HL Deb 07 December 1987 vol 491 cc35-60

4.49 p.m.

Lord Allen of Abbeydale rose to move, That this House takes note of the report of the European Communities Committee on Social Security in the European Commumity (3rd Report, 1987-88, HL Paper 12).

The noble Lord said: My Lords, I wish to begin by thanking the other noble Lords who have put down their names to speak in this debate.

This report on Social Security in the European Community by your Lordships' Select Committee was prepared by Sub-Committee C in response to a consultative document issued by the European Communities Commission. It was published with all the evidence some little time ago.

It is not perhaps the most exciting topic in the world and there was almost complete silence in the press when the report was published. An honourable exception was the Yorkshire Post, which managed to combine interest in what we had said about the movement of workers with recognition of the fact that the territorial title of the chairman of the sub-committee demonstrated that he came from that great county.

Although the topic lacks glamour, it makes up for it in importance. The sums involved in social protection schemes across the EC amount to something like 26 times the total EC budget. These are schemes which affect the lives of a great many people.

A lot of progress is being made in breaking down the barriers of trade in the Community but there has really been nothing comparable in the field of social policy. A little has been done, for example, in the way of poverty programmes, in arrangements affecting state pension benefits and over equal pay. However, the unemployed, the sick, the elderly and the disabled have not all that much to see as a result of membership of the Community. Even by 1992, to them it will still be essentially a European common market rather than a European Community and more concerned with the regulations about foodstuffs and toys than with the quality of life of the less fortunate members of society.

The issue today is whether the Community can be given a more human face. The powers are not lacking. Article 51 of the Treaty of Rome requires the Council, on the initiative of the Commission, to adopt such measures in the field of social security as are necessary to provide freedom of movement of workers; and Article 118 charges the Commission with the task of promoting co-operation between member states in the social field in a number of areas, one of them being social security.

Some time ago the Council of Ministers concluded that the Community would not be able to strengthen its economic cohesion without also strengthening its social cohesion and that social protection schemes were an important feature of social cohesion. We are only now beginning to consider ways of injecting some life into those splendid sentiments.

At the margins, social security provision could be relevant to the economic aspects of the Community in that they could affect competition policy. Member states might be tempted to bolster their competitive position by cutting back on social security expenditure. Indeed, for some time the French were muttering that the system in this country gave a competitive edge to United Kingdom employers. The movement of workers could be affected if they tended to move across boundaries towards the countries with the most generous social security provisions. In this context perhaps the Channel Tunnel will put us in the same boat—to use an appropriate metaphor—as the Continental countries with common land frontiers.

However, in our inquiry we did not come across hard evidence that either of these things had been happening, and in any case the issues go much wider than that. The sub-committee thought it opportune, and indeed overdue, that the Commission put round its paper designed to stimulate debate on these wider issues. We welcomed the opportunity of making a modest contribution at what is still an early stage of that debate.

It is perhaps as well to start with what cannot be achieved in this imperfect world. As our report shows, we concluded that there was no prospect within the foreseeable future of achieving complete harmonisation of social security provisions throughout the Community. Although many will regret this conclusion, I believe it is inescapable. The historical backgrounds of the different countries, the fact that social security policies are locked into national cultures and the differing political and administrative structures all add up to making it an impossible dream.

However, at the same time, it seemed to us to be highly regrettable if members of the Community drifted even further apart in tackling problems which in greater or lesser measure are common to them all. For example, all the member states except Ireland have the demographic prospect of society having to maintain an increasingly high proportion of the elderly. Long-term unemployment is something which the countries have to face as a persistent problem—a prospect not envisaged when the post-war social security systems were brought into being.

There are what are commonly described as the "new poor"—the young unemployed, the long-term unemployed and in particular one-parent families—who again exist on a greater scale than when the new system started, even in the Roman Catholic countries in the South. They may be the "old poor writ large", as one of our witnesses put it, but nevertheless they are a problem common to all member states. I add the disabled to this list. I hope that later speakers may have more to say about these groups, but for my part I must content myself with making the general point that these are common problems and it does not seem to make all that much sense for them to be tackled separately by each country without regard to what is happening elsewhere in the Community.

That takes me straight to the point that there is at present a marked absence of shared knowledge in this sphere. The one aspect common to nearly all our evidence was that, although the witnesses had very clear ideas about what they would like to see happening in this country, they had great difficulty in putting those proposals in a European context. We gather that even the Government when they embarked on their major social security review in 1983 found very little information available when they turned to Europe to see what might be learnt from experience there.

We dug out some information in our report which I believe some readers of the report have found of passing interest. However, it was clear to us that, first, there was no very large-scale research going on and, secondly, that the resources of the Commission were inadequate both to collect information and also to assimilate it and draw conclusions from it. There is a very big gap here.

We thought it desirable that the Commission should be better equipped to fill the gap. We thought that member states should be put under an obligation to inform the Commission of changes and innovations in their social security systems and in related areas, including benefits in kind such as health care. We also thought that the Commission should be so equipped that it could attempt to analyse the effect of current and proposed policies, do much more in the way of consulting interested bodies and organizations—a point we touched on in previous reports—and take a positive role in encouraging the adoption of the best practices. We hope that such a process might result, for example, in the adoption in all member states of what we describe as a "safety net", for example, for the long-term unemployed.

We are well aware of the problems of achieving this in our terms but we cannot think it right that there should be groups within the Community who are excluded from social protection; nor would we altogether despair of progress eventually being made over pension portability—to use that horrible word—despite all the very formidable obstacles. In short, we believe that that is an area which has been neglected for too long.

We appreciate that there are some signs of movement, some stirrings in the undergrowth. A group of officials, as it is described, for the Concertation of Social Protection Policies meets from time to time, although there is not all that much evidence of it getting to grips with these issues. The Social Affairs and Employment Committee of the European Parliament has been considering the Commission's paper. From conversations we had with it, it seems to have adopted an approach not inconsistent with that of Sub-committee C. In addition to some isolated pieces of research we know that a professor from Antwerp University has been officially commissioned to inquire into the definition of poverty in a European context.

All that does not add up to much unless there is a genuine debate on the issues raised in the Commission's document which forms the basis of our report. I am not at all clear as yet about the Government's reaction to that document. We shall learn tonight with great interest what it is. Do the Government share the view taken by some that nothing much need be done, on the argument that the development of the Community over the years will of itself be bound gradually to result in the Common Market becoming a genuine European community? Or do the Government see scope for positive action in that hitherto somewhat neglected area? If they do, what do they think of the suggestions made in our report? Have they any other positive steps in mind? Finally, do they see the political will being there to take effective action? I beg to move.

Moved, That this House takes note of the report of the European Communities Committee on Social Security in the European Community (3rd Report, 1987-88, HL Paper 12).-(Lord Allen of Abbeydale.)

5.2 p.m.

Baroness Cox

My Lords, I shall begin by saying how much I appreciated the opportunity to sit on the sub-committee. I found the inquiry immensely informative. I believe that the constructive contributions of so many witnesses have been reflected in the constructive recommendations which have emerged in the report. I deeply appreciate the chairmanship of the noble Lord, Lord Allen of Abbeydale, who so ably helped us to distill coherence from the abundance of significant and often fascinating material which was presented to us.

In my brief contribution to the debate, I wish to consider the demographic changes experienced by countries in the Community, with particular reference to the implications for the elderly and those who care for them. I have selected this theme because I understand that other Members of your Lordships' House will focus on other aspects of the report; for example, important issues such as the new poor.

When we look at demographic changes, we see a pattern in recent decades which is widespread throughout Europe. It tends to be characteristic of all industrial societies. I refer to a combination of a drop in the birth rate and a rise in life expectancy. The dramatic increase in longevity has been achieved through generally higher living standards, advances in medical science and better preventive health care. But, as is so often the case, in the field of health care and social policy, success breeds new problems especially as the increase in the numbers of people surviving to old age has in many countries occurred at the same time as the reduction in the size and proportion of the working population. As the Department of Health and Social Security memorandum points out: The demographic trend over the next few decades will create for all member states (with the exception of Ireland) a diminishing ratio of contributors to pensioners, both because of increases on longevity and because of the passage of the 'baby boom' generation into the retired population of the next century. The Government Actuary's Department suggests that the ratio of contributors to pensioners in the United Kingdom will fall to much lower levels than it is at present—from 2.3:1, which it is now, to 1.6:1 in the year 2030. According to the DHSS, other European countries will follow suit over the next 20 years.

One of the biggest challenges confronting all concerned with social security provisions is the need to find the means to provide financial support for the growing numbers of those who will reach retirement age and to enable them to enjoy a reasonable standard of living throughout the growing number of years of retirement that they may expect. Furthermore, consideration must be given to the needs of those elderly people, especially those whom we might call the older elderly, who will become subject to the frailties and infirmities of old age and who will therefore need some form of care.

I should like to highlight three inter-related problems that confront us: first, the problems of providing adequate financial support for the elderly; secondly, the problems of providing adequate social support for the elderly; and, thirdly, the problems of those who care for the frail and infirm elderly in their own homes.

First, financial support: there are at least two groups of elderly people who are especially vulnerable to poverty. In the memorandum submitted by Age Concern England, two poverty traps were identified: those into which some elderly women may fall and those afflicting the older elderly. I shall quote some of its evidence: Elderly single women are recognised to be the poorest of the poor elderly. During their working lives these women were badly paid and a wage-related pension is therefore inadequate…others have a reduced contributions record after leaving the labour force and returning late after bringing up children. Arrangements for the pensions of the widows of retired men often result in inadequate amounts for the surviving partner…this can be a particular problem when the man himself was low paid during his working life". Age Concern also comments that greater participation by women in the labour force and higher social insurance paymens will lessen that trend, but the below average wages of most women at work reduces its value for final pensions.

The second group of elderly people especially vulnerable to the poverty trap is the older elderly. I shall again quote briefly from Age Concern: Those who retired 10 years or more ago will not benefit from the recent new schemes of wage-related pensions now being introduced by many EEC countries. They must often rely on various types of minimum income guarantee, including social assistance, which is inadequate. This problem is likely to diminish over time, but meanwhile the current group of older elderly often have very low incomes. It is a problem which will remain, however, for low-paid workers as long as pensions are wage-related". The problems of inadequate financial support may be exacerbated by the various other problems which may affect old age, especially, "the ills which flesh is heir to". Many, especially among the older elderly, become frail, infirm and in need of help with the basic activities of everyday life. With the growing emphasis on community care, which apparently is policy in most if not all European countries, many frail elderly people who would previously have been in residential care will now be out in the community. At its best, community care can combine the ideals of independence and support, but at its worst, it may mask social isolation and physical neglect. The predicament of those who suffer may be hidden from view, because the community can be a very lonely place. Therefore great care needs to be taken in the implementation of the policy of community care for the elderly to ensure that those who are the most vulnerable do not sink into a black hole of desolate loneliness and neglect.

Of course many frail elderly people are cared for by relatives and neighbours and such care is often given with great willingness and affection. However, there are also often great costs involved for those who provide such care, and those costs may be financial and social and operate in the short and the longer-term.

This point was highlighted in the memorandum submitted by the Family Policy Studies Centre whose concern was expressed about what they call the "forgotten army of carers", especially women caught up in the "cycle of caring" who move from caring for children to caring for elderly relatives. The memorandum points out: Unlike married women caring for children, those caring for the elderly and disabled now have their loss of income recognised by the social security system, but at £23.75 a week, it is only a small substitute for full-time work". Of course women who remain out of full-time work to care for elderly relatives also suffer from loss of occupational pensions and from accumulation of career experience so that if and when they wish to return to work they are likely to do so at a lower level than those who did not take time out or who returned sooner. As Mrs. Rimmer from the Family Policy Studies Centre said in oral evidence: What I think is particularly lacking is not simply some sort of concerted effort to consider what pattern of services, and what balance of services, would be appropriate to carers themselves, whatever diverse situations they find themselves in, but also an emphasis on the employment impact of this on some women over their life cycles, and the extent to which they cart therefore generate under a national insurance system sufficient entitlement to a pension of their own, and during their lifetime accumulate capital sufficient to cushion them in their old age". Mrs. Rimmer went on to suggest that such problems will probably affect one in two women. One out of every two is likely to take time out of work to devote to caring responsibilities of some kind. She also suggested that it would be most useful if the Commission were to look at these problems in some detail.

That recommendation leads me into my concluding comments which relate to the need for more information—a need which has been emphasised by the noble Lord, Lord Allen of Abbeydale. As so many of the countries in Europe are facing similar challenges and problems, there is so much that we could learn from each other. It has been well said that a society can be judged by the way in which it cares for its most vulnerable members. Social security is by its very nature concerned with those who are vulnerable. Different countries have met the challenges of providing for those who are vulnerable in very different ways, reflecting each nation's own history, culture and social and political traditions. None has a perfect solution but we could all learn from each other's problems and achievements.

I therefore conclude by adding my voice to that of my noble friend Lord Allen of Abbeydale and to many others, including many of those who gave evidence to the Committee, by asking for more research-based comparative information on which to assess present policies and on which to base new policies. This would help us to ensure that those who are most vulnerable will not suffer needlessly in societies, many of which are among the world's wealthiest, and many of which are sufficiently affluent to ensure adequate financial and social support for all their citizens.

5.15 p.m.

Baroness Lockwood

My Lords, I too should like to thank the noble Lord, Lord Allen of Abbeydale, for the way in which he chaired the committee and for his very excellent introduction of the report this afternoon. It was a very interesting inquiry because of the information that was brought to the attention of the committee and also because so much information was missing. There was another sense in which it was interesting. As the chairman said when we interviewed our first set of witnesses, "It is a good idea to be taking part in a debate which is just beginning rather than one which is just ending." We hope that our report will be a contribution to that debate.

A number of issues have emerged, some of which are for long-term consideration and some for more immediate consideration. For more immediate consideration is the problem which both the noble Lord, Lord Allen of Abbeydale, and the noble Baroness, Lady Cox, have mentioned. That is the lack of information. There is a very real gap which makes it impossible to evaluate and compare the different systems within Europe. Even the 1979 Directive on Equal Treatment in Social Security—about which we have heard, and which some of us know quite well—was based on the principle of equality between the sexes. It was not concerned with social security coverage.

As the noble Lord, Lord Allen of Abbeydale, has said, there has been a concentration on economic and agricultural affairs. For example, we were told that of the Community budget, 65 per cent. went into CAP and only 0.019 per cent. into the second poverty programme. It is perhaps significant that the first meeting of Ministers concerned with social security was in June 1984 and it is obvious that their conclusion must have been what it was: that if we are to strengthen the economic cohesion within the Community we need also to strengthen the social cohesion. That is a view to which your committee subscribes.

As has been said, all the evidence and statements from witnesses agreed that harmonisation in the sense of a single social security system for the whole of Europe was neither desirable nor likely to happen given our different historical and cultural backgrounds and the different pace at which the economies and the political features have developed in different countries.

It was also pointed out that innovation could he valuable in setting new standards. Nevertheless, it emerged that it is possible to focus on some of the shared problems and the growing issues of common concern. As has already been indicated, these areas fall into four categories: the increasing number of elderly in the community; the growth in the number of long-term unemployed; the growth in youth unemployment; and the increasing number of single parents. I should like to concentrate on the area of single-parent families.

The Family Policies Study Centre in its evidence pointed out that currently there is no single generally recognised measure of one-parent families in this country, let alone at EC level. It went on to say that: Issues arise for example over the extent to which lone parents who are co-habiting, living in parents' households or with other adults can or should be separately identified". It drew our attention to the resolution passed by the European Parliament in 1986, which, among other points called upon the Commission to produce a common definition of "one-parent families".

Work in this area and in establishing longitudinal evidence, as the Family Policies Study Centre said—about how many people become lone parents at some time in their lives and how long they remain lone-parent families—seems essential.

In this country, we know, for example, that some 14 per cent. of families are headed by a lone parent. We know that approximately half of those are living on supplementary benefits. In other European countries the position is not so clear because of lack of evidence, but a Commission report prepared for a conference in Copenhagen in 1982 on one-parent families in poverty indicated, first, that the number of one-parent families had been rising throughout the whole of Europe and that it now represents an average of 10 per cent. of all types of family. In Europe, too, a high proportion are known to be people living at low income levels. This growth is largely due to the increasing incidence of marital breakdown. Even in countries where divorce is not legal, the separation of parents constitutes a growing problem. One-parent families arise from three situations: marital breakdown; widowhood and unmarried mothers. Of these areas, marital breakdown constitutes the largest group. Widowhood, which is the group best provided for financially, is now of less significance numerically in many countries. All three groups suffer deprivation in one way or another: financial, emotional, social isolation, homelessness, inequality in employment opportunities. Some single parents and their children suffer from all the deprivations.

From the evidence, and as many of us know from our own experience of encountering single parents, it is not merely a question of providing financial support through the social security systems. There is also a need to provide other social and economic support in the form of work opportunities, child-care provision, housing facilities, better opportunities for social interaction and so on. The policies of different countries emphasise different aspects. In some countries the emphasis is on assisting single parents to be self-sufficient through employment. In other countries, the emphasis is on the provision of a safety net. Very often, as in this country, it is on a means-tested basis. The incidence of employment varies from country to country. In the United Kingdom, 41 per cent. of single parents are in employment, compared with 89 per cent. in Denmark and 78 per cent. in France. All countries make some provision for child benefit. Some make provision for all children, irrespective of the type of family from which they come; others by an addition for single-parent families. Some make additional provision for different groups within single-parent families.

As many of us have argued for a long time, the best means of financial support is an adequate and non-means-tested child benefit which has the advantage of avoiding the pitfalls of the poverty and unemployment traps. It emerged that opportunities for employment are important, not only in the economic sense but in the sense of mixing in and being part of the whole community.

It seems to me that the issue of single-parent families is well suited to further community action in the context of common objectives and more coordination. The parallel of the equal treatment directives between men and women was discussed with the committee and they seem to provide a pattern which is a possibility. Single-parent families have featured as part of the Community poverty programmes but, as I have indicated, they receive only a very small percentage of Community funding. Although we understand that there is still a paucity of data and a need for research into the implication of existing policies, nevertheless we would not be starting completely from scratch in this area. A little work has already been done.

There is also an overriding common problem which is that in none of the European countries was the social security system developed on the basis of coping with single-parent families on the scale that we face today. There is also a great deal of interest in this subject among organisations and there is a certain amount of head of steam on the issue in all countries. In such a situation, a European directive might be appropriate, not imposing standardised benefits and services but seeking to work towards equal treatment for one-parent families in employment, housing and within the social security system. As with all the equal treatment directives, the principle would apply and would be operated within the systems of each individual country, so there would still be some difference and some flexibility.

As the noble Lord, Lord Allen of Abbeydale, implied in his speech, it seems that unless we begin to make some movement in social matters and in social security matters, the European Common Market, even with a single internal market, will not become a European community in the real sense of that term.

5.28 p.m.

Lord Banks

My Lords, as the first speaker who was not a member of the sub-committee, I can express the gratitude of the House to Sub-Committee C of the Select Committee for the production of this most interesting and thought-provoking report and to the noble Lord, Lord Allen of Abbeydale, for the way in which he introduced the report to us this afternoon. It is a paradox that while the possession of a highly developed social security system is one of the distinguishing marks of the member states of the European Community, certainly of the original members, nevertheless this is an area in which there is little concerted Community action. It is also an area, as all speakers so far have pointed out, where there is a lack of comparative information readily available, yet the sub-committee has managed to accumulate within the pages of the report a good deal of such information. The noble Lord, Lord Allen of Abbeydale, put the basic question. He asked whether social security policies have an impact on the operation of the Common Market. In theory the answer appears to be yes. People may move to a country where social security is at its greatest in order to have that protection. Employers who have an extra burden of national insurance and insurance contributions may be at a disadvantage competitively compared with employers in other countries.

However, in practice the answer appears to be no. Witness after witness before the sub-committee indicated that there was no evidence that either of those things happens. People moved in order to seek jobs and better prospects and social security was not uppermost in their minds. If employers had lower insurance contributions, that meant that taxation was higher and their employees would ask for higher wages. So it may be that there is no great impact on the operation of the market. But as the subcommittee and the noble Lord, Lord Allen of Abbeydale, pointed out, Article 118 of the Treaty of Rome charges the Commission with the task of promoting close co-operation in social security and other social policy areas.

The report makes very clear the considerable differences in the origins, the history, the benefits and the funding of the different national systems. There can be no doubt that harmonisation in the sense of standardisation is not possible. I agree with the subcommittee on that point. Even a measure of convergence would be difficult to achieve. Is it possible, then, to establish a common aim behind all the separate national social security policies? Other countries have put considerable emphasis on insurance benefits. These are often earnings-related, linked to individual previous earnings or to national average earnings, or to a mixture of both. There was some cutback in the 1970s but usually the benefits are set at levels in excess of British levels.

A study produced by the Dutch Government in 1983 showed that an average wage-earner, married with two children, would expect to receive sickness or disability payments, even after a full year off work, of more than 90 per cent. of previous net pay in the Netherlands, Belgium and Denmark; of 73 per cent. in West Germany; of 56 per cent. in France and of 47 per cent. in the United Kingdom.

The right to social justice is enshrined in the constitution of the Federal Republic of Germany. The state is committed to protect all its citizens against insecurity. A sudden drop in earnings or its possibility creates insecurity. Therefore earnings-related benefits are offered. The poorest are helped because all in a certain predicament are helped, regardless of resources. Social assistance on a means-tested basis is seen as a last resort and is administered regionally or locally.

The United Kingdom made moves along the earnings-related path with the state earnings-related pension and the earnings-related supplements for unemployment and sickness benefit. The present Government have reversed that trend. They have reduced the state earnings-related pension scheme's future benefits, but of course conditions in the United Kingdom are different because of the greater reliance on and development of occupational pension schemes.

They have also abolished the earnings-related supplements. The watchword is that help must be given to the poorest; help must be provided for those who are seen to be in the greatest need. There has been a great growth in the United Kingdom of dependence on means-tested benefits; on supplementary benefit in particular but also on family income supplement and housing benefit. Social assistance has increased on the Continent too, particularly since the emergence of large-scale unemployment, but to nothing like the same degree.

The British Government philosophy is well demonstrated in the freeze this year on universal child benefit and the increase in family credit as opposed to family income supplement. The trouble is that means-tested benefits have raised problems of take-up. The Government anticipate that only 60 per cent. of those who will be eligible next April for family credit will take up the benefit. Means-tested benefits create poverty traps. They are divisive and tend to divide the nation into "us and them". I should certainly like to see some reduction in the dependence in the United Kingdom system on means-tested benefits.

Is social security something for the nation as a whole, or is it state charity for the poorest? Which is right, the universal or the selective approach? The Commission might well promote discussion about that. I think the Commission should encourage discussion on the various problems that are mentioned time and again throughout the report—the ageing populations, about which the noble Baroness, Lady Cox, has spoken; the increase in the number of one-parent families, to which the noble Baroness, Lady Lockwood, has referred; large-scale unemployment, and the position of the disabled and the carers.

The Commission could perform a useful service by increasing the flow of information, as others have suggested. A simple comparative study is required. It would not be difficult to provide, because the information with regard to these schemes is not secret. It is available. What is required is for it to be collated. For example, the Federal Republic of Germany provides excellent booklets and leaflets in English setting out all the details of its social security scheme. While no standardisation is possible and probably no imposition of a minimum standard of benefit is feasible, nevertheless the Commission could draw up a charter for social security which would pinpoint the circumstances in which an individual could look to the state for financial assistance.

Such a charter should include a recommended minimum subsistence level, whether expressed as a percentage of average earnings or as a fixed real value. The drawing up of such a charter would be in keeping with the Commission's proposal in November 1986 that there should be an identification of key elements which all social security systems should eventually contain. I was interested in Age Concern's written evidence to the sub-committee, which pointed out: A simple to administer system would be the introduction of a basic income for all sectors of the population, including the elderly. This would guarantee to each man, woman and child the right to independent non-means-tested tax-free income sufficient to meet basic living costs irrespective of occupational or marital status. All other income would be taxable. This means that the basic income replaces existing income tax allowances for people with other income. It also replaces social security benefits for those who are retired or unemployed". The tax credit scheme which has been produced by my party goes far along that road but it does not offer the same basic income for those employed as for those unemployed. If that were possible on the lines set out in the quotation from the Age Concern evidence, your Lordships may imagine how it would help us in dealing with unemployment: no signing on for benefit, no black market problems and no means test when unemployment benefit runs out. I should like to see the Commission set up an inquiry into the working of such a scheme so that all the possibilities could be explored and widely discussed within the Community.

The promotion of discussion, the provision of comparative information, the identification of the key element which all social security systems should eventually contain, the establishment of a recommended minimum subsistence level, seem to me the modest but useful tasks on which the Community should embark. Although it might not be easy, the member states might, in addition, attempt to develop an agreed philosopy of social security.

5.41 p.m.

The Earl of Buckinghamshire

My Lords, if harmonisation of lawn-mower noise levels has occupied what many might regard as a quite disproportionate amount of the European Community's time and effort, the prospect of harmonising an area as vast and as complex as social security would no doubt take us into the 22nd century and beyond. But in a more serious vein, I should not want that rather irreverent sentiment to obscure or detract from the Commission's efforts to stimulate thought and discussion about member states' social security systems—not before time in your sub-committee's view.

As a member of the sub-committee which produced this report may I commend its contents to your Lordships? It is a wide-ranging, informative document which I believe both fulfils and progresses the Commission's intentions of stimulating informed debate. I should like to make some general observations on the report's findings before moving on to pension provision, not by any means a narrow subject but one with which I am most familiar.

The committee, as the report points out (and it is a point to which other noble Lords have already spoken) had some difficulty in acquiring up-to-date statistical and comparative information on European systems. Nevertheless, from the information available to us I was particularly struck by, first, the enormous variety and complexity of member states' systems; and, secondly, the wide divergences in the source and scope of funding, and in the administrative mechanisms of individual systems.

Thirdly, there is the fact that, as the DHSS pointed out in its supplementary memorandum to the committee, to some extent the centralised United Kingdom social security system has been better placed to meet the problems of rising expenditure, and more so than the more fragmented schemes of other member states. Finally—and perhaps inevitably—comes the conclusion, backed up by the excellent witnesses who gave evidence to the committee, that harmonisation of social security systems in any structural sense cannot be regarded as feasible in the foreseeable future.

This is not to say that harmonisation on objectives should be ignored. Indeed, the report recommends that this should happen. However, I think that even this would be a fraught area as specifics such as safety-net measures will excite discussions on quantum which will not be easily reconciled.

As we are all aware in the vigorous and sometimes partisan debate on levels of social security provision, the longer and broader term view is often ignored. This is regrettable not least because member states, as the report clearly shows, share many of the same problems. Financial strains are felt by all members of the Community and all have, and are continuing, to engage in efforts to contain expenditure.

In almost all states the rate of increase in social security spending has been slowing down. At the same time public expenditure has been subjected to more rigorous control. What this suggests—and what I hope your Lordships will agree—is that social security issues cannot be looked at in isolation. They must be seen in the context of fiscal and economic general policy.

As the CBI pointed out in its evidence, the central criterion in evaluating and assessing Economic Community proposals has to be the need to create an economic and social environment in the Community which encourages profitability and investment. This is the only sure way to create a solid base for expanding employment opportunities. Establishing a unified internal market is fundamental to realising the Community's real economic potential, and its achievement in 1992 will represent a major advance.

The short-term financial pressures, however, faced by most member states' social security programmes are largely due to the rising level of unemployment during the 1970s across the entire Community. In the case of the United Kingdom our loss of competitive edge, though partly due to the world recession, was also due in part at least to the lack of labour cost competitiveness. There are of course other reasons but those are at least two. The improvement in our competitive position is already helping to generate new employment, and this is leading in turn to a reduction in unemployment. It is important that measures to improve social security provision—and these are of concern to your sub-committee—should be at least designed to encourage and support such improvements.

Turning now, if I may, to pensions—and the noble Lord, Lord Allen of Abbeydale, can relax; I am not going to talk about portability! —the demographic trend over the next few decades, with the exception of Ireland, will create for all member states a diminishing ratio of contributors to pensioners. According to the DHSS this trend is likely to be less marked in the United Kingdom than in some other Economic Community countries—for instance, France, Germany, and Italy. We already have a high ratio of pensioners to active population.

I believe that the United Kingdom Government's recent radical review of the pension system is a good example of a member state anticipating, and responding to, changes in the structure of the working population. In order to give the public new opportunities and new choices in pensions it was not necessary to make a major revision of our financing methods in the private sector. Unlike many other states, we already have an occupational scheme system, generally with a mix of employee-employer contributions, plus support from general taxation via tax reliefs. Indeed the Commission's paper, to which this report responds, draws attention to the potential advantage of the advanced funding of pension arrangements. This, as your Lordships are all aware, is commonplace here in the United Kingdom.

As the House knows, steps have been taken to maintain the substantial funded element by permitting funded schemes to contract out of the state earnings-related scheme in the United Kingdom. It is worth noting that this facility is unique in Community countries, and it does not even extend to Ireland. A further move in this direction is to be made next year when members of approved personal pension schemes will be permitted to remain outside the scope of the earnings-related scheme.

I cite these changes to the United Kingdom pension provision as an example of the importance of the historic development of differing social security systems and schemes. The late development of the state earnings-related pensions in the United Kingdom compared with Germany, which pioneered the structure, meant that when earnings-related state scheme pensions were finally introduced into this country there was already a well-established private sector. This has given the United Kingdom a preeminent position in developing ways of integrating state and private pensions. The new legislation provides a framework which encourages private funding and allows the individual choice at a cost which should be affordable into the next century. It is this partnership between the employers, the employees and the state which other European states may well be advised to consider when, as I have no doubt they will find, their own generous levels of state pensions become too costly to support some time in the future. Indeed, we are seeing some moves in that direction already.

Despite the divergences of different schemes (including pensions and other areas which have been mentioned by noble Lords this afternoon) evolving from different traditions and in response quite frequently to different circumstances, the cross-fertilisation of ideas between EC countries remains very important.

The evidence of this report suggests that the members of the European Community have a creditable record in the provision of social security. There are of course always weaknesses, and again noble Lords have heard this afternoon about some of them. However, I would draw your attention to the fact that most members of the Community have a much more highly developed system than those of the wealthier industrialised nations outside Europe such as the USA, Australia and Japan.

As I draw close to the end of my speech, I am aware that I have concentrated perhaps almost totally on the economic aspects of social security. But the financing of these systems and the overall problem of public expenditure levels must be kept under constant review. We compete increasingly in a global market and not one that is purely confined either to the United Kingdom or to the EC. If we fail to compete both within the Community and externally then I am afraid that our social security systems will suffer, and the expectations of the needy and others that we wish to look after may well not be realised in full.

With that caveat firmly in mind I believe that this report is a helpful start in focusing attention on the desirability of the Community producing at least a coherent set of social policy objectives. I think that in setting those objectives we shall have major difficulties of getting down to detail.

I think it would be appropriate if I closed with a personal note of thanks to the noble Lord, Lord Allen of Abbeydale, our chairman. I do not speak on behalf of all the Committee members, but I know that we took the decision to go ahead with this inquiry with considerable trepidation. It is a vast subject and it is one where partisan views—and all of us have very different views on the requirements of social security—can play a major part. I think it reflects a lot of credit on the noble Lord, Lord Allen, that we have produced a report which I hope noble Lords will find informative and which will help us in our future discussions.

5.54 p.m

Lord Houghton of Sowerby

My Lords, it is a little disappointing to be the only vocal spectator of the team at work. Surely other noble Lords are taking an interest in this splendid report. I am happy that my noble friend Lady Jeger is to join me in cheering the team on, because this is the beginning of their work, and a long way they have to go. I shall come back to that.

To begin with I want to say how essential it is that the first thing we should always do about the European Economic Community is to reaffirm our faith in it, because I feel that experience has run rather ahead of our enthusiasm at times, and that has been a little less than good for all of us. We have witnessed the quarrelsome meetings in the EC summit, or the failures even when members have not quarrelled. We are led to believe that the EC bureacracy is more pettifogging than our own. Then of course there is the crowning imbecility of the agricultural system, which actually grows food to fill storage warehouses instead of feeding the starving people. Yet—and yet, I say—none of this, deplorable though it is, must weaken our conviction that in Europe lies our destiny. There is no alternative, although at times the Prime Minister behaves as if there were.

The EC and our membership of it has been my firmest political conviction for many years, transcending at times party allegiances and party considerations. I am sorry that the noble Viscount the Leader of the House is not in his seat for the moment, but I may now dare proclaim that at the time the European Communities Bill was before the House of Commons I led 67 rebel members of the parliamentary Labour Party into the Government Lobby against a three-line Whip to get it through.

Many is the time when the government of the day have been lacking the strength to put through a momentous decision of Parliament. That was such an occasion. Some of us had a very rough time afterwards and I sometimes wonder what would have happened had the government failed to carry that Bill on Second Reading. I have never regretted what I did then. I am sure it was right and I am sure that history will prove that it was a decision that the country wisely took then.

So when I had read quite a lot of the excellent report of the Committee, I turned to my copy of Encounter magazine and found to my pleasure a review there of a new book by Professors Hoggart and Douglas Johnson entitled An Idea of Europe. In the review of that book by Christopher Tugendhat in Encounter this week there is something which I hope your Lordships will permit me to quote: For the first time in the history of Europe a number of sovereign states have come together in a political system in which all are subject to the same rules, sovereignty is shared, co-operation the objective, and perpetual debate the norm. It is impossible to envisage a greater contrast than that between the spirit underlying the Community and the dreams of conquest and great-power compacts at the expense of smaller countries that have characterised all previous periods of European history. Just as the American Constitution at its birth was an experiment different from anything that had been tried anywhere else in the world, so is this. It represents a great ingathering of European peoples, beginning with six contiguous countries and now numbering twelve". That is the inspiration behind everything we should do on the EC.

I believe that the Treaty of Rome is more important than that which is to be signed tomorrow in Washington. The treaty to be signed tomorrow deals with a threat; the Treaty of Rome deals with reality.

I welcome the report. I think it is a splendid report, bearing the imprint of the studious care of the noble Lord, Lord Allen of Abbeydale, whose reputation as one of Whitehall's mandarins is well renowned. I think that it is a notable example of the way in which the foundations of the new European history are being laid and one should congratulate them all. An enormous amount of expertise and knowledge has gone into the report. It will be the foundation and the beginning of all the thought that will follow, and a great deal will be needed.

It is a pity that the Committee has encountered some of the problems and ambiguities in the Treaty of Rome: are matters within the terms of reference, or are they not? That is one of the disappointing features about our not being members at the inception of the EC. We should have had a hand in drafting the treaty, and we are much better at writing the law than anybody else in the world.

I am bound to point out that basically the European Economic Community, as its title implies, is an association to promote mutual economic interests. It is called a Common Market and we are reminded of that when, occasionally, thinking that the EC can do anything if it can only be minded to do it, we are told that some things are not within the terms of reference of the EC, or thought not to be. For instance, when we should like the EC to intervene and stop bullfighting in Spain we are asked whether it is within the scope of the Treaty of Rome. It is a deplorable spectacle to see the Italians shoot migratory birds by the tens of thousands for sport, dressed up as though they were big game hunters, but is it something which can be brought to an end by agreement of the Council of Ministers?

Let us suppose that I were to suggest that it is about time we harmonised the abortion laws of Europe so that we can stop talking with contempt about foreign women who come here to have the abortion which they cannot have in their own country. Is that within the scope of the EC? What about marriage and divorce and a great many other matters? If we stray from the economic basis of the Community we shall soon find what it is that will divide us, and it will be religion. Religion divides everyone and it will also divide the Common Market. We must not let that discourage us from doing as much as the unity of the Common Market and its terms of reference will allow.

I entirely agree with the conclusions of the Committee. I have only one reservation to offer and it is in respect of the conclusions on page 19. Paragraph 58 states: There should be a right to a basic level of social assistance throughout the Community". The words used are "a right". Paragraphs 46 and 47 do not state that it should be a right but that it should be provided. I do not want to cavil about the word "right" but I fear that we are laying down more rights, human rights, rights for every living creature than we can fulfil. They all spring from the goodwill and approach of human beings, but the establishment of rights should be approached with great caution, especially in the field of social provision. Matters will depend on whether there is the economic basis to fulfil them and much else besides.

I should also like to refer to paragraph 17 in the section dealing with demographic trends. As a spectator I can shout what I want at the team: "Don't do that", "You ought to have done something else". "Hooray!". Are the demographic trends of Europe to be left to the cause of human nature and be under no influence for the common good? Is there any real sense in an economic policy without an attempt to sketch out a match between economics and population? Many politicians are little better than one-armed bandits. They think that the more times one pulls the handle, the more the money will flow for everything one wishes. It is no good to talk about economic policy unless, in the end, one provides what is needed for social standards of us all.

What would happen to the world if China and India took no interest in the size of their populations? What about the teeming millions in the world who are starving? I suppose that we think that Europe is different and that we have no problems of this kind. Obviously we have but we do not recognise them. They are not sufficiently grave in our minds for us to grasp them fully and to act.

However, some interesting points are made in the chapter dealing with the evidence of the Family Policy Study Centre. One wonders whether it should have been called the Family Planning Study Centre because that is what population is mostly about. There are other factors which we must take into account alongside social policy. Health has a large bearing on social provisions, quite apart from population. One must also consider our national vices such as alcohol, tobacco, drugs and others that I shall not mention, and violence in society. What about education? All those things must come into the reckoning when one is looking for the foundations of the European Community with European citizenship and standards: in fact, to become Europeans. We are embarking on the concept of a European society and it will take a long time to build that up. We cannot have uniformity and harmonisation. We cannot always achieve harmony but we are getting on and I hope that we shall do so.

One of the purposes of our education should be to inculcate into the minds of the young the concept of European unity. We had Empire Day and Commonwealth Day but both have gone. Are we ashamed to have a European Day? Could we not explain it or would it not be popular? At least we could create the starting point of a nation of Europeans.

Noble Lords may think that that will be difficult but bear in mind that the English consented to become British; the Welsh call themselves British in moments of absentmindedness; the Scots do not easily take to it but nevertheless they are. However, it is important to note that the rest of the world regards us as Europeans. Let us live up to it. That is really what this report is beginning to understand.

I finish on a note of hope about the future of Europe. We must be realistic. I do not think that we ought to regard as sufficient to enable us to move forward a placid acceptance of membership of the EC. Our membership has to be active, inspired and courageous. Of course we shall have to meet many setbacks and disappointments but it becomes the statesmen of Britain who go to Brussels to represent this country to arrive there with a semblance of enthusiasm for the European ideal. Then there will be some hope for this country.

I sat in the Cabinet while one technological defeat after another had to be considered, as we failed to put through Blue Streak, TSR2 and other big, imaginative technological developments that we did not have the wherewithal or economic foundations to support. The lesson we learned is that there are some things that cannot be done other than on a European scale. I sincerely hope that that knowledge will be in the forefront of our approach to European matters.

6.10 p.m

Baroness Jeger

My Lords, we are all indebted to the noble Lord, Lord Allen of Abbeydale, for having chaired that interesting committee and to all members who served on it. I should also like to pay tribute to the many witnesses who gave such thoughtful evidence and who obviously took a great deal of trouble with it. I refer especially to some of the voluntary organisations, which do not always have vast resources to help them prepare their submissions.

As I was not a member of the committee, I have listened very carefully to all that has been said today, and I have read the whole of the report and the evidence. I do not count myself totally ignorant on the subject of social security, partly because for many years I served as a representative on the Council of Europe. During that time I had the opportunity of studying what was happening in such outlandish countries—according to certain noble Lords—as Sweden and Austria. I hope that we do not forget that Europe is not entirely composed of members of the EC and that there are lessons to be learned from all countries.

We are discussing a very complicated and wide ranging subject. I hope that the noble Earl, Lord Buckinghamshire, will not be too surprised to hear that I agree with some of his remarks; namely, that this matter has to be looked at within the context of the fiscal and economic policies of each country. Of course we shall never agree about the content of those fiscal and economic policies.

I also agree in some measure with my noble friend Lord Houghton, although he tried to take me down highways and byways on which I did not intend to follow him. However, I certainly agree that social security cannot be treated as an isolated subject. It is part of the fabric of the life of any country. Moreover, although we sometimes tend to think that social security concerns only the deprived people of a country, I submit that a full vision of a decent social security system embraces the whole population. It is part of what one used to call the social wage. and it affects the conditions of life of all people, whether they are employed—especially if they are receiving low wages—or unemployed, have children within a marriage or children while living in sin, or whatever may be the circumstances of their lives.

We must look across the whole spectrum of national policy. What about housing? What is the policy on rents'? Is the policy to offer subsidies or is any government which is a member of the EC allowing rents to rise more rapidly than people can afford to pay them and therefore encouraging a kind of self-inducing poverty? What about food prices? What about child care? I have always been impressed by the system in France of the Ecole maternelle which gives us such a splendid example of pre-school child care on a wide basis. It is not just for the children of the poor and unemployed: the schools are open for any child to attend.

What about charges for school meals? What about the cost of illness and how do costs differ in different countries'? What is the level of industrial injuries compensation? What about the low level of wages in some areas? What about the cost of transport and the torture of travelling that some people have to undergo? What about the high cost of fares to work'? What about all those things which go to make up everyday living? Noble Lords may feel that these matters have nothing to do with social security, but indeed they vitally affect the way that people live. What are countries doing through their taxation policies to alleviate the difficulties of those who are receiving social benefits? The noble Lord, Lord Banks, reminded us, as he often does, of the connection between taxation and social security benefits.

I am not insisting that the committee should have examined all those topics, but those who want to see the committee's ideas followed up on a European basis will want to relate the report to some of those other fiscal, economic and social policies which help to make social security—or social insurance, whatever we call it—a more realistic measure for the ordinary people of the countries concerned.

There has been a lot of sweetness and light during this debate but in conclusion I should like to say that many people believe, as I do, that the social security policies of the present Government will not improve the quality and serenity of life for our own people nor will they set an example to the governments of the EC.

6.17 p.m.

Lord Skelmersdale

My Lords, we are familiar with important and wide-ranging debates in your Lordships' House, but this debate has been exceptionally wide ranging, encompassing not only the broad field of social security in all its ramifications, but also its many variations in the 12 nations of the European Community and possible developments well into the next century.

Perhaps it is just as well that we are not covering countries such as Malta and Sweden and various others that the noble Baroness, Lady Jeger, knows so well. That gives me the opportunity to say that the House has been treated to a typically refreshing speech from that most "pro" of all pro-Europeans, the noble Lord, Lord Houghton of Sowerby. So far as he sticks to that point, I agree with him, but when he digresses into talking about the EC as a machine for social engineering on a large scale, I feel that that is not a path that I should like to tread, although as I know the noble Lord's background I am not surprised that he should hold that view.

I cannot hope to cover all the points which have been raised, so instead I shall concentrate on the main issues provoked by the report of the Select Committee which have been elaborated by different speakers today. The main thrust of the report was that social security should have a higher profile in Community policies, that there should be greater movement towards harmonisation of social security benefits and that the United Kingdom Government should give stronger encouragement to this movement.

From much of what we have heard this afternoon, one might be pardoned for believing that the European Community's policy on social security solely concerned the harmonisation of benefits. I think I should begin therefore by saying a few words about co-ordination. Harmonisation, after all, concerns the modification of national security systems to conform to certain common rules or guidelines. Co-ordination, on the other hand, concerns the inter-relationship between national systems so that they can work better in parallel, without necessarily changing their content.

While the noble Lord, Lord Allen of Abbeydale, has said there has not been a lot going for recipients of benefits in the Community to see, there has been, I believe, a great deal of progress in the European Community in co-ordinating national systems for the benefit of, for example, migrant workers. This has been achieved through regulations issued by the European Commission and administered in constant consultation with representatives and officials from member states. A large part of the jurisprudence of the European Court concerns the migrant worker regulations.

This is a dynamic area of law, policy and administration which has to evolve continuously to keep pace with the continual changes in national systems. The success of the European Community in this area has done much to make the free movement of labour a practical reality. The ordinary tourist as well as the migrant worker has also been able to profit from these developments, for the arrangements for medical care for temporary visitors is based on the migrant worker concept.

All this has been done without changing the content of any national social security schemes, but rather by defining the migrant workers' rights and obligations in their host countries and devising rules for calculating entitlements built up in working careers which may have spanned the frontiers of several different states. The achievement has been magnificent; but, whatever else it is, it is not harmonisation. Nonetheless, it is undoubtedly social security and it has figured frequently in the agenda of the bi-annual social councils. I must agree with the noble Baroness, Lady Lockwood, that normally this has been without the need for social security ministers to meet. Nonetheless, that does not mean that social services are seldom discussed in the European context.

Moving onto harmonisation, there is an area of harmonisation where, frankly, I found the Select Committee's report disappointing. It is the only area of harmonisation in which the Community has ever issued a directive, as opposed to non-binding recommendations and opinions. In fact, there have been two directives in this field and a third is in preparation. I refer to equal treatment between men and women in social security.

British Governments of both political persuasions have supported the Community initiatives in this field, on state schemes in 1979 and occupational schemes in 1986, although there have naturally been tough negotiations on points of detail. So harmonisation is not only about establishing common benefit standards; it is also about adopting common principles. The British Government's record shows that we are by no means opposed to harmonisation per se.Our attitude is that each proposal should be seen on its merits. In that we are probably in agreement with the Select Committee; but we are divided by the degree of caution and scepticism with which we treat some of these proposals.

To begin with, our experience with the co-ordination of social security systems has taught us that harmonisation of benefit levels is unnecessary to achieve some important objectives which were once considered unattainable without it. We can give continuing social protection to migrant workers without harmonisation and we can extend this to tourists and other travellers. I am not sure on first consideration that single-parent families lend themselves to the same treatment, as suggested by the noble Baroness, Lady Lockwood, but of course I shall consider this matter further.

Now that we know that the problems can be solved without harmonisation, the supporters of harmonisation have moved on, I suggest, to broader arguments, claiming that greater political cohesion is impossible without common social security and welfare systems. I must confess that I am sceptical as to whether the sense of national identity in the European nations is strongly bound up with their different social security systems. Indeed, as my noble friend Lord Buckinghamshire noted, federal nations—and I would add the United States to those—succeed in combining a strong national identity with considerable diversity between states in their welfare arrangements. Federal Germany, the largest of the EC member states, has a separate social assistance system for each of the Länder.Even the unitary states often do not have unitary social security schemes. And now it is suggested that harmonisation is essential not from the benefit angle, but from the contribution point of view.

Harmonisation of social security is claimed as a necessary part of the harmonisation of tax systems, essential for the achievement of the internal market. Naturally, I agree with the latter part of that sentence; I am suspicious of the former. We cannot say what developments may be appropriate in the distant future. But the programme to achieve the internal market by 1992 does not envisage any changes in social security arrangements for the very reasons given in the most interesting speech by the noble Lord, Lord Banks.

There are many more obvious changes to be made before we consider social security; and, indeed, care in the Community—a matter especially referred to by my noble friend Lady Cox—the point being of course that although certainly it is a goal worth aiming at, it is at the moment impossible to achieve on a European-wide basis with the differing needs and social backgrounds of the members of the differing nationalities.

The House may feel that the United Kingdom's social security is complex enough—and the Government have given a high priority to reducing that complexity—but we are the only member state of the European Community where the whole range of social insurance benefits, family benefits, means-tested help and special payments for disabled people is administered by one central government department. As the Select Committee itself points out, in other countries there is often a mosaic of autonomous schemes each with its own financing arrangements and providing differing benefits for differing occupational groups. Many member states are still a long way from achieving internal harmonisation of their social security arrangements. Portugal, Spain and Greece are only just beginning this process.

The particular measure therefore proposed by the Select Committee as a first step towards harmonisation is the establishment of a minimum level of social assistance. This may seem a logical one for a person from the United Kingdom where we have such schemes; but we should remember that we have an exceptionally comprehensive system of means-tested support for people in financial need to whatever category of the population they belong—elderly people, unemployed people, disabled people, single parents, and so on. In several member states this is the least developed area of social protection. Indeed, I note that it is not even called social security in most countries. It is often left to local authorities to run at their own discretion with no guarantee that all groups are covered. This is true of France, Portugal, Spain, Italy and Greece. Although the northern member states have more

comprehensive schemes none is as uniform as our system here.

It may interest my noble friend Lady Cox and the noble Baroness, Lady Lockwood, to know that the United Kingdom is the third highest spender in the Community on the elderly as a percentage of the gross national product. This comparison includes state and occupational pensions and spending on residential care, but excludes medical care.

That of course brings me rather quicker than I anticipated to the point that I wanted to make—that is, that I would agree with the Select Committee wholeheartedly that the bases for comparison within the Community are totally inadequate. But I shall say a little more about that in a minute. For now the imposition of a general income support system would, for about half the EC countries, go far beyond harmonisation; and I must say to members of the committee, in all honesty, that it would in my book be a radical innovation.

The Select Committee has suggested that the level of the basic assistance could be fixed as a percentage of the average wage in the country concerned, thus being adjusted to the general standard of living. There are technical problems there for countries with large numbers of self-employed farmers, shopkeepers or anyone else and where there are big differences in the spread of incomes within and between regions and differences in subjective perceptions of poverty. However, there is also a huge political and financial problem. Even though the social assistance level might be fixed at a lower level in absolute terms, in poorer countries they would still be being asked to spend money in areas where there is at present little or no expenditure.

I really do not think that this is a runner. Neither the Community nor anyone other than the country concerned can legislate for increased expenditure in this fundamental area. Indeed, an attempt to do so would meet the same reaction as noble Lords would give me if I introduced a Bill to make parents give their children more pocket money. If there were a transfer of resources I might just get away with it, but of course there would not be and indeed there is no immediate prospect that the European Community itself would be able to offer a transfer of resources. My noble friend Lord Buckinghamshire will note that the transfers required to make a standard basic level of assistance possible and acceptable would be very large by Community budgetary standards, carrying the budget far beyond its present ceiling with all the problems that that would bring. Furthermore, the flow of money into and out of Brussels would be on a new scale, permanently changing the nature of the Community. We do not imagine that the present levels of Community financial activity are permanent and sacred but I for one gasp at the thought of so great a change in the foreseeable future.

That is why in answer to one of the points made by the noble Lord, Lord Allen of Abbeydale, I do not think that in this case the political will is there. I would add to that by saying to the noble Lord, Lord Banks, that no government provide for the poor, pensioners, single-parent families or whoever, except by redistributing income from other sections of society. The Government cannot conjure up fresh resources from thin air. This Government's social security system is, I believe, better than most in redistributing resources from richer to poorer rather than recycling income at the same social level as do earnings-related pension schemes in most Community states. We cannot of course compel poorer states to divert to their social security beneficiaries resources that they do not possess. I repeat that this would mean a mammoth injection of finance into the Community system.

However, some forms of harmonisation are not only unnecessary and impossible, they are positively undesirable. Your Lordships' Committee has recognised this. Social security was invented in Europe and Europe has led the world in developing it. Each European nation has borrowed ideas from its neighbours and has in turn made its own contributions to the development of new arrangements and new principles. It is the very diversity of Europe which has made the launching and extension of fresh initiatives possible, which could well have been stifled had some international authority imposed a standardised régime across the continent.

However, as I have said, the British Government take each proposal on its merits. Where it seems necessary, practicable and desirable we will look at it further in detail. In the case of equal treatment for men and women, the proposals passed that test and we joined in voting them into Community law. We are definitely not partisans of harmonisation for its own sake.

Although I have been somewhat hard-hitting about some aspects of the report that we are debating tonight and perhaps the noble Lord, Lord Allen of Abbeydale, will criticise me for that, I should like to congratulate him and the Committee. I agree with the noble Baroness, Lady Jeger, that those organisations in the field such as the voluntary bodies which gave a wealth of evidence to the committee deserve to be congratulated. The result of course has been to achieve this debate on the Commission document which occasioned it. We wholeheartedly welcome that document and agree that all governments should consider the long-term future of their social security schemes.

That is why I should like to join those noble Lords who welcomed the opening of a debate on this particular subject. I believe that we in this country, of whichever political persuasion, are ahead of the game for we have already completed a major review and passed the necessary legislation. Many of the effects which will flow from our reforms will not be felt until well into the next century. We have been mindful not only of the burdens we can carry in this generation but also of the burdens which we can reasonably expect our children to bear.

The European Commission has not itself proposed any measures for harmonisation in its report Common Problems of Social Security.Instead it has proposed several research projects to be conducted at Community level. One noble Lord referred to the phrase "shared knowledge". I believe that that is exactly what we should seek in our first step of furthering this Community goal. That is shared knowledge on financial, demographic trends and new groups in financial need. The Government warmly support these proposals although we shall of course as usual seek to ensure that we get value for money and avoid duplicating work carried out elsewhere.

Finally, like the noble Lord, Lord Allen of Abbeydale, I think that the authors of Common Problems,as the Commission document is called, will be pleased to see that their report has indeed achieved its primary objective in this country, namely, to stimulate discussion. I know that the record of our debate will be read with interest in Brussels, Strasbourg and elsewhere in the Community. I wish to welcome the positive suggestions on harmonisation in the field of research that this report has brought forward.

6.36 p.m.

lord Allen of Abbeydale

My Lords, I shall only delay your Lordships for a few minutes. However, I am bound to say that the noble Lord invited me to be critical and I shall therefore make one or two comments. I had some difficulty in recognising the report that the noble Lord seemed to be discussing as the one that was laid before the House.

The report itself and my speech, which I may have put rather badly, explained why we could not go in for harmonisation. It was a little odd to find criticism being levelled at us and those who have spoken in the debate because of our concentration on harmonisation. There is also the point that we naturally took careful note of what was said by the noble Lord's officials about migrant workers. If I may say so, they had quite admirable evidence on that, but I obviously completely failed in my speech to explain why I at any rate thought that the issues went a good deal wider.

If the noble Lord will forgive me, I must say that he has been treating as firm propositions ideas which we merely floated for further dicussion. But I shall read his speech when it appears in Hansardwith great interest. Perhaps he would do me the courtesy of reading mine as well, as obviously I have completely failed to put over some of the points I was trying to put over.

I am most grateful to the noble Lords who have spoken and for the tributes that we have received to the work of the committee from the non-members of the committee with the partial exception of the noble Lord, Lord Skelmersdale. I also wish to echo the point made by the noble Baroness, Lady Jeger, about the valuable evidence we received and all the work which was put into the preparation of that evidence. However, I cannot help thinking that the noble Lord, Lord Houghton of Sowerby, was perfectly right when he said that in Europe lay our destiny. I am bound to go away from this debate wondering whether Her Majesty's Government have yet realised that.

on Question, Motion agreed to.

House adjourned at twenty-one minutes before seven o'clock.