Wealth Distribution (Hansard, 20 November 1984)

§ Lord Hatch of Lusby
My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Chancellor of the Duchy of Lancaster and Minister for the Arts (The Earl of Gowrie)
My Lords, over the period the estimated wealth of the top 25 per cent. of the adult population rose from 77 per cent. to 81 per cent. of marketable wealth. When pension rights are included, the proportion was unchanged at between 56 per cent. and 59 per cent.

§ Lord Hatch of Lusby
My Lords, I thank the noble Earl for that Answer. Does it not indicate that the Government believe that the rich will work harder only when they get more money and the poor will work harder only when they get relatively less? Is it the deliberate policy of this Government to widen the wealth gap between the rich and the poor?

The Earl of Gowrie
No, my Lords; the primary concern of the Government's economic policy is to establish conditions favourable to the creation of more wealth. I hope that the noble Lord's interest in the wealth gap will lead him to urge that those who wish to buy their council houses should do so and that he will lend his support to the British Telecom share issue.

§ Lord Stoddart of Swindon
My Lords, is it not a fact that the Government's policy from 1979 has been to make the rich richer in order that they would invest more in industry? Is it not also a fact that that simply has not come off and that investment in industry is still only about 30 per cent. of what it was in 1979?

The Earl of Gowrie
My Lords, it certainly is not my view that governments make the rich richer or the poor poorer. Industry does that, and the more investment there is the better.

§ Lord Diamond
My Lords, in view of that reply, how does the noble Earl explain the following facts which emerge very clearly from Table 4.8 in the recently published Inland Revenue statistics, which continue the series which we started by the Royal Commission on the Distribution of Income and Wealth and must therefore be wholly accurate? How does he explain the fact that those figures show, taking the top 25 per cent. referred to in the Question, that there has undoubtedly 484 been a halt in the movement away from inequality, and that not only has it been halted but that it has been reversed? If one looks not merely at that percentage but at the totality as shown by the GINI coefficient, with which your Lordships' House is now very familiar, one gets the same answer for the totality.

The Earl of Gowrie
My Lords, I am a little suspicious of the genie that the noble Lord is trying to make rise out of his bottle. The fact of the matter is that we really must try to translate some of those percentages into cash terms. A person need not be very wealthy to be in the top 25 per cent. In 1982, such a person needed to possess only £12,500 of marketable wealth. I should have thought that it was the policy of the noble Lord's party, as it is of our own, to see that more people joined in.

§ Lord Glenamara
My Lords, the noble Earl mentioned British Telecom. Can he explain to the House how the sale of an asset owned by all the British people to only some of the British people makes for a fairer distribution of wealth?

The Earl of Gowrie
My Lords, I do not accept that ownership of assets by government is ownership by the British people.

§ Lord Glenamara
My Lords, will the noble Earl say who does own it? Is it owned by a Minister, or is it not owned by all the British people?

The Earl of Gowrie
My Lords, I am delighted to be able to say that in a very short space of time the noble Lord will be able to own it.

Lord Paget of Northampton
My Lords, the noble Earl advises that those who buy British Telecom will get richer. If the buyers get richer, surely the sellers get poorer.

The Earl of Gowrie
My Lords, I suggest that the noble Lord, like the rest of us, tries his luck.

§ Lord Wells-Pestell
My Lords, is the Minister saying in his replies that since the advent of this Government the rich are not getting richer and the poor are not getting poorer?

The Earl of Gowrie
My Lords, as I said, the point of the Government's economic policies is that the country should get richer. The distribution of wealth within the country is a matter of great concern to the Government, and that is precisely why the Government are anxious that people should buy their council houses—because property is still the largest form of wealth distribution—and indulge in wider share ownership, as I said earlier.

§ Lord Molloy
My Lords, I am sure that we would all agree that we are proud of the fact that we are a property-owning democracy; that the fundamentals of the nation should be democratically owned and looked after on behalf of the people by the Government of the day; and that they should be checked by the Opposition of the day. Does the noble Earl disagree with that, and therefore believes that the 485 Navy, the Air Force, the roads, and all the other things which are now publicly or locally owned should be privatised?

The Earl of Gowrie
My Lords, I am saying no such thing. What I am saying is that the broad distribution of wealth has changed very little under this Government since the previous Government if one includes the retention of wealth in pension rights.

Lord Wallace of Coslany
My Lords, will the noble Earl tell the House how much income an individual should have in order to purchase and adequately maintain a council house? Furthermore, what percentage of the population are in such a position?

The Earl of Gowrie
My Lords, I should be delighted to try to find that out for the noble Lord if he will put that question down. It is a rather different question from that on the Order Paper.

§ Baroness Wootton of Abinger
My Lords, I think my noble friend Lord Wells-Pestell asked the Minister whether it was a fact that the rich had got richer and the poor had got poorer during the tenure of the present Government. I do not think the noble Minister answered that question. Will he answer it now?

The Earl of Gowrie
My Lords, I answered the question. If the noble Lady refers to Hansard tomorrow I think she will see that I did.

§ Lord Hatch of Lusby
My Lords, is the noble Lord aware that the original Answer he gave me will seem to 75 per cent. of the population to be particularly cynical? How does he expect such people—whether encouraged by me or not—to purchase council houses or British Telecom shares when, as he has shown, they are getting relatively poorer as a result of the economic policies of this Government while the top 25 per cent. have grown relatively richer during the term of office of the Government?

The Earl of Gowrie
My Lords, the answer to this is very simple. Over the last 20 to 25 years, whichever Government have been in office, there has been a gradual trend towards greater equality of wealth, which is largely the result of increasing home ownership coupled with the accumulation of occupational and state pension rights. However, changes take place from year to year because of differential movement in asset prices and recently there has, I am extremely glad to say, been a fairly sharp rise on the Stock Exchange.

§ Lord Hatch of Lusby
My Lords, I was asking a question—

Noble Lords
Order!

§ Lord Hatch of Lusby
My Lords, I was asking a question not about the last 25 years but about the period from the time when this Government took office in 1979 to the end of the last year for which the Inland Revenue give figures, 1982. What happened during that period?

The Earl of Gowrie
My Lords, the identical trend was taking place.

§ Baroness Seear
My Lords, would the noble Earl not agree that the real distinction today is, on the one hand, between those who have maintained their jobs and increased their income and those who are out of work, and, on the other hand, between those who have indexed pensions and those who have not?

The Earl of Gowrie
My Lords, working backwards through the noble Baroness's supplementary, I think that the tension between those without indexed pensions and those with indexed pensions has lessened slightly since inflation has come down. I am glad to be able to say that because I think it was a real source of tension. I certainly agree with the noble Baroness that it is important that those of us who comprise the 87 per cent. of the working population who are in work and who have on the whole been doing quite well should, when we pitch our economic demands, be sensitive to the needs of those who are not in work.

§ Lord Stoddart of Swindon
My Lords, if the noble Earl would reconsider his last but one answer, is it not a fact that, in the table that he quoted, the figures show that between 1976 and 1979 the proportion of marketable wealth owned by the top 25 per cent. of the population moved downwards from 84 per cent. to 77 per cent.?

The Earl of Gowrie
My Lords, I should certainly have to have some notice of those figures to check them out. But there is of course a marked distinction between the noble Lord and myself: the noble Lord, as a Socialist, is more interested in equality; I am more interested in a greater opportunity for more people to become richer.