Government Policies: Social Effects

HL Deb 30 April 1986 vol 474 cc272-334

4 p.m.

Debate resumed.

Lord Banks

My Lords perhaps we may now return to the debate. I should like to begin by saying that I am extremely grateful to the noble Lord, Lord Wells-Pestell, for providing us with the opportunity to examine the social effects of the Government's policies. Like him, I find them in many ways adverse. I was astonished to hear the noble Lord, Lord Young of Graffham, say, if I understood him aright, that the Government's policies are not designed to have social effects. If the Government are involved in social security, health, education, housing and the economy, what they do is bound to have a social effect, and we are entitled to review it.

The more I consider the problem the more I am forced to these conclusions. First, as a result of Government policy, there has been a redistribution of income from the poorer to the better off. That was clearly demonstrated by the noble Lord, Lord Wells-Pestell. Secondly, the numbers of the poor, though they are a minority within a comparatively affluent society, have considerably increased. Many of them—the noble Lord, Lord Young, may perhaps remember this—do not have any take-home pay at all.

Thirdly, the division between the comfortably off majority and the deprived has become more acute, as the right reverend Prelate the Bishop of Liverpool pointed out to us a little while ago. Fourthly, it is not only the poorest but also many in the middle income range who are concerned about the inadequacy of the resources available in the education system, the National Health Service, housing and the maintenance and repair of the infrastructure.

I shall give some of the evidence which has forced me to those four conclusions. There can be no doubt in my mind that part of the blame for the considerable increase in unemployment which has taken place since 1979 lies in Government policies. Unemployment is of course a problem for all similar industrialised countries, but it was exacerbated here by government policies which led to an accentuation of the decline in manufacturing industry, high interest rates, an overvalued pound, and a refusal to embark on a significant programme of redevelopment in mitigation.

There is no need for me to go into the details of the social effects of unemployment—no jobs for the young, and the middle-aged thrown on the scrapheap. The House is familiar with those problems. The House has discussed them many times (rightly) and will undoubtedly do so again. Unemployment has greatly increased the numbers of the poor, as the increase in the numbers on supplementary benefit clearly indicates.

Next, the shift in the burden of taxation has favoured the better off. The numbers caught in the poverty trap have increased fivefold since 1979. The number of families forced to top up their income with family income supplement has trebled in that period.

If we look at income tax and national insurance contributions as a percentage of earnings, we find, for example, that a married couple with two children on half national average earnings are 100 per cent. worse off than they were in 1979; a similar couple on national average earnings are 3 per cent. worse off; on five times national average earnings they are 13 per cent. better off; and on 10 times national earnings they are 22 per cent. better off.

We must bear in mind of course that social security benefits are less than they would have been but for government policies. I think in particular of the cuts to which the noble Lord, Lord Wells-Pestell, referred, which took place in 1980. At that time the then Secretary of State for Social Services declared that £1,500 million per annum had been cut from the social security budget. Some of those cuts have of course been restored, but many of them have not, such as the break in the link with earnings for pensions, the reduction of 5 per cent. in sickness benefit, and the abolition of the earnings related supplement in relation to sickness and unemployment benefit. More recently we have seen child benefit not uprated fully in line with prices so that its real value has decreased, creating concern about the future of that benefit.

There has also been a decline in the education system throughout the country. I recently watched a programme on schools on television and soon after I listened to a programme on the radio which was also about schools. The two programmes were separately produced and yet they had a similar theme, which was that our education system was dividing into three streams—the private schools with adequate resources, the state schools where the parents were able to afford to provide considerable resources, and state schools without any additional funding, which were normally in the more depressed areas where the buildings were likely in many cases to be deteriorating.

The National Confederation of Parent Teacher Associations sent a questionnaire to its members covering a great many primary and secondary schools, and among its findings was the fact that 48 per cent. of primary and 82 per cent. of secondary school children are sharing text books. That may not matter so much in primary schools, but one soon realises that it matters a great deal in secondary schools.

That survey also showed that parents are supporting the state system to the extent of 30 per cent. of capitation in primary schools and 9 per cent. in secondary schools where the amounts of money are higher.

There has been a similar decline in the National Health Service. The noble Lord, Lord Young of Graffham, said that noble Lords in this House would probably continue to talk about that. He rather suggested that the problem did not really exist, but Mr. Maurice Burrows, the chairman of the British Medical Association central committee for hospital services has told the Secretary of State for Social Services that there is widespread disillusion among senior hospital doctors over the state of the service. Why do those people say those things unless there is some substance in the charge? Mr. Burrows wrote: Across the United Kingdom, services are being reduced mainly in terms of ward closures on a temporary or extended basis". In a report entitled All our Tomorrows which deals with the treatment of the elderly the British Medical Association says: The general treatment of the frail elderly by the state' is a scandal". It goes on to explain why, and one of the reasons is lack of money.

I believe that there is now widespread concern in the country about the future of the education system and the National Health Service.

Let me deal with housing. We find that there is a shortage of houses to rent. I am glad that 63 per cent. of households are now owner-occupiers, but the remainder require rented accommodation, and they include, in the main, the poorest in the community. The amount spent on housing has been reduced drastically by over 50 per cent. during the period that the Government have been in office. There has been a continuing decline in the condition of the housing stock.

We are all aware of the problems of inner cities where unemployment, bad housing, a cumbersome and not always adequate social security system and a crumbling infrastructure combine to create a serious problem.

Nearly all these problems are due to shortage of money. Whether we are spending more money than we spent before is not the point. It is clear that we are not spending enough to avoid these problems.

That situation, I suggest, stems from the Government's belief that public expenditure as a percentage of gross domestic product should be reduced, and yet if we look at figures issued by the OECD for 1983 we find that the United Kingdom in that year on this calculation took 47.2 per cent. of gross domestic product for Government expenditure, while the percentage figure for West Germany was 48.6, for the Netherlands, 63.6, for Belgium, 56.3 and for France, 51.5—all higher than our own amount of government expenditure.

All the problems that I have mentioned except unemployment, could be solved, at least in the short run, by greater expenditure; and unemployment could be reduced, at least in the short run, by expenditure. The Government say that you cannot solve these problems by throwing money at them, but they do not mind individuals throwing money at their individual problems if they can afford to do so. The trouble is that if you leave too much to individual initiative the poorest go to the wall.

The Government do not mind extra expenditure on health and education so long as it is private. It is not increased expenditure therefore that they are against but increased public expenditure. Why is that? First, it is because they fear that increased public expenditure must be inflationary. Secondly, they seem to believe that money spent in the private sector promotes recovery but expenditure in the public sector does not.

I reject the second argument, because I reject the first. I do not believe that public expenditure is of necessity inflationary. If the Government financed extra expenditure out of taxation, that would surely not be inflationary. Incidentally, my honourable and right honourable friends in another place voted against the cut of 1p in the standard rate which cost £1.2 billion because they felt that with all these problems to be faced it was wrong to be making that cut at the time; and various tax cuts which have favoured the better-off since 1979 have cost over £3 billion. We on these Benches have made clear that we are committed to a measure of redistribution, and, in my view, as I have said many times in this House before, a tax credit scheme would be a suitable mechanism for that.

But what about borrowing? If the extra cost, or part of it, were financed by borrowing, would that be inflationary? We know that there are other countries with a public sector borrowing requirement which constitutes a higher percentage of gross domestic product yet which have a lower rate of inflation. May I just mention the Netherlands as one of those? It has a public sector borrowing requirement almost twice ours and yet the figures for the previous year to last February show an inflation rate of 1.2 per cent. Also, we know that the United States has run up a considerable deficit without any adverse effect on inflation.

How important is a percentage point or two on the public sector borrowing requirement so far as inflation is concerned? How much more important are exchange rates, interest rates and world commodity prices? How much more important than a few points on the public sector borrowing requirement is the price of oil?

I believe that the Government should speak clearly to the country and that they should say something like this: "We have these serious social problems. We propose to forget for the moment privatisation and nationalisation. We wish to concentrate on these social problems. To begin to reduce them, we need to spend more money in the years ahead. We propose to get that money partly by a limited increase in government borrowing, with the safeguard of an incomes policy, and partly by calling on comfortable Britain to make a contribution with a higher proportionate contribution from the most comfortable."

I believe that such an appeal and such a plan, detailed as to figures and proposed expenditure as it would have to be, would evoke a favourable response from the British people and go some way to offset the social effects of the present Government's policies.

4.15 p.m.

Lord Cledwyn of Penrhos

My Lords, I am grateful for the opportunity to take part in this debate initiated and opened by my noble friend Lord Wells-Pestell. My noble friend delivered an impressive, wide-ranging and deeply-felt speech and proved, in my view, beyond any shadow of a doubt that wide sections of our community are suffering acute hardship primarily as a result of this Government's policies—or lack of policies.

I shall deal with some of these problems in a moment, but I am bound to say to the noble Lord, Lord Young of Graffham, that it was unworthy to talk of my noble friend as having reflected "the politics of envy". I thought my noble friend was reflecting the politics of principle and compassion. My noble friend commented on the recently opened private hospital here in London which is charging £350 a night. I did not think that his remarks deserved the noble Lord's description of the politics of envy. It was a reference to what Mr. Edward Heath once described as the unacceptable face of capitalism. The noble Lord should not have dealt in so unworthy a manner with my noble friend's speech. My noble friend, of all Members of this House, is the last to have anything to do with the politics of envy. The Government's defence—

Lord Young of Graffham

My Lords, my reference to the society of envy was in reply to a remark that I did not think was justified about the man who built up Jaguar, taking it from 14,000 units a year to 43,000, and, who knows, many more beyond, and who is giving employment to many people. To say that people who are the leaders of companies that succeed are unworthy of the salaries they draw is only showing envy and is not looking at the achievements.

Lord Cledwyn of Penrhos

My Lords, that is a totally unsatisfactory reply to my charge, and I am sure that noble Lords in all parts of the House will agree. The Government's case is well known and we have heard it again from the noble Lord, Lord Young, today. Broadly, it is that they are on the right track, that inflation is down, that we are economically healthy and compare well with other developed countries and, finally, that the people of this country must work out their own salvation without government intervention; that is to say, that everybody must stand on his own two feet.

They go on to say, if pressed, that if there are difficulties, such as very high unemployment, these are due partly to the world recession and partly to the inequities of the previous Labour Government. They used to add that the difficulties were also partly due to the high price of oil and the OPEC cartel. I suppose they are now due to the low price of oil. Someone ought to write a book entitled How the Conservative Government took advantage of the great North Sea oil bonanza. It would be a classic on how not to run the economy of Britain.

It is also time that the Government accepted responsibility for their actions. They have been in power now for seven years, with a large majority. After seven years, we should begin to get results and the promises made in 1979 and 1983 should now be seen to fructify. This is what the debate is about. In her speech in the Debate on the Address in 1979, the Prime Minister said: On restoring the economic balance"— This was 1979— we start from a poor base. For almost four years there have been well over 1 million and sometimes as many as 1½ million unemployed. Recent improvements offer no hope of long-term recovery".—[Official Report, Commons, 15/5/79; col. 77]. Again, the Conservative Party manifesto of 1979 said: We are setting out to rebuild our economy and reunite a divided and disillusioned people". After seven years of Conservative Government, we have well over three million people out of work—probably nearer four million on the basis of 1979 methods of calculation. Furthermore, I regret to say that we are a more divided and disillusioned community, certainly than at any time since the last war. It is, in my view, a major tragedy. I do not dismiss everything that the Government have done as a failure or as foolish. They have, in fact, brought inflation down, although that has been done at a very high cost. I would pay the noble Lord, Lord Young of Graffham, credit for the work that he is trying to do in providing training opportunities over a wide field. But, broadly, the Government's policies and the quality of their leadership have created an atmosphere of division and hopelessness in many places, and this has bred an unpredictable mood that bodes no good for this country in the longer term.

One must leave the Home Counties and the more prosperous parts of the South to appreciate this properly. The noble Lord referred to the "higher standards of living" that people are enjoying. He should go to the North East; he should come to parts of Wales; he should go to Scotland. He must talk to the people there and learn the facts of life. I do not propose to deal in detail with unemployment in this debate, save to repeat that it remains the greatest problem and the greatest evil. I do not think that anyone in any part of the House will dissent from that. There are some who will seek to minimise it by talking about "moonlighting", about "fiddling" and about "the black economy". I think that I heard the noble Lord, Lord Young of Graffham, in an exchange at Question Time a few days ago, referring to the black economy.

Lord Young of Graffham

My Lords, no.

Lord Cledwyn of Penrhos

My Lords, I do not defend these practices. But those who practise them are a small percentage of the total out of work. Where these practices do exist, they are the product of high and long-term unemployment. They are men "getting on their bikes" to clean windows on the side. Anyone who wishes to study fiddling and the black economy should not waste his time with the poorer section of the community: he should take a walk to the City of London to see the experts at work. Some of the great men there have not set a good example at times of hardship and of poverty. As my noble friend Lord Wells-Pestell said so eloquently, poverty there is in so many areas of our society.

There are some Ministers who appear to resist the facts. They should look at them carefully. I was appalled to read a series of articles that appeared in New Society on 18th April. I hope that noble Lords will study them carefully, if they have not already done so. They are worth careful study indeed. For example, the articles calculate that in 1983—and, certainly, there has been no improvement since then—nine million people, or one-sixth of the population of Britain, lived in poverty. They claim that Government policy has made matters worse. They say: The number dependent on low wages has increased sharply in the past five years, a process helped by the weakening or dismantling of protective wage mechanisms such as the fair Wages Resolution or the Wages Council. As a result, the number of families dependent on family income supplement—payable to families with children dependent on low wages—has doubled, increasing by 100,000 since 1981". We hear a great deal—and we have heard it again today—about tax reliefs that help the poorer section of the community. The fact is that the tax burden on the poorer section of the community has increased. Since 1979, the proportion of income taken in income tax has doubled. The same proportion of tax taken from those earning five times the average has been cut by 13 per cent. I do not accept the definition of the right honourable gentleman the Secretary of State for Education that, a family is poor if it cannot afford to eat". The DHSS itself commissioned a study by the Policy Studies Institute in 1984. It produced a depressing report. Here are a few words from it: To run out of money more than occasionally is a pretty miserable life. To run out most weeks must make a lot of people near to desperation. Yet 38 per cent. of non-pensioners, and 51 per cent. of couples with children, reported that near desperate situation and many others were not far from it". Then there was the survey, "Breadline Britain", to which reference has been made. This found that three million people are unable to heat the living area of their homes and that around six million go without some essential item of clothing, such as a warm waterproof coat, because of lack of money. Three and a half million go without the basic consumer durables such as carpets, a washing machine or a fridge, which most people consider to be necessities.

The problem of poverty is vast and painful. Surely, it must be tackled as a matter of urgency by the Government. The welfare state, as we know it, cannot cope with its inequalities. The welfare state was not designed to deal with mass unemployment and poverty. It is true that our benefit system and our taxation methods must be reformed, but unemployment can only be tackled realistically by a new economic policy. This is precisely where the Government fail to act.

Ministers should also study the Gallup Poll, if they want the view of the people, or some of the people, commissioned by New Society. I will quote three conclusions of the poll. The first was that the Government say that they care about poverty: the public disagrees. Secondly, the Government say that they are providing an adequate safety net of income support for the poor: the public disagrees. Thirdly, the Government say that income tax cuts are more important than increasing benefits to the poor: the public disagrees. This should be a salutary warning to the Government. They will ignore it at their peril.

In her introduction to the 1983 manifesto, Mrs. Margaret Thatcher said: We have a duty to protect the most vulnerable members of our society, many of whom contributed to the heritage we now enjoy". I agree entirely with the Prime Minister. But have the Government really succeeded in doing this? Are the vulnerable members of society better off? Or are they as well off as they were when this Government took office seven years ago?

Let me sum up. I do not think that the elderly are better off. The link between pension increases and the rise in prices or earnings was broken in 1980. What about children—another vulnerable section of society? Here, again, child benefit was kept below its May 1979 value from 1979 to 1983. And it is really worth little more today in real terms. If there is unemployment and if there is poverty, the children of the families affected always suffer. These are "the vulnerable members of our society" to whom the Prime Minister referred—the elderly, the disabled, the children, the unemployed and their families. I regret to say that it is they who are suffering now—suffering from a drop in their standards as a result of Government policies over a period of seven years. Even now we are told that half a million children from low income families may lose free school meals. This is almost unbelievable.

My noble friend Lord Underhill and other noble friends will pursue these matters. They will deal, I know, with the questions of homelessness, shortage of qualified social workers and the problems that exist in the health service and in other areas. But there are, my Lords, other ways of managing this country—and I was impressed with the summing up of the noble Lord, Lord Banks, in his excellent speech—that would not lead to the disasters often predicted by some members of the party opposite. That is the view of many distinguished members of the Conservative Party. A good number of them have now indicated that they do not propose to seek re-election to another place although they are not elderly. Why are they opting out? One of the major reasons is that they are profoundly dissatisfied with the policies of Her Majesty's Government at the present time. They could form a very good government in exile if required!

I fear that these are dangerous times, and that if we do not change course very soon we shall be in trouble. Massive long-term unemployment and the levels of poverty I have described, taken side by side with a high crime rate, alcoholism and drug abuse, and a menacing increase in violence, are not to be dismissed lightly. I well remember the 1930s, and I believe that the atmosphere is more highly charged today than it was then.

I know that noble Lords opposite are not without compassion. They will understand me when I say that all this has to do with the future of our country—not only with material standards of living but also with the preservation of parliamentary democracy over the next 50 years; of freedom under the law; of the liberty of the subject; and of the right of the individual to build a good life for himself and for his family and children. The noble Lord must not think that we want the state to intervene at every point. As a Welsh non-conformist radical, I have been in favour of independence for a much longer time than the noble Lord. As we approach the end of the 20th century, those are the matters that we must analyse and ponder over. Again, there are those who would use every opportunity and every grievance to shake the stability of our country, and we must beware of them.

The Government still have time to assess the problems and to introduce new policies. But if they fail, they will carry a very heavy burden of responsibility.

4.32 p.m.

Lord Soper

My Lords, I should like to add my thanks to those already offered to the noble Lord, Lord Wells-Pestell, on the introduction of his theme and on the magisterial way in which he set the pattern of what I believe to be an accurate and comprehensive view of the kind of society in which we are living today. It was all the more impressive, it seems to me, because of the failure of the immediately succeeding speaker to produce a sermon after he had taken due care to read the collect for the day. I believe that the collect for the day was set forth admirably by the noble Lord, Lord Wells-Pestell. It is something upon which, as a Methodist preacher, I would humbly suggest that your Lordships should properly listen to my testimony.

I do not believe that one can measure unhappiness or destitution in corporative terms. After all, there is no suffering, no misery and no happiness that is not personal. However, I believe that one can calculate over a period of years what is the general trend of a society; whether it is away from those conditions that add lustre and goodwill, or whether it is to some extent a decadent trend. I have no pleasure in saying to your Lordships that I believe that there is a large measure of decadence in the society that I know today and which I have known in social terms uninterruptedly for the past 50 or 60 years.

I do not believe that the sum total of human wickedness has necessarily increased, but I believe that there are elements in contemporary society that present acute and hitherto unprecedented problems for those who seek the welfare of a society and not merely the aggregation of individuals. I shall select three and speak to them very briefly.

In the first instance, I believe that there has been a marked increase in the scourge of alcoholism, and more contemporaneously still, a very large increase in child abuse. I see no evidence in the social work to which I am committed to suggest that those problems are abating. They are probably increasing in their devastation. It is for me, therefore, a very desolate experience to have to read that the Maudsley Hospital, which has been a pioneer in alcoholic research in its work there, and the Tavistock Clinic and the two Maudsley institutions committed to child care and adolescent care are in peril of having to close a great deal of what they have been trying to do because they do not have the money to continue that work. I regard that as totally scandalous.

In the same area of Camden in which I have been involved in social work for a very long time, I visit from time to time—as no doubt your Lordships do—the great railway stations of Euston, St. Pancras and Kings Cross. I have no doubt that your Lordships have seen some of the young, single and unemployed youths from other parts of the country who have been encouraged to get on their bicycles and venture into London, where they have not been received with any kind of opportunity of a decent place in which to lay their heads and a decent opportunity of establishing themselves but where they have become increasingly dispirited. Should anybody be surprised that they are at the same time less liable to obey a strict moral code, when the very principles of life have been undermined so far as they are concerned?

One has there a situation that has been pinpointed in respect of the curse, as I say, of bed and breakfast hotels. I was associated for many years with Shelter. Your Lordships may allow me to read a very brief statement, for I believe that it is unexceptionable and totally condemnatory of the present indifference that there is in many respects to the need for decent housing and rented accommodation for those who come, with the encouragement of the Government, to seek their fortunes in London and to obtain jobs here. It says: The number of families in bed and breakfast hotels is only the tip of an iceberg of London's homelessness crisis. Thousands of other families are dumped in other forms of temporary accommodation like hostels and short life houses. If anything, the position of single people is even worse. They have no rights worthy of the name under the Homeless Persons Act and are increasingly obliged to live in bed and breakfast hotels with no prospect of being rehoused". It is that situation that prompts me to ask a question that hitherto has not been posed, or which has not been sufficiently dealt with. However, I have no doubt that it will receive adequate treatment in later speeches. My question is this: why is it that the Government are not prepared to pour into those particular vacant opportunities the kind of public money that in the short term at least can relieve a great deal of the misery that is suffered by so many people? The simple answer is that we are committed to a defence programme that absorbs such vast amounts of human and capital expenditure that, according to the Government, we cannot afford to do the things that are immediate and that belong to the nature of a civilised and compassionate society. It is in that regard that I shall venture somewhat wide of what I imagine was the original purpose of this debate and in a few words commit to your Lordships something that is increasingly my conviction.

I believe that we have a society for which there is no precedent and which has characteristics hitherto unknown. Some of them are unpredictable in their future possibilities but many of them require an entirely revolutionary principle if we are to survive the threats of this nuclear age. I say that not from a parsonic point of view, to scare the eternal wits out of anybody, but to say something that is increasingly my conviction.

I believe in the pacifist situation because I am convinced that increasingly the commitment of any country to the use of armed violence is first a danger in itself and then becomes an increasing danger with every new opportunity for increasing the total fire power of that armed society. I do not say that the recent calamity in Russia is primarily concerned with armaments, though I have no doubt that a great deal of it is. What I do say is that from the Christian standpoint that I hope I represent I find an increasing recognition on the part of ordinary people that the society in which we are encouraged to live and privatise into acceptance is a society that is in itself doomed. That society cannot continue to exist The dangers are ever increasing and the threats are ever more momentous. Perhaps what is more significant than anything else is the fact that we progressively lose control of the very means by which in other ages and under other conditions we were able to contain the menaces of even a capitalist regime.

I do not enjoy saying this. I only wish that the Church would say it with greater fortitude and greater clarity. In my judgment there is no way today in which one can baptise the influence and power of a defence mechanism which depends on the use of armed violence (or the threat of it) to deal with the problems which confront a society which is now bereft of the very source that turns a society into a community. The rich are getting richer and the poor are getting poorer; and the North is different from the South. If I may be permitted to say so, I found in the speech of the noble Lord, Lord Young, something which seemed to me to be a thousand miles away from the realities in Tower Hamlets from where I have just come, as I do every Wednesday. It did not seem to me that it corresponded with anything that I have heard in the words or seen in the eyes of those people, some of whom are unemployed, many of whom are cynical, and most of whom are frightened to death.

It is in the light of such conditions that I make this simple plea. We have taken the risk time and again of committing ourselves to the processes of violence in order to correct what we believe to be social evils. I believe that the situation which we have today no longer renders that a viable proposition. In the past we have been prepared to take that risk and now we can see to what extent that policy has failed us.

Would it not be in the interests of our children for us now to be prepared to take a comparable risk with non-violence? We could then direct the kind of resources that now are devoted to this fearsome option into the means by which we might indeed preserve our children from the kind of calamity of which so many of us are afraid. Such is my plea, and it is a very simple plea. I know that it contains within it immense problems, but I believe that it is the only way which is reconcilable with Christian teaching and the only way which can offer hope for the future.

4.42 p.m.

Baroness Turner of Camden

My Lords, I, too, welcome the opportunity to participate in a debate on this important subject, but how difficult it is to follow the noble Lord, Lord Soper, whose speech was so moving. Since I have been a Member of your Lordships' House I have had the opportunity of observing at first hand the working out in legislative terms of the Government's philosophy. It must be said that it has a cohesion and consistency which are rarely found in governments. Some people might call it an ideological inflexibility. Essentially it appears to be that deregulation, privatisation and the working of the free market will ultimately solve all our economic and social problems.

Deregulation includes the removal of all restrictions (thought by previous generations to be protection) in regard to employees, no matter how vulnerable those employees may be. Hence, we have seen the attempt to remove from employees the protection that existed under the Shops Act 1950 which was fortunately frustrated by your Lordships' amendment and dealt with finally in another place. More recently there has been a similar attempt in the context of the Sex Discrimination Bill.

Similar attempts are being made through the Social Security Bill, which undermines previous pensions legislation on which there had been an all-party consensus. The introduction of private personal pension provision in effect is an attempt to privatise pensions and, incidentally, it undermines good occupational pension provision as well. We shall shortly have the opportunity of debating these matters when the Bill comes before your Lordships.

In the field of general services we have had the privatisation of essential services such as transport, though there is no evidence that this will lead to an improvement in services in those parts of the country—particularly rural areas—where provision of such services is not and cannot reasonably be expected to be a profitable exercise. Of course, your Lordships also have before you the Gas Bill, and that again is another privatisation exercise.

On the wages and salaries front previous protection, some of which has existed for many years, has either been expunged or is in course of being so. My noble friend Lord Cledwyn has already referred to the fair wages resolution which was passed as long ago as 1945 and which has been honoured by all governments except this one. That has now disappeared. At least it meant that, if they wanted to get a public contract, contractors undertaking public work had to abide by certain minimum standards so far as their employees were concerned.

Schedule 11 to the Employment Protection Act which enabled a union to take a case to arbitration if it was felt that an employer was paying below the general level has also been expunged. As we have seen in another context, the Government seem to have no role now for the Central Arbitration Committee, despite its good track record and its acknowledged expertise in dealing with industrial relations problems.

We have often been told by government spokesmen that various regulations are no longer necessary. We are told that they are out of date and that such arrangements can be left to unions and employers to negotiate. However, this Government have done their best to weaken one side of the bargaining and industrial relations structure, and that is the union side.

Schedule 11 to the Employment Protection Act at least provided some kind of basis for assessing employee opinion about the recognition of a union at places of employment. The process was not perfect. It involved a survey by ACAS, which would then make an award on the basis of what that survey revealed. However, it was a reasonably civilised method of testing employee opinion and ensuring that the unions which the employees joined would be recognised by an employer. That, too, has gone. Now the only pressure that can be brought to bear on a reluctant employer is industrial dispute action, which it behoves governments to devise machinery to avoid, wherever possible. If the Government pride themselves on giving the unions back to their members, the least they can do is to encourage employers to recognise the unions to which employees want to belong. However, the unions themselves are subject to more restrictions now than ever they were before. In the employment field the bias of the Government is there for all to see.

The main thrust of government policy, as exemplified in statements repeatedly made on their behalf, is to put the emphasis on assisting the employer to reduce labour costs. For that reason protective legislation is repealed, wages councils are to be emasculated, and it is made more and more difficult for unions, which are already weakened by unemployment, to represent and look after members' interests, while tripartite and highly respected bodies such as the Central Arbitration Committee are to have their role drastically reduced in the name of government philosophy.

However, what is this policy achieving in social terms? We are told that the economy is recovering and that things are on the up-turn; but to the young unemployed person who has little hope of getting a job, or to the unemployed man or woman over 50 who is perhaps risking his redundancy pay in setting up a small business (and over a third of those small businesses fail) this may seem a hollow claim indeed.

According to published statistics, the total number of employees in employment has fallen considerably since 1980. The decrease has mainly been in male employment. In 1980 there were just over 13 million male employees, which is nearly 60 per cent. of the total workforce. By 1985 this figure had fallen to just over 11½ million, which is a decrease of nearly million jobs, or over 11 per cent. These figures reflect the decline in manufacturing industry as a major employer. The noble Lord, Lord Banks, has already referred to this fact in his excellent speech. Manufacturing lost over 1.4 million jobs between 1980 and 1985, which is a fall of over 20 per cent.

There have been increases in employment in the service sector. Much of it is female employment and a great deal of it is part-time. The slight rise in employment figures is almost entirely due to increases in part-time employment and in the service sector. But there are problems lying in wait for us there as well because we have not yet seen in the service sector the full impact of new technology, particularly in service industries, such as banking, where it would be possible, if technology were more widely applied, to perform the same sort of jobs with far fewer employees than are at present employed in those industries.

We know from debates in this House that your Lordships are concerned about unemployment. This is shown by the number of times the subject is referred to in debates. We also know that there are parts of the country where unemployment is incredibly high. When we discussed the closure of Gartcosh last year a figure of 36 per cent. was given for that area which was not disputed or doubted by the Minister when he replied to that debate. It is recognised on all sides that this is a major social problem which may very well lie at the root of other problems that increasingly trouble us; for example, the decline in the quality of life in urban areas, the disaffection of sections of youth, particularly very young people and young people in the ethnic minority groups, who are feeling basically alienated and disaffected, and the effect of that on the problem of law and order. It is by far the major issue that we have to tackle and yet government policy does not do so, despite the single-mindedness with which that policy has been pursued.

It will no doubt be said—indeed, it has been said already—that this phenomenon is not confined to the United Kingdom and that throughout the EC unemployment is perceived as a problem. Our belief on this side of the House is that the Government, through their policies, have made the situation worse. Nor are we alone in that belief. Both the CBI and the TUC agree that there should be a radical government initiative designed to boost manufacturing industry.

It is clear that the unemployment problem cannot be solved overnight—and I am sure that nobody on this side of the House would suggest that it can be—but the manner in which manufacturing industry has been allowed to decline, without apparently any thought for the social consequences, is not likely to assist; rather the reverse. Mass unemployment is economic nonsense. It has been stated on this side of the House that the real figure is probably nearer 4 million. If we take the figure as being 4 million, the annual loss of output from these people must be considerable. It has been estimated that it could be as much as £37 billion. More than £22 billion is lost to the Exchequer in payment of benefits and lost taxation.

There are countries that have pursued full employment as a major policy objective, with active government intervention and planning techniques. Despite economic difficulties, they have kept down the level of unemployment. Norway, for example, has managed to keep it down to 2.9 per cent.; Sweden, 3.0 per cent.; and Austria, 3.9 per cent. That should be compared with our figure of around 13 per cent. What I am saying is that it is a matter of policy priorities. The priorities of the present Government do not include full employment as a target, however difficult to achieve. Nor do they include social welfare, as many noble Lords have already said in this debate.

Indeed, the provision of employment is part of a social welfare policy. In that the Government differ from Disraeli. In his novel Sybil—or the Two Nations (and he was very much opposed to the polarisation of society into two nations) he wrote: Power has only one duty—to secure the social welfare of the people". Power is not being used in that way by this Government.

4.52 p.m.

Baroness Gardner of Parkes

My Lords, I am grateful to the noble Lord, Lord Wells-Pestell, for giving us the opporunity to debate this subject, which I find a very interesting one. I begin by saving that, knowing of his great knowledge of the health service, I was somewhat surprised to hear how amazed he was at the private hospital with beds at £350 a night. Many of the costs of National Health Service hospitals are now enormously high (although perhaps the patients do not realise it) but I had thought that the noble Lord would be aware of it. I left the Chamber briefly to telephone to check on that matter. In 1984–85 the cost of keeping a patient at the National Heart Hospital was £253.74 per night, excluding any capital cost. Such things have become expensive.

Lord Wells-Pestell

My Lords, the point that I was trying to make and probably did not make very well was that, not being an ordinary National Health Service hospital, it could not be used by National Health Service patients. Someone could get into it only by paying £350 a night.

Baroness Gardner of Parkes

My Lords, I thank the noble Lord. That leads on to the rest of the argument that I was going to bring against him. I blame the Labour Party for this division of the health service, and particularly of hospital treatment, into separate private and National Health Service camps. When we had pay beds, NHS patients definitely benefited from the amount of time the consultants were able to spend at the hospital which now they spend travelling between their private and their NHS commitments. That separation has not been a good thing in terms of medical treatment.

Another point to be appreciated is that if private patients were paying that amount of money to go to the hospital, those patients may well have been entitled to free NHS treatment and were not making the demands upon the state that they otherwise would. Anyone willing to pay such amounts, whether out of his own pocket or not, and choosing that rather than the cost of a holiday abroad, is quite entitled to do so.

I have been directly involved in the NHS for many years both as a general dental practitioner and as a member of health authorities and hospital boards. This Government's record on health care is good, and that should be stated and restated as it is not sufficiently well known. Under the last Labour Government capital spending on the NHS fell by 35 per cent. When we listen to noble Lords on the other side of the House, we get the impression that everything was marvellous in the health service, but it was not by any means. The health service has needed an injection of funds for a long time.

In 1984–85 this Government increased the real level of investment by more than 30 per cent. It is 30 per cent. higher than in 1978–79. It was a Labour Government who introduced RAWP, which was the planned reallocation of resources in the health service. There was a case for it because it was to meet the population movement out of London. New areas needed hospitals. The shrinkage of population from, I think, 8 million to 6 million in London has made a dramatic difference to the demands of patients, particularly in central London, whereas all the dormitory areas around the fringes of London have greatly increased populations and need better hospitals.

One hears a lot about what is happening in terms of rationalisation of health treatment in London. It is very painful for people who are used to a service and are familiar with a hospital. No one likes to lose the unit to which he is attached. But we must bear in mind that even in London new hospitals are under construction. We hear little about that. One needs only to drive to Paddington to see St. Mary's Hospital, a brand new, multi-million pound hospital being reconstructed as a major teaching hospital. The National Heart Hospital, the board of which I have had the honour to be a member since 1974, is being rebuilt right now on a new site in Sydney Street, Chelsea, as the National Heart and Brompton Hospital. Phase I alone is costing £21 million. That will be a centre of excellence and will be available to give the most complicated heart and lung care to patients from all over the country. The hospital has an international reputation for research and is doing much to help people throughout the world, as well as in our own country.

These hospitals have been made possible by the present Government. We hear so little about that. My daughter is a new and comparatively young doctor. She is now in Hertfordshire and has also worked in a hospital in Suffolk. In each of those places she was working in a new purpose-built hospital. These are the areas about which we tend to hear nothing because the people there are very pleased with the new facilities that have been provided. I suppose that it is human nature to complain about what we do not have and not to be delighted with what we have.

When I listened to the noble Lord, Lord Soper, who spoke so movingly about the homeless young in London, I thought of the time when I had been a social services chairman in this very part of London under a Labour Government. We had the same problems. The problem of young, homeless single people in London is not new by any means. The noble Lord mentioned the various units of accommodation such as short-life accommodation and old hotels or hostels that are being made available to these people. Under the Labour Government we were crying out for these to be made available. Times have moved on, there has been gradual progress and people now accept that these units can be made available. But I cannot see that problem ever being solved, because the capital city is a great magnet and draws people from all over the country. You cannot fit a quart into a pint pot. There is no way you can suddenly provide magically a lot of extra housing. But too much council housing is empty for too long. I believe that approximately 25,000 council houses have been empty for over a year. Whether it is due to turnover, refurbishment, or whatever, that is too long to have so many dwellings out of use.

Since this Government were elected in 1979 they have determinedly planned and pursued economic policies for steady, sustained growth with lower inflation and a balance of payments surplus. Every Government since the war have had this aim, but this Government have achieved it. The present rate of inflation is 4.2 per cent., and it is still going down. The target is 3.5 per cent. by the end of the year, and it is believed that that will be reached well before the end of the year.

The social effects of this are very significant. It is so easy to take improvements for granted and to forget the previous situation. In 1975 the rate of inflation was 27 per cent. Do noble Lords remember when the price of foodstuffs in the supermarket rose so quickly that those fortunate enough to be able to buy in advance of their needs were much better off than those who had to go in and buy whatever they could to use then and there? The prices rose almost daily, and certainly week by week. That was the time when all the higher-price labels were superimposed on the earlier ones, until that was banned. Then the supermarkets stopped putting prices on and told one the price at the checkout. With inflation under control people have the security of knowing how to plan their budgets. The financial experts last week pointed out that even with falling interest rates, which are of benefit to those with home mortgages, savers today are getting a better real return on their money than for many years.

Those who have worked and saved for their old age under the Labour Government found it a terrifying situation that inflation eroded those savings. They had to rely on the state for support. These were people who had wished to be independent and had worked and planned for their old age. Inflation was certainly a leveller, but not a desirable one.

I know that unemployment is high and that many want work who are not able to get it. I also know that in London there are plenty of jobs and no applicants for them. As I have mentioned before in this House, we have had a vacancy since March. I rang the careers office this morning to check the situation. The reply was, "Yes, we have quite a few vacancies." I asked, "Can you quantify those?" The reply was, "No." I asked, "Can you tell me how long people are waiting to get work?" The reply was, "No, but we do not get many applicants and no one is very interested". That is a tragedy. In London it is not a question of whether one wants a job—any job—but a situation where people are picking and choosing what they would like to do. It is very nice to have a job that one likes to do. There is greater job satisfaction if one can find that type of job. But it certainly gives the lie to the fact that there is such desperate unemployment in London.

There is a certain mismatch of skills and jobs—that I accept. However, recently I met a group of industrialists in this House. They have factories in Wales, the North and Scotland—all areas of high unemployment—and they said that they could not get people to fill their job vacancies. The reason is that they need people with the most elementary scientific knowledge, and the schools are not able to teach these sciences to an appropriate level. As your Lordships know, the Government are trying to get agreement on the curricula so that every child will be taught some sciences up to the age of 16. I hope that that will be accomplished, because it is a tragedy that there should he so many people genuinely wanting work who are unable to reach the necessary educational standards.

Comment has been made today about the appalling ILEA standards, and I must echo those comments. It is sad that the O-level standards in Inner London (which is the most expensive and, in terms of results, the least satisfactory educational system in the country) should be 40 per cent. below the equivalent for pupils in the whole of England.

Although I am limited by time I must comment on the housing policy of this Government, which is a great success. Two and a half million more people have now become home owners. The happiness and security of a family is based on its home. Families are taking a pride in maintaining and improving their own homes. I well remember the petty restrictions placed on people by the GLC, among others. People were not even allowed to have a budgie in a cage. It is rather nice to be able to paint one's front door the colour that appeals to one instead of being refused any right to have one's dwelling look different from anyone else's. People have taken to home ownership. I think that it is a great interest and morale builder. It also saves the council a lot of money, because maintenance and repairs have become a major item in the case of council-owned property. People talk about the high cost of repair needed to council homes as if this Government created that. It is due to many years of mismanagement and neglect on the part of local authorities. One cannot lay that at the door of this Government.

This Government have done much in housing to open up new opportunities with regard to converting flats, starter homes, and so on. Nationally, there are enough homes, and more should not be needed. But, again, we have that mismatch. These homes are frequently in places where people do not wish to live. Then, again, we have this problem of people who want to come to London, where we simply cannot provide for any more. I have mentioned the 25,000 houses which have remained empty for a year. However, Government policy is encouraging and supporting home improvements, and these have excellent social effects. In 1985 the local authorities estimated that £18.6 billion needed to be spent to bring local authority housing stock up to standard. The Government have given a commitment to support schemes. Many grants are being made for homes and home improvements.

I have almost run out of time. I cannot therefore go further into supporting policies that I believe have been introduced by this Government effectively and to the benefit of the people. It is very easy to be critical. We can always see more that we should like to have and to do: but I think that this Government's policies have been good and have helped people.

5.7 p.m.

Lord Parry

My Lords, if I understood the noble Lord the Secretary of State for Employment correctly one of the few substantive points that he made in his speech was not only that Government policy did not affect the community but that it should not. I found that an extraordinary statement because it takes us back more than 70 years to an economic situation that would allow events to happen rather than seeking to direct them to the benefit of the community.

Statistics are important to this debate, and we have heard vital statistics. I am therefore freed from the obligation to repeat them.

I wish to speak today of the community and of the communities. In common with other noble Lords I have a geographic title. Mine is Parry of Neyland. Neyland is not the first town to spring to mind when noble Lords discuss the communities of Great Britain. In a Welsh Office official report Neyland was described as a little grey street leading down to the river—the Blaenavon of Pembrokeshire. It was also fitting to describe it, as Dylan Thomas described Swansea, as "a tumbledown town". It is one of those towns which promised but never fulfilled. In the 1800s it was one of the fastest-growing towns in Wales. It became a railhead and attracted the advantages for social, political and economic development that railheads did attract. In 1900 it was given a town council. It may please the noble Baroness, Lady Gardner of Parkes, to hear me say that from that day it started to go backwards.

I am not subscribing to the unaccountable battle which has taken place between this Government and the local authorities. I believe that the closer government gets to the people, then the more local it becomes and inevitably the better it becomes. I believe that this country is superbly well blessed as regards its local government and the figures which it attracts. Some of the denigration of local government at this difficult time has been neither in the interests of the Government nor of the nation.

Let us consider the town of Neyland. Let us consider the whole basin of the Cleddau estuary. What about West Wales? Neyland is my town; Pembrokeshire is my county; and Wales is my country. I am as proud as anyone to be part of the United Kingdom of Great Britain. However, if you were to go with me to Neyland tomorrow, you would understand that the noble Lord, Lord Wells-Pestell, was speaking not the politics of envy; but the politics of empathy—the politics of understanding. It is possible for good and well-intentioned people and for good and well-intentioned governments so to isolate themselves from the truth of what is happening as not to be able to understand that there is real poverty in this land, real under-privilege in this land, and that in the town of Neyland probably more people are out of work long-term than those who have any prospect of fulfilling themselves in work.

Therefore, I have deliberately chosen to speak to those matters which I know best and to which I am closest, because I shall be going home tonight and I shall be meeting the people with whom I was at school, and who I taught, and a great many of them are poor—poor by the standards that I have come to enjoy, by the standards that your Lordships have come to expect, and by those standards that every medium and every government promise in advance of an election and lead the people of Great Britain to expect.

It is a question of rising expectations—and this is part of economics that we learned at university—which, when they are not met, lead to disillusion. When the disillusion arises it creates a mood which no government can properly affect. I repeat what my noble Leader said in his speech: it is a question of mood. It is felt thoughout the country that so much is at fault that it will take a very long time to put right.

What must we do to begin to put the situation right? The curious feature and the anomaly of the situation is that those very local governments which have come in for so much stick have pent-up expenditure which they have accrued. I am advised that if that money were now allowed to be used by the local authorities—not by spendthrift authorities, but by responsible authorities comprising expert people who have spent a lifetime in local government—they could begin to phase into the spending programme the resurfacing of roads, the restructuring of services and the rebuilding of the community which some government at some time soon must do, because the services which affect our lives are rundown.

I have sometimes heard from my own Benches noble Lords whom I deeply admire give the impression that the poverty and the difficulties now being faced by people are of a different nature and quality from the poverty that they knew in 1926. Indeed, this debate is very much about 1926. On St. George's Day I happened to hear someone say in honour of the Queen's birthday that she was born in 1926 and that it as a "vintage year". I was born just at the end of 1925, and my wife was born in 1926. My daughter has grown up in Neyland; and, as the noble Baroness has just said, under successive governments we have seen a deterioration in the quality of life in that community.

However, during my childhood one could catch a train out of Neyland and buses left Neyland every half hour. There was also a ferry operating. Nowadays that community has been isolated by acts of successive governments. To pretend that the quality of life has not been affected—which was what I thought the noble Lord the Secretary of State for Employment was doing—is to misunderstand what is happening in this country.

If it be thought that I have based what I have had to say on Neyland, let me immediately lift my remarks to apply to every other community. Let me tell your Lordships about the market towns of Wales—towns which in their own right were once proud of their individuality and independence; towns that were serviced by markets; towns that were invested in by the products of the agricultural economy. Acts of government and of the European Community—an amalgam of Government—have robbed those towns of their lifelines and are vitiating the agricultural economy of the rural areas of this country, halving the land values and creating real poverty in those places where once the strength of the community lay.

It would be ridiculous for anyone to have the impression that noble Lords on this side of the House believe that simply the election of a government of the party of the Members on this side will radically change overnight the long-term deterioration and decadence of those communities as a result of government policy. It cannot be done. However, there must be a change of mood and, instead of the dreary recitation of the catalogue of meaningless statistics which are piled one on top of the other as though they really mean something, let us for heaven's sake set up a national commission. Let us get three or four of the best people in this country to look at the communities of Great Britain. It may be a suitable role at this time for the heir to Her Majesty Queen Elizabeth. What more caring man could we find, who has expressed his view about the community, than His Royal Highness Prince Charles? Why not set up a Royal Commission to look at the state of the communities and the state of society and start to do something about rebuilding the quality of life that we once knew?

Sometimes I sit here and people who I know to be caring, decent and friendly stand up and react automatically to the situation as though it matters in the course of human history what particular card we carry in our pocket. Surely to goodness what we are talking about here is that there is a better way than the current one. When I see the people whom I have taught standing on the street corners of the town of Neyland, and when I sit with them, it becomes all the more apparent.

Someone mentioned people not wanting to work. The other evening I sat alongside a lad who had just completed a 19-hour journey from the Falklands. For 17 months he had worked in the Falklands putting down, to my mind, a totally unnecessary runway which we could do with in Cardiff, although we have a better runway there now. I understand that the conditions in the Falklands are not all that good, and certainly the money is not all that good. He has had two periods of leave in 17 months. That boy wants to work, and so do the majority of the people I have taught. They want work, but they do not have it. This is a European Community problem which must be tackled on a European basis, but first and foremost it must be tackled on a Neyland basis, a Swansea basis, a Cardiff basis and, of course, elsewhere.

Sometimes we talk as though nothing exists outside the "golden triangle". Sometimes we talk as though no problems exist except in the area of this great metropolis. I urge my friends on all sides of the House to understand that we have a major problem of the running down of our communities, which are the lifeblood of this nation. London can be made more powerful; London can be beautified; London can attract the tourists; but if outside of London there is increasing decadence and increasing failure to find new solutions to 20th century problems despite the progress that has been made, we shall all fail in the end.

I make this appeal. Will the Secretary of State for Employment ask his right honourable friend the Prime Minister to consider setting up, after consultation through all the channels and with all the parties, a national commission to examine the true state of the communities of Britain and to release funds to begin to rebuild them?

5.20 p.m.

Lord Sefton of Garston

My Lords, in opening the debate my noble friend Lord Wells-Pestell made a speech which I considered to be permeated with emotion and morality. It represented to me the best of British politics because my noble friend knew the difference between wealth and money.

The validity of that argument was highlighted by the arguments put forward by the noble Baroness, Lady Gardner. How easy it is, when one lives with a philosophy that the most important thing in life is money, to get to the situation where you really believe that because one person has more money than another he is entitled to go into hospital and take priority in the administration of health. The noble Baroness, Lady Gardner, nods her head, but the truth is that private medicine establishes those priorities.

Some of the private hospitals in this country are used for administering bedside manners to cases that could well wait, while working class folk are suffering untold pain and misery because they cannot have an operation on their hip because they cannot afford it. Members are looking at me as though they do not believe it. Of course they do not believe it because the philosophy of the present Tory Party is that market forces are dominant.

I am not surprised for one moment that there are not any senior Members of the Government side on those Benches eager to stand and defend the policies of this Government. I am old enough to remember when after the last war some Members on those Benches really believed that we should be able to create a society which was fair and just, and based on need—not upon the ability to pay, but on need—and they supported that. They supported the establishment of our National Health Service. I have heard them boasting about it.

The noble Lord, Lord Young of Graffham, in his speech used the words "politics of envy". It sounded to me like a speech prepared as a thesis by some university student who had been safely ensconced inside a university for years and had never seen the real world outside.

The noble Lord, Lord Wells-Pestell, underlined the division that exists between two types in our society. Roughly it was first the creators of wealth, who provide the necessary labour to create wealth, and the others of course were the wealthy ones—the manipulators of wealth on the Stock Exchange and in the City of London.

Let me draw attention to another division in our society: the division that Mr. Heseltine went to Merseyside to cure. When he arrived on Merseyside he was told, "This is not just a contemporary problem. This is a problem that Merseysiders have had for over half a century". The problem is that the reason for the existence of Merseyside has now ceased. It came into existence to serve this nation as the terminal of a movement from one land area to another. When the need for that went, the need for Merseyside went. But Mr. Heseltine would not listen, because he knew the answer. The answer was to let market forces run Britain. When market forces became dynamic and started increasing wealth, so would the wealth of the people be increased.

I took the trouble to get out the London dockland report and the Merseyside dockland report. They are good reading. The Government should read them. The report from London dockland talks about the creation of 3,500 jobs in the few years since it was set up. Good luck to them. We had an exchange about that with the noble Lord, Lord Mellish, and the Leader of the House the week before last. There are 3,500 permanent jobs. The only mention of Merseyside was 35 jobs created for the garden festival. They have had the same time.

The success in London is not due to the fact that they have a better board or executive. The success in London is due to the drift which takes place to the South East, and which is now being increased. You have the Stolport; the Channel tunnel; Stansted; and Canary Wharf. All those things will drain the North.

If it goes on, the situation that exists in Liverpool will intensify. In case your Lordships do not know what the situation is in Liverpool, generally speaking it is that both parties, Tory and Labour, realised after the world war that the first problem was housing, and so an intensive programme of housing was carried on. After that it was realised that what were needed were steps taken to create jobs in Merseyside, and that it was no longer possible or practical to rely on the old traditional industries of Merseyside.

From then on we started pressing the Government from 1947 that we should have special measures, and that the solution to Merseyside's problems lay in curing the maldistribution of resources in the whole of the nation. We pressed for resources—not money—to be moved from the south-east of England, which was hopelessly congested, and we asked for them to be sited on Merseyside.

During the debate we have had the noble Lord, Lord Young, telling us that it is not tax that matters and that what matters is how much money you have to spend after you have paid your tax. Again that is probably a point made by a social welfare worker in a thesis in a university. Let us examine what it means. If we take London alone and even assume that the working class chap at the bottom end of the scale is no worse off after he has paid his tax, what do we learn? We find that the pressure from the people the noble Lord, Lord Wells-Pestell, was referring to, those who manipulate the stock markets, has now increased to such an extent that the working class chap in London cannot even afford to buy a house, or even rent a house.

That is the fundamental problem, and that is why the Halifax Building Society—no doubt the kind of organisation favoured by this Government—is now coming out with the point of view in its latest housing report that one of the solutions that should be looked at seriously with a view to bringing down, and stopping, the escalation of house prices in London would be to move out of London some of the resources and congestion that causes those high prices. There has been a 19 per cent. rise in house prices in 12 months in London, while they have actually dropped in parts of the rest of the country because the demand is not there.

But the question of house prices is not the greatest danger to this Government, or the greatest danger to our society. The situation becomes more dangerous still. After the war we had a city government united in its desire to try to encourage private enterprise to come into the city, to try to encourage the Government to come into the city to create jobs in order to remove the discontent and frustration that people were feeling in that area. We tried and tried, and the last attempt was the Merseyside County Council.

Just before the Merseyside County Council was established we managed to persuade the Government to do something. The Leader of the House, the noble Viscount, Lord Whitelaw, said last week that I dare not accuse him of knowing nothing about the North. That is something I should not dream of doing. I should not dream of telling him that he does not know and appreciate the frustration and feeling of alienation of people who have been unemployed for five, six, seven years; the feeling of those young working class folk with a couple of children who at Christmas cannot even afford to give them some of the basic things that most people in this country accept as a right; the feeling that they are being starved of what they should have as of right and which ultimately sometimes leads them into law breaking that should never take place.

The noble Viscount, Lord Whitelaw, will know all about that. He will know that 3,500 jobs in the centre of Liverpool would have made a tremendous difference. I am not concerned that the noble Viscount knows about the North. I am concerned that he is not prepared to do anything about it, and worse still—he is not here, but he will be able to read it if he wants to—that he should have made it worse, because it was the noble Viscount, Lord Whitelaw, and this Government, as soon as they took office, who altered the plans of a Labour Government to move 3,500 civil servants to the North West, and 3,000 right into the centre of Liverpool. They did that and they boast about knowing the problems of the North but are not concerned to do anything about them. Ultimately the consequences were that one cannot say that the return of an extreme city council in Liverpool came out of the blue. It was not deliberately planned by some politician. "We will set out to be extreme. We will set out to defy the Government. We will set out quite deliberately to get control in Liverpool so that we can embarrass the Government". Of course it was not. It needed support from the grass roots. It needed the people in Liverpool to feel that ordinary moderate government, that ordinary appeals from local authorities to the Government, could ultimately win the day and improve their standing. They did not. Your Lordships should not be surprised if the voters in Liverpool prove once again that they have had enough that they are not prepared to accept what market forces are doing to them in Merseyside.

They see market forces operating on minor pleasures in Merseyside. Those who know Merseyside know that it is not a wheel round the hub of the centre. The centre of Liverpool is the port and the consequences of that are socially very severe. When the centre of Liverpool was depopulated, the people could only move one way. If those people down in the South could imagine what would happen if there was no South Bank and they had to spread the population out, they would see that they would have to spread long distances north. Doing that in Liverpool, because the roots are still in the centre of Liverpool, it would mean extra costs on transport. Both parties realised that they ought to subsidise transport. What is happening now? The Government have decided that market forces will be introduced into transport. The subsidies will disappear, the number of bus journeys will be decreased and the feelings of those people who have unfortunately had to be moved away from the centre will be made worse.

I could give a list of the deprivations suffered by Liverpool and Merseyside people which would easily last for another half hour. I shall not. My time is up. But let me make this plea. If the Government really want to do something about the existing divisions in our society—I do not believe for one moment that they do, but they say they do—then they should go back to Macmillan, go back to the people who realised that if there is to be a divided society ultimately the consequences will be on their own heads.

It probably will not be just a lost election. If this problem is not cured properly the sickness and the canker that have been eating at Merseyside because of the failure to control private enterprise will spread. Ultimately what appears now to be a small division between the South and the North will grow until finally the northern part of the United Kingdom will resemble the southern part of Ireland or the south of Italy and it will then be too late to stop the frustration breaking out just as it broke out in Toxteth and in other places throughout this country. If the Government really mean business on behalf of the nation they had better start redistributing the resources and jobs that exist in the nation and not have them all resting in the South-East.

5.34 p.m.

Lord Pitt of Hampstead

My Lords, I agreed so much with what the last speaker said that I should happily have given him my 13 minutes. Like other speakers I am grateful to my noble friend Lord Wells-Pestell for introducing this debate. I shall content myself with commenting on the way in which government policies have increased homelessness and their deleterious effect on youth.

The avowed aim of the Government in their housing policy is the expansion of home ownership. The noble Lord, Lord Young of Graffham, boasted how successful they are. As many of those who are homeless, or threatened with homelessness, are in no position to buy property, they receive little help from policies with this objective. Worse than that, to achieve their aim of higher levels of home ownership the Government have directed resources away from the provision of housing to rent (which would most benefit the homeless) to the provision of housing to buy. The clearest example of this is the reduction of public expenditure on housing. The housing budget for the Department of the Environment has fallen by nearly 60 per cent. in real terms since 1979.

One result has been a sharp reduction in capital investment in housing for rent by public sector agencies especially local authorities. Local authorities have the main legal responsibility for helping the homeless. The number of new homes built by local authorities in Great Britain fell from 75,000 in 1980 to 25,000 last year. At the same time local authorities have been obliged to sell houses to sitting tenants, and nearly 600,000 council homes were sold between 1980 and 1985. Councils have thus suffered a net loss of stock, making it more difficult for them to provide rented housing for the homeless. In fact in some areas the situation has deteriorated to the point where the local authority has fewer houses available for letting than the number of homeless households for which it is legally responsible. Yet government restrictions have prevented councils investing the proceeds of sales in building new homes.

Your Lordships will remember that when we were debating the Housing Act 1980, when we were opposing the forced sale of council houses, I pointed out in my speeches that if we were to build houses it did not really matter whether we sold them but that it mattered very much if we were not building. I suggested at the time that that was what I expected to happen. I remember my noble friend the Duke of Norfolk taking me to task about that. He is not present this evening, but he can read Hansard and remember what he said to me across the Floor. It is all very well to boast that council houses can be sold, but if as a consequence homelessness is increased then more harm than good will have been done.

The reduction in the number of houses available for rent from the public sector has a number of consequences. One is that it has proved impossible to expand the legislative framework for dealing with homelessness, which is the Housing (Homeless Persons) Act. We have always asked that it should be improved to include single people and childless couples. There is no point in doing all that, however, if there are no homes in which to put them. The position is that the Government will not amend the legislation. What is much worse is that lack of resources has increased the pressure on individual councils to interpret the Act in a restrictive way. All who have had anything to do with it will know that that is going on.

Lack of rented housing has also increased the number of people living in board and lodging establishments, often at public expense. Local authorities have been forced to place an increasing number of people in bed-and-breakfast hotels because of the lack of permanent homes for rehousing. Homeless single people have found hotels the only accommodation available particularly if they are unemployed.

The Government's reaction to this has been changes—not to their housing policy but to the welfare benefits system. This has merely resulted in increasing homelessness. It has not tackled the underlying problem at all. Government policies to decrease the number of people living in institutions under present circumstances are also likely to increase homelessness. The Care in the Community policy has a laudable objective but without adequate housing provision what will happen is that there will be increased homelessness among the most vulnerable sections of our community.

There is no evidence that the Government are providing the additional resources. The opposite is the case. The Government are pressing the local authorities to spend less; but they cannot provide the services by spending less. Housing policy needs to give greater priority to helping the homeless and that in time to prevent homelessness.

I should like to make a few suggestions—and I am looking at the clock—which I hope will help. For example, there should be increased public investment in housing: I think that we would all agree with that. Local authorities should be able to spend the receipts from the sale of houses. The Audit Commission recommended that controls on capital spending should be abolished. Why not do that? Let us have the houses being built. Then, in my view—and this is probably more controversial—local authorities should be encouraged to purchase private houses in order to fulfil their housing obligations. At present, as your Lordships know, they are forbidden by law to do so. Councils are not allowed to purchase homes on the open market. Such purposes, as I see it, would allow a rapid expansion of rented houses at the same time as we are building up the housing required.

I have suggested in this House before, and I repeat it, that housing subsidy should be reformed. The subsidy should aim to encourage the provision of homes for the homeless and reform of the housing revenue financial procedures—and that is a detailed matter which the noble Lord, Lord Sefton, will know very well—is needed in order to allow for better use of the subsidies to help the people who are homeless and in need. With more homes available, then we could amend the Housing (Homeless Persons) Act to include single people and childless couples. That really could be done in stages but it should be done.

Then, housing benefits also need to be improved because they need to be adequate to meet housing costs and the board and lodging regulations should be amended, with value for money being dealt with not in the way that it is being dealt with now but through regulation of conditions and costs.

Again I say to the Minister that the true cost of care in the community must be faced and extra funds should be provided to local authorities so that they can provide not only the housing needs but the other needs, the support needs, which must be met if we are going to have this policy. I do not want to be misunderstood. Care in the community is a laudable objective. What is wrong is advocating care in the community and then putting vulnerable people in the community without adequate support. That is wrong. It should not be done.

Housing of good quality costs money and of course people who are unemployed do not have the sort of money to enable them to buy houses of good quality. In many instances also the elderly are in the same position. Therefore, you find that people who are unemployed, the elderly and also the black population are in houses that are inadequate and in poor condition. In the case of the blacks of course, they have to face discrimination on top of their other problems. They will be discriminated against not only in the private sector but in the public sector as well. They encounter discrimination even when they try to buy. Even though it is illegal, they have problems in getting the loans and the credit facilities. Therefore, they tend to be found in disproportionate numbers among those in rented houses. In the case of the extended families, the local authorities have never built for large families and therefore people with extended families have difficulties and, again, find themselves disproportionately represented among those left in bed-and-breakfast hotels for long periods. But the fundamental factor preventing access to decent quality accommodation is low income. It is there that this issue must be faced.

I want to use the last couple of minutes of my time to deal with the effect of government policies on youth. Government policies have been particularly harmful to youth. I do not need to spell out to your Lordships the impact on growing youth of unemployment: everybody recognises that, but it undermines young people's vision of the future and leaves them without a clear sense of identity and a purpose for today. That is one of the things that it does. I ask myself about the sense of values of a society which is prepared to allow its youth to be unemployed and homeless.

The most glaring example of the way in which the Government are dealing with this situation are these board-and-lodging proposals. In addition to being homeless and unemployed, they are making them rootless as well. I cannot really believe that any thinking government can be satisfied with approaching problems in that way. I hope, for example, that these regulations will not be reintroduced in the same form. I hope that the Government will begin to look more seriously at enabling more homes to be built so that we can prevent increasing homelessness. And, as a by-product of that, a lot of people would be employed.

5.50 p.m.

Lord Carmichael of Kelvingrove

My Lords, I am most grateful to my noble friend Lord Wells-Pestell for raising this subject and giving us all the chance to speak on it. I think his own speech was moving, caring and gentle. Of course, there was a certain amount of indignation in it, but I think even to suggest that his speech reflected the politics of envy was a gross distortion of anything he tried to say. In contrast to that I was thinking about how I would categorise the noble Lord, Lord Young, who made the accusation. I thought of many things, but one of the gentlest things I could think of was what Pangloss said about everything being for the best in the best of all possible worlds. We have heard this frequently from the noble Lord, Lord Young of Graffham. I believe that what has come across from this side at least is evidence that the rest of Britain does not think that things are quite as easy, and they are not quite as smug as noble Lords opposite appear to be.

I do not want to speak for too long. Much of what I wanted to say has already been said, in some ways much better and more forcefully than I could say it. But I want to speak about some of the Scottish experience. It would be quite wrong if I did not take the opportunity to speak about it in such a debate as this. First of all, the old people in Scotland, particularly in my part of Scotland in the west, as well as generally, are mostly of the generation of the time of the smoke-stack industries we hear about, the heavy industries which have now disappeared. This has left them with a legacy of poorer health than people in many other parts of the country. People who have been involved in heavy physical work, frequently in inclement conditions, tend to have more acute illnesses than do those in much less onorous types of jobs.

We must accept that deprivation and lack of opportunity do not disappear quickly. Some of the deprivation of the 1930s is still apparent on people's faces, even now, in some of our areas.

The Scottish climate is not particularly suitable for old people. Last winter it was a gross scandal that old people in Scotland, in a country surrounded by oil, with unlimited coal reserves if we want to dig them out, were dying of hypothermia. Despite the pleas of the media and all sections of the Scottish community the DHSS still used quite unfathomable formulae to decide whether people should get an extra allowance to combat the cold. I can say that few people in Scotland actually got the allowance. Very little was given to them to help fight the cold last winter.

I hope that as we are moving towards slightly better conditions during the next few months the Government will sit down and take time to work out a better system for the allocation of additional heating allowances. One of the jokes in the newspapers has been that up to now the system was that someone in the DHSS office put his head out of the window and if he thought it was cold enough, an allowance was given, and if he did not feel it was too bad, no allowance was given. That appeared to be the attitude in Scotland: there was no genuine system.

The next question I should like to deal with in the context of Scotland has been dealt with very fully by my noble friend Lord Pitt. It is the question of housing. We have been discussing housing recently in this House, and we shall return to it. We have discussed the purchase of housing association housing and local authority housing in Scotland, but I should like to say something about the real problems we are storing up for the future in respect of local authority housing.

It is obvious from the debate—and many experts have spoken and given figures on housing—that no matter how many houses are sold, no matter how many people buy houses, there will still be a great need for houses to rent, and most of these will be controlled and owned by local authorities. No one in Scotland, including Government Ministers, believes that there will be a marked reduction in the need for local authority housing for a very long time.

The director of social work in Strathclyde, which is the biggest local authority area in Britain, speaking at a conference in Edinburgh some time ago, said: Housing quality is deteriorating quicker and the re-emergence of slum conditions is now a realistic prospect". He was speaking about slum conditions such as we had in the industrial areas of Liverpool, Glasgow and many other places. These conditions leave marks on people for the rest of their lives. The director of social work said that that is the situation we are approaching now.

We have about 975,000 public sector houses in Scotland. If one assumes that a house has a 60-year life, that means we need about 16,000 houses a year to replace the stock. At present we are building about 5,000 houses a year in Scotland; so there will be 10,000 houses a year fewer than we need merely to keep up. That does not include rehousing people. That is just trying to keep the stock we have in decent condition. One assumes that each house will have a major modernisation at least once in its lifetime. As one knows, wiring and many other things need fundamental, fairly drastic modernisation at least once in 60 years. Housebuilding, modernisation, repairs and planned maintenance are all affected by the stringent economic policy of the Government. I believe that we are building up massive problems for the future.

As I have said before in this House, one factor about housebuilding is that there is practically no imported content in houses at all. There may be a little imported timber, but practically everything else is indigenous. We have many building trade workers, bricklayers, joiners, plasterers, plumbers, and architects. There is also plenty of land in Scotland, and we have all the materials we need. Yet we are one of the worst housed nations in Europe.

The last point about which I should like to speak concerns young people. We have a special situation in Scotland, again linked to housing. Traditionally in Scotland a higher proportion of children stay in the parental home after leaving school than is the case in the rest of the country. That leads to higher levels of overcrowding. When that is added to unemployment problems, (of which we have as many as most other industrial areas in Britain) with perhaps both the parents and the children unemployed, one can imagine the situation in such an environment. The stress placed on the family is greatly increased because of unemployment and overcrowding.

If the suggestions of the Government housing benefit Bill go through—those put to the social security advisory committee—we shall reach a situation which I thought had disappeared in the 1930s, with young people having to leave home in order to allow the family to get as much as possible from their housing benefits. In the 1930s, as many of your Lordships may know, there was means testing—and there is a lot to be said for certain types of means testing so long as it is done right across society and with dignity. But if these housing benefit recommendations go through the type of means testing we get in the future could lead to the break-up of families such as happened frequently in the 1930s.

Where I live in Glasgow, and the place that I represented in the other place for a long time, is the centre of the student population, serving Glasgow University, Clyde University, all the technical colleges and the colleges of higher education. The young people tend to gather in that part of Glasgow. Therefore I think I know a little about students, and one of the sad things is that almost all these students or young professionals can tell you about their brothers, sisters or close friends who have the same qualifications for higher education as they had themselves when they were allowed into higher education; but because of educational cut-backs those people are not able to get into university or into other types of higher education now.

This of course causes great frustration. I am not talking about people who are not capable of benefiting from higher education but about people who are well qualified and who a few years ago would have got into a university but cannot get in now. This is a terrible waste of talent and a terrible waste of young people.

Academic cut-backs are disgraceful enough but when the latest burdens on young people trying to get into university are added, that raises again the question of student housing and the fact that the Government are going to stop students being given housing benefits during the long and short vacations. In fact, it has been suggested that they will not be able to apply for unemployment benefit during the long vacation. If they cannot get unemployment benefit or social security benefits, it means that the chances of a young working-class student being able to go to university, even if he does get a place (and he must have very high entry qualifications now to get a place) are very remote. It is just too much for him to do.

I think we must accept that we shall never have the mass industries back on the Clyde. The enormous shipyards, the Beardmores and the engine works will not come back. Those were the places that employed 20,000 or, in some cases, 40,000 people. We shall be much more involved in using brain power rather then muscle power in the future. The present unemployment figures for Scotland are 338,500 plus 18,000 school-leavers. From the way the Minister spoke when he was replying and the way the noble Baroness, Lady Gardner of Parkes, spoke, one would have thought it would not be long before we heard again the old cry (and it may be stamped on unemployment cards): "Not genuinely seeking work". That was the way we were drifting, I felt.

What has already come to the people of Scotland very clearly—and I think it will come to the rest of the country soon—is the way we have totally squandered North Sea oil revenues, which could, and perhaps should, have been poured into education. That could have been the last chance for a country such as our own to build a decent future in the 21st century. The way the money was squandered in order to give tax relief and to bolster Budgets for the Chancellor of the Exchequer will not be easily forgiven in the future by generations still to come.

6.5 p.m.

Lord Wallace of Coslany

My Lords, I too, with other colleagues who have already spoken in this debate, resent the remarks made by the noble Lord, Lord Young, about politics of envy existing on this side of the House. It is an unjustifiable remark and an insult to many people who have devoted their lives to raising the standard of their fellow men. Many of us are old enough to remember the workhouse days; many of us are old enough to remember the time when mother went without medical attention in order to pay the doctor's bill for her children. That is not just stuff to raise self-pity but is one of the driving forces, along with many other experiences that we have had not only of our own poverty but that of people among whom we have lived. That is the driving force that spurs us on in order to achieve a better society; and I resent very much indeed the remark the noble Lord made. Unfortunately, the same attitude is shared, I am afraid, by some of his colleagues.

I speak as one who during the 1945–50 Labour Government took part in the discussions on the health service Bill, having previously campaigned, like many others, for a National Health Service. Those were heady days in the establishing of a National Health Service which became the nation's pride and the envy of many other countries. In the general election of 1979 we were told by the present Prime Minister that, the National Health Service is safe in our hands". Today the situation is one of general crisis in health districts and a severe decline in service.

In fact, in spite of claims of increased spending by government—and I accept those claims—there has been a slow but sure dismantling of the health service and the encouragement and advancement of the private sector, which is dependent still to a great extent on the National Health Service, from which it recruits nurses and doctors trained at state expense. I once raised the question of some reimbursement being made by the private sector for this service, but so far as I am aware nothing has been done to obtain a degree of refund of the cost. However, it is only fair and right that there should be some degree of compensation.

There is hardly a health district that at this moment is not having to prune its budget and cut services. My own health district of Bexley faces a reduction of f £1.6 million. Last night decisions were made in secret session—that was the second meeting that has taken place in secret—and details are to be announced later of measures to be taken to meet the deficit. There is bound to be a drastic reduction of facilities. Only last week I was given to understand that domiciliary visits by nurses are being reduced and as a result elderly and disabled people will not be bathed and assisted by a friendly visiting nurse. In a caring society, community nursing is a vital factor in health care.

We are told of greater spending, which is true, but we are not told that spending has not kept pace with inflation, with technological advance or need. Another factor affecting health authority finances was the disastrous reorganisation built in by Sir Keith Joseph, followed by yet another reorganisation eventually; and Salmon was another disaster affecting nurses. Now we have the new general managers at inflated salaries on a three-year contract which, by the way, ensures that they will toe the government line, or else. Finance apart, all these measures, including a degree of privatisation, mainly affecting domestics, has brought about disillusion and despair among the staff. It is an undeniable fact that morale in the service is low.

From May 1979 to March 1985, 221 hospitals were closed and 38 new hospitals opened, with a net loss of 2,500 beds. With a major cost cutting exercise in progress in the majority of health districts, many more beds are being lost and more hospital closures are projected. Waiting lists for operations are becoming longer and longer. I understand that in London alone 10,000 people are waiting for operations under the National Health Service.

The closure of smaller hospitals, in particular in rural areas, has created hardships because of the additional travelling involved to obtain treatment. In my area Bexley maternity unit has been closed. That much loved mother-and-baby hostel in Woolwich was closed and an expensive extension was added to Queen Mary's maternity unit. That means that mothers come from a wide area. It is entirely wrong that an expectant mother in an advanced state of pregnancy should have the problem of obtaining public transport to go to hospital for an examination. At that extension there were over 3,000 births last year. I do not claim increased productivity in Sidcup, because the catchment area is large. RAWP—

Lord Ennals

My Lords—

Lord Wallace of Coslany

Yes, my Lords, I know that a Labour Government introduced it.

Lord Ennals

My Lords, I wonder whether my noble friend is aware of the recently announced proposals to make drastic cuts in the clinical services of the Maudsley Hospital, one of the greatest psychiatric hospitals in our country, which will affect young adolescents, disturbed children and drug addicts? They are some of the people in our society who most need treatment.

Lord Wallace of Coslany

My Lords, I am speaking generally and from my experience. I know that the Labour Government introduced RAWP and that my noble friend was responsible for it. It is another factor which affects the service. Originally it was intended to adjust differences of need among health regions. It is now being used to make adjustments to health districts within regions. That is a big difference. For example, the south-east regional authority is proposing to mortgage four hospitals to raise urgently needed funds. Government funding for the south-east region will fall by £1.8 million a year until 1995. There will be a need to switch funds from inner London to Kent and Sussex for an expansion of facilities in the Medway towns and the South-East. That is what I term internal RAWP. That is badly and seriously affecting many parts of London, outer London and my district in particular.

Official figures show that the various Thames regional health authorities had reductions in growth in 1982–83 from between 0.02 per cent. to 0.03 per cent., whereas in 1983–84 the reductions were from 1.1 per cent. to 1.2 per cent., and, in addition, in six other regions the reductions were between 0.01 per cent. and 0.04 per cent.

That is another factor that seriously affects health district finances. All those items will lead to pressure for cuts. Well deserved pay awards to nurses increase health authority problems. That is yet another burden that they must face. Many regions have increased spending on qualified nursing staff but have reduced spending on nurses in training.

According to a report in the Guardian yesterday, the DHSS was expecting the number of nurses in the National Health Service to fall by 2,000 because of recruitment problems. Part of the recruitment problem is caused by pay and career structure. Another even more important factor is the reduction in many areas of student and pupil nurses—the basis of future qualified staff.

A lack of facilities and long waiting lists are forcing people into the private sector, which is growing rapidly. By 1980 there were 139 private hospitals available with a total of 6,408 beds but by 1985 the figure had risen to 195 hospitals with 8,541 beds. The number is still increasing at the expense of the National Health Service. For instance, as has already been mentioned, we have the new London Bridge Hospital just a stone's throw away from the financially pressed Guy's Hospital. Apart from the provident schemes such as BUPA, many hospitals are seen as a financial investment by American or Arab interests. I emphasise that I find a profit motive in health hard to appreciate.

I have no objection to schemes such as BUPA. As I have said before, people have a right to choose, but it is wrong that today we have the situation of "Go private or wait and linger in hope". I have a personal problem. Someone made that remark to me. On principle, I should never go private having fought for a National Health Service to which my family and I will stick. I do not attack BUPA. It is a provident scheme, but there are other schemes where the profit motive is the only factor for the establishment of a hospital.

It is no use the Government boasting of additional spending when European countries spend more of their gross national product on health than Britain. Since 1979, there has been a massive increase in prescription charges. It is true that people of pension age obtain relief, but that does not apply to the supply of spectacles where, unless on supplementary benefit or in acute medical need, pensioners face the full cost of the provision. That could become much worse under the proposed voucher system.

We are told by Ministers that those of us who complain about cuts or charges in the National Health Service are Moaning Minnies. That is not the way that we should proceed. We are not Moaning Minnies. I regard that remark, which is so often repeated, as blatant arrogance from those who came into power on the pledge that the health service was safe in their hands but who proceeded to mutilate and disorganise what was once truly a National Health Service.

Viscount Massereene and Ferrard

My Lords—

Baroness Trumpington

My Lords, time—

Viscount Massereene and Ferrard

My Lords, the time factor of course spoils the debate.

6.19 p.m.

Baroness Fisher of Rednal

My Lords, I should like to compliment he noble Lord, Lord Wells-Pestell, on giving us the opportunity to debate this important matter. Although we have bandied around figures, statistics and percentages, all the comparisons that have been made are about people. That is the important factor that we must remember in a debate of this description.

As the noble Lord, Lord Pitt of Hampstead, said when he opened his remarks about housing, it is obvious that in the urban areas the declining housing subsidies and rate support grant, the tighter restrictions on revenue and capital expenditure, and the increasing level of homelessness are creating a crisis. Most large local authorities—and I know Birmingham so very well—say that that trend seems likely to continue unless government policies change.

Only last week I was speaking to the chairman of the housing committee and I took down her words to make sure that I did not misquote her. She said: The state of housing in the city"— that is, Birmingham— is deteriorating rapidly and every week more problems emerge. The housing committee is continually having to reassess priorities as the headaches grow but the money available dwindles. It is an absolute nightmare". Birmingham will be allowed only one-third of the amount for which it asked in grants towards housing.

But the irony is that the Government have already conceded that it was wrong to cut grants to Birmingham City Council by about £7 million. When the matter was taken to the High Court. the Department of the Environment said that it had exceeded its powers in reducing the city's block grant by £7 million. But Birmingham will not get that £7 million which it has lost, for the simple reason that the local government Minister has decided to bring in a one-clause Bill which will make sure that Birmingham does not get it. In other words, the Government are saying "We are going to move the goalposts because you have scored your goal".

It is a most unfortunate situation. I am talking about not 7p. not £70 but £7 million. The Department of the Environment has conceded that it was wrong, but the Government have said "No, you are not going to get it. We have found loopholes which we did not know about". Birmingham's lawyers were much more clever, as the leader of the council said, but although they proved their point and won their case Birmingham is not to get the money.

As regards council housing, it worries me very much when I listen to the constant sniping at local authorities and at their provision of housing. For a considerable time, I was chairman of the Birmingham housing committee and the wards that I represented were in slum clearance areas. I became involved with housing because, in the early 1960s, I was absolutely amazed at the conditions under which people had to live.

It is important for us to recognise the people for whom local authorities cater. For my information I am using the Audit Commission's report which the Government have already received. That report states at page 33: At present, council house tenants tend to be poorer, and generally older than the overall population average. The following statistics illustrate the social challenge facing local housing authorities generally in England and Wales: —The median household income of council tenants (excluding old age pensioners, single parent families and the unemployed) is almost one-third lower than for owner occupiers with a mortgage … The precise figures for 1982 were £7,419 against £10,787". That clearly shows the lower income. — 57% of single parent families in England and Wales are council tenants … — Over 62% of households in receipt of supplementary benefit in Great Britain are council tenants". That is the burden which a local authority has to carry. I ask the Minister who is to reply whether she thinks that the private sector will take up those responsibilities. If it does not take them up, they must be taken up by the local authority and further resources must be given to manage homes for those people.

I want to mention another item which is very well known to Her Majesty's Government; that is, the arrears on rent income that are accruing to local authorities. Arrears are a mounting problem not only in Birmingham but in the whole of the country. I am not talking only about rent arrears. There are electricity arrears, gas arrears and hire purchase arrears. In the courts—and I speak as a magistrate—there are even arrears of fines. Fines are being paid at the rate off £1 a week, which will take four years to pay off, in order to prevent people going to prison.

But I speak particularly of arrears of council house rents. At the present time the arrears in the city of Birmingham amount to £7.2 million. Before I go any further I want to explain that Birmingham is not a badly managed authority which cannot collect its rents. It has a very good arrears collection and it has been complimented by the Audit Commission on being a well managed authority. The strategy which Birmingham employs in collecting rents has been taken up and used by the Audit Commission. Nevertheless, the council has rent arrears of £7.2 million.

The economic furtunes of the West Midlands have declined substantially over the last 10 years. I have tables which show clearly what has happened to arrears of rents and rates. In 1979, the figure of council tenants in receipt of standard rent-rate rebates—that is, the unemployed or low-paid working tenants—was 19.1 per cent.; in 1981, the figure was 24.1 per cent. and this year it is 26.9 per cent. In 1976, the figure for tenants in receipt of supplementary benefit was 25 per cent.; in 1981, it was 29.9 per cent. and this year it is 50 per cent. In 10 years the number of people on supplementary benefit has doubled.

The figure for tenants in receipt of assistance with the payment of rent-rates was 44 per cent. in 1976, 54 per cent. in 1981 and 76.9 per cent. in 1985–86. Those people are in receipt of supplementary benefit or housing benefit. They are not rent arrears cases. For noble Lords who do not know the workings of housing benefit, it is a direct payment which is made to the housing office and the tenant never sees the money at all.

The Government's White Paper on the reform of the social security system insists that all housing benefit claimants should pay a minimum of 20 per cent. towards the cost of rates. Birmingham has estimated that 40.000 of its tenants who now pay nothing at all will have to pay 20 per cent. of the rates. When I tell your Lordships that the rates in Birmingham are over £2 in the pound, you will see that that will be an extra burden on them. Where are they to get the money when they are already in arrears with their rents?

My noble friend Lord Carmichael stressed that we should be asking the Government to use their priorities in the same way as this is being asked of local authorities. I concur in my noble friend's view that the Government waste money on unemployment and housing benefits when that same money could be spent on providing employment and giving people status once again in society within the construction and allied trades. If money was spent in this way, it would provide not only employment but also what the customer wants—that is, homes for those who are seeking them.

6.30 p.m.

Lord Elliott of Morpeth

My Lords, I am sorry that the noble Lord, Lord Sefton, has left his place. I should have liked to tell him directly, in response to his remark that few of us are standing up in defence of the Government's policies with regard to social welfare, that I am very happy to do just that. I am very proud of what my Government have achieved through their policies, in the face of many difficulties, over the past seven years. I am grateful, like other noble Lords, to the noble Lord, Lord Wells-Pestell, for initiating the debate. The noble Lord made a comparison between Labour and Conservative policies, suggesting that they were distinct. I suppose that in many ways they are. However, his remarks remind me of a debate in another place in which I took part a few years ago on a very similar subject to that being discussed today.

I had calculated, for the purposes of that debate, that since the end of the Second World War there had been 17½ years of Labour government and exactly the same period of Conservative government. I said, at that time, that I had never been in any doubt that every government between 1945 and the time of that debate—it was presumably the early 1980s—had done their utmost to introduce policies that would have, in their application, beneficial social effects. Methods differed, of course. They still do. But whichever government have been in office, they have done their best. Their application of economic policy, as mentioned several times already, has been basic to social welfare. I say without hesitation that success in controlling inflation has meant that this Government have been able to achieve a great deal in areas where problems common to every party in office have essentially to be faced. I refer to the relentless advance of automation and the decline of major industry, automatically leading to redundancies, to unemployment and to the social consequences of which we are very much aware.

It is on the subject of unemployment and this Government's facing up to the problem that I wish to address myself in the time available. I listened with great interest when the noble Lord the Leader of the Opposition suggested that my noble friend Lord Young should leave the Home Counties and go to the North-East. As the noble Lord knows, I go to the North-East all the time. I was born there, and I have lived there all my life. I should like to tell him that my noble friend Lord Young is a regular visitor to the North-East and is very concerned with our particular problems. I join with the noble Lord, Lord Cledwyn, in his tribute to my noble friend for what he is trying to do in respect of training. A great deal is taking place in areas such as my own. A great deal has happened in the past. But my noble friend, during his period of high office, has given a new impetus to training. We are grateful to him.

My part of England, the North-East, has known its share of the major problem of redundancies and unemployment. I welcome this opportunity to commend most strongly the present Government for their considerable success with policies in this context. I can give no better example of what is happening today than the northern town of Consett. In 1980, the town of Consett knew the closure of its iron and steel works. Those works had given employment for generations in that town and district, now known as Derwent. No better example could ever be given of a one-industry town. Consett was wholly dependent for its employment and social wellbeing on iron and steel. When the works was closed, this was a very serious matter for its people.

I was often asked by my south country colleagues in another place if unemployment, that, sadly, has been with us for some time in my part of the world, was visible in the North-East. Could one see it? The steelworks was closed in the autumn of 1980. It was just before Christmas of that year that I went to Consett to see this steel town that had lost its only industry. And, my goodness, unemployment was very visible! There were men and boys standing on the corners—the same scene, one imagines, as during the depressed days of the 1930s. There was a lacklustre feel about the whole place. Shopkeepers were expressing dismay at what they considered to be a very serious matter for them. The media wrote off the town of Consett. I recall two headlines of the period. Consett, in 1980, was described as the Jarrow of the 'eighties. It was described also as the town that had died.

On Saturday last week, having decided to take part in this debate, I visited Consett again. What a change is to be seen! The rusting steelworks, so depressing, right in the middle of the town at the time of closure are gone. They have been razed to the ground. Consett now has a trading estate called Consett No. 1 with an amazing range of new firms of all kinds, large and small. To drive round was very encouraging. High technology is to be seen in Consett No. 1, and small factories, providing everyday requirements. There is an unprecedented degree of diversification. What a wonderful thing this is for a town that was once dependent on a single industry. The closure of the steelworks meant bang—the loss of 3,500 jobs.

I should like now to quote from the Derwentside Industrial Development Association third annual report, just issued. It says: The direct results of the industrial development programme are measured very carefully each year through a job audit. To the end of March 1986 the Derwentside Industrial Development Programme has yielded nearly two and a half thousand 'jobs on the ground'. Many more job opportunities should be generated in future as the full growth potential of the businesses now located in Derwentside is realised. The agency is currently managing an exceptionally good set of active enquiries and anticipates another excellent year's peformance during 1986". This is a wonderful story. A town in the northern part of England has suddenly a new life, thanks to the present Government's policies of investment and encouragement. It is a wonderful co-operative achievement involving the development association, English Estates, who do so much good work in the northern part of the country, and the local authority. Every available grant has of course been taken up. The most interesting one, taken up to the full in Consett, is the enterprise allowance. It is so encouraging, in addition to seeing the new factories and workshops, to realise that much of the effort and much of the new business is indigenous.

I pay great tribute to people in that area, mans of whom used redundancy payments to get up, have a go and start a new small business. I wish them luck, and I am sure that that wish is shared by noble Lords in all parts of the House. Some bought their houses with their redundancy payments. Again, as has been stated during the course of the debate, the buying of houses has been encouraged by the policies of this Government. Good for them! They have decided to stay put and to make their town work.

In addition to Consett, English Estates appropriately has its headquarters in the Tee Valley in the North-East of England—appropriately, because that is where the very first trading estate was established in the 1930s. English Estates has just reached the end or its year and has announced a 20 per cent. increase in factory and workshop lettings in the North-East. What is more, that is a 20 per cent. increase on a very good previous year. There are 50 additional factories and workshops that have come into being in the past year on trading estates in that region. They represent 4,500 new jobs. Government policies are working very well.

That is not to underestimate—and I am sure that no one would expect me to do that—the problem that remains with us. Our unemployment rate is far too high but in making policies such as those I have described the Government are facing that problem and overcoming it.

The policy regarding enterprise zones was a courageous one in itself. There is considerable evidence at this time of existing firms within the zones investing and expanding when they would not otherwise have done so but for that courageous concept. Another great investment in the North-East that has just been announced is that of the twelfth Japanese factory. That was opened a week last Monday. What a wonderful thing that is. I pay tribute to the North-East Development Council, which has so energetically campaigned in that area and which has been and is able to do so because of an enormous government grant, currently running at £¾ million. Again, it is a case of the Government's policy working and working well.

I pay tribute to the North-East Development Council for having brought into being also a conference that is to take place on 16th May. I refer to the speech of the noble Lord, Lord Sefton, when he said that everything happens in the South-East. He included in his catalogue, quite rightly, the Channel Tunnel. In the North-East—not the South-East—there is to be held on 16th May a conference in support of engineering industries in the North-East, because there will be an awful lot of work for the North-East from the Channel Tunnel, even though the entrance to it, through which the noble Lord will pass, is in the South-East. I commend that conference very warmly indeed.

Finally, I move on to the Port of Tyne, which in my region has always been taken as the barometer of our well being or otherwise. At this moment the Port of Tyne is flourishing as it has not done for many a year. A deficit of £¾ million has been turned in the past year into a £2¼ million profit. Everything seems to be going well on the Tyne—particularly the new coal handling plant, which is a co-operative effort between the National Coal Board and the Port of Tyne Authority.

That coal handling plant has come into being with an enormous government grant. Again, the Government's regional policy is seen to be working well. It used to be known as, The Tyne, the Tyne, the coally Tyne". It used to be known also as the queen of all the rivers. It will be the queen of all the rivers again with regard to the coal trade. It is flourishing as it has never done before. That is an indication of government policies within the region working and working well.

As I have precisely one minute left, I conclude by again referring to the speech of the noble Lord, Lord Sefton, who did something that is damaging to both his part of the country and to my own. There is a constant suggestion that there are two halves to this nation—the North and the South. There is a constant suggestion that the southern half of the country is given all the preference and all the advantages to the detriment of the northern part. I do not accept that. We are one nation. The North-East of England and the Merseyside area wish nothing other than to play their full part in the nation's industrial well being and in ensuring that social welfare for all is kept at the highest possible level throughout the country.

6.45 p.m.

Lord Stallard

My Lords, I, too, wish to join in the congratulations to my noble friend for initiating this debate and for his choice of subject. He has given the House a useful opportunity to examine the effects of legislation enacted in recent years covering many aspects of our daily lives. I shall resist the temptation to follow the previous speaker because that would eat up all the time that I have for what I have to say.

My noble friend, in a thoughtful and constructive speech, set the tone for the interesting discussion that has taken place this evening. One of the inevitable consequences of being No. 15 on the list of speakers is that noble Lords have already raised many of the points that I intended to make. I can therefore concentrate on my main interest in this debate, which is the effects of the Government's policies on the elderly, because of my long association with pensioners and with pensioners' organisations.

In the years immediately after the last war, this nation was respected and admired throughout the world for its health and welfare services. Now we are falling behind most of our European partners in our treatment of the elderly and others in need. Countries much poorer than ours are giving higher priority to social and welfare services.

A recent discussion paper published by the science and education board of the BMA states: British doctors who have travelled to other countries to look at their systems of care for the elderly return here angry and depressed". It is asked why countries no richer than Britain can provide care that is so much superior.

That the Government have made it clear that they no longer accept the Beveridge objective of security against want without a means test must be obvious to all who try to keep abreast of developments in social security legislation in Parliament. The Green Paper Reform of Social Security which was recently published states in Volume 1, paragraph 7.13: We should not place on our successors the responsibility for meeting all our financial expectations in retirement. Instead we should ensure that everybody is able to save and invest for his own additional pension". Later, the report states in paragraph 7.19: That additional pension will be his own investment for his retirement, not a promissory note to be presented to a future generation". That goes completely in the opposite direction to the Beveridge concept.

To find the Government's inspiration for their new approach to social security, we need look no further than a book entitled Free to Choose which was written in 1982 by the Friedmans and which was republished in this country last year. In that book, Milton Friedman had this to say: Any assurance [about future pensions] derives solely from the willingness of future taxpayers to impose taxes on themselves to pay for benefits that present taxpayers are promising themselves. This one-sided 'compact between the generations' foisted on generations that cannot give their consent is a very different thing from a 'trust fund'. It is more like a chain letter". The Government's nil cost approach to social security benefits legislation has obviously interpreted that part of Milton Friedman's book quite accurately.

They take us back to the beginning of the century, because I read recently that it was recorded that at the end of the Boer War, Charles Booth's critics argued successfully that the government's first duty, now that they had money to spare, was to reduce taxes on the rich, and that the cost of old age pensions along the lines advocated by Booth would prevent a reduction of as much as tuppence in the pound on income tax. That has indeed been the present Government's approach since taking office in 1979.

What has been the effect on pensioners' incomes and living standards? I shall try in the few short minutes that I have left briefly to illustrate the effects in three main areas of concern, though there are many others, which are housing, income maintenance and transport.

First, as regards housing, because of cuts in central government finance and restrictions on local authority and housing authority expenditure and inadequate provision for repairs, many elderly people are living in inadequate accommodation. They often have insufficient support in their present home, but they are unable to transfer to more appropriate accommodation. Age Concern has estimated that 5 per cent. of elderly people live in residential and nursing homes or in hospitals and that of the 95 per cent. who are living at home 50 per cent. own their own homes, 35 per cent. rent from a council or a housing association, and 15 per cent. live in private rented accommodation.

About one-third of all elderly people live alone. Many of them are women, of whom a large number are over 75. It is estimated that there are 300,000 elderly council tenants who are desperately wanting to move, often from unsuitable properties which are too far away from relatives. In addition, a large number of elderly tenants live alone in large houses. This is not what many of them want and it means that family-sized properties are often under-occupied. Because councils do not have the resources to provide appropriate alternative accommodation, a totally unsatisfactory situation continues and worsens as a result of deliberate government policy.

There are 48,000 dwellings classed as unfit for habitation which are occupied by elderly people; a further 195,000 classed as fit but in serious disrepair are occupied by elderly people; and 500,000 dwellings lacking one or more basic amenities are occupied by the elderly. The number of dwellings lacking a bath is 290.000. It is a fairly grim picture, which cannot be confused with the presentation of glossy packages about which we have been hearing from government spokesmen in the past few years.

There is little chance of elderly people obtaining repairs or improvement grants because there is a lack of funds, and because of cuts in housing expenditure far higher than in any other area of public spending the number of one-bedroom dwellings and sheltered accommodation being built by local authorities has fallen dramatically, until the situation has reached crisis proportions. In this area the social effects must be as self-evident to Government Ministers and Members of the Government, if they are honest with themselves, as they are to the rest of the nation.

The effects of the board and lodging limits were mentioned by my noble friend Lord Pitt, but the major effect of the board and lodging limits has been upon elderly people—those who are already living in residential care and those who are in need of such care. Again, I am indebted to Age Concern, which represents the interests of elderly people, for reporting a steady flow of cases of people in difficulty because fees have been increased. I shall mention only a couple of examples because of lack of time.

There is the case of an 85-year old lady who suffers from senile dementia. She has no relative and her affairs are handled by a solicitor as receiver under the Court of Protection. The DHSS could not meet the increased fees of the nursing home which threatened to dump the lady in the solicitor's office.

Then there is the case of an elderly amputee who had been taken into a home before the 29th April 1985 but the home only had available a room on the second floor. She was promised ground-floor accommodation if it became available, so that she could move about in a wheelchair. But when such a room became available it was more expensive and the DHSS would not pay the extra cost. There has been a similar impact on elderly people who are living at home and on the people caring for them.

Gaining access to residential and nursing home care when it costs more than the supplementary benefit available is becoming virtually impossible. These effects of government policy are surely unacceptable to all who value this scheme.

I now turn to income maintenance. In the White Paper Growing Older, which was published in 1981, the pledge was made that: As the economy improves, elderly people will share in that improvement". How far has that promise been kept by this Government?

The Government's chief claim to benefiting pensioners lies in the decline of the rate of inflation. I accept that benefit, as does my noble friend Lord Cledwyn, but I qualify my acceptance by pointing out that because elderly owner-occupiers will have paid their mortgage, any reduction in mortgage interest becomes irrelevant. Indeed, it can be said that lower interest rates reduce the income from pensioners' savings.

Also, government fuel policy has meant that the price of gas has been raised to a level which is considerably higher than costs would warrant; and the structure of price increases is such that the standing charge increases proportionately more than does the unit charge. This adversely affects elderly people whose unit costs as a rule are a smaller proportion of their total bill.

Yesterday we also heard about the Government's charging policy given to the newly privatised British Telecom and the effects of that policy in further increases for domestic consumers which are well above the rate of inflation. It is deliberate government policy which has far-reaching social implications for telephone users as well as for pensioners.

The breaking of the link between pensions and prices and earnings has been mentioned. This has prevented pensioners from sharing in improvements in the economy, as promised in the White Paper, Growing Older. That, too, is self-evident. Had the link with average earnings been preserved, the single person's pension would have been £3.5 a week more in January 1986 and the married couple's pension would have been £4.55 a week more. By July 1986 when the next uprating is put into effect the losses may he between £6 and £7 for a couple and £4 and £5 for a single pensioner. So the total cumulative losses since 1981 could be in the region of £570 for a couple and £390 for a single pensioner. So much for a share of the improvements in the country's circumstances.

Other factors have affected the value of the retirement pension, with all the social consequences that that implies. For example, I recall that in 1980 the pension was two weeks late. It was a 54-week year instead of a 52-week year, and that cost a couple £12.30, which was never repaid. In 1984 the uprating was a week late again and that cost a couple another £2.80. So pensioners' standards have been deliberately reduced by government policies as the years have gone on.

As regards transport, I recognise that the effects of the abolition of the Greater London Council and the metropolitan county councils and the implications of the Transport Act on travel for elderly people cannot yet be fully judged. Concern that elderly and disabled people will be disadvantaged over time has not lessened. Deregulation of transport services under the Act will undoubtedly mean that unprofitable hut socially necessary services will eventually be withdrawn and doubts remain about the long-term future of concessionary fares.

A specific example of a difficulty caused by the abolition of the GLC is what has happened to the London taxicab scheme whereby certain categories of disabled people were able to use a taxi for a charge of £1, the difference in fare up to a maximum of £6 being paid by the local authority; in other words, by the GLC. A replacement scheme has been agreed by the individual London boroughs working in concert, except that Sutton, Hillingdon, Barnet and Bromley have decided not to participate and so certain disabled people, including some disabled elderly people, will be disadvantaged in relation to their counterparts in other London boroughs. Again this is a direct consequence of government policy and it has tremendous effects socially.

So all the difficulties that I have outlined—and I could outline many more had I time—are the direct result of government policy since 1979. Many of the concerns which I have expressed affect millions of other people as well as the elderly, on whom I have had to concentrate. In my view since there is no hope of any improvement—indeed, the proposals contained in the social security legislation which is to be debated next month in this House will worsen the situation—I can see no real solution other than a change of government, and the sooner the better.

6.59 p.m.

Lord Dean of Beswick

My Lords, I should like first of all to join previous speakers in congratulating my noble friend and colleague Lord Wells-Pestell on introducing this subject and giving us an opportunity to make our case regarding government policies and their effect on people. It would appear from previous speakers that the debate has in some respects been broken down by Members of your Lordships' House speaking for areas and more or less presenting the case as they see it for the areas from which they come. I have spent all my life in the North of England—eventually in one of the largest cities. I live in another large city, in the North of Britain. I think noble Lords will understand if I restrict my remarks to that part of the country.

I was extremely disappointed by the response of the Secretary of State to what I thought was an excellent speech by the mover of the Motion. The whole speech was riddled almost with self-congratulation and (dare I say?) self-deception. We did not hear anything new to help the situation. I am pleased to have the opportunity to take part in this debate and to comment on the implications of the present Government's policies for many millions of people throughout the country. I want to refer in particular to the growing disparities between the North and the South of this country and to the way in which Britain is to some extent being south-easternised almost by stealth.

We have across the country a record level of unemployment which has hit the North more severely than other areas. There is no apparant strategy for dealing with such regional imbalances—very little regional economic planning and no coherent strategy for regional development. Such mechanisms no longer find favour with the present administration, who in the main are content to let market forces dictate the economic future of the country. It is my contention that such an approach offers nothing to the millions seeking work or any solution to what is now becoming an increasingly divided society.

I should like to quote from an article which encapsulates what some of the argument is about. The article, entitled "Auf Wiedersehen, luv", appeared in last Saturday's Guardian newspaper. The article described how northern firms, particularly in the field of home improvements—double glazing and so forth—are now looking for work in the South because, to quote one company chairman: In the North demand is flat". The article highlights many of the issues that cause me and others so much concern—a buoyant economy in the South-East, families with money to invest in their property and of course the ever-widening gulf in house prices, making such an investment an attractive proposition for those in the South but beyond the reach of those in the North.

The article pays tribute to the high standards of workmanship of such northern firms, with wage costs being considerably lower than those of southern firms. I can only assume that such enterprise is what market forces or monetarism—call it what you will—is all about. The sad fact is that demand is flat in the North because of industrial decline. The money is not there for people to invest in that type of enterprise.

Unemployment figures have been bandied about. I should like to take issue with the noble Lord, Lord Elliott, who has just left the Chamber. He appeared to be somewhat complacent about the position in the North-East or to be satisfied with what is happening. Since 1977 the three northern regions—the North, the North-West and Yorkshire and Humberside—have lost 730,000 jobs, 64 per cent. of the total national loss. Of those, nearly 50 per cent. are long-term unemployed. The area about which the noble Lord spoke—Newcastle—has horrendous figures. In the main the position in the South, apart from some of the inner London boroughs, has remained static. There is not much evidence in those figures to support the Government's view that we are still one nation.

In Manchester, where I served for many years as a local councillor, the rate of unemployment stands at 23.8 per cent. Almost one in four of the city's resident workforce is unemployed. More than half of Manchester's unemployed have been without a job for a year or more and nearly one in five for more than three years. You can relate those figures—the figures are probably worse in Liverpool—to most of the cities in the North of England. This is a terrible waste of human resources and talent. They are desperate for the kind of capital investment that would allow them to deal with this problem.

The noble Baroness, Lady Fisher, spoke at length on housing. It is difficult sometimes to keep producing figures, but one has to produce figures to show the dimension of what is happening. The position this year is slightly worse than is shown by the figures given by the noble Baroness, Lady Fisher. Manchester City Council calculates that it requires £600 million to put its housing stock in good order in accordance with the recommendations of a variety of reports from non-political bodies and professional bodies. In 1985–86, Manchester requested £96 million. It was allowed as a borrowing requirement £36 million, which is just about one-third of the sum required.

Despite all the debates in your Lordships' House and in another place, despite speeches from all sides of the Chamber and the numerous reports to which I have referred, including the Duke of Edinburgh's report and Faith in the City, what have the Government done this year? Manchester has applied for £109 million in 1986–87, which probably includes an inflation factor and something else. Manchester has been granted £28 million, which is in effect a reduction. I do not have the figures for the other cities. I know how they are worked out, and the noble Lord, Lord Sefton, will concur with this. What happens is that bids are placed and you all get the same percentage of what you ask for. It is a reduction in every way you look at it. Twenty-eight million pounds is an £8 million reduction on last year. This is a city with appalling housing problems, just like most of the other cities.

My noble friend Lord Stallard referred to the Social Security Bill that is going through another place. The Government are currently taking legislation through the House of Commons to deal with what they consider to be defects in the present system of social security. One imagines that this would be welcomed. Let me tell noble Lords what it will mean for people in Manchester and for the city council, which has been forced to assume responsibiltiy for major areas of welfare provision because of the withdrawal by this Government of other facilities over a period of time. This can be applied to other cities and to the inner boroughs of London.

Housing benefit cuts to claimants will amount to approximately £9 million. The city council will also lose £12 million in housing benefit subsidy. Approximately 12,000 schoolchildren will lose their entitlement to free meals. That is how we are caring for our future. All tenants and ratepayers, no matter how poor, will be forced to pay 20 per cent. of their rates and/or water rates. Single payments for furniture, bedding and so on will be replaced by a cash-limited social fund. In Manchester the DHSS currently pays out three times the national average in single payments to claimants. The Government's proposed legislation will do nothing to tackle the problems of poverty in Manchester or in other large conurbations. It will merely place an increased burden on those least able to fend and provide for themselves. That is an example of what will happen in the very near future when we ask for increased resources and care for some of the more deprived in our society.

Noble Lords will recall that a few weeks ago I gave some statistics relating to Manchester during a debate on health on 26th March, reported at col. 1423 of the Official Report. With your Lordships' permission I shall repeat those statistics in the last few minutes that I have in which to speak. They come from a joint report of the three health authorities in Manchester and the city council: For example, areas with high unemployment levels will also tend to have high incidences of coronary heart disease and lung cancer. Those differences mean that, on average, Mancunians are more likely to die prematurely than their fellow countrymen". As I say, this refers to Mancunians, but one can apply it to other large cities and conurbations.

I quote again: Some examples of the scale of the problem are that between 1981 and 1983 over 5,000 Mancunians died before reaching the age of 65 years. That was almost 1,400 or 37 per cent. more than should have done had national trends applied. In parts of Manchester death rates due to respiratory diseases and lung cancer were over twice the national rate, while coronary heart disease accounted for almost 80 extra deaths per annum. That is the type of situations that some people think can be dealt with by using a broad brush on very broad canvas", and by leaving people who need aid to their own devices.

However, deprivation does not start among the elderly. It begins in these areas from the moment the child is born. I was not aware until I did some research that children born in these areas—such as the inner city area of Manchester and other inner areas of the big cities—are much smaller than those born in the more affluent areas. I understand that that is in the Platt Report. Evidence was given by my noble friend Lord Ennals that these children are much lower in weight and that the average child born in these areas is two inches smaller than those born in other areas. However, the most chilling statistic of those which emerged was that a child born in the inner city areas has twice the chance of dying in the first week of its birth than has a child in the other more affluent areas. Dare we say, as did the noble Lord, Lord Elliott, that we are one nation when there is that type of suffering being inflicted on babies as they come into the world?

I commenced by saying that I am a northener by heritage, breeding and up-bringing. I am extremely proud of my heritage. Bearing in mind the awful statistics for those inner city areas I hope that this debate—which has been so well initiated by my noble friend Lord Wells-Pestell—will move the Government out of their complacency towards understanding that a large number of people are suffering at the present time.

7.15 p.m.

Lord Hatch of Lusby

My Lords, I, too, am grateful to my noble friend Lord Wells-Pestell for initiating this debate. It should have been a debate about one or two nations. That it has not been is solely due to what we can see in front of us now: empty Conservative Benches. Indeed, if one looks at the list of speakers, one sees that out of the 20 speakers this afternoon 15 come from the Labour Party, four from the Conservatives, and only one from the Liberals or Social Democrats. Although the noble Lord the Secretary of State who opened the debate talked about philosophy—he at least used the word—it has not been possible to make this the kind of philosophical debate based on evidence which we should have in this House. I would make an exception only in the case of the noble Lord, Lord Elliott of Morpeth, who tried to put forward a coherent philosophy. I should like to refer to that later on.

The opening speech by the Secretary of State contained nothing philosophical. In his predecessor's day when the noble Earl, Lord Gowrie, was in that place, we were accustomed to having a true philosophical debate. I found the speech of the noble Lord, Lord Young, complacent, sterile and patronising, with no reference to anything that could be described in any way as philosophy.

The noble Lord, Lord Young, began, as he has before, by saying that he would not be here at the end—and I do not blame him after that speech. All we heard from him was the parrot-like repetition that one cannot cure social evils by public expenditure. There would seem to be a large divide between the noble Lord, Lord Young, and his Back-Bench colleague the noble Lord, Lord Elliott of Morpeth, who gave us instance after instance of how public expenditure and public boards could improve social conditions.

But I shall go beyond that. Who are we to listen to? Who are we to believe in the Conservative Party today? Which Conservative Party is it that determines policy? The noble Lord, Lord Young, tells us that we cannot cure social evils by public expenditure, but only last week his ex-colleague in the Cabinet had this to say: The elimination of social stress and the eradication of urban dereliction are not the natural hunting grounds for profit-seeking entrepreneurs left to their own devices". Those were the words not of a Socialist, but of Michael Heseltine last week on Merseyside, speaking as a man who has been in the Cabinet far longer than the noble Lord, Lord Young, but who seems only now to be contradicting what he, as a Minister with collective responsibility in that Cabinet, has been doing for seven years.

I want to talk simply about the issue of one or two nations. I shall not talk about the unemployed because that has been discussed widely during the afternoon. I simply mention that there are now 2 million more unemployed than there were when this Government came into office. They cannot escape that responsibility. If one has 2 million more unemployed, one has 2 million more poor households.

I want to speak for a moment on the personal issue. I returned last night from West Derbyshire. I invite the noble Lord. Lord Young, and any Member of the Government Front Bench, to return with me to West Derbyshire on Friday morning to meet some of the people I have been meeting over the past week. I do not have to talk about poverty being only among the unemployed. The workers in West Derbyshire are mostly either quarry workers or workers in the tourist industry—both low-paid jobs. Last week I was talking to a quarryman whose weekly pay is slightly above the old age pension. If one talks to the women—and a large number of women are employed in the tourist industry—one finds that it is not just the unemployed who are poor, but also people in full-time work, and, above all, those who can get only part-time work.

Come and talk to the pensioners, my Lords; talk to them about the loss of public transport in the rural areas, and hear about how they have to take three buses to get to hospital; hear about how a pregnant woman cannot get an ambulance to take her to hospital and has to travel by buses which run perhaps only once or twice a day. These are the realities. These are the people about whom we are talking.

Let me remind your Lordships—as my noble friend Lord Stallard has already emphasised—that the pensioners of this country are poor people. Nearly 2 million pensioners in this country are on supplementary benefit. One-third of all the widows in this country are on supplementary benefit. The Government admit that supplementary benefit involves a poverty test.

What did the noble Lord, Lord Young, tell us about the 571 old people who have died over the past four months from hypothermia? Is that part of government policy? Is that an example of the success of the social consequences of the Government's policy? I invite noble Lords to come with me to West Derbyshire to talk to some of the survivors and their relatives, because they will receive a very different answer from that which we received from the noble Lord, Lord Young, this afternoon.

Let me harden my view into national figures, showing that to talk about "one nation" is only rhetoric. The reality is that there are now two nations and those two nations are the rich and the poor. I address my remarks specifically to the noble Lord, Lord Elliott of Morpeth, because it is not worth trying to argue the matter with the noble Lord, Lord Young.

Since 1979 the gross earnings of the bottom 10 per cent. of employed men in this country have increased 69.5 per cent. But the increase in retail prices is 74.6 per cent. Therefore, the bottom 10 per cent. of employed men in this country are now worse off than they were in 1979.

However, let us look at the position of the other nation. The top 10 per cent. have increased their earnings—if you can call them earnings—or certainly their income by 101.2 per cent. The noble Lord, Lord Young, talks about pricing ourselves out of jobs. Who is pricing themselves out of a job? It must be the top men; the bottom men are not pricing themselves out of a job. They are receiving lower wages and lower incomes and so are their households—their wives and their families. I point out that these are all official figures.

Let us take the Government's test regarding qualification for supplementary benefit. In 1976 there were 4.7 million British people on supplementary benefit. By 1979 a Labour Government had reduced that figure from 4.7 million to 4.4 million. Therefore there was a reduction of 300,000. It was a slow process, but very important to those 300,000.

In 1983, the last year for which figures have been published, the number had risen to 7.1 million. From 1979 to 1983 the number of people on supplementary benefit had risen from 4.4 million to 7.1 million. Does that indicate one nation or two?

The noble Lord, Lord Young, talks about it not being the responsibility of government. Is that so? Let us look at taxation and national insurance. The noble Lord says that they do not matter. They matter to those people who are paying them; they matter to those who find their incomes being reduced because of the increased burden of taxation and national insurance. Again, let us consider the figures.

The noble Lord gave a selective example of a single man. I shall give real examples from the people to whom I have been talking in the past week in Derbyshire. Let us take the situation of the low paid family, and I emphasise "low paid". The government definition is a married couple with two children on half average earnings—fully employed, but receiving half average earnings. The taxation and national insurance for that low paid family has doubled since 1979. However, those who are earning five times the average income have had their taxation cut by 13 per cent. during the same period. Does that indicate one nation or two?

I wish that the noble Lord, Lord Young, had put some meat into what he claimed to be a philosophy, because there is a philosophy and we used to hear it from the noble Earl, Lord Gowrie. We had some good arguments and debates. The Conservatives believe in inequality; the honest ones say so, and they say why they believe in it. The Conservative philosophy is that inequality brings greater productivity, greater production and, therefore, greater national wealth, and that will trickle down to the whole community.

However, it has not worked. We have had seven years of it and it has not worked. Indeed, it has not worked by any test. It has not worked by the Government's own test. It has not worked by increased investment. It has not worked by increased employment, because we have 2 million more unemployed. It has not worked as regards trade, as was shown clearly by the report of the Select Committee of which I was an honoured member. It has not worked over seven years. However, what it has done is to deepen the difference between the rich and the poor.

A great deal of the money that the Government said would go into investment and the development of production in this country has gone abroad to the high interest rates of the Bahamas and elsewhere, starving our own industry at the same time. Therefore, the theory or philosophy which lies behind that belief in inequality has not worked by the Government's own test.

Like my noble friend Lord Cledwyn, I warn the Government that the public are against them. I have been talking to only a few hundred people in Derbyshire, and I shall not draw conclusions from that except that what I have found on the doorsteps in Derbyshire bears out national public opinion polls. On the national level, the commissioned public opinion polls show that 92 per cent. of the people of this country believe that the present poverty in Britain is important. I repeat, 92 per cent. take that view. The percentage is larger for the Labour Party than for the Conservatives, Liberals and Social Democrats, but of that figure 83 per cent. of Conservatives polled believe that poverty is an important and immediate issue in this country.

If we apply that test to the Budget, we find that 61 per cent. of the people of this country preferred that any surplus that the Chancellor had should go to the poor rather than to reducing income tax; only 27 per cent. preferred the policy which the Government followed in that Budget.

Therefore, I say to Members opposite: your own people—people like Mr. Heath and Mr. Heseltine, whom I quoted earlier—and your own people who voted for you in the last election are telling you that you are wrong. We will not tolerate this increase in poverty at a time of increased wealth in our nation.

I should like to ask the noble Baroness who is to wind up the debate two related questions. First, from the weight of evidence on this side of the House this afternoon, with scarcely a squeak from behind the Government, do Her Majesty's Government admit that the evidence shows that under their administration the rich have become richer and the poor have become poorer? Secondly—and this naturally leads on from the first question—in the wake of that evidence, do the Government still believe that this policy of deliberate inequality in our society is capable of regenerating the British economy?

7.29 p.m.

Lord Rea

My Lords, as the last speaker before the concluding speeches, I should like to thank my noble friend Lord Wells-Pestell for giving us the opportunity to put forward some of the less happy aspects or results of government policy. I hope that the noble Baroness who is to reply will not feel that this debate has been entirely in an attacking vein. Many speakers have put forward solutions, and I hope that the Government will take note of them.

As might be expected, I am going to look at a few of the effects of the Government's policy on health and the health service. The nation's health and the health service are not one and the same thing. Health depends on a far wider spectrum of factors than the provision of health care. It is easy to point to examples, as many of my noble friends have, of disruption and distortion of the NHS, but it is less easy to demonstrate that these disruptions have had a serious effect on health. In my view this is largely due to the dedication and professionalism of the many doctors and nurses who have had to work longer hours in difficult circumstances and carefully to concentrate their efforts on the critically ill. As a result some of those who are not quite so ill, who are recovering from illnesses or operations or who are awaiting admission to a hospital have had to suffer unexpected and unplanned waits to go into hospital or have found themselves discharged unexpectedly early.

Sometimes their admission is cancelled on the day they had expected to go into hospital. I have several examples of this among my list of patients in the Bloomsbury district. Many more patients than before are having to wait weeks and weeks for out-patient appointments. The waiting time for out-patient appointments in many specialties has increased. The problems of Bloomsbury are shared with many other health districts, as other noble Lords have mentioned. We have heard about Guy's, St. Thomas's and other districts.

The noble Baroness may say that this is part of the effect of applying RAWP—the recommendations of the Resource Allocation Working Party, rationalising the facilities between overprovided and underprovided parts of the country. But this scheme was devised for use during a period of growth in the National Health Service, and it was not designed to be applied within regions but between regions. The ruthless application of RAWP today is decimating once proud and world-famous teaching and research centres of excellence. I have seen it happening with my own eyes.

I am not against hospital closures as such. They may well be logical as health needs change. But just as hospitals need to warn general practitioners or district nurses if they are going to discharge someone unexpectedly, so the contraction of health facilities needs to be planned in advance. The present system of indiscriminate ward closures at very little notice, the temporary cessation of admissions and the sending home of medical students because there are no patients to teach on seem to me to be penny-pinching economy gone mad. It has made a lot of people disillusioned and a lot of people angry.

I could go on about the annoyances of working in the health service at the moment, but I should like to look at some general effects of the Government's policies on health. Health, says the World Health Organisation, is not merely the absence of disease but includes physical, mental and social well-being. Many speakers have spoken about unemployment Unemployment does not lead in this country to starvation or death from exposure, but the cost of preventing this happening is a major millstone around the Government's neck. The cost of keeping unemployed people from deprivation takes away sums from a whole variety of other, more contructive uses, and health and the National Health Service are two of those.

Unemployment affects mental and social well-being and the will to go on living. One recent study from the City University has shown that suicide among the unemployed is more than twice as high as in the rest of the population. Another well-known and careful study by Dr. Leonard Fagin called The Forsaken Families demonstrates how during a period of recession it is the families least able to cope who suffer most. These are the families most likely to have multiple needs, to make the biggest call on social security funds and to need expensive social support.

The boredom and lack of purpose in the lives of unemployed school-leavers is one of the factors—not the only one—behind the current wave of heroin addiction. Drugs relieve boredom, and their acquisition, usually by raising money by criminal activities, helps to provide excitement and a meaning to life. It is a major factor in the recent increase in crime.

I consider that the much publicised government campaign against drugs is concentrating far too much, in a punitive way, on controlling supply, and too little on the underlying causes or on the health of those with a drug problem. Many of your Lordships will have read of the plight of the Bethlem Royal. This was mentioned by my noble friend Lord Soper. It runs one of the few residential rehabilitation centres available in the National Health Service for drug abusers. It appears that one or more wards, or possibly the whole hospital, will have to close in order to balance the district's budget. The waiting list for admission is already far too long and will extend even more, or it may even have to be closed entirely. So much for the Government's priorities with regard to drugs. I very much hope that the noble Baroness in her reply will be able to tell the House that my information may be wrong here.

The Government have been so concerned with containing the cost of the National Health Service that they have neglected opportunities to tackle some of the basic health problems of the country. I mention, in passing, that an honourable exception is the recent agenda for discussion on primary care. I basically welcome the suggestions in that blue (or green) paper, but I hope that we shall have an opportunity to debate it and to look at the small print at a later stage.

I should like to mention two major health problems that ought to have been tackled more vigorously. These are child health and coronary heart disease. A crude but useful index of child health is the infant mortality rate. This has gone down as standards of living and the health service in this country have developed and new technical procedures for caring for health have improved. It has steadily gone down over the years. But other countries have done better than we have. We have been caught up and overtaken by Japan, Hong Kong, France, Denmark and Finland, and recently even Spain has caught up with us. This ties in with the remarks by my noble friend Lord Dean that many countries poorer than we are have better social services.

A characteristic of these countries is the small difference between the infant mortality rate of different occupational groups and classes. If the whole of the United Kingdom had the infant mortality rate of the better-off social classes, I and II, our rate would be equal to the very best in the world. If our national rate were even that of France, more than 1,000 babies who die each year would live.

The remedy for this state of affairs is to concentrate and improve services where they are needed. This is spelt out clearly in the Black Report and before that in the Court Report, both very much neglected and excellent social documents, whose recommendations would cost far less than unemployment benefit does at the moment, and the social security payments which go along with unemployment. We cry out if a child is killed by a terrorist attack, whether it is blown out of a Jumbo jet or killed in a laser-guided raid on Tripoli, but 1,000 babies are dying quietly each year in our country because of government inaction.

If we take coronary heart disease this country is in top position in the world. Some 30,000 men die each year before reaching retirement age, as well as many others suffering painful and disabling illness. There are two well-proven steps to be taken to cut down the risk of developing coronary heart disease. One is to stop smoking and the other is to cut down drastically on saturated, that is, mainly animal and dairy, fats. The Black Report in 1980, six years ago, suggested seven steps the Government could take to reduce cigarette smoking. So far they have taken only one of these, to put up the tax on cigarettes. I do not think that is enough really to deter people. I am still amazed that advertising of a lethal product is allowed when people can be put in prison even for possessing a far less addictive and no more harmful substance, cannabis.

The other thing that can be done is in relation to diet, which has been spelt out clearly by two authoritative and reasonable reports: the NACNE Report and the COMA Report. These have been out for four years and for three years respectively. Only this year are the Government putting into effect the recommendations on fat labelling from COMA. There is no agreed central policy in the Department of Health on food and health. Many of the agricultural support policies of MAFF and the common agricultural policy directly subsidise foods that contribute to coronary heart disease.

It is now accepted that coronary heart disease has its origins in childhood. In 1983 the Government commissioned a survey of the diet of schoolchildren. On 17th December 1984, in a Written Answer, I was told that preliminary results would be available in spring 1985. Last month, spring 1986, news was leaked that the findings showed that our children's diet was very bad, containing far too much fat and sugar and too little fibre. This important survey has yet to be published, although it is available. I have just picked up a copy from the Library today and I shall be studying it closely.

The report was discussed in "World in Action" on television on 15th April and several experts said that our school meals were worse than food obtained at home and were the kind of diet our children should be eating if we wished to maintain our leading position in the coronary heart disease stakes into the next century. I should like to ask the noble Baroness why there was a delay of a year in putting out this report and why it is only quietly available now on special request and has not been published? Could it be that pressure has been applied to suppress the results of this important survey, and, if so, by whom? One thing is clear. It was quite wrong for the Government to remove the requirement for school meals to conform to a minimum nutritional requirement in 1980. School meals have got worse. These nutritional requirements should be reintroduced as soon as possible.

I should not go so far as to adapt the warning on cigarette packets and say: This Government can seriously damage your health". But I do say that they are seriously impeding this nation's chance of improving its health. However, on a positive note I say it is not too late for something to be done about it. I hope it will be.

7.45 p.m.

Lord Underhill

My Lords, so that the Minister may commence her speech at the agreed time, I shall have to telescope my remarks or to cut some items out altogether. At the outset I should say how impressed all noble Lords were, I am certain, by the sincerity and the human understanding with which my noble friend Lord Wells-Pestell introduced this important debate. It is a tragedy that only two non-ministerial speakers from the other side have been attracted to take part in a debate that is really about human personalities in our country. Of the 20 speakers, 15 were my noble friends, and with a very impressive speech from the noble Lord, Lord Banks, in addition, they have presented a case dealing with quite a number of important problems covering a number of areas in this country.

I was re-reading the report of the Archbishop of Canterbury's Commission on urban priority areas, Faith in the City, the other day. In the introduction there is the paragraph: We have to report that we have been deeply concerned by what we have seen and heard. We have been confronted with the human consequences of unemployment". Incidentally, the one point I agreed with in the inadequate speech of the Secretary of State was the reference to the importance of the quality of life and values.

Continuing the introduction of Faith in the City, I find this is stated: many residents of urban priority areas are deprived of what the rest of society regard as the essential minimum for a decent life; they live next door to, but have little chance to participate in a relatively affluent society; by any standards theirs is a wretched condition which none of us would wish to tolerate for ourselves or to see inflicted on others". Later I find that in the latter paragraphs of Chapter 1 of the report the question is raised as to whether two nations are being recreated. The report says: the process of polarisation is a general one in Britain today The noble Lord, Lord Young, questioned remarks I made in a supplementary question a little while ago about the poor getting poorer and the rich getting richer. I hope that the noble Lord and the noble Baroness will be able to refer to the official statistics in Social Trends, published in 1986, which confirmed the fact that the position of the great mass of poorer households has declined while that of the better-off households has improved.

Chapter 8 of Faith in the City deals also with the decline in central government support. Noble Lords on these Benches and in many other parts of the House have stressed the steady drift downwards of the rate support grant. This is the way in which the nation as a whole is able to assist local authority areas, particularly those areas of deprivation and those areas where the needs are greater than in others. Who can deny that relationships between central government and local government have a considerable effect and have had a considerable effect on the social problems in many areas?

The Secretary of State said that Socialists believe in state control. Who has been endeavouring to stop the Government's central control of local authorities? It is surely Members on this side of the House. In 1978–79 the rate support grant was 61 per cent. of local spending and in 1986–87 it will have dropped to 46.5 per cent. Whatever else has been done about adjustments in rates and penalties, the system of GREAs (grant related estimated assessments) still remains.

The Government centrally—the state, using the words of the Secretary of State—are endeavouring to determine the needs element of all the local authorities. I know the problems that members of local authorities are facing in determining the priorities, which matters they will engage upon and which they will not. I know what my own daughter tells me. She is the chairman of a county council social services committee. They have terrible problems in assessing what are the priorities to be tackled, and that is due to a great extent to the Government's control of the rate support grant.

I must make one or two references to unemployment because the noble Baroness, Lady Gardner of Parkes, gave the impression that there are masses of vacancies all over the place. The figures that I have indicate that there is one vacancy for every seven unemployed claimants. We all see the press accounts of jobs that occasionally arise and where there is one job vacant and a thousand people are lining up rushing to try to get that one job. It would be wrong for anyone in this House to get the impression that there are hundreds of thousands of unemployed claimants who really are not seeking work.

Let us look at the position of youth. The number of young persons who have never had a job since leaving school totals 291,000. Some 85,000 of them are under 18 and have never had a job since leaving school; 56,000 are aged 18 and also have never had a job since leaving school; and 150,000 are aged 19 and over and also have never had a job since leaving school. We have the position that there are 1.25 million young people under 25 without jobs. Many noble Lords have expressed the problem that faces our country when we have such a vast number of young people who have never had a job and who have no expectation of a job. These are the youngsters to whom we have to pay considerable attention. Furthermore, 1.4 million of the unemployed—that is, 40 per cent. of those out of work—have been out of work for more than a year. More than half a million have been without work for three years.

As my noble friend Lady Fisher has said, these are just facts; but we are talking about human beings. It is of no use the government spokesmen, as did the Secretary of State today, continually giving us these assertions that things are moving. The Government claim that there have been new jobs created since March 1983. No less than 611,000 of that 700,000 are women's part-time jobs and not full-time jobs at all. The Secretary of State fails to tell us—and he is always talking about the numbers of those in employment, which is the important figure—that the numbers in employment have fallen by 1.8 million since the Conservative Government took office. These are not my figures; these are figures quoted by the Department of Employment Gazette. Manufacturing employment has fallen by one-quarter—no less than 1.8 million since 1979. I believe that we are alone among the industrial nations where that type of unemployment in manufacturing industry has occurred. Our manufacturing industry has lost a quarter of its jobs in under seven years.

It was interesting to listen to the noble Lord, Lord Elliott of Morpeth, who gave his account of Consett. We were all impressed with what he said about Consett; but as my noble friend Lord Cledwyn said to me, "This is like a beautiful flower in the desert". It is encouraging; but the deserts exist in Scotland, the deserts exist in North-East England and in the North of England; the deserts exist in the West Midlands; and the deserts exist in South Wales. These are the problems for our manufacturing industry, and this is where the problems are so acute. It expresses the case that we have for great public expenditure on the infrastructure of our country.

This was explained quite effectively in a speech by the noble Lord, Lord Banks. As he rightly said, the TUC has pressed for this and the CBI has pressed for this—that is agreed, but perhaps to a differing degree—and our own House of Lords Select Committee on Employment also pressed for this. I was impressed by the words of my noble friend Lord Hatch, who said that public work and development of this kind help to underpin the private sector. I think that that was a very important statement that he made and one which I hope the noble Baroness, when she replies, will accept.

Perhaps I may look at a few points in the education field. Apart from the turmoil which results from the present unfortunate dispute with the teachers, and despite what the Government say about expenditure, parents are worried about the shortage of books and equipment. The Minister said in another place that it is for local authorities and schools to decide on the balance of spending on these items, bearing in mind local priorities.

But, despite what Ministers have said, a recent survey by the National Parent-Teacher Association found that four out of five secondary school pupils are forced to share textbooks and that in over half the secondary schools only fund-raising by parents kept the classrooms equipped with such essential materials as exercise books. The Audit Commission estimates that there is a backlog of £500 million needed in school repairs. I noticed a report in the Financial Times of 9th April which stated: Britain, alone in Western Europe, is contracting its higher education sector. Only Portugal and Ireland have a lower proportion of 18 year olds entering some form of higher education than Britain's 13 per cent. The same report in the Financial Times went on to say that expenditure on further and higher education has been cut by about 10 per cent. in real terms since the Government took office.

One of the worst tragedies resulting from the Government's policies is that of housing. Housing has borne probably the most savage cuts since 1979. I am not filled with envy of anyone. My life has been quite happy and I have no envy of anyone, although the Minister seemed to suggest that practised in this House was the politics of envy. I am one who has always bought my own house. Even when I was married in 1937 on a salary of (what was it?) £4.15s.6d. a week, I bought my own house, and therefore I am not jealous of people who are owner-occupiers. But there will be masses of people who, by the nature of their jobs and by the nature of their low incomes, will want houses for rent. Public sector housebuilding reached the lowest figure since the 1920s—only about 40,000 in the year.

Is there not somewhere in the Department of the Environment files a report saying that some £20 billion is needed for urgent repairs to council estates? The Association of Metropolitan Authorities, of which, as most noble Lords know, I am the president, has estimated that in all there is a bill of £62 billion required for the public sector, for the private sector and for new homes really to bring our housing up to the standard at which it ought to be in a civilised society. I shall not go into all the details of what we are lacking; but local authorities are not even allowed to use the £5 billion of assets which they have and which could have been used to provide these new homes and to repair the property that badly needs repair. They are not allowed to use it.

I do not know whether the noble Baroness saw a statement in the Financial Times of 8th April when it reported a publication by the AMA dealing with the position of many persons who were encouraged to purchase their own council houses, albeit at very massive discounts. The publication reported the results of the AMA study into the mortgage arrears of council houses sold to tenants. Of those people, one in ten families became homeless because they were unable to pay the mortgage; despite the massive discounts that they had on the sales. In the last two years, the number in serious arrears—that is, in arrears over six months—has risen by 40 per cent. Encourage home ownership by all means, but not on the basis of those figures.

In conclusion perhaps I may say that of course the question of costs and expenditure must come into consideration, but what this Government always seem to reject is consideration of the social benefits of expenditure. My noble friend referred to the Transport Bill. We fought this on the question of one transport Bill after another; we even fought it on the question of the abolition Bill. Social benefits are important considerations.

This debate is not about who has the most compassion. I am certain the noble Baroness has as much compassion on these issues as I or anyone else; but it is the Conservative philosophy, if you can call a dogma and a doctrinaire outlook a philosophy, that is the problem. It leads to policies where people and social considerations are not placed as the important factors. That is why we on this side of the House have the Motion before us today. That is why we shall be putting before the country our new campaign policy of freedom and fairness—note the words "freedom and fairness". As my noble friend Lord Cledwyn said in his invigorating speech at the outset, what we are considering is the future of our country. That means the future of all the people of our country, and that is why this Motion is so important.

8.2 p.m.

The Parliamentary Under-Secretary of State, Department of Health and Social Security (Baroness Trumpington)

My Lords, I thank the noble Lord, Lord Wells-Pestell, for initiating this sometimes emotional, always interesting and wide-ranging debate. We have covered so many of the issues which are at the very heart of how we see our society that your Lordships will appreciate that I shall have to refer some points to colleagues, but I shall try to answer as many questions raised as possible. Of course, many answers to many questions are already in Hansard.

I suppose I should not do a tit-for-tat, but the noble Lord, Lord Wells-Pestell, the noble Lord, Lord Hatch, and the noble Lord, Lord Underhill, did point to a dearth of Conservative speakers in this debate. I point out that no Labour Peer except for the two Front-Benchers spoke in the Conservative debate on 23rd April on violent crime and the protection of the public, which also seems to me a fairly basic subject which interests us all.

It will not surprise your Lordships if I start from the base of my own department. The Government are fully committed to protecting the position of the least well-off in our society. I have said this before but it is well worth saying again, especially as some noble Lords seem to be in some doubt on that point. The noble Lord, Lord Wells-Pestell, appeared to think that his side of the House represents the only party which cares for people. How wrong can a man be? For instance—I say this in reply to the noble Lord, Lord Wallace of Coslany, as well—we are restoring the record cuts, cuts of over a third, that the previous Labour Government made in the health service capital programme. Members of the party opposite are keen to talk about so-called cuts made by this Government. Their memories are short.

My noble friend Lord Young gave examples of what this Government have done. My noble friend Lord Elliott of Morpeth gave other examples and used his long experience of the North-East to great effect. These were not dry statistics. As the noble Baroness, Lady Fisher, said, figures represent people and the ability of the health service to look after the ill and suffering. I could not agree more. That is what we in the Government care about and what we shall go on caring about and doing something about.

I refute the arguments of the noble Lord, Lord Wells-Pestell, and I was grateful to my noble friend Lady Gardner of Parkes for her informed remarks. Under this Government our hospitals are treating some 800,000 more inpatients than they were in 1978 under the Labour Government; 3 million more outpatients have attended hospitals; there has been a record number of kidney transplant operations: hip replacements are up by 40 per cent.; and more babies' lives have been saved from needless death. Spending in the health service is £950 million higher in 1986–87 than it was in 1985–86, more than double its 1978–79 levels, and about 24 per cent. ahead of general inflation.

As to the inequality of provision between the North and the South raised by the noble Lord, Lord Sefton, the distribution of money to RHAs which use the RAWP formula takes account of relative deprivation in certain parts of the country, as does the urban programme.

The noble Lord, Lord Wallace, raised the question of the NHS management board which is currently reviewing the RAWP formula. That will include a look at the problems of inner cities and the costs associated with medical teaching. The report will be ready by the end of this year. The noble Lord, Lord Rea, will want to know that the management board is also looking into the question of waiting lists.

The noble Lords, Lord Ennals, Lord Soper and Lord Rea, spoke about the Maudsley Hospital cuts. The Bethlehem and Maudsley SHA is considering various proposals for containing its costs. Some of the proposals being considered would affect the services mentioned by noble Lords, but recommendations will be discussed with my department before any decisions are taken.

The other key area of social policy where we are taking bold and decisive steps to secure much needed improvements is in social security. We shall have the opportunity, as the noble Baroness, Lady Turner, said, to debate the Government's proposals in detail when the Bill currently being considered in another place comes before your Lordships' House, and I do not have time to take up the noble Lord, Lord Dean, on his selective quotes from the green paper on the Government's new approach.

I should like to mention the single-parent families of whom the noble Lord, Lord Wells-Pestell, spoke. I acknowledge that one-parent families, as the final report found, tend to be less well-off than two-parent families and to rely more heavily on state benefits. That is why in our White Paper we repeatedly refer to one-parent families and include special provisions for them. On income support, there is lone-parent premium and the higher earnings disregard. On the family credit, lone parents will receive the same adult credit as couples and the one-parent benefit is disregarded. There is no intention in the Government's mind to change the structure of the one-parent benefit which has increased by 22 per cent. in real terms since this Government came to power.

With regard to housing benefit, one-parent benefit will not be counted as income. The lone-parent premium will be carried through into housing benefit. There is also preferential treatment in tax, as they get the additional personal allowance.

The noble Lords, Lord Banks and Lord Cledwyn, said that child benefit had not been uprated in line with prices. It is quite wrong to keep harping on about cuts in child benefit while at the same time ignoring what the Government are doing to ensure that help goes to where it is most needed. The Government are committed to bringing forward a balanced programme which will give all families a valuable contribution to the cost of bringing up children while directing extra help to low income families.

Although the November 1985 uprating of child benefit was less than the increase in the retail price index, the Government's record on family support over recent years has been well balanced. The level of child benefit from November 1985 compares reasonably with its value since April 1979. Those getting supplementary benefit are not affected by a child benefit increase of less than the RPI because child benefit is fully taken into account.

Also, many less well-off working families are being protected. Their increases of FIS and housing benefit more than compensate for the lower increase in child benefit. The increase of 10p a week from July 1986 for each child is slightly more than the rate of inflation. As for the future, there will be no change to the structure or character of child benefit. It will remain a universal benefit, not means tested and tax-free, and it will continue to be paid to the mother.

The noble Lord, Lord Banks, spoke about the number of families receiving family income supplement, which he said had tripled since 1979. That is not quite correct. I believe the noble Lord, Lord Cledwyn, also spoke about this. The number of families receiving family income supplement has increased from 80,000 in 1979 to over 200,000 now. That is an increase of two-and-a-half times. However, it does not provide support for the noble Lord's assertion that low wages are driving families into poverty. What it does reflect are the real increases in family income supplement, which means that more families are now entitled to receive it than in 1979. Since 1979 the family income supplement prescribed amounts have been increased by 17 per cent. in real terms.

The social effects of our proposals go far beyond simplification. For the first time the three major income-related benefits will be assessed on the same basis, and that basis will be net income. The result is not only streamlined benefits but also a structure that will tackle the absurdities of the poverty and unemployment traps at the roots.

Turning to the question of pensions, it is quite simply a fact of life that all attempts to increase occupational pension coverage over the last two decades or so have failed. No more than half the workforce are in a job which will give them a pension. A Bill shortly to be brought before your Lordships will change that. We believe that in future it will be, as it should be, the exception for people to reach retirement without some form of pension from their job. Because we are simplifying the rules for contracting out of the state earnings related pension scheme and because we are providing a worthwhile incentive to get more provision off the ground, we believe that those employers who, for understandable reasons, in the past have been reluctant to set up pension schemes will find it more attractive to do so. In particular, small employers will welcome the opportunity to contract out of the state earnings related scheme without having to make the open-ended promise of a salary-related pension.

The noble Baroness, Lady Turner spoke of the consensus on pensions having been removed. That consensus has ceased to exist. One cannot reconcile Opposition calls for a national investment bank and the direction of pension funds with consensus. The SDP have now called for a radical change to SERPS but cannot agree with their Liberal colleagues in the Alliance on what needs to be done. The noble Lord, Lord Cledwyn, suggested that pensions should be linked with earnings rather than prices. If the link with earnings were restored, the Government Actuary has estimated that for pensions and linked long-term benefits the additional cost would be £6.5 billion by the turn of the century. However, the Government have more than honoured their pledge to maintain the real value of pensions and a married couple's pension is now worth £3 per week more in real terms than in 1978.

The noble Baroness, Lady Turner, asked about occupational pensions being undermined by personal pension proposals. It is certainly not our intention, contrary to what the noble Baroness said, to undermine existing occupational pension schemes, but we are committed to giving every employee the choice of taking a personal pension. We believe that people who opt for a personal pension will do so because they wish to have a direct say in the investment of their pension savings or perhaps because they expect to change jobs frequently. We recognise that people cannot have an unlimited right to opt in and out of their employer's scheme. Once they have chosen a personal pension it will be up to the employer as to whether or not they can rejoin the scheme later on. We are also proposing that people who opt for a personal pension but do not change their job do not have an automatic right to transfer rights built up before April 1988 into the personal pension. This restriction is there specifically to protect the finances of occupational schemes.

The noble Lord, Lord Banks, spoke about the decline in education and three levels of provision. The Government are committed to giving parents the widest possible choice in selecting schools for their children's education, but they are not neglecting the state sector. Expenditure per pupil is now at the highest ever level: the pupil-teacher ratio is the best ever. I do not deny the need for more spending, but there is the need to be sure that current resources are being well spent and to take a view on what can be afforded.

My noble friend Lord Young referred to the need to bring education and work closer together. The Government have done a good deal to improve education and training opportunities for young people, particularly in the 16-plus age group. We have set ourselves a target: no young person should go out into the world of work without a relevant qualification or the prospect of obtaining one. We are well on the way to meeting that target.

I was grateful to the noble Lord, Lord Cledwyn, for his tribute to my noble friend Lord Young in respect of the part he has played concerning the Manpower Services Commission. The commision also provides many people with work-related further education, which is more relevant to them than anything previously on offer and has enormous benefits for society. Many health authorities—for example, South Tees, which I visited recently—make excellent use of MSC schemes and have found the commission's staff very willing to discuss difficulties.

The noble Lords, Lord Wells-Pestell, Lord Hatch and Lord Underhill, said that the rich had benefited at the expense of the poor. The country as a whole benefits by providing incentives to key individuals. That is perfectly consistent with wage restraint in industries and services, where we need to improve our competitiveness. It is consistent with benefits being increased by increases in the price level, or somewhat more. Pay increases for the higher paid often reflect performance bonuses and share option payments. Comparisons with 1979 will include the effects of widening differentials after compression during the Labour incomes policy.

I was very grateful to my noble friend Lady Gardner for quoting concrete examples of the cost of national health care, especially after the noble Lords, Lord Wells-Pestell, Lord Cledwyn, and Lord Sefton, had deplored what they regard as the immorality of private health care. There is a long tradition of private facilities complementing the National Health Services. Health care is expensive and if people can pay for themselves, who are we to deny them? It leaves more to care for those of us who are dependent on the National Health Service.

I regret that it is extremely difficult for me to answer all the questions that have been put in the time available to me to do so. However, there are just one or two things I should like to put forward. With regard to housing policy, the noble Lords, Lord Pitt, Lord Sefton, Lord Banks and Lord Carmichael, spoke about the planned level of public sector investment in housing. In fact it has been increased by £200 million for 1986–87. Earlier cuts were necessary to secure our primary objective of controlling inflation and achieving sustained economic growth.

This brief summary of the points raised by your Lordships will in itself show the length and breadth of the issues before us. I have been able to show your Lordships that this Government are already taking positive steps or have made clear equally positive plans for future action. We do not shrink from such action, nor from making it plain that, unlike the noble Lord, Lord Banks, and other noble Lords opposite, we do not believe unbridled public spending to be a cure-all for the social problems that we face. Our concern goes far beyond that easy and unrealistic "cop-out". We pin our faith on a sensible analysis of the problems and of the direction of resources to where they are most needed and where they will have most effect. I would say this to the noble Lord, Lord Cledwyn: it is on that and on care—in a deeper sense of that word which noble Lords opposite toss about—that our past record and our future policies are based and on which we are happy to stand.

Lord Wells-Pestell

My Lords, all I want to do is to thank everybody who has taken part in this debate tonight, in particular my noble friends whom I think succeeded in extending the debate so that it has been wide-ranging and very seldom overlapping. I wonder whether like me they will go away tonight, having listened to the noble Baroness, believing that we are living in Paradise. Whether I shall succeed in holding that view for any length of time I do not know.

The only other matter I should like to raise is this. I had good reason to believe that one of the bishops would have been taking part in the debate tonight. If I say this in the presence of a bishop, perhaps he will be good enough to pass it on to the right quarter. The bishops have so much experience in this field and have published a report in the name of the Church, and so it would have been useful had one of them participated in the debate. I beg leave to withdraw my Motion for Papers.

Motion for Papers, by leave, withdrawn.