the one body responsible for the personal social services they have been forced to do one of two things: either to put up the rates very substantially and to provide those services or to cut down the services in order to keep the rates down. And so you get this deprived section of the community not only losing some of their social amenities but paying higher rates; and we all know that along with higher rates goes the increased burden of high prices for gas and for electricity.

If there is any doubt in the minds of any noble Lords opposite about the serious effects of the cuts, let me refer to a statement—I was going to read three statements but will read only one—issued by the Association of Directors of Social Service, who can claim to be, as they are, a very reliable and informed body of experts in this field. The quotation that I want to leave with your Lordships is this: Spending on the personal social services had to increase by about 2 per cent. per year to maintain the present standard of service; and to maintain and expand the services to a level which directors considered necessary to meet the need in their areas would mean an increase of 16½ per cent. to 17 per cent. in the budget. Instead there had been a cut of 2½ per cent. to 3 per cent. in the original planned budget; this must harm services".

My Lords, I want to conclude by saying this. I do not say it lightly; I get no pleasure out of saying it; but I want noble Lords on the other side to realise what is happening because this Government may be with us for a while yet and I strongly suspect that each Budget will bring further limitations, particularly in the rate support grant. I say to noble Lords opposite that in the interests of that section of the community which is deprived they must resist this. All that this Government have given to a large number of people of this country is unhappiness and increased poverty. To people who should have been given a priority, they have given scant consideration. I plead with noble Lords opposite not to permit this to continue and to watch the Government's actions and intentions most carefully, not so much in the interests of the Conservative Party but in the interests of people for whom they say they care. If I may say so, actions speak louder than words. My Lords, I beg to move for Papers.

3.19 p.m.

Lord Cullen of Ashbourne

My Lords, I welcome the choice of Motion that the noble Lord, Lord Wells-Pestell, has made. Though there are many issues on which he and I do not see eye to eye, it is eminently desirable for your Lordships to debate the important issues he has raised; and the debate gives us on these Benches an opportunity to explain fully the reasons for those aspects of Government policy which the noble Lord has mentioned; to invite your Lordships to see the problems he has raised in the perspective of the country's overall situation; and to deal with some of the myths that the Opposition has been fostering—both here and, more frequently, in the House of Commons.

The noble Lord concentrated to a considerable extent on social services issues, which he has great experience of handling in this House. But his Motion goes very wide and he very relevantly referred also to such issues as general economic trends, Government policy on public expenditure as a whole and local authority expenditure in particular; and to unemployment and its social consequences. I have no doubt that your Lordships will widen the debate still further, and that when my noble friend Lady Young speaks this evening there will be a large number of issues on which she will wish to offer clarification.

At this early stage in the debate, it would probably be most helpful if, instead of dealing with each of the points made by the noble Lord, Lord Wells-Pestell, I concentrated on setting the framework of economic necessity and on the positive and carefully considered policies and strategies which the Government have adopted and are carrying through. Before I do so, let me say that we are as concerned as the party opposite to maintain the fabric of a caring and compassionate society. As evidence of this, it was a Conservative Secretary of State for Social Services who initiated a major programme of research into the "cycle of deprivation" by which disadvantage may be transmitted from generation to generation of the same family. The results of this programme are starting to be published, and they should give us further understanding of the causes of poverty and disadvantage.

More immediately, there can be no contesting that when this Government came to power it was given one overriding priority by the electorate: the renewal of the economy and the battle against inflation. Neither in Government nor previously in Opposition have Ministers ever claimed that this would be in any way a quick or painless process; or that it could be achieved without controversy and difficult decisions—particularly in relation to the funding of the public services.

Your Lordships are familiar with the Government's economic stategy to stimulate the economy by restoring incentives, controlling taxation, public spending and public sector borrowing, and reducing the Civil Service and other public service administration costs. This strategy is not being pursued in any sectional spirit, but in order to increase the prosperity of the country as a whole. Success will benefit no one more than the needy, the pensioners, the sick and disabled, who can never be given the services and the support that we should all like them to have until the economy creates the wealth needed to pay for them. And our strategy is delivering results. From the peak of 22 per cent. reached last summer, inflation is now down to 12½ per cent. on an annual basis. By the end of this year we expect the rate to be down to 10 per cent. While some pay settlements have been higher than we would have wished, there has been a marked—and extremely welcome—tendency toward moderation. The Government have moved to bring down interest rates, and this is helping both industry and private householders.

In the social services, the strategy has required the Government to pursue twin objectives. First, we have had to make some expenditure savings. But secondly, we have protected—and encouraged local authorities to protect—the most vulnerable. I shall show how those objectives have been reconciled in the services for which the DHSS is responsible: Government aid to individuals through the social security programme, local government's personal social services, and the National Health Service. My noble friend Lady Young will in due course touch on other programmes, notably education, housing and employment measures, and aid to industry.

For the necessary savings, we thought it right to look first to the costs of administration. We have already, in two years, reduced the staff of DHSS headquarters by 10 per cent. Between 1979 and 1984 we plan to reduce the staff of the department as a whole by no fewer than 15,000 people. The Secretary of State for Social Services has encouraged local authorities to look very carefully for savings in the administration of the personal social services. In the Health Service, we are making administrative economies—including the abolition of one tier of NHS administration—which will produce savings to the tune of £30 million a year. And we have reduced by over half the number of circulars that the DHSS sends out to health and local authorities.

As regards social security, we have indeed had to find savings; but, as the social security chapter of the Public Expenditure Survey White Paper shows, it is entirely inaccurate to speak as though the structure developed from Beveridge onwards lies in ruins. Expenditure is rising—and it will continue to rise—by 8 per cent. in real terms between 1980–81 and 1983–84. Certainly this reflects increasing numbers of beneficiaries, but it also reflects protection of the levels of those main benefits. The Bill in another place at present, with associated savings on this year's up-rating, will save some £225 million; but it will do that while still guaranteeing price protection for pensioners and related beneficiaries over the period 1979 to 1981. In other words, where pensions are concerned, what we are doing in the November uprating this year is to give the full value of the 10 per cent. inflation expected between the last uprating and the next one, but on the basis of a notional 1980 benefit rate giving full price protection, and no more than that, for the period from 1979 to 1980.

The benefits which have been given 5 per cent. less than price protection have been for the most part short-term benefits, and they have been benefits which ought to be subject to tax but are not as yet. We have stuck firmly to priorities, including extra help for families and for disabled people and protection of the real value of benefits for pensioners.

The House will be pleased to hear that I can now give a clarification of the basis for future uprating of social security benefits. My honourable friend the Under-Secretary of State for Social Security has today written to Mr. Rooker about the pledge given on shortfall by my right honourable friend the Prime Minister.

This Government are committed to compensate pensioners fully for price increases over the lifetime of this Parliament. This was the pledge repeated by my right honourable friend on 25th February. Pensioners include, in addition to those receiving national insurance retirement pensions, recipients of the following benefits: widow's pension—including widowed mother allowance and widow's allowance; industrial death benefit paid by way of a widow's or widower's pension; war disablement pension and industrial injury disablement pension; war widow's pension; attendance allowance, invalid care allowance and non-contributory invalidity pension. Supplementary pension, now aligned with retirement pension, will be similarly protected.

Invalidity benefit and unemployability supplement have of course had their uprating abated in 1980 but part of the abatement is to be made good at the 1981 uprating—invalidity allowance and its equivalent—and we have given an assurance that the benefits will be restored to the rate of retirement pension when they are brought into tax. The abated rates, transitionally, and the unabated rates thereafter, will be price protected.

Invalidity benefit—a sensitive benefit, and rightly so—was uprated last year by less than the increase in prices. It is not yet taxed, although retirement and widow's pensions are taxed; and the tax advantage has actually attracted people who are over pension age and effectively retired to stay on invalidity benefit. This year there has been no abatement; the invalidity allowance has been, if I may use a cumbersome term, de-abated; and firm promises have been made that when invalidity benefit is brought into tax, the process of de-abatement will be completed, and the benefit realigned with retirement pension. In the meantime, there will be price protection of existing rates of invalidity benefit; and realignment with retirement pension will mean price protection along with retirement pension.

The £2 increase in mobility allowance means an increase of nearly 14 per cent. of that benefit—that is. 65 per cent. since this Government came to office. One-parent benefit—that is, the extra paid to one-parent families—goes up in line with inflation this year. This too will have gone up by 65 per cent. since the Government came to office. Family income supplement has been substantially improved by successive upratings, and by the consolidation into the rate of extra help with fuel costs. So in spite of the savings we have made on social security, the total social security cash outturn for the financial year just ended was about £23,000 million; 1981–82 cash cost is expected to be about £27,400 million, and this is about a quarter of public expenditure. Pensions have been and will be price-protected; the supplementary benefit safety net has been preserved; benefits for disabled people have been improved; help with fuel costs has been increased too and held at a much higher level; there has been further help for one-parent families; and this year's uprating will price protect child benefit, as we said we hoped to do last year.

Again, the Government's opponents are eager to give the impression that we are forcing on local authorities massive cuts in services. The facts are rather different. When the Government took office in May 1979 there was an immediate request that current expenditure relevant for rate support grant in 1979–80 should be about 1 per cent. lower than that for 1978–79 in real terms. That was about 3 per cent. below the amount planned by the previous Administration, whose spending intentions could not be sustained by economic circumstances. A further reduction of just over 1 per cent. was called for in 1980–81, and for 1981–82 the volume target is 5.6 per cent. below 1978–79. We believe that a reduction of this order represents a realistic target.

The education services alone account for over half of local government expenditure and since the number of children in school will fall by 13 per cent. between 1979 and 1984, there must be considerable scope for making savings without detriment to the standard of education. In fact, the reduction on education indicated in our expenditure plans for this period is, at 6½ per cent., nowhere near 13 per cent. I would point out too that expenditure on education doubled in real terms in the 20 years to 1978–79; it would be rather surprising if, after such a long period of fairly high growth, a certain amount of fat had not grown into the system, which could be trimmed without significant loss.

Similar arguments apply to the personal social services, on which spending in real terms doubled between 1970–71 and 1978–79. In the event, while the response by authorities has varied, in national aggregate terms the target reductions are not being met. Spending in real terms in 1979–80 was about 2 per cent. above the previous year; the revised 1980–81 budgets which the Government called for are 2.6 per cent. in excess of the guideline, although we hope that some of this excess will disappear in the outturn figures. Spending on the personal social services actually rose by more than 4 per cent. in real terms in 1979–80, and it seems likely that expenditure will be maintained at about the same level in 1980–81.

The Government's assumptions about expenditure on particular local authority services are of course indicative. It is for local authorities themselves, within their discretion, to decide how best to meet local needs. The Government requirement is that they should have regard in their decisions to the needs of the country's economy as a whole, and in particular the need not to starve the productive parts of the economy. I appreciate, however, that these are difficult and worrying times for local authorities. Many of them are coping in a way which combines a responsible reaction to the Government's call for economies with careful consideration for the most important needs of their own localities.

Although circumstances vary between authorities, it is nonsense to talk about cuts seriously affecting those who depend upon the local authority personal social services. Indeed, the Government specifically asked authorities, if standards have to be reduced, to protect as far as possible the most vulnerable. This is clearly happening. In 1979–80, the latest year for which detailed figures are available, there were, for instance, overall increases of some 7 per cent. in real terms on residential accommodation for the elderly and younger physically handicapped; for the mentally handicapped the increase was even greater at more than 10 per cent. Fieldwork services also increased by more than 10 per cent. and expenditure on children, largely on those in the care of local authorities, went up by about 3 per cent. Other increases include 3 per cent. on meals for the elderly and 1 per cent. on home helps. Support for the voluntary sector was more than maintained. General grants increased by about 8 per cent. in real terms and payments for services provided by voluntary organisations increased by almost 5 per cent. On top of this, the allocations of joint finance have been increased each year and are now running above the level planned by the previous Administration. The allocation for 1981–82 is, in real terms, almost double what it was in 1977–78. Most of this will be spent by way of NHS contributions to personal social services projects, giving an addition of about 4 per cent. or £56 million to the capital and current expenditure being incurred by local authorities themselves.

As I have said, the effects of local government expenditure pressures have varied greatly between different authorities. In some, undoubtedly there have been cuts. But even in such authorities, ways have often been found to make provision more economical and maintain some service development. This has often been done by imaginative co-operation with the voluntary sector. I would like to elaborate a little on the key role we see for the voluntary sector in the personal social services. Since coming to office we have consistently encouraged an expansion of voluntary care—through organised bodies, through neighbourhood schemes and mutual aid groups, and the care available through family and friends. This is not because we see the voluntary sector as a substitute for statutory services, or simply as a means of maintaining services where a local authority decides that it has to reduce its own. Our objective is a major and sustained increase in the total amount of care available to the community and we see it best provided where statutory and voluntary services work harmoniously and supportively together. We have played our own part in helping the voluntary sector's resources by maintaining the value of total DHSS grants to voluntary bodies. Those now run at more than £8 million a year, and through them we give help to over 225 voluntary bodies.

Turning now to the NHS, we find here not the slashing of budgets and services that our critics have alleged, but a careful combination of an increasingly disciplined economic management with major Government efforts to maintain standards. There were certainly difficulties in 1979–80, when we had to cope with the inadequate cash limits and unfunded pay commitments we inherited from our predecessors. It would have been quite wrong for us simply to find further money to meet these problems, so the volume of spending by health authorities was less than planned because of the effects of higher pay and price rises. But even in that difficult year, current spending on the NHS in fact increased slightly in real terms, although capital spending was somewhat lower than the 1978–79 level. And it is very relevant that in 1979–80 productivity increased—in acute sector hospitals there were 5 per cent. more in-patients treated than in the previous year, at a time when total resources did not increase.

In the financial year which has just ended, 1980–81, some problems continued because the cost of goods and services purchased by the Health Service increased faster than prices in general, and because some aspects of the 1979 Clegg award to nurses and midwives proved in practice to cost more than was expected. But notwithstanding these difficulties, spending in real terms again increased. The Public Expenditure White Paper we recently published demonstrates that in real terms the money available for the NHS was about 2.4 per cent. more in 1980–81 than in 1978–79, the last full year of the Labour Administration. In cash terms, spending over the same period has risen by some £3.6 billion, or around 55 per cent. The NHS has made steady progress in reducing the national waiting list from the peak it reached in March 1979, which then stood at 752,000. The latest figure we have is for September 1980, when it had been reduced to 641,000. I must emphasise that the growth rates I have quoted are the national total. In particular areas the outcome may well have been either higher or lower depending on whether the health authority involved was a gainer or a loser under the resource allocation system.

For the future, further increases in real terms are planned. The increase in real terms in total gross expenditure on the NHS in 1981–82 is expected to be some 1.4 per cent. over the planned level for 1980–81. But my right honourable friend the Secretary of State for Social Services has made clear that the achievement of the development the Government intend is crucially dependent on the responsible pay bargaining by NHS staff. Increases higher than the 6 per cent. cash limit allowance will eat into the money made available for service development. In addition, the Government are also expecting the Health Service to find a further £25 million worth of development through increases from greater efficiency in each year from 1981–82.

In conclusion, while my noble friend Lady Young may well expand on these points, if that would be helpful, in the light of the points made by your Lordships, I hope I have said enough to show that many of the criticisms levelled against Government policy are without foundation. They are myths, and they stem from a major misconception of the Government's objectives and the Conservative traditions which underlie them. No one can say with any justification that the Government are dismantling the welfare state or lack concern for the disadvantaged. We differ from the party opposite not in the extent of our concern for the disadvantaged and the needy, but in our refusal to go for the short-term palliative solution of printing money to provide extra services—an expedient that can only damage the economy and hence the long-term interests of the welfare services and the people they exist to help.

3.44 p.m.

Lord Banks

My Lords, I should like to thank the noble Lord, Lord Wells-Pestell, for raising this important subject this afternoon. We on these Benches share the concern which he expressed about the effect of the Government's expenditure cuts on those who depend on Government aid and local authority services. In Colchester in February, the Secretary of State for Social Services, Mr. Patrick Jenkin, said this: We will have reduced spending by some £1.5 billion on social security and also saved the Exchequer £750 million on the Health Service". That, of course, is without taking into account the undoubted cuts there have been in the services provided by the local authorities. This is some indication of the extent of the cuts which have been imposed. The welfare scene today is dominated by the restriction of financial resources. There has been a nibbling away of national insurance benefits, and we saw that in the two social security Bills that were before this House last year.

However, I welcome the fact which has been announ- ced by the noble Lord, Lord Cullen of Ashbourne, that it is to be the Government's policy in the future to make good any shortfalls in their estimates of the increase in prices—any shortfalls in the benefits in the amounts by which benefits are raised. That was not their policy when they first came into office, when both for long-term and short-term benefits they did not make good shortfalls. But it is at least encouraging to know that the policy has been changed. I was not quite clear from what the noble Lord said, whether de-abatement, as he described it, was going to apply to the other short-term benefits other than invalidity pension, and I hope we may hear something about that later. So a nibbling away of national insurance benefits—I do not put it any higher than that, but it was certainly that—is the first aspect of the welfare scene today.

Then the supplementary benefit review was carried out on a no-cost basis, although the Supplementary Benefit Commission had said it could not satisfactorily be done on that basis. Plans for integrating the education of the mentally handicapped, welcome in themselves, into the general educational system lacked the resources to do the job properly. The statement on Government policy for the elderly is largely devoid of new proposals. Then there are the cuts in local authority personal services which, as the Directors of Social Services have said, hit the elderly and the disabled most. In fact, in a report issued by them they say: The policies now being promulgated by the Government hit many of the services specially aimed at alleviating the plight of the old, the sick and the handicapped and those who cannot tolerate the stresses which our society generates". Of course we hear repeatedly of the closure of particular hospitals and of hospital beds. If our economy were to contract continuously over the years, public expenditure cuts would undoubtedly become necessary and no doubt a point would be reached when cuts in welfare benefits and services could not be avoided; but that situation would be heralded by a steep and continuing increase in the proportion of gross domestic product devoted to public expenditure. It is true that this proportion has increased under the present Government in spite of expenditure cuts, partly because deflationary policies push up the expenditure on the unemployed, but the proportion is no higher than it was in the middle of the term of office of the last Government. So we are not in such a situation as I have described, which would justify large-scale welfare cuts, though a continuation of current policies might bring that situation about.

The wisdom of deflationary policies in a time of recession is widely challenged, but while it is true that we must live within our means it is also true that deflationary policies reduce our means. But whether or not expenditure cuts are justified as an instrument of economic policy, it is possible to argue—and we on these Benches would so argue—that the disadvantaged should not be asked to contribute to them.

We are considering this afternoon all the various welfare services which suffer from Government expenditure cuts but I suppose we are particularly concerned with the personal social services which have been singled out for particularly severe treatment; yet I am struck by how small an amount we spend on personal social services compared with what we spend on other welfare benefits. I think I am right in saying that the noble Lord, Lord Cullen of Ashbourne, said that in the past year our total social security expenditure was £23 billion. But on the personal social services, I do not suppose that the expenditure was more than £1½ billion; so that is £23 billion compared with £1½ billion. Comparatively small though the amount spent on them is, the personal social services expanded very rapidly in the early 1970s, in response to the demands made upon them, yet it is generally recognised that these demands are far from being satisfied. Who would pretend that the need for domiciliary services has been fully met? Who could say that there is adequate provision for day care or for residential care?

We have been witnessing cuts in services which are already inadequate. The Black report stated that there are 10 inner city areas where cutbacks of any kind would create despair. The demand on the social services is steadily increasing and the number of elderly people and children in one-parent families continues to rise. As the noble Lord, Lord Wells-Pestell, said, there has to be a 2 per cent. per annum increase just to stand still. For example, the population aged over 75 in Liverpool will double in the next five years, yet any growth there is virtually impossible in this financial year, because Liverpool's rate support grant has been reduced by £11 million.

Local authorities have used three main methods of making savings imposed on them by central Government: abandoning or reducing planned growth; introducing new charges for services or increasing existing charges; and transferring costs, usually through joint funding, or cutting the level of services. The most serious consequences have been in local authorities with a traditionally low level of provision. Three out of five authorities which are reported to be cutting their social services by some 6 per cent. had already spent, before they embarked on this, less than the average per head of the population. Cuts in this context will inevitably have severe effects on service provision.

At least 51 authorities made savings in the home help service in 1981–81, and I am particularly unhappy about this reduction in help in the home. The survey which was recently carried out reckoned that the average cost per week for home helps is £1 for all pensioners, including pensioners on supplementary benefit. But out of a sample of 130 in Redbridge who were receiving help from the home help service, 42 said that they would cancel the service rather than pay £1.50. In one London borough, according to Help the Aged, there has been a 10 per cent. cut in the home help service and the provision of transport by the borough for conveying the elderly to day centres has been cut by half.

As an example of the personal suffering caused to old people, Help the Aged quotes the case of a pensioner couple. Both are frail and need meal provision. Thanks to the gift of a Help the Aged minibus, they could travel to a lunch club. Now, however, the number of lunch clubs in the borough has been reduced from 14 to 8. Because the lady pensioner is ambulant there is no provision of Meals-on-Wheels, so the only alternative is to travel three miles to another club, which the lady does, transporting the meals back home because of her husband's disability.

Day centre cutbacks by local authorities represent 10 per cent. of the total cuts in the personal social service budget. But day centres are not a luxury provision or even simply a leisure provision for the elderly. They provide essential services, such as meals, chiropody and information, as well as combating the loneliness which is the cause of many of the illnesses to which elderly people are prone.

Disabled people have been particularly hit. They are, speaking generally, among the poorest people in the community. Partly, their low income is because they are either unemployed or in low paid jobs. They have the extra costs related to disability and they have to rely, to a large extent, on social security benefits. Three-quarters of disabled people are over 75 and 2 million of the 8½ million retirement pensioners have severe or appreciable handicap. It is clear that cuts such as I have described have a serious effect upon them.

In addition, among the first services to be cut was the supply of personal aids and adaptations, telephones and other forms of assistance under Section 2 of the Chronically Sick and Disabled Persons Act. In some cases, the supply of aids and adaptations was stopped completely when the budget for the year was exhausted. In some authorities, disabled people have to pay a handling charge for the loan of aids. A number of authorities have declared a moratorium on the installation of telephones and others are ending help with rental payments.

It is sometimes argued—and I think it was hinted at this afternoon by the noble Lord, Lord Cullen of Ashbourne—that, in the circumstances of general reduction in the statutory services, the voluntary services must do more. But the idea that we could hack back social service departments and hand their responsibility over to the voluntary bodies is absurd. I am second to none in my admiration for what the voluntary organisations do. The Wolfenden Committee found them in good shape, but they are strong in some places and not in others. They are not obliged to operate everywhere.

Statutory services and voluntary organisations, and what the Wolfenden Committee called "the informal sector of local help" are complementary. They are not alternatives. In any event, owing to Government restrictions on expenditure, many local authorities, as the noble Lord, Lord Wells-Pestell, indicated, feel reluctantly obliged these days to cut their donations to voluntary bodies. So that though the Government have maintained their contributions to voluntary bodies, there has been a loss of support from local authorities in present circumstances.

Furthermore, voluntary organisations are very concerned at the Government's failure to zero-rate charities for VAT. Help the Aged point out that, over a period of six months, they have provided 27 minibuses for transporting the elderly in various parts of the country, at an average cost of £11,000. If charities were zero-rated for VAT, they would have been able to provide another four minibuses, but publicly subscribed funds went to the taxman.

Seven well-known charities—the Spastics Society, Dr. Barnado's, Help the Aged, the National Children's Home, the National Society for Mentally Handicapped Children and Adults, the Royal National Institute for the Blind and the Royal National Institute for the Deaf—have joined forces to complain, as they say, "in the strongest possible terms" that they are bitterly disappointed by the Budget. They say that VAT is a crushing burden on charities. Charities are also concerned that the National Health Service is encouraged locally to enter into the fund-raising field, in competition with them.

In conclusion, may I say this: It is a most unhappy, and in some respects dangerous, situation that we are discussing this afternoon. It is, surely, utterly wrong that the disadvantaged, the most vulnerable, should be expected to contribute to national expenditure cuts through cuts in the personal social services, which were already inadequate to their task before any cuts were imposed.

4 p.m.

The Lord Bishop of Liverpool

My Lords, I very much welcome the debate and thank the noble Lord, Lord Wells-Pestell, for calling for and introducing it. Perhaps I should say that I am not going to quote quite so much scripture as did the noble Lord at the beginning. I belong to a small group of bishops who meet privately, all of whom serve in the six largest cities in this country. Last winter we were meeting, and in our conversation we felt that we really must try to find ways of expressing the very serious effects of the cuts on people whom we see in our daily work—effects on those whose needs are the greatest, the great majority of whom live in the big cities of our country.

I want to focus on two areas where the cuts are biting and where I believe that further cuts would savagely damage the services offered to those who most need help. In the first place, I shall follow the noble Lord, Lord Banks, on the effect upon the personal social services in the statutory field. Then I want to say something about the non-statutory or voluntary organisations.

Liverpool, over the last two years, has effectively abolished 50 out of 300 field posts in the social services. This has been done without causing actual redundancies—in other words, by not filling posts when they become vacant. But there is no argument that the number of filled posts has been substantially reduced. It has meant a continuation of the very bitter dispute which followed the protracted social workers strike of a little while ago. I regret very much that social workers are, in a number of cases, blacking cases. Who do they think they are hurting if it is not those who are in the greatest possible need? Although they have an emergency procedure, this blacking increases the number of those at risk. Since that strike, there have been an awful lot of hostile comments to social workers. We are told that nobody has missed the social workers not being there. Those who miss the social workers are those with the least voice in our society.

Let me give your Lordships an example of a couple in Liverpool who want to adopt two boys whom they have been fostering for some time. Both boys had been battered by their natural parents. The social worker dealing with the case was promoted. Because of the current local authority policy his vacancy remains unfilled. The future of the two boys and their possible adoption hangs in the balance. Without a social worker to advise and act as a go-between with the natural parents, no move can be made. The foster mother says, "You don't realise how much you rely on the social worker until he isn't there". That sounds to me like a false economy. Or with children in residential care, consider the savings if there can be speedy rehabilitation within six months. That will need a lot of social work time, before and after. If rehabilitation is delayed, the child concerned may deteriorate mentally and, in terms of cash and of loss of human wellbeing, costs will greatly increase.

Let me give your Lordships one more example. A teenager has come before the courts. With a supervision order, the child remains at home. With good time given by a social worker, supervision can help to iron out some of the problems at home, but without that supervision there may be further trouble, a court appearance and then residential care.

This illustration leads me to say something about the non-statutory organisations, the voluntary bodies. The kind of one-to-one care which would be needed in that instance, in homes where the very greatest needs exist, is something which the statutory services may very often find themselves too stretched to be able to offer. In fact, that is a case to which the Family Service Unit, the FSU, can give the intensive care which may be able to turn things around. The noble Lord, Lord Cullen of Ashbourne, spoke about the circle of deprivation. If particular families are to break out of it, there needs to be a lot of time to make possible very intensive care.

It is an attractive notion to think that the cuts will drive us to look in the direction of the voluntary organisations. My own experience, from 20 years of living and working in the Inner City of London and now for six years as Bishop of Liverpool, has been of a great many connections with the voluntary movements. In fact, I ought to declare an interest. They have included the settlement movement, the youth clubs, voluntary social work, community development groups.

Grant aid has become very much more substantial since I arrived, wet behind the ears, in the Inner City in 1955. It has been a period of enormous growth in grants. But do not let us suppose that we can cheerfully put back the clock and lean on the voluntary bodies in the way that once we did. Let us look back before, say, 1955. The voluntary bodies used to pay a pittance. They imposed on a worker's sense of vocation. Perhaps the Church has done the same thing in its years. But in recent years, the voluntary bodies have come to pay nationally agreed professional salaries, and with that of course to insist upon professional skills. We must not go back on that.

Perhaps I should say that voluntary bodies have, I believe, been so spoiled by large grants from major trusts and from urban aid from local authorities that they do not bother with raising subscription lists and the rest. They would always have done well to continue the hard slog of working at subscription lists so that there is a modest income with no strings attached to it. But the grants over these recent years have enabled them to expand and to raise the service which they offer to many people in need. We must not go back on that and let people down.

Liverpool has probably put more into encouraging, developing and supporting the voluntary sector than most other large cities, but it is facing the kind of reductions which have been mentioned. The city council, trying to keep down rate increases, has frozen all grants to all voluntary organisations for 1981–82. That is to say, there have been no increases for inflation while all the costs have increased. So what does an organisation do whose management committee is made up of busy people giving their time voluntarily? It has entered into an agreement to pay national salary scales to professional workers. Most of such organisations are unincorporated bodies. What happens if their members find themselves personally liable for unmet salaries, for running costs, or even for redundancy payments?

A little while ago I mentioned the FSU. On its present budget, with its grants frozen from the city, it will have to consider, before the year is out, axeing one or more full-time field workers at that point of particular need. That would be typical. A city like Liverpool has developed in recent years many self-help local community groups. In my opinion, they are one of the healthiest developments in the life of cities. In some of the most deprived areas, people are coming together to stand on their own feet, to find their own resources and to take their own responsibilities. There is a real fear in Liverpool among the voluntary bodies that national and local government attitudes to voluntary bodies will militate against community groups in deprived areas, because they themselves are much less able to raise substantial money and are less likely to get across the importance of what they are doing to public authorities, unless the public authorities go out of their way to be receptive.

I want to argue that public policy must recognise the very great significance of such community groups. I have known what it is to sit in a corridor waiting to make our case for grants, in 10 minutes flat, to the appropriate committee in Newham. I have known, too, on very much the credit side, what it was to have a very perceptive youth officer who came to see with her own eyes that somewhat unconventional youth work really was serving the youngsters in the greatest need, and who used to advise me which councillors I should ask down to show them the right things, to see that we were all right. Local authority and government get many services at remarkably low cost through voluntary organisations. For example, I know at first hand how much the Youth Opportunities Programme in Merseyside at the moment needs reliable voluntary organisations to sponsor many projects. Voluntary organisations can multiply core revenue funding but that core revenue funding has to be available in the first place if the other benefits are to be obtained.

Most voluntary organisations give the State far more than reasonable value for money. It would be good government which removed anxieties and allowed them to give the lion's share of their time, not to fund raising but to serving people. It is all very well for large voluntary organisations to decide to take on a full-time fund raiser—which is what several will now do. That is all right, but that course is not open to smaller community groups and many others. We must go on to say that voluntary organisations, important as they are, cannot carry the main load of caring for the neediest. The belief that the community as a whole has that responsibility expresses an important moral principle in our country. It is an earnest of the community's acceptance that its weakest members are valued and not judged.

Certainly there is a proper discipline which money imposes, and we should not shirk that. Yet the public often presses for incompatible things. When there is a disaster, perhaps some terrible case of cruelty to a child, the public criticises the social workers and asks what were they doing; but next week there are demands again for further cuts in public expenditure. We cannot have the meticulous care which is needed from a staff if funds have been cut back to the bone. It may be that there was some fat—but I do not believe there is now—for further cuts. May I put to your Lordships that we should always beware of talking about "cuts across the board", because "cuts across the board" means that one has abandoned any system of priorities. It looks fair, but that is the last thing that it is. Caring properly for the needy is not something that a civilised society does when it decides that it can afford it; it is a foundation commitment.

4.13 p.m.

Lord Soper

My Lords, it is a very pleasant thing to follow my noble ecclesiastical friend and to express my total agreement with the spirit in which he spoke, of which we should all be sensible and indeed we should be grateful. I also want to express my thanks to my noble friend Lord Wells-Pestell, not only for the substance of what he said but for the introduction in what he said of his own feeling of anger, which I share. Anger is a good aperitif in the feast of reason for our soul, but it is a very bad main course and I do not propose to indulge in it, except to say that I have a very strong sense of the injustice which so many people feel at what are called "these cuts". I share with my noble friend his desire to make an appeal to your Lordships, particularly (shall we say?) on the other side of the House, to consider again what in fact is happening, not only in the actual conditions in which so many of our contemporaries are living but also in their feelings and attitudes.

I could almost have wished that your Lordships had been present a couple of hours ago at Tower Hill, where there was a very large demonstration, in which I took some part as it was my pitch and they courteously allowed me to have some share in it. It was raucous. It was extravagant. I was commissioned to bring some messages to your Lordships' House which wild horses would not drag out of me, but nevertheless there was an overall sense of injustice, which I would commend to your Lordships. Over and over again there was the feeling that whatever the arguments might be, and whatever the statistics might declare, here was a situation in which those who are most in need bear the greater burden and those who are least in need get away with it more or less unscathed. That, to me, is an inescapable inference from the arguments which have already been set forth this afternoon. What I should like to do is make this appeal to your Lordships, not in the sense that you have an undue amount of original sin but because it is not unlikely that you may not be in touch—as some of us have been for long enough—with those who are most impoverished and most in need.

Therefore, let me in three areas describe what causes me to be angry and frustrated. The first area is that in which it is perfectly true, as the Government have said, that it is possible for them to state that they have not produced cuts. What has happened is that in the social services, as my noble friend has already indicated, there has been a vast increase in expertise, knowledge and development. What has happened is that there has been an increasing need for the fertilisation of this work, and the present situation is that in many respects that work will be halted and certainly will be curtailed of those inevitable consequences which have flowed from an increasing knowledge of what we are about.

I almost hesitate to bring in again the question of alcoholism. I am well aware of the New Testament warning that you are not necessarily heard for your much speaking. It may be that I have been somewhat type-cast as an addict in this matter of alcoholism. But here is an excellent illustration of the point I seek to make; this first trouble that now in many of the respects where we have to go forward, or indeed we shall go backward, we are prevented from so doing.

As I said the other day to some of your Lordships—very few, I am afraid—one of the great developments in the treatment of alcoholism has been the recognition that before you can apply any of the remedial processes the alcoholic has to be dried out. That is a chemical, specific and highly-skilled operation. We have discovered, having been able in the West London Mission to do this with regard to men and thereafter to provide some rehabilitation process, that we now have almost as many women in need of this drying-out process as we have men. We cannot afford it, because the grants, which have hitherto been more or less satisfactory, are the same as they were and, with the necessarily increasing costs, we are prohibited from going on with what is a necessary process if the problem of alcoholism is to be contained.

The same is true of the hostel for which I was responsible until a year ago—for boys who otherwise would have nowhere else to go and would be in borstal or in prison. The place is a shambles. Your Lordships will not be surprised to know that boys spend a good deal of their time destroying property as well as inhabiting it. There is a constant need for redecoration, which we are unable to do. It is this halting of necessary progress which I find intolerable; but no less intolerable is the already reduced amount of public care through local authorities, of which the noble Lord, Lord Banks, has given precise information in certain areas. Let me add two more. Over the last two and a half years 12 local authorities have lost 400 places for elderly people. In the last two and a half years 24 local authorities have lost 1,200 places for boys. I ask your Lordships to conceive of the addition to public expenditure. It would have been much more economic to have kept those places. The moment youngsters and elderly people are deprived of these personal services, it costs a great deal more to care for them in other institutions. It is therefore this depletion of available opportunities within this realm that is causing far greater expenditure on the part of the Government than the avowed—and in some cases successful economies—which hitherto have been produced.

But alongside the depletion of services there is a lamentable increase in the amount charged for the services that still remain. I want to make a special plea, which is admirably set forth by Help the Aged, and I think it is incontrovertible. If you increase from £1 to £1.50 the personal services of Meals-on-Wheels, or indeed the coming of people to care for those who are quite incapable of caring for themselves, the inevitable result will be that they will necessarily be committed to public institutions, no less kindly no doubt, but very much more expensive. These are salient points in the economic failure, let alone the moral failure, of the present cuts.

It was none other than Mr. Jenkin who, I think, probably invented the phrase "front-line providers". May I attract your Lordships' attention to an aspect of this which, it seems to me, is increasingly germane. There has been a great deal of talk recently by Government authorities, and it was ventilated in your Lordships' House only a week ago, that what we are now seeing is an attempt to take into the community rather than to take away from the community those who at particular times find it difficult to domesticate themselves or in fact are anti-social or loners. With this I entirely agree. I think that the more natural the environment in which you find people the more likely they are to respond to it profitably. That is all very well, provided that provision is in the voluntary sections of our community and is made available and made possible, but if it is not made possible then it seems to me that it totally lacks that beneficial quality which so much has been advocated in its defence. Therefore, I would tag on, if I may, to what my noble ecclesiastical friend has just said; I believe that in one sense the voluntary association is paramount. Mr. Jenkin does, by the way, in a continuation of his reference to front-line providers. But I believe that that provision in the voluntary services is in many cases a bell-wether for later public administration and public responsibility. One of the most valuable things that is now being lost is the adventurous, pioneering spirit of local voluntary associations, which, by their energy and their devotion, can provide opportunities which later on can be taken over by the authorities themselves, and those authorities will lose what now in many cases they still attract to themselves, a sense of unreality, or in some cases a sense of shame. I do not share that, but I have every sympathy for a great many people I have known over the years who would be quite prepared to accept what would be charity, what is love and care, from voluntary associations, but shy away from public institutions. I do not support their reason, but I think I understand their sentiments, their feelings.

Finally, my Lords, let me return to what was once again beaten into my experience only a couple of hours ago—and that is why I have more or less lost my voice—the sense that we do not live in a community, we live in a "heterogeneous accumulation of private parts"—that was actually said by one of the more exuberant speakers not so long ago. This is one of the things which to me make all the difference. We cannot, it seems to me, provide measures within a community when the community itself does not exist, particularly at a time when so many people—2½ million families—are dependent on the wife's earnings. In parenthesis I remark that there may indeed be a further decline in the employment of women which will have a devastating effect on the general economy or the general welfare—not only women who have to go home and look after elderly relatives but women who will lose their jobs within the social services, of which a great proportion are now manned by women. Therefore, taking part in this debate, I would plead with the Government and with your Lordships that in the long run I can see many difficulties in the economic situation, but if in politics a week is a long time for an elderly person an afternoon is a long time. What you cannot do is provide long-distance improvement for people who need care this afternoon or tomorrow. I believe it would be of the greatest advantage to stimulate within the present economic troubles a greater sense of community, for out of that would come a treasure not to be measured in pounds but in an increased development of belonging to a community in which we share those things from which we suffer and find in that sharing not only comfort but remedy.

4.26 p.m.

Lord Boyd-Carpenter

My Lords, many of your Lordships who share with me the experience of having been in public life for quite a number of years must have a certain sense of familiarity about this afternoon's proceedings. The scenario is generally the same whichever party occupies this Bench or that. You have speeches, fine speeches of deep sincerity, from people deeply moved and sad at a cutting back or an interference in work which they know to be good and doing good. And you have members of the Government firmly standing at the Dispatch Box to point out that there is a limit to the amount of expenditure which is possible for causes however good. We have all been through this before, and, speaking for myself, I have been on both sides of the argument. For that reason one fully understands and is neither shocked nor shaken by the very natural desire of the party in opposition to try to earn a little popularity by appealing to the feelings of those who will suffer as the result of Government restrictive measures.

It would be a particularly ungenerous person who sought to criticise the noble Lord, Lord Wells-Pestell, and his colleagues for that in the somewhat traumatic situation in which they are today. I certainly would not wish to be so ungenerous. But, my Lords, I did, I am bound to say, very much resent part of the tone of the noble Lord's speech. The noble Lord will allow me to say that, like many of my colleagues, I am a great admirer of his. Both in office and out of office he fights for and argues the case in which he believes with skill and pertinacity. But I thought—and I hope he will himself think this when he comes to reflect on his speech and to read Hansard—that he did go a little far this afternoon in his criticism of my noble friends. He said that he was appealing to noble Lords on this side of the House on the Back Benches. It so happens that I am the first of those to have the opportunity of taking part. Therefore, I must say to him that his repeated indication that we did not care about social welfare is a wholly unfounded one which I hope he will, when he comes to reflect, be ashamed he ever made.

The noble Lord went on to say that in the two social security Bills which have been before your Lordships' House in the recent past these Benches were conspicuously empty. That is certainly not my recollection. The noble Lord I think will do me the credit of admitting that I was myself present with considerable—perhaps, from his point of view, irritating—frequency during those debates. Really it is not true. Then to go on to say, as he did, that the way of life—the phrase struck a personal note with me—of some of my noble friends was such that we did not understand or know anything about what went on in the back streets, was thoroughly inaccurate. When the noble Lord comes to reflect, he will perhaps wonder how, like many of my noble friends, one could be elected to another place year after year—in my case for a basically working-class constituency—and yet know nothing about what went on in the back streets, quite apart from the possibility, like most others, of wartime experiences or indeed political experience, beginning, in my case, as a candidate for the Inner London County Council for Limehouse. It is simply not true for the noble Lord to suggest that my noble friends either do not care or know nothing about the welfare of the less fortunate section of our population whose welfare is the responsibility of my noble friend Lord Cullen of Ashbourne and his colleagues.

I hope that we can carry on the debate in this House at any rate—whatever may happen at the other end of the corridor—on the basis that we can and do disagree with each other. Indeed, I disagree fundamentally with many of the noble Lord's arguments while accepting his sincerity. I hope that we can carry on the debate here on the basis that we do not cast aspersions on each other's motives, but seek to debate these matters as sensible people who know in our hearts, as we all do, that 100 per cent. of truth does not lie either on this side or that, and that the object of debate and argument among sincere and intelligent people is to try to see where the balance of the argument lies. I do not want to labour the point any further, but in my view the noble Lord's approach does not help that, and nor, I think, on reflection, will he feel that he was not perhaps a little self-righteous about unemployment.

Of course, every noble Lord on this side of the House hates unemployment at least as much as do the noble Lord and his colleagues. The difference of view is as regards how we deal with it. But to suggest that unemployment with the humiliation that it entails—which is today I think a worse feature of it even than the economic hardship—is a matter of complacency on this side of the House is frankly untrue. Nor is unemployment peculiar to this country or to the policies of this Government. It is alas! in a time of worldwide depression a worldwide phenomenon. Indeed, certainly in Belgium the percentage of the total workforce that is unemployed is actually higher than it is here.

Nor is a rise in unemployment in this country peculiar to Conservative Governments. Perhaps the noble Lord may recall that when the Government of which he was an ornament came to office in February 1974, the level of unemployment was just under 600,000 and when they left in May 1979 it was rather more than double that figure. So if we are to start casting aspersions on each other's intentions and attitudes on these matters one is likely perhaps to encounter just as much mud in one's own eye as one succeeds in projecting into one's opponent's. I hope that we can debate this difficult and basically very emotional matter with the same sort of feeling and understanding as—if I may be allowed to say so—the right reverend Prelate the Bishop of Liverpool introduced into this debate.

We are concerned not with whether these things are bad, unhappy and evil; we are concerned with what is the best thing to do about them. When it comes to Government expenditure decisions, we all have to make up our minds on basically three courses. Do we agree broadly with the so-called cuts? They are, as has been explained, mainly cuts in programmes, but some are in the actual current expenditure. Do we approve of them or do we say that there should be cuts, but that there should be other cuts—alternatives? That is a perfectly legitimate point of view and one which in some measure perhaps I share. Or do we say that there should be no cuts? If we say that there should be no cuts, do we say that we should borrow in order to pay for the programmes, which would affect the level of expenditure, or should we increase taxation for that purpose? We must all, with respect, come clean on this matter.

I understood from the noble Lord's criticism of the budget of the year before last that he is in favour of increasing taxation. But if that is his view I wonder whether he has considered what the effect of that will he on securing the economic recovery on which our capacity to sustain all our elaborate system of social benefits depends. There is abundant evidence that high levels of company taxation and of personal taxation do have a disincentive effect. If one travels about the world, as it so happens I do to a certain extent, it is striking to see that it is the places where personal taxation and company taxation are low—the Hong Kongs, the Singapores and the Monacos of this world—where there is tremendous activity, full employment, cheerful attitudes and rising standards of life. Obviously their circumstances are different from ours and obviously much of what they do there would not be appropriate for us; but surely there is an indication, if you care for maintaining social benefits in the long run, that you can neither tax to maintain them at a time of recession and inflation nor borrow—which means simply put the charge of them on to posterity—beyond a certain very limited point.

As regards that matter, I must take up what the noble Lord said. He left nothing out. He even referred to the wonderful business that 364 professional economists cannot be wrong. I would only say to him that those 364 very distinguished gentlemen, several of whom I have the pleasure of knowing, united in a solemn, if perhaps a slightly pompous, denunciation of Her Majesty's Government, and said that other courses could be followed. However, they did not find time in the course of their pronouncement to indicate what those other courses might be. I would venture to guess that if they had done so there would have been 365 of them!

Therefore, we must come to the central point of this matter which is that the ability to sustain our social services depends on the re-creation of our power to generate wealth. If your Lordships want an illustration of that, let me hark back to the Macmillan era, during which it so happens that I was for rather more than six years social services Minister—

Lord Balogh

My Lords—

Lord Boyd-Carpenter

My Lords, I am sorry but I am talking about the Macmillan era and I do not think that the noble Lord actually advised us at that time. I shall give way to him later if he wishes to make a point. I ask the noble Lord to show a little patience. In the Macmillan era we had a time when social security benefits were rising steadily every year out of the product of lowering rates of taxation, because the general growth in the economy meant that lower rates of taxation produced a higher yield.

Therefore, although I shall not pretend that as Minister of Pensions and National Insurance I had an easy time with those of my noble friends who were at the Treasury, none the less it was possible to expand payments for social benefits, to raise the standards in real terms—and it was easier then to raise them in real terms, because there was hardly any inflation—and to build up our system of social security. What surely we want to seek to do is to get back to a position in which that situation recurs and in which we can move forward with an expansion of these benefits—and I agree so much with what noble Lords opposite have said because, after all, I have been responsible for administering them direct—and once those benefits can be properly afforded the situation will become quite extraordinarily easier.

I should like to pick up the remark of the right reverend Prelate in his moving speech, and I very much agree with what he said about the use of voluntary bodies. I can claim—and my reference to the Macmillan era reinforces my mind on this—that, in fact, as Minister I put into practice very much the philosophy which he outlined. I entirely agree with him that the voluntary bodies tend to be more efficient and more flexible, as well as being more economical than the official organisations. They are less bureaucratic and less tied by precedent. I very much agree with the right reverend Prelate that even in our present situation it would be a mistake to cut support for them. From my own experience I also entirely agree with the right reverend Prelate that cuts across the board are the last refuge of the intellectually-muddled; that what is required in social security administration is a conscious choice of priorities. That means not only favouring the most important directions in which money can be spent, but being equally ruthless with what seems, to you at least, to be the less favourable ones.

I can claim that that principle, which at the time we called the principle of selectivity, was the one that we tried to apply in the Macmillan era. Therefore, I ask your Lordships to look at this matter in the whole. I say this again to the noble Lord, Lord Wells-Pestell: nobody wants to damage valuable social services, but there is and must be a limit to the degree of expansion that is possible at a time when national wealth is not growing, when greater wealth is not being created; and a realistic judgment demands that there must be concentration of effort on restoring that creation of wealth so that all the other consequences can follow therefrom.

Therefore, I would say to your Lordships that one can ask for a little sympathy for Her Majesty's Government. My noble friends do not have a pleasant task. They have to exercise a choice; they have to exercise discrimination; they have to try to preserve the most vital part of the structure while being tough and perhaps ruthless towards other parts of it. We can all differ—I, personally, differ—with them on one or two of the details, but that is no reason for being critical of their attitude and their approach. I believe that they seek to do the right thing for this country. I believe that they seek to do the right thing for the beneficiaries of our social services, who are, as has been said in this debate, the first to suffer when things go wrong.

I would commend one further thought to the noble Lord, Lord Wells-Pestell. He concluded his speech with the words: Actions speak louder than words.". I wonder whether the noble Lord is familiar with the words of Edmund Burke: It is a general, popular error to imagine the loudest complainers for the public to be the most anxious for its welfare.".

4.44 p.m.

Lord Donaldson of Kingsbridge

My Lords, I wondered how the noble Lord, Lord Boyd-Carpenter, would manage to change gear in this debate, because until he started speaking there was a unanimous, very sincere, very careful and very worried discussion of those matters which, as a result of Government policy (which was not in this debate being attacked), seem to be causing real damage. That is a very interesting and important matter to discuss. But skilled parliamentarian as he is, he used an old method, which was attack. Happily, from this Bench it is not my business to intervene in arguments between the two Front Benches. In many ways this is a relief. Therefore, I shall not follow the noble Lord.

Rather, I shall take great pleasure in associating my friends on this Bench with the Motion so movingly put—perhaps the noble Lord, Lord Boyd-Carpenter, thought it was put too passionately but certainly it was put with passion—by my ex-colleague and I hope still old friend, the noble Lord, Lord Wells-Pestell. The Government's reply was, perhaps, insufficiently passionate. It read a little like a laundry list of items which had been done, and we shall look at that tomorrow in Hansard with great interest. I do not depreciate the value of what the noble Lord, Lord Cullen, said, but it certainly was not said with passion.

Above all, what worries me is the Government's reckless disregard of the consequences of their actions. All of us who have been in Government—as the noble Lord, Lord Boyd-Carpenter, said—have been familiar with the need to make cuts and the pain involved, but in every case it is a duty to estimate the effects of the cuts and to decide whether they create too much hardship to be acceptable. If they do, you have a further problem. But in any form of cuts, not all the cuts do that; it is the edge cuts at the end, here, there and there. I think that careful attention to these can, at quite a low cost, avoid the worst sort of trouble. That is what is not being given.

It seems as if a figure has been thought of out of the air, based on the requirements of an almost uncalculable calculation, and has been imposed on the rate support grant. This leaves the local authorities to incur the odium of selecting the areas to cut, and in the full knowledge that inevitably some cuts will be made which exceed the acceptable limits of hardship at the bottom end of the social scale.

I joined the Labour Party 50 years ago for just such a reason: because the Government of that day cut the dole for 2 million or so unemployed to a figure below what was scientifically recognised as the minimum cost of rearing a family—the poverty line—with the result that to this day we see people of 50 years old with bandy legs caused by rickets, which was due to inadequate food in those bad days. There are some things that no Government can be allowed to do, and that was one of them. I have never since been associated with the party that did that, nor shall I ever be.

I want to suggest that the present Government are getting very near this point in relation to the most vulnerable families at the end of the queue. I should like to quote the worries of the Family Service Units—which I am very glad that the right reverend Prelate referred to so warmly in Liverpool; I shall refer to their problems elsewhere than in Liverpool—as an example of the kind of thing that is going wrong in a way that no one can intend or be satisfied to allow to continue. I speak with pride as being the chairman of the national executive committee of the FSU a few years ago, and it was a very happy and proud time for me. I should like to point out, however, that that position carries no liability of the kind that the right reverend Prelate suggested might belong to the people who are running the Liverpool FSU, but I am sure that he is wrong about that. I do not think that they will find themselves having to pay for anything out of their own pockets.

The FSU has 23 branches throughout the country and is currently helping more than 1,000 families with more than 4,000 children, mainly in the inner city areas. In general, its clients are families referred to it from the local authorities with whom local authorities have found it difficult and time-consuming to deal. The FSU acts as a sort of long stop to the welfare authorities, and is prepared to deal intensively with a few long-term and particularly difficult cases, as opposed to the local authority's welfare people, who have to deal extensively with any applicant who comes along. The local authorities have accepted these bodies as invaluable allies and have been not ungenerous in providing funds on a regular and, with inflation, a rising basis.

A typical case referred to the Family Service Units which I will give you to show the sort of case I am talking about—and, of their thousand families, this is, in one way or another, like most of the others—is of a mother, separated from her husband, with six children to support. All seven members of this family live under extreme emotional stress, and they also have a marginal standard of living which is made even more precarious by present policies. It is, for example, of prime importance to such a family that the supplementary benefit rate should be high enough to allow them to buy the basic necessities. But the evidence of the recent Family Service Unit survey, Living from Hand to Mouth—which I have put in the Printed Paper Office because I should particularly like the noble Lord, Lord Boyd-Carpenter, to have a look at it, and I shall give him one personally—satisfies me, and I think would satisfy anybody who reads it, that it is virtually impossible to provide adequate clothing, heating, and nutrition on the rates approved by Parliament. This really shows that the present rates are inadequate. So the very possibility of cuts from other sources—and when I say "from other sources" I mean from the voluntary money which people like the FSU are able to give—is an intolerable suggestion.

There are many thousands of families in a similar position where a little help and a little extra money can just help the children to stay at home and stop them from being put into care, and help the harassed mother to manage her affairs. We have—I say "we"; I mean the FSU—received consistent support from the DHSS ever since I put the FSU case to Dick Crossman 16 or 17 years ago. The DHSS have helped us. We are not complaining of the central Government support. The complaint is that as a result of the rate support grant cuts, the total is going to be reduced and we may have to stop work in certain areas.

One of the worst examples of the current difficulties facing the FSU in inner city authorities is provided by Tower Hamlets. In this hard-pressed borough the council have been unable to tell voluntary organisations what the grant aid figures will be for the coming year. It was rumoured, and I think accurately, that they were reducing last year's figure of £1¼ million to £400,000. This is a cut of two-thirds. There was such an outcry that the final decision has been reserved and nobody will know until June, but there is a serious possibility that, as a result of these cuts, the small amount that is required for the Tower Hamlets Family Service Unit, who look after 50 or 60 families there, will be reduced from the £68,000 they are asking for to something under half that. This will simply mean that these families, who are on the edge of despair the whole time, will lose their help.

That is the kind of thing which is not adequately answered by Lord Boyd-Carpenter's question, "Where are you going to find the money?". The answer is that the sum in this particular case is small, and though, when I was a Minister, that was always used as an argument, it is an argument in certain cases. We are deeply upset and worried about what is going to happen there. Almost every speaker has said that it is a short-sighted policy to deprive organisations which do preventive work with the minimal finance needed to do the job. If the mother with six children of whom I spoke had not received help from the FSU at a critical time, the cost to public funds for supporting those six children would have been in excess of £40,000; and all we are asking for is £68,000 for fifty families.

I think I have said enough to make my point. I believe that the Government are already allowing the line to be crossed which divides acceptable economies from the imposition of unacceptable hardship on innocent and defenceless people. I know that this is not a direct intention of the Government. That is what makes it so difficult to get at the Government over it. I hope we shall hear serious arguments about the facts that one after the other of us is revealing, rather than a general economic statement that we have got to spend less money somehow. From these Benches we are fully in support of the Motion.

4.56 p.m.

Baroness Elliot of Harwood

My Lords, I have listened with the greatest interest to the whole of this debate and the speeches that have been made. I have spent many years of my life in social work, and I look back on the first time that I met the noble Lord, Lord Wells-Pestell. I do not know how many years ago it was, but it was a long time before the war. He was the mayor of a London borough—I forget which one—and I went as chairman of the youth clubs to make a speech there and to try to persuade that borough to give money to the youth clubs. I had a very friendly reception from the noble Lord, and, if I remember rightly, although it is 40 or 50 years ago, I think we got some money out of him. I say this simply because although I think he does realise it, he did not appear to realise how deeply many of us have been engaged all our lives in social work, and, in my case particularly, in family work and youth work.

I agreed with everything that the right reverend Prelate said, particularly about Liverpool. There was an area where the youth clubs were very strong and where we had splendid voluntary organisations and voluntary helpers. The right reverend Prelate said, and I confirm it, that he has spent much of his life helping a youth club movement of which for a great many years I was chairman.

Of course nobody likes to have to cut things. That is obvious. But the reasons which have been put forward for the consideration of noble Lords are reasons which are worthy of understanding and knowledge. I was enormously impressed by the noble Lord, Lord Boyd-Carpenter, who has had the experience which none of us has had—possibly some Ministers have, but none of the voluntary worker people has had—of actually running a Government department and dealing with this matter. Of course that must be extremely difficult.

My experience in administration has been entirely in local government. In local government you are more limited, but you do have an intimate knowledge of all the items of social work, education, or whatever the particular department is that you are in charge of; and when I look back on all those years I realise how much one could do in different circumstances. The circumstances I remember best were those that we explored and worked on in the years which I think the Labour Party described as "the 10 wasted years". They were the years of the Macmillan Government. I think of what we did in local government in the way of establishing day centres for old people, which were only beginning then and are now, of course, accepted everywhere. They were pioneering, and were of enormous value, and still are. There was the starting of children's homes; a day centre for children; all the people, the social workers, who work in Meals-on-Wheels, and so on. All that was started in my day when I was on the county council in those years. That was because we had an expanding economy and the whole world was in a much better position than it is today. Those are the economic conditions I should like to see return, and we all feel the same.

It is difficult, when speaking of the economic cuts that are being made, to know exactly what is happening, and therefore I asked for a memorandum to bring me up to date. After all, although one hears people speaking violently against certain cuts, it is not all that easy to obtain accurate information on the subject. Although we are able to read about the unemployment position and how crucial the situation is, we need accurate statistics to appreciate how large are the figures with which we are dealing. The Government White Paper on Public Expenditure refers to a figure as large as £77.8 billion. Because of the cuts, that has been reduced to £76 billion, an economy of 2½ per cent. True, when dealing with such large sums, 2½per cent. represents a considerable saving, but it cannot be considered very large when thinking of the total involved.

For instance, in connection with schools, local authorities have been asked to make a saving of between £65 and £70 million, or 1½ per cent., on planned spending. We must not forget that the school population has been reduced, and I gather that the fall in the birth rate and the school population has represented a reduction of 6½ per cent. It is always difficult to economise; whatever one does to make economies will result in criticism. Nevertheless, the number of children being educated is going down, so we shall not require so many school places and presumably we shall not require so many teachers, but that is a somewhat different point.

For about nine years I was the chairman of an education committee in a rural area. We had to economise because in those days—indeed it is still happening—the number of children living in rural areas was going down all the time. I remember being severely criticised because I closed a school which had only six children in it; it was cheaper to send those children by car or bus to a nearby school which had 50 or 60 children. I remember closing another school which had 10 children. One is always criticised for doing that sort of thing, but imagine the cost of running a school, even if it has only a few children in it; one must have a head teacher, janitor, school meals and so on. Purely as an economic exercise I worked it out once and discovered that to run a school for just half a dozen or so children cost as much as sending them all to a boys' public school. It did not make any sense to keep going the schools I have mentioned, but of course closing them was an unpoular decision at the time. Today, people are quite used to it, and they are prepared to organise transport for small groups to go to somewhat larger schools. That is an economy which in my view is justified, although one is always aware of the fact that we do not like cutting down on rural amenities. I am particularly aware of that, living in a rural area.

We have heard a great deal about the social services, and expenditure in this sphere has risen from £11,263,000 in 1978–79 to £11,800,000 in the current year and next year. For social security payments, the total has risen from £19,213,000 in 1978–79 to £20,390,000 in 1980–81. Those may not seem large increases, but they are nevertheless rises when everybody is talking about almost everything being reduced. We have also heard about old age pensions. I am a pensioner and I am as keen as anyone on Help the Aged and the other efforts to which the noble Lord, Lord Soper, referred. Pensions have risen in three years from £19.50 to £29.60 for a single person; and for married couples the pension has increased from £31.20 to £47.35. Of course prices have gone up, but there is still a margin of improvement in the pensions paid today. These are some of the matters which tend to be rather overlooked because people concentrate on the general situation. Fur families, the supplementary benefit for children under five has risen from £4.40 to £7.90 as of November of this year, and child benefit next November will be £5.25. Single parents can now draw higher supplementary benefit after one year instead of after two years and the benefit paid to one-parent families for the first child has been increased from £2 to £3.30 as of November 1981.

I appreciate what the noble Lord, Lord Donaldson, was saying about the Family Service Unit, another organisation with which I have been associated for many years. I am glad to tell the noble Lord that one of the grants which the Carnegie United Trust gave to the Family Service Unit some years ago started the whole thing off, and we have supported it for many years. That is a voluntary organisation giving a voluntary grant, and I agree with the noble Lord that voluntary organisations are of enormous importance.

While the figures I have quoted do not solve all the problems—they never have—looking back to the years when I was responsible in local government, I can say that we took advantage of the good years and started the various social services that I have mentioned. That was all made possible not because we were overdrawing and running into debt but because we were spending money we had earned in ways of which I am proud today. I have seen what a tremendous help the efforts we made then have been to the community in which I was working during those years. I am, therefore, as anxious as anyone in your Lordships' House to see an improvement in our conditions and in the payments that are made to people and so on, but that must come about not by increasing our debt and inflation but by spending money we earn as inflation goes down, as it is now doing. Until that time comes, I would rather we lived within our means, hoping that we shall be able to help those who are severely hit by cuts which unfortunately have to be made. We have helped in many cases, as the figures I quoted show, but we must not run into debt. Our first task must be to cure inflation, and when that battle has been won we shall have the money to do some of the things that many of us have been working all our lives to do. Then it will be money we have earned, and we can spend it honestly.

Lord Noel-Baker

My Lords, does the noble Baroness recognise that our standards in education, affecting school age, site of classes and so on, are much below those of other leading nations, including the United States, Canada and Japan? Since education will represent the true greatness of our nation in the years to come—I am talking of 20 or 30 years from now— does she not agree that what education needs is not a few more hundreds of thousands of pounds a year but a larger percentage of the national income?

Baroness Elliot of Harwood

My Lords, I agree with the noble Lord. I think that education is ablsolutely vital, and I should be only too happy to see as much money as possible spent on education. But it must be money that we earn, money that we can spend because we have it, and not money that we have to borrow, with the result that at the end of the day the next generation is poorer than today's generation. I entirely agree with what the noble Lord says about education.

Baroness Young

My Lords, perhaps I may correct one point that the noble Lord has made. I feel that he should be aware that in this country at present we have the best ever pupil/teacher ratio, at 18.6 pupils to a teacher nationally. This is the best ever we have had, and I doubt whether many countries in the world are able to do much better over the whole of their educational services.

5.10 p.m.

The Lord Bishop of Guildford

My Lords, I wish to begin my speech by going down a pathway that has not yet been followed in the debate, and by thanking the noble Lord, Lord Wells-Pestell, for using the word "depend" in the Motion that he has put before us. The noble Lord's Motion includes the phrase: those in the community who depend on Government aid and local authority services…". The reason why I am referring to this point will become clear in a moment. Dependency upon Government aid of one kind or another is inevitable in a highly industrial society such as our own. It is not a stigma to be attached to those who lack the will or the initiative to stand on their own feet, and even the most successful in our society are dependent in various ways upon Government aid. One can readily think of aid given, for example, to British Leyland. Neither is dependency a condition to be avoided, even if it could be avoided, because dependency is the inevitable consequence of industrial development, and the greater the advances in technology, the more essential a component of ordinary, everyday life does dependency upon Government aid become for all citizens. The image of strong, independent citizens who do not need help from the resources of others is feasible for only a very few privileged people.

I believe that that is clear if we look back to the beginning of the educational, health and social services. Many of them owed their immediate origins to charitable organisations and philanthropic individuals, but those initiatives were taken only in response to the human needs which emerged during the last century in the growing industrial towns. When hundreds of artisans are crowded together into small terraced houses and exposed to the strains and tensions of labour in noisy factories and amid environmental deterioration, then economic common sense, no less than altruistic feelings, demands that their health should be protected and their children educated to become, in turn, hands in the factories and the shops which serve them.

So as a consequence there has emerged in every industrial nation the concept of a "social wage"; namely, the provision made by Government agencies, central or local, of services which maintain the wellbeing of the community. I want to suggest that dependency of that kind upon Government aid through the social wage and social benefits will not decrease in the future. It can only increase. That is so for a number of reasons, which I shall give very briefly. There are other reasons besides those which I shall mention.

The first reason is that modern health care employs techniques and equipment which are possible only if the state underwrites their provision and maintenance. They are far beyond the capacity of most ordinary citizens to provide for themselves, and this is true also of the equipment and medications needed in support of the chronically ill and the handicapped.

The second reason is that modern technology has displaced the craftsmen and artisans from the key roles that they once played in industrial processes, and the key people are now a much smaller number of researchers, designers, engineers, programme writers, and consultants. As computers are brought into engineering firms, so the number of draftsmen and even the number of engineers needed will become less, because the computer will repeat many of the routine design schemes in engineering offices.

Thirdly, those engaged in manufacture will necessarily become fewer as microprocessors are pressed into service. As a result of that, the earnings gap will greatly increase between those few who are privileged to work in the wealth-producing industries and the many who will have to find work in the service industries or remain unemployed.

Fourthly, the growing interdependence of the world community, both economically and politically, leads to massive changes in world patterns of trade. At the last General Synod when we were discussing unemployment one of the speakers stood up and said that it had nothing to do with the Government. It had to do with the patterns of world trade which resulted in factories being opened in some areas, while entire factories were closed down in, say, Norfolk, or other places in this country. These changes in the pattern of world trade cause widespread dislocation and unemployment among people who have little access to the decision-makers, and who are the victims of decisions made with little reference to their skill or the qualities of their service. These changes and developments will greatly increase the number of those who depend upon Government aid to protect them from their harsh effects and to maintain the quality of their living conditions. The effects of such changes are plain for all of us to see in contemporary Europe.

Today the great majority of people—and I include myself—depend upon the social wage to maintain the quality of life. They depend upon it for the education of their children, for the care of sick and elderly relatives, for the quality of the environment, for transport facilities, and very often for the provision of housing which they can afford to rent. But dependency upon Government aid is of course much wider than the generality of dependence upon the social wage. There are now in Britain 15 million people who depend on state benefits in the form of pensions, or sickness, disability or unemployment benefits. In most cases the only economic support that they have is what the Government make available to them. Fifteen million people seems a large number, but it is in fact increasing, which is one of the reasons why expenditure is increasing in social services and in health services, and it is estimated by some people that by 2000 AD half the population might be so dependent. The nature and quality of this dependency must therefore take a large place in the economic and social policy of any Government.

It is of course true that the Government are not responsible for many of the economic difficulties which now face both our own country and other European nations—the world recession is perhaps the most important factor here—and that is so; we must acept it. But no Government can escape their responsibility to attend to the effects of those difficulties, and in particular to maintain both the social wage and social benefits in a just and compassionate way. The adjustment of a society's resources to provide essential services for all its members should not provide their "survival rations". It should—this is the main theme that r wish to emphasise—make it possible for all members of the community, including those dependent upon Government aid, to live securely, with dignity, to develop their full potential as human beings, and to share in the wealth of society. As the right reverend Prelate the Bishop of Liverpool said, the core of this support cannot be supplied by the voluntary services, however welcome their help may be. While voluntary services may be ample in some parts of the country, in other parts, such as the inner cities, they are less frequently to be found in support of the statutory services.

In seeking to establish just social benefits we must measure public expenditure not only in terms of net growth or decline, but, as the noble Lord, Lord Banks, said, as a proportion of the gross national product. Measured by that yardstick, our record in the last few years has not been good. Between 1976 and 1979 the Labour Administration reduced the amount previously proposed for allocation to capital expenditure by £5,000 million and withdrew £3,000 million from current expenditure on goods and services. As the House well knows, that trend of withdrawal has been continued by the Conservative Administration, most recently in the paper published on 10th March, which showed reductions in central Government spending on housing, education, transport and overseas aid. They affect both the "social wage" and more direct social benefits; and these reductions must be set alongside the cuts which local authorities have been asked to make.

I do not intend to review in any detail specific cuts which have been made in public expenditure—and these have been referred to already. May I make just two comments? The first is simply to say that I am particularly concerned about the cuts in the provision of public sector housing, where the expenditure is to fall by over £1,000 million in the financial year 1981–82. The Association of Metropolitan Authorities predicts a shortage of 430,000 homes in the next five years, and even in Surrey there is a shortage of houses for those with limited financial resources. There are two side-effects of this failure to meet the housing needs of society: on the one hand, unemployment is increased in the building and allied trades; and, on the other, conditions are created which perpetuate the cycle of deprivation and increase the need for personal social services.

The second point I want to make, which has been made by other noble Lords today in this House, is that I am concerned about the general effect of these cuts on the quality of life which may be expected by those, such as the elderly, the handicapped and the unemployed, who depend, through no fault of their own, on Government aid. I tried to make that clear at the beginning of my speech, when I talked about dependency as a fact of life for almost all of us; as an essential of the developed industrial state in which we live; a fact of life which can only increase as technology becomes more dominant in our factories. I recognise fully that the essentials of the social services are being maintained—the essentials, my Lords. What I am concerned about is the fact that, as was said a moment ago, the edge is being turned. They are being reduced to the bare minimum possible, and that causes the elderly, the unemployed and the handicapped to be withdrawn from sharing in the wealth of the nation, which I believe is their proper right and their proper due.

For example, I think the linking of benefits to prices rather than to the average earnings, as has been done in the case of supplementary benefits, is in fact to withdraw the increase that is related to the growth in wealth, and to make it simply related to the basic needs for existence. I could quote some figures and reports on that, but I do not think I will do so since the point has well been made already. There has been reference to the report of the Association of the Directors of Social Services, and perhaps I might just say that the Personal Social Services Council recently carried out a survey of the reactions of 50 local authorities to the cuts in their expenditure asked for by the Government. Their survey shows similar erosion in other areas of need besides those that I have mentioned. I am not questioning the quality of the services given. I am simply asking: Are the services supported strongly enough to enable those wholly dependent on Government aid to share in the life of the community as fully or as richly as they deserve to do?

My Lords, I hope that this debate today will impress upon both the Government and the Opposition the urgent need to reassess the role of the essential services upon which the wellbeing of the whole community depends, and also the necessary part which taxation plays in making available the resources upon which those services depend, because I think that, as has been mentioned in our debate, the question of taxation lies behind the question of the social services. May I suggest that it is not simply a question of: Should we increase taxation all across the board? It seems to me that the real question is: What should be the pattern of taxation? What should be the priorities in taxation? When one looks at those questions one is forced to ask a number of other questions, such as whether our system as it has evolved is a just one; whether, for example, it is right that one-third of all tax relief on mortgage payments should be given to people earning more than £10,000 a year.

Is it just that, as the Royal Commission on the Distribution of Income and Wealth reported in 1978, company welfare for salaried employees in 1975 was an extra 18 per cent. of salary for those on £5,500 a year but 29 per cent. of salary for those over £24,000, and that much of that should remain untaxed? Those figures come from the report of the Royal Commission on the Distribution of Income and Wealth. I will not go on, my Lords. There are other questions I could ask, but I believe the question is not: Should we have taxation all across the board? It is: What kind of taxation should we have? The shift to indirect taxation places an unduly hard burden upon the poorer and weaker members of society when there is no corresponding adjustment in the incidence or scales of personal taxation.

There has been a marked change, I think, in public attitudes. In March 1979 34 per cent. of those questioned in a Gallup poll wanted tax cuts. By February 1980 that figure had dropped to 22 per cent. Even more striking, in February 1980 52 per cent. of those questioned in the Gallup poll then said that they were willing to pay more tax if that meant more Government spending on health, education and welfare. Your Lordships may know that recently the social service departments of the Anglican Church, the Roman Catholic Church and the Methodist Church held a day of fasting and prayer for justice in public expenditure. That may seem an odd act to many of your Lordships. The social responsibility bodies of the Churches are not party political groups; they are people who wrestle with concern for the wellbeing of our community. To call a day of fasting and prayer is a very solemn thing to do. They did it because of a deep unease about the pattern of public expenditure—not only, I think, by the present Administration, but perhaps by the previous one as well, as the papers relating to that day clearly showed.

Finally, may I come back to the point which Lord Soper made at the end of his speech and suggest that maybe a real feeling of community in our country would be a better springboard upon which to plan the economic growth than simply the freeing of money to be used in particular economic projects. I fear that the present policies could confirm the suspicions of many people that there are in our country two nations: on the one hand, those who, because of their privileged position within the economic structure, are able through tax concessions and a shift from public to private expenditure to maintain and develop their wealth; on the other, those who are dependent for their wellbeing upon Government aid and the Government social services, which are in danger of being starved of adequate and generous resources. In a speech at the Mansion House in November 1980, the Prime Minister said: Poverty, wherever it exists, is the enemy of stability". She said that with reference to overseas aid. It applies equally well to our own country. I beg to support the Motion.

5.30 p.m.

Lord Blease

My Lords, I should like to commence by thanking my noble friend Lord Wells-Pestell for inititaing this debate. I am sure that noble Lords will understand if I deal specifically with the Northern Ireland aspects of Government policy concerning public and community welfare services. I listened with keen interest to the right reverend Prelate the Bishop of Guildford and I feel that perhaps part of what I may say may follow his excellent theme; a theme of dependence and interdependence, a theme in which I think he urged the need for policies to form the fabric of a caring and sharing society. The evidence about the extent of poverty in Northern Ireland is conclusive. As the most depressed region of the United Kingdom, it is characterised by low incomes, family dependence on social security and welfare benefits, high unemployment and atrocious housing conditions while such basic commodities as food, clothing, travel fares and fuel all cost much more.

The news media portray dramatic scenes of a troubled Province with its areas of communal strife, its extremes of violence and its unplumbable depths of political division; but the real tragedy is that the awesome accumulation of social deprivation and outright poverty is accepted as almost inevitable. It is true that, since its foundation as a provincial state some 60 years ago, Northern Ireland, as compared with other regions of the United Kingdom, has suffered from a wide disparity of basic living standards, those standards which make for equality of opportunity and quality of life. It is in this connection that it would be fair to say that in the early 1960s, in line with progressive changes in the rest of the United Kingdom, the Stormont Government was moving Northern Ireland toward a more prosperous and outgoing community with greater efforts towards building the social fabric so necessary for a caring society and a community wellbeing. Even since direct rule, successive United Kingdom Governments have sought to tip the balance of public initiative and investment towards closing the gaps in parity between Northern Ireland and other regions of the United Kingdom, especially in respect of employment prospects, housing accommodation, hospitals and medical services, educational opportunity and welfare facilities for the disadvantaged in the community.

I join with many in Northern Ireland who pay tribute to all those in Government who have promoted policy decisions towards attempts to achieve this parity in public and community services. I would be the first to acknowledge that, as a result of these earlier decisions, we have had in Northern Ireland opportunities for community participation in some levels of educational achievement with standards which are higher than in many other regions of the United Kingdom. Also, as some noble Lords will know, Northern Ireland has been in the forefront of the world in pioneering specialist forms of heart and other surgical developments together with medical expertise and hospital care. I wholeheartedly concur with the sentiments expressed by the Secretary of State for Northern Ireland, Mr. Humphrey Atkins, who at a meeting of international surgeons held last week in Belfast said: …the dedication of the medical, nursing and other staffs has been beyond praise, and their achievements have echoed round the world". But, sadly and tragically, the experience of the past two years since this Government took office has been a manifest erosion of the scope of many of these public services including housing, hospitals, welfare and education. The deterioration in the capability of many of the public services to cope with the needs of the people has given rise to much public outcry in the Province. This, in turn, has resulted in a perceptible, marked loss of morale and in frustration among all levels of professional and other groups engaged in the work and administration of these community and public services. Among many of those who are most strongly and publicly critical of the Government's policies concerning the needs of the public services are persons with creditable public-spirited and responsible records of work for the community, persons with no ideological political axe to grind but with knowledge and experience of public accountability and of the constraints necessary in the allocation of resources.

If called upon, I could quote from many public statements and official reports made within the past 12 months to verify the substance of these criticisms about the effect of Government policies on Northern Ireland public services. However, much ground has to be covered in this debate and I will attempt to be brief while at the same time being as representative as possible and fair to the case that I wish to present. Some examples which I wish to quote are typical, but not specially selected. First is the report of the Northern Ireland Health and Social Services Council, a statutory-appointed board, which states: …the council expressed concern that cuts in revenue and capital resources would result in a reduction in the levels of services which the boards could provide ". Concerning the scarcity of nurses in the Province, the report of the Eastern Health and Social Services Board states: For some time past, the Board has been aware of the significant shortage of trained nurses in the Belfast area and the constraints placed on developments in hospital service as a consequence of this shortage". In the area of dentistry, the Northern Ireland Committee of the British Dental Association told the Eastern Health Board, in a report published two weeks ago that: the dental service in Northern Ireland is in danger of collapse". Not only are there shortages of nurses and of dental personnel but also of persons trained in radiography and physiotherapy. These shortages place great strains on the specialist treatment services to patients and to the general public. While we have a reasonably good record compared with the rest of the United Kingdom as far as waiting lists for hospital beds for acute hospitalisation are concerned, we have fallen sadly behind in cases of coping with geriatric and special care patients in hospitals.

In connection with deafness, Mr. John Henderson, the director of the Ulster Deaf Care Organisation said: Deaf people outside Belfast have been badly neglected for years". He claims that there are 25,000 people in the Province who are handicapped by deafness. One particular area that I should like to mention—and I have done so before in this House—is that of infant mortality. I am relying on evidence from a special committee appointed by the Government. Its report, the Baird Report, was concerned with infant mortality and handicap in Northern Ireland. It shows that although infant mortality rates have declined in the United Kingdom there is still a greater proportion of children in Northern Ireland dying before the age of one year than in Great Britain and in most other economically developed countries. The report convincingly argues that such death rates are inextricable entwined with poor socioeconomic and environmental conditions. The Government have so far refused to commit additional resources to permit the implementation of the major recommendations of this report and have satisfied their conscience by launching a limited health education programme beamed at expectant mothers. A far more aggressive approach than this, and on several fronts, is required if any appreciable improvement in infant mortality and handicap is to be achieved. Problems associated with infant mortality and handicap are not the monopoly of any one profession. Neither medicine, nursing nor social work, single-handed and in isolation from one another, is adequate.

Indeed, even given the closest inter-professional cooperation the problems are enormous. This leads me to ask: What steps do the Government intend to take to promote post-qualifying inter-professional training opportunities in the field of maternal health and child care which will equip doctors, nurses, health visitors and social workers with appropriate attitudes, knowledge and skills so that they may offer a truly effective multi-professional service to mothers and children at risk? What steps do the Government intend to take to guarantee the availability of an easily accessible, Province-wide genetic counselling service supported by an adequate medical genetic laboratory? I would not expect any Minister from the other side to answer that tonight. But my question will be on the record and I hope that I shall get a reply in due course to that particular aspect concerning Northern Ireland.

A senior civil servant in Northern Ireland is reported to have said: I am not sure whether money alone is the answer to Northern Ireland's troubles. I do know that there can be no solution without it". I stand supported from this side of the House in saying that there must be public accountability in connection with public services. I support all efforts for good housekeeping and public accountability in the use of resources in carrying out these services. In saying that, I feel that due attention will be given by the Northern Ireland departments concerned to the report of the Comptroller and Auditor-General for the year 1979–80. I quote from some parts of that report. Some £175,000 was due last year by general medical practitioners for the nominal rent in respect of the occupation of health centres. I think that it is right of the Auditor-General to draw attention to this, particularly when there are people in Northern Ireland who are unemployed or have been forced to pay back their rent arrears and other arrears in connection with their living.

The Auditor-General also draws attention to weaknesses in stores accounting and valuation and cites one instance where physical stocktaking valued goods at £180,000 as compared with a book value of £46,000—a discrepancy of almost a third. He goes on to refer to a breakdown in the system and draws attention to the fact that people in some of the services purchased fuel from commercial garages when supplies were equally available from district stores. He also refers to salary overpayments in one board and a high incidence of overtime in three boards. One instance is noted where overtime payments amounted to 90 per cent. of basic salary. The warden of one hostel was paid a total of £18,953 during the year.

I cite those because here we have a public servant drawing this to our attention. I have every reason to suppose that those matters will be given careful attention and will be fully investigated. I do that because, as I have said, I believe that there ought to be good housekeeping in all these public services and public accountability. The idea that savings can be achieved by good housekeeping without affecting the standards of services is mere wishful thinking. The expenditure of hospitals and public services has been the subject to economic constraints for several years, and opportunities which may have existed for saving money in this way have long since been used up. A real reduction in the quality of service available to the public must result, at a time when public expectations and population changes are giving rise to increased demand for services of all kinds. Without corresponding increases in residential care, home-help services and mobile meals, the quality of life for many old people and others will decline and they will face a bleak future. In addition, a lack of social services facilities imposes greater demand on other, possibly more expensive, services, principally in the National Health Service. Yet in the current national economic strategy services must decline.

I think that the burden of what I wish to state is that in my view in economic terms the Government have been penny-wise and pound-foolish. Money spent now on some of these services would be a total saving in many respects in the long term. But there is another aspect of it, and that is we are building a grab and greedy society instead of a sharing and caring society.

5.45 p.m.

Lord Walston

My Lords, I, too, am grateful to the noble Lord, Lord Wells-Pestell—and I shall persist in calling him my "noble friend" in spite of speaking from this Bench. I am grateful to him not only for giving us an opportunity for discussing this enormously important subject, but for introducing it with so much vehemence, with such depth of feeling and such depth of knowledge. I am sorry that the noble Lord, Lord Boyd-Carpenter, is not in his place because I would refute emphatically his suggestion that the noble Lord was doing little more than playing a political game. I do not want to misquote him, but the impression he gave was that we who are the old politicians know this game. We sit on one side and we attack the Government for not doing the job properly. We sit on the other side and defend the Government for doing the job properly. It is all part of the political game.

But this is not part of a political game. This is part—and a very vital part—of the whole life of this country. It is part of the life and wellbeing of a very significant proportion of the people who live in this country, the poorest people, the under-privileged people. There is no point in pretending that many of us in this Chamber are in close contact with such people. We should be. Perhaps in our day when we were candidates for Parliament, when we were candidates for local autho- rities we were in closer touch; but there are very few of us here who can get up and say, not just with sympathy but with empathy, "I know what it is like to be poor, what it is like to be suffering, what it is like to know that the future holds nothing for you, whether it is because you are young and unemployed or whether it is because you are old and alone—whatever the reasons may be". Therefore, it is vitally important for people like my noble friend to remind us of this. It is no slur on Members of this House to say that we need reminding. Of course we need reminding. It is no slur to say that unless you are reminded you will do nothing about it.

We in this country are a very extraordinary people. We pay no attention to the preservation of our countryside and the habitats of endangered species until somebody comes along and reminds us of it. Then we have a great outcry, and because of public outcry the Government put up money and that particular area is saved. Very few of us will go to museums to look at pictures or our national treasures. We pay little attention to the fact that they slip away, one by one, from the country until, again, somebody reminds us of this. Then there is a national outcry and again money comes from the Government and from other sources and a particular work of art or a particular building is saved.

Surely the plight of the underprivileged in this country is something even more important than the preservation of wildlife habitat, than the preservation of a Leonardo or the preservation of a Vanbrugh building. They are all important but this is far more important. It is right that we should think about this now, that we should talk about it now, and that we should use such influence as we have individually and, above all, collectively, upon the Government to make them realise the feelings of the great majority of people in this country.

My Lords, of course it is impossible, as the noble Lord, Lord Cullen of Ashbourne, has pointed out, to discuss this problem without dicussing economic policy, because the difficulties which are being faced and the hardships we have heard about today are intrinsically bound up with our economic policy and with priorities. We know that, relatively, we are a poorer country than we were a few years ago. We know that we have less money to spend on all the things we would like to spend our money on, and we have to make decisions as to where the cuts should be and how the money that is needed should be raised. That is essentially an economic and political problem. The Government have decided that the priorities must be national defence and law and order within this country, and that other things have to take their share of the cuts. Of course we must defend ourselves, and of course we must have law and order in this country, and I am not going to enter into any argument as to the relative merits of one against the other. But I will very briefly enter into the argument which was raised by the noble Lord, Lord Boyd-Carpenter, concerning where the money should come from.

The Government's policy was that we had to produce more, and that people would only produce more if they were given more incentives, and that the best incentive was to reduce peoples' tax. Therefore, in the present Government's first Budget tax was reduced, particularly that affecting upper and middle management executives. I have always felt that it was an insult to those people to say, in effect, that they would not work hard unless they were paid to do so; that they had no feeling of patriotism; no feeling of the importance of productivity to their country and to the firm for which they were working; and that the only way they could be made to work harder was by giving them more money—by bribery. I consider that that was insulting; but neither the Government nor those who voted for them appeared to consider it insulting. But it has not worked. Upper and middle management is not producing any more today than it was two years ago. In fact, it is producing less, and I would suggest to your Lordships that the policy of incentive by reducing taxation at the higher levels has manifestly and demonstrably failed.

In passing, I feel it is rather a curious reflection on the attitude of the Government when the noble Lord, Lord Cullen of Ashbourne, when talking about health services, said that the ability to maintain health services would depend to a large extent on the degree of restraint exercised by hospital workers in respect of their wage claims. So far as I can make out, two years ago the Government were saying that we would only get higher management to work harder by giving them more money and that we would only get a good health service in this country by getting hospital workers to work for less money than they might otherwise get! In one case you have free collective bargaining and an incentive towards making more profit, and in the other you are appealing to patriotism and love of one's neighbour to hold down wages. To me that does not seem to be very consistent, and it does not seem to me to be a policy that will work, or is in fact working effectively. Until we change the basic structure of our economic policy we shall always have the problems which have been so vividly outlined by almost all noble Lords who have spoken in this debate.

I should like to draw your Lordships' attention to some of the problems in rural areas. I do not pretend that poverty in rural areas is as overwhelming as it is in some of the inner cities, but there is poverty in rural areas and in some respects the present economic climate makes that poverty worse in certain respects than it does in the inner cities and urban areas. In rural areas, old people are more isolated. The higher cost of transport makes it more difficult for them even to draw their old age pension and certainly to do their shopping or visit their friends. If they are fortunate enough to have a telephone—and very few of them are—the rising cost of telephone charges imposes an increasing strain on their pockets. The rural youth has even fewer opportunities of alternative work than does his urban counterpart; there are probably only one or two potential employers within reach of where a youth may be living in a rural area.

The housing situation to which the right reverend Prelate the Bishop of Guildford so rightly drew attention is one of particular significance in rural areas. People in those areas cannot rely on private building, even if there were any. The price of houses in most areas—even of farm workers' cottages if they become vacant—is way beyond most people's means and such houses are snapped up by second home owners or commuters, depending on which part of the country they are in. They therefore depend solely on council building, and that has come to a halt. In particular, this has affected houses for old people, such as bungalows, which are a very valuable social service. Today, as the proportion of the population who are elderly increases, so are there more people wanting bungalows for the elderly. They are not available and elderly people have to go on living in unsuitable houses, which are often too large, and that means that young married people and those who want to get married are unable to move into houses which might otherwise become vacant.

Our whole family structure, as the right reverend Prelate so rightly pointed out, is at risk because of the shortage of housing. Let us remember too the spin-off effects. It is not just a question of spending more money on housing; it is also a question of saving money, because we all know what effect the present cuts are having on the building and construction industries as a whole. The cement works, the brick works, and all the ancillary industries are facing rising unemployment because there is no public or private sector building taking place. If there was an injection of capital today into public sector building there would be an enormous surge of employment in certain areas—in rural as well as urban areas—and the building industry would start taking on labour. Money would be saved on the vast amount being paid out in unemployment benefits, and money would be gained in the form of income tax from those people who were in gainful employment. Above all, the people who need housing would have somewhere to live and our community life would develop.

I will make only one further point about community life, arising from that which was made by the noble Lord, Lord Soper; and that is that we must foster in every way we can this feeling of responsibility for other people. This is one of the great assets of rural areas, where one is closer to one's neighbour and it is therefore easier to have a feeling or responsibility. The danger lies in a general attitude on the part of the Government and local authorities, and all the way down from there, that it is the one who shouts loudest who gets most, that it is the one with most muscle who wins wage disputes, and that it is only by reducing taxation and increasing take-home pay that one will get more work out of top management—in other words, fostering the lowest motives of human nature, rather than the highest. We must do what we can to encourage those higher motives which are not very far below the surface, and in that way we may being to see some alleviation of the very real suffering which there is in this country among very many people.

6 p.m.

Lord Orr-Ewing

My Lords, I think we owe a debt of gratitude to the noble Lord, Lord Wells-Pestell, in drawing our attention to this matter, though I shall seek to refute some of the points that he made. I should particularly like to endorse some of the things that were said by my noble friend Lord Boyd-Carpenter. Many of us on these Benches have spent years nursing constituencies and then more years representing them and in 25 years of such occupation, we held, I think, consulting hours every single month, and each time 20 or so people came in. We listened to their complaints, and they were largely the poverty-stricken and under-privileged section because they were not able to write letters and they were not able to put their thoughts together very well. So we have had in 25 years abundant knowledge of the under-privileged, the sad, the sorry, the ill, the sick, and the deprived; and it would not be right to say that among those of us sitting on these Benches, as I think was suggested earlier, there is little experience of true poverty. There is a lot of experience and it is very grevious when we have it.

The Labour Opposition have chosen this subject and I just wonder whether the local elections tomorrow might possibly have had some influence on the timing.

Noble Lords: Oh!

Lord Orr-Ewing

There are some local elections in my part of the country. I was sorry in a way, despite the tenor of the opening speech—

Lord Wallace of Coslany

My Lords, would the noble Lord give way? The noble Lord is imputing low motives to those on this side of the House. We are mainly and solely concerned with the deprived, the sick and the disabled who at the moment are going through hell as a result of policies that he supports.

Lord Orr-Ewing

My Lords, I disagree entirely with the intervention, but I note it and am delighted to hear that there are no electoral interests whatsoever. That applies on this side of the House, too. There is no monopoly of compassion and sorrow in this House, as was suggested in the opening speech, and if you start with arguments of that sort, then you may occasionally get the ball hit back at you.

I have consulted the clerks and wondered whether we could amend the Motion but I was told that it was very unusual; they did not know of any case where a Motion of this sort had been amended. It would be awkward at the end of a debate, because the mover would probably withdraw his Motion and one would be left high and dry with an amendment but without a Motion. But had that been our practice I should have liked to add at the end of the Motion: but regrets that the Labour Opposition in both Houses have failed to put forward any constructive policies as to how they would stimulate the growth and efficiency of the wealth creating private sector so that industry can carry the cost of the largest public sector in the free world and Britain's burden of social services". That, it seems to me, would have been a balanced Motion, which we could have discussed with greater merit than the rather loaded one which is on the Order Paper.

The noble Lord who opened the debate referred to the cuts and their effects, but again there was nothing very constructive. I occasionally read Labour Weekly—it is not my normal bedside reading, but I read it last October, when Labour had held a conference on the health service. The Labour Weekly said, after that conference: it was impossible to get away from the impression that the whole thing floated some feet off the ground. It is certainly good to know what the goals are. But a little greater emphasis on how they are to be achieved might have helped avoid that sagging cynical feeling at the end of the day". I think we would say, Hear, hear! and we should like to hear some constructive suggestions put forward.

I think it has also been suggested that we have forced very painful cuts—this is really the burden of the argument—on the local authorities. It may be that some local authorities and some branches of NALGO have resisted cutting the staff and have sought to cut, I think, in more harmful areas, like the day-rooms and so on which the noble Lord listed. I would hope those are not cut, except in exceptional circumstances, but it is interesting to look at what has happened to the number of people employed by local government. In March 1979, 1.927 million were employed by local authorities and in September last year, which is the latest figure, it was 1.878 million. So, a total of rather less than 50,000 people in nearly 2 million have gone from local authorities, despite the urgent need to cut their bills.

What is also significant, is that the social service departments within those local authorities have actually increased. Surely this reflects the emphasis which the Government have tried to put on—cut where it is possible and where there are perhaps too many people, but do not cut where it is desperately painful and services are essential. The figures show that in March 1979 there were 205.9 thousand in the social services and that in September last year there were 207,000. So actually there has been an increase in the numbers. That, I think, refutes the idea that somehow the Government have forced cuts on the social service departments. They have not: the numbers have actually increased.

Turning now to the burden of the public sector on the Government of the day, but for that burden it is possible that we could have been more generous and not forced these cuts as we have endeavoured to do. In an article on 3rd January 1981, the Economist drew attention to the enormous expansion of Government employment in most industrial countries, and a table was published there which showed public sector employment as a percentage of the total civilian labour force. Britain came at the top with 20 per cent. of the public sector and was way ahead of any of our competitors. Italy came next, with 15.6 per cent.; France had 13.4 per cent. and West Germany 11.5 per cent. So we had nearly twice as many people in the public sector as our Western German competitors.

The last months have vividly shown, as everyone knows in both Houses, and have brought home the demands of the public sector on the Government's financial support. The BSC needed nearly £1,000 million, British Leyland needed £990 million, and this morning I read in the paper that British Shipbuilding is losing money at the rate of £2 million a week; in other words, over £100 million a year. So the public sector is a considerable burden which any Government has to provide support for, because we could not let steel go out of existence in this country. Of course, on this side we accept the need for a mixed economy, but in contrast the Labour Party, I believe, are still dedicated to going on increasing the size and scope of the public sector. They keep very quiet on this one, because it will be very difficult to sell to the electorate that you are in favour of a larger public sector, with more losses and with more bureaucrats and the like; I think this is a millstone which they would like to get off their necks before the next election.

I rather hoped that we would hear something from the Social Democrats about their policy, despite the admirable speech we have already had; but, as I understand it, they have announced that they accept the public sector roughly in its present form, so presumably they will neither denationalise nor nationalise. It will stay as a very large burden. Only the Tories have sought to reduce it. We believe it is too big and it is over-manned. Moreover, when called upon to work within cash limits, it is often the nationalised industries which have failed to prune their manpower and have made pretty demanding wage demands, often as high as 25 per cent., and have increased their prices by 25 per cent. In addition—this is the most damaging of all—they have often cut their investment programme for the future.

I am sure it is important that the infrastructure of our country should be modern and well equipped, equipped with modern machine tools and the like. It is sad, because British industry benefits by supplying the nationalised industries with their wants so that a cut there not only mortgages the future but adversely affects the viability of British industry and has an adverse effect on the jobs created there. So while the private sector has reduced its employees by something like 10 per cent. all round, the public sector has done very much less well with reduction of only about 2 per cent. or one-fifth.

The Opposition, I hope, will eventually publish their policy for the future. In the meantime, they seem to give the impression that cuts are something new, so I asked the Library to get me some facts and figures to remind us of just what happened under the previous Government not very long ago. On 22nd July 1976 Denis Healey made an announcement that £1,000 million was to be cut off the public sector. There was to be £157 million cut off the nationalised industries' capital expenditure; health and personal social services were to be cut by £70 million and so on, making a total of £952 million in all.

That was hardly out of the way when Britain needed to go to the IMF for a big loan, and the Government of the day were then told by the IMF that they must have another two series of cuts. On 15th December, just before the Christmas Recess, Denis Healey announced that they were going to cut £1,000 million off the public expenditure budget for 1977–78 and £1,500 million off the budget for 1978–79. I shall not go through the burden of that, but one of the big cuts was in health and personal social services, where a total of £40 million was cut off although it had been cut six months earlier by £22 million. So in a period of six months the Government had announced cuts of over £60 million. Therefore, it would be wrong to suggest to people outside this House or even inside this House that this is new.

I remember going down to listen to the announcement being made. A total of £2,500 million was cut from public expenditure. The capital cuts in the school building programme were £33 million, with other educational cuts such as on school meals and school milk of £50 million. The National Health Service, of which we have heard a lot this afternoon, and other social services had capital cuts of £70 million and other cuts of £10 million. It was that programme that really began to reduce the rate of inflation. So we are only repeating the same pattern a little later and I hope with rather more vigour and determination than the previous Government undertook a few years ago.

When the Labour Government published their plans for public sector expenditure just before the last election in January 1979 they were basing all their plans on the fact that there would be an expansion of industrial output in the manufacturing sector of 3 per cent. Why they should have thought it would be 3 per cent. when there had been a diminishing output—not an expansion—in previous years I cannot understand, except that it might have been for electoral purposes. But we were landed with a public sector expenditure plan based on a tremendous upturn in the productivity of our industry: only then would it be possible for the Government to do it. In fact there was actually a reduction of 6.6 per cent. in 1975; a growth of 1.5 per cent. in 1976; a growth of 1.5 per cent. in 1977 and in 1978 a growth of 0.9 per cent. Yet they were telling us that the whole of their plans were based on a growth of 3 per cent., though they had no track record to justify that and no economic logic either.

Perhaps this Government should have moved more quickly in the public sector, but your Lordships will remember that they were burdened with the Clegg comparability settlement and other postponed settlements which had been promised to public servants and which were going to be honoured after the election, settlements that we could not escape from because of our obligation which we accepted. It is a fact that average earnings in the last two years from October 1978 to October 1980 went up by 44.3 per cent. while prices rose by only 35 per cent. Whether you look at the position of a single man or at the position of a married couple with two children, you will find that in real terms they are marginally better off and these increased earnings have more than compensated for inflation. If you look at the statistics you will find that that is also true for the man with two children who is on half the average earnings. Average earnings in industry are now £130 a week and a person earning £65 a week is still better off as a result of his earnings having expanded faster than inflation. It is some triumph that the Government can say, absolutely honestly, that most social security benefits have been fully protected against inflation. These include retirement pensions, widows' pensions and supplementary benefits.

This is no mean Government achievement, but let no one in the House or outside it misunderstand the facts. For 30 years we have been living beyond our means. We have been paying ourselves more than our prowess or our productivity warrants. No Government enjoys making cuts. People have suggested that we do it for fun, but surely they realise that politicians love to be loved. That is the first thing in political life. Why do you think we used to kiss babies till the babies grew too fussy? It was to gain popularity. Why did we hold welfare meetings all over our constituencies? It was to gain popularity and try to communicate. So Governments do not do nasty things for the fun of it. They do them because it is their duty, in order to put the economy right—

Lord Donaldson of Kingsbridge

My Lords, will the noble Lord allow me to intervene for one moment? With respect, he seems to me to be missing the whole point of this debate. This debate is on a perfectly clear motion which is suggesting, not that there ought not to be cuts but that the effect of some of the cuts is very damaging and ought to be thought about again. Nobody has suggested that the Tories or anybody else make cuts for fun. With respect, this is all quite irrelevant to the subject which we are trying to discuss.

Lord Orr-Ewing

My Lords, I have to say that you need to create the wealth before you start increasing the benefits. That comes after creating wealth. I do not think anyone would disagree with that. I can see from this debate that of course there are agonising areas, and if local authorities have not cut their staffs where they ought to have cut them and have cut areas where people are deeply dependent on the support of local authorities, that is not something which we can dictate from a Government position. It must be by the local authorities being pressurised by their local representatives to make the cuts where they are not so painful and to preserve the services where they are really meeting the needs of the under-privileged, the poverty-stricken and the ill—

Lord Donaldson of Kingsbridge

My Lords, the point of my intervention was that there has been a great deal of evidence from all sides of the House to suggest that that is not being done at the moment.

Lord Orr-Ewing

Yes, my Lords, and I agree. We have had some very disturbing evidence on this matter. But I do not think that I can depart from the main thrust of my argument, which is that we have to get public expenditure under control. We have to encourage the private sector to generate the wealth of this country which pays for our imports and underpins our social services. Unless you get that going you cannot afford to index fully all the social services. I accept the argument that you should not cut the voluntary services because they are most cost-effective and most compassionate because they are dealing with people; they are caring people dedicating their lives to helping the unfortunate. I hope that the private sector is investing for the future, and all my evidence in the companies with which I work shows that they are; and as the recession begins to fade we shall then be better placed to respond, to create the wealth and earn the exports. Thus Britain will be better able to look after the old, the needy and the sick who deserve the best of their nation.

6.19 p.m.

Lord Sefton of Garston

My Lords, I am sure that your Lordships will join with the last noble Lord in saying that we hope that the private sector will produce sufficient wealth in order to ensure that our economy is a stable and fast-growing one, because, if it is not, then not only will this Government have failed but the nation will have failed. So it is vitally important that that should happen. Wealth is not produced only by the private sector; it is also produced by the public sector.

When the noble Lord, Lord Boyd-Carpenter, took issue with our spokesman, as to what he said about Members opposite, I think that he treated him very unfairly indeed. It was not my impression that the noble Lord, Lord Wells-Pestell, was saying that people did not appreciate the problems of unemployment. He was pointing out quite clearly that, as he saw it, Government policy inevitably was going to lead to very great hardship. Against that background, nobody on those Benches made any gesture of opposition to the Government's policy at that time. It may well be that Members on the other side really believe that the Government are pursuing the right path.

I do not think that I am under a misconception about the Government's intentions. During our debate following the Budget I said that it was the Government's intention to free the economy, to allow the entrepreneurs to develop wealth so that we could all go on and up on the backs of free enterprise. I do not think anybody call deny that this is their fundamental aim.

The noble Lord, Lord Boyd-Carpenter, mentioned the Macmillan era. How very apposite! Members of this House at times forget that when the history of this nation comes to be written no historian will refer to a particular period when a Labour Government or a Tory Government were in office. History will say that this nation went through various development phases, took a certain stance, made certain pledges and then failed to keep those pledges.

This debate would not have taken place in your Lordships' House before the First World War because the Members of this House at that time would not have considered that a debate of this kind was apposite. Before the First World War or, indeed, before the Boer War, they did not consider that unemployment, poverty and suffering were a matter for the Government; it was an accident of the economy; things would get right as the cycle turned. And they did, in some cases. However, the First World War brought the first evidence that the Government were beginning to realise that they had a responsibility for the poorer sections of our community. In the words of Lloyd-George—if one were to pay attention to some of today's television programmes, I do not know how anybody could ever have believed him—we were about to build a society fit for heroes to live in.

The inter-war years were hardly a society fit for heroes to live in. Not three years had elapsed before once again the burdens of economic problems were falling upon those least able to bear them. That was the position during the inter-war years. During the 'forties Beveridge introduced the concept that in a modern age you had to look after everybody in the community, that the welfare state should be a pledge for all politicians. This was no figment of the imagination. There was a strong general consensus, arising out of a kind of society that r did not particularly admire, that we should give a pledge to this community and to the world that we would set an example by building a decent, humanitarian society in which people would be proud to live. We said something else: that gone were the days when Government would stand idly by and allow 3 million or 4 million unemployed people to be used as a means of straightening out our economic problems. Of course, nobody was blaming anybody else for the unemployment problem.

The history of this country immediately following the war shows that we set about building that welfare state. There was opposition as to how it should be done but, by and large, the building of the welfare state went on from 1945 to 1950. It was built upon the basis of control of the economy and of the rationing of scarce goods, upon the basis that investment had to be channelled into social services and into the production of the basic materials which were necessary in order to allow the private sector to flourish. The whole of the motor-car industry of this country was built upon and founded upon public investment in fuel, transport and everything else in order to ensure that it could be a success.

The noble Lord, Lord Boyd-Carpenter, speaks to us today as though he were the apostle of all things good. I was part of the Macmillan era, and I remember it. I can remember the age of "You've never had it so good". I know who never had it so good: the property speculators, the builders of the bingo halls, the builders of the present night clubs which are now a curse upon the face of London. And all the while the nation suffered from lack of investment where it was most needed. Slowly but surely we moved along that path. I am not blaming in particular a Conservative Government. All I am saying is that that is the path which the nation took and that it took it upon the basis that, if you freed the economy, private enterprise would produce sufficient wealth upon which we could build a new society.

Did it? Of course it did not. A Labour Government came to power with tremendous difficulties because investment had not gone into private production or into the motor-car industry. Investment had not gone into making sure that private enterprise in this country captured the markets of the world. Investment had gone into property speculation. It had gone, in fact, into where the return was greatest. So of course the productive force of this nation went down, and of course we moved into a situation where we could not afford social services.

I make no excuse for a Labour Government which made cuts in the social services. I make no excuse for the fact that because of the failure of the private sector of productive industry in this country, the IMF had to tell us what to do. There is no sense in making excuses for that. They are the economic facts.

What is the situation today? Will anybody deny that we need more investment in social services, that we need more investment in the railways—that more investment is needed all over the country, particularly in the area I am concerned with: North-East Wales, Deeside and Merseyside? Oh, no. But where is that investment going? According to the latest estimate made by one of our broadcasting channels, last year, £3,000 million went into property investment in the City of New York, a sum of money which should have been invested here. I am not denying that the private sector has the right to invest wherever they want to invest. The Government of the day have given them that right and we must not grumble if they exercise that right. But that is what is happening. Instead of seeing that money goes into productive industry, the administrators of our pension funds plough it instead into useless office blocks in the City of London, in the face of wide-scale opposition from the people who live in London.

Is it right that we should have a community that is building offices when the most vital need in London is for housing and when the building of public housing has been stopped? Is it right that we should keep overloading London with a chaotic transport system when what is needed is a diversion of activity from London? But the administrators of the pension funds will continue on their way because, on its past record, investment in office blocks in the City of London has paid dividends. But the dividends that office blocks are going to pay will not be very good; they are going to be empty office blocks, a need for housing and poor amenities when the need is to create better amenities. Those are the dividends which they are going to pay. When the wise administrators of our pension funds wake up, they will find themselves with some very burnt fingers.

When this debate was put down—I should like to join with others in thanking the noble Lord, Lord Wells-Pestell, for having put it down—I decided to make out a list showing how the area I am concerned with—Deeside and Merseyside, one of the most badly affected areas in the United Kingdom with regard to unemployment and deprivation—is affected by some of these cuts. However, I gave up the task. It was impossible. I could not possibly have stood here and listed the number of occasions upon which effects are being felt by people in those areas. There are too many. Half a million pounds cut here, a million cut there, 50 social workers cut here, 39 social workers cut in another district. Worse still, in one district in Merseyside which three years ago conceived the idea that social services should be based upon the principle that we have to get people standing on their own feet and introduced a system called home-making, in which they deliberately used public money to enable people to stand on their own feet, to recreate homes that were broken and to create new homes out of old homes, that has gone. As a concept it is finished, because this country decides that it has not got the money to carry it out.

Let me take just a few examples. An insurance man went to a housing estate in Liverpool—a nice housing estate on the fringe of the city, facing the countryside of Lancashire. He knocked at the front door of a onebedroomed flat, in which lived an elderly woman of 74. He got no answer. He heard what he thought was a whimpering inside the living room and he thought that perhaps there was an animal trapped in there. He went on his way, worried about the fact that he had not seen the elderly lady; he went back, knocked on the door, and realised that he had made a terrible mistake. So he broke the door open and an elderly lady had been lying on the hearthrug for at least 24 hours. That is the kind of thing that could be repeated in the absence of home helps—and do not let anybody tell me that when we talk about priorities those priorities have to be within the social services.

Let me quote the noble Lord, Lord Boyd-Carpenter, that Government must be firm; Government must determine their priorities in the social services and they must be firm in giving to those that need to be kept on, all the assistance they need—and I quote: but in regard to the other services it must be ruthless". Ruthless in what? Removing them? Abolishing them? Will anybody tell me that ally social service today is not an integral part of the welfare state that this country committed itself to keep in being? I refute completely that if economic priorities are to be laid, they must be laid within the section of social services. Of course priorities can be laid, and those priorities were referred to by my noble friend Lord Walston. Is it right that we should even contemplate taking away from an aged person the right to travel from the suburbs to the City of Liverpool with a concessionary fare, to enjoy a few fleeting moments of company with her former neighbours? Is it right that that should be denied to her, or that she should be made to pay for it while somebody else gets thousands of pounds in relief in their income tax?

I can remember an argument being advanced in a national daily on that Budget which this Government introduced, in which it said, "there may even be a possibility that the pop stars and the tax exiles might be persuaded to come back here, if we could make it beneficial enough for them to do so". Well, I do not want them and I do not think that any society that so gears its affairs that it has to rely upon unpatriotic, selfish individuals like that, deserves to remain in existence.

Let me give your Lordships the other reason why I decided to speak in this debate. Somebody said that across the board cuts are wicked—and wicked they are. It is bad enough if you are unemployed in a place like Liverpool and you live in a block of flats and you can meet 50 per cent, of the male population in that block of flats at any time of the day, because they are unemployed too. It is bad enough to realise that you cannot buy a new suit when the last one is getting threadbare. It is bad enough to realise that your own children have not got all that they are entitled to. That is bad enough. But what makes it worse is that all those people—or most of them—have parents living near them, and they see that even the small pleasures that a welfare state gave those elderly people are being taken away from them. How does that make the unemployed person feel?

Nobody in this House will tell me what it feels like to be unemployed. Having served an apprenticeship for a miserable wage and then served the next few years on the dole, I know what it feels like. I know the sense of inadequacy, because one cannot do what one thinks one should do in society. It would have made it considerably worse if at the same time I had not been able to replace those little comforts that my mother got from the welfare state. That is the situation that the present problem is driving people into in North-East Wales and Merseyside. North-East Wales is a perfect replica of the kind of situation that was in existence in all the conurbations throughout our country before the last war, where you walked through at ten o'clock in the morning, and there were grown, fit men standing at street corners with nothing to do; where there were elderly people who would dearly have liked to go out with their sons or their daughters for a run in a motor-car in the wonderful countryside, but who were condemned to stay put. That is the kind of situation that exists.

I want to conclude on this note. I have said it before in this House, but it will bear repeating. If the kind of society that we are building and I repeat, I am not making party points; at the end of the day it will be our society and our people who will take the responsibility—has to rely on the pluralities that have been listed to us; has to rely on a Member of your Lordships' House, standing there and using Hong Kong as an illustration of some kind of society that he wants, then that society deserves to perish. If shortly we do not do something to convince the people in Merseyside, the North-East, in Northern Ireland and all the other places that are afflicted by this problem, to convince these people that there is hope for them, hope for their parents and hope for the family, then this society will perish—and in a very nasty way.

6.38 p.m.

Baroness Faithfull

My Lords, this debate is on the effects of Her Majesty's Government's cuts on those in the community who depend, as the right reverend Prelate the Bishop of Guildford said, on Government aid and local authority services. As an ex-Director of Social Services, I am particularly grateful to the noble Lord, Lord Wells-Pestell, for raising this matter in the House today. In his opening speech, I think I am right in saying that he threw down a friendly gauntlet to the Back Benches on this side—and I suspect to me in particular as an ex-Director of Social Services. Therefore, in a friendly way, I pick up the gauntlet and seek, first, to establish truth in various areas of this debate and, secondly, to see how, in the circumstances in which we find ourselves today, we can look for some solutions. But I wish to point out that I am only going to cover local authority social services.

I have very deep sympathy for my ex-colleagues, both field and residential social workers. Believe you me, when one has assessed a need in the community in the sphere of the elderly, the handicapped, children in trouble, families with difficulties, the needs of the under fives and children who are abused, and when one has submitted schemes to meet those needs, only to be told by one's committee that the resources are not forthcoming, then the disappointment, the frustrations and stress for one's clients are deeply felt. We are a compassionate society and we do feel deeply when we have these schemes turned down.

However, there is another side to the coin. Perhaps I may say to (if I may so call him) my noble friend Lord Wells-Pestell that he does less than justice to those who work in the social services in the statutory and voluntary sector, and indeed to the people whom we serve. I think that we should see that no despondency and gloom comes out of this debate, but rather that we look for something positive that can come out of our deliberations today. First of all, I think I must say to the noble Lord, Lord Wells-Pestell—I had great admiration for him and I still have—that he, above all people, knows what it means to have a dream. He, above all people, knows what it is to start a movement with practically no money and to establish that movement so that it is a living thing today—and I talk about the Marriage Guidance Council, which he started and which he left in good fettle.

In a magazine, which is a professional magazine, the Health and Social Services Journal of 16th January 1981, it is written: Think of all the problems we would not have had if we had not had rampaging inflation these 15 years or more, problems with the hospital building programme, problems with industrial relations, problems of unfulfilled aspirations for the elderly and handicapped". It goes on to say: Inflation rots the very fabric of society, adding in many ways which we are now only beginning to suspect to the health and social problems of the nation. So whatever else happens to us in 1981, if inflation is brought under control, we all stand to benefit. Quite apart from the interests of the country as a whole, it is very much in the interests of health and social services that Government should continue to give the conquest of inflation first priority". I am bound to say that among the social workers in the country, among the social services, there are those who very much take this view.

When we talk about knowing the facts and knowing the truth, I would suggest that we do not know the facts and we do not know the truth. The noble Lord, Lord Wells-Pestell, quoted, and very rightly quoted, the report of the Directors of Social Services. I know that report and I have read it. But I have also talked to the Secretary of State for the Department of Health and Social Security, and he has said that his assessments and his figures do not accord with those of the Directors of Social Services. He is puzzled by their figures; they are puzzled by his. Therefore, I think I am right in saying that a committee, jointly agreed by both the Secretary of State and the Directors of Social Services, has been set up in order to find out the truth of the figures; because the Secretary of State maintains that the expenditure on the personal social services is being maintained, and in the five years 1979–80 to 1980–84 inclusive will be higher in real terms than in the preceding five years. I have looked up the Public Expenditure White Paper for 1980 and this does seem to be so.

The Child Poverty Action Group maintains—and I quote from Poverty magazine, December 1980; Local authorities were not necessarily having to reduce their expenditure below what it has been in previous years". For the sake of your Lordships' House, for the sake of Members of Parliament in the House of Commons, it is right that we should know the truth and it is right that we should know what is the present position. We hope very much that the Secretary of State together with the Association of Directors of Social Services will be able to give a true and accurate statement.

When it comes to the question of staffing in regard to social workers, again I am puzzled, because the figures show that the number of social workers has increased and stands now at 22,916. The number of staff in residential establishments has also increased; in 1978 it was 26,074 and in 1980 it is estimated—this may not be absolutely accurate but nearly so—it is 28,095. So here again is a discrepancy. I believe that we should know exactly what is the truth, because how can we estimate our services without knowing what the truth is?

I feel that I must congratulate the Secretary of State for setting up the Barclay Committee which seeks to define the role of social workers. If I may say for social workers, the colleagues with whom I worked for so many years—and I am grateful to many noble Lords and the right reverend Prelate who appreciated their work—the sad situation is that those who work hard, those who work consistently and are committed, are those who very rarely speak. Of the 120 local authorities in only 11 authorities were social workers on strike, and in those authorities, as has been said, they were sorely missed, particularly in the area of the elderly, the handicapped and the children. Therefore I hope very much that we may establish that they are not being cut and that their work is continuing, and that they will not suffer as a result of the cutbacks.

In many local authorities where there is a commitment, where there is a sense of real desire to help the clients, those with whom they work, it is extraordinary the way the work has been able to go on despite the fact that in many local authorities cuts have been made. May I give some examples, from the point of view of structure of the departments. There are many departments in this country that have restructured, and they have restructured in such a way that the social workers have stepped down from the top bureaucracy into the field and are now much more closely in touch with field work than they were before. This is because they have had to cut down. I have learned from at least five authorities, and I think there are many more, that they have welcomed the cut-down and the restructuring because it has been something positive.

Those of us who have been involved with children in children's homes have come to realise how terribly expensive are the children's homes, residential establishments, community homes. But we have also come to realise how very much better it is for children to be out of children's homes and in communities. We have sought to foster children, to have children adopted, even those who are extraordinarily handicapped. I have done some figures and found that if a child from seven to 17 is adopted, we are saved £60,000, but that is infinitesimal as compared with what it has meant to that child. But it is the fact that, because people have realised that they must look again and concentrate on their services, there have been some really positive results.

I pass on to an area which I find very difficult. I seek the help of those of my colleagues in the House who are trade unionists. I belong to a trade union myself, so perhaps I should go to my own trade union. However, I would make a plea to the trade unions to think about the clients that we serve. There are various restrictive practices which are a terrible burden to the clients, but not to the staff. For instance, it is difficult in some areas for old people to potter about and do the garden because it is said by their trade union that they may keep somebody out of a job. It is said in some old people's homes that the old people should not cook and clean because it would deprive someone of a job. In the North-East a number of departments have got together with a view to starting up a voluntary service—a service of volunteers—and that has been forbidden by the trade unions. The trade unions have much to offer. Many of us have worked with, and been grateful to, our unions. But I wonder whether those of your Lordships who carry weight with the unions could bring this matter to their notice.

There are other ways in which we can curtail expenditure and give a better service. There are the day centres. In my own authority—as the noble Lord, Lord Wells-Pestell, will know—I was fortunate enough to get one centre built before the cuts came. We needed several more centres and I pay tribute to the social workers because they were not daunted by having no money. An enormous number of small day centres have been set up in village halls and in many ways I sometimes think that they are more effective than the rather expensive centres that are purpose built.

I am bound to say—and the noble Lord, Lord Donaldson of Kingsbridge, will expect me to say—how important we believe is the allocation of money to be spent on intermediate treatment keeping children out of custodial care. In this respect I think that I must pay tribute to the Secretary of State because extra money has been given to the Rayner Foundation. I think that I would be less than fair—and I would wish to say this from the point of view of my own party—if I did not say that I cannot agree with my own party over the question of detention centres. I would wish the noble Lord, Lord Wells-Pestell, to know that because I think that in this House we should work for what we really believe to be the best thing for the clients for whom we are working. I think that they are expensive and I do not think that they are effective. I would much rather see the money being spent on something other than detention centres.

As regards voluntary organisations, I think that we are in danger of putting our money in one place or the other. The statutory services and the voluntary organisations should work as partners and not individually. I think that for them to work separately is a great mistake. Each has something to offer to the other. The voluntary organisations have flexibility, they are able to try out schemes and they are able to concentrate on just one subject. However, we make a mistake if we do not regard the statutory and the voluntary social services as working as equal partners.

I should like to mention one further point and to ask the Minister whether, in her reply, she could say something on the question of the under-fives. I believe that the care of the under-fives is where it all begins. The book that has just been brought out called The Great Under-Fives Muddle—Options for Day Care Policy, needs to be deeply thought about particularly in an age when some mothers have to go out to work and others must stay at home. I would wish to pay tribute to the Minister who is to reply and to Sir George Young in the Department of Health and Social Security, knowing that both of them together—one from the Department of Education and Science and the other from the Department of Health and Social Security—have jointly been visiting various centres and looking at the ways in which the under-fives could be cared for.

So, in conclusion, I hope that out of this debate something positive will come—something constructive will come. I would only say that if you are committed to something, if your heart lies in that place, then whether there is money or whether there is not you will do it. You will find the money come what may. I hope that that is how we shall go forward in the social services.

Lord Wells-Pestell

My Lords, before the noble Baroness sits down I should like to ask her one question, because I think that it is important that we should get the situation correct. I understood her to say that the Secretary of State for Social Services does not accept the report of the Association of Directors of Social Service. I should like to ask the noble Baroness whether it is not a fact that the Association of Directors of Social Service compiled this 95-page report as a result of a carefully prepared questionnaire that they sent out to every other director asking them to list the cuts and the enforced savings—which were in point of fact the matters that I mentioned during my opening speech.

Baroness Faithfull

My Lords, the noble Lord, Lord Wells-Pestell, is absolutely right. This matter has puzzled us. I think that the Secretary of State has had difficulty in squaring the money that he has allocated for social services with what is going on in the local authorities. I cannot say whether the Secretary of State's assessment is right or whether the directors of social services, are right. I only know that both are puzzled. As a result of that, I am informed—although I was not able to check it this morning—that there is a committee being set up with members from both sides to look at both reports and to see exactly where the truth lies.

6.58 p.m.

Baroness Jeger

My Lords, I must say that the noble Baroness, Lady Faithfull, for whom I have a very great personal regard, sounds very much more satisfied with the situation than anyone else who I know in the social services today—and I know very many of them. She started her speech by referring to feeling deeply, but by the end I felt that she was letting arithmetic rule her warm heart. I appreciate her point of view—although of course, I do not share it—that there are people who say that we must give the conquest of inflation priority. But what does that mean to an autistic child? What does it mean to a blind old man who will not live through this winter? In my view this is a totally false conception.

I have been thinking back. Indeed, I am so old that I can think back to when the late Arthur Greenwood appointed Beveridge to set up that committee over 40 years ago, and Beveridge stated quite clearly: The plan for social security is first and foremost a method of redistributing income". That is the challenge that we have to face. It is not a question of whether we have the money or not: it is a question of what we are doing with the money we have. Beveridge continued by saying that: We should put first the most urgent needs so as to make the best possible use of whatever resources are available". I was particularly interested in what the right reverend Prelate the Bishop of Guildford had to say and I should like to take one of his thoughts a little further. I honestly do not think that this country is in a position where we can afford much longer to think in terms of Disraeli's two nations. I think that we are one nation or we shall be nothing at all, because if too many people feel that society does not care about them, they will not care about society, and its very fabric will be in danger.

I submit to your Lordships that the welfare programme, which started with such high hopes following the Beveridge Report, instead of being taken further forward is, in fact, going backwards from Beveridge, because the welfare programme for this country has lost all social purpose. It has become part of economic policy. The only philosophy that this Government seem to understand is the domination of fiscal considerations over everything else, especially over the wellbeing of the most disadvantaged.

We had a very impressive speech from my noble friend Lord Sefton, who put some reality into this rather academic debate. I also want to remind your Lordships of the people about whom we are talking, who are at pension age now. Most of them were born in the First World War; their young life was spent during the 1920s and the 1930s, through times of hardship and unemployment. Then came another war. These are people who have not had the opportunity in their lives to accumulate capital resources; to get a sort of camel's hump of supplies around them for emergencies.

I remember vividly how so often, when I was a Member of Parliament, there would come old men, and sometimes old women, to my surgery and often they would want to reminisce. It would turn out that this impoverished old man had been on a ship to Murmansk; that another had one been in a Japanese prisoner-of-war camp; that some brokendown old woman had been a nurse in Singapore. We are talking about people who have not had the opportunity in their lifetime to build the comfort of fat around them; and because many of them are living longer, we must take on board this responsibility, even if it means a totally different allocation of our resources.

Of course, I agree with the need to work with the voluntary organisations; I have done much voluntary work myself. But we cannot use the voluntary organisations as an alibi for statutory provision. We do not have the Beatrice Webbs and the ladies bountiful with private incomes and leisure to go around the East End doing good works any more. Society is changing. More and more women are employed, and increasing numbers of women are trying to be employed because they need to earn the money to keep up the living standards of their families.

Therefore it is quite unfair to suggest that there could be an economy in this direction. I would also point out that the poorest areas which need the most help usually have the fewest resources in terms of manpower and womanpower, because there are too few of those people who can give their time to voluntary work. I have noticed this particularly in the East End of London where almost every able-bodied woman who might be thought to be a good person to do Meals-on-Wheels, is either in a factory or trying to get a job somewhere to help raise family standards.

I should like to ask one or two specific questions. Today we have heard much about what we cannot afford. I want to ask how much money is in the National Insurance Fund. I have been told that it is £687 million, just sitting there. I hope that the Government are getting a good rate of interest on it. That is three times the amount that the Government claim to be saving. How much will it be next year?—or is it the Government's policy to sit on this money, and to force more people on to supplementary benefits, which have to be financed out of taxation?

By 1984 it has been estimated that 3.5 million people will be depending on the safety net of supplementary benefit. That will be an increase of half a million on this year. That was not the original intention of Beveridge. The idea was that supplementary benefits—the old Assistance Board—were there for emergencies and for difficult problems. But they were not meant to be an integral part of our social security plans. I believe that a Government's policy on welfare would be well judged, not by how many people are on supplementary benefit, but by how many people come off supplementary benefit and are paid proper rates. The Secretary of State, Mr. Jenkin, boasted at a Conservative meeting in Colchester last February: Compared with Labour's extravagant plans which we inherited, we will have reduced spending by something like £1.5 billion on social security and also saved the Exchequer around £750 million on the NHS—almost entirely through higher charges and higher contributions". But every pound that the Government save is a pound taken off the people who need it and the people who deserve it.

I want to refer to the abolition of the earnings-related supplement next January. If the unemployment figures progress as they are at present, that should, on my calculation, save the Government about £360 million. Again, that is £360 million taken from people who have made their contributions and feel that they have an honest right to those benefits. Another question that I want to ask concerns income tax. What we cannot afford, we cannot afford, but in the Government's first Budget how could we afford to give away £1.5 billion? Thirty-seven per cent. of tax hand-outs went to the richest 7 per cent. of the population. Now this Government come here, saying that they cannot afford to help the poor, that they cannot afford nursery education that we cannot have so many home helps—that is where we must cut. This is the real political evil of the argument.

Then there was the failure in the last Budget to raise tax thresholds and to index allowances. In effect, that is a deliberate cut in income and it hurts most the poorest people. We are now in this sort of Alice in Wonderland post-Beveridge age where we are taxing the poor to pay for their own benefits, instead of using fiscal policies for a real distribution of the resources of the nation.

There is one particular example to which I should like an answer. For the first time in history women between the ages of 60 and 64 are to be liable to income tax if their income consists only of their pension; that is, the retirement and graduated pensions. A Question was asked the other day about this and the Minister replied that the Inland Revenue had a tolerance level, and that as long as the tax did not come to more than £30, it would not be collected. I think that this is absolute nonsense. Surely it can only mean that, if you have to bring within the network of the Inland Revenue women who have no income other than their pension, the income tax threshold is appallingly too low.

Moreover, I have to ask about this £30, supposing one woman who has worked particularly hard and had a good job and has a graduated pension, say, of not many pence a week, perhaps 55p a week, and her income tax liability comes to over £30. Say it is £32 to £35. Does she have to pay only £2 or £5, or will she have to pay £32 or £35 because the Inland Revenue will say that one of these actuarially minded wooden heads at the Treasury says that it is only up to £30 that you can have a tolerance level? By freezing allowances in the last Budget the Government have brought thousands of women pensioners into this tax bracket for the first time since their retirement. This has been quite a shock for many of them.

The sick, the injured, the unemployed suffer a real cut of about 5 per cent. because the Social Security Act provides uprating which is 5 per cent. below inflation. This of course will be worsened when the earnings-related supplement will be abolished. That is a move which would have caused a Department of Trade inquiry if any city insurance company had treated contributors in this way.

Other noble Lords have spoken about the result of cuts in housing, which I think are most desperate and ill-advised. Noble Lords talk about the need to cut inflation before we do anything else, but I cannot think of anything more inflationary than paying men and women to do nothing. That must be the most inflationary nonsense in our society. We have, for instance, in Camden 1,000 houses which have been acquired in better times, but are now empty because funds are not available for improvements and renovations to make them "letable" in the jargon. So where do the homeless families go? They go to bed-and-breakfast hotels. Where do the children go? They go into children's homes at vastly more cost to the country than if the social services and welfare services were constructively financed to deal with those problems.

We are not able to give council mortgages any more to people who want to buy their own homes in the borough. That again contributes to the awful problem of homelessness. I hesitate at this late hour—or at any hour, I may say—to quote Scripture, especially in the presence of so many holy Lords. I hope they will forgive me if I say that I think a good text for a civilised society is, "Bear ye one another's burdens". That is the voice not merely of piety and good manners, but in the long run, of sound economic freedom.

7.14 p.m.

Lord Young of Dartington

My Lords, I should like to join with my noble friends Lord Donaldson and Lord Walston, with me Social Democrats, in welcoming the Motion put before us today and introduced so ably by the noble Lord, Lord Wells-Pestell. I was particularly moved by what the noble Lord, Lord Sefton of Garston, had to say, and very much welcomed too what my noble friend Lady Jeger has just said in her speech. The noble Lord, Lord Orr-Ewing, who unfortunately has left us now, in referring to the Social Democrats, said that they do not seem to be doing anything in this debate, at any rate, except supporting what some of the Labour speakers have said before them. What I want to try to do, while certainly supporting what Labour speakers have said, is also to show what one of the differences is, as I see it, between the Social Democratic Party and the Labour Party on the kind of issues being discussed this evening.

I can start my argument by referring to the Motion itself, which lumps together Government aid and local authority services, as indeed it is customary to do. The central Government and the local authorities are so intimately bound up together that sometimes it is difficult to see where one ends and the other starts. My contention is going to be—and I hope I am going to carry my noble friends with me on this—that this should not be so. There should not be such a close bond. If there were not, then there would be rather less of the kind of suffering that we have been hearing a good deal about this afternoon and evening.

It is necessary to ask why have the Ministers of this Government been able to impose themselves as successfully as they have upon the local authorities. Why has the reorganisation of the rate support grant, even though it has not gone quite according to plan, been accepted as readily as it has by so many authorities? I accept of course that there has been resistance. There has been resistance on the part of Conservative authorities as well as Labour authorities. But it would have been greater still, and much of the suffering that we have heard about today would not have existed, if there had been greater independence on the part of local authorities from the hand of Whitehall.

By and large I would maintain—and I know that several speakers who have come before me have also maintained this, although there are many exceptions—that local councillors tend to be, by and large, nearer the ground and more aware of the intimate needs and the important personal needs of the people whom they serve in their own locality. I would think that by and large local councillors—and not only in Labour authorities—recognise that the already vulnerable in this country are the people who have been particularly hard hit and made more vulnerable by this Government's policies; mainly their policies which have led to the encouragement of unemployment and the growth of unemployment, but made worse by the cuts in public expenditure which they have urged on, and forced on, local authorities throughout the country.

As a result of this, grievous divisions in our society which the Welfare State had to some extent healed have now unfortunately been opened up, and in many cases searingly opened up. The divisions between the North and South with the periphery countries of Scotland, Wales, and Northern Ireland suffering most of all; the divisions between the mature and the young, with unemployment rates higher among youngsters than among older people. Divisions also between white and black with rates of unemployment among black people, especially young black people, being a good deal higher than among their white peers. Above all, and underlying all this, the differences and divisions between the rich and the poor, of which the noble Lord, Lord Wells-Pestell, spoke so well when he opened this debate, and about which the right reverend Prelate the Bishop of Guildford also spoke so well earlier on.

The result of all this is that the always vulnerable have been made more so. Many in the Government would, I think, accept this. I noted the other day, as many others may have done, that Sir George Younger, whose name has been mentioned already, is worried about the effects of growing unemployment on the health of people in this country. But all that is proposed by way of action on this is to start up some research project, when it surely should be obvious to many people that unemployment, producing lower incomes, and in some cases much lower incomes, is absolutely bound to lead to some deterioration in health.

According to my argument, all those changes are more present in the consciousness of local councillors than in that of many people in Whitehall. They know better than the people in Whitehall that if a housebound old lady in, say, the back streets of Gateshead is deprived of the services of a home help she badly needs, that could, and often does, lead to grievous suffering for that old lady. The noble Lord, Lord Orr-Ewing, said we could not afford all the home helps we need until more wealth has been created. Surely, however, to find and pay someone to act as a home help for somebody who needs her services represents the creation of wealth. The satisfaction of need through the economic process is the creation of wealth, and much public expenditure leads to the creation of wealth; it is not only private expenditure which creates wealth. The public sector as well as private enterprise produces wealth and increases the national income, and it leads to greater satisfaction of the urgent wants of people greatly in need. Monetarism may make sense to some of the surviving economists in the Treasury, but to that old lady in the back streets of Gateshead—or any other person in any other town in the country—it makes no sense at all. How can one explain it in terms that such a person, or a local councillor or most social workers, can understand?

The noble Lord, Lord Orr-Ewing, spoke, as did the noble Baroness, Lady Faithfull, about the importance of the voluntary bodies and I agree with what they said. My noble friend Lord Donaldson mentioned the important work being done by a voluntary body in Tower Hamlets. I do not know if Lord Donaldson has seen the proposed cuts in the grants made by Tower Hamlets Borough Council to voluntary bodies in that borough; the list runs for seven sheets, so several hundred voluntary bodies will have their grants cut to zero or to almost nothing. A vital part of the Welfare State has been the partnership between voluntary bodies and local authorities, but that partnership has depended in many cases on grants being given by local authorities. If they are to be cut off, as is happening now—it is happening not only in Tower Hamlets but in many other parts of the country—the voluntary bodies will not be able even to begin to take up some of the slack which has been left and so meet some of the extra need that has been created as a result of the cuts in local services. I should be grateful to the Minister if she could give figures showing how much local authority grants to voluntary bodies have been cut since the last general election, and particularly in the last year.

Baroness Young

My Lords, as the noble Lord has asked a specific question on a most important point to which many speakers have referred, perhaps I might intervene now to tell him that local government grants to voluntary organisations actually increased by about 8 per cent. in real terms in 1979–80 and payments for services to voluntary organisations increased by about 5 per cent.

Lord Young of Dartington

My Lords, while thanking the Minister for that answer, may I ask if she has any estimates for the next year, and can she give any idea—this particularly worries me—of cuts proposed for the coming financial year? As I see it, that will be the year of the real, hard, unfortunate truth for the voluntary bodies.

Baroness Young

Clearly we do not have information for the current year, my Lords, because it has only just started. The figures I gave are the latest ones I have.

Lord Young of Dartington

I am obliged to the Minister. My Lords, I return to my previous question: Why has there been so little resistance by local authorities to the pressure from central Government to save money? I suggest it stems from the dependence of local authorities on central Government grants and on our archaic system of local rates, a system which no Government so far, Conservative or Labour, have wanted to reform. If there had been some reform—if some of the proposals put forward in the Layfield Report in the early 'seventies had been acted on by a Government of either party—there would, to some extent at any rate, have been a liberation of local authorities from control by Whitehall and Marsham Street. I believe the present Government will go down in history as the most centralising Government the country has ever had—all because they have tried to take control of local expenditure and have used almost every means open to them, along with the creation of new means, to achieve that objective.

But—and here I return to the question asked by the noble Lord, Lord Orr-Ewing—the Conservative Government have not been alone in what they have done. Successive Labour Governments (I put this to some of my noble friends in front of me) have been great centralisers, too—for good reasons (for the fairer distribution of resources) and for bad reasons (that there seemed to be economies of scale to be had from larger organisations)—and I am as much at fault as many others in having believed that economies of scale were so important that it was worth sacrificing a lot else to get them.

That has meant that by and large municipal socialism has not been good enough for the modern Labour Party; I believe it is good enough for the new Social Democratic Party and will prove to be so. The Labour Government of 1945, despite their many great achievements, nationalised all manner of services including gas, electricity, buses and health. It was to be a National Health Service from the beginning, although Herbert Morrison in the Cabinet argued strongly for the retention of local control over the health services, but he was overborne, and the process has gone on since then. When a National Water Authority was set up less than 10 years ago there was very little opposition to the proposal from either of the main parties, though what good a National Water Authority has done as a substitute for local water authorities has yet to be seen. Certainly it has put the Government of the day somewhat at the mercy of the trade unions in that industry. So what disagreement there has been between the two main parties—and they have been manifold and important—there seems to have been tacit agreement to undermine genuine local government.

According to my argument, all will remain as it is until local authorities have their own tax base so that they are not under the financial control of Whitehall in the way they are and have been. That brings us back to the proposal in the Layfield Report about a local income tax which would give local authorities a defensible source of revenue so that they would not be so dependent on rates and, above all, so that they would not be so dependent on central Government grants. My belief is that the local income tax would play an important part in the future programme of this new party to which noble Lords on this Bench belong. The Social Democratic Party strongly believe in decentralisation. We believe that one route towards greater decentralisation would be the introduction of a local income tax. I believe that we would want to do that partly because in years to come, if success greets these efforts, it will not be necessary to have debates such as that which we have had today, in which the effects of central Government and local authority policies are all locked together, as though they were all of a piece, which they have been, but which I believe they should not be for much longer.

7.30 p.m.

Baroness Fisher of Rednal

My Lords, I do not agree with all that the noble Lord, Lord Young of Dartington, has said, but I go along with him on the point that the needs of local people are well and truly served by their local representatives. The needs of local people become apparent, and so, because they are known, they can be met. This evening I want to concentrate on the situation in Birmingham, and wish to assure the noble Baroness, Lady Faithfull, that I have tried to glean the facts regarding this situation. The facts have been given to me by those whom I would call very responsible people in that city. It was not long ago that we had a debate on unemployment, fostered from these Benches, and on that occasion I spoke about the serious unemployment situation in the West Midlands. As the Minister the noble Baroness, Lady Young, will recall, I have recently tabled a couple of Questions about the number of children taking free school meals.

Among the facts that I have been able to elucidate regarding the situation in Birmingham is that the percentage of free meals taken by children is rising. Not only does that mean more expenditure for the local authority, but, more importantly, it is a clear indication of the way in which the economic situation is hitting ordinary families. I am informed that the daily average of pupils taking free school meals in Birmingham during 1980–81 was 31,300. The figure that is being estimated for in respect of this year is 36,100. So there is to be an increase of approximately 5,000 in the number of children expected to receive free school meals in the city of Birmingham during the next 12 months.

I think it was the noble Lord, Lord Banks, who gave details of cuts in local government grants for Liverpool. I should like to point out to your Lordships that 1981–82 is the first year in which the Government's new block grant arrangements are to apply. This change, and the impact of Government policies on public expenditure, resulted in the city of Birmingham losing £43 million in grant. It is very difficult to try to recoup £43 million. Whether the Government like it or not, all local authority departments have to take their fair share of cuts, in the same way as all Government departments are told that they must take their fair share. Therefore it is no use the Government saying that there are no cuts. Local authorities are having to take action in the same way as are Government departments.

I think it was the right reverend Prelate the Bishop of Liverpool who mentioned the problems of the great cities, and I believe that he included Birmingham in what he had to say. I am informed that with regard to the budget for social services in the city of Birmingham for 1981–82, the amount to be met by rate support grant is £49¼ million. That is a very substantial amount and I expect that the noble Baroness, Lady Faithfull, would agree with me that Birmingham is a good provider of social services at a personal level. Regardless of which Administration has been in charge, the city has gone forward with all kinds of social service schemes at a personal level.

We must recognise that the Government are saying not only, "You must sustain cuts", but also, "You must cut your manpower". Many local authorities and Government departments are cutting the number of tea ladies who go round every morning, or the number of cleaners. It is then claimed, "Well, we have got rid of 500". But in fact the authority or department concerned has merely got rid of 500 women cleaners, only to go to an outside contractor for office cleaning. Thus there is no saving of public money. So this numbers game which the Government are calling for is really a stupid game.

In considering social services, to use Birmingham as an example I would point out that 60 per cent. of spending on social services relates to manpower. So if a local authority is asked to cut down on manpower in the social services department, it cuts down on home helps and health visitors. This is cutting back on services which people really need. The Government must recognise that the aim of personal social services is to give services to those who really need them. If there are cutbacks of manpower in social services, assessments of new work will be held up, the number of new cases taken on will be reduced and tragedies will occur. Inevitably, when tragedies occur everyone becomes very hot under the collar. But it must be realised that the Government policy on de-manning in departments and on cuts in local authority grants must be held responsible for the inevitably increasing risks that will arise, as well as for the time lag from which clients will suffer, and the reduction of services in many areas.

As I have said, I asked for facts, and I have received them from a very important source. I have been told that: The greatest effect upon the services of the department through Government action is that we cannot do all we would wish to do for different clients. That is a straightforward fact. My informants continue: For instance, we can only maintain the existing level of home helps, whereas"— Here I would point out that all large cities have the problem of ageing communities. Where possible the young people move away to more attractive areas, and in the large cities the numbers of aged and lonely people are increasing. I have been told that whereas the department would have liked to spend another quarter of a million pounds under this particular item, because of the ever-increasing number of elderly people it is unable to do so. During this Year of the Disabled it would also have liked to provide many more aids and adaptions for the disabled. The department has increased the amount by £60,000, but this will be nowhere near enough. It is not felt that that is the right contribution that the department should be making to the Year of the Disabled. It is felt that it should have been much greater.

One of the serious effects of the Government cutbacks has been felt in the housing improvement programme. I was for a long time chairman of the housing committee in Birmingham and we were always proud of the adaptations to houses that we were able to carry out for disabled people. The adaptations included such work as providing ramps outside houses, widening doors and lowering sinks for disabled housewives. We felt that all those kind of things were most essential so that people could continue to live in their own homes, in their own neighbourhoods. Unfortunately, with the reduction in housing improvement grants it will mean that there is less being made available for the adaptation of council houses for the disabled. This can only be regretted because, as I think many other noble Lords have said, if you cannot keep people in their own homes the immediate effect is excess expenditure on some other kind of public service.

Therefore, I am informed, it is true that there will be many cases in Birmingham not dealt with simply because of Government policies on rate-support and cuts in local government grants. We all accept that the Government are trying—some of us would say they are not trying in the right direction, but they are trying—to beat inflation, but I think many noble Lords ask—and I think the Bishop of Guildford also made this point—where is the tax burden supposed to fall? Is it supposed to fall on those who are sick, those who are elderly and those who are less fortunate, when we can read day after day in the national press that in this country there are some organisations, some large families, who, I am not saying are breaking the law but who are able not to pay their full share, so helping to take the burden off those in society who are more impoverished. It is for this reason, I think, that we question the Government's handling of their economic strategy.

I am sorry the noble Lord, Lord Orr-Ewing, has left the Chamber, but I want to make it quite clear that what I am going to say now is not a policy of the City of Birmingham. This is where I believe that perhaps those of us on these Benches sometimes think there is a difference in attitude between what some of us think and what Lord Orr-Ewing thinks. I am about to quote to your Lordships now a letter which has been sent to me, because I think noble Lords know that I have a serious interest in the blind-handicapped. The noble Baroness, Lady Vickers, and myself are vice-presidents of an organisation dealing with the blind-handicapped; and this letter was sent to me from a metropolitan borough in the West Midlands by a boy who lives in that borough and is severely blind-handicapped. The letter starts off: Dear Sir or Madam"— and I am reading exactly what the letter says. Re concessionery travel 1981–1982. I am writing to inform you that at its meeting on the 10th March 1981, the Council decided to stop the provision of Free Bus Passes to Blind and Disabled Persons with effect from the 1st April 1981. The decision was taken as part of the cutbacks in local authority expenditure. Consequently when your pass expires, should you wish to obtain a renewal, you would have to pay the full cost of the pass as follows: Disabled—£73.50. Blind—£62.00.". They even differentiate between being blind and being disabled! This person is saying to me, "What shall I do? Shall I ask for a blind pass or shall I ask for a disabled pass?—because I am blind-handicapped."

This letter says very nicely at the end: Should you have any queries, please do not hesitate to contact my Department". He contacted the department and was told, "We want it all in one go; you cannot even have a quarterly season". So the blind and the handicapped will now be asked £73.50 and £62.00 for their passes. It might be that that local authority feels that it has got to make that kind of cutback at a personal level. All I would say again is that it is not the Birmingham local authority which is taking that action.

We must look at all these things in context. I was speaking only a few weeks ago with the Birmingham Council for Voluntary Service, an organisation which tries to co-ordinate the work of all the voluntary services. While they were able to give me such details of where the local authority was going to cut back on specific grants, they pointed out to me that, with electricity going up 11 per cent., with gas going up 15 per cent., with water rates going up approximately £10 to £11 a year, with rates in Birmingham increasing by a very substantial amount of 38 per cent. and with rents of council houses going up £2.50 a week, the people were saying that obviously the all-round increases were bound to cause hardship, particularly to those on fixed incomes and those on low wages.

What I should like to ask the Minister is this. Despite all these difficulties of increased rents, increased electricity and increased gas charges, what are the Government going to do to overcome the difficulties that many of the people who are on supplementary benefit are going to face within the next six or seven weeks? Is the department geared to take up the extra work which is necessary to realign all the supplementary benefits, which are going to be so different in so many parts of the country, to take account of all these increases—the gas, the electricity, the water, the rents and the rates?

The other question that I would seriously ask is this. Statistics are clear, and the Government have statistics which show that there are many people who are entitled to claim benefit but who do not claim it. I am not going into the reasons why they do not claim it—and I think Lord Soper gave his understanding of why they do not claim it—but this failure to claim in some cases is going to cause extreme hardship, especially now, with the increases in other things. Therefore, one should like to ask the Government: What promotional campaigns do the DHSS envisage to increase the take-up of benefit from their department?

The other question I should like to ask the Minister to answer when she replies is this. There have been discussions, so one understands, regarding the new housing benefit proposals, and I understand that there is a scheme in outline. All I would say to noble Lords is that I listened very patiently to noble Lords opposite when they were speaking. It is rather unfortunate that one particular Member has need to wander around and speak to everybody in the Chamber. I would have said that we have the new housing benefit proposals, and there is a scheme now being outlined. One would say, if one has read the press correctly, that it is important for the DHSS to put into operation as soon as possible the new housing benefit proposals, because this will mean that they will immediately be able to cut back on the number of people employed in the DHSS, and pass over the administration of the new housing benefit proposals to the local authorities. If this is the case—and quite obviously, the Government are considering some new scheme—will it mean that local authorities will have any benefit? Will they get any increased finance to do this? Will they be able to increase their manning to do it? Or is it just for the satisfaction of the DHSS in saying, "We can get rid of X number of jobs, but we are not getting rid of the provision; what we are doing is just putting it on the backs of somebody else"?

My Lords, I conclude by saying that I join with all those noble Lords who have spoken today and pointed out the injustice of the Government's economic policy as it affects the less fortunate. I think it was the noble Lord, Lord Cullen of Ashbourne, who said that the battle of inflation must be won. He used the word "battle". What we on this side of the House are questioning is this: Why should the more impoverished be the front-line troops in that battle?

7.50 p.m.

Lord Winstanley

My Lords, the hour is late and we must leave adequate time for the important debate which is to follow on the Prayer Book—particularly when I bear in mind that for some of the people who are utterly dependent on Government and local government personal social services there sometimes seems to be little left but prayer. I hope that this debate may give them some other things on which to depend. It would be a very great waste if such an excellent and well-informed debate, with speeches of such high quality, were to have no practical effect on anything or anybody. It is my earnest hope that the Government will think again. To be honest—and why should I not be so?— my worry is not their hearts but their heads. At the beginning of this debate the noble Lord, Lord Wells-Pestell, raised the question of whether noble Lords opposite were indifferent to or ignorant of the plight of some of the disadvantaged people in society. I have no doubt at all that many noble Lords opposite know, and know well from their personal experience, what is happening. Many noble Lords opposite, from work that they do in the field and in voluntary bodies of one kind or another, know what is happening in society today and among the elderly, the handicapped and the disabled. But I am afraid that the Government do not seem to be clearly aware of the actual effects and of the real costs of some of their policies.

Here I must briefly take issue with the noble Lord, Lord Boyd-Carpenter. He talked of justified cuts at the moment in the present economic circumstances. He asked those of us who feel that services must be maintained at the present level, or perhaps improved, how we will find the money. The question that I must put to him is this. How will we find the money for some of the cuts which the Government have made, which in effect are not cuts at all but items of extreme extravagance which the nation can ill afford at the present time? I must say to him that some of these cuts cost money. I am sure that he would not be in favour of cuts which, as far as public funds are concerned, prove to be costly. I will give examples.

Lord Boyd-Carpenter

My Lords, if I may intervene as the noble Lord put a question to me, obviously if what is involved is not a cut but what I may call an "anti-cut" then my question does not apply. My question applies only to what is the really difficult issue to which I hope the noble Lord will address himself as to where savings can be made, although painfully, and what to do about it if you do not make the savings.

Lord Winstanley

My Lords, I am grateful for the intervention by the noble Lord. It shows that he is listening with such care that perhaps there is hope that when he has heard the argument he may change some of his views.

With regard to local authority cuts, I spoke last week in the debate in your Lordships' House initiated by the noble Earl, Lord Longford, about mental health after-care services. At that time I pointed out that at the moment there were 34 local authorities that provide no day care centres at all and no other kind of day care provision. The noble Lord, Lord Cullen of Ashbourne, in winding up the debate, said that the provision of day care services of that kind is mandatory under the Mental Health Act. In other words, these local authorities probably are acting contra vires; but it is a fact that every day people are having to go to hospital because of the inadequacies of the domiciliary services. People who could have been cared for at home are now having to go every day into hospital or into some other expensive institutional care because of the inadequacy of the domiciliary services at home. It is a fact that every day people are being kept in hospital because the domiciliary services in their own areas are inadequate for them to be discharged. That is costing a great deal of money.

My Lords, I think that this is hardly the time at which to drop into the debate any new matters; but perhaps the noble Baroness will forgive me if I refer to two such matters of which I have personal knowledge. First, as she and we are all aware, we recently have had a vast increase in the cost of prescription charges. Now, the person who must pay the full prescription charge, and there are many, and who does not have the money to buy a prepayment prescription charges exemption certificate must pay £1 per item on a prescription. The immediate consequence is precisely what happened before when the prescription charges went up and precisely what happened when the prescription charges were re-introduced—by a Labour Government, I may say—in 1967. Immediately, doctors who are anxious to save their patients' money begin to think: "If this old lady needs iron and also some vitamins, I must think whether there could be a combined tablet". Therefore we have what is called "polypharmacy", blunderbuss prescribing and we have the pharmaceutical industry setting out to manufacture, to prepare and to develop tablets which contain a whole range of different ingredients so that doctors can prescribe those rather than prescribe three or four items on a prescription and thereby save their patients' money. But it costs the nation money.

The noble Baroness will see, when modern figures are produced, that once there is an increase in the prescription charge then doctors start to prescribe in much larger quantities. Prescription in small quantities is very extravagant and wasteful, but prescription in quantities which are too large is also wasteful and costly. I think that at the end of the day when the full calculations are done the noble Baroness will find that the increase in revenue from the increased prescription charges will have had the effect of increasing the nation's drug bill as a whole rather than reducing it.

While on the subject of drugs perhaps I may go briefly to another matter about which there can be no argument. Hospitals which are at present anxious to reduce expenditure (and properly so) are reducing it in this way. They are telling consultants who have continuing clinical responsibility for certain outpatients not to prescribe or issue drugs to them but to send the patients to their general practitioner for prescription. These consultants are people with perhaps heart cases and who give anti-coagulant treatment where the therapy must be monitored and changed frequently. Patients are very often psychiatric patients being prescribed new therapeutic substances in the field of psychiatry where the dosage must be modified or the therapy changed from time to time.

Those consultants are told: "Do not prescribe the drug for the patient but send him to his own doctor and his own doctor must issue the prescription". Obviously, that reduces the hospital's drug bill; there is no question about that. But it is a fact that the cost of drugs to the public funds when issued under the family practitioner committee services in the retail chemist's shop is more than double the cost of the drug when issued by a hospital. So what is a saving for the hospital is a greatly increased expense to the nation. That is saying nothing of the hidden expense of the waste of the general practitioner's time, who must make a telephone call to find out what the drugs are and what the dose is and the waste of time in his seeing the patient. That is the kind of cut which is actually costing our nation money at a time when we can ill afford it.

Now let me turn back to voluntary bodies. The noble Lord, Lord Boyd-Carpenter, said that he was entirely in favour of our making use of them. So am I. I have always been a whole-hearted supporter and believer in the Welfare State; but I have always believed that whatever central Government or local government are able to provide, however comprehensive the various services are, in an ideal world there will always be gaps which can only be filled by the voluntary and dedicated efforts of well-meaning people who are ready to come forward and give of their time and their energy. It is greatly to our credit that we still have so many people wishing to volunteer. I have been immensely encouraged by the way in which young people, teenagers, unemployed people, have been more than ready in Merseyside—as the right reverend Prelate knows in Liverpool—to do admirable work for the elderly, handicapped and sick.

As I reminded the House the other day in the other debate, to make proper use of volunteers you must have organisations and professionals. The optimum ratio is probably about one full-time professional worker for every 10 volunteers. There is nothing more inhibiting to potential volunteers than to come along, having volunteered, and find that they have had their time wasted. There is an immense pool of manpower and womanpower which we can call upon to do work to our benefit if we can provide the services. That means more money for the voluntary bodies.

The noble Lord, Lord Cullen, told us that the grants to voluntary bodies would be increased in real terms. That is very gratifying. We then had the argument about whether or not the grants from local authorities to the voluntary bodies were being cut. My information comes from the all-party disablement committee and at the moment there is a 25 per cent. reduction in grants to the voluntary bodies from local authorities. I know that the figures of the noble Baroness were different, and I also know that the noble Baroness would be the last person to wish to mislead the House; but she will know that Government figures are always in arrears, and sometimes the figures of the people who are actually working in the field and who are there at the sharp end are sometimes a little more up-to-date. When the time comes that the noble Baroness has more comprehensive figures she will find that the figures referred to by the noble Lord, and also by my noble friend Lord Banks, are perhaps more accurate than those which are a little out of date, which she was able to give us, but which were accurate at the time that they were collected.

Then let us look at other matters. What about VAT and things of that kind? Last week I told you that the increase in the price of petrol was costing the Spastics Society alone an extra £30,000 a year. I am now told that the increase in VAT will cost the Spastics Society at least an extra £220,000 a year. That is an extra quarter of a million pounds a year on the expenses of just one of the many voluntary bodies upon whom we have become more and more dependent and upon whom we must rely more and more in the future. It is no good telling them that their grants will be maintained. They will have to have more, if they are to keep pace.

I am not being as brief as I had hoped. On the question of cuts in personnel, the noble Lord, Lord Orr-Ewing, spoke at length about cuts in public expenditure. I agree with him entirely. I am entirely in favour of making cuts in public expenditure; but we have to think where we make those cuts. The noble Lord, Lord Cullen, told us—and I think I have the figures right—that there were to be cuts in headquarters' staff' at the DHSS, and the staff would be reduced by 10 per cent. I am not sure whether he said "had been reduced" or "would be reduced". That is welcome news. But who are these people? Some time ago I saw a copy of a speech made by the Secretary of State for the Environment, Mr. Heseltine. This was to senior staff in the Department of the Environment. He congratulated them on having reduced their numbers of staff by well over 5,000. Mr. Heseltine went on to say that he was interested to see, when he looked at these rather more than 5,000 posts in the Department of the Environment which had disappeared, that they contained no deputy-secretaries and no under-secretaries. People at the top of the public service, whether central Government or local government, find it easy to get rid of people at the bottom. If we are to make economies, it is some of the people at the top whom we must get rid of.

We have heard a lot about home helps. There is no question at all that every doctor in the country will tell you that it has become much more difficult than it was to get a home help to assist some elderly person at home. I suspect that there has been a large reduction in the total number of home helps. I doubt whether there has been much reduction in the actual number of home help organisers or other people higher up in the local authority organisations.

The right reverend Prelate, the Bishop of Liverpool, told us that in Liverpool they had abolished 50 out of 300 field posts. These are the people who do the work at the sharp end. These are the people whom we have to keep. The noble Lord, Lord Soper, in an excellent speech, talked to us about alcoholism. You may think, my Lords, that noble Lords from this Bench have said rather more than enough about alcoholism. I shall content myself by merely reminding your Lordships of Dylan Thomas's excellent definition of an alcoholic. He said an alcoholic was somebody whom you dislike who drinks as much as you do. I entirely agree with the noble Lord, Lord Soper, who said that we spend an enormous amount of public money in very expensive institutions, highly developed, highly technological medical facilities, "drying-out"—to use the noble Lord's term—alcoholics. Those are people who suffer from a serious illness, which is very costly to society as a whole. The noble Lord, Lord Soper, was entirely right when he said that we are wasting public money if we spend money on drying these people out and then fail to provide follow-up services which are necessary in order to enable society to benefit from the expenditure in drying them out. That is the kind of saving that we are making at the sharp end.

I shall end by saying this in all seriousness to the noble Baroness: I honestly and sincerely believe that we shall save money in real terms—and by that I mean a lot of money—if we increase grants to the voluntary bodies. In doing that, we shall unlock other private funds. We shall unlock an immense amount of voluntary effort which all comes free. We shall save ourselves a great deal of money in the end. Secondly, we shall waste money if we force local authorities to make cuts which at the end of the day cost money. What we really need is somebody farsighted, with a breadth of wisdom and vision like the noble Baroness, who can look at these things as a whole, and not just people looking at their own department who say, "We can save a little here". Or somebody looking at another department. We want somebody to take a broad view to look at some of these policies in the general field of health and the social services and say, "Overall, having looked at this, I find this is wasteful and costly. It is wasting public money". I say that we shall waste public money if we force local authorities to make cuts which at the end of the day cost a great deal of money. By all means cut unnecessary personnel, but I hope that so far as possible the Government will try to cut personnel at the top and not at the sharp end.

8.9 p.m.

Lord Wallace of Coslany

My Lords, in winding up the debate from these Benches, I should like to express our thanks and appreciation to my noble friend Lord Wells-Pestell for his initiative in suggesting and pressing for such a debate. His firm and dedicated belief in the need for a compassionate, caring society is, I am sure, appreciated by the whole House, as are the invaluable contributions that he has made over a long period backed by years of practical experience.

My Lords, the debate has been well worth while. I should like to thank all the speakers, although I would disagree with some and especially with the noble Lord who completely forgot when the local elections are to be held; they are to be held on the 9th May. He said they were being held tomorrow, but the noble Lord should know by now that tomorrow never comes. I should like to thank in particular the right reverend Prelate the Bishop of Liverpool and the Bishop of Guildford, because they spoke in terms which could be understood by ordinary people and, if I may say so, in a manner which the nation needs from the Church today. The right reverend Prelate the Bishop of Guildford also brought back some romantic memories to me, because my wife and I were married in St Saviour's in Guildford just over 49 years ago. We remember the great cross on Stag Hill which marked the site of what is now the magnificent new cathedral. It was very much in our hearts and in our minds at the time.

We have a framework of a compassionate, caring society and it still exists today, but we must never forget that the pressures of the modern world hit hardest the weakest, the poorest, the handicapped, and the sick. We must frankly admit that in Britain we still have two societies; the "haves" and the "have nots". It is at times of economic stress such as today that the vulnerable sections of the community suffer most from economy measures, however small they may appear to be on paper and in statistics. Those of us who have had first-hand practical experience of low income as a result of unemployment, sickness or poor pay realise only too well that even a small reduction in income, together with an increase in the costs of essential goods and services, can only increase misery and hardship. I have no hesitation in saying that I have known poverty and unemployment as a teenager, and although it was hard and bitter at the time, at least when I speak in a debate of this kind I can speak from a wealth of human experience, which has certainly improved my education.

For the lower paid, the Budget was a disaster. The Low Pay Unit estimates that the 100,000 families who are unable to cope and to work their way out of poverty will be joined by a further 13,000 as a result of the Budget. Like the noble Lord, Lord Cullen of Ashbourne, who, with respect, provided us with a torrent of statistics, no doubt when replying to this debate the noble Baroness, Lady Young, will provide statistic after statistic to prove the Government's action in increasing social security benefits, which in our view are inadequate. But the fact is that the cuts in social services forced upon local authorities by the financial policies of central Government, and, at times, the crazy actions of the Minister responsible for local government, outweigh any of the advantages secured by the increases in social security benefits.

Housing has been referred to—notably by my noble friend Lady Jeger. It is the view of many of us on this side of the House that housing provision is an essential social service. Rents should be geared to need and the ability to pay. It is true that rent rebate schemes exist in some areas, but, let us face it, rents are soaring. Progress in local authority housing development is at a standstill, to all intents and purposes; due to the Government's obsession with the sale of council houses there has been a gradual reduction in the housing stock, and the situation is now becoming critical. I am not against people owning their own house—I do so myself—but it is wrong to force people, particularly young couples, into that situation, bearing in mind rising rates and maintenance costs. These mean that husband and wife must both continue working and, I am sorry to say, to avoid pregnancy at all costs as that would mean economic disaster for their little family.

For elderly people on low incomes the housing situation is even more serious. When I was a constituency MP I was frequently asked for assistance in securing a housing transfer for an elderly couple or a widow from, say, a high-rise flat, a large house or a house with a garden too large to manage, to something on ground level, in order that the couple or person could cope with increasing age or infirmity. Decreased housing stocks do nothing but increase anxiety and hardship, both to the elderly and to the young.

Public transport is another factor of social consequence. Steep increases in fares and a reduction in services impose a further burden on the unemployed seeking work, those needing out-patient treatment at hospitals, the pregnant woman attending pre-natal clinic, and many others in the low income groups. So far as the elderly are concerned, the availability of bus passes varies from one local authority to another, and there is no national policy. In the GLC area, thanks to the initiative of a previous Labour Administration, free travel is available to pensioners in off-peak periods and at weekends. I must be fair and say that this valuable concession has been continued by the present Conservative majority party. Elsewhere in the country the position varies from the provision of little or nothing to a system such as that run by the GLC, but only in a comparatively few places. The mobility afforded to the elderly by a system of free bus passes represents an invaluable social asset which is urgently needed on a national scale.

Some speakers today—far too few in my opinion—have given examples of reductions in social services among local authorities known to them. I should like to refer specifically to the Kent County Council. When I was a member of the (always) minority Labour group on Kent County Council and was continually in a state of frustration over the inadequate provision of social services, I used to imagine in my mind's eye the words engraved in the massive stone entrance at Maidstone: Abandon hope all ye that enter here. That is exactly how I felt time and time again. What is the present position in reducing social services in an area where the standards have never been high? I will give the House the full facts. In the 1980–81 Kent County Council budget 5 per cent. of total social services expenditure was erased. In the 1981–82 financial year a further 3 per cent. cut is being imposed—a reduction amounting to £1.4 million. In 1980–81 there was also a reduction of £700,000 to meet the Government's cash limits. The cumulative effect of these cuts is hitting at services for the elderly, mentally handicapped, young people distressed by unemployment, and young families in distress. What is more important, this has weakened if not destroyed the morale of dedicated social workers.

At its budget meeting recently, Kent County Council approved a number of cuts in social services and I wish to give them in detail. The Social Services Committee agreed to the following cuts: Residential homes, general economies, £.73,000; residential homes, maintenance cuts, £41,000; reduced provision for mother and baby homes, £5,000; increasing the minimum home help service charge from 50p to £1 per week, giving the Kent County Council—they hope—an additional £287,600: increasing Meals-on-Wheels charges from 40p to 55p, expected to yield £41,000; reduction in grants to voluntary bodies at a time when an extra load is being placed on voluntary bodies, £41,000. Then what about this one?—reduced provision for the elderly terminally ill, £31,700. Also there is reduction in craft materials for the physically handicapped, £5,000; reduction in transport aid for voluntary escorts for children, £9,000; deleting any aid for holidays for the physically handicapped, £25,900; general economies at day-care centres, £17,000; increasing meal charges to the elderly attending daycare centres, £9,000; the introduction—I do not know whether this is revolutionary—of £1 per week attendance charge for day care for the elderly, £7,500. In other words, if they want to attend they have to pay a fee of £1 per week. That is reckoned to bring in to the council £7,500. I rather doubt whether they will get it. Then there is the reduction of maintenance of day-care centres grounds, £9,000; reduction in fieldwork staff, £135,600; reduction of travel expense budget for social workers, £21,000; and reduction in social work training, £137,000.

These are not isolated examples. This sort of thing is going on all over the country as a result of Government policies and the impulsive actions of the Minister responsible for local government. What moved me to real anger is the reduced provision for the elderly terminally ill. While a great deal of unpublicised specialist service is given by the Roman Catholic, Anglican and Jewish communities, the bulk of the terminally ill need support, care and attention, as do their relatives. Again, parents of mentally handicapped children have special needs, as have the children. Some of your Lordships may remember that in a recent debate I drew attention to and quoted from a television report that less than 50 per cent. of local authorities were carrying out their responsiblilities in the field of helping handicapped children. What is also disturbing—and the noble Lord, Lord Winstanley, has also referred to the present situation—is that at a time when pressure is increasing on voluntary bodies as a result of reductions in local authority services, grants are being cut—as in the case of Kent, by £41,000.

We are told time and again by the Prime Minister and others in Government that sacrifices have to be made to reduce inflation and that all sections of the community must take their share of the burden. In the Crypt Chapel of St. Stephen in this our Palace of Westminster are stone benches lining the walls. Centuries ago pews or chairs were not common and the elderly or infirm went to sit on the benches. Tradition has it that that is where the old saying originated: The weakest go to the wall". To use that phrase today I am sure could be held to be over-simplification, but the fact is that the less well-off sections in our society, the elderly, the handicapped, the infirm and the low-paid, are bearing a burden far greater in proportion than that carried by better-off sections of the community.

The Government—and this has been referred to before during this debate—on taking office gave generous cash handouts to the better-off, with no obvious benefit to the economy. Yet in April next year the jobless will be taxed on social security benefits, which is estimated to yield £200 million per annum. The same also applies to people on strike, without question of the justice of their cause. Tax rebates are to be held back equally to the unemployed or to those on strike. What right have the Government to hold back tax rebates to which people are morally and legally entitled?

Finally, it is indeed a sad commentary on life today in Britain that, while we continue to pour out money to provide the means of destroying life even during a period of economic recession, we reduce the means of sustaining life and impose reductions in standards designed to enhance the dignity of human life. This is not humanity; it is the madness of a monetary policy giving priority to material gain at the expense of easing the burdens of the needy.

8.26 p.m.

Baroness Young

My Lords, if I were to begin by thanking the noble Lord, Lord Wells-Pestell, for introducing this debate, I do not suppose he would really believe me. He would feel that I have gone through some terrible kind of masochistic exercise in listening to this. But I should like to thank him. We have argued a great many times across the Dispatch Boxes in this House, and although I do not agree with him, and he knows that, I respect his sincerity and I am very glad that so many speakers have taken part in this debate today. I should like to pay my own personal tribute to the contribution the noble Lord has made on many occasions, both from this side of the House when he was a Government Minister—a very effective one, if I may say so—and from the other side of the House, where he has always made us on this side of the House keep on our toes. I should like also to thank my noble friends who have supported me this afternoon.

I think it is perhaps a good starting point to take that we will all, in all parts of the House, accept that we do care for those who are disadvantaged in society and for those who are weaker, and that all of us would like to have more money for the many desirable causes that have been suggested today. I and my colleagues in Government certainly would; and in a way I was surprised by the speeches of both the noble Lord, Lord Wells-Pestell, and the noble Lord, Lord Donaldson, who were after all both members of the last Government and who were faced with very painful economic realities and had to introduce in 1976 the cuts forced on the Government by the International Monetary Fund, as was so clearly explained by my noble friend Lord Orr-Ewing.

I might also add a rather painful postscript, if I may say so. I hope that the facts were noted by the right reverend Prelate the Bishop of Guildford and that his strictures on us all might at least be even-handed. I was even more surprised to hear the two Social Democrats, the noble Lords, Lord Walston and Lord Donaldson. Certainly the noble Lord, Lord Walston argued for higher taxation, which would appear to be considerably at variance with his own colleagues in the Social Democratic Party, who, as I have understood it from their manifesto, are bent on encouraging incentives to increased productivity. But no doubt the outside world will at least notice that although the Social Democrats sit on a different Bench, their policies appear to be identical with those of the Labour Party, with the exception of the noble Lord, Lord Young of Dartington, who complained that we have too much central government. Has this not been a policy of my party for a considerable time?—too much government of all sorts. But I would say to him—and I speak as an old local government person with 15 years' experience in local government—that I believe local government has a very valuable role to play. However, one of the difficulties he would find in social services, in education and in all these other public services is that you do get a very uneven standard of provision if there is not a certain amount of central government direction over those services.

I have listened this afternoon to an unending list of requests for increased expenditure. I have made a list: pensions, social security benefits of all kinds, extra money for the family service units, charities generally, more for children with special educational needs, more domiciliary services, more home helps, lower prescription charges, reductions on VAT and no increase in the price of petrol. Indeed, this debate has turned very largely into an economic debate. I shall not repeat the arguments, because they were so cogently put by my noble friend Lord Boyd-Carpenter, as to the actual choices that confront us all in this country.

Whether we like it or not, it is a fact that we shall not, ultimately, get better services in this country unless we get increased productivity from the wealth- creating parts of it. If we do not have that increased economic growth, we can have better services only by higher taxes or increased borrowing, which ultimately builds up problems for the future. It is because we are confronted by these basic facts that I should like to turn, first, to the Government's policies, which are aimed specifically at increasing and helping the wealth-creating parts of our society, and indeed at helping those parts of the country which are in serious difficulties at the present time.

We have maintained the urban programme which was started by the last Government in 1977 and, as both the noble Baroness, Lady Fisher, and the noble Lord, Lord Sefton, will know, there are inner city partnership schemes in both Birmingham and Liverpool. We have also started an urban development corporation on Merseyside and the present resource allocation for it in 1981–82 is some £17 million. In Birmingham the inner city partnership scheme is to receive over £16 million.

But, not content with these policies, we have also introduced a series of enterprise zones. These are an experiment in stimulating private sector development in areas of economic and physical decay where the old remedy of ever more Government interference and expenditure has manifestly failed. If successful, they will provide a real stimulus to the revival of local economies and help some of the hardest-hit areas of our towns and cities. Above all, they will create more jobs—real jobs—and we must all hope very much that these zones prove to be a success.

At the same time, there was in the Budget an entire enterprise package. Among many proposals is one of loan guarantees. This is a pilot scheme, agreed with the banks and with the Industrial and Commercial Finance Corporation, to run for three years up to a maximum of £50 million. Loans from two to seven years will carry an 80 per cent. Government guarantee at the full commercial charge, and the scheme will be self-financing. So in this debate we are indicating three ways in which quite specifically we are helping small businesses; and helping the inner cities to create new jobs, in order to create the new wealth from which we shall get a firmer foundation.

A number of different points have been raised in the course of this debate on which I should like to touch. The noble Lord, Lord Banks, asked, right away, whether or not the Government's policy was to make good the shortfall on pensions when we first came into office. Of course, in the first uprating of retirement pensions in 1979 the Government made good the previous Administration's shortfall on long-term and retirement benefits. It is very important that we should recognise that fact.

The noble Baroness, Lady Faithfull, asked me a number of questions about the whole provision for the under-fives. This is an issue in which, I know, she takes a great interest and on which she is very knowledgeable. I am glad to say that, despite the terrible warnings about what would happen in the education service, the recent HMI report on the effects of local authority expenditure policies for 1980–81 indicates that there was an increase of some 5,600 children in nursery classes between January 1979 and January 1980, and the numbers in nursery schools have remained stable. At the same time, there has also been an increase in the day-care services for under-fives. By March 1980, far from falling, the number had actually increased slightly and nine local authority day centres had closed while 19 had opened.

This raises an important point about the joint use of facilities. My honourable friend and colleague Sir George Young and I have ourselves visited a number of examples of joint provision of social services and education for the under-fives. I should like to pay particular tribute to a nursery that we visited in Hounslow. That is a day nursery with educational provision within it, which is one of the most successful examples which has come to my notice. We did, of course, see a number of others.

The noble Baroness, Lady Jeger, asked me a number of questions. She will, I hope, forgive me if I do not at this stage answer them all. But she asked about the amount in the National Insurance Fund, the amount expected to be there next year and what it is being used for. I should like to remind her of the debates that we had at the turn of the year about the increase in National Insurance contributions. The balance in the fund represents about 15 or 16 weeks of expenditure from the fund. There is not a large surplus in relation to the costs that it has to meet.

The noble Lord, Lord Winstanley, asked me about cuts in the numbers of civil servants. I can confirm what my noble friend Lord Cullen said in opening about the numbers that have contracted, and will contract, in the Department of Health and Social Security itself, which also include three Under-Secretaries whose places have not been filled. The noble Lord, Lord Blease, asked me a number of questions about Northern Ireland. If he will forgive me, I will write to him on them as I do not have the information to hand.

There were a large number of points raised on housing. Again, housing is a very emotive subject, but I should like to say to the noble Lord, Lord Wallace of Coslany, that we believe in the sale of council houses, because we think that that is one of the ways of unifying the country. It raises standards and not only do people want to buy their houses; they want a valuable asset which they can pass on to their children. They will have something which is with them, and this is something which it is valuable for everybody who wants it to have. Far from dividing the country, I believe that selling council houses unites it, by raising standards all the way through. There are many arguments about it, but it is important to recognise that we are not seeking to divide. We are seeking to unite in a property-owning democracy—

Lord Parry

My Lords, does the noble Baroness accept that her argument is tenable only if there is also a will to increase the housing stock? If she is putting the view that it unites the nation to allow people to own their own houses within a council housing estate, that presupposes that one has to go on and create more houses in order that people who are denied the opportunity of enjoying a council house are also included in the unifying process.

Baroness Young

My Lords, that is one of those arguments which are not sound. It is always the argument that a council house that is sold is lost. As the noble Lord, Lord Parry, knows—I am sure that he has been involved with local authority housing as long as I have—once people get into a local authority house, they very rarely go out of it. It is extremely difficult to move out. You cannot get a house in another part of the country unless you have a direct swap. Unless you can buy it and then sell it, you cannot move. Once you are in it you stay put. You are much more likely to get some circulation if houses are sold. I do not accept that argument.

It was said by several noble Lords that there will be no house building at all, but of course that is not true. Despite all the reductions in public expenditure, we have continued to make what seems to me to be generous provision for housing, with over £2 billion allocated to local authorities for gross capital spending in 1981–82. Out of that, £12 million has been allocated to the Housing Corporation for this current financial year to be spent specifically on special need hostel projects, some of which will be for the elderly. Indeed, my honourable friend Mr. Stanley in another place said that we have made it quite clear that public sector housing programmes should concentrate on providing for those groups in special need, such as the elderly and the disabled, and there have been a number of ways in which authorities have been helped to that end.

The noble Lord, Lord Winstanley, raised a very important point about achieving a shift to community care. Clearly this is one of the most cost-effective ways of achieving care. It is better for the people and it saves money. The joint financing between the hospital service and the personal social services has proved to be a useful bridging device. Last year, the sum set aside for joint financing between the National Health Service and the local authority personal social services was £54 million. That sum has been increased in this financial year to £56 million and will increase again next year. Of course we should like it to be more, but at least we recognise the problem and we have recognised that we must do something about it in that particular way.

Nearly every noble Lord has referred to the importance of the voluntary sector. On behalf of the Government I should like to pay my tribute to the enormous amount of very good work that is done by the voluntary sector in this country. It receives over £85 million in aid from central Government. That was the amount of money that it had last year. The Secretary of State for Social Services has maintained the total value of grants made by his department to voluntary organisations between the years 1978–79 and 1980–81. The grants are increasing by 16½ per cent. in 1981–82. So this is well in excess of the rate of inflation.

The figures I have given for local authorities, which I accept are the last figures we have, are for 1979–80. However, we have to accept that if local authorites are free to choose, they are free to make their own expenditure choices. The Government, beyond exhorting local authorities to help voluntary organisations, which we have done on many occasions, have not at the end of the day the power to make them give this money, unless a direct grant is given for that particular purpose. For a variety of reasons, this is not always the way in which local government wishes to receive its money from central Government.

Besides that, we have introduced a number of other policies which are particularly designed to help voluntary organisations. For example, the concession on covenants whereby contributions may be offset against higher tax rates as well as the basic rate of tax which was announced in last year's Budget, comes into force in April 1981. There have, too, in the Budget been VAT reliefs. Zero rating of articles given to hospitals has been extended to ambulances and wheelchairs and to car adaptations for disabled drivers. This eligibility has also been extended to institutions caring for the handicapped. What is particularly interesting is that the earnings limit will be raised from 75p to £2 a day without affecting eligibility for unemployment benefit, so as to encourage unemployed people to work for voluntary organisations. Of course we should like to do more, but noble Lords will recall that the last Health Services Act, which was debated at length, contains scope for health authorities to raise money by voluntary contributions for a whole number of purposes. It was a great disappointment to the Government that the Opposition somehow saw this as something which would be bad for the National Health Service, instead of, as we feel, tapping a source of money which many people are glad to give to help to provide many things by means of voluntary contributions, which otherwise in our straitened circumstances we may not otherwise be able to do. So the Government have made quite clear the great importance which they attach to voluntary contributions of all kinds.

I have not answered all the questions which have been raised in the debate. I do not think the House would have expected me to do so. However, I hope I have said enough to make it quite clear that the Government have a number of priorities. We have set our hand to try to get the economy right and to bring down the rate of inflation. Nobody in the Government, or anywhere else, has pretended that this is an easy or a painless task. Indeed, it would be foolish to pretend that we could do it easily: foolish to pretend that anybody has a monopoly of truth on getting the economy right. As has already been said, not one of the 360 or so economists has suggested something which has not been tried before and which has failed. If only somebody could produce something for us which would produce an easy and a painless way of giving us our services, of getting the economic growth that we would like, of keeping down taxes, then perhaps the public opinion polls would not swing about quite so widely. As the right reverend Prelate the Bishop of Guildford reminded us, at one moment they say that most people want a reduction of taxes and at the next that they want an improvement in services. Of course, we all want both. The difficulty is to live in the real world and to face the real choices which confront the Government.

That is why I have split my speech into three parts. First, I have tried to show the positive steps which the Government are taking to encourage enterprise and industry. Second, I have tried to answer specifically some of the points about what Governments can do to help the disadvantaged. Finally, I have sought to say something about our encouragement to voluntary organisations. We believe that they have a very real role to play, just as we believe in supporting the family and encouraging everybody to support themselves by preventive medicine of all kinds, a point which was referred to by the noble Lord, Lord Winstanley, because these are the ways in which individuals can help themselves.

I should like therefore to conclude by giving a summary of some of the improvements that we have tried to make for the most vulnerable groups in our society. When the next pension increase starts in November, pensions will have been fully protected against inflation since we came into office. We have completely exempted war widows' pensions from income tax. We have given a pension for the first time to the pre-1950 Service widows. Sick and disabled people have been enabled to claim the higher long-term rate of supplementary benefit after one year instead of two. Single-parent families are being given special help through the child benefit scheme. A decision has been made to make the maternity grant non-contributory from 1982, thus enabling about 60,000 more mothers to qualify for it. And special help with fuel bills is being given to poorer households at a cost of £200 million a year.

Spending in real terms on the National Health Service was slightly increased in 1980–81 and the hospital waiting list, which went up by some quarter of a million under the Labour Government, has been reduced by over 100,000. Expenditure on the local authority personal social services is higher in real terms than under the last Government. In the recent Budget we have doubled the special tax allowance for the blind and we have given VAT relief for charities serving the disabled. We believe that tax reliefs for charities will be worth about £30 million for them. The mobility allowance for the disabled is being increased well ahead of the rise in prices. So, despite difficult circumstances, we have managed during the International Year of Disabled People to make some small but worthwhile improvements. This, my Lords, seems a right priority in the difficult circumstances in which we find ourselves.

8.48 p.m.

Lord Wells-Pestell

My Lords, it is not my intention to keep your Lordships for more than two or three minutes. However, I do wish to express my gratitude and thanks to the noble Baroness for what she said at the beginning of her winding-up speech. She knows that I shall be leaving the Opposition Front Bench at the end of April and this may well be my last appearance at this Box. Therefore I am grateful for the very kind remarks and observations which she has made. I think the House should know that I have enjoyed every minute of the last seven years against her. She has been very good for me. Of all the Ministers I have had to deal with, if I was up against the noble Baroness the next day I did not go to bed until I had done all my homework, because I knew that she would have done hers. I have enjoyed it very much indeed. We are in many ways deeply opposed, but it never once has had any effect upon our personal relationship or our friendship. I do not know of a more competent person. The noble Baroness is carrying two ministries. One, I should have thought, at the Department of Education and Science, would have been enough. The noble Baroness is bearing up very well and I hope that she will continue to do so.

I shall not go into great length now, but my only other comment is that the noble Lord, Lord Boyd-Carpenter, took me to task. I do not object to that for one moment because, as he quite rightly said, we ought to be able to do that without allowing personalities to come in. In what I was saying about taxation, I was complaining about the £4,500 million that was given by way of a reduction in taxation at the very first period of the Government. I was not talking about taxation generally. I did use two phrases: one was "most noble Lords opposite"; the second was "the majority of noble Lords opposite". I think perhaps it would have been wiser if I had said that I was excluding those noble Lords who had been Members of Parliament because I realise that those noble Lords who have been Members of the House of Commons by virtue of their constituency responsibilities would know what I was getting at.

With that, I only want to thank all noble Lords who have taken part, particularly, if I may say so, the two right reverend Prelates who have made a most valuable contribution. We on this side of the House would like to see more of the bishops taking part in our deliberations. I have said that on more than one occasion, and the last time was in the presence of the most reverend Primate the Archbishop of Canterbury, so it was not behind his back. We do not necessarily expect the bishops to agree with what we say, but we do feel that it is of tremendous importance and of great significance if bishops do take part in those debates which are affecting social policy because we believe that they have a contribution to make. With that, my Lords, I beg leave to withdraw the Motion for Papers.

Motion for Papers, by leave, withdrawn.