Social Deprivation

HL Deb 04 July 1984 vol 454 cc303-74

4.34 p.m.

Debate resumed.

Lord Barnett

My Lords, may I begin with an apology to your Lordships in that, unfortunately, a long-standing engagement may mean that I shall not still be here at the end of the debate. I should, however, like to start by sincerely congratulating my noble friend Lord Wells-Pestell on the excellent Motion that he has introduced and the manner in which he has done so. I am sure that the House will be grateful to him and also to the noble Lord, Lord Banks, for his contribution. I wish that I could say the same about the speech of the noble Lord, Lord Cockfield. I fear, however, that it was both irrelevant and complacent to a degree that I have rarely heard in any debate. That is not to say that I am not grateful to him for reading my book so carefully and quoting from it so selectively. I am grateful to the noble Lord and to his staff for the way in which they have selected the quotations. I hope that he continues to derive much pleasure from the book. The only things that he did not mention were the date of publication, the title, and the name of the publisher, but I shall refrain from doing so.

I should like to refer to one or two of the things that he did say which, although irrelevant to the debate, need commenting upon. First, he accused the Labour Party of being obsessed with the objective of a better distribution of wealth. Let me say at once—I am sure that I speak for all my noble friends—that I plead guilty to that accusation. Of course, that is so, when we see the appalling distribution of wealth that exists in this country. In saying that the noble Lord's speech was irrelevant, I mean that it was not just that he offered no real help to those in real poverty, but that the whole of his speech was an implication that there was no real poverty in this country. Anyone who looks around must be aware that that is so utterly complacent as to be disgraceful coming in the speech of a noble Lord and Minister in any Government. I hope that, on reflection, the noble Lord will regret the nature of his speech.

If I may say so to the noble Lord—I have some regard for him personally—one of the problems, I think, is that there is perhaps something that his best friends do not tell him. He reveals too clearly what he thinks. The more sarcastic he becomes, the more he exposes the weakness of his case. He did so again today. For example, at one stage, he related compassion to charity. I do not see compassion, so far as Governments and we as politicians are concerned, as having anything to do with charity. I do not want to give charity to the poor in this country. That is the last thing in the world that I want to do. I want to ensure that, as of right, they have a better living standard.

There were so many errors in the noble Lord's speech that it would take me far too long to go into them. I shall, however, take up one or two points. The noble Lord stated as evidence of the Government's compassion that public expenditure had risen since 1979, and that they had not cut taxation. The reason for that is nothing to do with compassion. It is the very reverse—and he must know it. It is to do with the increase in unemployment that this Government have brought about. It has nothing whatever to do with compassion. It is the very reverse.

As for the United States, the fact that it is now increasing growth much faster than we are and is reducing its unemployment, whereas ours is increasing, is due to the fact, as the Minister must know, that it has moved away from dogmatic adherence to strict monetary theories and is going in the opposite direction. That is why the United States has managed those achievements. It is because this Government are failing to learn that lesson that we are still in the appalling situation that we face in this country.

I, and many others, I imagine—indeed, the noble Lord, Lord Banks referred to it—are bound to approach this subject with some humility. At the present time I personally enjoy a comparatively high living standard, though it has not always been so in my life. However, I saw much of real poverty in the constituency that I had the honour to represent for nearly 20 years.

Let me come, therefore, to the first part of the Motion that my noble friend so eloquently introduced. I refer to the phrase in the first part of the Motion, the widening social and economic differences between the rich and the poor in the United Kingdom". Despite what the noble Lord, Lord Cockfield said, I should have thought that there was no real dispute that there is an enormous disparity between rich and poor in this country. It may well be the case that the noble Lord seeks to argue, as some Conservatives would sincerely argue, that they are happy to maintain that level of disparity. They do not see, as anyone listening to the noble Lord would have discerned, any evidence of real poverty. In their view therefore, the gap between the two is not a terrible thing. Their approach is that of course they must try, with a little charity and compassion, to help, but in the main there is no real gap that should warrant any Government action.

I should have thought, however, that among most people in this country it is recognised that there is a serious gap—too wide a gap—between rich and poor. I do not want to argue this afternooon whether there was a widening of the gap to a greater or lesser extent during Labour or Conservative Governments. I believe the facts are indisputable and that the position is getting worse, but I do not want to pursue it; neither do I want to pursue too many statistics, because the plain fact is that it is a pointless exercise as far as the real poor are concerned. They are the ones who matter, not an exchange of statistics. I hope there is agreement, whether or not we agree about the extent to which it has widened, that there is a real gap, which is too big, between the rich and the poor.

I emphasise to your Lordships that I am not talking about inequality. As we all know, there are great disparities of income and wealth in this country—great inequality. I noticed that in a debate last week in another place there were those on the Conservative Benches who argued that this form of inequality was not unreasonable. But I hope there is no difference between us about the need to do something about the really poor in this country.

If I may, I want to come to a definition of what one means by "really poor". I may have overstated the agreement there is within this House, including, I hope, the Benches opposite, about the gap, but as earlier speakers in this debate and others outside have indicated, the facts show clearly that there is some very serious and real poverty in the United Kingdom, and we should be hiding our heads in the sand if we ignored it.

We have had a few statistics. I do not want to give too many more, but let me give just one or two. My noble friend Lord Wells-Pestell referred to supplementary benefit. I imagine that the supplementary benefit level is not a living standard that any of us in your Lordships' House would like to have. It is accepted generally as a level of relative poverty. I say, "relative poverty" because everything is relative. If we look around, in Asia, Africa and elsewhere there is much greater real poverty than anything we know in this country. However, the Motion does not talk about that; it talks about poverty in the United Kingdom. There is—and I believe the figures my noble friend gave indicate this—real poverty, relatively, within the United Kingdom, if one judges by supplementary benefit levels, which are accepted generally, and, I should have thought, accepted by the Government, as nothing more than a safety net, an absolute minimum. It is a minimum which, if I may say so, many thousands in this country still do not claim. They have a variety of reasons for not doing so. They are living well below that level, some of them precisely because they see supplementary benefit not as something to which they are entitled as of right (which they are) but, to use the words of the noble Lord the Minister, as a charity. The more he refers to that kind of expression, the more they will think it so.

The number of people living on supplementary benefit is a bit difficult to ascertain because the most recent figures are for 1981. But certainly there are in the region of 7 million or 8 million people on supplementary benefit, and some 15 million—over a quarter of the population—on low incomes which are just 40 per cent. above the supplementary benefit level. More than a quarter of all children—3.7 million—are living on low incomes, including 1.7 million on or below supplementary benefit levels.

Nobody looking at those figures can dispute that there is real poverty, relatively, in the United Kingdom, and we would ignore that at our peril. It is not just that we can sit back and say, "Well, it's all right; they won't complain too much". That is the basis for social upheaval of the kind that none of us would want to see. The present Secretary of State for Education, a man for whom I have some regard as a man with quite a heart in these matters, said some time ago that a family is poor if it cannot afford to eat. I hope we can accept that in a modern society, and certainly in the United Kingdom, poverty is about something more than that.

I should like to refer, as has been done already in this debate, to a speech by the right reverend Prelate the Bishop of Liverpool in a recent Dimbleby lecture. Speaking quite graphically on this subject, he talked about contrasting a so-called comfortable Britain with what he described as, poverty which imprisons the spirit behind the locked doors of dank housing, unemployment and low incomes". Those of us who have seen some of that in our constituencies, and others who have been around the country, will know that it would be utterly complacent to pretend that that is not happening in the midst of the wealth that does exist in this country. All the quotations from the Minister about the houses with television, fridges, and the rest, are equally irrelevant to that essential fact.

So I say that the facts are clear: the gap is indeed widening. But even if we disagee—there are people in this House who would disagree about which Government did better or worse—I hope we can agree at least, in the words of the first part of the Motion, that there are, social and economic differences between the rich and the poor in the United Kingdom". Whatever our party political differences about the numbers in real poverty, we can agree that, by any reasonable definition, there are millions in the United Kingdom living in poverty. A civilised society, or a society that claims to be civilised, should be doing something about it.

I want to come immediately to the second part of the Motion, which speaks of, the need to break into the cycle of deprivation which condemns families to poverty". In the short term, both now and last week in the other place, Ministers boasted of some of the things that are being done and have been done, including increases in child benefit, which I for one certainly welcome. But the impression one has from Ministers is always that they would like to do something more but the resources are not available. As a former Chief Secretary to the Treasury, I had to use that argument often, and although the noble Lord did not quote that particular part of my book I plead guilty to having used that argument frequently with my colleagues in the Cabinet.

But, having said that, and having said that normally I should have some sympathy with the argument about the proper use of resources, I want to say that it is difficult to have any sympathy for a Government who have used resources in the way that this Government have done. In the most recent Budget, never mind what came before, the Chancellor reduced the yield of capital gains tax and capital transfer tax in a full year by £64 million, while recently the Secretary of State for Social Services announced what he called small changes in family income supplement. The result is that families with two children will be £2.50 a week worse off. The change will save the Government £7 million a year. By any civilised standards that is a disgraceful use of resources.

But it is even worse. The Chancellor abolished the investment income surcharge, at a full-year cost of £360 million. The Chancellor's case was that it was to help people like poor widows and pensioners living on investment income. But I must tell your Lordships that up to £7,000 a year was already exempt; so that is going to help people receiving above £7,000 a year of investment income. When a government use resources in that way they cannot seriously argue that there are insufficient resources in the short term to help the really poor in the United Kingdom. It just is not possible.

Frankly, I should have thought that those actions and facts dispute any case that any Government Minister, either in this House or in another place, can put forward. In my view it makes a mockery of a recent statement by the Prime Minister to the 100th annual meeting of the NSPCC, when she said: Of course poverty matters"— she obviously had not been listening to her noble friend Lord Cockfield— but when it comes to the welfare of children it is the family, and relations within the family, that count the most". I do not know what that is supposed to mean; but neither the Prime Minister nor any Minister speaking in this debate can have any credibility. Their words of sympathy for those living in abject poverty cannot be treated seriously when seen against the background of what the Chancellor of the Exchequer has done and what they support.

I should make it clear that I would be the first to admit that there is indeed a problem of scarce resources, but not to the extent that something is not possible in the short term in the way in which I have described. Something could he done, admittedly on a fairly modest scale, to alleviate the worst poverty in the United Kingdom.

I want to say a few words about the really big problem in the longer term of (as the second part of the Motion says) breaking into "the cycle of deprivation". Perhaps I should start with ways of not doing it. It has been said by the noble Lord the Minister (as if he is the only man and this is the only Government that ever cared about economic growth) that economic growth is the way forward. One would think that we have had five years of economic growth. For the first four years we had negative growth. That is all that we have had under this Government.

But economic growth alone will not, in my view, answer the problems, because if we do not plan in advance that the growth be allocated, in the terms of the Motion, to break into the cycle of deprivation", it will not happen. For while we might agree now that it should be top priority, I am bound to tell the House that my experience is that Ministers, with the best will in the world, will not accept the logic of that choice. They will agree to high priorities, but they will not then agree that other areas should have lower priority. The net result invariably is that the really high priorities—and this surely is the highest—are not treated in that way. That equally applies to trade union leaders. If they insist on increasing the real living standards of their members in work, then they must accept that there will be less available for those of their former members who are not in work and those who are in the cycle of deprivation—not only their former members who are now unemployed, but also their former members who are now pensioners.

Again, while some redistribution can be made through a more socially conscious use of the tax system, as I have indicated, a really major shift cannot be made through the tax system alone even with confiscatory top tax rates. For as has been shown time and again, the bulk of our taxes are paid by people on average earnings, and they are paid at the rate of 30 per cent. So even if we had confiscatory rates, apart from the fact that we can only confiscate once—I am not even sure that, with the tax avoidance industry that exists in this country, we could confiscate once, but even if we could it would be only once—I would argue that it is not the answer to the problem.

Many ways have been suggested—and some were suggested in the debate last week in another place—as to how one could break into the cycle of deprivation. How can one, in the long term, do something about real poverty? I do not want to go into details today, because I do not have the time. Many ways have been mentioned, and obviously one would need higher benefits—especially child benefits. I see that the Treasury has recently argued that the solution to the poverty trap is best helped by increasing tax allowances. A minimum wage has been advocated. I was pleased to see that a very courageous Member of Parliament and honourable friend of mine, Frank Field, who is a very knowledgeable Member, has shown that a minimum wage alone, in isolation, would not of itself do anything about the problem because for the greater part it would go to teenagers. So we would have to do something about that, too.

But that being said, there is no way—whether through the help of the trade union movement, through the tax system, through child benefits or whatever—in which we are really going to break into the cycle of deprivation if, at the end of the day, having done something for the people with the very lowest incomes in this country, the workers in work insist and the trade unions insist upon maintaining the differentials that were there previously. That is a plain fact. If they do that, then we are all worse off and nobody is any better off. Until that is recognised, we shall never break into the cycle of deprivation.

Whichever solution we choose to deal with this great social evil I believe we all have to stop pretending that there is a simple, painless way. There is not. No Government have yet seriously faced up to the problem, and nor will they unless they really allocate to the issue the top priority that it deserves. I know that my own party desperately wants to tackle this problem, and I have no doubt whatever that it would give it top priority. But it will all be to no avail unless we recognise that, by definition, other areas of public expenditure have to have a lower priority. It will require a greater degree of co-operation and understanding from the public and the trade union movement than anything that has yet been seen in this country. It will effectively mean selling the truth of lower expectations for those outside the cycle of deprivation. Anything else would be the worst kind of pretence. If we really do care, then the sooner we make a start on public education the better. I hope that this debate will help.

4.57 p.m.

Baroness Lane-Fox

My Lords, the noble Lord, Lord Wells-Pestell, opened his remarks by asking that this should be a non-party political debate. He then launched an attack upon the Prime Minister. I hope, therefore, that he will forgive me if I now remind your Lordships that the first ministerial office held by the Prime Minister was Parliamentary Secretary to the Ministry of Pensions and National Insurance. She was appointed in 1961, and I am told that she served with skill and with constructive sympathy. In fact, the noble Lord, Lord Boyd-Carpenter, was her boss at that time.

The Motion speaks of the widening social and economic differences between the rich and the poor". In a converse way, this puts me in mind of two patients in a public ward of a hospital which I attend. One was a vagrant and the other a millionaire. It was an example to me that there is no greater leveller than a personal crisis. They were both in the same boat, almost totally dependent on others and striving for recovery. Neither had the time nor the energy to struggle with more than the basics of life: a measure of tenacity, flexibility and acceptance was required to see them through the rigours. What was recorded was the similarity between them, and not the difference.

At first there was no point in discussing different home circumstances, for they did not know when or even if they would return there. In recovery, the millionaire had many burdens, responsibilities, dependants and employees to worry about, while the vagrant was free of all the harassment but short of friends and visitors. The disparity referred to in today's debate seems to me to lie between these two. None of your Lordships could claim that there is a cure-all, magic formula for the complex condition of deprivation. It thrives on misfortune, bad judgment, mental or physical inadequacy and sometimes downright bad luck. Sir Winston Churchill's recipe of "a safety net below which none shall fall" really set the scene for greatly increased social provision.

It is rightly said that households handicapped by aged or disabled members of family are among the very poorest. Those of us who knew in the late 1950s what it was like then with no benefit to draw unless you gave up the low-paid job you were proud to have mastered, those of us who knew of the paucity of schemes to help you fight your way out of the obstacles, look with wonder at today's opportunities. There was then no attendance allowance, no mobility allowance, no invalid care allowance. From the 1970s attendance allowance and mobility allowance changed our whole horizons. For the first time we could give a small reward to those who had sacrificed so much to help and care for us.

We remember now how much it had cost other people to enable us to travel in order to look for opportunities and then to make something of them. I for one applaud the fact that the mobility allowance has risen by 90 per cent. since this Government took office in 1979. Generally to become self-supporting and tax paying, disabled people need to be mobile, and it was encouraging when the allowance was taken out of tax in 1982.

Knowing how thankful I was to get this kind of financial assistance it is really not for me to underrate its importance, but I believe that a network of helpful personal support schemes can be invaluable. In recent years and months the Crossroads Care Scheme and other similar schemes have provided much needed back-up support in those very poor households for the careers of handicapped people, and to ease accommodation problems the number of adaptations carried out by housing authorities to their own dwelling stock is, I believe, over twice the number it was in 1979, while the number of such grants in the private sector is over four times what it was in 1979. Both these are of great importance in home care.

Going further into the outside world the English Access Committee has been set up by the Government, funded by the DHSS, and serviced by the Centre on Environment for the Handicapped. This is extremely important, In fact, I shall have to ask forgiveness for this very afternoon going to a meeting with the Minister of Housing to discuss better access for disabled people to public buildings. All this is important because it gives more flexibility to disabled people. In the London Regional Transport Act the Government recognise the need to provide transport for disabled people.

Among the special studies under way are those for provision for retirement, a review of the housing benefit scheme, a review of the supplementary benefit scheme, and the arrangements for giving financial help to families with children and to those young people above school-leaving age. The main objective is to see that the help given goes to those who need it most. The initiatives taken to assist the movement of mentally handicapped children and young people into more homely units and into the community, and the £3 million for special problems in this area available for each of the three years to 1986 for local authorities, are most interesting and timely moves.

Those of us who think back ruefully to our working age employment difficulties welcome the new strides taken to get employers interested in the good employment qualities of disabled people, and the new code of practice combined with the MSC schemes which finance adaptations required to accommodate us in the place of work. Most of all, it is the recognition by the Department of Trade and Industry that there is a special niche for us disabled people in information technology, both in jobs and in aids, that assures me that we are properly included in their calculations for this exciting programme for the future.

Another measure of immediate help for the disadvantaged which is really pleasing is the Government's increased help on heating additions. Even in this weather it gives one the shudders to think of hypothermia, and it is a relief to know that this Government have increased expenditure—as my noble friend the Minister said in reply to my Question last week—from £124 million to nearly £400 million this year. It is good to know that those additions are made automatically to those over 70 who are on supplementary benefit and those with children under five.

Obviously it rests with all of us, my Lords, to try to improve the lot of those who have a rotten time, both socially and economically. Even after this debate there will be a long list of measures taken by this Government to bolster those who are disadvantaged which have not been mentioned in this debate. Nevertheless, there is still a need for better dissemination of advice and information. Of that I am certain. I should like to see those who are inadequate guided by sensible, clued-up people. Many social workers have not the chance to do this, nor the full knowledge of what is available.

The Disabled Living Foundation, with its fund of advice on how to overcome or reduce difficulties for disabled people, is a most useful and worthy recipient of Government grant. Believing, as I do, that wonders can be achieved by attitude of mind, I am saddened to see fortunate people in well-paid jobs failing to appreciate, let alone cherish, their good fortune, for too often a jaundiced outlook stems from expectations which have been jacked up too high so that the competitive element drives a person to chase their own tail to no avail.

It is so sad if the satisfaction in doing a job well is lost, because then half the fun of life vanishes. I consider that those theories and doctrines which cultivate envy, malice and discontent are no less than criminal. They rob people of the natural resources and gifts which alone provide the spring with which to vault over the difficulties.

If there is a dividing line in society it rests on attitude of mind. There are those who will remain unembittered despite all their troubles and deprivations and no matter how often they are told their lot is hard. They are the ones who are plenteously endowed. Then there are those in all income brackets who are embittered, and they are the deprived.

I am sure that the noble Lord, Lord Wells-Pestell, would agree that creation of wealth is good. This was a point of view that was made in fact by the right reverend Prelate the Bishop of Liverpool in his book Bias to the Poor. Anyone except an impractical idealist must realise that it is by the creation of wealth that there is the best hope to raise the safety net and expand the opportunities. Already there is now a better chance for the less well off to plant their stake with the increasing sale of council houses wherein half a million families have become property owners. Employees get a better chance to take shares in the enterprises in which they work now more than ever before, largely because of extended Government policy of privatising or denationalising, call it what you will.

For those who have such a stake it is the Government's achievement in lowering inflation rates that is all-important. It has been one of the major successes of the Government in helping those on lower incomes, those who live on small fixed incomes, who have seen their nest eggs drain away like sand through an hour glass. I humbly suggest to your Lordships that you will not be surprised from what I have said that I cannot possibly support the Motion in the name of the noble Lord, Lord Wells-Pestell.

5.10 p.m.

Lord Stewart of Fulham

My Lords, we know, both from what has been advanced in this debate so far, and not refuted, and from general and common knowledge, that there are one or two important facts that we cannot dodge. The first is that about one-seventh of the population has a standard of living that is a disgrace to the community as a whole and a reproach to the rest of us. Secondly, the degree of inequality between the rich and the poor has been increasing during the lifetime of, and as a result of the policies of, this Government, in particular their policies in relation to taxation.

I should like to say to the noble Baroness, Lady Lane-Fox, (if she was still in her place) that she must not imagine that people who draw attention to these facts regarding inequality are merely giving vent to envy, malice and uncharitableness, because this inequality is an injury to society as a whole. It passes on from one generation to the next. It is of the nature of the society in which we live that, unless we are constantly taking steps to rectify it, the amount of inequality will increase.

If one is already rich, it is easier to save, it is easier to invest to increase one's income in that fashion. It is easier to see that one's children, in addition to whatever is provided at school, have a home in which there are books and other aids to education, and that therefore they are more likely to end up in well paid jobs. There is a general tendency for inequality to perpetuate itself and to increase as time goes on. The reason it does not happen to an intolerable degree is simply that the welfare state has been set up to prevent it.

In what I have to say I want to pay special attention to what the Government have been doing, or failing to do, in education and to the way in which that is tending to maximise the degree of inequality between classes and groups as time passes. The Government started in the field of education with one considerable advantage: the number of children of school age was diminishing, school rolls were falling. It was therefore comparatively easy to make an improvement in one of the fields of education to which students of the matter have given a good deal of attention; that is, the relationship, or proportion, between the number of teachers and the number of children to be taught. That ratio has improved inevitably with the considerable fall in the number of schoolchildren.

But we notice that at the same time the Government have been practising a policy of slow strangulation of the local authorities. We have heard over and over again from members of the Government reproaches about the extravagance of local authorities. The fact is that local authorities in the main have been, or have been compelled to be, more successful in reducing their expenditure and keeping it under control than have central Government. One of the results of the Government's constant policy of squeeze on local authorities has been the starving of the education service. This has occurred not always in any strikingly spectacular manner, but rather in a process of slow discouragement of education.

For example, from a recent report by Her Majesty's inspectors we find that three-quarters of the local authorities had school buildings in a state that was damaging to education, and that one in four of schools were in such a condition that education could not be properly carried on. We find, too, that there has been gradually increased difficulty for local authorities in providing their education services with sufficient books. In view of other matters we have been debating recently in this House, and in the light of the Government's notorious hostility towards local government in London, it is interesting to note that in the recent report of Her Majesty's inspectors of schools it is stated in particular that London authorities have been exceptionally good in ensuring, despite the difficulties, that their schoolchildren are adequately provided with books.

But we also learn that outside London, in relation to at least one age group of schoolchildren, half the local authorities have failed to provide adequate books. When that occurs, what happens next? The parents are called upon to provide the books, instead. The educational publishers have told us recently that about 15 per cent. of school books are now being provided by the parents. What does this mean? It means that schools in localities where the parents can afford to do that kind of thing will be able to provide decidedly better education than will schools less fortunately placed. There will be an increase in inequality. The section of society that is already comparatively well off will be able to hand down that inequality to its children by the provision of schools that are better supplied with books and other aids to education.

The report of the inspectors goes on to tell us that the chief sufferers from this squalor in education—buildings that are not good enough, inadequate supplies of books—are children who are of somewhat less than average ability. There are few subjects on which there has been more bitter argument than that concerned with how far the ability of children is inherent and inherited and how far it is influenced by the education they receive. We know it is a plain fact that for one reason or another some children are less gifted than others, and it should surely be one of the objects of an education system to see that it does not aggravate that disability. That is, in effect what we are doing now, by having an education system which is being starved of essential books and buildings. Those children who are less apt to learn are those who will suffer most. Thus a greater degree of inequality will be handed on to the next generation.

We ought to notice, too, that while this was happening in the schools which are part of the state system, the Government took two steps to try to widen inequality. One was an endeavour to put selection at 11-plus on its feet again by allowing local authorities to create what used to be called grammar schools, if they wish to do so; though only a very limited number do. In plain fact the system of selection at the age of 11 was really a device whereby a better education could be given to middle class children, because one way or another the selective process always worked out to favour children from middle class homes, rather than children with exceptional intellectual capacity. That was how it worked in practice, and that was why, in certain quarters, it was defended. It was a retrograde step, therefore, for the Government to try to reintroduce selection at 11 into the educational system.

The other step they have taken is what was called the assisted places scheme, which was a way of diverting public money, of which there was a shortage for buildings and books in the ordinary schools, to help the finances of private schools in order to enable them to take what were believed to be some of the ablest children from the public educational system. That is another way of increasing the degree of inequality in society. The right honourable lady the Prime Minister once remarked when she was Minister of Education that she thought it her duty in that office to look after remarkable people. A significant remark! If you take that view, you will pursue a policy of inequality all the time. It is your business, I should have thought, if you are Secretary of State for Education, to be concerned with all children, and, indeed, to regard them all as remarkable. That is what their parents think about them, anyhow! Her conception that you have a special duty towards children who are considered remarkable was a recipe for widening the gap between those who may and those who may not have been more gifted by nature than others, and for creating a society in which there was less mutual understanding between different members and different classes than there had been before.

I am not going on for very much longer. I merely want to add that, in addition to what has been happening in the schools, we had a statement from the Committee of Vice-Chancellors that in October 1983 there were turned away from universities 12,000 students who, in 1979, would have been considered to have had the qualifications that would have let them in; and that this was a result of restriction of public expenditure on the universities. Here, again, this is something that is going to produce, in the end, a less equal society. I am arguing that you need an educational system that gives wide support all round if you are to combat the general tendency towards increasing inequality that exists in a society like ours. But both in the schools and in the universities the Government have been shifting policy in the other direction. This we shall regret. It means not only that talent is wasted: it means that the differences in sympathy and understanding between one section of society and the other get successively wider as time goes by, and that is to the disadvantage of both sections.

5.22 p.m.

Lord Stallard

My Lords, I, too, should like to thank my noble friend Lord Wells-Pestell for initiating this debate. I have always known my noble friend to be a man of deep compassion and understanding, and I think that the speech with which he introduced the debate today underlined, certainly for me, those qualities. I should like to thank also my noble friend Lord Barnett for dealing, in the main, with the speech made by the noble Lord, Lord Cockfield, from the Government Front Bench; because as I listened to that speech from the noble Lord I was tempted to interrupt almost every few seconds, and I thought that I may have to scrap my few comments and deal with some of the points that were raised by him in his outline of Government policy and Government thinking on these things. But my noble friend I think dealt quite adequately with those points, and I can now revert to what the noble Lord, Lord Cockfield, scornfully referred to as the symptoms—and I can do that now with a slightly easier conscience.

I see the Motion, or the part that I want to deal with, as giving us the opportunity to review the situation after five years of the present Administration, particularly since Government spokesmen, surveys, parts of the national media and, as I have said, speakers this afternoon, give the impression that the economy is improving, that we are climbing out of recession, that things are getting better, and so on. I am certainly as guilty, and plead so, about the obsession with redistribution as was my noble friend earlier. We ought not to apologise for wanting to see and to argue for a much fairer redistribution of the national wealth.

I want to speak briefly about the effects of Government policy on the mentally and physically handicapped, and to deal with three aspect of that policy. Government Ministers made great play during the last election about their record in the field of disabled people and the handicapped; and the noble Baroness, Lady Lane-Fox, in her contribution this afternoon, has again dealt with that kind of approach. I certainly understand why she feels that she has to be proud of her Government's achievements—and she is quite entitled to be so, just as much as we are entitled to be proud of the achievements of our Governments and, particularly, of the appointment of the first Minister for the Disabled, and the achievements of that Minister for the Disabled, my right honourable friend Mr. Alf Morris, in another place. I take great pride in those achievements as well.

But because we are proud of those achievements, it does not mean to say that we have now to be satisfied and are to be saying constantly: "That is that. Now you can stand on your own two feet. We do as much as we can, but now you are on your own and can get on with it". That is not our attitude. I am loath to go into long quotations, as did the noble Lord, Lord Cockfield, but I seem to recall somebody (although I cannot recall who it was) saying that satisfaction is the enemy of progress, and that to be constantly satisfied may therefore impede progress. We are certainly never satisfied that we have achieved our goals of redistribution and of attacks on deprivation and poverty.

I want to deal first with the question of income for the disabled. In 1983, if I may remind your Lordships, the Conservative manifesto said: Expenditure on cash benefits for the disabled is 21 per cent. higher than under Labour, even allowing for rising prices". But the Disability Alliance, in their publication Hard Times, examined the Government's record and showed that between 1979 and 1983 £2 billion had been cut from the value of social security benefits. The 21 per cent. claim represents, in fact, a rise in overall expenditure on benefits for disabled people during that period. This reflects an increase in the number of people becoming eligible for certain subsidiary benefits, particularly mobility and attendance and other benefits, rather than an increase in the basic invalidity pension.

Recent surveys which show that people are getting richer and claims that people in this country have larger disposable incomes—and we have heard some of that, as well, this afternoon—are certainly not true of disabled people, or certainly of the disabled people that I know. But Government estimates never do tell the full story. For example, the Family Expenditure Survey fails to take account of the fact that people with disabilities have far less access to the subsidies and welfare provisions and facilities offered by employers, while at the same time they face a higher cost of living because of increased prescription charges, increased fuel charges, difficulty in travelling, difficulty in shopping and so on, compared with the rest of the population.

Secondly, the disposable income of people with disabilities has been falling. Benefits are no longer linked to earnings. Speeches this afternoon have made great play about the fact that the benefits have gone above prices. But there was a period when benefits were linked to earnings or prices, whichever was the higher—a deliberate attempt to allow people on benefits to share in the increased wealth and production of the country. That has ended, and benefits are no longer linked to earnings, so the disabled and other beneficiaries do not share in the increased wealth produced by the country. As well as that, in 1980 the Government introduced a 5 per cent. abatement on invalidity and sickness benefits in anticipation of the proposal to tax benefits which, in turn, will further reduce the income of many disabled people who may be existing only fractionally above the poverty line. We still have no date for that taxation proposal, but the 5 per cent. abatement continues.

Thirdly, as has already been said this afternoon, many thousands of elderly and non-elderly people with disabilities who are eligible for existing benefits are in fact not claiming them. In my view, insufficient urgency is being shown at Government level about this problem. Here I am tempted to give a couple of quotations. In the recent debate in the other place (Hansard, col. 1175) the present Minister for Social Security, the Member for Brent, North, was quoted as having said: The State spends all its energies taking money from the energetic, the successful and thrifty to give to the idle, the failures and the feckless". In the same copy of Hansard (col. 1186) the Parliamentary Secretary to the Treasury said: Part of the oppression of poverty lies in the dependence that it brings on the safety net and on state handouts". Is it any wonder that people do not claim benefits when they are being told by Ministers responsible and by Government spokesmen that they are being given state handouts or that they are feckless and so on? So it is no wonder that people shy away from claiming.

5.31 p.m.

Lord Beaumont of Whitley

My Lords, if the noble Lord will give way, I do not have the greatest regard myself for the Minister whom he is quoting, I must say, but he ought in fairness to say that that first quotation was from a member of his own party, Mr. George Bernard Shaw. As he pointed out, it was. It was then denied by Mr. Hattersley, who was not aware of the remarks of Mr. George Bernard Shaw, but I am afraid that he will find that it is a very typical remark, if I may say so, from Mr. Shaw, who was given to making remarks of that kind.

Lord Stallard

My Lords, I do not intend to go down that road and take this up with the noble Lord, but I do not accept his explanation. Whoever said it, I believe my noble friend, and I think the quotation as I read it is probably under the interesting title "Down with the poor" which could be related to George Bernard Shaw, rather than quotation. But if he did say it, he is still wrong as far as I am concerned. If that is being repeated by the present Minister of State for Social Services, it is disgraceful that he went to that kind of source or quotation to use against people in these circumstances. So I have no conscience, whoever said it, about saying that it is entirely wrong.

In my view, that is one of the many reasons that prevents people from claiming their rights. In fact, the other thing, of course, is that the whole system in the last few years has become so complex that very few people can understand their entitlement. It is that that I think the Government are not paying much attention to.

In fact, the Social Security Advisory Committee, in their last report, highlighted the complexity of the system and recommended that some action should be taken. Here is the introduction of yet another complicated and controversial benefit. The severe disablement allowance, contained in the Health and Social Security Bill now passing through the House, will not in my view do anything to simplify matters in the way suggested at all.

In addition to what I have just outlined, there has been a series of strange devices and expedients contained in various Bills since 1979 to reduce costs or to introduce changes on a nil cost basis. I am thinking, for example, of the overshoots, of the clawbacks, of the 54-week benefit year—this year is a 53-week benefit year—of the changes in the method of calculating the retail price index and rumours of further changes. Housing costs were excluded from 1982 onwards from the retail price index for increases in supplementary benefit rates. Different calculations from May to May, as opposed to November to November, meant further savings for the Government, but greater losses for disabled people. The loss of heating additions, changes in linking rules—the list grows longer and longer of Government savings at the expense of the most vulnerable. These are facts of life; they may be symptoms, but they are important symptoms to a lot of people who are on the receiving end of these cuts.

I would have thought that the 1984 Budget could have given the Government an opportunity to prove that they intended to benefit the less well off, if all the other things they were saying were correct, and to reflect the improving state of the economy referred to by Government spokesmen. However, that Budget, in my view, did not take any significant steps at all to lessen the burden of poverty. In this Budget the main tax concessions amounted to £2,810 million. Since 1979 it is estimated that the cumulative value of tax cuts stands at £13,000 million, while, as I have said, over £2 billion has been saved on social security cuts. No amount of juggling with figures will disguise the effect of this policy on the disabled and on other beneficiaries.

So the 1984 Budget raised the main tax allowances above the rate of inflation except for the age allowances. Why leave the age allowances out if you are really sincere over doing something about poverty? The blindness tax allowance remains the same as last year, and overall the Budget, in my view, did not take any significant steps towards changing the situation. The Chancellor again left out many items which could have helped the disabled and should have helped to reduce the gap between the haves and the have-nots, if Government spokesmen had been truthful. On the invalidity pension, for instance, there is still no announcement to restore the 5 per cent. cut: we await that. On unemployment benefit, there is no announcement to extend the long-term rate of supplementary benefit to the long-term unemployed. There is absolutely no reason at all why that should not have been done. On the invalid care allowance, there is no extension of this to married women, and again there is no excuse for that omission and we shall return to it in a few weeks' time, I hope. As to the mobility allowance, there has been no announcement to allow people aged over 65 to claim the mobility allowance and we still await progress on that.

On the comprehensive disability income and costs allowance, it has been recognised that this is something we should all be striving for and we all at least accepted the principle of it. The Black Report highlighted this point, as a means of reducing the difference between the rich and poor. Even this Government accepted it and promised in 1979 in the manifesto to work swiftly—those are their words, not mine—towards this. Now, five years later, not much has been done; in fact, as I said during the course of discussion on the severe disablement allowance, we may have taken a step backwards.

I want now to mention another aspect: care in the community, which is my second point. The Green Paper, Care in the Community, published in 1981, was broadly welcomed on all sides; and rightly so. The philosophy appeared to be right, but what was and is missing is the cash, the resources to ensure that if mentally handicapped and mentally ill people are to be discharged from long stay institutions into the community, then appropriate provisions and resources must be available.

If I may quote from a recent report in the Guardian newspaper, on 31st May, it said: Thousands of mentally ill patients are being discharged into private hotels which are overcrowded, understaffed, under-equipped, and run by landlords more concerned with profit than caring for residents, the Health Service union, Cohse, warned in a report yesterday. Encouraged by the Government, private nursing homes and guest houses have become the primary source of non-hospital care for the elderly, mentally ill, and mentally handicapped who are being moved back into the community. The Social Security Minister, Dr. Rhodes Boyson, has ordered big increases in payments by local authorities to private landlords … One member of the Cohse working group, Mr. Harry Packham, associate director of nursing services at Goodmayes hospital, Redbridge, yesterday accused local social security departments of paying private landlords up to £200 per person per week without ensuring that a decent service was being provided. The food is poor, the accommodation is awful … In practice, said Mr. Packham, social service officials were afraid of taking legal action lest the landlords evict the patients". I submit that that is yet another symptom, one of those symptoms scornfully attacked by the noble Lord, Lord Cockfield, but a very important symptom to a lot of poor people who really understand this question of poverty and deprivation.

As well as that, a survey was published by another organisation called Exodus, set up especially to help get children out of long-stay abnormality hospitals. That is something we would all like resources and funds to be used for. The report, entitled Left Behind, showed that at that time no regional health authority had stopped admitting children for either long-term or short-term care, let alone trying to get them out. Only two regions had taken steps to adopt policies which would recommend no further admissions. The majority of admissions are for short-term care, but that can be for as long as two or three years. There is no specific time limit and, in my view, this is quite unacceptable. Two years is not "short-term" in the life of a child and the Government should be taking more definite action to instruct council authorities to admit children for care, and to introduce a definition of "short-term care" as a maximum of six months. And of course resources must be made available for alternatives.

Social services directors have continually warned about the dangers of the Government's approach to questions of community care. It must be obvious to everybody that an extension of community care will make more demands on the social services. If resources are not there then the whole thing gets worse and worse. Voluntary organisations like the Spastics Society are having to use funds which they can ill afford to do the jobs which ought to be done by the National Health Service and the Department of Health and Social Security at local level. This is at a time when all voluntary organisations' funds are under severe attack from cuts in grants and from value added tax, so that they can ill afford to use up resources in that fashion.

Finally, I wanted to mention the question of employment difficulties for disabled people. We have mentioned from these Benches this afternoon the problems of the unemployed. It was 18 minutes into the speech of the noble Lord, Lord Cockfield, before he even said the words: but nevertheless, in my view, the plight of the disabled is becoming worse at a time when the disablement resettlement services are being cut back and job centre services are being cut back, while more and more disabled people are being thrown on to the dwindling facilities of job centres. This will result in further dilution of the availability of jobs for the unemployed.

I must end there, but I will just say that, in my view, the policies of this Government have increased inequality and the problems of those at the lower end of the spectrum. Most people I speak to believe, with me, that the gap between the rich and the poor in our society is already far too wide and is widening. I support the Motion.

5.43 p.m.

Lord Gisborough

My Lords. I must first apologise that I am unable to stay until the end of the debate because I have to keep an appointment and then to catch an aeroplane. It is facile to point to the increased differential between the wealthy and the poor and to say that the poor are becoming worse off. It is easy to point to any group of people and say that they should have more and how desirable that would be. The first question I want to consider is: have the poor been getting better or worse off since 1978? Secondly, does the fact that the entrepreneurs and the better-off pay less tax and have more money to spend themselves make things better or worse for those who are less well off?

To begin with the first question, let us examine the poorer incomes. Support for the elderly, the disabled and those on low incomes has been increased by this Government by some 25 per cent. in real terms since the Government took office. Further, this money increasingly goes to those most in need. There have been set up since November 1983 four social service inquiries—into retirement pensions, housing benefit, supplementary benefit and help for children. Two of the objects of these inquiries have been to simplify the system and to channel help to the most needy cases.

In November, benefits will increase by 5.1 per cent., compared with the likely inflation rate of 4.5 per cent. In the last six years, pensions have risen by 83.6 per cent., compared with a rise in prices of 76 per cent. The pensions earnings rule limit has been increased, and there are a host of other benefits, including the heating addition, the spending on which has increased from £124 million to £400 million. I am sure that we shall hear a great deal more about this from the Minister. This Government have a better record so far than the previous administration. But the poor will always continue to exist, and they will continue no matter what form of Government may be in power and regardless even of the time that any one Government have held power.

I am afraid that the destitute will also continue to exist simply because there is always a section of every population that is quite incapable of managing its weekly financial planning. This does not make the plight of the most badly-off any happier or reduce the desire to see a rise in the lowest incomes, and I hope that the Government will continue to improve benefits. But when the noble Lord talked about extreme poverty in this country, where everybody is caught in the safety-net of benefits, he does not appear to have seen much of poverty in other countries. I do sometimes wonder whether enough is done to teach in schools, and through social welfare and the probation service, the skills of family income management and the dangers particularly facing potential one-parent families.

Nevertheless, figures show that the poor are at least better provided for than they were six years ago and more people have been able to acquire wealth and security, for example, by home ownership and participation in the shares of their businesses and in ownership of televisions and washing machines, as we have heard. This must surely be a good influence towards reducing the social difference between rich and poor. Indeed, many of the present rich were the poor in their own youth. There are thousands of people from poor families who have made good and have made their fortunes. Strangely, that does not stop them from being castigated now for being rich.

The next question is: does the fact that the better-off have more spending power make the poor worse off? Reduction in the tax rates and the abolition of the investment surcharge have undoubtedly given the better-off more spending power. Above all, it has encouraged work, investment and wealth creation. I am sure that we, particularly on this side, agreed with the Prime Minister when she said that only if we create wealth can we continue to do justice to the old and sick. It is economic success which will provide the surest guarantee of help to those in need, yet I once heard a distinguished noble Lord who sits opposite, loudly stating that all businessmen were dishonest. And one of his noble friends said that a market place was a place where businessmen drew together to cheat each other. I remember exactly who they were. What a depressing thought it is that elder statesmen who have held high office have not lifted their horizons of knowledge above such prejudice.

No wonder business did not have confidence under the party opposite, or that talent went overseas. Surely, if a man can be encouraged to employ labour and buy machines, themselves made by other labour, to produce goods and make them available either in better quality or at a cheaper price than those already on the market, it is not dishonest; nor is it cheating his competitors or anyone else. Surely the important thing is that he employs labour and pays wages, which gives money to spend on other goods made by other men; and the fact that the employer tries to make a good profit as an incentive for getting the business going is of no ill consequence whatsoever to those he employs: quite the reverse. The more employers and entrepreneurs can be encouraged by high reward, the more jobs will result and the fewer people will be unemployed or on low incomes.

Would greater equalisation of reward, achieved perhaps by greater taxation, give a higher standard of living for the lower paid? In China, after 40 years of socialism, where the differentials are small, the worker takes home £15 a month and the factory manager £60. I am two years out of date, so those figures are probably wrong now. Certainly the life-style is egalitarian, but even the well-off there have less buying power than our lower paid. Prices are low for essentials, but international luxuries are unknown and there are special shops which are only available to the senior party officials.

I was taken to a show farm with new houses for all the workers. Those houses would be condemned in this country, and are far below what any worker, or even an unemployed person, in this country would accept. Meanwhile there are millions of unemployed who get no unemployment pay at all and have to be supported by the one member of the family who has been allotted a job. Having stopped enterprise for fear of people growing wealthy, China lacks the wealth to be able to pay its unemployed or to give good housing to its people.

Perhaps China might be thought to suffer because it is not in the industrialised West, or because of racial characteristics or because of climate—but not at all. The peasants and factory workers in Taiwan, South Korea, Hong Kong and Japan are far better off under capitalism than their compatriots under socialism and egalitarianism. And that is in spite of China having a bigger potential home market than any other country in the world. However, far from feeling that a few more years of egalitarianism will do the trick, China—and, I think, Russia—are at last beginning to allow private enterprise and reward for individual or family effort. It will be interesting to see how the success of their enterprise zone outside Hong Kong will affect their thinking.

A similar sort of story can be told of Russia. Socialist egalitarianism condemns those with enterprise and wealth to be poor. Worse still, socialist egalitarianism condemns the poor to be poorer. Now for the first time since the war we have in England a Government who realise that the best way to help the poor is to encourage the creation of individual wealth. As inflation comes increasingly under control and as enterprise is increasingly rewarded by wealth, so resources will increasingly become available for social welfare.

I am not original in finishing with the story of the baker. Only by encouraging the baker to bake a very big cake will there be, in time, an adequate number of slices, and slices of adequate size, to feed those round the table, as well as giving the baker enough to feel that all the effort was worthwhile and worth doing again.

5.52 p.m.

Lord Hatch of Lusby

My Lords, thanks to the efforts of my noble friend Lord Wells-Pestell, we are debating a Motion To call attention to the widening"— and I stress the word, "widening"— social and economic differences between the rich and the poor in the United Kingdom". The speech which we have just heard from the noble Lord, Lord Gisborough, shows that he is not addressing himself to this issue. None of us on this side of the House would claim that socialism, as we understand it, has ever been put into practice in any country in the world, including both the Soviet Union and Soviet China. But what we are debating is whether the policies of this Government have widened the gap between the rich and the poor. If the noble Lord, Lord Gisborough, will come with me to some of the northwestern and north-eastern areas, and tell the unemployed there that they should learn more about domestic management, I can assure him that he will get a very warm and unfriendly reception.

On the first issue of whether this gap between the rich and the poor is widening, we need to say very little, because it has already been established and is very well-known in this country. All I would say is this. To take the official figures from the low pay price index, since 1978 the workers in the bottom 10 per cent. of the wages table have had their real living standards reduced by 1 per cent.; that is, during the lifetime of this administration and the previous administration. At the same time, the top 10 per cent. have had their incomes increased by 60 per cent. If that is not a widening gap, then what is?

What are the consequences of this widening gap between the rich and the poor? I wonder whether the noble Lord the Minister who is to wind up has had drawn to his attention this very deep study of the City of Bristol—a fairly representative city in our country. This was published just a few weeks ago and it is entitled Inequalities of Health in the City of Bristol. The research has been conducted by Professor Peter Townsend and two of his colleagues. I would recommend it to the noble Lord, not because I want to draw from this report a list of health difficulties but rather the other way round, because I want to show that from a study of health can be gained a knowledge of the difference in living standards.

This is the way in which this report, which is based upon a study of the six most affluent wards and the six poorest wards in Bristol, gives evidence for our debate this afternoon. First, it looks at family living standards in general and it takes a number of tests; for instance, the number of children entitled to free school meals, which is a good test of family living standards. Since 1979, the number of school children eligible for free school meals has declined in all the six affluent wards. In St. Philip and Jacob wards, which any noble Lord who has visited Bristol will know, the number of school children eligible for free school meals has increased by 23.6 per cent. whilst in Easton it has risen by 16 per cent. This is the actual effect of the widening gap in living standards and this is what it means to families.

Secondly, the study looks at the electricity disconnections—again, a test of family living standards. In all the six affluent wards, the number of electricity disconnections has declined; in five of the six poorest it has risen—and this is in the period from 1979.

Thirdly, unemployment has risen in all the wards, but in the affluent wards it has risen by a range of only 1 to 3.5 per cent., while in the poor wards it has risen by between 5.7 and 13.1 per cent. Again, the conditions of poor people have become relatively worse during the period since 1979.

Finally in these tests of family living standards there is the basic one of life expectation. In the six poor wards there are between two and two-and-a-half times more deaths than in the rich wards, and there are two to three times more stillbirths and infant deaths. If that is not clear evidence of the widening gap between the rich and the poor in real human living terms, then we are surely misusing the English language.

In conclusion on this issue, I wonder whether the noble Lord who is to wind up saw the programme "World in Action" on Monday of this week. Did he see the examination of that refuse tip on Merseyside in, ironically, the wealthy area of the Wirral, which is being used to clothe people, to provide furniture for people and to provide cooking utensils for people? Let me just give a couple of quotations from that programme and the journalistic follow-up which succeeded it. Here is one of the ladies who uses the tip. She said: I have not been in a clothes shop for 10 years. Everything I need for me and the three children is on the tip. I can't afford to go shopping". The second quotation is from a man who is unemployed, who is 55 years old and who is forced to live on a weekly benefit of £50 a week for himself, his wife and his five children. He had this to say: Just about everything in the house is from the tip—the furniture and the ornaments". Did the noble Lord see this programme? After seeing this dramatic illustration of poverty in our country, can he still maintain what his noble friend, opening for the Government, had to say about the improvement in the standard of living of the poorer section of our community? Improvements do not come about simply by quoting figures of increased benefits. Of course you have to spend more on benefits if you have got 4 million unemployed instead of 2 million unemployed, if there are more people suffering illness as a result of unemployment and if there are more people who are depressed and mentally disabled because of the conditions in which they are living.

I want to put a question to the noble Lord the Minister and also to the noble Lord, Lord Mottistone. There is a very sparse gallery on the other side of the House; therefore we have to pick and choose who we shall ask to support the Conservative cause so that we can have a relevant, proper and rational debate. I would ask those who are to speak from that side of the House—I believe that there are only three more still to speak—to address themselves to a question which I believe to be fundamental and which goes one stage beyond what has yet been said in the debate. I would ask whether the kind of society I have been describing, both from the researches in Bristol and from the television programme about Merseyside, is the kind of society that the Conservative Party and their Government are seeking. I do not believe that it is. I do not believe that it is the end product which they set out with their policies to achieve. What I do believe is that it is the inevitable consequence of their policies. When the noble Lord, Lord Gisborough, spoke about the need for greater enterprise and for more entrepreneurs he touched upon a basic philosophy in the ranks of the Conservative Party. This basic philosophy should be debated, not just in this Chamber but in the country as a whole.

Let us address ourselves just to two figures. Before the cuts which came in the last Budget, the tax cuts for the rich since the Conservative Party came to office in 1979 cost round about £2.9 billion. It is fair to argue that those tax cuts were financed by cuts by the Government of £2.7 billion in social security spending. I understand that there are many noble Lords and other people in the Conservative Party who believe that this is the correct policy, not in order to achieve the consequences which I have described but because they genuinely believe that inequalities in society increase wealth production. If they believe that, let them say so. The noble Lord, Lord Gisborough, came very near to saying it and I believe he would agree that this is part of his philosophy. But is it not a philosophy which believes that the rich will work harder if their incomes and incentives are increased and that the poor will work harder if their poverty is increased? Is not this the natural logic of that philosophy?

Lord Gisborough

My Lords, when the noble Lord refers to the rich having to bear less taxation, he should think not only about the very rich but also about those who are in jobs and doing well and who are being encouraged to increase their output. He should think about those people as well as about those whom we nonchalantly think of as being very rich.

Lord Hatch of Lusby

Yes, my Lords, I quite understand that part of the philosophy. I was about to address myself to it. If this is the philosophy of the Conservative Party, it comes back to what the noble Lord, Lord Cockfield, had to say at the beginning of the debate about the necessity for wealth production. We believe in wealth production, but we believe in real wealth production. I cannot see how members of the Conservative Party today can reconcile that philosophy, based upon wealth production and the necessity for inequality to achieve wealth production, with the record of their Government.

What is the record of their Government so far as wealth production is concerned? Manufacturing industry has virtually collapsed. Bankruptcies have been at a record level in each successive year of this administration. For the first time since the beginning of the Industrial Revolution there is a deficit in the British manufacturing balance of trade. In other words, we are importing more than we are exporting. Unemployment is at a record level and sterling has been devalued. Is that a record of wealth production? It is a record of growing inequality. How does the honest Conservative reconcile these two sides of the picture? I believe that we are entitled to an answer.

I hope that the noble Lord, Lord Glenarthur, who is to wind up the debate will give us an answer to what is a central issue for everybody in this country: how do you reconcile your philosophy of the necessity for social and economic inequality in order to produce more wealth with your record of having failed on every count in the declared effort to produce greater wealth for this country? I hope that the noble Lord will address himself to that question. I hope, too, that he will remember that his administration has been in existence during a period in which it has had the bonus of North Sea oil, which no previous administration has enjoyed, but which will run out in a few years' time. So we are entitled to know where the Government are going.

Do they accept the cycle of deprivation and poverty? Do they accept the philosophy of inequality? Do they accept what the noble Lord, Lord Gisborough, has just said: that there will always be poverty and that there will always be poor people in this country? Do they accept all that as a necessity for wealth creation? If they do, where is their wealth creation? We are always being told by the noble Lord, Lord Cockfield, "Oh, yes, we have built a rock for the future". It is always for the future. It has been said before that in the future we are all dead. When are we going to get something for the people who are living in this country now and for the children who will be living when we are dead? When shall we get something which is a success story for this Government in terms of wealth production for the benefit of the people of this country?

We are also entitled to ask the noble Lord who is to wind up where the Government stand in relation to the wording of this Motion. Do they claim that they have a policy which will break the cycle of poverty? Do they claim success in having created a widening gap and greater inequalities? Do they claim that these have produced more wealth during their five years in office? If they do not, what are the Government going to do in the rest of the term that they have to serve before the next general election?

6.9 p.m.

Baroness Nicol

My Lords, before I begin I should like to make a small, personal, and probably unpopular observation. Some 30 per cent. of the speakers so far this afternoon have prefaced their contributions with the remark that they will not be here for the whole of this debate. I feel free to say this since their number includes one of my noble friends: this is very discourteous, and it is a growing practice in your Lordships' House which I personally find most exasperating. We are all busy people and we all have other things to do. With the greatest of respect to those who find themselves in this situation, if they cannot stay to hear the debate through, then they should withdraw from speaking.

Noble Lords

Hear, hear!

Baroness Nicol

I am very surprised to hear that response, my Lords. I will now return to the subject of this debate, and I will start by thanking my noble friend Lord Wells-Pestell for introducing this subject, which is one about which some of us feel very deeply.

I will return briefly to the beginning of the debate to say that I do not believe that compassion or charity is solely in the hands of the Labour Party. In fact, I have known some of the most compassionate acts to come from Members of the Benches opposite. But we are not now concerned with compassion or charity—we have gone beyond that. I will speak in a moment about the real situation in which we find ourselves.

One of the most serious divisions in our society at the present time was touched upon by the noble Lord, Lord Cockfield, in his remarks—although I would not go along with him in the way in which he laid blame for it. That division is the one which exists between the employed and the unemployed. In a social system where a man or woman is identified by occupation and where the first vital fact to be learned about any new acquaintance is what he or she does for a living, then the loss of identity suffered by the unemployed is another of their many problems.

The loss of purpose that afflicts many retired people is well known and it is catered for, and efforts are made to prepare for it. At least retirement is expected and can be planned for, and financial provision will ensure survival in a situation where family responsibilities are usually less.

The plight of the unemployed man or woman who is still employable is much more destructive. Added to the loss of identity and purpose is the crushing anxiety of inadequate financial support. Despite the social changes of the last decade, the largest single group among the unemployed is the man who is the main support of his family. Despite the agonising problems and statistics of single-parent families and of women, it is upon the family group that I wish to focus today.

We are trying to find the ear of a government which have declared themselves to be the champions of the family unit as the ideal basis for the Government's social structure. The first and immediate effect of unemployment on the family is a drop in its living standards. Commitments entered into in good faith in the expectation of continuing earned income (most often a mortgage on the home) cannot be met. The noble Lord, Lord Cockfield, stated with great pride that 12½ million people are now home owners. But they are not home owners, mostly—they are people with mortgages. Those homes can be taken from them if they do not manage to keep up their mortgage payments, and that is happening in a large number of cases. Many of the people who so proudly and eagerly bought their council homes when this Government's legislation first made that possible are now finding themselves in difficulties and being forced to sell their homes back to the local authority, or are trying to do so, if the local authority is able to repurchase—which in many cases it cannot.

Other financial commitments also cannot be met. The very refrigerators which seem to cause the noble Lord such comfort are very often on hire purchase and are lost when unemployment occurs. Growing financial anxieties put pressure on family relationships and when the problem becomes long term many marriages do not survive. I have spent five years in the domestic courts and can say from first-hand knowledge that a large number of broken marriages have as a factor financial difficulties. I would not put all the blame on financial difficulties but they do represent a large factor in broken marriages. The majority of those financial difficulties prove, upon investigation, to have been caused by unemployment.

Parents who cannot provide properly for their children become frustrated, over-anxious and irritable—and the main wage-earner becomes guilty and demoralised. The effect on children is obvious, and if they are in their teens and are themselves facing a "no hope" situation, the problem is compounded.

I must quote to your Lordships a case which came before the courts fairly recently. It concerned a man in his late twenties with a family, who obviously was not an habitual criminal. He had gone into a supermarket and filled his basket with goods, and had then left without paying. When he came before the court we heard all that there was to hear about him—which included the fact that he had no previous convictions and that he had been unemployed for more than a year. When we asked him what he had to say for himself, he clenched the front of the dock, looked directly at us, and said, "Your worships, I am supposed to be the provider and I cannot provide". That was a most heart-rending case and it is one whose circumstances have been echoed again and again, although not in such an articulate way, in the courts. I wonder whether we realise what we are doing to the fabric of our society. If we destroy the basic family unit on which so many of our institutions rely, we are destroying ourselves in the long term, and we should consider that very seriously.

Unemployed adults cannot afford to mix with their friends. They cannot afford to go into the club or the pub and buy their share of whatever entertainment is going. Their horizons are reduced. A person unemployed for up to 12 months is 11 times more likely to attempt suicide than an employed person. For someone out of work for more than a year, this figure rises to 19 times. Long-term unemployed cannot claim the same benefits—and the noble Lord, Lord Glenarthur, has recently defended this system at the Dispatch Box—as the long-term social security claimant. The difference to a married couple in one week is £11.5p. This can be a life or death difference for a couple and I ask the Government to look again at this provision to see if there is not some way of bringing the long-term unemployed onto the same level as the long-term social security claimant who is not a registered unemployed person.

In a recent debate there was discussion on the subject of what constitutes a "real" job. When replying the Minister took great pains to explain that the Government are not interested in creating jobs which are not "real" jobs. But, when pressed, he was in great difficulty in describing what a "real" job was. This fool is prepared to rush in where that angel feared to tread and say that I can define a "real" job.

A real job is a job that allows a man to keep his self-respect, and his family from want, and to contribute to the welfare of society. It is well within the reach of the Government to produce jobs of that kind. We have piles of unused bricks. We have unemployed brick workers. We have unemployed builders. Seeding that particular field would surely pay off with a splendid harvest, and I see no reason at all why such jobs cannot be described as "real" jobs and subsidised in the beginning by the Government. When one considers the real cost and the social cost of unemployment, surely that would pay off in the end. The noble Lord, Lord Cockfield, himself said at the very beginning of his remarks—and I hope I have reported his words correctly—that it is the Government's job to create a vigorous society with the wish to succour those in need, and with the means to do so. The means are to his hand. I beg to support the Motion.

6.20 p.m.

Lord Beaumont of Whitley

My Lords, I should like to start by saying that if I was in error when I interrupted the noble Lord, Lord Stallard, I apologise. The noble Lord is someone I have admired in politics for a very long time, and I certainly did not mean any discourtesy. In addition, as I think the noble Lord, Lord Barnett, realised, the quotation might well have been one from George Bernard Shaw even if it were not, because it was the kind of thing he did say.

The noble Lord, Lord Wells-Pestell, is to be very much congratulated, as I think everyone agrees, for bringing forward this Motion, tying together the ideas of riches and poverty. They are united in that you cannot have either of them without the other, and they must be considered together.

I put myself forward to speak today partly as a spokesman for Church Action on Poverty, which, although it would certainly not go along with every word I have to say, I am sure would be behind the main theme I shall be putting forward. In this context I am particularly sorry that, although we were lucky enough to have some bishops on the Benches during the early speeches, there is not a speaker from the Episcopal Bench. We are well aware how full their diaries get for periods ahead, and how difficult it is for them to come here to take part; but, nevertheless, I should have hoped that this was a subject for which very special efforts might have been made. The Church, however, has something to say on this matter, I think, and it is worth exploring that a little.

My criticism is that possibly this Motion does not go far enough. Most of us were brought up to believe that riches are a good thing and poverty is an evil, and there is a slight implication of that in this Motion. If you rigorously read through the Gospels you will find that poverty is not taken tremendously seriously but that riches are. Riches are not regarded as a good thing at all, and nor are those who possess them regarded as anything but unfortunate. Indeed, if one were to take that seriously, the Motion should also call attention to the need to break into the cycle which condemns families to riches. And, by hat! in Britain there is a cycle which condemns families to riches. We have read fairly recently in newspaper headlines of the rich and aristocratic families, and what they possess. I would be quite content to defend as a thesis this implication that riches are not necessarily a very good thing. But we are so used to saying the opposite—that we are only against poverty and that we are not in any way against riches, and we think that riches are a good thing—that I suspect I would not get very much support in your Lordships' Chamber.

Where I hope I might get a great deal of support, and where I follow on from previous speakers, is in emphasising that the problem is not so much a problem of extreme poverty. What is happening in Newcastle does not compare with Bangladesh. On extreme riches, your Lordships' House is not concerned, thank goodness, with judgment. The matter is one of the health of society. That, I think, is what the noble Lord, Lord Stewart, said, and I entirely agree with him about it. No society is healthy if it has great extremes of riches and poverty, and nor can it produce healthy results. We all pay lip service to the need for a healthy society, and it is one of the functions of politicians to produce that healthy society. The Prime Minister has made a plea for a healthy society, and Members of your Lordships' House of all parties watch with dismay the present disintegration of society in some respects, which is undoubtedly happening.

The division between rich and poor is no myth. We have already heard some comparative figures today about deaths among the babies of the poor and of the rich. No other figures are needed: just two minutes' meditation on the facts should be enough to bring home to noble Lords and noble Baronesses on both sides of the House the real implications of a situation in which, compared with children of the rich, something like three times as many children of the poor die at an early age.

From time to time we see figures published which actually give Britain rather a good rating on the maximum spread between the rich and the poor. They are usually figures which report take-home pay, but they conceal wide variations of, for instance, perks. The director of a multi-national company—I take these figures from the Economist, and they are typical figures—may receive £35,000 a year and a British Telecom worker £7,000 per year—a five times differential. That is nothing very much and nothing to complain about. A society which has a five times differential is a society which can keep together. But the director has perks of (typically) £11,000 and the worker has perks of £600. The differential immediately goes up to eight times. If you add at the top the very rich indeed, of whom there are a large number, if you take the top directors and chairmen earning well over £100,000 a year (and there are plenty of those), and if you take at the bottom the unemployed—and we have heard quite a lot about them and about the real misery there—the differentials grow and grow. When we start talking about the really rich and their incomes, we are in a different league altogether from that about which we normally talk when we refer to ordinary earning levels.

These differentials create poverty in themselves. As the right reverend Prelate the Bishop of Liverpool has said: We manufacture new forms of poverty as the affluent majority constantly drives forward its standards of living. Few people realise what they are doing to those who see them but cannot keep up. It is easy to condemn envy, and there has been some implication today—and I have certainly heard it outside your Lordships' House—that the complaints which are produced from the parties on this side of the House are the complaints of envy. To those who say that, I would place the roots of envy where they belong. As Fritz Schumacher said: The rich corrupt themselves by practising greed, and they corrupt the rest of society by provoking envy". The problem that we are discussing today has not yet been seriously tackled. It has not been tackled by the Government, who do not pretend to tackle it. I regret to say that it has not been tackled by the Labour Party. When I was campaigning in the 1960s we used to talk about the 13 years of wasted Tory rule. Since then there have been 13 years, altogether, of Labour rule, and I do not think the best of the spokesmen today can boast of what has been done about this real problem. Nor do I particularly cast blame, because I am not pretending that my party, or the Alliance, will necessarily be able to do a great deal better.

I am extremely proud of the policy that has been produced on the question of negative income tax and I pay tribute to the enormous amount of work that the noble Lord, Lord Banks, has done on this particular side and for the lead that he gives to us all.

It is a failure of the whole political system, not just one particular party, or one particular Government. If I cast some blame on the Labour Party, my remarks are not the barbs of a political opponent, they are the heartfelt regrets of a would-be political ally. The remedies are both simple and complex. The simplicity—and I now quote Professor Peter Townsend's figures—lies in the fact that less than 18 per cent. of the income of the top 20 per cent. of the richest of the population would double the incomes of the poorest 20 per cent. We have heard enough this afternoon to know what that would mean to them. That is the simplicity.

The complexity lies in the mechanisms which have built up these differences and in the task of dismantling them. Recently the Economist pointed out that over the past 25 years three types of saving have been massively privileged—owner-occupied housing, pensions, and life insurance. Personal holdings of those assets have risen, after inflation, by 260 per cent., 280 per cent., and 80 per cent. respectively. To do him justice the Chancellor has shown some signs of being aware of this problem and has tackled the very smallest part of it; but awareness is not enough.

It is not my business to turn to the other side of the coin today. Many of your Lordships are aware of the problems and miseries of comparative poverty—more so, probably, than I am—and many others of your Lordships are not, as has been rightly pointed out. But most of the problems of comparative poverty are caused by exclusion—exclusion of children from treats, school trips and wearing the same clothes as their classmates do; exclusion of their parents from the fellowship of the club and the pub, as has already been said; and, possibly above all, exclusion from the joy and virtue of dispensing hospitality.

That great man, Abraham Lincoln, once said: You do not make the poor richer by making the rich poorer. The rich have quoted him ever since; well, they would, wouldn't they! What he said might have had some validity in a frontier country with limited resources and with no need for a binding sense of community, though I doubt that. It is wholly untrue in Britain today. If we can lessen the differences between rich and poor, if we can make the poor less poor and the rich less rich, then both will be wealthier and our society will be on its way to becoming a healthy society.

6.34 p.m.

Baroness Lockwood

My Lords, I want to look at the Motion in the name of my noble friend Lord Wells-Pestell from the point of view of the effect of the situation upon young people. Their problem at the present time is a double one. They have the usual, normal, problem of coming to terms with the adult world, and they also have the problem of understanding and fitting into a world where the accepted norms are changing and, sometimes, changing very rapidly. My noble friend Lady Nicol mentioned, for example, the problem of broken marriages. There are the changes in marriage and life partnerships, the changes in job opportunities and work patterns and the changes in technological industries and technological applications. Yet, despite these major technological developments, young people are having to come to terms with a society where the economic outlook is bleaker than at any time since the 1930s.

The noble Lord, Lord Cockfield, made great play of the fact that the rate of inflation is lower than at any time in the last half century. The price of that, of course, has been a very high one, and has included the highest unemployment rate we have had for half a century. This, of course, is creating very great problems for young people. My noble friend Lord Wells-Pestell said that it is not surprising that there is increased violence, crime and drug-taking. This trend affects young people, and it is very relevant, incidentally, to a Bill which is at present going through your Lordships' House—the Police and Criminal Evidence Bill.

In that context I refer your Lordships to the speech of my noble friend Lady Ewart-Biggs on the occasion of the Second Reading of that Bill, when she referred to the deteriorating relationships between the police and young people. This situation was amply illustrated recently at an all-party meeting when the British Youth Council arranged for a group of young people from different parts of the country to present their concerns about what they thought would be the effect of that Bill on them. Some of their thoughts and fears may not be justified; nevertheless, that is symptomatic of their relationship with authority in this country.

I must say that I am at one with the junior education Minister, Mr. Peter Brooke, in saying that only a small minority of young people belong to the cult of football hooliganism. The social work that many young people perform through their school and youth group activities is largely ignored because the publicity is concentrated on the more dramatic and less worthy activities of some of their contemporaries. But this is a very real problem and it needs to be looked at in the context of a society where there are very deep differences between groups of people, and where those who are deprived—in particular the young deprived—quite naturally feel rejected by that society. Not only is society as a whole divided into different groups, but so are young people themselves. I want to look at some of the areas involved and some of the problems that are caused by these differences in groups among young people.

The very first, of course, must be that of unemployment. Again, this is a point which was made by my noble friend Lady Nicol. The greatest divide among young people is between those who are in employment and those who are not. Incidentally, this divide cuts across some of the acceptable social groups. We are finding that graduates, as they leave universities and polytechnics, are also experiencing unemployment and, unfortunately, are competing with some of the less well educated youngsters for jobs at a level which a few years ago their equivalents would not have contemplated.

This is an area where the division is increasing. For example, in 1979 in the 16 to 19 year-old age group 202,000 young people were unemployed; today in that age group 500,000 young people are unemployed. If we extend the group from age 16 to 24, 1.2 million young people are now unemployed, compared with 430,000 in 1979. There is a very real growth in this problem. Whatever other problems we have to tackle, I am sure that your Lordships will agree that this is one of the most urgent.

The second area to which I wish to refer is training, which is very closely related to the problem of unemployment. Some people would say that there is no point in having training unless there are jobs. Where then do we start? I am not at one with the noble Earl, Lord Gowrie, who on 26th June, in reply to a question from my noble friend Lord Dean, said at col. 781 of the Official Report: I cannot say when the trend will be reversed because the Government do not accept, as the noble Lord and his party suggest, that the Government can control the overall level of unemployment in this country". I do not accept that, and I think that in all parts of the House there is dissent from it. We had the excellent report from the Select Committee of the House on unemployment, which put forward proposals for the Government to take an initiative over unemployment.

Perhaps sooner or later the Government will take an initiative here. If the priority of the noble Lord, Lord Cockfield, of extending wealth production is to be realised, something has to be done by the Government. It would be much better if we could focus training in areas where the Government felt that initiatives could be taken to increase employment, whether in the private or public sectors.

Be that as it may, I still support the concept of the youth training scheme. But after a year of the operation of that scheme, it is important to look at the areas where we can close some of the gaps. I gather that something like 250,000 young people will complete their YTS training in the summer. It has been estimated that as many as 100,000 might complete their training and not have a job. If we are to prevent those young people from becoming completely disillusioned and feeling an absolute failure at having taken the course and not got a job at the end of it, we must consider the suggestions made for extending it to a two-year course at least, and making it into a modular course, so that young people can move from the YTS course to another course, as a progression of their training.

I recently sat in on a meeting of the Careers Association in Bradford which was considering this problem. The main item on the agenda was how to involve the young people coming off the YTS in additional training or to help support their confidence in themselves if they failed to get a job. I must say that I was very encouraged by the activities of that association. Its initiatives extended to discussions with local authorities and educational bodies to try to put on additional courses and to put the young people on YTS courses in touch with employers who might be able to take them on. Nevertheless, if the YTS was viewed not as a training scheme in itself but as the beginning of a continuous process of training and work experience, we should go a long way to help young people out of this very real problem.

Another difficulty in this area is the co-ordination of schemes and grants. I shall not enter into the discussion of how much the YTS grant should be. I accept that it is a training grant. There ought to be a grant and the training ought to be good and valuable. But there is confusion and a lack of coherence. Young people on the YTS at the moment get £25 a week for their training. Other young people who stay on at school get nothing, but their parents continue to get the allowance for them. Young people who are unemployed get unemployment benefit, but if they take up study and study for more than 21 hours a week they lose that benefit.

There is to be a further development. We are told that next year the certificate of pre-vocational education will be interchangeable with a year on the YTS. What will the young people on that scheme get if they stay on at school to take their CPVE? They will probably get nothing, but youngsters on the YTS, which is equivalent, will still get the YTS grant.

The whole area needs to be looked at, particularly from the point of view of encouraging young people to think in terms of continuous training until they can get a job. If they had a grant in their own right, there would not be the great division between them and their young friends lucky enough to be in employment. There would be a bridge. Important changes need to be made in the provision of training for young people.

The final point that I should like to make is in relation to the youth services. They again are a very important element in fitting young people into the community—bridging the gap between young people and the community and building a link between young people in training and young people in work.

At a time of high unemployment one would have thought that the youth services was an area of priority for increased resources. Instead, it is one of the areas that have been starved of resources and the people who are working in youth services, whether in a professional or in a voluntary way, feel very frustrated in what they are attempting to do.

So I ask the Government to seriously consider what they can do in this whole area, and ask them when they are likely to give their response to the review on youth services which was published in October 1982. That was almost two years ago. It did recommend a number of changes and an expansion of the service. If we could have a positive response to that report, this also would help. I would conclude by saying that the problems of youth cannot wait. Unless they are dealt with now, we shall find that young people, who should at this time in their life be full of hope, will become the disillusioned adults of tomorrow.

6.52 p.m.

Lord Gallacher

My Lords, the welfare state is geared to the concept of full employment. Without it either rates of taxation, direct and indirect, are high or benefits do not match expectations.

Even before the present levels of unemployment, Britain was two nations in retirement, actual and potential. First we have those in good pension schemes, public or private, supplemented by the state retirement pension; secondly, those relying entirely on the state, including the earnings-related scheme introduced by the Social Security Pensions Act of 1975. Workers in the first category, as well as having the expectation of better pensions, are also better off tax-wise in paying for their pensions because of relief on contributions, plus the fact that they pay at a lower rate for a state pension by reason of being contracted out. Over a working life of 30 to 40 years, this is an added income tax benefit because the personal allowance makes no distinction as regards levels of national insurance and pension contributions.

The Government are currently concerned with portability of pensions for early leavers and the taxation cost of the non-funded earnings-related scheme. Both are important issues, but any consideration of either category which ignores the effect of long-term unemployment on the eventual pension position begs what is now a major part of the question.

In a funded scheme, the number of contribution years is basic to the level of pension earned. Little is known of those in funded schemes who become unemployed. The Government's decision to end the first-year supplement to unemployment benefit must force some workers to spend any pension contributions refunded. This is in neither their nor the state's long-term interests.

For the employee in the state reserve scheme, if he becomes unemployed he no longer makes contributions. If he reaches pensionable age over the next decade he will have a lower earnings-related entitlement because the scheme is based on 20 years' earnings from 1978 for a full award. Thus the cost of long-term unemployment includes pension contributions not made and a lower pension on retirement, with consequential, yet unexpected, claims on social security in future years.

The Government Actuary is now basing pension calculations on a rate of unemployment of 6 per cent. with variants of 3 per cent. and 10 per cent. What is certain is that Britain will still be two nations in old age with an even greater burden of maintaining the retired section of the community.

I will not attempt to convince the Government about the wisdom of a modified scheme of public works as jointly advocated by the CBI and the TUC. Such advocacy is rejected by the Government and is responsible for much disenchantment, because the Government appear impervious to external influence, even when employers and workers speak as one.

The build-up of pension funds is important for beneficiaries and for social equality. The latter was reflected in the first report of the Commission on the Distribution of Income and Wealth to which the noble Minister has already referred. That report showed that the distribution of personal wealth became less inequitable if pension rights entered the calculation. Using figures based on 1972, if occupational pension rights were not included, the top 1 per cent. owned 28 per cent. of the nation's wealth and the top 5 per cent. owned 54 per cent. If one included both private and state pension rights in the calculation of wealth ownership, the share of the top 1 per cent. became 17.4 per cent. and the top 5 per cent. owned 35 per cent.

Nineteen seventy-two is, in pension fund terms, a long time ago. The asset value of occupational schemes at the end of 1982 was estimated at £83.5 billion for 12 million workers. This figure justifies attention paid to pension funds by the committee on financial institutions over which Lord Wilson presided.

The direction of investment made by trustees of pension funds is now of major economic importance, though state pensions are still more important than occupational schemes. All Governments have adopted a neutral stance as regards pension fund investment, as did the committee on financial institutions. To some extent, the laws on trusteeship and the absence of a pensions Act have encouraged neutrality. It is to be hoped that these deficiencies will be rectified in the next Session of Parliament.

Yet investment influences are at work. For example, the ending of exchange controls resulted in a considerable flow of pension fund money for investment in the United States of America, much of it in commercial property. It may be argued that external investment is compensated by the inward flow of capital to the United Kingdom, but it is mildly ironic that public sector enterprises are large external investors when they have ample assets to provide security for internal pension investment and are already paying market rates for borrowing.

It is even more ironic that, in the current privatisation programme, workers in denationalised enterprises are being encouraged to become risk bearers as company shareholders. In the past they were not even encouraged to lend some of their pension funds as secured loans. Thus public sector workers have at all times been divorced from the success of the enterprise which employed them. All Governments bear responsibility for this.

No one wishes to make claims for self-investment which cannot be substantiated. Where it exists, for example in Western Germany, labour relations are better and so is economic performance, despite recent hiccoughs settled by sensible arbitration. Retirement pensions are also good in the Federal Republic of Germany, and worker participation in management has formed the basis of the European Community's proposed Fifth Company Law Directive, which this Government oppose. Britain appears to build confrontation into its system.

We need to look closely at the effect of chronic and long-term unemployment on the eventual cost of supporting an ageing population. We need also to ask whether excessive differences in the living standards of workers in retirement can be justified. Finally, we need to see whether controlled self-investment of some pension fund money has a part to play in improving industrial relations, and, if it has, to legislate for it.

6.58 p.m.

Baroness Denington

My Lords, today in this House we are considering the thesis that the gap between the rich and the poor in this nation is widening. For the expression "rich and poor" I should like to substitute the words "those who can live comfortably and happily without undue worry and those whose life is one long worry" because they have not enough to eat and are always looking to see from where and how cheaply they can find the next meal. Such people are short of clothing; they are short of other necessities of life and they seem to be caught in a trap from which they cannot escape.

I propose to examine this thesis for just a few minutes in relation to housing. Surely no one can disagree that the house that a family or a person occupies has a very great deal to do with their happiness and health. A satisfactory home should be the right of every citizen. There are not thousands but millions in this nation who are not able to enjoy this basic right.

The Government's overall policies have had the effect of making the wealthy more wealthy through tax relief and other measures. They have enabled other people, through council house sales, with exceedingly generous price rebates, to achieve a capital asset at low cost, so enhancing their prospects. To those able to contribute part of the cost of home improvement, the Government have given renovation grants. But what of those who are down, who are in the lower group, the worried group—those who are badly housed, overcrowded and without basic amenities in damp and decaying housing? What are the Government doing for them?

Council waiting lists are still formidable. Homelessness has increased to such an extent that many authorities are unable now to house from their waiting lists. They can only try to deal with the homeless. There are at present over 78,000 homeless people in this country. That is the actual figure of those who are accepted on local authority lists, those in the high priority groups. There are others who are homeless but whose circumstances do not seem so urgent and who are not even put by councils on a list, because it would be useless. The priority groups are mainly women with young children, pregnant women, and so on.

Many homeless people can only be put in bed and breakfast accommodation. The borough of Brent—this is just one London borough—has 600 people in bed and breakfast accommodation. I am told that it will be 18 months to two years before those people can be properly housed. That is a dreadful situation. I invite your Lordships to imagine what it is like for women with young children in a place with no common room, although an, hotel sometimes has some kind of common room, being turned out every day, rain or fine, to drag the children round the streets or to some open space, and trying to feed them while living on a pittance. It really must be a devastating nightmare.

More houses will deteriorate and decay and reach a point at which they are uninhabitable and beyond repair because the Government will not find enough money to deal with the problem. These houses will remain empty and boarded up until, along with neighbouring properties, they are finally demolished. In due course, the empty site, it is hoped, will be redeveloped. What happens when it is redeveloped will depend upon whether the site happens to be in an up and coming neighbourhood, in which case a private developer might use it—for houses for sale, of course. The poor cannot afford a house that is up for sale. If, however, the area is not attractive enough for the "spec" builder, it may go to a council or a housing association. They will be able to provide housing for rent if the Government increase the amount of money that is available for public housing.

There is quite insufficient money available to make the adaptations needed to help the disabled to be properly housed. Many more homes are wanted for sheltered accommodation and special homes for the elderly. There are 200,000 people registered on local authority waiting lists who need sheltered and specially adapted accommodation for the disabled. I find this an intolerable situation.

There are some council estates, particularly those which were system built in the 1960s, that are so hated and despised because of the conditions that have developed—the dampness, the mould and the unpleasant decaying external appearance—that no one wants to live there. Those who are there and who fail to get rehoused feel that they are discriminated against and doomed. The result is increased vandalism and ever worsening conditions. Such estates must either be rehabilitated or demolished. Decisions by the Government and the local authorities that have to deal with the problem are urgently needed. Apart from the decisions, Government money is also needed. The AMA has put the figure for dealing with this problem alone at £5 billion.

There are other old council estates, I am told by housing officers, which, if improvement and modernisation are not carried out with some urgency, will reach a stage when they are no longer suitable for occupation and will become unacceptable. I know that I keep saying that all these things must be dealt with and that this means money, money, money. The Government must find the money. They could, of course, reverse their policy of taxation relief for the better off. I cannot, however, see the Government doing that. It would lose them votes if they did. They could, of course, please a number of people by scrapping Trident. They might even follow United States policy and try a little deficit spending in order to help the important but downtrodden section of the community we are discussing.

If the lives of the millions who now live in unacceptable conditions are to be made tolerable, the Government simply have to find the money and make it available. I could continue to elaborate this housing picture which shows that the poor of the nation are being deprived of a sufficient share of the nation's capital investment to enable them to be adequately housed, while the better off have their financial position improved and are promised more and more.

The gap between the two nations is steadily increasing. The low income groups and those needing special provision are increasing in number. There is a growing number of old people, of single parent families, of the unemployed, both young and middle aged, and of those on very low wages whose income is inadequate to meet their needs. The fact is that the Government are endeavouring to reverse the social revolution that has been achieved since 1945. In so doing they have abandoned the ideal of raising the standard of life for all the people which had broadly been the aim of both major parties until the advent of this particular Government.

After the two great wars and the terrible suffering of the 1930s depression, this nation has come to value social justice very deeply. We do have a sense of morality. We do care that the unfortunate among us shall be helped to live decently and be adequately housed, fed and clothed. We believe in democracy and decent behaviour, as recent votes in your Lordships' House have shown. This is a message that the Government would do very well to heed.

7.10 p.m.

Lord Mottistone

My Lords, I must open by apologising for the fact that I have a commitment which will mean my leaving before the end of the debate. I apologise in particular to the noble Lords and the noble Baroness on the Front Benches. I am sure that this will incur the displeasure of the noble Baroness, Lady Nicol, but she is not present to hear me.

I congratulate the noble Lord, Lord Wells-Pestell, on his Motion and thank him for it. I was interested in the fact that he started his speech by saying that it was not going to be political. Then he went on to deliver one of the greatest diatribes I have ever heard against the party on this side of the House in general and my right honourable friend the Prime Minister in particular. I should just love to know what it will be like when he says it is going to be a political speech.

I agree very much with the noble Lord, Lord Wells-Pestell, and, indeed, with most, if not all, noble Lords opposite, about, the need to break into the cycle of deprivation which condemns families to poverty". I think that the noble Baroness, Lady Denington, was pursuing that theme as well. It is absolutely crucial and is the most important thing about this debate.

However, I am not quite so sure—later I shall explain why—that the social and economic differences between the rich and the poor are widening. Even if that were true, I am not sure that the narrowing of such differences would help to break into the cycle of deprivation. If we make comparisons with other countries, I think we find that the more prosperous a country, the easier it is for individuals to escape the cycle of deprivation. My noble friend Lord Gisborough gave us examples, comparing Hong Kong and Taiwan with China. If one thinks of countries such as Russia and many of the third world countries, one sees that in proportion they tend to have a greater number of deprived people than we have in this country, and statistics show us that there the difference between rich and poor is even greater than it is here.

Then, if one turns to Japan, which I have had the good fortune to visit on many occasions—not many; four occasions since 1946, when first I was there; the last time I was there was 18 months ago—one sees that it is quite remarkable how much that country has improved the wellbeing of all of its people, from the poorest to the richest, if one likes, but certainly the poorest. The standard of living in that country is now quite dramatically different. I am not suggesting for one minute that we in this country could ever, let alone quickly, adopt the same kinds of disciplines and way of life as the Japanese. Japan has concentrated on another type of approach. I believe the key factor—I think my noble friend Lord Gisborough said much the same—is not the difference between rich and poor, but the ability of industry and commerce to be competitive in the world market, and, as was said by my noble friend Lord Cockfield, create wealth.

Under Labour Governments, when the rich were taxed excessively, we were confronted with a brain drain; we used to talk a lot about that. But I have not heard the brain drain mentioned in the last three years or so. To enable us to create circumstances in which individuals can break out of the cycle of deprivation we need to have the best brains in industry organising the production of goods and services which customers want, truly competitively and produced by a competent workforce. Obviously there is a limit to an acceptable difference between rich and poor, but I would suggest to your Lordships that this has been much narrowed during the past 50 years, and, indeed, the differences, both socially and economicaly, are splendidly less than they were even 25 years ago. That applies especially to the social differences, but, sadly, it does not apply so much economically; and there I would agree with noble Lords opposite.

Personally, by way of experience, I have always had to earn my own living. I remember that as a junior naval officer in the 1950s, with a growing family, I noticed very much, and rather resentfully, the economic differences between the poor—me—and the very rare rich who I met from time to time. In the terms of the noble Baroness, Lady Denington, it was, indeed, a life of worry to make both ends meet. Perhaps I have been fortunate to earn a little more as the years have gone on, but it has not been an easy life and I should hate your Lordships to think that one gets into this House, sliding in on a sort of gold carpet, just because one has a hereditary title.

In order to provide encouragement for people to give of their best in their work we need to have opportunities for proper reward. Excessive high taxation at the top end, and, even more, the poverty trap at the bottom end, remove that encouragement. The Government's efforts in both these directions have been laudable, in particular in taking 850,000 extra people out of tax through the present Budget and in stopping the brain drain by easing the burden of taxation at the top end and, in the last Parliament, returning it to where it was in the 1960s. An outstanding problem, though the Government are working on it, with varying degrees of success, is the paramount need substantially to reduce the high costs of subsidy to nationalised industries, which is a great drain on the resources of the country as a whole.

Thus I believe that this Government, and their immediate predecessors, are doing, and have done, a great deal more towards meeting the important call of the noble Lord, Lord Wells-Pestell, to break into the cycle of deprivation which condemn families to poverty", than have any other Government in history; though there is much more to be done.

I would say to the noble Lord, Lord Hatch, who asked whether the sort of society he described to us is the one we want, that of course the answer is, No. But I would say that it exists because we have not yet had time to correct the errors created by Labour Governments in the early part of the past decade. Time is needed for this process.

In addition, I believe that some economic differences, but not necessarily social ones, between rich and poor are necessary—notwithstanding the interesting comments of the noble Lord, Lord Beaumont, about the poor rich, rather than the rich poor—to provide incentives for people of all types to give of their best, for their families, for their jobs, and, indeed, for their country. I do not believe that those differences are widening in an overall and long-term sense. On the contrary, I believe that, in that broader sense, they are less than ever before, and if as a country we achieve the essential greater prosperity, then they will become even less.

In conclusion, I believe that on both sides of the House we are deeply, and equally, concerned about the need to break into the cycle of deprivation, but we have very different ideas about how it can best be done. For my part, I invite my noble friends in the Government to continue the good work and to hasten the relief of the burden on us all of the high cost of subsidising nationalised industries.

7.20 p.m.

Lord Prys-Davies

My Lords, my noble friend Lord Wells-Pestell drew on the evidence of the last decade or so. But I think that the noble Lord, Lord Mottistone, questions the validity of the assertion in the first part of the Motion. As the noble Lord questions its validity I would invite him to read the evidence of the Director of the Family Welfare Association to your Lordships' Select Committee on parochial and small charities. I invite your Lordships to read the evidence published in the minutes of evidence for 3rd April 1984, and I refer the noble Lord in particular to page 229. I should like to quote two or three sentences from the evidence of the director of this charity. He said: we are inundated with poor people through social workers and other people of that kind, asking us for money for desperate needs … The need of poor people in this country at the moment is enormous and is increasing daily … The statutory allowances are not any longer in our view meeting the basic needs of poor people. We are now having to find money to provide poor children with shoes to go to school, with clothing, the unemployed with clothing, fares to look for work and so on". The noble Lord, Lord Mottistone, might note the following sentence in particular: These are needs which we did not, 10 years ago, have to trouble about at all, but we are finding that the numbers of people in those kinds of basic needs are rising, and their appeals to charities are growing daily and it is a very worrying situation". We on this side of the House would concur that it is worrying if our people have to turn to charities to enable them to live a good life.

Speakers from this side of the House who have spoken earlier in the debate have identified the widening gap between the rich and the poor in sector after sector. I shall not go over the ground which they have covered admirably, but I shall confine my few remarks to my impressions of this ever-widening gap among some of the elderly.

The elderly are not a homogeneous group. We know that their needs vary from person to person. But I believe that there are two groups among the elderly whose needs are increasing and they are people who can be described as almost "forgotten citizens". First, I refer to the elderly on a state pension, who are not in receipt of supplementary benefit, but who are not well endowed through the generous occupational pensions referred to by the noble Lord, Lord Cockfield, and whose capital is very modest. They find themselves, after retirement, in a poverty trap. An adequate income is probably the major contribution to a healthy and independent old age. Low income means material scarcity in real terms. Low income is a contributing factor to poor health, influencing nutrition. There has been evidence given to the DHSS of malnutrition among the elderly. Indeed, low income can be a matter of life and death as reduced expenditure on heating their homes properly can lead to death from hypothermia in the cold of the winter.

So the elderly without supplementary benefit, without occupational pension and possibly with a few thousand pounds in a building society account have been hard hit by the effects of inflation. The value of the pound which they saved 15 or 20 years ago as security for old age has been decimated. We hope that the Government can find their way to lift the capital limit for entitlement to supplementary benefits, particularly as it relates to the group of elderly which I have identified.

There is another group among the elderly whose members are at an increasing disadvantage. I refer to people aged over 75. Because of their advanced age and their frailty, the members of this group are among the most vulnerable in our society. Rather strangely, although we are talking of hundreds of thousands of such people, they have no economic or political power to call in aid.

The health pattern of the very elderly is one of repeated medical breakdown. Moreover, their number is increasing and will continue to increase into the next century. But the criticism which we constantly hear—I heard it last week from the professor of geriatric medicine at the University Hospital of Wales—is that the health resources which are available to meet the needs of the elderly are not increasing at the rate which is necessary to keep pace with their demands. Therefore, the very elderly are disproportionately disadvantaged. It seems to me that in many parts of the country the health service for the very elderly is a relative backwater, which is disturbing to many doctors and to many nurses.

I must refer finally to the frail elderly—they are frail, they are handicapped and they are among the poorest of the poor in our community. I appreciate what the doctors tell me; namely, that their condition must eventually deteriorate and they must fade away. But the quality of their life meanwhile could often be made better, much better. I understand that the onset of their illness could often be postponed and their disability reduced for a time if they received suitable treatment in good time. But there is an acute shortage of psycho-geriatric beds. Can the Minister, when he comes to reply or at a later date, tell us when will there he an adequacy of such beds?

So if an elderly person belongs to one of the groups to which I have referred, our country is not yet a good country—although I agree that it is better than many—in which to be very old. It must be a cause for concern, and indeed shame, that the last years of so many old people who have given of their best to the country are so cheerless and so lacking in basic care and comfort when it is in the power of a Government to improve their circumstances.

I would not press the claims of the elderly to the exclusion of the claims of the poor generally. The young, the middle aged, the unemployed and the low paid all have a powerful claim on the country's resources. But we cannot do justice to that claim unless and until we have a Government and a community which have the will to make the very awkward decisions suggested by the noble Lord, Lord Barnett.

7.31 p.m.

Lord Molloy

My Lords, I feel it is incumbent upon me, if not to proffer an apology at least to explain to the House why I have not been here during the whole debate. I know that Members of your Lordships' House will understand when I say that we get involved in all sorts of organisations in the House which have annual general meetings and executive committee meetings, and that is why I have not been able to attend all the time; but I did listen to what was a superb introduction for this subject matter by my noble friend Lord Wells-Pestell. As the noble Lord, Lord Cockfield, correctly said, my noble friend feels deeply and passionately about the matters on which he spoke to your Lordships this afternoon. I wish to thank my noble friend and to join with the noble Lord, Lord Cockfield, in congratulating him on the magnificent way in which he introduced this subject.

There was one thing which my noble friend said that I should like to follow, but I do not know whether I shall be able to do so. My noble friend asked us not to be too party political about these matters. That was a good injunction; but after he had recommended that the noble Lord, Lord Cockfield, did not take a blind bit of notice but read the speech which had been prepared for him. One has to congratulate the noble Lord, Lord Cockfield. He is the finest whitewasher of any Government since the war. As for being a political cosmetician, he is in a class of his own, and he is entitled to that accolade.

It is regrettable that when opening the debate from his side the noble Lord, Lord Cockfield, did not touch a little more on the greatest of the services which, despite our disagreements, have been honoured by Governments of both parties, Labour and Conservatives, but to which there is some danger at the moment. I am talking about the greatest thing we have ever done, in my judgment. It is rightly the claim of the British that it was one of their Governments which put on the statute book of their island home the finest piece of civilised legislation ever placed either on our own statute book or on that of any other nation in the world; namely, the National Health Service.

From a most cursory glance at history one realises the most terrible paradox. It was also the British who made some of the most remarkable inventions in the early industrial era of our island nation. Our industrial history on invention is magnificent. Yet close on its heels came behaviour which was shameful, ugly and vulgar, and that was the treatment of millions of men, women and children in the new industrial age by our forefathers in industry—not the inventors themselves—which was disgraceful.

One thinks of the forerunners of the National Health Service, and the creation, for example, of the sanitary inspectorate. How many millions of lives were saved simply by the establishment of bodies of able men and women who took on these responsible jobs. We in our turn, in our generation, have done something worthwhile, too, which has been supported by all Governments, and that is the implementation of health and safety at work.

What is grievious today is that there is still exploitation, not of the rich by our present Administration but rather of the poor. Part of the editorial of the Guardian today talks of the Chancellor's odd way of trying to defend the poor—and what is happening is perfectly ridiculous. Poor people are paying more tax than the relief which rich people are getting. To put it another way round, the relief which some people are getting is more than the entire income that comes into some homes in our nation. There must be something wrong in that. This is what we have to apply our minds to.

My noble friend Lord Wells-Pestell pointed out that 7½ million—that is, one in seven of our population—have an income at or below the supplementary benefits level. I should like to add that 5 per cent. of the adult population of our land own one-half of our nation's private wealth, while, on the other hand, half the population own only 5 per cent. between them. It is always a good thing when you can check up, because I am a particularly religious man and this is the fundamental message of freedom itself. The fundamental message of freedom is to share all that is good, and in times of stress share the difficulties as well. In my lifetime we did that from 1939 to 1945; and we continued to do it under what I believe was the greatest Government I have ever known, that of Clement Attlee, from 1945 to 1950, which started off so many things.

That Government set about tackling the five giant evils of disease, want, ignorance, squalor and idleness. Perhaps the rest are slowly succumbing, except idleness. Idleness is coming back. I hope that the noble Lord, Lord Cockfield, as an honest man, will acknowledge that two years ago he was coming to this House and telling us—and I accept that it was from the depths of his heart and soul, and was sincere—that they hoped that this appalling scourge of unemployment would be tackled in six or seven months' time. It just has not happened.

I grant that the Government seem to be dispensing with that awful policy of monetarism, but the wound that it inflicted was deep. We in this House—and I believe we can do it—must acknowledge that at twenty minutes to eight this evening, in a few million homes in our country, there are people who are desperately worried as to how they are going to pay the rent and as to how they are going to buy some new clothes, but, thank God!, because of Aneurin Bevan, if one of their children is ill they are not particularly worried about having to pay the doctor's bill and suffering the agony that my mother used to suffer.

These great things have been maintained by all Governments. All Governments have endeavoured to see that our National Health Service is kept top of the bill, as it ought to be. I only wish that there had been the same application to the important asset of everybody contributing through their labour, skilled or even unskilled—the men and women of the great professions—to paying for all the things which make life worth living.

When you have nearly 4 million unemployed, you are denying them the right to contribute as well as scalding their hearts with agony. That is why we have to tackle this. It was very wrong of the noble Lord, Lord Cockfield, to say that there had not been much improvement when unemployment climbed under the Labour Government. It did, but when they left office in 1979 the number was coming down. Those are indisputable, irrefragable facts of life, and they have to be acknowledged.

I should like to turn briefly to one other problem in our National Health Service which we do not really appreciate. I have had the honour to be a vice-president of the Disabled Drivers' Association. One must realise, as some of the older disabled tell me, what it was like in Great Britain, before the National Health Service, to be disabled: not to be able to move because you could not afford a wheelchair; sometimes not to be able to move properly because you could not afford even a crutch. That no longer exists, and that is why this tremendous service must at all times be maintained.

But, alas, there is a feeling supported by fact that our National Health Service is sickening for something serious. The very air within the National Health Service is redolent with crisis. We have seen resolutions passed only a fortnight ago by the British Medical Association totally condemnatory and expressing great anxiety that Britain's National Health Service under this Administration is in danger. I know the Government will say that they are spending more than anyone else. That may be so but when one takes into consideration so many other things such as inflation and that we have about 7,000 nurses unemployed and 2,000 doctors on the dole, that ought to give us reason for concern.

I am fairly close to people like the nurses and ambulance drivers, the Confederation of Health Service Employees, the British Medical Association and the junior doctors, and never, since the inception of the service, has there been such staff consternation at all levels. I sincerely hope that this will be a feature of concern for every one of us in this Chamber, irrespective of party or whether we are members of none.

I ask the Government and the noble Lord who is to reply to concentrate—if not tonight, on some occasion—on the great anger that exists among National Health Service staff because of the dreadful Griffiths report. They are asking me, "Do they really believe that we can advertise for a super marked-down cheap line of hip replacements", or say, "For every transplant on one day you can have two for the price of one on another"? This is the sort of language they feel is involved in the Griffiths report. Who am I, or anyone else in this place, to argue that that is that: that the British Medical Association is wrong, that junior staff doctors are wrong, that the Confederation of Health Service Employees, the nurses, the midwives, the sisters, the ambulance staffs, are all wrong and only the Government are in step? I think that would be a very distasteful thing to do.

In conclusion, I hope that we can together, both Front Benches, and all the Benches including the Cross-Benches, support a great appeal to help and assist the Government. I believe they do not want to see the health service go under but they are giving this impression. I want them to stop it and I hope we give them all the assistance we can to arrest their present policy. To find out what is required I beg them to consider consulting the best minds in the National Health Service and those voluntary organisations concerned with the National Health Service. I believe that to remove this threat would be to remove a great worry from our nation. This threat is causing anxiety to men and women of all the great professions in our National Health Service. It is causing anxiety to all the great voluntary organisations in this country.

I am so pleased that my noble friend Lord Wells-Pestell has given me this opportunity to make this plea to the Government to consult these people of all political complexions who believe that they have advice, experience and, what is more, first-class knowledge which they think can help the Government, which in turn will help the National Health Service and the people of our nation.

7.44 p.m.

Baroness Gardner of Parkes

My Lords, in introducing this debate the noble Lord, Lord Wells-Pestell, said that it was not to be a party political knock-about, but, following Lord Molloy, we know very well that it is nothing but that. I must also take issue with the noble Lord, Lord Wells-Pestell, on his reference to a very arrogant Prime Minister and his comment on the callous indifference of the present Prime Minister's policies, as I cannot accept those comments. I believe the Government care and are doing their best in their own way to deal with the problems that occur.

I had a conversation with the Prime Minister two or three years ago now and I expressed concern on issues of this type. I was most impressed by her reply: she said that she cares as deeply as anyone else, but she believed that the important thing was to try to produce positive action—this was on the matter of unemployment —and she was not prepared simply to pay lip-service to something. She wanted to implement policies which would see a gradual reduction in unemployment. I believe that that is still her policy and that she has as much compassion as every one of us.

When I read the text of the debate today I saw that it discusses this widening of the economic and social difference. This makes me wonder exactly what period we are talking about, because there is nothing in the text to indicate whether we are talking about today, or post-war or any other time. The premise as set out there is quite wrong if we are going back as far as the days of the peasants on the land and people working in the factories. I think the social and economic differences are much less now than they were then.

When one of my patients has said to me, "Wouldn't it have been nice to live in the 17th or 18th century?" I have always said, "No; I would not have liked it because I would have been at the bottom end of the pile and that would not have appealed to me". It is a matter of when one looks at this argument to decide whether the gap is widening or not widening. It is terribly easy to say that the poor are getting poorer and the rich are getting richer. This is one of those old statements that we can rule out. I do not think it is as simple as that. There are many problems to be considered.

The noble Lord, Lord Wells-Pestell, referred to derelict land. When I was fighting a parliamentary election in Blackburn in 1970 there were vast areas of derelict land in that town, all cleared because they believed they were going to build and re-house people. But these areas had been cleared for years and the little businesses left opposite were going bankrupt because all the people who used to shop there had gone. That was the time, as I am sure your Lordships will remember, when the aim was to build tower blocks everywhere to solve everything, and now we all know that that was not the right answer. In those days it was considered the thing to do.

When I went canvassing I went through rows and rows of houses and four out of every five were boarded up. It was at the time of the summer election in 1970 and on that fifth doorstep someone would be sitting, looking absolutely desolate, as if the world had forgotten him. I received a very large vote, not because they were Conservative but because I was the first human being who had gone along those streets for so long. It is all very easy to say that conditions have worsened, but I do not think they have in all ways. Some of those areas are better now than they were then.

We talk about unemployment today, but surely we have to remember the years of overmanning, the years when in London one could not get anyone to apply for a job no matter what job it was. There was then a very sad time when so many patients came in who had been made redundant—as your Lordships all know, I am a dentist who has been practising in an ordinary area in the inner city for 25 years. Large numbers of them were tailors, skilled craftsmen, but no one wanted expensive, made-to-measure suits—what is the phrase?

Lord Dean of Beswick

Bespoke tailoring.

Baroness Gardner of Parkes

Bespoke tailoring, yes. Everyone wants something off the peg now. Those people who had been made redundant knew that there was never any hope of their ever getting another job in that field because it was vanishing from under them. The noble Lord, Lord Cockfield, mentioned that one of our problems of unemployment is that, compared to the United States, we have not been sufficiently adaptable, flexible and willing to learn new things and change over. For older people it is very difficult, but the young people should be looking to the new opportunities.

Today in central London unemployment is in a strange situation. There is not really a shortage of jobs, but a shortage of people who want those jobs and who are skilled or trained for them. I have personal direct experience of this. I am always advertising for someone; usually the job centre says that it will send me six people—and I am lucky if two turn up. I take one of them: sometimes they last and sometimes they do not. They come in when they feel like it and they do not bother on other days. But when running a practice and looking after patients, one has to have someone there to care for those patients all the time.

It is a different pattern outside London. I read in a recent report about unemployment that if one advertises a job outside London there will be a queue of people, whether it is in Portsmouth or the north of England. In London it is very difficult to get people to apply for a job. When you phone the job centre to say that you want someone, they practically laugh and they say that you have not much hope and that people do not think it worthwhile. There is something wrong about the loss of incentive in central London today.

Then, too, there is the physical structure of that area. I know that the noble Baroness, Lady Denington, knows a great deal about housing and I was most interested in her contribution. Some 25 years ago, all the houses around me were little, really falling-down houses. The drop on the doors was about six inches. There were no inside toilets and if it was a little tenement block of flats, there was one water tap in the courtyard for all those people. Then they were all demolished and the occupants were moved out, mainly to Dagenham. Eventually, they were allowed to come back because they were fond of the area and they wanted to come back. A great many of those same people still come for treatment today.

I know there is a certain amount of nostalgia in it when they long for the old days. They are better off in physical terms in the new buildings but they have lost the sense of community and they have lost something which was very precious. They may be better off economically—indeed, they certainly are! There is no shortage of money. The people on the whole are reasonably well employed now. There is no shortage of money but there is a great loss of social benefit which they had before when they had their families and their extended families and their friends there and doors were open and you could walk in. Now, the old ladies cannot go out at night because they get mugged. I am often asked to make someone a new set of false teeth because they have been knocked down for about 10p in their handbag and they get either their teeth or jaw broken. There are many problems that add to these deprivations and this situation is not something which can easily be dealt with.

I believe that we have a compassionate and caring society, although I thought that the point made by the noble Lord, Lord Barnett, earlier was particularly interesting, in that he placed responsibility very clearly on both the trade unions and the public. He said that we all have expectations that are just too high now. And I think the media are very much to blame in this.

I sit in court and regularly we have people coming in to be fined for having no licence for their television sets. They have, no licence because they cannot afford to pay for it. They are living on supplementary benefit. It is very difficult. How can you fine somebody who has not got the money to pay the fine? It is all coming out of one Government pocket into another. When you ask, "Have you still got the set?" "Oh, no! I got rid of that black-and-white set because I wanted to get a new video", is a pretty common answer. It is worrying to consider how they can afford a video if they cannot afford a licence for the black-and-white set.

However, some of these people are so depressed and unhappy that this is about the only thing that they have got and about the only occupation for their children. It is not as simple as it appears. Again, children have lost the art of amusing themselves or playing. Life has become too passive where we all sit in front of a box all the time and expect to be entertained by it. And, because the teenagers get to a stage where that is pretty boring, that is when they go out committing all these crimes. At every half-term school holiday, there is a great spate of crime in London committed by people who are on half-term holidays and whose parents are not around.

That leads me to another sector; the loss of the parents' presence. That is a very big thing. When we talk about how to break this cycle, surely something we must look at is the fact that parents do not know how to live or to get the best out of life and have very little opportunity to encourage their children to get a better life because they do not know what a better life is. Then the children, in turn, become parents and they just pass on what they learn from their parents.

One noble Lord, the noble Lord, Lord Stewart of Fulham, spoke about education and said he felt that the comprehensive system was a good system. In his area, of course, it has not worked at all. I can remember boys from very poor backgrounds getting scholarships to grammar schools and open scholarships to Oxford and now that area does not even run an "A" stream, so that the brighter children there have no prospects at all. That is where, if we are going to have a levelling of education, we cannot afford to have a levelling down. It has to be a levelling up. I know that the education authorities are trying to look into sixth form colleges and ways of taking the people out and giving them a better education. At the moment, the effect there has been anything but good.

Again, if you look in terms of education at Buckinghamshire, property in Buckinghamshire has become extremely valuable. One of the reasons, apart from the convenience of the journey to London, is that Buckinghamshire has retained its grammar schools and people like that educational system and go there for that.

The noble Lord, Lord Barnett, also commented on the people who do not claim what they are entitled to. The latest speaker to deal with the elderly, the noble Lord, Lord Prys-Davies, covered this point. He made many interesting points about the elderly. I have found that they are people who have an immense personal pride, particularly if they set aside means for themselves and had intended to be self-supporting in their old age. They were very hard hit by inflation. Inflation under the Labour Government was the greatest leveller of all time. The people it hurt so much were those elderly on fixed pensions, for it reduced what should have been a good amount to live on—

Lord Molloy

My Lords, I feel sure that the noble Baroness would not want to go on with that statement. The highest level of inflation on record was about six months after we had the increase in VAT by the Conservative Government.

Baroness Gardner of Parkes

My Lords, I thank the noble Lord for that intervention. I am talking about all the years which went on before that under the Labour Government when there was a pretty steady increase in inflation. That was the time when every time I went to the shop I looked to see what the new price would be. Shops did not even put the prices on a lot of foodstuffs, if you remember, because they were going up so quickly they could hardly get the new price on before it had gone up. That was the time when all those people were very hard hit. I think they are at real risk.

They are the people—I would agree with Lord Prys-Davies— who are at risk from hypothermia—not those who are in touch with the social services, not those who are getting the social security benefits (because I think this Government have covered that very well indeed) but those who, through personal pride, wish to maintain themselves and are unwilling to run their heating for fear that they will not be able to pay the bill. The most responsible of the elderly people are the ones who are really at risk. The kindness that we can all do for those people is to assure them that the first thing they should be thinking about is applying for their heating supplement. Do your Lordships know there are very many blocks of flats built for the elderly which have had to have built into them a heating system that you cannot turn off?—because only by supplying heating in that way can one be sure that the old people will have adequate warmth. When it was made so that it could be turned off and the occupiers had to put coins in the slot, they did not use it for fear of what it would cost them. And this is not just recently. I am talking about when I was chairman of social services in 1976. This problem existed then. It is all because they are the provident, thrifty, careful people. They might well die leaving some money in the bank—and they could die of hypothermia. I think there is a real point there.

A lot has been done to improve the condition of the frail elderly. Sheltered housing is now the norm. I am sure we all remember Part III housing accommodation—those great, big old people's homes where those who went into them almost became vegetables overnight. They are barely used now. Sheltered housing has become the norm. This is a great improvement for elderly people. They are supported there by home helps or other people who come in from their local council and they live out their days there until the time comes when they have to go into hospital just at the very end. This is a vastly superior situation from when they lived for years and years in those Part III homes.

I think that transport for the disabled is something that has improved immensely in recent years. The noble Baroness, Lady Lane-Fox, and I were at the launching of the Westminster Dial-A-Ride last Friday and we were delighted to be there. A lot has been done in that situation.

A point that has come through again and again, and, indeed, came through very clearly in the speech of the noble Baroness, Lady Denington, is that money is looked on as the answer to everything. Money can do a lot to solve problems, but it certainly cannot do everything to break this cycle. There has to be a much greater understanding between the different sections of the community, and much greater willingness to care about other people and not just to feel, "I'm all right, and damn the rest of the world." That is one of the real hazards.

There are additional problems, of course. The single-parent families, separated people, and other groups are all placing great added strains on housing lists, because where you have a separated family, you now have demands for two housing units, where before you needed only one. The noble Baroness, Lady Denington, mentioned that there are 600 people in bed and breakfast accommodation in Brent. This, too, seems sad when in some parts of this country houses are left empty and no one wants them. I appreciate that some people have to be in a certain area because of their employment; the job is important. But there are many single-parent families with children who would do better if they lived in a country area, or some other place where nicer housing is available, rather than be in bed and breakfast accommodation.

People have always had an urge to flow into the big cities, and especially into the inner cities. This creates pressures; you cannot create a quart out of a pint pot. I think I have got that the wrong way round, but I am sure your Lordships all know what I mean. There is no way in which you can stretch the land in inner London; you can fit only a certain number of people in. Every bit of housing demolition has been matched by a demand to build to higher standards and with lower housing densities. That means some people have to go somewhere else.

I could go on and on—I have lots of notes—but I shall not, because time is running out. We must realise that we have to break this cycle. It is not at all simple, the differences do exist, but we would all wish to see a greater improvement for everybody.

8.3 p.m.

Lord Dean of Beswick

My Lords, first, I should like to congratulate the noble Baroness, Lady Gardner of Parkes, on her "winding up speech" on behalf of the Government. I do not think there is much left for the noble Lord, Lord Glenarthur, to say. However, I propose to speak on a much narrower front during my few minutes, and I do not thinkI shall detain the House as long as did the noble Baroness.

To begin with, I want to join noble Lords from all quarters of the House in congratulating my noble friend and colleague Lord Wells-Pestell on the subject he has placed under debate today and on the very able and, I thought, moving and compassionate way in which he opened this debate. That indicated quite a conscience about and quite an experience of the divide that is developing, and growing wider, in our society between the haves and the have-nots.

The noble Baroness, Lady Gardner of Parkes, spoke for quite some time on the question of housing. I want to speak on housing, but not on a broad basis. If we want to debate the haves and the have-nots, and the widening of the gap, there is no better way to illustrate it than by referring to the present Government's policy on housing.

If you have a lot of money, if you want to buy a house for over £100,000, £130,000, or £150,000, you will find that they are being built in London. People are able to buy them and, if they have the money, sometimes they are second homes. The noble Lord, Lord Cockfield, is not due to reply to the debate, and I must apologise for the fact that I was not present for the whole of his speech. However, I understand that during part of it he made reference to the successful policy of the Government in the sale of council houses. Of course the Government's housing policy is a success, if you live in a council house and you are able to purchase it at a very high discount which is funded from other people's money.

But that is not the only criterion. I spent most of my local government years in the field of local authority housing. During the days when I was involved—and I am sure some noble Lords on both sides of the House were involved, too—the priority was to tear down the tens and hundreds of thousands of properties which were terrible by any standards, which were relics of the Industrial Revolution, and replace them with something better. I considered that by the time I had finished my chairmanship in the city of Manchester, where I was born, we were starting to come out of the tunnel, that that was a priority that was starting to recede. In other words, the volume was starting to equate with the demand. What we had to get right then, in my opinion, and that of those with a social conscience, was what was the next priority. It certainly was not the owner-occupier—and I am one myself—because people who can afford to be owner-occupiers can obviously care for themselves.

But at the worst end of the spectrum that seemed to have been totally ignored in the rush to build family houses. Later there was a push to build elderly people's accommodation, because that had gone by the board during the rush to get family houses.

I just want to digress for a moment while we are on housing. The noble Baroness in her speech mentioned Part III accommodation. If ever there has been anything foisted on to local government and the taxpayer for which the tab ought to be picked up by central Government, it has been the abuse of housing in its entirety. When I was first involved in housing and the Part III welfare service homes, as they were termed, were being built, they were supposed to be for people who could look after themselves. They needed just a basic, little flat of their own. They could go out where they wanted, shop where they wanted, and do what they wanted.

I challenge any noble Lord or noble Baroness in this House to go into one of those homes now and see whether it is being used for that purpose. Some of them—about 90 per cent.—have occupants who are advanced geriatric patients, dumped there by the health services, which cannot cater for them. What is happening is that this kind of pressure is put on the ratepayers of those particular authorities, whereas the burden ought to be borne by central Government.

I want to deal with the question of people who are described as homeless. It is a question that relates mainly to London, which has a problem that transcends that of any other area. But the problem also seriously affects other large conurbations—the big cities. I happen to believe—and this is why I do not want to be controversial—that there are occasions when people of all political persuasions in this House can look at a problem in a way that transcends the normal political divide. The powerful units which make up our society are quite eloquent and articulate in representing themselves—most of them—from the employers' side, from the trade unions' side, from the professional organisations. They make sure their case does not go by default; at least they put it.

But nobody has ever spoken with authority on behalf of the homeless of this country, who are the most deprived section of our community. In order to try to illustrate the point that I should like to put before the House this evening, I shall tell your Lordships that about three years' ago—I do not think the dates are so important—I drew a fairly high number in the draw for a Private Member's Bill in another place. Because of my interest in housing, I sponsored a Private Member's Bill known as the Housing and Multiple Occupation Bill, or, at least, the title was very similar to that. I received tremendous assistance from the noble Lord who sits beside me, Lord Stallard. He had intimate knowledge of the situation in London. We worked hard on that Bill; and let me make it quite clear that it was not a one-party effort; there were Conservative Members in another place who gave us the fullest support. The case was proved beyond doubt that here was a group of people, growing in number, who were being not particularly ignored, but nobody was bothering about them and the problem was continuing to grow. The Government of the day, of course, killed the Bill because it involved large-scale revenue responsibilities for the local authorities.

At that time I happened to be serving on the Standing Committee on the housing Bill when Mr. John Stanley was the Housing Minister and Mr. Geoffrey Finsberg was the Parliamentary Under-Secretary. During the passage of that Bill I was able to get the Government to move some way, and during that debate I read out a tragic letter written to me by a woman—I am sure that noble Baronesses present will remember the awful holocaust at a women's hostel in Kilburn when 11 women died in a fire. That was only 3 or 4 years ago. The letter was from the mother of a girl who only 12 hours before had left a good family home in Dorset. She was well educated and had a bright future before her, but wanted, before she finally settled down, to do some community work. That girl was dead within 12 hours.

It is surprising how things turn again, because only last week I received another letter from the mother of that girl, who has gone back to undertake further studies as an extra-mural student at Lancaster University. This letter was almost as poignant. It said that it was still terribly difficult to come to terms with the tragedy that had happened to the family. It asked if I could please write to her and say whether there had been any progress in legislation which would prevent somebody else from having to suffer the trauma that she and her husband had suffered.

I am sorry to say that, although the Government took some tentative steps along the road, they were by no means definitive enough really to deal with the problem. They did of course bring in grants for fire prevention, but they were mainly for the smaller type of property, while the biggest risks are the larger types of buildings. These are really, as I said in my earlier remarks, very prevalent in the London area and the large cities. There is no question about it: the main problem is London itself.

I predicted that unless the Government decided to include within that particular housing Bill provisions for hostel accommodation and multiple-occupation property that were mandatory on local authorities, nothing would be carried out. I said it would only be the deaths of other people that would convince us once again that we have to prime the pump and move further along the road and tackle this problem as it should be tackled.

I am sorry to say that there appears to have been—whether it is deliberate or not—a moratorium on any advance in that direction. I want to say just briefly that there has been a television programme on hotel people as recently as Tuesday, 3rd July. This is the most recent example, showing the scandalously substandard and unsafe conditions which exist in multiple-occupation lodging houses, hostels and commercial bed and breakfast premises.

I want to quote some evidence from the report. It says: Month after month people are dying in fires in these types of properties because of the failure of the Government to insist on adequate minimum standards of safety and repair. Only last month the Westminster Coroner warned of the terrible risks to tenants in these properties after recording a verdict of accidental death of the victim of a fire at 238, Edgware Road, Paddington. It was reported that the fire—which left one person dead and 19 homeless—had been started by a matchstick wedged in a light switch. The coroner stressed that 'it is a terrible tragedy and it brings home to everyone how mindful they must be of fire, especially in houses of multiple occupation'.". Another recent fire in Salford produced a similar story. Four men died at the Hythe House Hotel last December. Two days before the fire a fire officer had found the fire door nailed up. This is the type of thing which is not diminishing one iota. I have to tell your Lordships that I have been having some discussions with people from various parties in this House with a view to introducing a Bill to try to deal with this matter in the next Session of Parliament, because—let us make no mistake about it—further deaths will be recorded. We always think that the last accident has been the final one—and it is not so.

So when we talk about housing, the situation is that if you have been living in a council house for a long time and you get a massive subsidy, the Government have a good policy. If you can afford to buy a second home by the financial arrangements the Government have brought in, they have got a good policy for that. Or perhaps you can afford to pay £100,000 or £150,000 for such houses as those in Spencer Walk or in the heart of Hampstead Village—there has been a total sell-out of properties at prices of £110,000, £175,000 and £220,000 per house. I wonder what is felt by those people who are sleeping on the Embankment although they do not want to sleep there, or who are subject to dangerous conditions—and I have only touched on the outer periphery of the problem.

Just before the close, I will quote a personal thing that happened to the noble Lord, Lord Stallard, when he was "Jock" Stallard, as we knew him, the honourable Member for Camden. We took a petition to Downing Street, and at the entrance to Downing Street—I can still picture it clearly—was an elderly lady carrying a large bag in each hand and she spoke to Mrs. Stallard. She said: "I am glad you are doing this. It's about time somebody took notice". She was quite plain and not particularly well dressed but obviously had made a big attempt to look after herself. Lord Stallard asked her: "Where are you sleeping, dear?" She said: "In a car park". He said: "Are you being serious?" and she said: "Oh yes, it is the only place I can find. There isn't any accommodation". I say to noble Lords in this House who do have compassion that transcends the normal political scene: for God's sake!—look at this before we are faced with tragedies that we shall all be ashamed of.

8.18 p.m.

Lord Graham of Edmonton

My Lords, I want to begin my contribution by joining in the thanks that we all have for the noble Lord, Lord Wells-Pestell, for giving us the opportunity this evening to take part in this debate, and to congratulate him on the excellent way in which he started us off. I believe my noble friends have taken great care to treat this short debate with a sense of responsibility befitting the seriousness of the charge that many of us on this side of the Chamber level against the Government: that is, that they have a major responsibility to break the cycle of deprivation which condemns families to poverty and that they preside over a widening of the gap dividing the rich and the poor in Britain today. I have no solutions; nor do I expect the Government to be able to come up with many of them. But they certainly need to speak directly to that charge.

I intend to concentrate on the realm of council social services. The welfare state, which has been mentioned more than once in this debate, is a concept born of the post-war era. Those of us who have followed it and believe in it passionately recognise that there has been a revolution in family responsibility, one to the other, and that has taken place before our very eyes. As a result of enormous changes, it is clear that the burden of care in the community has shifted gradually so that increasingly responsibilities are laid on local councils and the state. The pressure brought by Ministers on councils in the past five years has been unremitting. Councils, like mine at Enfield, have been deluged with restriction after restriction. Let me illustrate the problems of the council and the people in Enfield in the realm of care for the elderly, the children and the mentally ill.

At Enfield, the council has recently closed a home for the elderly at Ingleborough on the Ridgway in Enfield. Heartbeaking appeals were made, not just publicly but also directly to me, from residents and staff, and a case was made out to rationalise the closure. The fact that the building is unsuitable was advanced as an argument, and it was said that, after all, there is a decline in demand. "Besides", it was further said, "our policy now directs that it is best that the elderly be looked after in the community".

Yet while the council, the public sector for elderly care, asserts that there is less need for council residential homes for the elderly, private homes for the elderly in Enfield have doubled in the last 10 years. Clearly, as the population lives longer we need the support of private provision as well as, not in place of, public provision. If we really care for our elderly, we should be uneasy at the simplicity of the process for registering a private home for the elderly. For a £1 registration fee and a fire inspection you are in business, with no standards on staff, on qualifications or on numbers.

There is nothing to compare with council home standards. These are under pressure even when homes are closed. The prime pressure on the council comes from the Government's policy of rate support, or the withdrawal of rate support. A rate support grant of 62 per cent. in 1979 is now reduced to 52 per cent. in 1984, and there are enormous consequences on every council in that regard, whatever its political complexion. Like Enfield, other councils have been driven to make economies or to put up the rate. Yet even if Tory Enfield Council wanted to put up the rate, it is driven up against the dreaded complexity of grant-related expenditure, penalities, clawback and the like—never mind ratecapping when it comes! The result has been that the provision of residential care for the elderly in Enfield is declining.

What does this mean in human terms? It means the positive discouragement of placing the elderly in residential care, because there are fewer places with increasing need and fewer social workers to service the social services. I will say more upon that later. That simply means that overstretched area teams are unable to respond to community needs. Doctors, as well as social workers, work against the restraint that they know there is unlikely to be a place for the old person who they honestly feel should be in care. So what happens? A daughter—it is more often a daughter than a son—soldiers on with devotion, yes; love and care in abundance, yes. But often the best place for that elderly mother or father is in care.

Enfield has the syndrome of declining public provision for elderly residential care, while at the same time there is an increase in privately owned and managed homes for the elderly. I have to say that I have less faith that the elderly in private homes will receive proper care than I have that they will get it in council homes that are proprerly staffed. Make no mistake: we are seeing councils—Enfield is one of them—which are getting out of public care for the elderly and allowing the privatisation of the service by stealth. Desperate people are the poorer. The poor suffer and bear greater burdens every day.

The social services department has responsibilities to care for the mentally ill. Near to Enfield we have Friern Barnet mental hospital and Claybury mental hospital. Both render yeoman service to the wider community, including Enfield. What is planned by this Government? The Minister who is to reply to this debate may very well have something to say. It is planned that they be closed, that they be phased out of existence, and the patients will be, in a phrase, returned to care in the community.

What does that mean for present and future patients? Enfield Council, regardless of its political complexion, is aghast. Who cares? Who provides? Who pays? Do relatives take them back? How do they do it? Does Enfield Council provide? How do they do it? Where are the resources coming from? Overstretched social service budgets will snap. Who depends on social service provisions, such as mealson-wheels, home helps and domiciliary services? It is not the rich: it is overwhelmingly the poor. They may not be poverty-stricken, nor would they plead poverty; but they can do without these savage blows at their purse and at their dignity.

Let me turn to the question of children's residential homes. Recently, in Enfield, they closed the Eastbrook children's home. Social workers and doctors urged that it be retained, but it has been sold. It is now a private housing scheme. Closure has been justified on the ground that demand has declined. A section of the community which suffers grievously under this Government is the one-parent families and the families with children needing special care in residential homes. Cuts in rate support grants—a direct central Government action—drive councils like Enfield to weaken a prime responsibility to the community. We shall be told that there are changing fashions in residential child care; that to a greater extent fostering is now being encouraged.

In 1984, having pulled out of supporting children's homes, Enfield Council is spending more than £1 million on out-borough accommodation for Enfield children. Now, with the financial pressure which they are under, they are bringing back as many as they can to Enfield. Child-minding is an element familiar to working mothers, the poor and the disadvantaged. In Enfield, child-minders are not monitored. There is a no-growth policy in respect of staff. Day nurseries have long waiting lists. Only children at risk and one-parent children are being considered.

In the social services department of Enfield Council—and I know the department very well from my experience as a constituency MP—the staff are dedicated and caring, but they are wretched at their inability to meet what they know are community needs that should be met. They are fighting an uphill battle. Ever since this regime of cuts owing to Government policy, Enfield has been short of social workers, especially field workers—the ones who are needed most. They are crucial. The cuts have been made in social services, despite a woefully inadequate base. Simple statistics show that, with a range of broadly comparable situations, Barnet has 160 field workers, Haringey 188 and Enfield 126. Those are three boroughs which are all next to each other.

In conclusion, I submit that there are many indicators of the reality of the gap between the rich and the poor in Britain today. It is the poor, the disadvantaged, the weak, the feckless and the ill, mentally and physically, who need access to council social services. These have been diminished. They are under threat, and should he restored and improved at the earliest possible moment.

8.28 p.m.

Lord Kilmarnock

My Lords, we are reaching the end of a long debate, and your Lordships will be glad to hear that I have struck out large parts of my speech; but I certainly cannot strike out the words that I wish to say to the noble Lord, Lord Wells-Pestell, in thanks for having moved this extremely necessary Motion.

The problem of poverty is interconnected with the growing crisis in our whole welfare system, particularly the social security side. If Beveridge were alive today, he would be horrified at the present position. The whole of welfare expenditure—that is, benefits, allowances and services—was projected when he presented his original plan to cost £697 million in 1955, rising to £858 million by 1965 at constant prices. Of that £697 million first-year operation, only £47 million was set aside for national assistance—the forerunner of supplementary benefit. This was planned to reduce to £32 million by 1965.

This is a far cry from the 1984 position, with some 7¾ million people either wholly or partly dependent on supplementary benefit, as the noble Lord, Lord Banks, has told us, and with just that part of the scheme costing in excess of £6 billion. The noble Lord, Lord Banks, also mentioned a further estimated 15 million people who are living within the range of supplementary benefit plus 40 per cent., which can be defined as relative poverty. We therefore have 22 million people, on those figures, who are not living in very satisfactory circumstances.

Of course there are varying views as to what constitutes poverty. The Secretary of State for Education and Science, Sir Keith Joseph, was quoted as defining it as follows: A family is poor if it cannot afford to eat, and by any absolute standard there is very little poverty in Britain today. That is a quotation from Volume 62 of Commons Hansard, col. 1175. Most of us feel that that definition is not adequate. Looking backwards to Seebohm, or Rowtree, or abroad to the shanty-town poverty of Casablanca, or to the urban squalor of Calcutta or the rural poverty of Bangladesh, to which my noble friend Lord Beaumont of Whitley referred, it is clear that there is an element of relativity; yet it cannot be dismissed because it is relative. As a definition of poverty, I think I prefer to Sir Keith Joseph's that of Professor Townend's, which runs as follows: Poverty is a state where people cannot purchase goods or engage in acts which many take for granted". But it is not only a question of the diminution of choice. There is still infant malnutrition. The elderly do still die of hypothermia, and those on supplementary benefit, particularly those on the lower rate, especially if they are not in receipt of unemployment benefit. are suffering considerable hardship, as has emerged from a number of speeches in the debate. As more and more people rely on such benefits for their income, the extent of such deprivation is growing, and it leads to more than hardship. It leads to bitterness, cynicism and a profound contempt for the prevailing political and financial institutions, with all the social consequences that that entails. My noble friend Lord Beaumont of Whitley referred to the need for a healthy society, but we do not seem to be moving towards one on that basis.

The cost of financing the welfare state has certainly escalated during the 1970s and the early 1980s, but there are some interesting movements within that overall increase, for health, personal and social services and, notably, housing have all, from a peak in 1975, dropped sharply as a percentage of GDP, while social security transfers have risen to 12.97 per cent. of GDP in 1983, which is three and a half times higher than they stood in the record year of public spending in 1975. But it is no good the Government pointing in shocked terms to such figures, dramatic as they are, and then abdicating all responsibility in the matter. It is the massive increase in unemployment since 1979 which is largely responsible. It is the Government's action in consistently promoting unemployment as an instrument of policy which must take much of the blame for the rising social security bill, a bill which should be far higher but for the disincentives to take up benefits which are present at every stage. This is a point to which I shall refer later.

Furthermore, we should not lose sight of how the welfare services are financed. Ministers continually refer to "the taxpayers' money" and the burden which escalating welfare costs place on taxpayers as a whole. But which taxpayers? I believe that the noble Lord, Lord Molloy, touched on this point. A closer look gives us a rather different picture. Owing to the high national insurance contributions from a low wage base and the heavy incidence of expenditure taxes on low earners, the lower groups gain little or nothing from social security in aggregate. The lowest quartile largely finances its own lame ducks.

As an illustration of this, I have here some interesting figures. Whereas in 1979 those on two-thirds of average earnings were paying 6.5 per cent. of their earnings in national insurance contributions, in 1984 they were paying 9 per cent. of their earnings in national insurance contributions; while for those on five times average earnings, the equivalent rise is from 1.7 per cent. to 2.5 per cent. and for those on 10 times average earnings, the equivalent rise is from 0.9 per cent. to 1.2 per cent. I have all the figures here if the noble Lord, Lord Cockfield, would later like to look at them. I am sure he is aware of them. This means that the lowest paid are paying proportionately seven and a half times as much towards the financing of the welfare state as those at the higher end of the income scale.

It is not only a question of finding money for maintaining expenditure. Personal social services will need to grow at some 2 per cent. per annum in real terms if the system is to keep up with the changes in the demographic profile of the population. This is an inescapable pressure. The cost of social security rises because obligations increase as more people become eligible for benefits—not because benefits improve. In short, a larger bill does not indicate any improvement in quality. Rising costs, changing demographic patterns and the emergence of new needs probably account for most of the growth in social welfare expenditure.

That is the picture, but what are the remedies? There have been speakers from the Labour Benches whose concerns we very largely share: the noble Baroness, Lady Denington, on homelessness, the noble Lord, Lord Prys-Davies, on the connection between low income and health and the noble Lord, Lord Stallard, on the inadequate resources which are available for care in the community. On all those points we agree with the Labour Party, though we do question some of the methods that they propose.

Minimum wage legislation is one remedy which has been proposed by the Labour Party. I think that the noble Lord, Lord Barnett, referred to it. We do not deny that it is desirable in its own right. We are certainly not in favour of the exploitation of part-timers by cowboy laundries in hospitals and places of that nature. It must be emphasised, however, that such legislation would do little to reduce poverty in working families or to eliminate the poverty trap, for in most of the poorest families what is actually being earned is already above any feasible national minimum wage. The family is poor because there are several children and the wife is not working. A higher minimum wage would mainly benefit working wives and single people. In the present climate, it could also lead to an increase in unemployment.

It must also be remembered that there are 30 million people in the country who are outside the labour force. If we add those who want to work but cannot find it, we get a grand total of 33 million to 34 million who are either too old or too young to work or who are prevented from working. The proper course, as I shall endeavour to show, is to build a combined tax and benefits system, rather than minimum wage legislation, to produce a fairer distribution of income.

But, first, what is the Government's solution? They appear to believe that raising the tax thresholds will relieve the poverty and unemployment traps. However, this measure is almost completely useless as a means of achieving that object. Here I must venture to disagree with the noble Lord. Lord Cockfield. A recent study by Mr. John Kay, the director of the Institute for Fiscal Studies, shows why this is the case. In 1983–84, just over I per cent. of working households faced marginal tax rates of over 100 per cent., and 6.7 per cent. of such households experienced marginal rates greater than 60 per cent. The expenditure of a whopping £4.3 billion in increasing tax thresholds would reduce the proportion of households which actually lose from extra earnings by a mere 0.2 per cent. to 0.8 per cent., and the proportion with marginal rates above 60 per cent. from 6.7 per cent. to 6.2 per cent.—tiny reductions on the previous figures. Mr. Kay said: Many people will find these results surprising. Surely an increase in the tax threshold must he of help to the low paid. This view reflects two misunderstandings. It should be appreciated that although an increase in the threshold does relieve some people from income tax altogether, the greater benefit goes to those who continue to pay tax. If an allowance of £2.000 is raised to £2,500, someone who earns £3,000 has his taxable income reduced by £500; someone whose income is £2,100 is relieved of tax only on £100". Furthermore, the present tax allowances are equivalent to an earnings level of £34 a week for a single person and £54 per week for a married person. Very few adults in full-time work earn as little as this. Many people have incomes at about the tax threshold—there are about 11/2 million of them—but almost half of them are pensioners. Most of the rest are married women (who are secondary, or part-time, earners) or juveniles. Less than 10 per cent. are heads of households. So we are not going to do much for low paid families by this route.

It is fair to ask: what, then, would we do? Our main proposal is to introduce a basic benefit which would provide a topping-up of total income for those in low paid jobs and for those receiving a national insurance benefit that is inadequate for their needs. The new benefit would take the place of family income supplement, rent and rate rebates, and free school meals. It would consist of an amount which would vary according to family size and housing costs. It would go to those who need it, and it would be gradually withdrawn at a fixed percentage of each extra pound earned, until earnings reach a point at which no more benefit is received.

For a married couple, this would consist of a personal credit for the couple, plus a generous credit for the first child (which effectively takes the mother out of the labour market) and a much smaller credit for subsequent children, plus a housing credit of 60 per cent. of costs. Forty-five per cent. of the total package is withdrawn for every £1 earned. A couple with two children, for example, would be entitled to £88.50 under this scheme. If they have earnings of £80, then 45 per cent. of these—or £36—would be withdrawn, leaving a credit of £52.50 in addition to earnings—or £132.50 per week. The poverty trap would have been eliminated. As earnings rise, benefits decline, but there is a constant upward curve.

How would we pay for this? I have already remarked that social security transfers are very largely horizontal transfers between ordinary people on PAYE and their brethren who are not in work or who are very badly paid. It can be argued therefore that the welfare state is an agency for redistributing income horizontally—particularly to families with children. Clearly this is not an adequate basis for any improvements in the system. Yet it is an illusion to suppose that one can achieve a major redistribution in favour of the less well-off solely at the expense of the "rich". There are simply not enough of them.

In the distribution of income, the top quartile of earners starts at about £180 per week and one cannot help the least well-off without asking for some sacrifices from those who are not necessarily earning much above the average wage. Prime candidates for reform are, therefore, mortgage tax relief and the married man's tax allowance, which was designed when only 10 per cent. of wives worked, whereas 60 per cent. now do. It would also be permissible under our general economic strategy to increase public borrowing from its presently absurd low base and to apply some £600 million to £700 million from this source.

From what I have said, it will be apparent that we are proposing a radical redistributive scheme. Our final proposal would be that the new scheme should be computerised at about the same time as income tax is computerised. The two systems must work together, and not against each other as at present. Also, this is the only way of ensuring that people get that to which they are entitled. They will not have to claim, and payments will be automated. I shall return to this point later.

It is clear that we shall not get action along these lines from the present Government. Therefore, we must try to urge upon them such improvements as are feasible within the existing system. I have a short list to which I should appreciate a response from the noble Lord, Lord Glenarthur.

First, there is the question of long-term supplementary benefit, to which the noble Baroness, Lady Nicol, referred. We had some exchanges on this matter recently in this Chamber. I understand fully the considerable cost that would be involved in shifting all he long-term unemployed onto long-term supplementary benefit, but would the Minister not agree that those aged over 55 who have been unemployed for three years are never likely to work again, and that they should be the next candidates for transfer to this benefit? I understand that they number 64,000. Could they not be followed by those in the same age group who have been jobless for more than two years and who number 42,000? Would the Minister not endorse this step-by-step approach and undertake now to give serious consideration to the first of these steps? Have the Government done any costing, and, if not, will they do so?

Secondly, there is the matter of take-up. Given the complexity of the actual system and the confusion it induces in many ordinary people, can the Government cross their heart and say that they are doing their best to improve take-up? What about family income supplement and other benefits? Can the noble Lord report any improvements? What steps has his department been taking?

Thirdly, in respect of the procedure for claiming (which of course influences take-up) does the noble Lord not agree that it would be a great improvement for the claimant if he or she did not have to claim unemployment benefit and supplementary benefit at separate offices? Would it not be possible for forms to be collected and handed in at the same office, even if they were separately processed? As regards the claims forms themselves, is it not the case that the new B1 purple form, which I believe has nine or 10 pages, is causing great difficulty, particularly for those whose first language is not English? Is the noble Lord convinced that these forms save time? My information is that they are leading to more delays than the previous system of direct interviews.

Fourth, I turn briefly to the subject of fuel and heating bills for the elderly. I understand that the volume of disconnections—and the noble Lord, Lord Hatch of Lusby, referred to this—has begun to decrease and that a new code of practice is in force, but that some families are still being left disconnected for long periods of time. Does the noble Lord the Minister have any figures? The noble Lord, Lord Hatch, fed him some, but I wonder whether he agrees with them.

We have on a number of occasions suggested to the Government that the abolition of standing charges for pensioners would be a better system than heating additions. The Government have always responded by saying that they already spend £380 million on heating additions, as opposed to the £350 million which the abolition of standing charges would cost. But is it not possible that the inclusion of heating additions with supplementary benefit can lead directly to disconnections; as, for example, when there are delays at benefit offices or strikes? Does the Minister not agree that waiving standing charges would eliminate this problem?

Finally, does the noble Lord, Lord Glenarthur, not agree that in the interests of efficiency, of fairness, and of a reduction in complexity (which almost everyone believes is becoming a nightmare) the Government should take the opportunity afforded by the computerisation of the Inland Revenue to link the tax and benefit systems in a coherent whole that will be comprehensible to everyone? We do not doubt that the Secretary of State's reviews of five major social security areas are timely; but we doubt whether a piecemeal approach, and the piecemeal answers it will produce, can provide an adequate solution to poverty in the late 1980s and the 1990s. Are the Government taking any steps to prepare for this much-needed rationalisation? I look forward to hearing the noble Lord's comments on those questions.

8.47 p.m.

Baroness Jeger

My Lords, it is difficult to sum up this debate because it has covered so many different subjects, but I shall start by thanking the noble Lord, Lord Wells-Pestell, for giving us an opportunity to discuss this matter today. He has brought to the House imaginative sympathy and the wisdom of his practical experience. That is a combination not always to be found, and one that enriches your Lordships' House; it has done especially today.

I admire in particular the stamina of the noble Lord, Lord Cockfield, in staying to listen to this debate for so long. However, I must take issue with him on one point. It has nothing to do with economics, about which I know absolutely nothing. I wondered what the shining, militant angel spirit of Shelley would have thought about being quoted by a Conservative Minister in the House today. I do not believe that he would have appreciated having his name taken in vain. But the devil can cite scripture. I shall reply in Shelley's words, from another poem: Most wretched men are cradled into poetry by wrong". I think that explains why even the noble Lord the Minister can be cradled into poetry occasionally; although he enriched our debate by what he said.

I should much rather spend a few minutes talking about the poetry of Shelley than about some of the matters which are now before us, but it is my duty to be a little more practical. The question that faces us this evening is this: what is poverty? Poverty is a question of comparison. An Indian peasant with no cow thinks that an Indian peasant with one cow is well off; and if the other peasant has two cows, then he is thought to be very well off. In this country children are very sensitive to comparability: if they do not have the other things which children have in their class, which children in their street take for granted; if they do not go on school journeys; if they do not have holidays; if they do not have similar clothes, they feel poor. And it is no use citing economic definitions.

I was interested that both the noble Lord, Lord Barnett, and the noble Lord, Lord Kilmarnock, referred to the most extraordinary definition of poverty which was quoted by the Secretary of State for Education (of all people) in the other place on 28th June: A family is poor if it cannot afford to eat. By any absolute standard there is very little poverty in Britain today". I think that it is a most abject definition. It seems to suggest that nobody should have any stars in their eyes about the things they want, that they are all right if they are fed—as if they were pigs being fattened or puppy dogs being given a meal, when all the time we are trying to stretch the sensibilities, understanding and appreciation and minds of people. The Secretary of State for Education might be reminded of that old proverb: If you have two loaves, sell one and buy a bunch of flowers". That is the kind of dimension which he seems to be missing out absolutely in that unfortunate quotation.

We know that the DHSS is undertaking four inquiries into social security and we welcome these, but I wonder if the noble Lord the Minister could tell us what public and treasury involvement there is to be in these inquiries because we cannot talk about poverty as a separate question. It is a mainstream part of Government policy and it cannot be isolated from other national processes.

We hear too much of Government spending and not enough about the Government's income, while we are told too often when we ask for further help for the poor and the disadvantaged that it is all a matter of the economy and the Government cannot afford it yet. We have to say to the Government that we are not necessarily asking for more money to be spent but possibly for the priorities to be altered, and many of the figures which have been given during this afternoon's debate do indicate that there is money coming in from various sources. We are wondering if the money which is going out is properly balanced.

The noble Lord, Lord Barnett, who knows a great deal about these things, made it quite clear that the fiscal policy of the Government makes it easier for the better off, and then we are told that no money is available for extra help for the poorest people. I want to come back with a quotation from Aneurin Bevan which is relevant to this debate: There is no test for progress other than its impact on the individual. If the policies of statesmen, the enactments of legislatures, the impulses of group activity do not have for their object the enlargement and cultivation of the individual life, they do not deserve to be called civilised". Taxation is the price we pay for civilization, and I think it is not a civilised government which puts priority on the reduction of taxation for the better off at the cost of the civilisation for the whole of society.

We are living in a very complicated, modern, sophisticated society of total interdependence. It is more true than ever that, "No man is an Island". The noble Lord, Lord Cockfield, in his very literary speech this afternoon referred to John Donne, that we are all "involved in mankind": and so we are. There are some people who think they buy private medicine and say that they buy themselves out of dependence on the state, but they are treated by doctors and nurses who trained at public expense and they are probably cured as a result of research carried out at public expense. The same is true in our schools, and we have had debates in this House recently about education which is one of the most important aspects on the subject of poverty. We have mandarins in Government and their advisers in high posts who are the products of subsidised universities, some of whom are busy in later life trying to deprive the less privileged of getting the advantages at a lesser subsidy than they themselves had in earlier life, by cutting grants to the WEA and the Open University.

This question of saving money and what the country can afford is extremely complicated. I want to be very brief tonight as I promised noble Lords, but I was very interested in the question of housing which was particularly referred to by the noble Baroness, Lady Denington. The noble Baroness and I have both been chairmen of housing committees and we know how much money is wasted by bad housing, how much illness is perpetuated, how many marriages break up, how many children have to go to child guidance clinics because they are living in a bed and breakfast hotel room where there is no room to play and no room to stretch and enjoy themselves. I think it is no good for the Government to answer this debate in terms of economics and the availability of money because so much so-called economy is impoverishing not only the lives of people but the economy itself.

Every person who is kept waiting longer than necessary for a hospital bed is longer on sick leave than he needs to be; his condition becomes worse and more expensive to treat and his convalescence longer. Every person who is kept out of work needs more money from social security, his children need more money and therefore it will be no answer—and we certainly shall not expect an answer tonight—that there is the problem of the economy which needs to improve before we can do these things, which many of us think will save the economy in the long run.

We have this lunacy (if I may concentrate on housing for another moment) of reducing building in the public sector in the name of capital economies while we are increasing expenditure by putting homeless families into these unsuitable, miserable and expensive hotels. That money is spent and gone for ever, whereas if the money was spent in building council flats that would be a capital investment and at the end of the day the flats would still be there, whereas the landlord who collects £60-£100 a week deals with money which is lost to the public sector completely.

When we get to the question of health, where we see even the chairman of the BMA complaining—and he is not noted for being a friend of this side of the House—I think the Government must really take some notice.

My noble friend Lady Nicol and several noble Lords referred to the question of the long-term unemployed. We discussed this the other night, and I must say again that I think that keeping people who are out of work a long time on short-term benefits is one of the cruellest things that this Government can do, because it is impoverishing their families and reducing their purchasing power, which again ripples out into the economy because we need more demand for consumer goods in order to re-create employment.

I think that all the speeches which have been made stand on their own. I am glad that I am not the noble Lord. Lord Glenarthur, who has to reply and I will not add to the burden of points which he has to answer. I will end—as I feel literary too—with another quotation (just the third) from John Stuart Mill, who was for too short a time a Member of the other place. He wrote in Liberty, which is one of my favourite books: The worth of a state in the long run is the worth of the individuals composing it". I think that if the Government took that for a text it would really create a happier civilisation and a more prosperous country.

9 p.m.

The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Glenarthur)

My Lords, this has been a long and wide-ranging but nevertheless important debate, and I should like to begin my summing up by echoing my noble friend Lord Cockfield when he acknowledged the sincerity and depth of concern that characterise the Motion before us. They are qualities we associate with the noble Lord, Lord Wells-Pestell, and I join with other noble Lords in congratulating him. He and all those who have contributed to the debate have brought much experience from all walks of public and private life to this debate.

I should like to assure the noble Lord at the outset—and I hope he will accept my assurance—that we are at one in believing that it is the duty of this or any Government to promote and to defend the well-being of all their fellow citizens. Few English historians have given more lucid expression to this principle than Macaulay—and I am going to embark on a quote to match the noble Baroness opposite—when he wrote of the undoubted progress of civilisation in his own time that it afforded, no reason for tolerating abuses or for neglecting any means of ameliorating the condition of our poorer countrymen". Where the party opposite and the Government differ is in our view of the policies most likely to best increase the prosperity and the well-being of all our countrymen. For as Macaulay went on to say: It is not by the inter-meddling of the omnipotent state but by the prudence and energy of the people that England has hitherto been carried forward in civilisation". That perception is as true today as it was when Macaulay wrote those words more than a century and a half ago. If the energy, the talents and the initiative of our people, as expressed by my noble friend Lord Mottistone, are frustrated by bureaucratic restrictions, by penal taxation and by the absence of incentives, it is the people at large who will be the losers in the end. Conversely, everyone stands to gain from measures designed to promote an increase overall in the national income.

Listening to some of the views expressed by the party opposite, I sometimes think that they would prefer their fellow countrymen to be less well off and less happy, provided each man can have his fair share of the despondency and misery which they have described, rather than that prosperity should increase for everyone, albeit unequally. Only by encouraging the nation's most enterprising and successful producers of wealth (as my noble friend Lord Gisborough described in a speech with which I entirely agree), by careful housekeeping in the public sector, by seeking value for money and by calling those responsible for public sector budgets to account (and, indeed, by calling ourselves to account) will we both maintain the value of the money in people's pockets and increase the availability of goods and services they can buy.

Noble Lords opposite sometimes appear to think that we can have our cake and eat it: that the national cake, which has been referred to several times this afternoon, does not need to be replaced and increased by national effort—effort which demands as a prerequisite the freedom to develop what my noble friend Lord Cockfield aptly described as, not a society which wrings its hands and laments in the night but which is "vigorous, enterprising and self-reliant". We shall not achieve this society by bureaucratic state intervention which attempts to lay down formulae for every eventuality the individual may meet in life, and which relies on borrowing or printing money to avert each recurring financial crisis as it looms.

We place our first emphasis on freedom—freedom for all to prosper. Noble Lords opposite want to achieve their egalitarian ends through a reorganisation of society's wealth-creating capacities. It was the French historian, Elie Halevy, who said: Socialists believe in two things which are absolutely different and perhaps even contradictory: freedom and organisation". That is why we on this side of the House have always contended that without individual freedom there can be no prosperity, else the prosperity that might be is swallowed up in the machinery of organisation and intervention. This is why the road to socialism has been so chillingly described as the road to serfdom.

What about the facts? What is the Government's record? My noble friend Lord Cockfield has already summarised some of the strides we have made in recent years: indications of prosperity that would have been unimaginable even when Beveridge was writing his report. The noble Lord, Lord Kilmarnock, compared the amount that Beveridge originally allocated for national assistance with that which has been spent on supplementary benefit, and estimated £6 billion in 1984–85. That is a misleading comparison. Apart from the effect of inflation, I am glad to say that the real value of the scale rates has more than doubled between these two dates.

Lord Kilmarnock

My Lords, the noble Lord has misinterpreted me. The point of my intervention there was that Beveridge foresaw that national assistance would actually decline as a proportion of total social security spending, whereas in fact it has not. It has constantly increased since his day.

Lord Glenarthur

My Lords, it has increased partly because the benefits, too, have increased enormously. My noble friend Lord Cockfield referred to property owned by households—fridges, and so on. I agree that the examples he gave are hardly signs of an impoverished nation. They come to seem unremarkable because we so rapidly take for granted what previously were distant aspirations. But, of course, there will always be some who are unable to provide for themselves the standards of living that the more fortunate regard as the norm. This Government have not turned their face against them, nor flinched from the difficult task of steadily improving their lot. Across the whole field of social security and of health and personal social services, our record stands comparison with that of any previous Government, and notably with that of the party opposite.

The noble Lord, Lord Wells-Pestell, the noble Lord, Lord Banks, and the noble Lord, Lord Kilmarnock, raised the matter of a definition of poverty, suggesting that the supplementary benefit minimum drew that particular line. Of course, it would not be appropriate to define poverty in absolute terms. There can be no serious suggestion of poor people in this country being limited to a bare subsistence income. To use the supplementary benefit level as a definition of poverty is clearly a nonsense, because it means that whenever the benefit is increased in real terms more people would be defined as being in poverty.

Let me revert to our achievements, and take pensions. There are over 9 million pensioners in the United Kingdom. From November 1978 to November of this year, the state retirement pension for a married couple will have risen by 83.7 per cent. Allowing for inflation, this is a real increase in spending power of over 4 per cent. The figures for a single person are comparable. At a time of necessary financial constraint, this is an achievement of which we can be proud.

Supplementary benefit, similarly, has continued to rise, which again is an important real terms increase. Mobility allowance, for example, has risen by a massive 100 per cent.—some 11 per cent. in real terms—and we have taken that allowance out of tax. We will have doubled its rates since November 1978. The family income supplement prescribed amount has increased since November 1978 by 10 per cent. in real terms. The fact that these benefits and others are all higher in real terms demonstrates clearly that we have taken positive measures to help those groups and not that the benefits have risen due to the recession, as was suggested by the noble Lord, Lord Barnett.

In the face of those figures, it is absurd for noble Lords opposite to suggest that the Government do not care about the relatively poorer and needier members of our society. We have made those increases while pursuing vigorously policies which, to everyone's benefit—including the elderly, as was described by my noble friend Lady Gardner—have succeeded in breaking the back of inflation. Annual expenditure on social security benefits is now running at well over £37 billion. The DHSS pays out well over £100 million a day—and, incidentally, employs 80,000 staff to do it. Payments in benefits have increased significantly, partly because of increased demands from claimants—there are 600,000 more pensioners now than in 1979—and partly because of the kinds of benefit improvements that I have described.

At the risk of sounding like Gradgrind in Dickens's Hard Times, I shall offer your Lordships one or two more facts and comparisons. The number of supplementary benefits recipients receiving heating addition—which was referred to by noble Lords earlier—increased from just over 70 per cent. of pensioner claimants in 1978 to nearly 90 per cent. in 1982. For allowance claimants, the numbers increased from only just over a quarter in 1978 to 40 per cent. in 1982. All in all, since we came to office we have spent an extra 140 million in real terms on heating additions.

Expenditure on benefits for the long-term sick and disabled was about £4 billion in the last financial year. That is an increase of about 30 per cent. in real terms since the last Labour Government. While we have continued to offer mortgage interest relief to the tune of some £3 billion in the current year, which benefits some 7 million households, we shall have spent some £3¾ billion in the same period on housing benefits to some 6.5 million recipients. We have at the same time enabled more and more people to buy their own homes, as my noble friend Lord Cockfield described. In December last year over 60 per cent. of the population owned their own homes, compared with 54 per cent. in the last year of the Labour Government. So, far from neglecting the needs and aspirations of the less well-off, we have a record of which we can be proud.

The noble Lord, Lord Molloy, in particular referred to the health service. The record is no less commendable there. I have on many occasions rehearsed the figures and I shall not go through them all again now, except to say that, in a service free at the point of delivery, total spending on the NHS has doubled since 1979 from £7¾ billion to £15½ billion. That is an increase of 18 per cent. over and above inflation. More patients than ever are getting better treatment, in better hospitals and with better after-care services. That is no mere trumpeting.

These facts set to right the misrepresentations and misunderstandings that still surround much talk about the National Health Service. They demonstrate beyond doubt the Government's continuing commitment to health and welfare in this country. So much for the view of the noble Lord, Lord Molloy, that the NHS is in crisis. Even if it was, I simply cannot understand how making someone responsible at every level, as Griffiths suggests, can do anything but help.

The Motion before us today refers to a cycle of deprivation and exhorts us to break into it, although I am bound to say that, if it existed, I should have thought it more appropriate to break out of it. I hope that the facts that I have adduced this evening will dispel the myth that there is some absolute level of deprivation from which the deprived cannot escape and from which they have no protection, although I do not suppose that they will satisfy the noble Lord, Lord Hatch.

The noble Lord asked whether the sort of society that he described in Bristol, and that of those who reportedly clothed themselves from a tip in Merseyside, was one that this Government wanted. As my noble friend Lord Mottistone said, of course it is not. If it is true that someone has clothed himself from a tip for the past 10 years—and I very much deplore the idea, whatever the quality—it will not have escaped the noble Lord's notice that five years of that time was under the auspices of his party.

Our welfare benefits system has an essential safety net—supplementary benefit. There is no one, however relatively poor, whose basic domestic needs must go unmet. As I have explained, in line with social security benefits as a whole, supplementary benefit has been protected, and indeed improved in many areas. Particularly for children of certain ages the scale rates are significantly higher than when we took office.

I have to say that I find the concept of a cycle of deprivation a depressing one and one in which I do not wholly believe. One of the findings of the research studies on the matter was that there was only limited evidence to support the cycle of deprivation hypothesis. A person's coming from a poor or troubled home may increase the chance of similar difficulties in the next generation, but research has shown that there is no inevitability about that pattern. Many children from deprived backgrounds avoid deprivation in adult life. I have seen examples of it myself; some of them only yesterday. We are pursuing policies which are opening up the opportunities for everyone to live freer and more prosperous lives.

In describing supplementary benefit as a safety net, I should like to dispel any suggestion, such as the noble Lord, Lord Wells-Pestell, made, that its recipients are inevitably eking out penurious lives with the barest minimum of human comforts. Let me give an example of a couple with three children, say, aged four, nine and 11. First of all, I must point out that such a family would now typically receive benefit of over £9 more, in real terms, than in 1978. That is a very tangible improvement. From this November, such a family would receive, at the ordinary rate, a weekly rate of £45.55, plus £9.60 for each of the two younger children, and £14.35 for the elder child, plus a heating addition of at least £2.10. That is a total of £81.20. Additionally, the family's rent and rates, all mortgage interest, and an allowance for repairs and insurance in the case of owner-occupiers, would be met in full. As well, there would be free dental and optical treatment, free NHS prescriptions, and free school meals.

The noble Lord, Lord Prys-Davies, has said that he hoped that the Government could see their way to increasing the capital limit for supplementary benefits. The capital limit for receipt has in the past two years been raised by 50 per cent. to the present limit of £3,000. It is not being raised again this year, but it will be kept under review.

No one suggests that the sums to which I have referred are princely sums. I should be the last person to suggest that. However, they put into perspective the allegations that the Government have all but abandoned low income families. Nothing could be further from the truth. The noble Lord, Lord Banks, referred to the MORI poll and breadline Britain. Despite economic difficulties, the Government have been able to protect the poorest from the worst effects of recession. Supplementary benefit scale rates have, overall, kept up with the movement in prices since 1979. Extra help has been given to certain groups; for example, automatic heating addition for households with under-fives; increased earnings disregard for lone parents; reduction in the qualifying period for the long-term rate to one year. I could go on. But the survey's findings themselves are equivocal. Social security was only the seventh most popular out of 12 options suggested for increased spending, with only 19 per cent. in favour.

Despite the progress I have outlined, we are not complacent about the way the social security system is working. It has grown to fairly unwieldy proportions. Its machinery, sometimes of baffling scale and complexity, has been likened to a juggernaut rolling on by its own momentum. The noble Lord, Lord Banks, called it a creaking system. As he said, we have responded to the challenge by reviewing its major operations, as my noble friend Lady Lane-Fox also described.

My honourable friend in another place, the Minister for Social Security, is leading a team looking at benefits for children and young people. My honourable friend the Parliamentary Secretary for Social Security is looking at supplementary benefit. Mr. Jeremy Rowe, chairman of the Peterborough Development Corporation and deputy chairman of the Abbey National Building Society, is leading the review of housing benefits. Each of the reviews has recently issued a short document indicating the areas in which it is particularly interested in receiving evidence. So in answer to the noble Baroness, Lady Jeger, I can say that the reviews are not taking place behind closed doors. We want to hear directly the views of our customers, the public. I can tell her that my honourable friend the Minister of State at the Treasury is involved with a pensions inquiry. In any case, the Government will take a collective view on the reviews as they go on.

The question the reviews will be tackling are complex and difficult; they affect millions of people. The review teams have a major task ahead of them in trying to find ways of simplifying the systems, making them more intelligible, and focusing help on the areas in greatest need. My right honourable friend the Secretary of State has also launched his inquiry into the provision for retirement.

So with four reviews at work on different parts of the social security system, it is very important that their activities and conclusions should he meshed together to form a coherent whole. The subject is a massive one. There is no doubt that the exercise which my right honourable friend has launched will build into the most fundamental and wide-ranging examination of social security since Beveridge.

The noble Lord, Lord Banks, talked about a tax credit scheme. We are aware of the various and differing schemes put forward from time to time for the reform of the social security system. Most of them are very sweeping indeed. Even those involving tax credit principles go much wider than the relatively modest proposals of 1972 and 1973. Schemes of this magnitude require very careful analysis, as I am sure the noble Lord would accept, and assimilation also, because of, for example, their redistributive effects, the way they create gainers or losers, and particularly the way they increase and pe-empt public expenditure.

In the meantime, it seems to us eminently sensible to carry out the sort of reviews that my right honourable friend has announced and, by that means, progress slowly but securely to a greater rationalisation. It would be wrong, I think, to forget those supported mainly by their own earned income in a debate like this. Real take-home pay has increased since 1978–79 for all those whose earnings have risen in line with the national average. A married man with two children on half average earnings, for example, will have seen an 8 per cent. increase. In the 1984 Budget, 80 per cent. of the total full year cost of income tax went on personal allowances. At the top end of the scale, we offer no apologies for reducing the highest rates of tax. Our top rates of tax are now much more in line with those prevailing in Europe, though our 60 per cent. rate is still higher than the top rate on employment income in the United States and, indeed, in West Germany.

In such a wide debate, many points have been raised. If I tried to answer all of them, I fear that we would be here all night. I shall deal with those that I can, and I hope that your Lordships will bear with me if I only pick up some of the major points that have been raised. The noble Lord, Lord Wells-Pestell, and the noble Baroness, Lady Denington, referred to defence, suggesting that less spent on that would mean more for the poor. But we are part of an alliance. The noble Lord and the noble Baroness know that there is a threat, even if they do not particularly want to believe it. They also know how adequate defence is fundamental for all of us, even the very poor, so that we may all live the life that the noble Lord, Lord Wells-Pestell, would wish us to.

The noble Baroness, Lady Denington, referred, among other things, to accommodation in Brent, suggesting, I think, that the problems here were due to the low income that some families were suffering from. The main reason for the increase has been to some extent the increase in unemployment, but the underlying cause of that was the failure of the party opposite to adjust wage demands to reflect falling export markets. This was also a period of global recession and of a large increase in unemployment in all developed countries. On top of that, in the United Kingdom, high wage settlements led to a loss of competitiveness. People priced themselves out of jobs.

The noble Baroness, Lady Lockwood, raised a number of points concerned with training and young people. I note the conviction and the experience with which she speaks, particularly her experience in this field. She asked about the Government's views on youth services. I am afraid that I cannot tell her when the response to the report on youth services will be available. I shall try to find out and let her know. I do not have that fact with me. The noble Lord, Lord Banks, spoke of a comparison between child benefit and tax allowances. There can be no real comparison between increases in tax allowances and child benefit. In 1981, for example, child benefit was increased but tax allowances were not.

The noble Lord, Lord Stallard, chided us for not doing enough for the disabled. The noble Lord described what we have not done, but did not say what we have done. Let us be clear about expenditure on benefits for the long-term sick and disabled. We have increased expenditure on these benefits by 30 per cent. in real terms since coming to office. We have made significant progress towards our aim of a coherent system of benefits for the disabled with the introduction of the severe disablement allowance. The noble Lord might well criticise us for saying that the system is further complicated by the new allowance; but it does bring 20,000 more people into benefit. He cannot have it both ways. The noble Lord talked about care in the community. The real point here is what best benefits the potential customer, the mentally handicapped and the mentally ill. He said that children should never enter a mentally handicapped hospital—an aim, I think, that we all share. But there may always be some who continue to need medical care in a hospital setting. We exhort health authorities, through reviews, in this direction.

The noble Lord, Lord Kilmarnock, asked me a number of points. I shall have to read them and answer some in writing. I can perhaps answer two. He asked about our introducing procedures for those who are unemployed to claim without having to go to both the unemployment benefit office and the social security office. A postal claim procedure has been introduced for unemployed people to claim supplementary benefit. This removes the need for them to go to the social security office and makes it easier and more convenient for them to claim supplementary benefit. The B.1 claim form, which he referred to, has been found generally to be a success. The noble Lord looks quizzical about it, but it is a fact that it is a success. I have been to local offices and I have asked this very question, and I have not yet met these people who say that is not the case.

The noble Lord also asked, not the first time, about the long-term rate of supplementary benefit being given to those who are unemployed. The noble Baroness, Lady Nichol, raised the same point. I have to give her the same answer: that whatever its merits, the cost would be colossal—some £480 million. In an earlier debate I promised the noble Lord, Lord Kilmarnock, to have some calculations made about the cost of his suggestion that it should be payable to those who are aged over 55. The cost is estimated to be of the order of £10 million if payable after three years of unemployment, and in times of limited resources I feel, as I said before, that this group should not have priority over other unemployed people.

Despite the criticisms and some extravagantly-worded prophesies of doom and disaster, we have maintained our economic strategy. Why? It is because our policies are working, and we will not now throw away the key to increasing prosperity. That key is the maintenance of a firm financial framework. It is the key to an economic strategy which is bringing success. But it has not been easy; nor are we yet out of the wood. Certainly it does not indicate any lack of compassion.

There has been a progressive reduction in the growth of money, and in public borrowing as a proportion of GDP, which has brought inflation down sharply. The Government's commitment to reduce inflation can only be of benefit to all our people, whether comparatively rich or comparatively poor. We remain committed to the incentives which my noble friend Lady Gardner wanted. We remain firmly committed to our objective of stable prices. Last year our growth rate was the fastest of any member state in the European Community, and this year we confidently expect it to again be one of the highest. For the noble Baroness, Lady Jeger, to suggest that benefits, housing, or anything else, are not part of economic policy and should not be regarded as such seems to me to be flying in the face of reality, if not in the face of common sense.

Against the background of a major recession and the inflationary legacy of the last Labour Government, we have succeeded in laying the foundations for steady economic recovery; that is to say, real stability, real growth and real prosperity. At the same time, we have ensured that even the least well-off in our community have the means to provide the essentials of a civilised standard of life. Compassion for the less fortunate is a quality we should all share, but it would be a tragedy for them and for all of us if our hard-won gains were lost by failure to maintain our resolve.

9.28 p.m.

Lord Wells-Pestell

My Lords, having listened to the Minister, it is quite clear that much of what has been said today has fallen on stony ground and not on fertile soil. But, having said that, I should like to take this opportunity of thanking him for his very full reply. If we have to have a Conservative Government—if we must—I think this House is fortunate in having him in the Department of Health and Social Security. If I may say so, he handles the House very well. He is very informative. He will go to great lengths to give us adequate replies, and those of us who from time to time have correspondence with him are very grateful for the thoroughness with which he goes into the matter. He is in a good department. I had five years there and I enjoyed every minute of it. On behalf of the House, I should like to thank him.

I wish to thank everybody, without exception, who has taken part in this debate. It has given us a wealth of information, and almost in one Hansard we have a very comprehensive understanding as to what is going on. I want to apologise for the length of the debate. Certainly I did not want it to go on as long as this.

The Minister referred to what the Government had achieved financially. Our concern is that we want the benefits not just to be topped up in line with inflation—that is a moral obligation—but to be dealt with in such a way that the basic amount is well above the subsistence level, which it is not at present. I remind the Minister that privatisation has brought the Government in £2,541 million—I do not know what they have done with it—and in addition, the gas levy that they imposed, in my view quite disgracefully, has brought them in another £690 million. I hope that the noble Lord, Lord Cockfield, will feel that some of that money could be used to help the poorer sections of the community.

Finally, I may have misunderstood something that was said by the noble Baroness, Lady Gardner of Parkes. I thought she said that she did not know whether we were talking about the widening gap between the rich and the poor today or at some previous time. Quite clearly we were talking about the widening gap between the rich and the poor at the present moment. I thought that the noble Baroness said that she did not accept that there was a widening gap. If I am right in my recollection, may I suggest to the noble Baroness with the greatest respect that, when tomorrow's Hansard is available, she reads the speech of the noble Lord, Lord Banks, whose contribution was quite outstanding and very full of factual information that will remove doubt from anybody's mind as to whether or not there is a widening gap.

Baroness Gardner of Parkes

My Lords, will the noble Lord allow me to intervene? I certainly did not wish to imply in any way that I do not think that there is a gap. My statement was that the actual wording of the Motion did not make clear whether we were dealing with it only in today's context or historically. I considered that historically the gap had narrowed rather than widened; but the rest of my contribution will be as in Hansard.

Lord Wells-Pestell

My Lords, all that remains is for me to beg leave to withdraw my Motion for Papers.

Motion for Papers, by leave, withdrawn.