Sitting of 6 November 1972

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  WALES

    Employment (Flintshire)
    Sir A. Meyerasked the Secretary of State for Wales what is the total number of new jobs announced in Flintshire since the grant of intermediate area status to the whole county.
    The Secretary of State for Wales (Mr. Peter Thomas): I know of about 400 new jobs likely to arise from projects approved in Flintshire since March. In addition 200–300 new jobs are likely to be created at the Hawker Siddeley plant at Broughton.
    Sir A. Meyer: Is my right hon. and learned Friend aware that that is a most welcome consequence of the Government's economic policies in general and in particular of the removal of the disabilities from which Flintshire has suffered to date as a result of being excluded from all intermediate assistance until the present Government took office? Will he accept that all this could be undone many times over were the rundown of steel-making at Shotton to proceed in such a way as to put 6,000 men out of work?
    Mr. Thomas: I am fully aware of the importance to the area of the employment opportunities given in the steelworks at Shotton. There have been moderately encouraging moves since Flintshire was made an intermediate area. The number of inquiries has trebled in the six months since then compared with the six months before.
    Mr. Barry Jones: Is the right hon. and learned Gentleman aware of the special problems of the borough of Flint? How many jobs are there for
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    that borough? Is he aware that the borough is grossly over-dependent on the ageing mills of Courtaulds?
    Mr. Peter Thomas: Yes. As the hon. Gentleman knows, I am fully aware that that area depends to a great extent on three major industries, of which Courtaulds is one.

    Residential Caravans
    Mr. Johnasked the Secretary of State for Wales whether he will order a review of the problems of residential caravan residents in Wales.
    The Minister of State, Welsh Office (Mr. David Gibson-Watt): My right hon. and learned Friend the Secretary of State for the Environment and I keep the problems of residential caravan dwellers generally under constant review.
    Mr. John: Does not the Minister realise that there is great anxiety upon these three sites about a number of matters—security of tenure, the ways in which people may dispose of their caravans when they move away and the terms upon which they may do so? Does he not think that the limpness of his answer betokens his general nerveless grasp of Welsh Affairs?
    Mr. Gibson-Watt: I do not think that the last part of that question is worth a reply. The National Federation of Site Operators and the National Mobile Homes Residents Association are in the process of drawing up a mutually acceptable model site agreement and the Government are in touch with the parties.
    Mr. Gower: Is my hon. Friend aware that the existing law, which results from the 1968 Act, passed by the Labour Government, is deemed by many people living on the residential site at Rhoose, in Glamorgan, to be somewhat inadequate to deal with the difficult problems which they encounter when they have invested rather heavily not only in the caravans but in the improvement of the sites around them? Will he look at that aspect of the matter?
    Mr. Gibson-Watt: I take the point. The Caravan Sites Act, 1968, gives some protection. We take the view that new legislation would be likely to dry up the supply of new sites and would not be in

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    the long-term interests of caravan residents, but I will certainly continue to look at the matter.
    Mr. Gowerasked the Secretary of State for Wales what representations concerning the use of the land he has received from or on behalf of residents at Court Farm Caravan site, Rhoose, Glamorgan; and what steps he will take to assist them.
    Mr. Gibson-Watt: Four hon. Members have written about the circumstances of the residents. I have also received representations from other sources. As my hon. Friend knows, court proceedings are pending and, therefore, I can make no comment on the situation until they are concluded.
    Mr. Gower: Will my hon. Friend take into account that the possible closure of this site will create emergency conditions over and above the sort of housing needs for which the local authority should reasonably be expected to cater? To that extent, it is possible that help may be available from the Department to the local authority to enable it to meet this emergency need?
    Mr. Gibson-Watt: The Cardiff Rural District Council is empowered under Section 24 of the Caravan Sites and Control of Development Act, 1960, to provide sites for permanent caravan dwellers, and compulsory powers are available to it. It also has powers as a housing authority.

    Health Service Reorganisation
    Mr. Rowlandsasked the Secretary of State for Wales whether he will make a statement on the report on the management arrangements for the reorganised Health Service in Wales.
    Mr. Peter Thomas: The report contains the recommendations of a steering committee set up to advise me on detailed management organisation within the proposed new health authorities. It was widely distributed, without commitment, to health and allied organisations in September in order that they may comment on it by the end of November. I shall not be forming conclusions on these recommendations until I have considered the comments.
    Mr. Rowlands: Does not the Minister think that the management consultancy and the steering committee should have
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    had the decency to consult the Welsh Hospital Board, the one representative body for Wales dealing with health, before publishing its report? In view of the considerable expense—over £70,000 paid out to an American management firm—will he now send it packing and reorganise the Health Service on democratic principles based on the 1948 Act?
    Mr. Peter Thomas: The steering committee, which was assisted by a study group which contained National Health Service officers and the management consultants referred to, made its own recommendations. The committee did not formally consult any authority although some authority members offered informal views. There were numerous informal discussions with officers of the Welsh Hospital Board and other authorities.
    Mr. George Thomas: Does the right hon. and learned Gentleman confirm the figure mentioned by my hon. Friend the Member for Merthyr Tydvil (Mr. Rowlands) of £70,000 spent on considering the reorganisation of the Health Service in Wales? Is he aware that we could tell him plenty of ways in which he could have spent that £70,000?
    Mr. Peter Thomas: The sum of money approximates to the figure mentioned by the hon. Member for Merthyr Tydvil and was the proper fee one would pay to management consultants for work which they did. I have already announced the figure involved.
    Mr. Alec Jonesasked the Secretary of State for Wales what representations he has received regarding the proposed reorganisation of the health services in Wales.
    Mr. Peter Thomas: I have received many representations mainly as comments on proposals outlined in the consultative document. Some are now coming in on the proposals in the White Paper and on the Welsh Health Management Study Steering Committee report.
    Mr. Jones: Does the Secretary of State realise that those of us on this side of the House who live in Wales and represent Welsh constituencies feel strongly that any Bill to bring about a reorganisation of the Health Service in Wales must be subjected to detailed scrutiny by

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    Welsh Members, that this can be done only if we have a separate Bill for Wales and that we shall not take kindly to a sell-out similar to that on local government reorganisation?
    Mr. Peter Thomas: I assure the hon. Gentleman that there will not be a sellout, as he describes it. The fundamental provisions will be the same for both countries. Differences arising from the proposal that there should be no regional health authority in Wales need occupy only a small part of the Bill, and hon. Members will have all the normal opportunities to examine and discuss its provisions. Discussions are taking place for this to be debated in the Welsh Grand Committee.
    Mr. Rowlands: Will the right hon. and learned Gentleman put pressure on the Leader of the House to change his mind about introducing a separate Bill? Is not this another example of the Welsh Office ducking its parliamentary responsibility in not being prepared to defend its Welsh proposals in a separate Bill before the proper Committee of this House?
    Mr. Peter Thomas: Obviously the hon. Gentleman did not listen to what I said. The fundamental provisions of the Bill will be the same for both countries, and it will be Statutes common to both England and Wales which will be subject to discussion and amendment. The one difference, which is the absence of a regional tier in Wales, will occupy only a small part of the Bill.
    Mr. Nicholas Edwards: Is my right hon. and learned friend aware that many of us on this side of the House who take a keen interest in these matters would regard it as an intolerable waste of parliamentary time if we had to discuss separate Bills dealing with virtually the same proposals for both countries?
    Mr. Peter Thomas: If there were two Bills, most of their provisions would be common. For that reason there would be duplication.
    Mr. George Thomas: Has the Secretary of State forgotten that he has executive authority for the Health Service in Wales, that he issued a separate White Paper dealing with the Health Service in Wales and that, having produced his own separate set, it is clear that either he does
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    not carry sufficient weight in the Cabinet to get a Welsh Bill or that he has been overruled by his colleagues?
    Mr. Peter Thomas: The right hon. Gentleman, not for the first time, is wrong. I have looked into the matter carefully. Appreciating all the problems involved in a separate Welsh Bill, I have come to the conclusion that it would be wrong to have a separate Bill.

    Health Centre (Pontllanfraith)
    Mr. Kinnockasked the Secretary of State for Wales when he anticipates that a health centre will be opened at Pontllanfraith, Monmouthshire.
    Mr. Gibson-Watt: The general medical practitioners have withdrawn from the scheme for a health centre which was approved last April. I understand that a local meeting is now being arranged to discuss the position.
    Mr. Kinnock: Does not the Minister agree that the people of this area have already waited an inordinately long time for civilised health centre facilities? Does he acknowledge that this delay is almost solely attributable to the social irresponsibility and selfish attitude of certain general practitioners in the area? Will he undertake to intervene and use his widely renowned powers of persuasion to try to convince these general practitioners of their duty to the community, which they are supposed to serve?
    Mr. Gibson-Watt: Without commenting on some of the remarks of the hon. Gentleman, I would say that it is my policy to encourage health centre development. No pressure can be brought upon general medical practitioners to make them practise from such centres.

    Country Park (Pembrey)
    Mr. Denzil Daviesasked the Secretary of State for Wales when the public inquiry will be held into the proposal by local authorities in Carmarthenshire to establish a countryside park at Pembrey.
    Mr. Gibson-Watt: Arrangements have been made to hold a public inquiry on 27th March, 1973, into the Llanelli Rural District Council's application to my right hon. and learned Friend for the confirmation of the Llanelli Rural (Pembrey Country Park) Compulsory Purchase Order, 1972.
    Mr. Davies: Is the hon. Gentleman aware that there is considerable suspicion in my constituency about the motives for calling this inquiry in the first place? Does he realise that the two private companies involved are controlled by one person and that neither has any title or ownership to any part of the land in question? Can he tell the House why this inquiry has been called?
    Mr. Gibson-Watt: An earlier inquiry in 1970 was concerned solely with the proposed use of the land in the Pembrey area by the Ministry of Defence. As to the suspicions to which the hon. Member refers, I would be prepared to talk to him personally about these, although I cannot add anything at the moment and would not support his anxieties.

    Private Houses (Purchase)
    Mr. McBrideasked the Secretary of State for Wales to what extent he has assessed the availability of all types of private houses for sale in Wales; and if he will obtain and publish information as to what extent mortgages are available for the purchase of these houses.
    Mr. Gibson-Watt: There are about 528,000 owner-occupied houses in Wales, any one of which might become available for sale. There are no financial restrictions on local authority mortgage lending and I am not aware of any difficulties in the private sector.
    Mr. McBride: Is the hon. Gentleman aware that the typical Welsh house buyer now earns £41 a week and makes mortgage repayments of £38 a month thus paying on average 21·4 per cent. of his income? In the face of soaring land and house prices in Wales and the difficulty of securing mortgages for wage earners, can the hon. Gentleman hold out any hope of Tory Government assistance to the wage earner, the young marrieds and the homeless in Wales as they endeavour, without the Government assistance which they should have, to secure a home of their own?
    Mr. Gibson-Watt: I would remind the hon. Gentleman that the position with regard to financial restrictions on local authority mortgages has been greatly improved under the present Administration. That is a point he should recognise.

    Steel Industry
    Mr. Barry Jonesasked the Secretary of State for Wales if he will make a statement on the future of Shotton steelworks.
    Mr. Peter Thomas: The Government have received the British Steel Corporation's investment proposals and are studying them urgently. It is not possible to comment on the future of individual works before this study is complete.
    Mr. Jones: Will the right hon. and learned Gentleman fight and fight again to save steel-making at Shotton? Is he aware that this steelworks, employing 13,000 men and facing 7,000 redundancies, is the economic linch-pin of North Wales? If the Government axe falls on Shotton will he have the guts, the spunk and the spine to resign his seal of office? Will he either get out or deliver the goods?
    Mr. Peter Thomas: The hon. Gentleman has had many discussions with me about this problem and he knows very well that I fully appreciate the social and regional implications in the reduction of steel-making at Shotton. He can be assured, as I have assured him before, that these matters will be fully taken into account when decisions are made.
    Mr. Roy Hughes: Will the right hon. and learned Gentleman also bear in mind that several large steel plants in South Wales are also under a serious threat? Does he appreciate there is deep anxiety among the employees at these works, such as those at Ebbw Vale, East Moors at Cardiff and Stewarts and Lloyds at Newport, which is already under threat of closure? Will he reassure the House about the steps he is taking to alleviate anxiety among these people?
    Mr. Peter Thomas: I accept what the hon. Gentleman says; there is anxiety and of course Wales is greatly dependent on steel. Naturally I wish to relieve that anxiety as soon as possible and reach a decision quickly. But big decisions are involved and they must not be rushed.
    Mr. George ThomasWhile I agree with the Secretary of State that big decisions are involved, as 70,000 of our men in Wales are engaged in the steel industry, may I ask him whether he is aware that his worth to Wales will be measured by

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    the degree that he can protect our steel industry?
    Mr. Peter Thomas: As the right hon. Gentleman will be aware, the British Steel Corporation has a duty to put forward its proposals about steel. The management of steel in this country has been vested in the corporation and it has made its proposals. The Government, taking into account all the social and economic interests, will have to come to a decision. As I have said, these are big decisions and must not be rushed.
    Mr. Jones: On a point of order, Mr. Speaker. In view of the wretchedly unsatisfactory nature of that reply, I beg to give notice that I shall seek to raise this matter on the Adjournment at the earliest opportunity.
    Mr. Ellisasked the Secretary of State for Wales if he will make a statement about the future of Brymbo steelworks.
    Mr. Peter Thomas: The Government have received the British Steel Corporation's investment proposals and are studying them urgently. It is not possible to comment on the future of individual works before this study is complete.
    Mr. Ellis: Is the Secretary of State aware that the present time appears to be appropriate for exorcising the spectre of the hiving-off of these works conjured up by the Government, and when it is exorcised, will he not agree the employees of the British Steel Corporation at Brymbo will have been firmly convinced that they are employed by one of the more viable, not to say juicy, steelworks?
    Mr. Thomas: Although I appreciate fully the social and regional implications of the reduction of steel-making at Brymbo, I must point out that all these matters will be taken into account before a decision is taken on these works.

    Imperial Chemical Industries Fibres, Pontypool
    Mr. Abseasked the Secretary of State for Wales if he will make a statement on his discussions with Imperial Chemical Industries Fibres, Pontypool, relating to the future of the fibres research and technical development departments.
    Mr. Peter Thomas: As soon as I heard of this regrettable closure I met senior company representatives and urged them to reconsider their plans, but they were unwilling to do so. I was assured that the rundown will be managed so as to relieve individual hardship and that the new investment of £2 million at Pontypool, which I welcome, should safeguard the future of the production plant.
    Mr. Abse: Before the Secretary of State begins to accept this closure as a fact, may I ask him whether he is aware that on Harlech Television on Friday night, under interrogation by the hon. Member for Monmouth (Mr. John Stradling Thomas) and myself, the Chairman of the man-made fibres section of ICI, however equivocally, suggested that he was open to still further persuasion as a result of talks that are now going on? In the light of that, will the right hon. and learned Gentleman, instead of being so despairing, again intervene and emphasise the social irresponsibility of a closure involving such a massive brain drain from Wales? When he does intervene, will he point out that the company will be leaving, if it does leave, nearly half a million square feet of laboratory and office space totally abandoned in Monmouthshire as a consequence of this flagrant act, so obviously against the interests of development in Wales?
    Mr. Peter Thomas: I can assure the hon. Gentleman that when I met representatives of the company I put forward as strongly as I could the case for retaining this research unit in Pontypool. They felt at the time that the arguments for moving were overwhelming. This is essentially a commercial decision and the Government would have no power to intervene if the company's decision was final. I am glad to hear what the hon. Gentleman says, that it is still open to persuasion.
    Mr. Jeffrey Thomas: In view of the mounting anxiety in Monmouthshire about this matter will the Secretary of State agree that he has given an incredibly complacent answer? Would he not further agree that the directors of ICI have behaved in a thoroughly diabolical and inhuman way about the whole affair? Will he look again at the many contracts which the Government have with ICI

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    with a view, if necessary, to those contracts being transferred to Monmouthshire?
    Mr. Peter Thomas: I assure the hon. Gentleman that I was not being in any way complacent. I expressed my concern because I regarded this as a regrettable decision. I was happy to hear from the hon. Member for Pontypool (Mr. Abse) that the decision was not yet final. I assure right hon. and hon. Members that I shall do everything possible to try to persuade ICI to reverse the decision that it has announced.
    Mr. George Thomas: In view of the statements by the Secretary of State and by my hon. Friend the Member for Pontypool (Mr. Abse), may we have a categorical assurance that the Secretary of State will see the chairman again and indicate to him that both sides of the House regard it as offensive that such a major concern should treat people as though they were chattels and not even discuss with them beforehand a major move of this kind?
    Mr. Peter Thomas: It is my intention to see the chairman in view of the remark made by the hon. Member for Pontypool (Mr. Abse) reporting that he said he was still open to persuasion. I assure the House that I shall follow this up.

    Children in Hospital (Report)
    Mr. Nicholas Edwardsasked the Secretary of State for Wales whether the Welsh Hospital Board has received its working party's final report on children in hospital in Wales; and what action has been taken to implement the recommendations of the interim report made in May, 1971.
    Mr. Gibson-Watt: The Welsh Hospital Board will consider the Report of the Working Party on Children in Hospital in Wales at its meeting on 8th November. The interim report was circulated to hospital management committees, their staffs and other interested organisations as a discussion document. The observations made on it have been taken into account in the preparation of the final report.
    Mr. Edwards: I am glad to hear that the final report has at last appeared, but was not the reason for the interim report that many of the recommendations were
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    urgent? Today, 18 months later, is it not time that they were implemented, especially those concerned with the visiting of children in hospital and the availability of beds for mothers with children in hospital?
    Mr. Gibson-Watt: I agree that the matter is urgent. I welcome the board's initiative in setting up the inquiry and I look forward to receiving in due course its advice on the report's recommendations.

    Opencast Mining (Abernant)
    Mr. Probertasked the Secretary of State for Wales what representations he has received from the Forestry Commission in Wales regarding the proposed extension of opencast mining at Abernant, Aberdare.
    Mr. Peter Thomas: None, Sir.
    Mr. Probert: Is the right hon. and learned Gentleman aware that his reply is more than a little disturbing since, over the years, my constituents have had quite enough environmental pollution and that any further extension of opencast mining, especially if it is associated with pit closures which throw hundreds of men out of work, will add insult to injury? Is the right hon. and learned Gentleman aware, further, that on the site in question there are many hundreds of oak and other fine trees which no amount of reclamation by the Opencast Executive will be able to restore?
    Mr. Thomas: I have noted what the hon. Gentleman has said. He will appreciate that the authorisation of my right hon. Friend the Secretary of State for Trade and Industry would be required before opencast mining could take place and that I would be consulted before a decision was taken. The National Coal Board has not yet applied for an authorisation.

    European Economic Community
    Mr. Cledwyn Hughesasked the Secretary of State for Wales how many officials will be seconded from his Department to represent Welsh interests in Brussels following the United Kingdom's entry into the European Economic Community.
    Mr. Peter Thomas: Staff who go to work in the European Commission will be servants of the Commission and not representatives of any national interest. Welsh Office officials are already in regular contact with Brussels and satisfactory arrangements exist to ensure that the interests of Wales are fully taken into account in the formulation of United Kingdom policy in the European Community. These will be reinforced if it should prove necessary.
    Mr. Hughes: Will the Secretary of State confirm that there will be Welsh officials permanently in Brussels? Is he aware that this is of cardinal importance to Wales in view of the need for a strong regional policy? If these arrangements are not agreed already, will he discuss the matter with his right hon. Friend the Prime Minister and with his right lion. Friend the Chancellor of the Duchy of Lancaster, who is the new Minister for Europe, because these matters are causing increasing concern in the Principality?
    Mr. Thomas: I do not know whether the right hon. Gentleman is referring to Welsh officials in the Commission. As I said, any officials in the Commission would be the servants of the Commission. As for our own delegation, one does not have regional interests, either Scottish or Welsh, represented on it. It is a United Kingdom delegation. As for individuals, I anticipate that many Welsh men and women, including some members of my Department, will respond to the recent advertisements of vacancies within the European Economic Commission. In my own Department, as the House knows, I have set up a new division to co-ordinate the Department's European work. The division is already in regular contact with Brussels. I regard this arrangement as the best one for safeguarding Welsh interests. Two of my Department's senior officials are spending four days in Brussels this week meeting both Commission and Community officials.
    Mr. Kinnock: What evidence did the right hon. and learned Gentleman, as Secretary of State for a region of Great Britain, give to the Prime Minister before be went to the recent summit meeting in Paris? The only evidence we have of the kind of representations which were made by the right hon. and learned Gentleman to the Prime Minister was the
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    very superficial piece of political confidence trickery when the Prime Minister came back and said that he had obtained certain regional safeguards. Will the right hon. and learned Gentleman now spell out those safeguards, since otherwise many doubts will remain in the minds of many hon. Members and of their constituents?
    Mr. Thomas: I do not know whether the hon. Gentleman knows how the Government machine works. I, as Secretary of State for Wales, was on the European Committee of the Cabinet which dealt with all these matters before my right hon. Friend the Prime Minister went to Brussels.

    Railways
    Mr. Colemanasked the Secretary of State for Wales what is his policy regarding applications for railway closures in Wales; and if he will make a statement.
    Mr. Peter Thomas: I am concerned to ensure that a most thorough examination is made of all the social and economic implications of any proposal affecting the railway services in the Principality.
    Mr. Coleman: Is the right hon. and learned Gentleman aware of the recently published plan for the future railway system of the United Kingdom? Does he think that the industrial development that he hopes will take place in Wales can take place if the railway system proposed in the plan for Wales is carried out? Will he now undertake that no approval of cuts will be carried through as are proposed in the plan for Wales?
    Mr. Thomas: The hon. Gentleman must not make remarks which mislead. There was no "recently published plan" for the future of the railway system. The plan to which he is referring, and to which so many hon. Members have paid so much heed, was one of a series of studies taking place in a Government Department and no decisions have been taken at all on any of the conclusions reached by any of that series of studies.
    Mr. Hooson: Does not the right hon. and learned Gentleman agree that these studies, which presumably are eventually to form the basis of decisions, should be published so that hon. Members from Wales and others concerned should know

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    the grounds on which arguments for and against are being made? Will the right hon. and learned Gentleman bring influence to bear on the Secretary of State for the Environment to publish these studies?
    Mr. Thomas: The hon. and learned Gentleman will appreciate that internal studies in a Government Department would not be published. The position is that no rail passenger service in the country may be withdrawn without the consent of the Secretary of State for the Environment, and every opportunity is given for a full expression of views. I am, of course, consulted before any decisions are taken affecting Wales.
    Mr. Coleman: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the reply, I beg to give notice that I shall seek to raise the matter on the Adjournment.
    Mr. Elystan Morganasked the Secretary of State for Wales if he will request the Graham Rees committee on transport in Wales to make an interim report on Welsh railways.
    Mr. Peter Thomas: I refer the hon. Member to the reply I gave him on 17th October.—[Vol. 843, c. 77.]
    Mr. Morgan: Does the right hon. and learned Gentleman recollect that when he announced to the Welsh Grand Committee on 15th December last the setting up of the Graham Rees committee, he gave the impression that it would be the report of this comprehensive study that would be the basis of strategic decisions to be made in Wales in regard to transport? Was he at that time the victim himself of a deceit in that he did not know that this plan was being prepared by the Department of the Environment, or was he perpetrating a deceit on the members of the Welsh Grand Committee in that he knew about the plan but gave them no inkling of its existence?
    Mr. Thomas: There was no deceit whatever. I announced the setting up not of a Graham Rees committee but of a study being undertaken by Professor Graham Rees for the Welsh Council, and I announced that the money entailed would be provided. That was what I announced to the Welsh Grand Committee. I hope I gave no other impression. It is not for me to dictate the scale
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    or timetable of that study. It is an independent and objective study and I hope that it will not be made into a political football.
    Mr. Morgan: Will the right hon. and learned Gentleman tell us whether he did or did not know of the existence of the other studies being made by the Department of the Environment?
    Mr. Thomas: I am fully aware that the Department of the Environment and British Rail have been conducting a series of studies and that to seize on one study and consider that that is to be the subject of a decision by the Government shows that the hon. Gentleman is wholly remote from the processes of Government.
    Mr. Rowlandsasked the Secretary of State for Wales whether he will make a statement on the recent exercise of his oversight powers as they relate to transport matters in Wales.
    Mr. Peter Thomas: I am in constant touch with my colleagues about all matters relating to transport in Wales and no decisions affecting the Principality are taken without full consultation with me.
    Mr. Rowlands: If the right hon. and learned Gentleman is indeed in such constant touch, was he in constant touch on 15th December last when he made his announcement about the Graham Rees committee? Was the right hon. and learned Gentleman aware of the study published in the Sunday Times, or did he read it for the first time then? Will he scotch the ideas in that study, which would wipe out every valley passenger service in South Wales?
    Mr. Peter Thomas: I repeat what I have said. As my right hon. Friend the Minister for Transport Industries has explained, no decisions have been taken on the shape of the future rail network. There will be full consultation before future policy is decided upon once the present studies have been completed.
    Mr. George Thomas: The right hon. and learned Gentleman owes it to the House to be more frank and forthcoming. Is he aware that he is giving the impression of trying to hide behind this

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    question? Was he aware on 15th December of the proposal that was leaked to the Press? If he was, is he further aware that he is open to the charge of deliberately misleading the Welsh Grand Committee?
    Mr. Peter Thomas: I admire the right hon. Gentleman for the tortuous way he approaches any of these problems. The position is that I was aware that these studies were taking place but I was not aware of an individual study. It has been explained to the House that this paper was one of a series of studies being prepared both in the Department of the Environment and also by British Rail, that no decision has been taken by the Government in respect of future rail services and that when a decision is taken as far as Wales is concerned I will be fully consulted. We will take into account all the representations being made and the Welsh Council will be consulted.
    Mr. McBrideasked the Secretary of State for Wales to what extent he has assessed the present and future railway service requirements of Wales; and from what sources he has received advice in relation to this matter.
    Mr. Peter Thomas: The needs of Wales are kept under regular review. In this, as in other matters, I receive advice from a variety of sources.
    Mr. McBride: lf, as the right hon. and learned Gentleman has said, he was consulted about the recently publicly leaked report from the Department of the Environment, has he, on behalf of Wales, stated his objection to the implementation of the proposals in the Cabinet? Has he been consulted about the map which is extant at Strasbourg showing the railway services of the Nine and indicating much worse rationalisation for Wales than is contained in the Department of the Environment report? Will he, on behalf of Wales, fight for the retention of the existing railway services in Wales which are so important in industrial, social and employment terms?
    Mr. Thomas: I am well aware of the anxiety which the hon. Gentleman feels about the future of rail services in Wales, and I have read his recent speech in the House, but he must not say that I have stated that I have been consulted about the publicly leaked report. As I have
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    said, I was aware that studies were being made, but I did not see any individual report. No decision will be taken about railway services in Wales without consultation with me and without full consideration of all the implications.

    A55, Northop
    Sir A. Meyerasked the Secretary of State for Wales when work is due to begin on reconstruction of the A.55 at Northop in Flintshire.
    Mr. Peter Thomas: I expect work to start within the next three months.
    Sir A. Meyer: Is my right hon. and learned Friend aware that this reply will give intense satisfaction in the village of Northop, where there has lately been a number of very serious accidents which caused grave apprehension in the neighbourhood? The Government's new, generous and sensible proposals for compensation will greatly relieve the minds of those liable to be affected by any realignment of the road.
    Mr. Thomas: I am grateful to my hon. Friend for what he has said.

    Disabled Persons' Vehicles (Sale)
    Mr. Johnasked the Secretary of State for Wales whether he will modify departmental rules of governing the sale to disabled persons of invalid carriages.
    Mr. Gibson-Watt: All matters relating to help for disabled persons are treated with particular sympathy, but I see no necessity to amend the departmental procedures to which the hon. Gentleman refers.
    Mr. John: Does the hon. Gentleman recollect that, in a recent case which is evidence of many more cases, a disabled person was given 14 days in which to pay the purchase price of a three-wheeled vehicle for the disabled that he was being offered? Does not the hon. Gentleman think that disabled people, who are in a lower income group generally in our society, deserve a somewhat longer period in which to pay the purchase price of such vehicles?
    Mr. Gibson-Watt: If the hon. Gentleman is referring to a case on which he and I have had correspondence, I would point out to him that we have consistently

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    shown our desire to help his constituent by exceptionally agreeing to the sale. The price agreed upon was generous and the gentleman concerned has expressed his appreciation in a letter dated 25th October.

    Regional Employment Premium
    Mr. Denzil Daviesasked the Secretary of State for Wales whether he will ask the Welsh Council to carry out a survey on the effects upon the Welsh economy of abolishing the regional employment premium.
    Mr. Peter Thomas: No, Sir. The council has already given me its views on the future of the premium.
    Mr. Davies: The right hon. and learned Gentleman's answer is predictable but disappointing. Will he tell the House whether it is the view of the Welsh Office—his Department—that the abolition of the regional employment premium will be beneficial or detrimental to the Welsh economy?
    Mr. Thomas: I do not quite know what the hon. Gentleman means. The view of the Welsh Office is the view which I expressed as Secretary of State for Wales. I accept that the premium has no doubt been of some value to Wales, but its impact cannot be isolated. What matters is the value of the total package of incentives, and the incentives which the Government have announced are now particularly attractive.

    Housing Finance Act
    Mr. Kinnockasked the Secretary of State for Wales how many local authorities in Wales have refused to implement the Housing Finance Act, 1972.
    Mr. Peter Thomas: Of the 168 local housing authorities in Wales, three have informed me that they still do not intend to implement the Housing Finance Act.
    Mr. Kinnock: Does the Secretary of State realise that the names of Bedwas and Machen, Merthyr Tydfil and Vaynor and Penderyn read, for thousands of people in Wales, as a roll of honour? Does he recall that in the account of the Downing Street talks which ceased last week it is reported that the Prime Minister was prepared to make concessions
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    after acknowledging the pressures that will result from the implementation of the Housing Finance Act? In the light of that, will the Secretary of State concede the claims made by these local authorities and declare the rents which they currently charge to be fair rents?
    Mr. Thomas: The three authorities to which the hon. Gentleman has referred have been in touch with me. Representatives of Merthyr Tydfil were seen by my hon. Friend the Minister of State last Friday and I believe that further meetings will take place. Vaynor and Penderyn will be having a meeting on 9th November, and I hope that Bedwas and Machen will reconsider the attitude they have adopted, no doubt supported by very misguided people.
    Sir A. Meyer: Will my right hon. and learned Friend take note of the incitement by the hon. Member for Bedwellty (Mr. Kinnock) to local authorities to violate the law? Is he in a position to estimate the number of needy families which have been deprived of a rent rebate because of the doctrinaire refusal by these authorities to implement the Housing Finance Act?
    Mr. Thomas: In the areas of all the authorities referred to by the hon. Gentleman there are many people who would benefit from the rebate allowances in the Act. I hope that the hon. Gentleman will be guided by his right hon. Friend who has given very sensible advice to all the local authorities in Wales.

    Forestry
    Mr. Probertasked the Secretary of State for Wales whether he will make a statement on the implications for Wales of the report of the Forestry Commission.
    Mr. Gibson-Watt: I assume that the hon. Member refers to the consultative document on forestry policy issued by the Government in June. Consultations on this are still in progress and all the implications for Wales will be taken fully into account before decisions are reached.
    Mr. Probert: Will the hon. Gentleman assure the people of Wales that the invaluable work of the Forestry Commission will not be eroded to the benefit of private woodlands owners and at the expense of the Forestry Commission?
    Mr. Gibson-Watt: I certainly agree with the hon. Gentleman that the work of the Forestry Commission in many aspects has been highly successful, but I hope that he will not be too derogatory about the work of private owners.

    Advance Factories
    Mr. Alec Jonesasked the Secretary of State for Wales what discussions he has had with the Welsh Council regarding the letting of advance factories in Wales.
    Mr. Peter Thomas: I keep in close contact with the Welsh Council on all matters related to employment in Wales.
    Mr. Jones: Is the Welsh Council satisfied about the presence in Wales of empty advance factories scattered throughout the Principality? In my constituency there are two such empty factories. One was previously tenanted under the Labour Government and one has been empty for more than two years. What is the Secretary of State doing about it?
    Mr. Thomas: I am myself concerned about empty factories, advance or otherwise, in Wales. Of the three vacant Government-owned factories in the Rhondda, the Department of Trade and Industry is negotiating with a prospective tenant for one and with a prospective purchaser for another. Last October three advance factories were allocated in Fishguard, Aberdare and Llanelli and two out of four nursery factories at Lampeter have been allocated.

    Horticulture
    Mr. Cledwyn Hughesasked the Secretary of State for Wales what steps he is taking to encourage horticultural production in Wales.
    Mr. Gibson-Watt: Our present arrangements provide substantial assistance to growers of horticultural produce in Wales through various schemes to help them improve their businesses and maintain their competitive position with overseas suppliers.
    Mr. Hughes: Is the Minister aware that there are many areas of Wales which are eminently suitable for the expansion of the horticulture industry by reason of the
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    climate and the soil? Is he further aware that new horticulture enterprises are not eligible for grants under the Horticultural Improvement Scheme although in wide areas in Scotland and under the Highlands and Islands Development Board considerable benefits are available which are not available in Wales? Will he and his right hon. Friend discuss with the Prime Minister and the Minister of Agriculture whether Wales can have the benefits which Scotland enjoys?
    Mr. Gibson-Watt: I well understand what the right hon. Gentleman says about the position of new businesses. He will know from previous office that the policy of successive Governments has been to encourage the improvement of existing businesses rather than the establishment of new businesses because of the keen competition the industry faces at home and abroad. Since 1960, over £1 million has been paid to growers in Wales.

    Accident Unit, Haverfordwest
    Mr. Nicholas Edwardsasked the Secretary of State for Wales what action has been taken to appoint a new consultant for the accident unit in Haverfordwest; and how many general practitioners have been recruited for permanent appointments at the hospital.
    Mr. Gibson-Watt: The appointment of an additional consultant has been approved and the Welsh Hospital Board is discussing the detailed working arrangements with the hospital management committee. Nine local general practitioners work at the hospital on a sessional basis but none has been recruited for permanent appointments.
    Mr. Edwards: Although the appointment has been approved, no consultant is actually working in the hospital. As 18 months have passed since the Report and people's lives are daily at stake, will my bon. Friend give the matter his personal attention and do his best to ensure that the problems are overcome?
    Mr. Gibson-Watt: Yes, I give that assurance. The appointment of a new consultant will make necessary changes in the working arrangements of other consultants and these are taking time to resolve. The hospital board is doing all it can to reach early agreement.

    Sully Hospital
    Mr. Gowerasked the Secretary of State for Wales what new long-term plans he has for making use of the Sully Hospital at Sully, Glamorgan.
    Mr. Gibson-Watt: I am awaiting the Welsh Hospital Board's proposals for the future of this hospital.
    Mr. Gower: In his assessment of this problem, will my hon. Friend bear in mind that this is one of the few hospitals in Wales which has a truly international reputation, and will he ensure that at least some use is made in the future of its magnificent facilities?
    Mr. Gibson-Watt: I gladly pay tribute to the work that has been done at Sully. I have asked the Welsh Hospital Board to give most careful thought to the long-term future of the hospital to ensure that its full potential is realised and the maximum use made of its excellent facilities.

    New Towns (Mid-Wales)
    Mr. Elystan Morganasked the Secretary of State for Wales if he will give further consideration to the designation of more towns in Mid-Wales under the New Towns Act, 1965.
    Mr. Gibson-Watt: I keep this matter under continuous review, but have no immediate plans for designating other new towns in Mid-Wales.
    Mr. Morgan: Will the hon. Gentleman accept that a very substantial body of opinion in Mid-Wales—people of all shades of political views—believe that the only way in which the economic debilities of Mid-Wales can be overcome is by the injection of substantial finance from the central Government? Since under the present machinery it would appear that the only available source of finance is that provided under the New Towns Act, 1965, will he give urgent consideration to the adoption of new towns for development within that scheme?
    Mr. Gibson-Watt: I have noted with satisfaction the progress made in the new town; indeed its population has increased by several hundreds. A good deal has been achieved in other growth towns in Mid-Wales. For example, in Welshpool and Llandrindod there has been a marked
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    increase in population without the assistance of a new town development corporation.
    Mr. Hooson: May I reinforce what has been said by the hon. Member for Cardigan (Mr. Elystan Morgan) and ask what steps the Government have taken to implement the growth towns policy—a policy which they proclaimed they would implement two years ago?
    Mr. Gibson-Watt: There is a review in progress on the subject of Newtown. It is well advanced and should be substantially completed this year.

    Council Tenants (Rent)
    Mr. Roderickasked the Secretary of State for Wales what proposals he has to reimburse those local authority tenants who will have paid more than an additional £26 in rent in this financial year.
    Mr. Gibson-Watt: Local authority tenants are entitled to reimbursement of rent under the Housing Finance Act, 1972, if the rents they are paying are above the fair rent determined by the rent scrutiny board.
    Mr. Roderick: The Minister seems to have misunderstood the Question. Under Section 63 of the Act tenants who did not pay 50p in April or who paid something less will now have to pay 75p more. Can the Minister take steps to correct this anomaly in the Act?
    Mr. Gibson-Watt: In some cases tenants will be paying rent increases of more than £26 during the current financial year, but that is subject to the statutory maximum of £1 a week.

    DETECTIVE INSPECTOR RONALD LARBY
    Mr. Arthur Lewisasked the Attorney-General whether he will cause an investigation to be made to ascertain why, in view of the fact that Detective Inspector Ronald Larby was found guilty of several offences whilst serving in the police force, that he then resigned, that prima-facie evidence exists and was submitted to the authorities in January, February, March and July, 1972, by Mrs.

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    K. Bruce of Essex showing that ex-Detective Inspector Larby was guilty of unlawful entry and theft, the Director of Public Prosecutions refuses to prosecute.
    The Attorney-General (Sir Peter Rawlinson): No, Sir. This matter has been fully considered by the Director of Public Prosecutions who has come to the conclusion that the evidence is not strong enough to justify criminal proceedings for unlawful entry or theft, and I agree with his opinion.
    Mr. Lewis: Did the Attorney-General look at these papers personally? Is he aware that this detective-inspector has an unsavoury record, has committed criminal offences and planted a gun on one of my constituents for which offence he is now serving a term of imprisonment? Is it right that the evidence which has come out since the trial should be used against a man who is now in prison because of the irregularities and illegalities of a crooked detective-inspector?
    The Attorney-General: The criminal allegation to which the hon. Gentleman refers in his Question referred to that made by Mrs. Bruce. As I understand it, the allegation was that this man entered her house without permission—she was a lady with whom he had been associating—helped himself to a glass of whisky and, after writing a note, left. In those circumstances the Director did not think he would prosecute.
    Mr. Lewis: On a point of order. Since the Attorney-General has not told the House the facts, I give notice that I shall seek to raise this matter on the Adjournment.

    CRIMINAL TRIALS (DELAY)
    Mr. Croninasked the Attorney-General what further steps are being taken by Her Majesty's Government to reduce the delay in trying criminal cases.
    The Attorney-General: There is no serious delay in trying criminal cases except in London. My noble Friend is continuing to take urgent measures to reduce the delays in London, in particular by the provision of additional court rooms.
    Mr. Cronin: In view of the great increase in crime which has occurred since
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    the present Government have been in office, is there not a case for substantially increasing the number of courts in the London area to try these cases? Is it satisfactory that people who are acquitted are sometimes remanded in custody for four to six months?
    The Attorney-General: I am surprised that the hon. Gentleman should have preface his supplementary question with that comment. If I may return to the serious part of the question he posed, I agree that there is a problem in London: whereas the period outside London in regard to somebody awaiting trial might be only six or seven weeks, in London it is about 14 weeks. There has been the provision of 31 court rooms in the last two years and a further 10 will be brought into operation next year. In addition, 15 judges and 17 recorders have been appointed to the circuit. Nevertheless, there is a problem and it must receive urgent attention.

    SOUTHERN RHODESIA STOCK
    Mr. Wallasked the Attorney-General if he will make a statement on the future payment of interest to the United Kingdom holders of Rhodesian Government stock subsequent to the recent High Court judgment.
    The Attorney-General: The High Court decided that a person claiming to be interested in Southern Rhodesia 6 per cent. stock 1976–79 and interest thereon may present a petition of right in England against the Crown under Section 20 of the Colonial Stock Act, 1877. No question as to liability in respect of payment of interest to persons claiming to be interested in Southern Rhodesia Government stocks was decided in those proceedings.
    Mr. Wall: Since legal proceedings take a long time and as many elderly people have been adversely affected by the blocking of Rhodesian funds, will my right hon. and learned Friend consult his colleagues to see whether funds could be released at least to those over the age of 60 who are in need?
    The Attorney-General: This is a matter of policy for my right hon. Friend the Chancellor of the Exchequer. I will draw his attention to my hon. Friend's remarks.

  LEGAL AID
  Mr. John Fraserasked the Attorney-General when he will announce new capital limits for the Legal Aid Scheme.
  The Attorney-General: Regulations will be laid shortly increasing the capital limits of the Legal Aid Scheme from £125 to £250 and from £500 to £1,200.
  Mr. Fraser: How soon is "shortly"?
  The Attorney-General: Very shortly.
  Mr. John Fraserasked the Attorney-General when the £25 scheme under the Legal Advice and Assistance Act, 1972, will be implemented.
  The Attorney-General: It is hoped to bring Parts I and III of the Legal Advice and Assistance Act, 1972, into operation on 2nd April, 1973.
  Mr. Fraser: When will Part II of the Act, providing for a panel of solicitors to be paid for by the Law Society, be implemented, as we often thought that it should run together with the £25 scheme?
  The Attorney-General: I appreciate that that was the view expressed during the passage of the legislation, but it was then announced that the Government did not intend to bring Part II into force until we had had experience of the effects of Part I.

  GAZUMPING
  Mr. McNamaraasked the Attorney-General when he expects to receive the report of the Law Commission on conditional contracts and gazumping.
  The Attorney-General: The Law Commission hopes in the early part of next year to publish, for comment and criticism, proposals concerning agreements for the sale of land subject to contract.
  Mr. McNamara: How soon do the Government expect to be able to introduce legislation on this matter, or are prospective house-purchasers to be faced with a continuance of gazumping over the next two years?
  The Attorney-General: What is important, as the hon. Gentleman will appreciate, is to have enforceable and sound
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  conveyancing procedure and machinery. This is a difficult problem which the Law Commission has been studying. I can give no undertaking about a date.

  OBSCENE PUBLICATIONS
  Mr. Ellisasked the Attorney-General if he will make a statement about the list with which he has provided the Director of Public Prosecutions of publications which he considers might under certain circumstances contravene the Obscene Publications Act.
  The Attorney-General: I have not provided the Director of Public Prosecutions with any list of publications which I consider might under certain circumstances contravene the Obscene Publications Acts.
  Mr. Ellis: Is the Attorney-General aware that many people believe that a list bearing a quasi official authority imprimatur is in circulation among several police forces and that it would be no bad thing if in this muddied pool, which is being increasingly muddied by the present prevailing wind, good-faith retailers had the guidance of some such list?
  The Attorney-General: That goes wider than the Question which the hon. Gentleman asked. The question of the enforcement of the law is for the chief officers of police. The function of the Director is to advise. Naturally I pass on to the Director for his consideration any matters or publications brought to my attention by Members of Parliament or the public.

INFLATION (GOVERNMENT PROPOSALS)
The Prime Minister (Mr. Edward Heath): With permission, Mr. Speaker, I will make a statement on the breakdown of the discussions between the Government, the TUC and the CBI, and on the action which the Government now propose to take.
In my speech in the debate on the Address last Tuesday, I gave an account of the earlier stages of these discussions, and I explained the difficulties which at that time seemed to stand in the way of an agreement, particularly over the issue

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of a voluntary arrangement or the use of statutory powers.
The Government and the CBI both made clear their strong preference for completely voluntary arrangements over the whole field, pay as well as prices, though they were prepared, for the sake of reaching agreement, to accept that voluntary arrangements should be supported by backing-up legislation over their whole range. The TUC representatives, on the other hand, had made it a prior condition that there should be statutory control of prices but they were not able to accept the introduction of similar statutory controls on incomes.
I had therefore asked the TUC representatives whether the TUC was prepared to accept either completely voluntary arrangements, or voluntary arrangements backed up by statutory powers over the whole range of any agreement. This issue was so fundamental that it would clearly have been pointless to go on discussing other matters until the answer to this question was known. The TUC representatives said that they could answer that question only after reference to their General Council, and we adjourned on Monday evening to enable them to consult it.
The representatives of the TUC consulted the General Council on this question on Wednesday morning. At the beginning of the tripartite meeting on Wednesday afternoon, the TUC tabled a proposal requesting that the Government should give an unqualified guarantee that the retail price index in general, and food prices in particular, would not rise by more than 5 per cent. in the year ahead.
At the end of the meeting on Wednesday, the Government and the CBI made it clear that they would only accept arrangements which were either completely voluntary or were supported by backing-up legislation over their whole range. The representatives of the TUC said that they understood this position and would continue to negotiate on this basis.
At the opening of the meeting on Thursday, I explained why it was impossible for any Government to give a guarantee of the character sought by the TUC. However, I reminded the meeting of a number of features of the Government's proposals which together would
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ensure a strict limitation of prices. Let me remind the House what those features were.
First, there was a CBI recommendation to its members to undertake not to increase prices of manufacturers over the next 12 months, except where unavoidable, and then only as little as possible. The intention was that the increase in the price of manufactured goods should not exceed 4 per cent. on average over the 12 months.
Then there was the Government's request to the nationalised industries generally to limit their price increases to an average of 4 per cent.
Thirdly, there were the undertakings by the large majority of the British retail trade to reflect this restraint and to hold their gross percentage margins at no more than current levels. Further, the food distributors had offered to collaborate with the Government in a system of maximum retail prices for certain foodstuffs. Maximum prices for a number of manufactured foodstuffs were to be increased only if a tripartite monitoring body agreed In relation to goods other than food, the remainder of the retail trade agreed not to increase their cash margins on individual items by more than 5 per cent. without the approval of the monitoring body.
Fourthly, the Government agreed to consider taking action to limit prices where they had the ability to influence them.
The general intention thus was that the rise in retail prices attributable to the rise in domestic costs should not exceed 5 per cent. over the 12 months. We also envisaged the possibility of action to limit or offset price increases arising from other causes.
There were further proposals designed to provide and protect an improvement in the living standards of wage and salary earners, particularly those on low pay. The flat rate increase of £2 proposed by the Government would have allowed average earnings to rise by over 8 per cent. For those on or below £20 a week it would have allowed increases of 13 per cent. or more, and thus an appreciable improvement of living standards.
Threshold agreements were also proposed, to allow additional increases of

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pay if towards the end of the year, because of certain special factors, the rise in the retail price index exceeded 6 per cent. These would provide a safeguard for all wage earners.
I repeat that the effect of these proposals was, for anyone earning up to about £40 a week, not merely to protect but actually to improve living standards, while at the same time reducing the rise of inflation.
At the meeting on Thursday, I went on to make a number of further proposals designed to improve the position of those in low paid employment and pensioners. These included the following proposals. The needs allowance should be increased by 50 pence in order to limit the effect of rent increases in 1973 for tenants in receipt of rent rebates and housing allowances. The period for which family income supplement, free school meals and free welfare milk are awarded should be extended from six months to one year, so that entitlement to these benefits would continue throughout the year for those receiving them, irrespective of increases of pay or other changes in circumstances. When reaffirming the Government's intention that, as a result of the review of pensions in the spring, at the next up-rating pensioners should have the benefit of a share in the nation's increasing prosperity, I stated that, as an earnest of that intention, the Government would pay a special lump sum to those over national insurance retirement age in receipt of retirement pensions and supplementary pensions, as soon as the necessary arrangements for payment could be made.
In addition, I said that the Government were consulting the local authorities in order to moderate the rate of growth of local rates.
All these proposals, together with the very important arrangements made with the retail trade, were additional to those which the Government had made on 26th September. Moreover, in reaffirming its own intentions, the CBI had already stated its willingness for dividends to be controlled.
As the House will be aware, the representatives of the TUC stated that they did not regard the total package of proposals as a basis for negotiation. They
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said that, although they would take them back to the General Council, they would do so without being able to recommend their acceptance. The General Council met this morning. The statement which it has issued shows that there has been no change in the TUC's position.
Although it has not been possible to reach agreement in this round of discussions, the Government are fully prepared to continue to take part in tripartite discussions with the CBI and the TUC on subjects of mutual concern to the three parties.
The responsibility for action now rests with the Government. We have come to the conclusion that we have no alternative but to bring in statutory measures to secure the agreed objectives of economic management in the light of the proposals discussed in the tripartite talks.
These measures will take time to work out in detail and to implement. In order that the fulfilment of the objectives should not be prejudiced in the meantime, the Government propose to introduce tomorrow an interim Bill to provide for a standstill on increases in pay, prices, rents and dividends, subject to a limited number of defined exceptions. The standstill will come into operation immediately, and will run for 90 days from the Royal Assent to the Bill, with provision for an extension of up to 60 days, by order subject to affirmative Resolution.
The arrangements for the standstill are set out in a White Paper, which will be available in the Vote Office at 4.30 p.m. The draft of the Bill is contained in a separate White Paper which will be available later this evening.
Although it has not proved possible to reach a tripartite agreement, the Government intend to implement their proposals for increasing the needs allowance; for extending from six to 12 months the period of entitlement to family income supplement, which carries with it exemption from National Health Service charges, and to free welfare milk and free school meals; and for paying a lump sum to pensioners. As regards the latter, the payment will be made as early as practicable in the new year, and will consist of £10 to each retirement and supplementary pensioner—that is, £20 for a married couple both of whom are over retirement age.

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The CBI's and the TUC's acceptance of the Government's invitation to join in discussions on the objectives and methods of economic management signalled a major change in the conduct of economic policy in this country—far in advance of anything even tried for by previous Governments. I know that I was not alone in thinking that it was one of the most hopeful things that had happened in Britain for many years. I deeply regret that last Thursday's disagreement has forced us to take action which I regard as less satisfactory than a voluntary arrangement could have been.
I profoundly believe that the course upon which we had embarked was the right, rational and sensible course for Britain. I therefore hope that this setback will not be allowed to stand in the way of our resuming discussions between the three parties in due course on the objectives and problems of economic management.
In the meantime, the Government have a duty to the nation to carry through the proposals which I have now put before the House.
Let me remind the House again of the objectives: the maintenance of a high rate of growth and an improvement in real incomes; an improvement in the position of the low paid and the pensioners; and moderation in the rate of cost and price inflation.
All those round the table at Chequers and Downing Street were in full agreement on these objectives. But I would go much further than this. I believe that they command the support of the great majority of the people of this country. The opportunities now open to the country and to us all are immense, if we can, together, succeed in these objectives.
The Government's proposals are designed to secure these objectives. I therefore commend them with confidence for the approval of the House, and for the support and co-operation of all those concerned, on both sides of industry, and of the whole nation.
Mr. Harold Wilson: The right hon. Gentleman will know that, as we said publicly on Friday, we share his disappointment at the breakdown of the discussions. I take it that his words mean that he wishes the talks to be resumed
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at an early date. In our view, if they were resumed, there would have to be a radically different approach on the Government's part to certain fundamental issues affecting prices and the wider living costs of the average household. If there is to be any agreement emerging from future talks that will have to be the fundamentally changed approach of the Government.
This is not the time to remind the right hon. Gentleman of all the many strongly worded statements, since he became Leader of the Conservative Party, in every debate in this House, on every proposal of the Labour Government, and during the General Election—and of the fact that this represents the biggest reversal of positions he has taken on any subject since he broke his "at a stroke" promise on coming to office.
We have repeatedly warned the right hon. Gentleman that no agreement would be fair and just, or workable, which did not provide for guarantees on food prices, not only domestically created prices—the right hon. Gentleman again referred to domestic prices—and a limited range of other essentials—rents, both private and public, rising mortgage interest rates, VAT and school meal prices, which he is to increase next April, as well as the dividends referred to in his statement. The right hon. Gentleman has moved a little in his three months' proposals, but he has not met the main requirements for a fair agreement as we put them to him.
Has the right hon. Gentleman recognised, in all these long-drawn-out talks, that those he has to meet are not so much employers or trade union leaders as trade union members and, above all, the wives of trade union members responsible for balancing their family budgets? Does he agree that a three-months freeze—for it is only three months; even if the further 60 days are added, it will take it only to early April—would mean on 1st April, or soon afterwards, increases in rents of up to 50p for many families, many private rent increases—he has not told us, or perhaps I did not hear him correctly, whether private rents are to be included in his controls, but I hope they are—increases in school meals, taxation of school and other children's clothing and V.A.T., as well as three months of rising European food prices and rate increases, all next

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April? Does he recognise that, even at the end of this period, that will be the position, whether the freeze is renewed for 60 days or not?
Will the right hon. Gentleman tell the House his proposals for dealing with the wide range of prices that have been pushed up since the breakdown of the talks, on Friday, Saturday and again this morning? They are on record already in the Press—for example, pharmaceutical and other manufactured goods. How does the right hon. Gentleman propose to catch those in his Bill? Of course, as a public employer he has caught many wage discussions and held them back since 26th September while allowing rents to rise on 1st October and other prices to rise since last Thursday. What machinery has he in mind? Recalling that he scrapped the National Board for Prices and Incomes, in a mood of euphoria after the last election, will he now restore that Board and the Consumer Council?
The right hon. Gentleman referred to exceptions. What exceptions has he in mind? For example, do they cover increments in public and private employment? Do they cover pay increases for the police, atomic energy, local authority and electrical workers which have been agreed but not yet paid? Will he explain the answer to that question?
Finally, is the right hon. Gentleman aware that, in our view, no proposals will be workable, or fair and just, which fail to deal with food prices, rents, both private and public, school meals, mortgage rates and taxation of children's clothing, and that, because such proposals will be neither workable nor fair, we shall oppose them?
The Prime Minister: On the right hon. Gentleman's first point, of course he is right. As I said in my statement, we are prepared at any time to carry on further talks with both the TUC and the CBI. They realise this and I hope that it will be possible.
I reiterate my belief, of which the right hon. Gentleman is well aware, that in a free society it ought to be possible to make these arrangements on an entirely free and voluntary basis. No Government have tried harder than we have tried during the past three months to achieve that result. Indeed, this has been widely recognised by both the CBI and the
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TUC. I regret that it has not been possible to do this. Therefore, we must look forward to the time when we can have an arrangement of a similar kind, which I hope can be negotiated voluntarily.
The right hon. Gentleman will find the answers to the detailed points he raised set out in the White Paper. However, I will deal with some of the major ones. He asked what machinery would be used. Government machinery—Government Departments—will be used. One of the first things I learned in the discussions was that the National Board for Prices and Incomes had been anathema as much to the TUC as to many other people. Therefore, there was no desire to recreate that body. [Interruption.] Let us discuss these matters frankly. This is what I was told.
Incremental payments will be excluded. I hope the right hon. Gentleman will agree that that is right. In the nature of their payment, they are not in fact wage increases.
Concerning the other matters mentioned by the right hon. Gentleman, concentration is not only on domestic costs. As I pointed out in my statement—and it was said on Thursday to the TUC and the CBI—the Government have undertaken to use the means available to them for influencing and holding down costs outside domestic costs. We gave our full undertaking to do that.
Many of the other matters mentioned by the right hon. Gentleman—I must frankly say this to him—are political. They are not matters which directly affect the discussions which we have been having. Every Government has the right to carry through its policy. I told the CBI and the TUC that I was not prepared to repeal the Act taking us into the European Community, nor to repeal the Industrial Relations Act, nor to repeal the fair rents Act, but that the Government were prepared to take into account the results of that legislation. That is what we have told them all the way through. When we said this, we said that the Chancellor of the Exchequer in framing his next Budget will, of course, take into account the consequences of membership of the European Community and of the other factors in the economy. This is the right position for Government and Parliament to take up, and then to discuss with those concerned how best we can deal

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with these items. That is what we have done.
Mr. Wilson: One of the first points the right hon. Gentleman made when he said that the Government had a policy for food price increases that arose from causes other than domestic causes, was—I think his statement was to this effect—that he envisaged the possibility of action to offset price increases. Was he able to tell the TUC, or can he tell the House today, whether there is a firm Government proposal for shielding the British consumer from the increase in food price rises that will result from entering the Market in January and from other increases arising from outside causes? Is the right hon. Gentleman prepared to answer that question? Will the right hon. Gentleman, following what he has just told the House about the discussions on other prices, now give an undertaking that he has powers to deal with them? When he refers to political matters, is he not confirming that it is the right hon. Gentleman's own political prejudices which stopped an agreement on rents and on other matters?
The Prime Minister: In no circumstances do I accept that. As to the food prices of the Community, they do not have an effect until the spring in any case. The Government have in mind certain items of food the prices of which they can influence. As my right hon. Friend the present Leader of the House pointed out on Friday, it is quite incorrect to say that the rise in food prices has been due to levies by the British Government—quite untrue. It is due to the impact of the rise in world food prices. We told the TUC and the CBI that in dealing with other factors we would take account of what was going on in this sphere.
Mr. Powell: Does my right hon. Friend not know that it is fatal for any Government or party or person to seek to govern in direct opposition to the principles on which they were entrusted with the right to govern? In introducing a compulsory control of wages and prices, in contravention of the deepest commitments of this party, has my right hon. Friend taken leave of his senses?
The Prime Minister: The present Government were returned to power to
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take action in the national interest when they were required to do so.
Mr. David Steel: Is the right hon. Gentleman aware that we on these benches also share his regret at the breakdown of the talks? He said that no Government had tried harder in the past three months to seek agreement. Is he aware that his party has been in office for two years and three months and that we regret that this approach was not adopted when the Government came to power in June, 1970? Can the right hon. Gentleman say whether the exceptions during the 90-day period will include exceptions for the lowest paid and whether the Government are moving towards a national minimum earnings rate?
The Prime Minister: I am grateful to the hon. Gentleman for what he said. I must emphasise that the present Government, when they came into power, asked the CBI and the TUC to consult and co-operate with them. It was through no fault of the Government that consultation was refused. I have no desire in any way to make it more difficult to achieve a resumption of these talks and I therefore do not wish to discuss that matter further. Whether the reluctance to consult was based on political motives is not for me to say. The Government have always been fully prepared to consult and co-operate with both the TUC and the CBI.
On the second point which the hon. Gentleman raised, he will see the exceptions set out in the White Paper. The one to which I would particularly draw his attention is that of wages councils' awards. These are concerned with those who are the lowest paid in the country, and where the proposal has taken place before the standstill and it is more than a year after the last award it will be possible for it to be an exception.
Sir Harmar Nicholls: Is my right hon. Friend aware that although the method that he has announced is a change of direction for the Conservative Government, the nation as a whole will recognise and respect the great efforts that he has made to arrive at a voluntary agreement? Is he also aware that the one thing he could not do, under the circumstances that exist in this country at the moment, was, as the Leader of the

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Government, to do nothing, and that what he has done by underwriting the offer he made to the bodies when they were discussing the matter will help to restore the credit of this country when it is badly needed in a time of crisis?
The Prime Minister: This country now has expansion going at a rate of 5 per cent., faster than we ever had under the last Administration, with capacity for further expansion for at least another year, with capacity for investment to carry on that expansion over further years ahead. In addition, we are now providing more jobs and greater productivity. [HON. MEMBERS: "Where?"] We are not going to see this expansion and the future of the British people thrown away by excessive wage increases.
In reply to what the right hon. Gentleman said, the great mass of trade unionists and of their wives believe that the proposals which were put to them by the present Government were fair and gave them a better chance of a steady improvement in their standard of living than ever before.
Mr. Eadie: The right hon. Gentleman is very fond of using the expression "economic management"? Is he aware that if he applies the test of economic management to the Government which he is leading he will fail in that test and, therefore, that he should resign as a consequence of what he has said this afternoon or reconsider his position? Is he aware that a former Conservative Minister has said that the policy that he is presenting to this House this afternoon cannot succeed unless he has a long-term economic strategy? However hard the right hon. Gentleman may try to convince or influence this House, he cannot say that he has a long-term economic strategy.
The Prime Minister: I have constantly told the House that the economic objectives were agreed around the table. Those objectives are very clear, and I believe that they have the full support of the country.
Sir D. Walker-Smith: Does my right hon. Friend appreciate that thinking people, who tend to respect the constitutional principles of this country, will support efforts to resist any attempt by organisations or people, however
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respected and however powerful, to deny the function of government to the elected representatives of the nation?
The Prime Minister: Yes, Sir; I am sure that that is the view of the majority of the people of this country. It is time that all three parties in this House made it absolutely clear that when Parliament has passed its legislation the law should be observed by everyone, regardless of his position, wealth or power.
Mr. Sheldon: Is the right hon. Gentleman not aware that the whole argument about a prices and incomes policy is an argument about who gets what? What the Prime Minister and the Chancellor have ensured over the past two years is a redistribution in favour of the well-to-do. When the Prime Minister went to those tripartite talks, he did not go with clean hands. If he ever wants to get a voluntary agreement, he will have to reverse those policies which he has carried out already.
The Prime Minister: The hon. Gentleman's first sentence touched on what obviously proved to be one of the major matters in the discussions—namely, whether the higher paid wage earners are prepared to see, in this stage, the lower paid getting proportionately larger increases. This is what was agreed around the table, but when the proposals were put forward at the end of the day they did not secure acceptance.
Mr. Edward Taylor: As steel is one of the basic costs of manufacturing industry, and a crucial one for Scotland, will the right hon. Gentleman confirm that any restraint on the prices of nationalised industries during or after the 90 days will apply to steel also? Will he obtain the agreement of the ECSC for this to be done?
The Prime Minister: As I said in my statement, the Government have requested all nationalised industries to comply with the voluntary policy. Now that we are moving into the standstill, obviously the nationalised industries themselves—all of them—are involved.
Mr. Palmer: Would the right hon. Gentleman not agree that many of the wage and salary claims at present before negotiating machinery are for the rectification of unjust and unsatisfactory differentials? Will not this proposal

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simply freeze an artificial payments structure and mean that it will take a very long time for the country to recover from it?
The Prime Minister: I do not think that the hon. Gentleman's last sentence is justifiable, in view of the fact that the intention of this proposal is for a 90-day standstill, in order then to get through the legislation which will enable the further stage to take place. But of course the hon. Gentleman is right that many of the problems of wage bargaining arise from differentials which some groups believe to be unjust. The real problem is how that can be dealt with without causing inflationary wage increases. What we were trying to do in the talks was to get agreement about a basic approach for this first year only and to establish priorities. The priority which was agreed was to help the lower-paid workers. Of course, this affects differentials right the way up, but it is a priority which was agreed. What one has to do in any attempt at a policy which will prevent inflation is to see how these can be adjusted fairly.
Dame Joan Vickers: In view of the fact that many proceedings are going on under arbitration, including those for Her Majesty's Dockyards, when the arbitration court decides on the award, will the Government agree to accept that without any further delay?
The Prime Minister: I would ask my hon. Friend to await the White Paper. These matters are set out quite specifically, stating what will be done in the particular cases. It is much better that it should be seen in the whole context.
Several hon. Members Several hon. Members rose—
Mr. Speaker: Order. I want the help of the House, if I may have it. There is to be a business statement next, the contents of which I know. There is an important debate on poverty today and there is a debate on the industrial situation tomorrow. I hope that it is the wish of the House that I should not continue these exchanges indefinitely.
Mr. Strang: Is the right hon. Gentleman aware that his proposal to increase the rent rebate needs allowance by 50p will mean in practice that council tenants
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in Scotland who were facing increases of £1 a week will have it reduced by a derisory 8½p? Will the local authorities which have refused to implement the Housing Finance Act have present rent levels frozen, and will council tenants who have had increases imposed on them as a result of the Act have them withdrawn?
The Prime Minister: No, Sir, and those councils which have refused to carry out the law will not be exonerated by the Bill.
Mrs. Knight: Would my right hon. Friend be reluctant to prescribe either excessive medication or the surgeon's knife except in a case in which the patient is quite incapable of recovering otherwise? In view of what he has recently said, will be assure us that the fears that some of us have entertained since hearing what the Post Office Corporation intends to do about putting up prices, will be allayed by his statement?
The Prime Minister: As I have said, this applies to all the nationalised industries. Therefore my hon. Friend's fears can be allayed during this standstill period.
Mr. Roy Jenkins: May I ask the right hon. Gentleman one question on a matter on which I think the House is entitled to know the state of his current thinking? Has he now abandoned his constantly reiterated view that a statutory policy could only make inflation worse in the long run, or does he now regard the short-term situation that he has produced as so disastrous that he cannot afford any longer to think about the long run?
The Prime Minister: I have already told the House that I believe that, in a free society, it ought to be possible to manage the economy in co-operation with the TUC and CBI in a voluntary way. I have read with great interest a reprint of the speech which the right hon. Gentleman made, in which he himself said that these matters should be voluntary and that there should be as little legislation as possible. I am glad to see the right hon. Gentleman nodding his head. Therefore, we are both in agreement on that matter.
What I am saying is that, in the situation when these talks have not led to agreement, it is essential to have this standstill for 90 days and then to move

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on to the next phase. But I believe that there is a difference between the situation in which we are doing this and that in which the right hon. Gentleman had to do it. He was doing it at a time of a stagnant economy, at a time when he was deflating continuously through heavy taxation and at a time when he was trying to reduce the real standard of living of the British people. We are doing it at a time of expansion. Our sole objective—I am sorry that the right hon. Gentleman turns away—is to protect the expansion and the improvement in the real standard of living of the whole nation.
Hon. Members Hon. Members: Resign!

BUSINESS OF THE HOUSE
The Lord President of the Council and Leader of the House of Commons (Mr. James Prior): Following the statement of my right hon. Friend, I wish to announce the following changes of business.
The debates arranged for Wednesday, 8th November, on Irish Affairs will be postponed until Monday, 13th November, to allow the House to consider the Second Reading of the Counter-Inflation (Temporary Provisions) Bill. In consequence, the business already announced for next Monday will be deferred until Tuesday, 14th November.
Mr. Harold Wilson: As this is the right hon. Gentleman's first statement to the House in his new capacity, may I offer the best wishes of the whole House to him? May I further congratulate him, at such a moment of time, on getting out from under, after the largest food price rises in our history? Will he convey to
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the Prime Minister our congratulations that, as we are to have this legislation on Wednesday, the Prime Minister has decided that he had to get rid of this particular bogey in respect of inflation?
Sir Harmar Nicholls: On a point of order, Mr. Speaker. Is it not out of order—[HON. MEMBERS: "No."] Is it not out of order to take up time allotted to business statements in order to make partisan propaganda?
Mr. Speaker: There are many attempts in the House to take up the time by making partisan points. Sometimes I wish that I could interfere with them. But if the right hon. Gentleman had been out of order I should have so ruled.
Mr. Wilson: As we all sympathise with the hon. Gentleman and are all jealous of the hon. Member for Colchester (Mr. Buck) on his promotion, may I put one final—[Interruption.]
Mr. Speaker: Order. I am not quite certain where we are getting, but the House must subside.
Mr. Wilson: I meant the hon. Member for Chelmsford (Mr. St. John-Stevas). I have congratulated the hon. Gentleman personally. May I put a final question to the right hon. Gentleman? When the Prime Minister speaks on Wednesday, will the right hon. Gentleman represent to him that, if he cannot keep his promises, he might keep his temper?
Mr. Prior: The right hon. Gentleman has been his usual kind self. The only trouble is that he takes an awful long while to say things. That apart, however, no doubt the Prime Minister has heard every word of the right hon. Gentleman and will deal with it in his usual competent fashion.

ORDERS OF THE DAY

  DEBATE ON THE ADDRESS
  [FIFTH DAY]
  Order read for resuming adjourned debate on Question [31st October]:
  That an humble Address be presented to Her Majesty, as follows:
  Most Gracious Sovereign,
  We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.—[Mr. Buck.]
  Question again proposed.

  POVERTY
  Mr. Speaker: I have selected the first Amendment in the name of the right hon. Gentleman the Leader of the Opposition and in the names of his right hon. Friends.
  4.14 p.m.
  Mrs. Barbara Castle: I beg to move, at the end of the Question, to add:
  "But humbly regret that the Gracious Speech contains no measures to reduce means testing and eliminate poverty, to reverse the Government's massive redistribution of wealth in favour of the rich or to ensure as of right to every citizen the essentials of a civilised life, including housing, education, and adequate provision for old age, and, in particular, that it offers no immediate help through higher pensions, benefits and family allowances to the pensioners, sick, disabled and other low-income families now threatened with further disastrous cuts in their standard of life as a result of rising prices, rents and value-added tax."
  I was always aware that Her Majesty's Opposition were endowed with unusual prescience, but even we could not have foreseen the appositeness of the Amendment. In the light of the situation just described to us by the Prime Minister, I remind hon. Members of the relevant part of the Motion, which I have just read.
  The Motion describes the situation in which the Prime Minister is seeking to impose a prices and incomes policy. The very attempt to impose such a policy has forced the Government, and this after-
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  noon must force this House, into a fundamental examination of the nature of our society. Listening to the Prime Minister's imperturbable self-satisfaction, in which he could not think that he had had any need to change or that in any of his policies he had any further need to change, I was reminded of some earlier speeches of the right hon. Member for Wolverhampton, South-West (Mr. Powell). Indeed, this afternoon it fell to him, with his usual courage, to point out that the emperor had no moral clothes.
  The Government have come to us this afternoon full of the inadequacies of the trade union movement in responding to what the Prime Minister tried to present to us as radically progressive social overtures. The simple fact, however, is that the Prime Minister was announcing changes in his techniques and not changes in his social morality. Indeed, it was hard enough for him to do that.
  "Oh what a word eating is here, my country men."
  It is extremely fortunate that the right hon. Member for Mitcham (Mr. R. Carr) was a little earlier moved to the Home Office, because if he had remained at the Department of Employment in this situation he would positively have had to choke on his own words. I remember the speeches he used to make to us in 1967 and 1968, when the Labour Government were striving to find an answer to the inflationary problems that then beset us, and the contempt he poured on the whole idea of a statutory prices and incomes policy. It was a folly and a myth, he said, and unjust and unworkable. He rejected it both on grounds of practicability and on grounds of principle. The right of people to determine their earnings without State intervention or direction, he said, was one of the hallmarks of a free society. Obviously the right hon. Member for Wolverhampton, South-West continues to hold that view, logically But there is one thing which the right hon. Member for Mitcham said then which seemed to make sense:
  "Legislation to implement a prices and incomes policy becomes legislation to control the whole economy."—[OFFICIAL REPORT, 21st May, 1968; Vol. 765, c. 319.]
  The right hon. Gentleman was right to this extent. One cannot hope to win an acceptance of a prices and incomes policy, in other words, to control the

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  free bargaining power of trade unions in the name of the pursuit of the national interest, fairness, social justice or greater equality, unless one is prepared to apply these principles to the working of our whole society. It cannot be done in a society where an essential provision such as housing is at the mercy of free profiteering in the price of land or through the Housing Finance Act, about which the Government are still unrepentant. The Government have deliberately chosen to move from socially subsidised rents to market rents.
  The acceptance of a prices and incomes policy as part of a contract between the Government and the people is dependent upon the nature of our society. The Prime Minister cannot build a more just society "at a stroke". One must build such a society brick by brick. Everything one does must be infused with a determination to move towards one's socially planned and socially just gaol. Our complaint against the Government, and in particular the Prime Minister, is that brick by brick they have set out to create an unjust society with the sort of results which are outlined in our Amendment.
  In all their actions the Government have set out to divide the country into two nations, not just in the trimmings of life, the inessentials or the marginal additions which we make to the standard of life, but in the basic essentials of life. In taxation, housing, education, the National Health Service, and now in the new pension scheme which has been produced by the Secretary of State for Social Services. The Government have sought, as an act of conscious national and political policy, to build up two systems of social provision, with those who can afford it making superior private provision for their own needs, often with the help of generous tax relief, while the rest of us are dependent on pinch-penny or means-tested benefits. It is true that the right hon. Gentleman is now trying just a little to draw back from the abyss which we can see yawning in front of us, the abyss to which his divisive policies have been leading not only his party but the country's economy. Now, like a one-man morality play, the right hon. Gentleman is talking to the House once again in terms of social justice and national unity. He has tried belatedly and desperately
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  to recapture the pristine innocence of his first 100 hours when he stood on the steps of No. 10 and said that his policy was to create one nation.
  In recent months many of the Prime Minister's supporters, and certainly his Ministers, must have been praying that his one gesture of co-operation with the trade unions would be enough to work the miracle and enable him to undo the destructive work of the past two years. The right hon. Gentleman cannot transform the country from two nations into one by the simple gimmick of proposing a flat-rate increase in wages across the board. However much I might agree with that principle as a socialist, one cannot take just one socialist principle and then try to apply it in a society which the Government are making anti-socialist.
  Nor can one transform the country into one nation by arguing, as the right hon. Gentleman has done recently, and as he did again this afternoon, that the trade unions are entitled in the new era of co-operation and partnership to be consulted on only one limited aspect of inflation, the relationship between prices and incomes, whereas all the other factors which play such an important part in inflation, such as the new high market rents, the levies on food imports, the Industrial Relations Act, and the Government's tax policies, must remain the Government's responsibility. That is what the right hon. Gentleman has said in the past, as we heard him repeat that this afternoon. I do not think that there was anyone in the House who was surprised that the talks had failed.
  As the right hon. Gentleman the Member for Mitcham (Mr. R. Carr) said when discussing prices and incomes, one is discussing how to control the whole economy and in whose interests. One is talking about a deliberate choice of political and of social priorities. Our indictment against the Government is that for two and a half years they have chosen a reactionary set of social priorities. They now say to the trade unions, "It is your duty to co-operate, to help us to save the nation. You should put the national interests above your own." However, the House knows that in the past two years the country has been deliberately divided by Government policy into the evermore-privileged rich and the ever-more-patronised poor.

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  The keynote of the Government's social philosophy was set at the outset. It was struck in the autumn of 1970. That was the decisive step which moulded the nature of our society which we see today. In the autumn of 1970 the Chancellor of the Exchequer introduced the most regressive package since the Geddes axe. As a policy of social injustice it could not have been more carefully calculated.
  The method, as the House will recall, was to reduce public expenditure on essentials such as regional policies, social services and nationalised industries, and to increase charges on the social services and the health services in order to finance £450 million worth of tax cuts, the benefit of which went overwhelmingly to the well-to-do. The result of that financial juggling was that the average family wage earner, the man with two children at primary school earning less than £40 a week, was actually worse off.
  The autumn of 1970 was also a decisive moment of scene setting because it was the moment of the Government's commitment to put import levies on food as a matter of principle. That was a personal choice of policy which was taken regardless of whether we entered the EEC. That decision set us on the road to spiralling food prices.
  At the same time the Government's announcement of their intention to withdraw housing subsidies set us on the road to higher rents. That was the moment when the Government dedicated themselves to the systematic creation of the means test State. The only hope the Government offered to low-income families was through means testing. The increase in the price of school meals and other charges was a deliberate choice by the Government to extend means testing. The introduction of the family income supplement was the Government's tacit acceptance that poverty will always be with us, not only for pensioners, the sick or the unemployed, but for many wage earners. So the Government devised a means tested supplement to low-wages to provide for that.
  Finally, through their housing legislation, their gratuitously provocative and inflationary Housing Finance Act, the Government deliberately chose to subject some 3 million council tenants to means-
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  testing. This was the blue-print of the ideal Tory society—they call it the incentive society, but of course it is the disincentive society.
  As we discuss a crisis moment in the national economy and the sort of context within which we might be able to secure acceptance of a prices and incomes policy, let us realise that this ideal society is by definition a highly inflationary society. The absurdity of the Prime Minister's thesis this afternoon—about the need to check inflation and at the same time to help the lower paid—lies in the fact that the Prime Minister himself has created a situation in which the two goals cannot be reconciled, thanks to the building-up of the means-tested State. It is a fact, and Government supporters had better start to face it and to do something about it, unless they want to get economically more and more into the red, that in this means-tested society, anything less than £4 or £5 a week wage increase does not improve the income position of the lower-paid; it worsens it.
  The irony of the Prime Minister's great egalitarian gesture of how he will both counter inflation at a stroke and at a stroke create a socially just society by the device of £2·60 across the board flat-rate wage increase to help the lower-paid is that, as Jo Rogally pointed out in the Financial Times the other day, if the lower-paid were to get £2·60 a week, they would be worse off, thanks to the loss of means-tested benefits. The evidence that that is at the heart of our modern society is to be read daily on every hand.
  In the society that the Tory Government have created we do not relieve poverty; we penalise it. We relatively penalise poverty all along the line. One of the larger fallacies in Conservative mythology is that means testing concentrates resources on those in greatest need. In fact it does the exact opposite. Those in greatest need in this society are those who get least, partly because they do not claim and partly because it is a too complex society—one almost needs to take A-levels in means testing to survive—and the reasons they do not claim are ignorance and pride. Despite the massively expensive advertising campaign that the Government have conducted to try to sell the concept of their means-tested family income supplement—they have spent nearly £500,000—overall

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  the take-up of the family income supplement is still only 50 per cent.
  The main reason why in this Tory society those who are in greatest need get the least is that if the poor manage to get their means-tested benefit, they lose that benefit if they dare to try to better themselves. The Secretary of State frowns, Does he not know some of these basic facts of his own Conservative life? The "surtax" the Government levy on the poor would produce a counter revolution to make Carson's rebellion pale into insignificance if it were levied on the well-to-do.
  For instance, the Government have introduced a range of what they call tax reforms. One of those reforms provides that in future the highest rate of tax charged on any income, earned or unearned, will be 75 per cent. That means that however wealthy someone is, he will retain 25 per cent.
  The Chief Secretary to the Treasury (Mr. Patrick Jenkin): I am sure that the right hon. Lady would not wish to mislead the House. Next year, the highest marginal rate on unearned income will be 90 per cent.
  Mrs. Castle: I will stick to the immediate position with 75 per cent. However much someone earns, however big his salary, he retains 25p out of every £1 that comes his way. I am subject to correction, but I think that I am right.
  But if someone is poorly paid, for instance, a family man who has two children and who earns £21 a week, out of an extra £1 a week he will not be even 25p better off. There will be a reduction in his disposable income of 81p, because he will lose £1·81 through the loss of family income supplement, free school meals, the increase in graduated contributions, income tax and so on.
  One may go even further. I think that everyone would agree that agricultural workers are among the lowest paid, and even the Government were therefore probably secretly relieved about the recent offer to the agricultural workers of an increase of £3·30 a week, well above the Government's proposed £2·60. That is not an agreed offer, for it still has to be ratified. It is not agreed because the Agricultural Workers Union says that
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  it is nowhere near enough. Can one blame the union when one sees what happens to the disposable income of these low-paid workers in agriculture?
  I take first the example of the agricultural worker on the basic wage, and I understand that about 10 per cent. of them are on the basic wage. It is now to be increased from £16·20 a week to £19·50 a week. However, with the loss of family income supplement and free school meals, to say nothing of rent and rate rebates, the increase is not £3·30 for the family man with two children, but about £1, and that has to cover a level of inflation of £1·70 since his last increase.
  I take next the example of the slightly better paid agricultural worker on average earnings, formerly £22, now increased to £25. The family man with two children will lose the benefit of free school milk and will be liable to income tax and he will be left with an increase of £1·18 to cover inflation of £2 or more since his last increase.
  The greatest admission of the folly of this policy has come from the Government themselves. It has come in a revelation from the Prime Minister himself, who in recent weeks has been reluctantly forced to admit the existence of this poverty trap. He mentioned it in the statement he issued when the talks broke down, and this afternoon he talked about dealing with it. What does he propose to do about the system that the Government have created and which penalises poverty because it is poverty?
  First, the Government propose to introduce a tax credits scheme. We now have the Green Paper and we shall have a Select Committee to examine it. It is a tax credits scheme which, we accept, has potentialities in the hands of the right Government. There are, however, two major question marks about the scheme. First, we do not know the level of credits at which it will operate and therefore how effective it will be in reducing poverty. The figures given in the Green Paper are illustrations only. Secondly, we do not know who will pay. The Government say vaguely that the cost, about £1,300 million, can be paid for by increased growth, one of those euphemisms which enable them to avoid answering difficult questions.

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  If the scheme were to be paid for by an increase in VAT, then once again the poor would be financing their own benefits and we would still be in the vicious circle of poverty. So how the scheme is paid for is crucial to its effect in dealing with poverty. How, therefore, can the Prime Minister say, as he said this afternoon, that taxation questions are a matter not for the unions but for the Government? How can he say that these are areas which must be left to Government responsibility and then, having used taxation in a certain way for social purposes, expect the trade unions to co-operate with those purposes even when they disagree?
  The trade union movement knows that the Government have spent the last two years deliberately manufacturing an unfair society by their taxation policy. Andrew Davenport pointed this out in The Guardian the other day. He remarked that it was rather unfortunate for the Government that the talks on wage restraint were taking place against the background of the new tax system which is to be introduced, a system says Davenport,
  "whose principal beneficiaries will be the rich".
  He gives us examples. A man earning £15,000 a year before tax will have an extra £324 in his pocket, a nice, useful £6 a week, thanks to the new tax reforms of this Government. A man with unearned income of £15,000 a year will do better still. He will have an extra £1,430 or another £30 a week. Davenport says
  "Compared to these bonuses the new tax system will give very little benefit to the ordinary working man."
  Again he gives illustrations. A married man earning £1.800 a year will get per year relief of £3·50 or about 7p a week. It is by such means that the Government have systematically engineered a massive redistribution of wealth in favour of the rich and, by their various economic, fiscal and social measures, distributed on average 50 times as much largesse to the man earning over £5,000 a year as they have to the man on average earnings. So if the trade unions say to the Government, "Take back that which thou hast given to the rich and distribute it to the poor" this Conservative Prime Minister may go sorrowing away, but he can hardly blame
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  the breakdown of the talks on the trade unions.
  The most important thing about the tax credits scheme is that it is not due to come into operation for five years. This Government are very good at producing a marvellous scheme as though it had some relevance to poverty today but then saying it cannot administratively come into operation for five years. Yet the poor are somehow supposed to be fed and clothed by it. What the Government has in effect said in the Green Paper on the tax credits scheme is, "Yes, we admit the existence of intolerable poverty, we estimate it will cost about £1,300 million to begin to cure it, but we have no intention of spending that money now." The pensioners, the sick, the unemployed, the low-income families must wait five years to be put out of their misery.
  Even the Prime Minister, forced to face the facts about the nature of our society as a result of the cross-examination of the trade unions, has realised that this is hardly the scenario for the just society. What is his immediate answer to the poverty trap? We had it this afternoon in his statement, just as we had it in his statement the other day. He has been considering ways—the best means—of what he calls "minimising the risk that wage increases for the low paid may be offset by the loss of means-tested benefits". He has been considering the best means, and his answer as we heard this afternoon is to extend the period of entitlement to family income supplement and other benefits from six months to one year even where there has been a wage increase.
  In other words the Prime Minister will keep the poor out of their poverty trap for another six months and at the end of that period the trap will close on them again and remain closed until 1976 or 1977 or whenever we get the tax credits system. This, says the Prime Minister, is the best means the Government have been able to devise of helping people in the poverty trap. I can tell the Prime Minister and the Secretary of State of a far better way, a method, incidentally, which the Prime Minister promised the Child Poverty Action Group that he would adopt when he was seeking its support in the 1970 Election, when the promise was given that the Conservative

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  Government would increase family allowances.
  The Government have not done that for one simple reason, because that is a means which is too redistributive. The great distinguishing mark of family allowances is that they are not means-tested. If, as a first immediate step in this situation, in which we are talking about poverty and the relevance of the continuation of poverty to our hopes of a prices and incomes policy, the Government would put in payment a family allowance of £2 a week for the 7 million first and only children in this country then it would, at a net cost of about £400 million, give all workers with children more than they would get from the Prime Minister's proposed pay rise of £2. The Government would also begin to correct some of the basic inequalities in our society. Those who are wealthy enough to pay tax already enjoy tax allowances for the first child.
  That is a first step and could be done at once. It does not require any elaborate administrative machinery; it just requires an act of political will to get at some of the fundamental causes of poverty. I do not want the Government to stop there. Secondly, they should begin preparing for the introduction of a full child endowment scheme under which family allowances and child tax allowances would be merged in one comprehensive child benefit adequate to lift low-income families out of means testing. Such a scheme, far simpler than that with which the right hon. Gentleman is playing in the Never-Never World, could be operating in two years' time. It has the great advantage, which the tax credits scheme has not, that the mother would continue to draw the benefit.
  What about pensioners and those eking out an existence on other benefits? Are we to ask them to wait five years for the £2 increase which the Green Paper estimates they will receive? This afternoon we were told that the Government would recognise the clamant needs of the old-age pensioners and will give them a lump sum special payment of £10. Of course we welcome this; we were pressing for such a special payment last year, as the right hon. Gentleman knows.
  Last year we said that it was intolerable to expect our old-age pensioners to
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  go through the winter without an emergency payment or any increase in heating allowances, and, of course, we should welcome anything which would help in the costly winter which lies ahead. But this emergency payment would not have been necessary if the Secretary of State had listened to our pleas in Standing Committee on his National Insurance Bill. If the right hon. Gentleman had accepted our proposed Amendments to that Bill, old age pensioners at the moment would have been getting not £6·75 or £10·90 for a married couple but £8 and £13.
  The Prime Minister said in his statement that he wanted to use this new tripartite machinery that he seems to think he has created out of thin air to ensure that pensioners shared in the nation's increasing prosperity. But in respect of the trade unions the right hon. Gentleman is pushing at an open door. It is not the unions that he has to convince of the urgent need to do something for pensioners. It was the National Council of Labour which took up the initiative on this matter more than 12 months ago when a deputation made up of the three wings of the Labour movement—the political, the trade union and the Co-operative wings—saw the Secretary of State and the Chancellor with a view to urging the Government to give old-age pensioners the £8 pension immediately and to increase the Exchequer contribution substantially to pay for it. Thanks to the appalling rate of inflation which has taken place, that figure is out of date already. Only a few weeks ago at our party conference it was the trade unions which led the demand that the pension should now be increased to £10 and £16.
  Can anyone in this House pretend that the special lump sum payment of £10 in the New Year will be enough to fulfil the Government's promise to insulate those on fixed incomes against the rise in the cost of living that we shall experience from next January as a result of our entering the EEC? Will it really he enough to insulate them against rising food prices and VAT? I assure the Prime Minister that an immediate substantial rise in pensions and other benefits will have to form part of any prices and incomes policy that is acceptable to the

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  trade unions, and such an increase is essential if we are to create the new moral climate in our society without which we have not a cat-in-hell's chance of persuading the better-off to forgo their wage increases.
  What contribution to that ethic—the new moral climate of our society—do we find in the Queen's Speech? What clarion call does it give us on the need to find a permanent solution to the problem of poverty in old age? Just look at the language that the right hon. Gentleman uses to describe the Bill which is supposed to hold out the hope that in future we shall so organise our affairs that no one will dread that retirement will rob them of security and dignity. It reads:
  "Legislation will be introduced to reform the finances of the national insurance scheme and to encourage the more widespread development and improvement of occupational pension schemes."
  No language could more succinctly express the Government's aim or reveal more clearly the difference between this Government's approach and our own. When we were in Government our approach was to say that we must provide decent pensions through a comprehensive national insurance scheme. That was the priority obligation of the Government. If private schemes could then be fitted into that excellent national scheme, well and good. This Government's priority, in obedience to their friends in the insurance companies, is exactly the other way round. It is to encourage private schemes and then, if decent pensions result, so much the better. But as we can see from the Government's new Social Security Bill, bad occupational schemes will continue in existence, so the State reserve scheme must be bad enough to enable them to compete with it. The Government's priority means that we shall finish up with bad pension provisions, except for the fortunate few who are in good occupational schemes. So once again the ethic of "two nations" and the continuance of poverty is perpetuated.
  This is the essence of our attack. On the steps of Downing Street 2½ years ago the Prime Minister said that he wanted to promote reconciliation and
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  unity. In the last few months he has begun hesitantly to lisp the language of reconciliation. But he has not even begun to talk the language of unity. The social policies that he has pursued in the past two years have systematically undermined national unity, and the Queen's Speech shows no evidence of a change of heart.
  We say to the Prime Minister that he cannot switch on the idea of social justice like the Blackpool illuminations when he talks wages and switch it off when he talks about all the other policies which distribute wealth. The only society which deserves the co-operation of working men and women in a prices and incomes policy is one imbued in all its acts by humane priorities—one which, in the words of our Amendment, ensures
  "as of right to every citizen the essentials of a civilised life."
  It is because this Government have not built, and show no signs of building, such a society that they are in such a mess, and they deserve to be.
  4.57 p.m.
  The Secretary of State for Social Services (Sir Keith Joseph): The right hon. Member for Blackburn (Mrs. Castle), in a lengthy and uninterrupted speech, touched upon many large issues some of which we shall be debating before long in this House. I had prepared myself to give to the House a progress report on some of the factors affecting poverty and the poor. I think that the House will still wish to have that, though I must obviously meet the points made by the right hon. Lady.
  Much that is regrettable in this country, including the poverty that remains—and I do not deny it for a moment—can be put right only if we have the optimum mix of growth, a high level of employment and stable prices. That optimum mix has been the objective of the Government and remains our objective.
  One of the factors in growth is the encouragement of wealth creators and, while it is very easy to point at certain features of a free market, one must remember that the function of a market is to match supply and demand within the framework of the law, and restraints

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  on a market which harm some of those in queues—some of those who have expressed demand—can be justified only by the large causes which have been unfolding recently.
  I still feel, as I know my right hon. Friends feel, that we must aim at the growth now within our grasp, and we must do so for many reasons, among which one of the most important is to be able to continue to alleviate as fast as we can the poverty and hardship which still remain in our society.
  The right hon. Lady laid much emphasis, among other subjects, on rents. She showed no recognition of the large numbers of people who, because rents have been subsidised by connection with the dwelling rather than with the tenant, have been waiting for years and years for council dwellings that were expressly provided for those who could not afford otherwise. The right hon. Lady gave a biased picture of a number of subjects. I would only remind her, when she talks so earnestly about means testing, that the present Government have added only one single means test, that for the family income supplement. That means test affects, as the right hon. Lady justly complained, only 50 per cent. of the people we were aiming to help—namely, over 100,000 households. That is the only new means test which we have introduced to add to the battery of means tests left to us by the last Government. But the present Government have been a great deal more vigorous in trying to secure take-up of means-tested benefits. Indeed, we have been dramatically successful—although, we admit, not successful enough yet—in securing a much higher take up of the benefits which were left to us by the Labour Government.
  I shall be identifying in my speech a number of areas of intensive importance to the poor where the Labour Government offended the right hon. Lady's own criteria very seriously and where we have been busy rectifying the damage done to the poor by what the Labour Government did. The right hon. Lady spoke about a massive redistribution. Because I have a large amount of ground to cover, I think that it would be right for me to leave my right hon. Friend the Chief Secretary to the Treasury to comment on her reference to taxation.
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  The right hon. Lady chose to neglect a number of areas where, if the Labour Party had been responsible, she would have rightly taken the credit. The present Government have increased the share of the gross national product going to the National Health Service and to the personal social services, having raised the aggregate capital spending in real terms on the National Health Service to an amount over the current five years that will be nearly 50 per cent. as big again as that of the last five years of the Labour Government. We have introduced numerous new benefits and I repeat that only one of these—the Family Income Supplement—has been means tested. I shall list briefly the new benefits, many of them very helpful to the poor and to that even larger group, the hard pressed, who are all in our minds today.
  First, and perhaps one of the most important, is an improvement that was begged for from the Labour Government and regularly refused—the annual up-rating of national insurance and related benefits. We have brought to an end—I hope for ever—that biennial misery when pensions went up after supplementary benefits had been raised the previous year. This torment was inflicted on an uncomprehending country by successive Governments, including the Labour Government, but has been brought to an end by the present Government's initiative.
  I do not wish to take credit where credit is not due. The attendance allowance was invented by my predecessor, the right hon. Member for Coventry, East (Mr. Crossman). But it was this Government who had the privilege of bringing in the attendance allowance for the severely disabled, and we who, within a year of the first payment of the new allowance for the most severely disabled, are about to embark upon a probable threefold expansion of the scope of the attendance allowance. Already 82,000 households are receiving the tax-free attendance allowance of £5.40 a week, and I know that it is of enormous help to many households which, if not very poor, are very hard pressed.
  There are 100,000 younger widows, many of them poor and hard pressed, whose plight was not relieved by the Labour Government but who receive

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  benefit from the present Government. There has been a dramatically increased take up under the present Government of free prescriptions, free dental treatment and free optical treatment. We have provided a pension for 125,000 people over 80 who had no pension as of right before, and we have provided an age addition, relatively small but all the same welcome, for over 1 million people over 80 on national insurance and supplementary benefits. We have brought in an invalidity package of benefits which are greatly improving the incomes of over 300,000 households, are substantially improving the incomes of over 100,000 householders and are making less substantial but still welcome improvements in the remainder. All of these, except for the attendance allowance and some features of the invalidity package, have been initiated and brought in by the present Government.
  Mr. Michael Meacher: Will the right hon. Gentleman nevertheless confirm that, on the Government's own figures, the total value of these benefits to the poor which he has listed are rather less than £120 million a year, which is precisely 4 per cent. of the tax relief which the Government have given away and only one-fifth of the total they have given to those with over £5,000 a year? Does not that put these benefits in better perspective?
  Sir K. Joseph: The hon. Gentleman's figures, which have been accepted by his own Front Bench from him very uncritically, were described by a leading national economist as grossly misleading. I shall go on to explain the substantial additional benefits which have affected the poor and the hard pressed and which were not described by the right hon. Lady, and I want to go on to one particularly significant difference between the attitudes of the two Governments.
  As the House knows, for many years a feature of our national insurance system has been that contributions to a large extent if not entirely have been on a flat-rate basis. In the old days before the 1964 Labour Government, the Conservative Governments were always criticised when they touched the flat-rate contributions. We were bitterly attacked for what was called a "poll tax on the poor". The
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  Labour Government inherited a flat-rate contribution at 58p. Did they avoid this poll tax on the poor? Did they leave that rate of contribution untouched? Or did they raise it? They raised it in their six years of office by no less than 50 per cent., after all their talk. The present Government have, however, within our policy for helping the poor and the hard pressed, refused to increase the flat-rate contributions. We have left the flat-rate contribution unchanged. The Labour Government increased it by 50 per cent., a significant breach of all the right hon. Lady's fine words, while this Government have left it unchanged.
  How also the right hon. Lady can attack the Housing Finance Act, which will reduce the rents otherwise payable by probably 750,000 council tenants and probably 200,000 private tenants, leaves me breathless in view of the general principles she has enunciated.
  The largest factor which she failed to mention and which the hon. Member for Oldham, West (Mr. Meacher) also failed to take into account is the operations by successive Governments on the tax threshold. Under the Labour Government the tax threshold did not even keep pace with inflation. In real terms, a married couple with two children found over the six years from 1964 to 1970 that their tax threshold had been lowered by 8 per cent. That meant that a married couple with two children were paying standard rate of tax on earnings of just over £15 under Labour. Now my right hon. Friend the Chancellor of the Exchequer has raised the tax threshold to £20·55. Since the Tory Government came into office the tax threshold has risen in two years by 11 per cent. in real terms. The House will remember that, because the then Chancellor of the Exchequer abolished the reduced rate of income tax, it was the standard rate of income tax and not the reduced rates that bit at Labour's lowered tax threshold, to the great damage of poor households.
  I expected that the subject of this debate would largely be the position of people living below supplementary benefit level of income. I think we should all like to look at the position of those who are on supplementary benefit and those who are just above it who receive no help from it but who are often

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  hard pressed. I agree with the hon. Member for Oldham, West in something he said about this in an Adjournment debate. Supplementary benefit sets a level of incomes below which contemporary society decides that those not in full-time work should not be allowed to fall. In other words, it is a moving measure of the lowest acceptable level of income for a family that is not in work. It moves as society's standards and wealth move.
  It is, however, impossible to take a single figure from the supplementary benefits scheme as a measure below which life is poverty-stricken, because the supplementary benefit varies for each household or beneficiary, depending on the number and age of children and the cost of housing. I want to look for a moment at the movement of two of the most important factors in the standard of living of those who are less well off.
  The single pension, to which the right hon. Lady referred, has had an increase in buying power since June, 1970 of over 10 per cent., since the last Labour up-rating in November, 1969 of about 6 per cent. The over-80s, because they have had an age addition, have done 5 per cent. better in each case, that is, 15 per cent. and 11 per cent. respectively.
  The Trades Union Congress in the recent tripartite talks expressed concern—a concern shared by the whole nation—about the elderly, and I think the TUC would acknowledge that it found the Government anxious to do whatever inflation made practicable. The House will have noted what was said by my right hon. Friend the Prime Minister this afternoon about our intentions for next year's up-rating depending upon the rate of inflation and the progress of the economy. The House will also have noted the undertaking to make a lump sum payment as expressed by my right hon. Friend the Prime Minister as early as practicable next year.
  Mr. Arthur Lewis: Why do all Governments say "as early as practicable"? Is it not possible for every person with a pension order book to be paid a certain amount on a given date? Why do the pensioners have to wait until "as early as practicable"? Could it not be done next week or the week after?
  Sir K. Joseph: I sympathise with the hon. Gentleman's question, which rises naturally to everybody's mind, but even such a simple job as paying the single lump sum becomes a substantial operation when it has to be paid to about 8 million people, particularly in the winter months where there is apt to be a lot of sickness about. Legislation is needed, and careful preparations must be made to ensure that the operation goes smoothly and with minimum inconvenience to pensioners. As the House will see, I anticipated that question.
  The supplementary benefit scales—although the House notes with impatience the slow movement over the years—have more than doubled in real buying power since 1948 and have kept pace with growth in gross average earnings. I remind the House that all on supplementary benefit receive automatic exemption from National Health Service charges, and, where appropriate, free school meals and free welfare milk. There is also a whole range of discretionary additions made to try to help the needy. There are over 4 million individuals on supplementary benefit at the moment and the conditions among these people vary widely.
  The differences between household and household on supplementary benefit have to take into account whether there are any earnings disregarded in the household, whether there are any resources disregarded in the household, the standard, convenience and economy of the housing in which the household lives, the degree to which the household has a family within reach, neighbours and friends, the state of the household's cupboards, the quality of the services in the area—and services are expanding, particularly for the elderly—and perhaps, above all, something intangible, the capacity of the individual household to cope.
  All these conditions vary, and we feel most concerned about those where the housing is bad, there is no family, no disregarded resources and where, because of ill health or for other reasons, the capacity to cope is relatively low. These are the households about which we are most concerned and to which we are trying to bring all the help we can.
  I will briefly focus on groups who are still living on incomes below the supplementary benefit scales. First, there are

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  those who are not in work. It is still true that, from a combination of pride and ignorance in some cases, not all the elderly who are entitled to supplementary benefit are yet claiming it. I am sure the whole House longs for a more automatic way of reaching them. The tax credit scheme, if approved by the House, will be some help, but it will not solve the whole problem of reaching the elderly with the benefit to which they are entitled.
  There is another group not in work who are living below the supplementary benefit scales. The Labour Party used to make a great fuss about them, but lately the fuss has been somewhat reduced. I refer to those who are on wage stop. When the Conservative Government came to office, no fewer than 10 per cent. of the unemployed were suffering from the wage stop. Now, largely because of the impact of family income supplements, the latest figure for the proportion of the unemployed who are wage stopped has been reduced from 10 per cent. to 3 per cent., and this means a substantial cut in the number of people living below supplementary benefit level.
  I turn from those who are on lower-than-supplementary-benefit incomes who are not in work to those with incomes below supplementary benefit level who are in full-time work. In the light of the right hon. Lady's indictment, I will make this single political point. According to the National Board for Prices and Incomes—Report No. 169—Labour made no visible progress in improving the relative position of the low paid in their six years of office.
  Dr. Shirley Summerskill: Equal pay.
  Sir K. Joseph: I am quoting the report of the National Board for Prices and Incomes. I assure the hon. Lady that I would not have presumed to make such a pronouncement without solid support. The proposal made by my right hon. Friend the Prime Minister, which has been the basis of the tripartite discussions, of a flat-rate increase has been acknowledged widely to be a real help to the low paid in jobs, but I have some good news to announce to the House.
  The House will be aware that when attention was first drawn to what in brief was called "family poverty"—that is, the
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  existence of households with children on levels of income below the supplementary benefit scale—the Department of which I am the head, at the moment, set in hand a statistical inquiry about numbers.
  Last year saw the publication of the first report—relating to late 1970—on the incomes of two-parent families and that report identified, with many qualifications, some 77,000 households with children. I am glad to tell the House that the latest evidence, which will be published soon, shows that between late 1970 and late 1971 the number of 77,000 such households has been cut by between one-fifth and one-quarter. This still leaves a substantial number of such families but nevertheless is a worthwhile improvement on which we propose to make further progress.
  Mr. Meacher: Is the right hon. Gentleman aware that the latest Family Expenditure Survey shows that the earnings of the wage earners with whom we are dealing in this debate fell last year to 67 per cent. of average compared with 68 per cent. in the previous year? Does he not agree that, although this is a small fall, it is an unmistakable downward trend from 70 per cent. in 1967?
  Sir K. Joseph: I must be careful about entering into statistical quicksands, but it is probable that in 1967, and certainly in 1968–69, the very low wage earners were caught by the tax trap of the then Labour Chancellor of the Exchequer, from which they have now been totally rescued. My right hon. Friend's proposals will be a substantial help to those at the bottom end of the earnings scale.
  The right hon. Lady asked why the Government did not introduce an improvement in family allowances when we came into office. I have explained at great length in earlier debates why this was so. I then said that on the evidence we had when in Opposition we thought that it was the right option, but that when we came to office we found that it would not achieve the purpose and would not reach straight away the first child. But even when it had done so, no practical increase could possibly have been made to poor households with children or to the very poor. Therefore, the Family Income Supplement was presented by the Government as a first step in our

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  policy of tackling family poverty. I described it during the Second Reading debate as a first step, because we have now introduced the rent allowance and tax credit proposals as a further stage in tackling family poverty.
  Mrs. Castle: I made a specific proposal to the right hon. Gentleman and would like to know whether this is his considered answer. Have not we had an admission from the Prime Minister this afternoon that the family incomes supplement is in a sense self-defeating? Therefore, is this not an appropriate moment to introduce a family allowance immediately for the first child?
  Sir K. Joseph: I will come to the right hon. Lady's proposal in a moment. FIS reaches directly, or by the cut in the numbers of wage-stopped, about 100,000 households and has a take up of 50 per cent. of the categories we think are so entitled. but 75 per cent. of those who are entitled to over £2 a week are receiving it.
  The right hon. Lady gave a distorted picture of the poverty trap and I hope she realises her responsibility in this matter. If she discourages people from taking up benefits, she will be doing a great damage to her cause.
  I will see whether I can explain to hon. Members opposite why the poverty trap, though important, can affect only a very small percentage of the working population. It is caused only by the interaction of means-tested benefits, which are largely connected with children, and with low earnings and as such affects only a very small minority of households.
  The latest calculation is that a surtax of 50 per cent. or over affects theoretically—and I repeat theoretically—at most 160,000 families or about 3 per cent. of the working population. Of these 160,000 families, around 40,000 households—under 1 per cent. of the working population—might theoretically suffer a surtax of 100 per cent. or over, and I agree that this would be very serious. The uprating of the benefits, including FIS, has over the last two years protected the great majority of those and avoided their losing benefit. The take-up figures are evidence that this has happened.
  It is very complicated to make a theoretical analysis of the impact of the poverty trap. I wish to pay a tribute of
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  admiration to Della Nevitt for her serious and objective approach and for the analysis which she prepared for the National Council for the Unmarried Mother and her Child. I studied her paper with the greatest interest. There are comments I could make upon it. Its tables depict a snapshot effect and ignore changes in time, but I found particularly cogent her plea that we need to find the right combination of universal and selective measures to beat the poverty trap.
  Two of the main ingredients of the trap are FIS and free school meals. This is why the Prime Minister's announcement today was relevant to the subject of poverty. I will explain in some detail what is proposed.
  After a year of operation the FIS scheme has been reviewed to see in what way it can be made more effective. Only one change has been found to be necessary, though this is an important one, in order that FIS can serve its purpose more fully.
  From 3rd April, 1973 awards will be made for periods of 12 months instead of six months and, as at present, changes of circumstances will not affect the awards. All six-month awards current at 3rd April, 1973 will be extended for a further six months. The effect of this will be that any six-month award made on or after 10th October, 1972 will automatically last for 12 months. The cost of this change will be roughly £1 million a year.
  The effect as far as the poverty trap is concerned will be very beneficial. At present when a man in receipt of FIS receives a pay increase his FIS claim falls to be renewed, on average, three months later; he gets a smaller award or possibly no award at all, in which case he has to remember to claim again when the FIS prescribed amounts are raised. The right hon. Lady failed to take account of the fact that the FIS amounts are raised. In future, with twelve-month awards of FIS, and assuming that wages and FIS prescribed amounts move upwards each year in step with increases in the cost of living, recipients of FIS will remain continuously in benefit. During any twelve-month FIS award a beneficiary will have a wage increase—which will not affect the FIS award—and there will also be an uprating of the FIS

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  prescribed amounts. Consequently, when the next FIS renewal claim comes in, the award will be about the same as it was previously. Thus, a recipient of FIS will tend to remain continuously in benefit as long as he has children and remains in low-paid employment. If a beneficiary has a very substantial pay award there would be a reduction in his FIS but not until, on average, six months afterwards.
  Family Income Supplement awards carry a passport entitling those receiving the supplement to automatic exemption from National Health Service charges, to free welfare milk and to free school meals. A pay rise will reduce a family's entitlement over the year as a whole only if it is greater than the annual increase in the qualifying income levels. The change announced today will result in a very substantial cut indeed in the already very small percentage of wage earning families—between 1 per cent. and 3 per cent., depending on the definition of "poverty trap"—subject to the poverty trap.
  Like so many of our changes—the annual uprating, attendance allowance, the invalidity package, the raising of the tax threshold, the pension for the over-eighties, age addition and the uprating of the qualifying levels of many benefits—this change will benefit not only the very poor and, in many cases, those on supplementary benefit, but the hard pressed just above the supplementary benefit level. The hard pressed have gained by increases in the qualifying levels for many benefits, by the raising of the tax threshold, by rent rebates, by a number of new benefits and by annual upratings. They benefit from the extension to 12 months of free school meals. The other announcement made today—the lump sum for pensioners—will benefit all pensioners, including those on supplementary benefit, and very many hard pressed people who are not on supplementary benefit.
  I must mention an instrument which we think will help the poor and the hard pressed, namely, the tax credits scheme, if it is approved by the House. The right hon. Lady the Member for Blackburn was fair in saying that it is some way ahead. I noted the suggestion of the Leader of the Opposition about a debate on the subject. Therefore, I shall
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  not mention it in detail today. It meets one very important need of any effective instrument of social reform, namely, that it provides an automatic improvement in benefits and without a means test.
  However, I should not like the House to think that we propose that the prospect of a tax credits scheme should paralyse progress meanwhile. We have announced today the extension to a year of the family income supplement, the free school meals and free welfare milk and all the passport benefits connected with the family income supplement and a lump sum payment to pensioners next year. These decisions are evidence that we do not propose to stand on what we have already achieved until we can bring in the tax credits system.
  I should not like the House to think that we are "sailing blind". A great deal of research has been done into what, for shorthand, I call crudely the dynamics of poverty to enable us to identify and meet the needs of the poor and to raise them from the poverty level as rapidly as is possible in this world. I do not believe that a Government which has done so much so quickly—two increases in the tax threshold; annual up-rating; the introduction and extension of attendance allowance; the introduction of invalidity benefits; the introduction of an age addition; pensions for the over-eighties; benefits for the young widows; family income supplement; year-long entitlement to family income supplement; free school meals and free welfare milk; the introduction of the rent allowance scheme; and now the proposal to introduce a tax credit scheme—deserves censure. On the contrary, I hope that my right hon. and learned Friends will vote enthusiastically against an Amendment which so maligns a reforming Government.
  5.33 p.m.
  Mr. Michael Stewart: The Prime Minister today has asked Parliament and the country to agree to a prices and incomes policy. He could hardly have asked for anyone more suitable than the right hon. Gentleman the Secretary of State for Social Services to help persuade the House and the country to agree with him, for the right hon. Gentleman has so kind a heart, such a mastery of statistics and such skill in argument that he could persuade anybody who was

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  being stretched on the rack or subjected to the thumbscrew that it was all for the best. The right hon. Gentleman and I well remember years ago how he almost managed to persuade us that the Rent Act, 1957, was not so bad after all and that even Rachmanism might have its good social side. However, whenever I listen to the right hon. Gentleman I realise that what he says falls short of reality.
  The Prime Minister is asking the House and the country to agree to a prices and incomes policy. All Governments do that in the end. A character in one of Molière's plays was astounded to learn that throughout his life he had been talking prose; since he was not a poet there was nothing else he could do. Just as we all have to talk prose, all Governments in the end have to talk incomes policy.
  Governments which start, as the present Government did, by saying that they will not have an incomes policy finish by having a nasty one, which bashes the public servants and all those who are in the least position to resist, and if the country becomes too angry about that they have to pull up their sleeves and introduce another incomes policy. That is the stage that we have reached. As a matter of common sense, an incomes policy which people will be prepared to accept is obtainable only on the terms which my right hon. Friend the Member for Blackburn (Mrs. Castle) suggested.
  If we accept that the wealth of the country which is produced by the conjoint efforts of all those who work with hand or brain should be shared on some general public principle, what are the principles which can be adopted? I think that there are four: to each what lie can grab; to each according to his needs; to each according to what he produces; and the luck of the draw. The way in which the wealth of the country is distributed is a mixture of those four principles.
  The principle of "to each what he can grab" recommends itself warmly to the Conservative Party. I am sorry that the right hon. Member for Wolverhampton, South-West (Mr. Powell) is not present to help us in discussing this problem because he is an enthusiastic advocate of that doctrine. It was he who said that anyone who does not insist on get-
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  ting the best possible return for his services, whatever the public interest may be, is wrong.
  The principle of "to each what he can grab" recommended itself to the Conservative Party as long as those who could grab were property owners and reasonably well-off. It is a common sense principle that if a person already has a good deal his power to grab more is greatly increased. But, alas, the Conservative Party found out by experience that it is not only the landowners and profiteers who can grab; it is also the highly skilled worker with the sort of skill which cannot be replaced and the withdrawal of which will do the country great injury. If he is not only highly skilled but highly organised, his power to grab is very considerable.
  Once the Conservative Party grasped the fact that it was not only the gentry but nasty, vulgar working men, highly skilled and highly organised, who could grab, it realised that the principle of "to each what he could grab" was not the best way to distribute the national income. Once members of trade unions who are highly skilled and organised and who can grab a great deal are willing to forgo this if we can offer them some better and more justifiable principle than "to each what he can grab", what next?
  Here I come to the principle of "to each according to his needs". Slowly and laboriously we have begun to accept this principle. We have established that nobody should fall below a certain standard of living, whatever other claims he may have on the community. If anyone suggests to the Government that the wives and dependants of people on strike should be deprived of social benefit, may I point out that every human being has a right to a minimum standard of life, whatever the conditions or situation. I hope that is agreed. However, we must realise that we have adopted this principle only on the most microscopic scale, as was pointed out by my hon. Friend the Member for Oldham, West (Mr. Meacher). I believe that to get Parliament and the country to accept the whole idea of an incomes policy we must go a long way further in asserting that nobody ought to fall below a certain standard of living.
  Britain is a rich and prosperous country. We ought to accept that everyone, merely by virtue of being a human being

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  and being here, has a right to a certain standard of living. We accept that now, but on too small a scale. I believe that we can afford, and ought, to step it up. The trouble is that we have dillied and dallied over this principle by saddling the whole of life with rebates, filling up special forms, and so on.
  What will the Housing Finance Act do? It will create a situation in which the majority of people affected will have to claim rebates. I am quite sure that this is wrong. I accept that, in order not to be recklessly extravagant in the social services, there is some argument for selectivity for rebates, and so on. However, we ought never to create a situation where the majority of people have to ask for rebates. That is what the Housing Finance Act will do, and it will make nonsense of any incomes policy which purports to help the lower paid.
  I hesitate to spell out again what has been spelled out so often, but the Government ought to grasp the fact that, by saying, "We will have an incomes policy, we will really try to help the lower paid so that, whatever happens to anyone else, they will go up £2, £3 or £3·50", in the kind of society we have created, the moment their incomes go up they are disqualified from a rent or rate rebate and have to pay for their children's school meals, which they did not have to pay before. Therefore, a large number will be no better off. In fact, some will be worse off.
  The Government must sort out this problem. If they believe, as they claim, in a wages or incomes policy designed to help the lower paid, they must realise that it will not work if at the same time the social services are run on the basis that rebates become the rule rather than the exception.
  Sir K. Joseph: The right hon. Gentleman speaks with great force. I had hoped that he had taken in the figures that I gave. The poverty trap, which takes away more than a household receives, at the moment theoretically affects under 1 per cent. of the working population. On today's announcement, by 3rd April next year that figure should be cut very substantially.
  Mr. Stewart: I hope that the right hon. Gentleman is right. However, having
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  heard his comforting counsel on everything from the 1957 Rent Act onwards, I am not entirely convinced.
  As a matter of general principle, a wages or incomes policy aimed at helping the low paid is not consistent with a social services policy which makes rebates the rule rather than the exception. I ask the right hon. Gentleman to look at the figures again.
  It is possible that a working man on a limited income might like to take his children to visit a museum. However, he will be bashed by the Government if he does than. Cannot they conceivably be a little more generous or realise that, if not, they cannot expect the good will and massive support that is necessary to make any of their policies work?
  I have spoken of the principles "to each what he can grab" and "to each what he needs". There is nothing to be said for the first principle. For the second there is a good deal and we ought to give more weight to it.
  A third possible principle is "to each what he produces". There is a good deal of sense in that. In my judgment, in a civilised society the sharing of wealth can be based on some kind of reasonable compromise between the two principles "how much one produces" and "how much one needs". We already have this to some extent and we can accept the justice of it.
  We talk of workers by hand and by brain, but nowadays increasingly more people earn their living by the use of their wits, skill, knowledge, training and sweat. If Bill and Jack are arguing they will probably accept that if Jack works longer hours, sweats more, and has taken more trouble to make himself skilled, it is not unreasonable that he should be paid more than Bill. But what happens next? Both Bill and Jack can look at Sir Marmaduke, who gets his income from the luck of the draw. Unless the Government do more to prevent incomes from being distributed by the sheer luck of the draw, they can talk until they are black in the face to people who work for their living about social justice and the national interest and they will get nowhere.
  In this connection I should like to refer to two matters which came up in our debates last week: the long outrage of

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  profiteering in land and distribution of wealth according to the luck of the draw and nothing else. I know all the elegant arguments that are produced for allowing an individual to collect in half a day as much as, if not more than, a skilled working man will earn in his whole working life, and to do that through sheer luck.
  The Prime Minister claims to be a national leader appealing to the whole nation. If one wants to be a national leader, it is occasionally necessary to throw overboard previously held party beliefs. There is no justification, in the kind of society in which we live today, for any individual obtaining a large chunk of income through pure ownership of land. There is no answer to that in the end but public ownership of land. If right hon. and hon. Gentlemen opposite care to cite all the traditional Tory arguments against this suggestion, I should point out that that is all very well provided they are not at the same time talking about the national interest, private incomes policy, and so on. If they accept the concept of the national interest, which in the last resort is a Socialist concept, they cannot move towards a Socialist point of view because it happens to suit their interest and use it to persuade working men to accept lower wages. If they want to do that, they must come the whole way. If we want to get the whole nation to accept that the way in which wealth is shared is based partly on justice, on how hard we all work, and partly on compassion and how much we all need, we must do everything we can to get rid of the other two principles—"to each what he can grab", and "the luck of the draw". I do not believe that can be done without the public ownership of land.
  I want to say one other thing about the housing matters that were referred to in our debates last week. What will be the effect of the Housing Finance Act? If a person is already badly off we are told that he will get a rebate, if he claims it, if he knows about it. What publicity has there been of the sort which existed about the Rent Act, 1957? I am eagerly awaiting a leaflet as informative as that relating to the 1957 Rent Act.
  Sir K. Joseph: The right hon. Gentleman, who is scrupulously fair, I am sure will acknowledge that full-page advertisements in great detail in all the national newspapers were a very effective instrument.
  Mr. Stewart: I accept that, but the right hon. Gentleman will remember that in 1957 there was an immensely detailed booklet telling everybody what their rights were. Incidentally, it was a great advantage to the local Labour parties because we made use of it and we made the lives of some landlords hell. I am hoping the Government will be generous enough to produce a similar booklet about the present Act. There ought to be.
  If one is already very well off, one can afford to buy another house and its value will continue to increase. If one is not sufficiently well off to buy another house, one is in an increasingly difficult position. If the Government are seriously thinking about social justice in relation to incomes, they must reconsider their whole housing policy.
  I should like to mention one other detail of housing policy—the offence of harassment whereby a landlord so bullies a tenant that the tenant goes and the landlord can then sell the house for a very high price. The penalty for harassment is either £100—or is it £300? I forget for the moment; it really does not matter—or a term of imprisonment. I know of no case in which somebody convicted of harassment has been sent to prison. If he got a prison sentence it would almost certainly be suspended. Even if a landlord got the maximum fine, if he harassed his tenant out and was fined £300 for so doing, he would have a house with vacant possession. The house would probably be worth £30,000. If the Government have the smallest regard for social justice, let them look again at the penalties of harassment.
  As I understand it, it has always been regarded as a good legal principle that a criminal should not profit from his crime. The Government should look seriously at this. If any landlord by the crime of harassment got his tenant out, that property ought to go to the local authority at a fair valuation. Otherwise, all the penalties for harassment mean nothing at all.

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  I spell this out because this is the kind of thing that makes it difficult for many people to accept all these appeals to the national interest that we always get whenever a Conservative Government are in financial difficulties. Everybody else is expected to endure, to tighten his belt, except those classes of the community who are rich. Indeed, I would not resent this if they were rich by working hard and contributed to the national wealth, but the people I have in mind are rich without contributing to the national wealth and, indeed, possibly out of their own wealth they contribute substantially to the funds of the Conservative Party.
  I do not believe for a moment that the Prime Minister's case has been made out. If he wants to get the country out of its difficulties, he has got to think far more fundamentally than he has ever done before.
  5.56 p.m.
  Mr. F. A. Burden: One of the fortunate circumstances in which we debate the Gracious Speech is that not only are we permitted to raise matters concerning proposals in that speech but we can also raise subjects that we think should be included in it.
  I do not wish to be controversial because the subject that I wish to raise is not in any way controversial. However, I cannot resist making one or two comments on the speech that we have just heard from the right hon. Member for Fulham (Mr. Michael Stewart). He finished his speech by referring to the financial difficulties of the present Government. He certainly gave no indication of the fact that the last Labour Government might have been in financial difficulty. What I cannot help wondering is why, if they were in no financial difficulty whatsoever, they did not introduce many of the measures which my right hon. Friend has announced today and which have been brought forward by the Conservative Government.
  The right hon. Gentleman also said that we are a rich and prosperous country. I would remind right hon. and hon. Members opposite that we are not nearly as rich as we were. However compassionate we may feel, however much we many wish to help those who deserve greater help, the wealth of this country must inevitably depend upon its ability
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  to export to the rest of the world. That means that a prices and incomes policy is necessary if we are to ensure that our goods are at a price and of a quality that will encourage the world to buy, so that the rest of the world buy them because they are competitive. If we fail to do that, it matters not one iota which party is in power in this country. The standard of living of the people will gradually decline and the position of the lowest paid will become worse and worse. I am afraid that that is an inevitable fact of life.
  One of the things of which we all used to be so proud—it was a fact and it meant that people bought British—is that not so many years ago the words "British is best" really meant something. Those words meant that British goods were best in design, that the quality and price were right and that delivery was right. We have got to get back to the standard of production which will encourage people to buy from Britain, before we can greatly improve the standard of living of our people, even the poorest.
  I am encouraged to speak today because this is a day on which we have a very compassionate approach to the people of this country. I want to discuss the question of vivisection. In 1876, an Act of Parliament controlled vivisection, and there has not been a major amendment to that Act since. In 1895, only eight years after that Act, there were only 4,679 experiments on animals. In 1962, the figure had risen to 4,041,944 and there was such concern in the country that the Government set up the Littlewood Committee, in April, 1963.
  Its terms of reference were:
  "To consider the present control over experiments on living animals and to consider whether, and if so what, changes are desirable in the law for its administration."
  That committee reported in April, 1965, and, despite constant pressure from hon. Members on both sides and a number of Early Day Motions calling for legislation to effect many of the committee's recommendations, it was not until 11th June, 1971, that the report was even debated. On that occasion, too, hon. Members on both sides pressed the Government for legislation. But we have had no such legislation.
  Let us look again at the numbers of experiments. In 1968, there was an

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  increase of 452,987 experiments over the year before—nearly half a million more. Since that year, the number has risen to 5,607,435 experiments—a further increase of 1,112,504. Animals were being experimented on last year at the rate of no fewer than 15,240 a day—little wonder that there is growing public anxiety and concern.
  On 2nd October this year, the Daily Telegraph carried a leading article which pointed out that 86 per cent. of the experiments were done without anaesthetics, in circumstances in which animals were likely to feel pain, and that last year alone 500,000 certificates waiving the anaesthetic provisions were granted. I cannot help wondering how many applications for certificates were received and how many were refused.
  How many officials are engaged in scrutinising applications for experimentation? What is the average time taken in vetting every application? We know that there are 21 inspectors, and of these, when there were only 13—
  Mr. Speaker: Order. I have no wish to interrupt unnecessarily speeches on the Gracious Speech, but this is not the general debate. We are dealing with an Amendment relating to poverty. The hon. Gentleman must relate his argument to the Amendment.
  Mr. Burden: Of course, it is very difficult to do this, but when we are discussing the question of need and the need for compassion—this of course raises the question of poverty among people—there is nothing poorer than an animal which is subjected to vivisection.
  Mr. Speaker: The hon. Gentleman's argument is ingenious. However, we have had four days of general debate during which at times there was a shortage of speakers. The hon. Gentleman could have made this speech then if he had wanted to do so. We are now on a much narrower debate, dealing with human poverty.
  Mr. Burden: Of course I accept your ruling, Mr. Speaker. However, I have made most of the points which I wanted to make. I hope, therefore, that, when the Leader of the House replies, he will give us some encouragement to hope that the Government will introduce legislation
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  during the present Session into the light of the modern requirements that experiments will be categorised. I am sure that such information will be welcomed not only by hon. Members but by the general public.
  6.6 p.m.
  Mr. Lewis Carter-Jones: Obviously, I will not follow the hon. Member for Gillingham (Mr. Burden). I will return to the debate on poverty. I regret that the Under-Secretary of State for Social Services is not here. I wanted to make a speech in the form of a battery of questions, the first of which is directed at him. It relates to non-payment of benefits to non-strikers thrown out of work because of a strike. At present, the National Insurance Commission, which is an independent body, has interpreted its functions in such a way that we are getting what might be called "judge's law" applied by the Commissioners. They are deliberately withholding benefits from non-strikers with the sole purpose of breaking a strike. This seems a gross abuse of their powers.
  If the Minister has any doubt that this is so, I would ask him to consult the Department of Employment at Eccles, where there has been a serious strike at Gardner's. A substantial number of people who have gone on strike feel that they have been deliberately victimised by the DHSS and by the Commissioners with a view to ending the strike, without taking into account the merits or demerits. I would urge the hon. Gentleman to investigate recent strikes in my constituency, where non-strikers and their families have been the chief victims.
  Mr. Jeffrey Archer: Does the hon. Gentleman also know the kind of case, which I have experienced, where people can go on strike in one constituency and put out of work people in another constituency, who cannot get benefit? That is an equally bad, if not worse, case.
  Mr. Carter-Jones: Yes, the cases are equally bad. I am grateful to the hon. Gentleman for highlighting that problem.
  As for the pensions scheme which is to be introduced soon, once again it is the disabled who will suffer the double disadvantage. If one is disabled and cannot earn a living, one will be in the only category which cannot do so. No doubt,

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  from time to time, the Minister will have to meet deputations from the Disabled Income Group, the Child Poverty Action Group, the Central Council for the Disabled, the Spastics Society and the Multiple Sclerosis Society on this very point.
  Since we are talking about poverty, I hope that the Secretary of State will look again at his Bill and make sure that the disabled will not once again be the only substantial group to be penalised.
  Would the Minister also bring his powers of persuasion to bear on the Prime Minister, to ask him to organise a conference with Distillers Ltd. and all the Departments involved with the representatives and the parents of the victims of the Thalidomide drug to find out whether a reasonably good working solution—possibly, initially, a compromise—can be reached to resolve this tragic problem? We are now talking about poverty. Ten or 11 years have passed since the first victims emerged. The families of these children have suffered severe poverty. In some cases they have suffered total poverty. Parents have had to give up their work. They have had a dual role of being nursemaid by night and working under great strain by day. So there is also the poverty of the parents of thalidomide children; but unless we take action very quickly indeed we shall have the poverty of the thalidomide child himself or herself.
  The training and education of these children and their development and potential should have been examined a long time ago. I ask the Minister to ask his right hon. Friend the Prime Minister to meet the request of my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) and to convene a conference urgently to tackle this problem. It a solution to the problem were to be reached tomorrow, there would still have been far too much poverty and hardship suffered already. I urge the Minister to give prompt attention to this matter.
  I know that the previous Government were proud of their record with regard to the take-up of the attendance allowance. I gather that it is now about 70 per cent. But those of us who are concerned with the matter are very worried about some of the cases which are
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  turned down. Some cases are beyond belief. One visits the people involved and one has to say, "My God, if you are not entitled to the allowance, who is entitled?" A multiplication effect arises from this because people in a township who hear of cases being turned down are, therefore, discouraged from even applying for the allowance. Will the Minister please seek an urgent review of all the anomalies? Sometimes busy doctors who are independent ought not, perhaps, to be involved. Perhaps the attendance allowance applications would be far better handled by social workers, who are very much involved in the suffering of the family and deeply understand the family's financial and social needs. Will the Minister ask for a review of the manner in which attendance allowance decisions are reached?
  Last week I spoke at the regional conference of the North-West Society for Mentally Handicapped Children. Rightly or wrongly, that society believes deeply that the mentally handicapped child suffers a severe hardship in respect of the attendance allowance. The society is convinced that the medical profession is not fully alive to the problems of attending to these children day and night. Will the Minister have a look at that problem also?
  Finally, I come to the double disadvantage of age and disability. This is a problem which requires perhaps even more urgent attention. As a person becomes disabled or old he suffers the double advantage of having a reduced earning capacity when his needs are at their greatest. This is contrary to what is generally stated, but there is little doubt in my mind that the needs of the aged in terms of food, shelter, clothing and warmth are greater than those of other people. I urge the Minister to tackle the problem now.
  I have four questions. Will the Minister realise, first, that the most urgent requirement is money? The proposals today from his right hon. Friend the Prime Minister were totally inadequate to meet the requirements of these people. Will the Minister ask his right hon. Friend to return to the House and say that there will be a substantial increase in pensions, an increase which is needed now? Will the Government make

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  a gesture to these people by offering something which hon. Members on all sides of the House would willingly support—a 5p television licence? For many of these people who are house-bound television is their sole method of entertainment. A 5p licence would be of tremendous benefit to them.
  My third and fourth questions are linked. As people grow older, those who have lived together as man and wife for many years become dependent upon each other. Generally, people have loved in marriages which have survived, and where one has loved one needs massive support at this time, so that one person in the family who becomes disabled before the other does not cripple the able-bodied person as a result of the amount of effort required for nursing. They will give the service willingly and freely. In so doing they are sustaining their marriage but, above all, they are saving the State vast sums of money.
  I turn now to the need to provide for the aged the advantage and support of a home help service. In speaking of the home help service one is also speaking about the geographical lottery. In some areas the service is efficient but in others it is not. If it is to become efficient in the deprived areas it will require vast sums of money from the Government. Will the Government undertake to give this money now to assist local authorities to provide home helps where there is a need? It is morally right and it may turn out to be economically sound.
  Finally, still dealing with the problem of a geographical lottery, will the Government give financial support to local authorities, and do more than that, to make parts of the Alf Morris Act mandatory, to compel local authorities to provide facilities within the home to make the joy of living together as old-age pensioners easier, in terms of access, environmental machines and simple devices in the home?
  We may well feel that we have done much for the disabled and aged in our society. I hope that in my short speech I have indicated that there are vast gaps still requiring to be filled.
  6.18 p.m.
  Mr. Hugh Fraser: I am sure that the whole House has a great deal of sympathy with many of
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  the points made by the hon. Member for Eccles (Mr. Carter-Jones), but the problem which faces us, and especially old people, is inflation. Therefore, I hope that I am in order in addressing myself to the last section of the Amendment moved by the right hon. Member for Blackburn (Mrs. Castle), which deals with value added tax. This subject has been touched on by other hon. Members today, but since the Budget we have moved into a different position from that which was perhaps envisaged when VAT was accepted by the House of Commons.
  First, inflation has got wildly out of control. Secondly, from a reading of the orders which will be put before the House within the next few days it is clear that by next April we shall have reached a pitch and a point where a flood of new demands for price and wage increases will be coming forward. Therefore, it seems only prudent to delay or postpone the introduction of VAT for at least one year—preferably until it can be brought in in parallel with the negative income tax and, thereby redressing the regressive elements in VAT.
  I know that my right hon. and hon. Friends on the Treasury Bench take a different view. However, I must remind them that we have seen today that the Government are determined not merely to be in office but to show that they are in power. For some of us that is a beneficient view. But the only way that power can be made real is by the support of the people. Therefore, it is essential that the Government of the day should never be shown by their policies to be encouraging or pushing up prices. That is vital to the success of the policy which was outlined this afternoon by the Prime Minister.
  The Front Bench should bear in mind—perhaps they could occasionally pay attention to what is being said by their colleagues—that they are still in office. In doing so, there are two points that have to be faced which may cause considerable difficulty to those who are trying to support the Prime Minister's policy. First, from 1st January, there will be a considerable increase in food prices, which cannot be controlled. I will not state what the increase will be. It may be 2 per cent., as some Ministers have said, but it may be much nearer to 4 per cent.

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  or 5 per cent., which people like Professor Kaldor believe it will be. That is inevitable.
  Secondly, the Government have decided to go into Europe. I must point out to them that the people believe that VAT is connected with entry into Europe.
  Mr. Arthur Lewis: It is.
  Mr. Fraser: It is not actually. It is believed that VAT is part of going into Europe. Consequently, many people are opposed to entry. They believe that the introduction of VAT is merely an aggravation of the felony of entering Europe without the people's consent.
  Let us consider the damage that VAT will do. First, the Government must ensure that the syndrome between VAT and Europe is broken. Therefore, the Government must consider whether VAT can be postponed. Of course it can be postponed, because there is no need for VAT when we join Europe. VAT in Europe becomes of importance only when all its rates are harmonised. There are now 30 rates, and it will take several years to effect harmonisation. If VAT is postponed, the first result will be the breakage of the syndrome, which is in the minds of the people, that there is a connection between VAT and Europe.
  Secondly, it is important that the Government should consider where the tax will fall. Will the tax be regressive and hit the lower-paid? Some members of the Treasury Front Bench claim that the fall of the tax will be neutral, but I do not believe that is true. The more I write to the Treasury Front Bench and the more I try to communicate with the Customs and Excise, the more evasive and incomprehensible are the answers that I receive.
  I have some letters from the chairman of one of the biggest and most important exporting potteries in the country, who cannot make sense of the answers that he has received from the Treasury. I also know many accountants in the City who cannot make sense of the Treasury's answers. Many people believe that the administrative side of the tax has not been thoroughly considered. In Clause 4 of the Bill which the House will consider the day after tomorrow, there is wide
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  machinery for searching premises and sending for accounts. Imagine the administrative confusion that will arise from Clause 4 plus the rate of inflation that will result from VAT.
  I shall now return to the regressive effect of the tax. It is said that VAT will help food prices, but it will do so by only ·01 per cent. There will be £50 million saved in SET in the manufacture of food, but food prices will rise next year by at least 3 per cent. or 4 per cent. It is said that VAT will reduce the cost of a house by 0·1 per cent. because SET will not apply, but the cost of moving into a house will be increased by 10 per cent. There are as many anomalies in VAT as there are in purchase tax. Why should rabbit food be zero rated when pet food for rabbits will be rated at 10 per cent.? The implications have not been thought out. Why should a chocolate biscuit be rated at 10 per cent. and a chocolate cake zero rated? Why should a taximan earning under £5,000 a year be free of tax while an author who makes less than £5,000 a year receive no rebate from his inputs?
  VAT is full of anomalies, as any tax is bound to be. However, the burden undoubtedly falls on sections of the public who have hitherto been untaxed. Therefore, the tax will tend to be inflationary. The tax will fall not only on school shoes—which the headmistress of St. Paul's has recently been discussing—but on a wide range of goods that have previously been untaxed.
  An excellent pamphlet issued from the Conservative Central Office shows that anyone who spends £400 on refrigerators, washing machines, sound-recorders or hi-fi equipment will be better off by £26. But who in the working class will spend £400 on hi-fi equipment unless he is devoted—like the Front Bench—to the musical arts? That is a palpable nonsense. A family who visited Blackpool and spent £100 last year will find that it costs them £10 more this year. There will be a 10 per cent. increase on their hotel or boarding house bill. There will be an extra 10 per cent. in the restaurant. or wherever they eat out. There will be 10 per cent. extra on a football game. There will be 10 per cent. extra on beach craft and deckchairs.

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  Of course, to the members of the Front Bench these are tiny matters. They consider that these things do not matter—that they are things of total unimportance. They say one must take like with like—that one must build up the great pattern and picture of the rate of inflation it does not matter a darn to the people in the Treasury. I am sure that it does not matter to those who are out of touch with ordinary people. But that is the point; if the Government wish to have their policy accepted they must show that they have turned their face against inflationary action.
  There are many sides to VAT, one of which is the feeling that the tax will be used by the unscrupulous in the same way as decimalisation was used. Heaven knows that decimalisation was a bad enough idea in the way it was introduced by the Labour Government. Decimalisation worked in Australia, but it has roughly doubled prices here, and produced a new currency.
  However, VAT will be used, including the rebates and discounts. Not all of these matters are understood by the Treasury. A great many people in the Treasury do not know about business. VAT will be used to ensure that profit margins are not destroyed by inflation. That is what the people believe. They are told by the Treasury, "It will be just like decimalisation", but the Treasury was wrong about decimalisation. The sense of people who know is much better on these matters than the sense of the Shogun or the sense of the man sitting in a Treasury office.
  The fact is that this will happen. This is what happened abroad. Let us see what has happened abroad when this tax has been introduced at periods of high inflation. In France, it was brought in during a period of comparatively stable prices, and the general price index rose by 1·5 per cent. In Holland it was introduced in 1969 and the result was, first, a 10 per cent. shoot up in prices. As a result the Act was withdrawn and a new system introduced, but even then the increase was 5 per cent. that year.
  Then there was the experience in Belgium, where the introduction of the tax was postponed for one year—or so I am told by members of the former Belgian Government. Even so, when the tax was introduced last year there was a
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  10 per cent. increase in prices, and riots in the streets. There will be quite a lot of riots round here without any unnecessary ones. When the Government look to the police forces under their command perhaps they should bow their heads to the wisdom of people who are likely to be more in contact than are the Government with the ordinary people.
  Lastly, we, as a Conservative Party, believe that we are the loyal party, the patriotic party, the good party, the best party, the party to which I belong, amongst other things, full of advantages; but also amongst our membership and amongst those who work for us, and who send my right hon. Friends to power, there are people who are engaged in trade—a terrible thought; they actually sell things; they actually have little shops; they are small manufacturers; they are actually in industry; they are actually involved in entrepreneurial exercises.
  How do the Government think that those people will like this damn-fool tax being imposed on them next April, a tax which the Government do not even understand?
  There is an overwhelming case for the postponement of the introduction of the tax. The tax will be an irritant. The tax, by where it falls, will tend to create inflationary pressures. The tax has not been fully thought out. It is full of anomalies. It is unjust. It is a tax which can be postponed in terms of the EEC. It is a tax which the Government, especially a Conservative Government who are presumably keen on keeping their own people on their side, should abandon or postpone—and that would bring a sigh of relief to the whole country.
  6.33 p.m.
  Mr. William Price: I shall attempt to do something which is, perhaps, unique in any debate on poverty. I want to quote no figures, no statistics, no percentages. I seek to make no political or propaganda points. Let us see whether I can perform this miracle.
  What worries me is that whilst we conduct our academic arguments, whilst we set out to convince each other that one side of the House is more guilty than the other, and whilst we enjoy ourselves at each other's expense, millions of poor people are looking at us with increasing cynicism.

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  We in the House think that we understand poverty. That is a myth. I am fairly certain that, largely by the nature of our work and however good our intentions, we have become detached from those who live in poverty. It is true that many of us came from families who knew what poverty was about. They knew what it was like to be on the dole for months and for years on end, to buy their food on the slate, to be out when the rent man called. They knew what it was like to live from week to week in the forlorn hope that things would get better.
  However, we have moved on. We have joined a middle-class, masonic cliqué. We are getting lost in a welter of slogans and platitudes and are indulging in self-righteous sympathy for those less fortunate than ourselves. What we are trying to do from both Front Benches and from the back benches, myself included, is console our consciences.
  How often do we stop to ask ourselves the following simple questions about poverty? How many children at Christmas will get no visit from Santa Claus? How many old people on Christmas Day will regard themselves as fortunate if they get one good meal? That is what poverty is about.
  We spend a great deal of time in the House talking about the increasing numbers of people buying their own homes. Splendid—I am buying mine. We glory in the sales of motor cars, of colour television sets, of washing machines, of refrigerators. We content ourselves with the thoughts of the millions of people who can now afford to take their holidays abroad. We believe that these are achievements for which we are entitled to claim the credit.
  Those are not the important statistics in life. There are far more important things than that. Far more important are the millions of people who have no homes, or are living in slum accommodation; those with no work, those suffering from long-term illness, and those with no television, no washing machine, no refrigerator and no hope of ever getting one. That is what poverty is about.
  I was brought up in a mining town where poverty was taken for granted. It
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  was an accepted thing that the working class were poor, ill-housed and badly fed. We expected that. That was the nature of society. It was in that environment that I spent my first 18 years. Twenty-five years ago I looked round that mining town and saw men dying of silicosis—unwanted, unloved, unneeded, living out a miserable life on the dole.
  What do I see today? I see up to 1 million people out of work, and miners still dying of silicosis.
  Twenty-five years ago I saw old people with no money hanging around shopping windows looking at goods they could not afford. What do I see today? Old people standing outside shop windows counting their pennies trying to make up their minds whether they can afford to go inside. They are the same shops, but different people.
  I saw many people living in dreadful housing conditions, most of them without a bathroom and many sharing outside toilets. What do I see today? The same toilets, millions of people without a bathroom, and, most appalling of all—we all suffer this—people at my advice bureau pleading for accommodation that I cannot provide.
  I saw something else, perhaps the most distressing experience of all—women fighting at rummage sales for the opportunity of purchasing other people's discarded clothes. What do I see today?—the same rummage sales. That is what poverty is about.
  I saw much more, but I do not seek to weary the House. These were the conditions that brought myself and many more people into active politics decades ago. There are times when, in view of what I see today, I wonder whether my time has been well spent, because in some respects the position today is far worse than it was back in that mining town. Poverty was bad enough, but we survived, largely because we were all in the same mess. None of us had any expectations. There were relatively few jealousies, little greed, and the immortal phrase "I'm all right Jack," had yet to be thought up.
  What we have today is a situation far more tragic. The majority of our people are doing well; it would be quite wrong to try to deny it. They have their

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  material goods. Life is treating them as it should. I make no complaint about that—I am one of them. But in the midst of this prosperity a substantial minority is suffering poverty. Poverty on its own was bad enough, but poverty in the midst of plenty must be unbearable for those who suffer it.
  It would be wrong to argue that Parliament has done nothing about this situation. I believe that Governments since the war have had good intentions. Many useful Measures have been introduced. We shall no doubt continue to do our bit, but we are really only playing around at the edges. However admirable our motives may be, the simple fact remains that millions of people in Britain today have far too little money and some have far too much. I regard men like Harry Hyams as an obscenity, and I look forward to the day when people like him will no longer be around. But as such a man makes his millions, what do we in this House do? We make it easier for him, and whilst we are doing so Ministers boast about the increasing numbers of children now enjoying free school meals. We are thrilled when we see the statistics of all the people now in receipt of supplementary benefits.
  What we need is a reawakening of the social conscience. We have to get away from acceptance of the fact that people automatically become poor when they retire; that the sick must accept, by the very nature of sickness, a cut in income, and that children in big families must expect to go without. We could solve the problem of child poverty today if we had the will and—perhaps more important—the courage to do so.
  We know why the present Government ran away from their pledge. We know that family allowances are not far behind the Ugandan Asians and overseas aid in the unpopularity league. That was why this Government ran away, and why my own Government did not do anywhere near enough. We do not face up to the problems, because there is still the widespread view that if people live in bad conditions, if they lose their jobs, if they live on social security, if they have big families and end up in poverty, it is their own fault, because they are idle, shiftless or just incapable. So we turn the other way. We do as little as we can to book
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  our place in heaven. We boast about what we have achieved but overlook the massive failures of the last 25 years.
  Many of us on our way to Westminster must pass the dead-beats of the world—the destitute old men, some not 200 yards from this Chamber, sitting on park benches waiting for nothing. How many of us have ever stopped to talk to one of those old men? I did so this morning and, I might say, not for the first time. He was a man in his seventies, a dosser, with nowhere to live, nowhere to go, nobody to care about him, practically no money, and his few possessions in an old string bag. Whatever the cause of that man's predicament—and it may be that he was as much responsible for it as was anyone else—that is what poverty is about.
  Let us consider a letter that I received recently from a pensioner constituent, who wrote asking whether I could get him a £5 grant from the Department of Health and Social Security so that he could buy the clothes of a friend who had died the previous week. Five pounds! The price of a man's pride. That is the sort of society we have created, and that is the sort of society we tolerate. That decent old man, who had worked hard all his life, is now reduced to begging so that he can wear his dead friend's belongings. There could be no greater indictment of the system.
  That old man, like many more, will this winter live in fear of a prolonged cold spell of weather. He will rely for his one hot meal a day, five days a week—and possibly none at all at the weekend—on voluntary workers. He will dread the possibility of his money running out before his next pension payment is due.
  If anyone thinks that what I say is an exaggeration, I quote from one of the many stories that have appeared in recent months. The following article is from yesterday's edition of the People. It is headed:
  "Tragedy of old folk who steal."
  It states:
  "The plight of penniless patients in an old folks' ward has shocked a hospital's voluntary workers.
  One of the volunteers, a doctor's wife Ida Fryer, said yesterday: 'I have seen elderly patients without any money reduced to pilfering and stealing from the hospital trolley.

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  It is heartbreaking to see them lying there without the price of a bag of sweets, a bar of soap, or even writing paper'."
  That is what poverty is about.
  I have no doubt that my remarks would have been more effective, far more important and worth while if they had been crammed full of facts and figures. I appreciate that I should have spent my time attacking the Government—and I am quite happy to do that in normal circumstances—and defending Labour while in office. I make no apology for not having done so. All I have tried to do, as simply as I can, is explain my own sense of failure, my belief that we all share a collective failure, and my hope that the future will be better for the minority than the past or the present.
  I do not think that we shall solve the problems of poverty overnight, but I do believe that over a period of years we could bring to an end the scandal of the old, the sick, the disabled, the large family, the widow with children to keep, and all the others. I remain to this day an optimist, and I pray for the time when the people of the mining town to which I have referred will all be enjoying the good things of life. When that happens, as surely it must, I shall know that my time in politics has not been wasted.
  6.50 p.m.
  Mrs. Elaine Kellett-Bowman: I find the Amendment astonishing, because it is my firm belief that there has never been a Government more concerned than the present Government with the social problems, the welfare problems and the health problems. The right hon. Member for Blackburn (Mrs. Castle) said that the Government had the wrong system of social priorities. We inherited not merely general poverty—grinding poverty among millions of people—but, what was almost worse, some acute pockets of poverty dotted around the country and much more difficult to deal with. They were the results of the stagnation, the industrial decline through the years of Socialism and inflation, bracketed by the late Iain Macleod, who called them stagflation. These were the pockets of poverty that we made up our minds to overcome.
  Was it a wrong social priority to put in the very first of the Queen's Speeches
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  a forecast of pensions for the over-80s? Was it wrong to give widows over 40—the old 10s. widows—a fairer share in the prosperity of the country, on a graduated scale? Was it wrong to bring in invalidity allowances? Perhaps the most heartening of all developments was the attendance allowance, to assist those going to the trouble of keeping older people at home instead of shovelling them off on to the State, as still far too many people do.
  We had to support those honourable fathers who, although they could do better on social security, nevertheless had the pride to work, and it was with those in mind that the family income supplement was introduced. In addition, although it may be a small matter, it is important that we should have gone a long way towards improving the standards of transport for the disabled, particularly for disabled mothers with small children, for under the old regulations disabled mothers could not take children shopping with them. Now we are going over to an annual review of pensions. All those were exactly the right priorities.
  I fully agree with the hon. Member for Rugby (Mr. William Price) that we are still only tinkering at the fringe—and we know it. It was for that reason that in the middle of October my right hon. Friend brought forward the Green Paper on the tax credit system. Many of us had been advocating the system for the last 10, 12 or 14 years, and we were delighted with its introduction. We dislike means tests. The only way to conquer the problem is to go over to the tax credit system.
  The right hon. Lady rather grudgingly referred to this system as having potentiality in the hands of the right Government. It is the right Government who have brought it forward and the right Goverenment will carry it through. But it would be a great pity if any misapprehension about the Green Paper were to be created in the minds of the public.
  I was sorry to hear the right hon. Gentleman the Leader of the Opposition, in the first day of the debate on the Queen's Speech, making the wholly wrong comment that in this document the Government had made the proposal to take family allowances from mothers. It is simply not true.
  Three alternative suggestions are made in the Green Paper from paragraph 82

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  onwards. The first is that we might leave the tax credits, which will replace family allowances, with the father. The second suggestion is that they might be split between father and mother. I regard this as the best of the three. It would not be detrimental to the position of the father, and it would be advantageous to the mother, because whereas a mother has been getting 90p only for the second and subsequent children, under this proposal she will get £2. The third suggestion is that all of it should be paid to the mother. That would be going too far, because it would merely reduce the father's take-home pay and not only cause domestic discord but generate inflationary wage claims.
  The Amendment refers not only to the problems of poverty, but to housing and education. We inherited a bad housing situation, in that house building was decreasing week by week. It was the second time that we had inherited precisely that situation. In 1951 the house building figures were decreasing month by month. The programmes were going down when we took over. Now, happily, they are rising. Housing starts in the public sector in the first six months of this year were 18 per cent. up on the corresponding six months of 1970.
  As everyone knows, the number of houses for sale is increasing even more rapidly. I see a smile on the face of the hon. Member for Rugby, but those houses are not only for the wealthy, for 30 per cent. more young people under 25 and 40 per cent. more people earning less than the average industrial wage have taken out mortgages than was the case under the Labour Government. One rural district council in my constituency is now offering council houses at about £3,000, so that it is not only the wealthy who have benefited.
  What is even more significant and important is that the rate of improvement grants has doubled over the last two years. This means that instead of houses of character—perhaps still with 30, 40 or even 100 years of life—being pulled down and replaced by soulless blocks of flats, they are being improved into comfortable family homes.
  All these developments are tremendous steps forward. They show that we have a Government of conscience and com-
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  passion, taking steps and not just talking about them. The Government are doing what is needed. They are looking not just at today and tomorrow but at the long-term needs of the poor. They are determined to conquer the problem of poverty not just for today and tomorrow, but for all time.
  6.57 p.m.
  Mr. William Hamilton: The hon. Lady the Member for Lancaster (Mrs. Kellett-Bowman) has repeated in a rather more high pitched voice the sentiments eloquently expressed by the Secretary of State—"Everything is wonderful; we are all desperately concerned about poverty."
  I looked at the Tory Party Conference, and last week I watched the State Opening of Parliament. I did not see much evidence of poverty at the State Opening. The people there did not represent the people that my hon. Friend the Member for Rugby (Mr. William Price) was talking about; nor did many of those at the Tory Party Conference.
  If everything in the garden is so wonderful, and if the compassion that the hon. Lady mentioned is so evident among hon. Members opposite, one wonders why the Prime Minister made his statement this afternoon, for in effect he was saying, "We have failed in the last two years and we must about-turn on everything and every promise on which we won the 1970 election". That would include the improvement of family allowances which the Child Poverty Action Group naïvely believed the Prime Minister would improve, as he said in the course of the election campaign, as a means of solving family poverty. He did not do any such thing. Instead, he introduced the family income supplement as a better way in which to do it.
  He failed to answer the 64,000 dollar question asked by my hon. Friend the Member for Oldham, West (Mr. Meacher)—and this is the crux of the matter to which I hope the Minister will reply. Taking all the benefits that the Government have produced, and in which they take great pride—pensions for the over-80s, the family income supplement, the attendance allowance, the invalidity allowance, and all the rest—the Government must have a total cost figure. Equally, they must have a total

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  cost figure for the tax benefits given to those earning over £5,000 a year. My hon. Friend asked the Minister a simple question. Is it the case that the total value of all that the hon. Member for Lancaster was shouting about—the family income supplement, and all the rest—is £120 million a year, and the total amount of tax concessions to those earning over £5,000 a year is five times that figure? In other words, have there not been £600 million in tax concessions to the extremely wealthy, who are small in number, by definition, and £120 million to far greater numbers of people in dire poverty.
  That is what the debate is about. All of our debates here, on the social services at any rate, are about the distribution of wealth. This debate has centred on personal financial poverty, but it ranges much wider than that. Individual poverty is related to, and is very much part of, environmental poverty, or regional poverty. We need only go north of the Trent to find a different nation, poorer housing, poorer educational facilities, poorer job opportunities, and lower wages. The further we move from the centre of things in London the greater the poverty and the greater the deprivation not only in money terms but in terms of environment.
  The fact is that we can deal with it only by more and more Government intervention. To suggest that these problems can be solved by the free play of market forces is blatant and arrant nonsense. That was the principle on which the Government came to power. Lame ducks were out; people must stand on their own feet. Competition was the thing; shop around. All these slogans are now dead ducks themselves. No one now pretends that we must watch people in poverty trying to stand on their own feet. No one pretends that we must not prop up nationalised industries if they are performing a social service. The Government have said that in the national interest the nationalised industries should stabilise their prices, and that the taxpayer should subsidise them—should pay the social cost of maintaining these services at a tolerable standard from an employment point of view.
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  When the Prime Minister embarked on the talks with the TUC and the CBI they were described in the Press and by the Prime Minister as "tripartite". They were nothing of the kind. There were but two parties to the talks. The CBI is the same thing as the Government. It is the industrial branch of the Government. It finances the Tory Party. It speaks with the same voice. Its sole aim at the talks was to put the trade unions in the dock—to blame the unions, Clive Jenkins, Hugh Scanlon and Jack Jones, for all the failings of the last two years. The Prime Minister, the CBI and the TUC knew very well that none of them could deliver the goods.
  The TUC could not commit anyone to anything, the CBI could not do so, as I will show, and the Government could not commit their own back benchers to anything. It will be interesting to see how they vote on—what was it called?—the Counter-Inflation (Temporary Provisions) Bill, for God's sake! The fellow that announced that we were to debate that next month is the same fellow who said, "If you cannot afford apples eat peaches; if you cannot afford beef go out and shoot a pigeon". That is the fellow who is now saying that we have to introduce a Bill to combat inflation.
  I do not know what the experience of other hon. Members is in their surgeries, but 99 per cent. of my cases are old-age pensioners, people on supplementary benefits—everyone who is on the poverty line. There are very few middle-class folk in my constituency. I would not be here with a 20,000 majority if there were. All the folk I see are trying to get an extra 10p or 20p or whatever, free milk, free school meals—or trying to get out of the slum in which they are living or to get a rent or rate rebate. We have scarcely touched on this problem over the years. I concede that my Government were just as much at fault, but we were operating in economic circumstances very different from those faced by the present Government. We had certain problems that we inherited. The hon. Member for Lancaster talked about the problems that her Government inherited, but the problems that we inherited were infinitely more serious.
  My basic point is that of the gross mal-distribution and the gross injustice

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  in the distribution of wealth since 1970. It is all very well talking about these benefits; at the same time, at the other end of the scale, there have been vast hand-outs to people who are better off. I have mentioned those earning over £5,000 a year, but there is also the question of profits. There is no mention of profit or dividend restraint in the White Paper. I have obtained figures from the research department of the Library. My hon. Friend the Member for Rugby (Mr. William Price) said that he would not quote figures, but it is important for me to quote some and to get them on the record, because the worker sees these figures.
  Beaverbrook Newspapers published its half-yearly report last week in the Evening Standard. I got out the figures relating to Beaverbrook Newspapers, which has been calling Jack Jones and Hugh Scanlon all the dirty names it could think of—greedy and grasping trade unionists. They were accepting the Prime Minister's philosophy of "Grab what you can". We live in an acquisitive society. That is what we are here for. That is what we have been taught. That is the Tory Party philosophy—"Grab what you can and give a few crumbs to those who cannot grab as much as others."
  In 1970, the net profits of Beaverbrook Newspapers, after tax, were £957,000. In 1972, the figure was £1,992,000—more than a 100 per cent. increase in two years under this Government who had been preaching restraint to the trade unions and who gave old-age pensioners 75p last month. That is the kind of contrast which ordinary working people make—Beaverbrook Newspapers versus the lower-paid worker. I have been a lifelong defender of the rights of nurses. They are among the lowest-paid people in the country, and every Government persistently exploits their unwillingness to strike. We take advantage of it. But that is the kind of gulf that exists between the lower-paid and those dedicated to the kind of gangsters that we have in Beaverbrook Newspapers.
  Perhaps I may cite two further examples. The first is Associated British Maltsters. I should not have thought that it was a firm of major importance to the country's economy. It may be. I do not know its export potential. But its net
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  profits in 1970 were £492,000. In 1972, after two years of Tory Government, they were £1,241,000. In other words, there has been more than a 200 per cent. increase in the profits of that firm at a time when the Government are regretting that unions are grasping for 10 per cent., 15 per cent. or even 20 per cent. each year.
  The other example is that of Procter and Gamble—the people who make some of our detergents which wash whiter than everyone else's. The company's net profits in 1970 were £2,196,000. In 1972 they were £4,490,000. In those two years there was a 50 per cent. increase.
  In addition to the contrast between those who have and those who have not, the housewife living on £20 or £30 a week finds it increasingly difficult to keep track of what is happening to prices. An article in yesterday's Observer showed that whilst certain products appeared to have stablised their prices, in fact there were substantial price increases in the form of either reduced quality or, more often, reduced quantity. It quoted Cadbury's milk chocolate. The price per bar may still be the same but it has been reduced to the thickness of a wafer. The same applies to baby foods. Another example quoted in the article concerned Boots, at the Elephant and Castle, where, last Friday, in the space of two hours the price of a medicinal syrup for children called Calpol was increased from 30p to 33p. In two hours the same bottle on the same shelf in the same shop went up by 3p.
  That is free enterprise at work. The Minister says, "Shop around". I wonder what consolation that is to people who cannot shop around for one reason or another. It may be a woman with a house full of kids, an invalid or an old-age pensioner.
  We have land speculation going on. My hon. Friend the Member for Rugby referred to that guy Hyams. He should be in Brixton Prison. People have been sent to Brixton for lesser offences.
  When the Government talk about what they are doing for old people, and about the annual increases that they are giving, it does not follow, as I have said before, that because the old-age pension is reviewed annually our old people automatically are better off. That is not the case. We need something more than that.

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  We need something more too than the promise to give old people a flat rate once-for-all benefit of £10 and £20 for married couples. I wonder whether it will be tax-free. The 75p was tax-free. There will be an awful lot of anomalies if the lump sum is taxable and the 75p is tax-free.
  Another point about which I want to ask the Minister relates to paragraph 10 of today's White Paper. It says that the standstill applies to terms and conditions of employment, etc., hours and holidays. Does that mean that, after today, if a union goes to an employer asking for an hour off each day the employer will say, "I am sorry. We cannot do it. We cannot even give you half an hour off the day because of the standstill. We cannot give you an extra half-day's holiday because of the standstill"? We are coming to a pretty pass if we do that, especially when one bears in mind that in this House we can give ourselves days off. Does it apply to us? Can we say that we shall take three weeks at Easter and three weeks and three days at Christmas? It will be very interesting to see whether the law is to apply to us. We shall have to find out what our Christmas holiday was last year and we shall have to say that we must have not a day less nor a day more than that, otherwise the Government will be in breach of their legislation.
  Mr. Arthur Lewis: Will my hon. Friend take the argument a little further? An hon. Member might be called to the BBC for a half-hour broadcast and get more by way of a fee for it than many workers get for a week's work. Will they be precluded from doing that?
  Mr. Hamilton: The people who do that cannot be called poverty stricken. I should be out of order if I pursued that point.
  There are few right hon. and hon. Members on my own Front Bench who can deride others for their inconsistency on inflation or on industrial relations, for standing on their heads or for refusing to admit that they were wrong. It does Governments and politicians good occasionally to admit that they have been wrong in their judgments, and I wait for the Prime Minister to come here suitably penitent, and to admit that he has made
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  a hell of a mess of things in the last two years and that he wants to start afresh. Instead, the Secretary of State today spoke as if the Government had achieved a great victory. He implied that we were in a hell of a mess but that his party foresaw it all and that things are turning out properly. It is a pity that right hon. and hon. Gentlemen opposite will not be a little meek and humble and say, "We are in an awful mess. Inflation is a world problem. Let us try to solve it." It means that the Government of the day must intervene more. The non-interventionist society is finished. More and more the central Government must bring outside bodies into their confidence.
  I have been listening keenly to the radio recently. I heard all that I could about what was happening in Downing Street and at Chequers. I even heard about the wines that they were drinking and the meat that they were eating. They were having a jolly good time there. But we, the elected representatives of the people, did not know what was going on. We still do not know what was the small talk round the dinner table. It may have been a good deal more illuminating than today's White Paper.
  We have been far too happy to accept a definition of democracy which says in effect that it is a dictatorship lasting four or five years, with the Prime Minister occasionally, as he feels disposed, allowing the people to put a cross on a piece of paper, but that after that the people have to sit back and, whether it is rape or anything else, they have to enjoy it or at least endure it for four or five years before they get another chance. Those days are gone. The sovereignty of this country does not rest here any longer. As an elected Member of Parliament I have less power than the average shop steward. I have less power to disrupt the economy of the country than a worker at Battersea Power Station.
  We have to face the realities of the situation. Governments have to learn to work with the people, otherwise we shall never solve the problem that we are pledged to tackle. Inflation is serious. It jeopardises the lives of us all, not least the people about whom we are talking today. It behoves us all not to make too much political capital out of it. I am as partisan as anyone in this House. I

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  believe that that is what we are here for. But we are still living in a greedy, selfish, acquisive society. I fear that it will not be changed overnight by any Government. It will never be changed by the present Government, since it was their philosophy which built it up. That is why we are having this debate today: I do not think the problem of inflation will be solved so long as this Government remain in office.
  7.20 p.m.
  Mr. Kenneth Warren: The hon. Member for Rugby (Mr. William Price) spoke with power, eloquence and a great deal of feeling about poverty. I do not think it a platitude to say that hon. Members on both sides of the House are united in a desire to eradicate poverty. Nor do I think that we should be deterred from putting that as an aim before us. I hope that the hon. Gentleman will in no way be upset by what he feels is slow progress towards a most desirable aim. As we see the way in which society has progressed—and most of us are better off in that society—it is indeed grievous to see a section of the community which has not only grown in size but has found itself weaker as we have all gained in wealth. I refer, of course, to the retirement pensioners.
  These people are badly off. They are particularly badly off when they find themselves living in large groups—retirement towns of the type of Hastings. Hastings is, of course, well known to the hon. Member for Fife, West (Mr. William Hamilton), who visited us and, surprisingly enough, stayed at the Queen's Hotel.
  Mr. William Hamilton: Why not?
  Mr. Warren: Excellent. I understand that the hon. Gentleman was writing a book about the Royal Family and something associated with them at the time. I hope that his wages will be limited in the 90 days. If I refer to Hastings in statistical terms, although hon. Members opposite may not want me to dwell on them after the previous flow of words, it is because it represents the typical situation of the grouping together of pensioners which presents a new type and new style of poverty, and I hope that the Government will take account of some suggestions which I have to put.
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  Hastings has a population of 72,000, of whom 18,000, or 25 per cent., are over 65. This is a very substantial section of the population to be grouped together. The director of social services has recently conducted a survey in the town showing that in the whole population some 7,500 are disabled. Most of the disabled people, not unexpectedly, are also over 65. That means that 10 per cent. of the population of one town is disabled. It is a tremendous task to face a community. It is a whole new type of poverty, and I do not think that it is faced in most parts of the country. It is a poverty which affects the whole town—those who are under 65 and with their full facilities as much as those who are in some way suffering.
  There are three characteristics of this type of situation. The first is very low average incomes right across the whole community. The second, arising from that, is the very low spending capability. Thirdly, there is the corollary of very low rateable values per head of the population. This has a direct effect on the cycle of the first two characteristics in that it means that the local authority cannot find sufficient resources to undertake the tremendous tasks which face it in this type of burden. It means that the ratepayers who are working find themselves having to bear burdens frequently far beyond what would be regarded as reasonable in other parts of the country.
  All is not bad in the situation in many communities of the same type, largely seaside towns. One finds councils such as that of Hastings developing industrial and commercial expansion schemes. In the next ten years in Hastings, not only will this lower the average age of the population but it will also, we hope, promote a larger cash flow. But that will take ten years, and the poverty we are debating today is the poverty around us now, and we cannot look forward ten years for a solution.
  I am delighted by the progress which the Government have made in helping the needy—for example, the annual review and the £10 bonus, which will be of tremendous help to old people. I congratulate the Government. But we have to look at the problem of today and consider three things.

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  First, we must make a greater demand on workers in employment and on employers to give larger contributions to the national insurance scheme. I know that this may sound unpopular in the context of erosion of take-home pay, but greater preparation must be made today for people who will retire in ten or 20 or 30 years' time, principally because the expectancy of the standard of living that people have now for their retirement is greater than they would have dreamed of getting 10 or 20 or 30 years ago. This accommodation has to be encouraged by the Government through employee and employer contributions.
  Secondly—this is easy and popular to say—I believe that the rate of income which pensioners have nowadays is far too low for reality. I commend to my right hon. Friend the thought that there are no taxpayers who would not be willing to give up some of the tax concessions which might be coming their way and see them going in direct transfer to the pensioners. I believe that this would not only be sensible but would be a popular thing to do politically. I see no reason why people should shrink from doing that sort of thing when they have the chance.
  Thirdly, I believe the time has come to abolish the earnings rule. This is not just to give people the chance to get more money but because people now at 65 are much younger than people used to be at 65 and should be encouraged to go on working if they want to do so in order to keep body and mind agile. It is important that people should not necessarily have to face an instant transition in their lives just because they have to meet an arbitrary age barrier.
  I want to move away from a point on which I think both sides of the House will agree to a more contentious point—means testing. I disagree with the Opposition Amendment in many respects. First, I think that means testing is essential to ensure that aid goes to those who need it. Secondly, in my constituency, out of the 7,500 handicapped people there it is found that only about 1,200 are getting the benefits to which they are due. I suggest that the reason for this is that so many people find it difficult to know what help is available to them and to know how to claim that help.
  It may be easy enough for the intelligent, well-meaning and virile people in
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  our society to say, "All you have to do is apply at the right place". But when one is old or handicapped is the very time when one needs something more than just publicity in the post offices. There needs to be a visiting service to find these people and to make sure that aid is brought to them. We must not argue that all they have to do is to go and get the aid themselves.
  It would be useful to explore the possibility of reducing the different kinds of aid to a more manageable number. This would mean fewer forms to fill in and it would help the old and the handicapped.
  I am not happy about the type of means test that works against people who have saved all their lives. It is sad to think that on retirement the people who have saved are usually worse off than those who have not bothered to save. This is particularly grievous when one knows that Government after Government encourage people to save and then, accordinv to the Opposition at the time, erode their savings. I suggest that in addition to the bonus announced today to retirement pensioners, the Treasury might consider giving redemption at par to long-term holders of War Loan from World War I. The people who have consistently held their savings since World War I should surely receive the gratitude of the nation and some compensation. They are the people who need help now.
  Lastly, pensioners and handicapped people have a right to expect the Government to put the ability to get State benefits more readily in their hands than in the hands of strikers, who were categorised earlier by the right hon. Member for Fulham (Mr. Michael Stewart) in terms of "to each according to what he can grab". The hon. Member for Fife, West asked where the poor in the nation now lie. I should have liked to hear the right hon. Member for Blackburn (Mrs. Castle) comment on this, particularly in view of her simile of the Labour Party being a three-winged mechanism—which makes one wonder how it could ever get off the ground. The "grab" mentality in society is not appreciated by the old and the handicapped. They have no chance of striking. I am unhappy about the alacrity with which strikers can claim benefits in comparison with those who really need help.

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  What principle would the trade unions accept? If the cash is floating around and awaiting claimants, the poor of the country should come first. I will read one sentence from a letter which I have received from a pensioner:
  "I would willingly dispense with any further pension increases if the Government would really stand up to and refuse further militant wage demands."
  The Prime Minister has set about doing that this afternoon. In opposition to that quotation, I will give a quotation from the Handbook For Strikers published by the National Federation of Claimants' Unions, which states on page 1:
  "In reality strike funds are no longer the mainstay of people on strike. Supplementary benefits are a much more important source of income."
  That is militancy at work. I intensely dislike these direct and calculated attacks on the standard of living of the poor and the handicapped. The so-called militants should be ashamed of what they are inciting their fellow workers to do.
  I hope that the Government will recognise that many people believe that it is high time that strike pay came entirely out of the funds of the unions. An unofficial striker has no right to fall back on the State and expect the State to subsidise him and his family. Why should the poor be forced to subsidise those who are richer than they are?
  7.34 p.m.
  Mr. Bruce Douglas-Mann: I am tempted to follow up many of the speeches made from the Government side this afternoon. For the most part they gave the impression—particularly the Secretary of State—that poverty is a minor but peripheral problem which the Government have largely solved, instead of an obscene disease which affects the whole of the society in which it is allowed to persist.
  Sir K. Joseph: I challenge the hon. Gentleman to give evidence that I treated poverty like that. I treated it with great seriousness, and I discussed many manifestations of it. I also had the privilege of announcing that one aspect of it, family poverty, has been reduced by one-quarter in our second year in office.
  Mr. Douglas-Mann: It depends how the Secretary of State measures family poverty. Does he measure it to include the number of evictions that take place and all the other social aspects of society? Does he measure it in terms of whether a person can catch a bus to go to work, or whether he has to walk or half-starve in order to buy a car because there is no other means of transport? I strongly challenge the Secretary of State's assertion on this.
  I referred to the Secretary of State treating poverty as if it were a peripheral problem. Of course, it is one of the main aspects of his job; nevertheless, one gets the firm impression from the tone of his speech that he sees poverty as having been largely tackled. He has just repeated that it has been reduced. I invite him to come to my surgery to see the persistent and continuing manifestations of extreme and acute poverty in our society. If he did so, the tone—I can only criticise the tone because I do not have the text of his speech before me—of what he said this afternoon would be exposed as a sham.
  Our debate is in the context of the earlier announcement this afternoon that we are to have a statutory prices and incomes policy. Both parties have erred in the same way, but not to the same extent. We have treated the prices and incomes policy—of which I have been a supporter in principle—as something which can be introduced regardless of the state of society into which it is being introduced. The Labour Government accepted it, although it was likely to have the effect of perpetuating the differences of wealth and income which divide us and make us into a weaker society than we should be. Certainly the Government's proposals will have that effect. That is unfortunately, a characteristic of Governments of both parties.
  I strongly agree with my right hon. Friend the Member for Blackburn (Mrs. Castle) that our measures must be dominated by humanity and concern for the poorest. But if we are attempting to change the rules under which the income and wealth of society are distributed, if we demand, as the Prime Minister demanded this afternoon and as is implicit in any attempt to introduce a prices and incomes policy, that the interests of the community must come first, and that

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  those who have economic power, whether as members of trade unions or in any other capacity, shall not use that economic power to the full, then before we can hope to get that appeal answered we have to take steps to ensure that we are a genuine community.
  Mr. Arthur Lewis: Why do both sides talk about the economic power of the trade unions, while the lawyers are entitled to get whatever fee they can? In the recent case of the dockers who were sent to prison, there were four lawyers who shared between them £5,000 in fees for a couple of days so-called work. Is not that the biggest extortion racket in this House, where there are more lawyers than members of any other profession?
  Mr. Douglas-Mann: As a lawyer, I must tell my hon. Friend that solicitors' fees, particularly under legal aid, do not begin to approach the figures of which he is talking.
  Every sector of society has its economic power and exploits it to the full, but if we are to ask any sector to refrain from the exercise of what power it has we can do so only in the context of a society which is a community. Ideally, it would be a society in which we all contribute and receive approximately the same at the least it must be tending towards the concept of equality. Unless we are moving towards such a stage of equality—and the present Government certainly have not done so, and indeed the Labour Government did not move fast enough in this respect—we shall not receive that sort of response to the appeal being made by the Government.
  I invite any hon. Member to look at the conditions which the relatively poor in my constituency have to face. I represent Kensington, North, which is a poor part of London. Day after day in my surgery I see people from the poorest sections of our society whose standards have been constantly eroded by the changes in the structure of our society. I see their environment being destroyed for the sake of motor cars which my constituents cannot afford to buy. We have almost a million unemployed in the country at large, and there is a good deal of unemployment in my part of London. A large number of my constituents depend on service jobs. Tenancies of their homes
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  go hand in hand with their jobs, and when they get too old to do their work, or their employer cashes in on the property boom, they are evicted. I see many people who do not have the slightest prospect of even a modest measure of comfort in their old age.
  I invite hon. Members to visit the old people's accommodation provided by the Kensington and Chelsea Borough Council at Runcorn Place and Hesketh Place. The accommodation has a prison-like atmosphere and old people are forced to live out their lives in discomfort, cold and squalor.
  The greatest problem in my area is that which faces poor people who lack housing. There is very little accommodation in North Kensington for much under £10 a week, and even then it may be for only one or two rooms. Houses in which people have lived for many years are bought by speculators, notices to quit are served and those people have to find other accommodation. In my area most of the tenancies are alleged to be furnished tenancies and therefore the families have no security. If they are held to be furnished tenancies they can be evicted. Although 95 per cent. would not be accepted as genuinely furnished so as to exclude the Rent Acts if the question were challenged in court, most people do not know that and do not challenge it and so they are evicted.
  Every week in my surgery there are queues of people who have been given notice to quit from the place where they have lived for many years. If such a person is dispossessed of his accommodation, where is he or she to go? I have a case which I am pursuing at the moment involving a person of 65 whose total income is £8·50 a week and whose present rent is only £2·50. She has been given notice to quit and undoubtedly will have to go into welfare accommodation, probably miles away from the area in which she has her friends. She can have no expectation of any reasonable standard of living.
  Another case with which I dealt in my surgery involved a young married couple who were still living separate lives in their respective parents' council flats because neither local authority would allow a subtenancy to be given to that couple since this would be regarded as overcrowding.

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  That couple have been married, trying to find accommodation, for nearly two years.
  At the same time probably every one of us who owns a house has been getting steadily richer through increases in property values. I have tabled a Question to the Chancellor of the Exchequer on this subject and I have not yet had an answer.
  Mr. Arthur Lewis: It will probably be dodged as usual.
  Mr. Douglas-Mann: My Question seeks to discover by how much the value of land in Britain has increased in the last two years. I do not know the answer to that question, but I know that there are about 7½ million owner-occupiers in the country. Since a house worth £5,000 has increased in value on average by 40 per cent. in the last two years, this means that everybody who owns a house worth even £5,000 has gained £2,000. That sort of sum spread over 7½ million people amounts to a figure of £15,000 million, which is about half the total income from wages and salaries last year.
  Mr. William Price: I am sorry to fall out with my hon. Friend, but I wish to dispute his view. As an owner-occupier whose property in the last five years has increased from £7,000 to £18,000, I appreciate that I am sitting on an enormous profit—but what am I supposed to do with the profit? I cannot sell up because I have to live somewhere, and if I sell my property I shall have to buy another house, assuming I want to maintain my standard of living, for about the same sum. Can my hon. Friend tell me where my profit arises?
  Mr. Douglas-Mann: If my hon. Friend goes to his bank to borrow some money, he will find that because he bought his house for £5,000, or whatever the figure was, he is now regarded as having very substantial equity on which he can borrow. When an owner-occupier eventually retires, he will usually sell his house and retire to a smaller property and have in his hand a substantial capital sum. Furthermore, when an owner-occupier dies his family will inherit. In this way one section of society benefits substantially at the expense of those who are only tenants. My hon. Friend's house is appreciating in value without his contributing anything. He is still paying a
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  constant sum in the form of mortgage, but the other half of society who live in tenanted properties will find that their costs will increase year after year. There is a constant redistribution of wealth between those who own property and those who pay rent.
  This matter is extremely relevant in view of today's announcement by the Government, and the White Paper which has been published this afternoon. I recognise that council rents are to be frozen for a period of three months, but I do not regard this as a very big deal. May we be given some information about what will happen to those who are about to be evicted from accommodation, be it furnished or otherwise? Is there to be a freeze on evictions for a period of three months?
  The Minister of State, Treasury (Mr. John Nott): The Question tabled by the hon. Member for Kensington, North (Mr. Douglas-Mann) refers to the rise in land values generally. I hope that he will not expect an Answer relating to the remarks which he has just been making.
  Mr. Douglas-Mann: The Question is related to land and, so far as I am aware, all houses are built on land. Furthermore, so far as I recall the situation, the Law of Property Act regards all houses and flats as being "land". I had interpreted my Question as relating to all immovable property, but I am prepared to re-table my Question if that is thought to be necessary. I was asking the hon. Gentleman whether he can tell the House about any freeze on evictions, property speculation and the prices which can be demanded for houses. A very unfair situation will arise if we are not to have a freeze of this sort, to prevent people being evicted during the coming period. Many speculators are making tens of thousands out of property from which people have been evicted, and unless the Government intervene in the property jungle, their appeal to the country will never be accepted by the people who, like so many of my constituents, are facing homelessness to make profits for speculators. If we are to have rules about how much more money people are allowed to earn, it is not enough to control prices or even rents. We must change the structure of society and move towards genuine

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  equality with a determination of which there has been no sign from Governments of either party.
  I want to see introduced a wealth tax and a gifts tax and higher taxation of above-average incomes. We shall not get such things from the present Government. There should be higher family allowances starting with the first child. There should be security for furnished tenants. There should be justice for those afflicted by accidents. Whether they receive compensation is a lawyer-operated lottery. As I have said before, I should be only too delighted to see lawyers excluded from saying whether people should receive compensation for accidents.
  We could have from the Government now measures which would ensure adequate living standards for old-age pensioners. We could abolish poverty now. The cost of doing so would be minimal compared with the cost of the major social problems with which we shall have to cope before the end of the century such as world poverty, population and the destruction of the environment. Unless there is soon a sense of community within Britain, people will not be willing to take the steps which have to be taken if we are to survive.
  Almost every section of society is capable of bringing the nation to a halt. This is being demonstrated by the landlords in my constituency in Notting Hill. It has been demonstrated by the electricians and other groups of organised industrial workers in other parts of the country. We can appeal to people to refrain from exercising their economic power only in a society which is a community. We cannot hope to be a community unless the Government move much more rapidly towards equality than any Government has shown any sign of doing until now.
  7.53 p.m.
  Mr. Robert Boscawen: I enjoyed the intervention about house prices in London which the hon. Member for Rugby (Mr. William Price) made in the speech of the hon. Member for Kensington, North (Mr. Douglas-Mann) because he gave me a good piece of advice. However, it did not tell the whole story.
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  House owners must pay considerable sums in rates and for repairs. I have not found that the cost of having a house in London is getting any cheaper, although I agree that the value has increased. I do not think the hon. Member for Kensington, North told the whole story about the question of owning houses.
  We have not heard enough about how the standard of living of very poor people can be raised. The main question is how we can find the large sum necessary to do it. When we have found that large sum, how shall we ensure that it goes to the people who need it, and in which form should they receive it? None of these questions has been answered by the Opposition, and I am disappointed about that.
  We have heard stock answers from the Opposition that the money can be raised by taking it from the surtax payers and the very rich through a wealth tax. But the sum of money required is more than the amount which can be found in that way. My hon. Friend the Minister of State often points out that the old-age pension costs hundreds of millions of pounds a week. The hon. Member for Fife, West (Mr. William Hamilton) said that the amount of money being given away to people earning £5,000 or more was £500 million. That would pay the pension of old-age pensioners for five weeks. But that would not solve the problem of finding sufficient money to improve the old-age pensioner's lot to the extent that we want it to be improved. We must think of other ways of finding the money.
  First, let us consider the Exchequer contribution. Eighteen or 19 per cent. of the cost of old-age pensions comes from direct taxation. The hon. Member for Oldham, West (Mr. Meacher) is continually asking why the percentage should be 18 or 19. What is the philosophy behind it? Should it not be a bit more? One of my hon. Friends said earlier that all of us would be prepared to give more of our weekly income to the elderly people. We would not have to increase the percentage by much in order to produce a very large sum of money.
  Then there is the question of the contribution. I believe strongly that it is right that the individual should feel that he is contributing to his pension. I am glad that that is to be dealt with in the

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  earnings-related scheme which the Government are to introduce this Session. However, every person needs to feel that he is contributing not only to his old age but to the present-day elderly people. It may well be that we shall have to consider raising the contribution. If the old-age pension is only one-fifth of national average earnings, that is too low and we must work to increase it.
  I think that the Government have ensured the pensions kept pace with the cost of living. In fact, they have improved on it. But we still have a long way to go, and we want to go more quickly. Having raised the money, is it best to put it all in the pensioner's pocket? Does he have enough for his basic essential needs? Should we not put more of the money into some of the services which he and some of his less fortunate contemporaries badly need? We have not given enough thought to this problem. I have been looking into it in my constituency. Unlike the area north of the Tweed, to which reference has been made, it is not an impoverished area. It has not had the hard times which other areas may have had.
  I find that in cash terms the pensioners have sufficient for their basic needs. But I do not believe that they have enough community help and care. Many of them find the management of their affairs extremely difficult. Shopping is extremely complicated for them. Decimalisation is a terrible bugbear for old-age pensioners. More thought should be given to helping elderly people to manage their housekeeping. Much of that is done today by the voluntary services—the WVS, and so on—but there is still a lot of scope for it.
  We run a very good system of meals on wheels, but it is not entirely satisfactory. I should like more to be spent by local authorities, presumably coming from central Government, in trying to arrange central community meals once a week for the elderly. A meal together is so much more valuable to them than having it shoved through the door once a week with someone saying, "Good afternoon. I have to go to the next one. I cannot stop." It will not be so costly to arrange with the help of the voluntary services. Many councils already do this. Let us examine some of the best schemes to see whether the State can help more in that respect.
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  There is also the difficult problem of the telephone and the television and helping towards the rent of those items. Time and again we hear the argument that it is better to help the pensioner by raising the general level of his pension than by specific help in kind, because not everybody needs a telephone or wants a television and not everybody needs to get on a bus. Even so, elderly people, especially those living alone and sometimes far away from others, must be given some means of communication so that they can contact their friends or doctor for help. I know that my right hon. Friend has given some thought to this problem.
  Obviously it would be beyond the cost of the Exchequer to give everyone over the age of 65 a free telephone. However, I should like to instance a case in my constituency. An elderly woman, whose husband had been taken ill, had to go out late at night to try to telephone for the doctor. The first two telephone kiosks she tried had been broken by vandals. During the time she was out desperately trying to find another telephone her husband died. That is what did and can happen. I realise that her husband's death was not due to the fact that she could not find a telephone; it was a coincidence. However, such things rankle. I do not think that we have done enough to try to solve this problem.
  Another way to help the elderly is through bulk buying of welfare foods. Many voluntary organisations are able to get beverages—tea, cocoa, Bovril—at a cheaper rate by bulk buying for 100 or 200 elderly people. This needs organisation and thought. Perhaps we shall never have it done by the State. It may be better done by voluntary organisations. Even so, it needs to be publicised and done over a wide area.
  Another point which rankles is that when hon. Members go abroad—some go abroad quite often—they come back with a tax-free bottle of spirits. I always try to do that. I gather that the pinchfisted view of the Common Market countries is that that should stop. Anyhow, it is a concession. Elderly people, especially those on supplementary benefit, cannot often, if ever, go abroad, so they never get a tax-free concession towards their bottles of spirits.
  Mr. Arthur Lewis: The hon. Gentleman is right to point out that some hon. Members go abroad. Perhaps he would go a stage further. Some hon. Members have for years been going to Strasbourg, for which they get £23 a day expenses. Perhaps we should give some of those expenses to the old-age pensioners.
  Mr. Boscawen: I think that a tax-free bottle of spirits would be very helpful to many elderly people, but I know it is crying for the moon because of the amount of abuse there could be over that.
  However much we may give in cash, there is still more we can give in community care and services. When costing the redistribution of money from those who are earning to the old and the poor we should also take into account what we are doing in community care. We are already doing a considerable amount, so that somewhat improves the balance sheet.
  The tax credit scheme has not been welcomed in some quarters, because it is not fully understood how it will help to fill some of the awkward gaps in our present system. Those whose level of income is just above the supplementary benefit level, those on marginal incomes, always fall between two stools. Here is an opportunity to bring the equivalent of tax relief to those who are desperately in need. I refer to those who have commitments that they cannot really afford, particularly widows who may have taken on large houses and other commitments which they can no longer keep up. They are extremely hard pressed. I think the tax credit system will help those people.
  The tax credit system will also help the single child or first child family. One hon. Gentleman made the sensible suggestion that this item should be brought forward, not wait for five years, to help the single-child family. If we are to do anything, we can do so only by raising the general growth of our economy. However much right hon. and hon. Gentlemen may wish to make our society more egalitarian, it will do no good whatever unless it raises the general level of our economy.
  The sums required to help the elderly, the disabled and the very poor are far too large to be found by juggling with our existing financial resources. Therefore, I
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  ask right hon. and hon. Members on both sides of the House to consider how we are to raise the general amount of money that we can redistribute to the elderly, the disabled and the very poor.
  8.8 p.m.
  Mr. Gavin Strang: I agree with many of the points put forward by the hon. Member for Wells (Mr. Boscawen). However, I am sure that he will understand if, because of the limited time available, I simply put forward a few points of my own.
  During the last week Ministers and the mass media have gone to enormous lengths to give the impression that the Government were offering substantial concessions to working people in return for an agreement by the trade unions to limit wage increases to about £2 a week. On Sunday, 29th October, the Press reported that there were to be big concessions for working people in terms of the Industrial Relations Act, the Housing Finance Act, and a whole host of other Measures. Even after the talks had concluded on Friday, we had an incredible leader in The Times which still claimed that the Government were offering to hammer dividends, to stop property speculation, and to make real changes in the Industrial Relations Act and the Housing Finance Act. However, the Prime Minister made it clear today that the Government were doing nothing of the kind. The talks failed because the Government were found wanting. They were not prepared to make any meaningful concessions to the trade union movement.
  Let me take two crucial tests. Taking the expenditure incurred by householders as a whole and looking at the Department of Employment survey for last year, it is not surprising to find, particularly among recipients of low incomes, that expenditure on food is by far and away the biggest item. Expenditure on housing comes next. In the case of households with £15-£20 a week coming in the cost of food accounted for 29 per cent. of total expenditure and housing accounted for 17 per cent. In households with incomes from £10-£15 these two items together accounted for about 50 per cent. of total household expenditure.
  The Government are offering nothing of substance in the context of food prices.

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  The promises by the CBI on behalf of manufacturers bear no relevance to the real food costs incurred by ordinary people. Manufacturers have not offered to control the prices of meat, bread, milk or eggs—the things that matter.
  On housing, what are the Government offering? How pathetic can they get? They have offered to increase the council rent rebate needs allowance by 50p. That means that tenants in a constituency like mine, who will be paying £1 a week more in council house rent later this month, will have it reduced by 8½p per week. How absurd can the Government get! Let us have no more of this nonsense from the Government saying that they are prepared to make real concessions to the trade union movement. They are nothing of the kind.
  We are now in a new situation. We now have the freeze. What does the freeze involve? Let us take these simple points. Will the freeze control food prices? Will it prevent increases in bread and beef prices? It will do nothing of the sort. What will the freeze do to rent increases? It will do nothing for my constituents, most of whom will be paying an extra £1 a week. The increases under the Housing (Financial Provisions) (Scotland) Act are not covered by this freeze, according to the White Paper. These increases in rent in Edinburgh and Musselburgh are going ahead.
  What about the Government's concession to the pensioners? Are the Government saying that they will not increase pensions until next November? Are they telling us that all they have got to offer is £10 for a single pensioner which, over the period—assuming that it is paid during December—works out at 20p a week? Are they telling us that they are offering something substantial to pensioners in this package?
  We have heard a great deal of talk from the Government and the mass media about low wages and the problem of low wage earners. The best known low wage earner nowadays is the farm worker. He has got what was hailed in the Press as a magnificent increase—£3·30. His wage has been increased from £16·20 to £19·50. The minimum agricultural wage means a lot, because many of our farm workers are on the minimum wage. What was the Government's reaction to that
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  increase? The former Minister of Agriculture, Fisheries and Food—the present Lord President of the Council—thought it was appalling, and that it was against Government policy. My right hon. Friend the Member for Blackburn (Mrs. Castle) referred to this. Let us pursue it a little further.
  Let us consider a farm worker with three children whose ages range from five to 10 and who lives in a council house. He receives £16·20, and gets an increase of £3·30, giving a total of £19·50. Look at what he loses. In family income supplement he loses £1·70, in National Insurance 17p, in rent rebate allowance, 40p, and rate rebate, 12p, making a total of about £2·40. The net increase to that farm worker's income is 90p. That is not an extreme example.
  Such a farm worker's children are still getting free school meals. In addition, he is still eligible for exemption from all National Health charges. A farm worker earning a few pounds over the minimum wage will lose his children's eligibility for free school meals. As hon. Members on this side of the House have repeatedly said, we now have a situation in which, for the first time, thousands of workers can be worse off as a consequence of a wage increase. The Minister of State, Treasury, looks surprised. Does he not know that these means tested benefits are such that it is possible that people can be worse off as a result of an increase? The family income supplement is such a massive means test. Another factor to be taken into account is that many people, when they get an increase in their income, cease to be exempted from the payment for school meals.
  My main point concerns pensioners. As has been said on both sides of the House, they constitute the largest group of people living in poverty. On Friday I listened to the then Minister of Agriculture, Fisheries and Food congratulating the Government on their record on pensions. It is easy for any Government immediately after a pensions increase to quote the increase in retail prices and the percentage increase in the pension and to say that pensions are marginally better. But that is not the real situation. The real situation is that hundreds of thousands of pensioners this winter will be sitting in the cold, not daring to light

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  their gas fires because they cannot pay the gas bill. They will almost be starving themselves, spending too little on food because they cannot afford to buy the amount of food they need.
  The gap between people in retirement and people at work is far too big. I am not saying that that situation has been created by this Government. If we take the increase in earnings between October, 1964 and June, 1970 we find that almost exactly the same situation existed. In that period the gap between the standard of living of the wage earner and the pensioner was not closed, and the same situation exists under this Government.
  We do not have the latest figures of earnings but, taking the figures which we have got, we can be sure that by November or December this year there will have been no closing of the gap between the standard of living of people at work and people in retirement. The situation is acquiring a new urgency because these pensioners are facing substantial increases in prices in the near future. Many pensioners in Edinburgh are having £1 put on their rent. It is all very well for the Government to talk about the rent rebate scheme and supplementary benefits. Under Government policies many pensioners will pay up to £1 per week more in rent this month. We know that food prices will shoot up over the next few months after our entry of the Common Market, as the levies come into force and cereal prices rise into line with the absurdly high ones prevailing in the Market. We know that VAT will have an enormous effect on prices. So it is nonsense for the Government to talk in this complacent way about pensioners.
  When the miners got their increase after their strike we moved away from seeing every increase in percentage terms. There was talk of the "adjustment factor", in the Wilberforce Report—the fact that miners had fallen well behind other workers and the fact that their work is so arduous entitled them to a substantial increase. That is the situation with pensioners. No Government have yet faced up to this situation. We should be talking about not an increase of £1 or a bonus of £10 to cover pensioners for a whole year but a pension of £10 a week for a single person and £16 a week for a couple.
  716
  There is nothing great about that; £16 for a couple is still only half present-day average earnings. It shows how appallingly miserable we are to pensioners that these figures are regarded as extravagant. They are realistic, sensible demands in this day and age. These are the increases that pensioners are pressing for. If the Government really want to convince the people that they mean business they should introduce pensions of that magnitude before the end of the year.
  Once again we will have a barrage of propaganda telling us how great this Government are being in reversing all their policies—getting rid of Selsdon Man, as the Leader of the Opposition has called him, and starting to be fair. We will hear that this freeze will be to everyone's benefit. It is just not true. The Government may be successful in holding down wages for a while but they will never get an incomes policy which is acceptable to the people until they are prepared completely to change their policies.
  To me it is inconceivable that a Conservative Government could ever pursue policies which would lead the mass of the people to accept an incomes policy. Such a policy will never be accepted until we start to redistribute wealth in a way which I must admit the last Labour Government did not do, and until we start to attack poverty on a massive scale and change the absolute inequality in our society.
  If we get a Socialist Labour Government who are prepared to make a real attack on the unequal distribution of wealth and on the capitalist system, then one day we shall get an acceptable incomes policy and a fairer society. But I am afraid we shall have to wait until then.
  8.23 p.m.
  Mr. R. A. McCrindle: Listening first to the right hon. Member for Blackburn (Mrs. Castle) and then to other speakers, I was almost persuaded that poverty in this country is not only a creation of the present Conservative Government but that it dates back precisely to 18th June, 1970. The House will recognise that that is very far from the truth, and that poverty has been with us a long time. In fact, it is arguable that the incidence of poverty has increased over the last 15 years.

  717
  It is interesting to study the Labour Party Manifesto for as long ago as the 1950 General Election—22 years ago—in which they boasted that they
  "have ensured full employment and fair shares of the necessities of life for everyone."
  If I have heard them correctly tonight, they are saying that 22 years later, and with six years of Labour Government somewhere in the middle of that period, that cannot be said to be so.
  That manifesto also said, "Destitution has been banished." This is largely true, yet, as the hon. Member for Rugy (Mr. William Price) reminded us in a telling speech, even this thas not been entirely banished in 1972.
  In the period immediately after 1950, poverty was rather less a political issue than it has again become. This can be traced back to the mid-sixties. Hon. Members opposite will recall that in 1965 a pamphlet was produced by Professor Abel Smith and Professor Townsend, called "The Poor and the Poorest". The House will not need to be reminded that those two gentlemen are not among the leading members of the Conservative Party. The professors' point on that occasion was that poverty was still very much with us, notwithstanding its receding influence in political thinking over the preceding 15 years. In 1965 they started a campaign to restore the whole subject of poverty as the central issue of politics.
  Looking back on the seven years since, one sees that they did not suceed in that object, but they did enable the Conservative Party, during the 1970 General Election, to point out that during the period of Labour Government from 1964 to 1970, far from poverty having been eradicated in many ways it had become worse. I do not wish to make a particularly partisan speech, although hon. Members may be forgiven for thinking so from what I have said so far.
  Another aspect of the mid-sixties was the emergence of a number of pressure groups directed to the eradication of poverty—among them the Child Poverty Action Group. As though to say something against myself and my party, I should like to quote a fairly recent utterance of the director of that body:
  "Although, at the time, it was difficult to say anything good about the Labour Administration, they have taken on a Christ-like
  718
  appearance by comparison to the present Government."
  Mr. Strang: Hear, hear.
  Mr. McCrindle: I expected that that expression of opinion would find rather more favour with hon. Members opposite than what I have said so far.
  I want to examine just how badly or, as I shall seek to prove, how well the present Government have done in the eradication of poverty. In what I am going to say I am in no sense complacent. Like other hon. Members, I recognise just how far we have to go.
  Whereas poverty was not the central issue in politics in 1970, poverty and its relief were made politically important in the latter half of the 1960s. To that extent, therefore, it was important for any Government returned in the election of 1970 to give the problem of the eradication of poverty, or at least its mitigation, a central place in their programme.
  The first action of the present Government was to introduce family income supplement. Listening to the criticisms of this benefit from the Opposition benches I was struck by the fact that it was all based on the point that the take-up has been insufficient. I accept that that springs from the Opposition's deeper criticism that the benefits are means-tested. Nevertheless, the basic criticism is that the benefit has not been fully taken up. I concede that that is so. However, if the Opposition are saying that the relief of poverty, or at least its mitigation, among 68,000 families—I understand that that was the figure at the end of 1971—can be lightly dismissed as being of no consequence, I ask them to think again. The family income supplement scheme is not perfect—it must be improved in its take-up—but many thousands of families have been relieved of some of the most acute family poverty by the introduction of this benefit.
  I ask my right hon. Friend the Secretary of State for Health and Social Security whether we have reached a stage at which we can review the methods of publicity of FIS. I am not sure whether that has been done. If it has not, a once-and-for-all insertion in every pay packet in Britain of a statement of a family's rights under the FIS scheme may be worth considering. Tax credits seem to be the long-term solution to family poverty, but until they arrive the FIS

  719
  scheme is most important. We should keep FIS constantly under review and make every effort to improve the take-up.
  I now turn to the situation of poverty among the non-employed. There is not as much real poverty among those who are away from work because of sickness or those who are unemployed as there is among certain other families. That is why it was right of the Government to give precedence to the FIS scheme. There is serious poverty, however, in some other areas of specific suffering. I refer particularly to those who have been benefiting from the introduction of the invalidity benefit and the attendance allowance. Here we all have the opportunity of directing resources to where we believe it is most correct to direct them. In the process of relieving specific areas of poverty we can also feel that we are engaging in a humanitarian activity.
  My right hon. Friend the Secretary of State may not particularly like my next point, and I warn hon. Members on the Opposition benches that they will dislike it equally. I believe that there are two types of specific grant which could with advantage be re-examined—the maternity grant and the death grant. As things stand, neither of those grants is particularly generous. The proper solution, and the way to improve the standard of these grants, is to introduce an element of means testing. I cannot accept the blanket condemnation of means testing which comes from the Opposition benches. I believe that it is better to describe it as "needs testing", and that the fair, honest observer of the political scene since 1970 would concede that the present Government have concentrated their resources—which have been made available by a surprisingly generous Treasury—where they are needed. One of the few ways of assessing where benefits are needed is to apply a needs test.
  Although the situation of the poor remains unsatisfactory a great deal has been done by the present Government and there is more in prospect. I mention only two factors here. There is to be an annual review of pensions and other benefits. Although there was some scepticism from the Opposition as to
  720
  whether this would necessarily mean an annual increment, I should have thought that there was a very fair chance—I put it no higher than that—that while inflationary pressures continue there would be an annual increase. This takes away from many beneficiaries the need to wait and suffer for two years, while trade unionists and other wage and salary earners obtain their increases in income on an annual basis.
  I am also surprised to note that so little attention has been paid to the other half of the Social Security Bill. The right hon. Member for Blackburn talked about the Social Security Bill's provision for a second pension. I do not remember her saying anything about the other aspect, which is to improve the financial viability of the National Insurance Fund and make it easier for the present Government and for future Governments to pay the increases to which I have just referred.
  We have heard the statement today of my right hon. Friend the Prime Minister. I believe that the anti-inflationary package presented to the House will be of greater advantage to the poor and the lower paid of Britain than it will to almost any other section of our community. While the Government have no reason for complacency, I cannot accept that there is a reason for the hypocrisy that has been forthcoming from the Opposition.
  I now draw to the attention of the House a section of the British people who will not benefit from anything in the Queen's Speech. It may surprise the House to know that there is such a section. I refer to citizens who have retired and gone to live abroad and who have contributed to national insurance throughout their working lives. These people are receiving pensions at the rate prevailing when they left the country. No increases have been payable since they left and there will never be any increases under the present system unless they emigrated to a country which offers reciprocal benefits.
  I am delighted to see represented on the Front Bench not only the Department of Health and Social Security but the Treasury.
  I register a protest on behalf of approximately 100,000 forgotten British

  721
  people. I recently had the temerity to write in one of the national newspapers about this subject, and I received hundreds of letters which were not just mildly complaining but were full of bitterness and despair. They came not only from Spain, which is accepted as the area in which most of these people have settled, but from all over the world.
  Why should successive Governments turn their backs on these people? Can it be—I cannot believe that Governments and politicians are so cynical—that not many future votes are involved? Can it he assumed that these people are wealthy? Can it be assumed that they have retired and settled in sunny spots around the world as wealthy emigrants? Not many of them have gone in that fashion. Many of them have gone for health reasons, because they have been told by their doctors that one of the best ways of extending their lives is to leave this country and settle in these places.
  Mr. Arthur Lewis: Can the miners do that?
  Mr. McCrindle: I hope that some of them will do so in future. I hope that the hon. Member for West Ham, North (Mr. Arthur Lewis) will give me his support.
  It is said that these people do not pay tax in this country. That is true, but they spent a lifetime paying tax here. Those who live on invesment income only pay tax on that income. It is shortsighted as well as callous not to allow these people to enjoy any increases in their pensions. I know, from the correspondence that I have received, that if we do not try to assist them many thousands will be obliged to return to this country. In so doing they will become a burden on the National Health Service. In the best interests of these people, I ask that the Government should seriously consider the matter.
  While there is no room for the Government to be complacent about poverty, they have nothing about which to be ashamed. The record which the Government can put before the House is a good one. I, too, suggest that the Opposition Amendment should be soundly defeated.
  8.40 p.m.
  Mr. Robert C. Brown: The Gracious Speech
  722
  delivered from the Throne by Her Majesty on 2nd July, 1970, contained these words:
  "My Ministers attach the greatest importance to promoting full employment and an effective regional development policy. They will stimulate long-term growth in the less prosperous areas by increasing their economic attractions and improving their amenities."
  Last year's Gracious Speech contained these words:
  "At home my Government's first care will be to increase employment by strengthening the economy and promoting the sound growth of output. Their aim will be to curb inflation, encourage increased efficiency, and maintain a strong balance of payments. In developing their regional policies they will pay close attention to the economic needs of particular areas."
  This year's Gracious Speech contains these words:
  "In developing their policies for economic growth My Government will pursue their measures to create confidence and stimulate employment in the assisted areas."
  One would have thought that a solemn pledge to the development areas given by the Government in three successive years would have meant something and that they would have produced something by now. Yet the Department of Employment figures for mid-October for the Northern region show that 81.242 were registered as totally unemployed, representing 6·2 per cent. of employees in the area; vacancies for young persons were 1.504; the total number of notified unfilled vacancies numbered 8,067. This means that 10 unemployed people are chasing every registered vacancy, and the registered vacancies will not be very choice jobs.
  One of the most regrettable facts is that in the period 6th September to 4th October there were 340 fewer vacancies for school leavers. This is a damnable indictment of any Government. That is the position in the area of the country part of which I have the honour to represent.
  My right hon. Friend the Member for Newcastle-upon-Tyne, Central (Mr. Edward Short), who is to wind up the debate, will support my statement that there are undeniable signs of poverty in the streets of Newcastle—drawn, pinched faces, chiefly among women who, unfortunately, now, as in the bad old days before the war, have to sacrifice themselves for their families: clothes clean but

  723
  very worn; shoes down-at-heel and looking shabby; children wearing clothes darned and patched.
  This is the evidence of increasing poverty in the midst of plenty, unfortunately. Reference has been made already to those people who already have it pretty good and who from 1st April next will, under the new tax structure, be awarded increases of up to £30 a week. They will not feel any draught under a freeze lasting for six months, for 12 months or for two years. No one who benefits from that treatment will complain.
  This is a picture that we have not seen on Tyneside for many years. The evidence of poverty is clearly there now. We thought that we had eradicated rickets—that scourge of poverty—for all time—but the city medical officer of health reports that it is reappearing.
  I have talked so far about things which are in the Gracious Speech, which were in last year's Gracious Speech and in the Gracious Speech in 1970, and none of which had been carried out. I do not have sufficient confidence in this Government to be able to tell my constituents that the platitudes pronounced in this year's Gracious Speech are more likely to be carried out this year than they were last year or the year before that.
  It is a scandal that in the Gracious Speech not a word of hope is given to the chronically sick and disabled; not a word recognising their need for a pension as of right—a disablement income as advocated by the Disablement Income Group. As a result, last week I received the following telegram:
  "Pensions Bill ignores needs of worker forced to retire early through disability. Also ignores needs of disabled young persons and housewife. Why inflict financial hardship on families carrying extra physical burdens? Jean Nicklin, chairman, Disablement Income Group, Newcastle-on-Tyne."
  That question might well be asked. I refer specifically to disabled families because there is no denying that a family with a chronically disabled person in it is a disabled family. Disability affects not only the individual but the family. Why should provision not be made for these people as for those disabled in the service of the country, whether it be in the Armed Forces or in industry? It is high time that naturally caused dis-
  724
  ability was not looked on as a crime or as something to be disregarded but was recognised in the same way as is disability due to loss of a limb in the service of the country.
  Another glaring omission in the Gracious Speech is any reference to the plight of the thalidomide children. Why, 12 years after the drug was prescribed with such tragic results, should a wealthy firm like the Distillers Company Limited shelter behind the law instead of accepting its moral responsibility? Or why do the Government not now say that they will accept the moral responsibility to provide for these children even though legislation may be required to do so?
  The Secretary of State, who is now present, may not be prepared to go as far as that, but let me point out that the firm must be making massive profits from Government contracts, and if the Government are not prepared to legislate I suggest that the right hon. Gentleman could well use a back-door method, lean on the firm quite heavily, and say, "If you are not prepared to accept the moral responsibility, we must look again at some of the lucrative contracts you have been getting from the Government."
  I make a further plea for cheap television licences for old-age pensioners. I am sure that no one who enjoys television and is able to pay for it would begrudge an extra few pence on his licence to allow all old-age pensioners to have a 5p television licence as of right. Sooner or later some Secretary of State will have to convince his colleagues that such provision is just and the cost of which the country would be prepared to accept, so let it be done sooner rather than later.
  8.50 p.m.
  Mr. Michael Meacher: I wish to return directly to some of the statements that the Prime Minister has made in the House over the last week. There can have been few transformations in modern political experience as artificially concocted as that which now seeks to engineer a portrayal of the Prime Minister as a man of fairness and of concern for the poor. For a man of his record to seek to don the mantle of social justice is like one of the train robbers expecting to be taken seriously as an applicant to be secretary of a local charity.

  725
  But if such claims were serious and not merely a matter of public relations, as we know they all are, three challenges would have to be made. First, how much has actually gone to the poor in the last two years? Secondly, what has been the price ticket on the transfers? Thirdly, how fair a carve-up of the national cake does this represent anyway?
  I say immediately how indebted we are to the Government for making it so brutally clear for all to see just what their chosen philosophy of selectivity for the poor means in practice. We are told, as we were by the Secretary of State today, that the number of families in receipt of family income supplement, exempted from prescription, optical and dental charges and with free welfare foods, has been much increased; well and good. What he did not say was that the number of those families who are eligible and who in fact are claiming is in every instance less than two-thirds and in some instances less than one-third.
  We also heard today a recital of the new benefits introduced, but the right hon. Gentleman did not make clear how paltry these are in terms of the Government's budgetary perspective, nor how they could be greatly expanded by an even moderate wealth tax on the basis of the £28 billion rise in Stock Exchange share values in United Kingdom managed companies over the last 18 months.
  Now, in an effort to compete with the Prime Minister as the fairest man in the Government, the Secretary of State for the Environment is offering rent rebates to more than 1 million tenants, rent rebates averaging less than £1·50 a week, which are supposed to protect the poor in a housing world in which the value of the average house has increased over the last two years by more than £2,000. What we are not told is that even if they claim their rent rebates, the size of the rent increases to which they will be subject will still be cut on average by less than a half.
  Nor are we told that what is to be done over the next five years is to reduce housing subsidies for council tenants with incomes of less than £40 a week by more than £100 million while at the same time increasing housing tax relief subsidies to owner-occupiers with incomes of more than £40 a week by more than £50 million. Although the situation is com-
  726
  plicated, those would seem to be the facts as nearly as possible. If more accurate information can be produced by the Government Front Bench, I should like to see it.
  Implicitly admitting the manifest failure of the family income supplement, the Government are now seeking to sell the tax credit proposals as a long-term solution for poverty, largely to be paid for painlessly out of growth. What we are not told is that only one-ninth of the benefits from these proposals, even if they come into operation, will go to those with incomes of less than £20 a week. Nor is it made clear that it is much more likely that the poor will pay for these benefits themselves through the up-rating of VAT or the ending of certain essential zero-ratings in VAT. At one go, VAT will be made more regressive and at the same time the tax credits made even more to benefit the well-off.
  Yet to obtain even these modest gains, which, apart from the normal annual benefit upratings, constitute virtually the whole of the fair deal the Government propose, there is a price to be paid. That price has been the inauguration, with all the creeping poison of the stigma involved, of the means-test State, which has been produced by a trebling in the number of working families brought within the ambit of means tests.
  One of the evils of this system has clearly not been brought home to the Prime Minister. He blithely said this in his reply to the Gracious Speech, talking of the £2 a week flat rate in increase:
  "The flat-rate increase would give higher proportionate increases to the lower paid than to the better off, and so achieve the objective of a relative improvement in the position of the low-paid."—[OFFICIAL REPORT, 31st October, 1972; Vol. 845, c. 47.]
  As has already been said, rightly and eloquently, he is obviously ignorant, perhaps wilfully so, of the poverty wage trap. Despite what the Secretary of State said today, there can be no doubt that the poverty wage trap still makes nonsense of his argument. So far from gaining most from a flat-rate increase, low paid workers actually gain least.
  There are good reasons for this because pay rises of this kind, despite what the Secretary of State said—and I listened to him carefully—will mean that people will lose entitlements to rate rebates, rent

  727
  rebates, clothing allowances, school uniform allowances, education maintenance allowances—there are, after all, 47 of these. The only benefits to which the Secretary of State applied his remarks numbered five. These had the period of eligibility lengthened. Nor can the Government claim that this is merely a temporary imposition on the poorer members of the community because the tax credits proposals will hardly have any effect on this at all. It will remove only one means-tested benefit, family income supplement.
  It means that the Government are still burdening the low-paid with a disincentive against increasing their incomes which is still substantially higher than that levied on higher-paid executives, for whom, according to recent Institute of Fiscal Studies reports, the effective tax rate, bearing in mind all the permitted allowances against tax, is often as low as 40 per cent.
  The other price which the poor will have to pay, and against which there has been no special protection offered, concerns the cost of Europe. The replacement of the deficiency payments system by the import levy scheme will hit the poorest hardest in terms of rising food bills. This is made worse by the Chancellor of the Exchequer's refusal, in a debate in the House on 9th May, to give an explicit assurance, on the basis of Britain's right to veto any disapproved steps towards harmonisation, that he will not agree to any VAT rating on food.
  Perhaps the most serious prospect for the poor concerns the future of regional policy. The Prime Minister brought back no figures from the summit, but what can be said is that in the absence of a far more ambitious industrial regional policy than the recently passed Industry Act to compensate for loss of the devaluation option, it will be the poor who will chiefly pay for countering inflation and for regional stagnation within the wider community of Europe as it stands. The key issue regarding fairness in terms of the poor remains to be posed. If the Prime Minister expected on grounds of fairness to obtain voluntary co-operation with temporary restraint of incomes, then he must understand that a last-minute conversion will not do. If he were concerned about low-paid workers with his flat-rate
  728
  increase, why do tax credits offer only one-seventh as much to each member of the low-paid with incomes under £20 a week as they do to each member of that small, privileged group with incomes over £5,000 a year?
  If he were really concerned about the low-paid, why have the Government so far allocated via three Budgets, via social service cutbacks, National Insurance Acts and the Housing Finance Act, roughly 50 times bigger gains on average to each member of this same, small privileged clique than they have on average to each member among the broad mass of skilled workers?
  If he were really concerned about the low-paid, why has the Chancellor of the Exchequer provocatively chosen this moment to give this same 1½ per cent. of the population an extra £110 million through the easing of the investment surcharge on unearned incomes—a sum which by itself is 16 times the total given this year to recipients of family income supplement? If he genuinely cared about the low-paid, why did the Government decide, as a priority, to increase the permitted stock options by 10 times, up to 400 per cent. of an executive's salaries at this time?
  The ugly truth is that there has not been a single social and economic measure introduced by this Government applying to the population as a whole to have benefited the poor more than the rich. Therefore, it is not surprising that the number of people in poverty in Britain today is at an all-time high. A year ago there were 242,000 more persons and their families on the supplementary benefit breadline than at the time of the last election. The comparable figure today is 271,000.
  Nor is it any use the Secretary of State saying, as he tried to say today, that this is merely an increase in the take-up of supplementary benefit by the elderly. It is not. It is due almost entirely to one single deplorable factor, which is an increase of 218,000 in the number of unemployed and their families who have been forced on to means-tested dependence on public funds by the Government's economic policies.
  In poverty terms this is the net result of two years of Tory Government. It

  729
  is a miserable record of redistribution not to the poor but away from the poor. The Prime Minister said firmly that he would increase family allowances. He did not. The Government proclaimed "One Nation", but they have deliberately engineered two nations. The Government assert their belief in incentives, but they have undermined incentives to the poor. The Government propagated selectivity to reduce poverty. In fact, poverty has increased. So far from endorsing fairness, the Government have used every major social and economic measure to reward wealth and privilege. It is a miserable divisive and unjust record, and not until that record is changed decisively will the Government get the co-operation of the nation in solving our economic problems.
  9.1 p.m.
  Mr. Edward Short: Three weeks ago Northern Television showed an item which I thought I had seen the last of in the 1930s. It appeared later in national television programmes. It showed a queue of old people outside a Tyneside bacon factory, waiting in the cold and rain for 12½p bags of bones. They were interviewed one by one by the television interviewer and asked what they felt like going into a butcher's shop. One after another they said, "You are joking. We cannot go into a butcher's shop. We cannot afford to go into a butcher's shop.
  That is the kind of poverty that we are discussing in this debate. These are the poor—the people in Britain who do not get their fair share of the wealth that has been and is being produced.
  As many hon. Members have said, a debate about poverty must be a debate about how we share out wealth in our society. But the imbalance in the way in which we share out our wealth is seen in very much more than the shortage of cash in those old people's pockets needed to maintain a reasonable standard of living. It is seen in a dangerously low standard of nutrition. It is seen in poor, very often substandard, housing. It is seen in drab, grey streets, without a tree or a green space in sight. It is seen in poor educational opportunities. It is seen in the much greater incidence of disease and the higher mortality rate. It is seen
  730
  in cultural neglect. All these add up to an acutely impoverished quality of life.
  "A Better Tomorrow" said:
  "We want a society in which material advance goes hand in hand with the deeper values which go to make up the quality of life."
  After two-and-a-quarter years of the Government—which won an Election on that manifesto we have old people in Tyneside—just as in the 1930s, when I was a young teacher there—queueing to buy bags of bones because they cannot afford to go to a butcher's shop.
  That is the tragedy and immorality of it all, because poverty has many faces. It is very rare to find one face of it alone. Most of our fellow men in poverty suffer from multiple poverty. They are the men, women and children who live in the inner cities of our old industrial towns; they live in the small, rundown industrial communities of South Wales, Lancashire, the West Riding, Durham and West Cumberland, sometimes in rural areas. There are millions of them—men, women and children.
  The capitalist system cannot, because of its very nature, share out rewards equitably between capital and labour. Government policy can and should correct the initial maldistribution in wages and salaries by fiscal policy, by housing policy, by education policy, and by social policy generally. The indictment of the Government is that not only are they not doing this; but, to date, they have also increased the imbalance in the distribution of wealth. The rich have got richer and the poor are certainly more numerous. The Conservative Party exists to make the rich richer. The Conservative Party is the tool of the rich, and when the rich become richer inevitably the poor become poorer.
  Mr. Patrick Cormack: This is a bag of old bones.
  Mr. Short: The hon. Gentleman says it is "a bag of old bones". This is a man who is joking about the old people on Tyneside buying bones. Hon. Members opposite ran out of speakers in the debate. Look at what the Government have done in two-and-a-quarter years to increase the imbalance. On their own figures, the Government reduced taxation—
  The Chief Secretary to the Treasury (Mr. Patrick Jenkin)The Chief Secretary to the Treasury (Mr. Patrick Jenkin)rose—
  Mr. Short: I understand that the hon. Gentleman is to speak next.
  On the Government's own figures they have reduced taxation by £3,000 million. They have distributed that sum in inverse proportion to the degree of poverty. Almost one quarter of the amount has gone to the one per cent. of the population with £5,000 plus per annum—and these are also the people who own most of the capital.
  The Government's second major device to redistribute incomes is the Housing Finance Act. Over a five-year period, beginning this year, this will effect a massive redistribution of housing aid as between council tenants, private tenants and owner-occupiers. Between 1970–71 and 1975–76 the average subsidy, from all sources, on a council house will fall from £86 to £33. That is the central Government subsidy, the rate fund subsidy and the supplementary benefit repayments.
  Mr. Arthur Lewis: But not for Ministers with their free flats.
  Mr. Short: The subsidy for the private tenant will rise from £21 to £54 and for the owner-occupier from £62 to £68. So, at the end of the five-year period, the subsidy will amount to £33 for the council tenant, £54 for the private tenant and £68 for the owner-occupier. This is in spite of the fact that council houses, on the whole, are occupied by people who cannot afford to buy houses of their own.
  The total public aid towards each council tenant will be less than half the total public aid to each owner-occupier. If all the economic measures and the Housing Finance Act are taken together, the 1 per cent. who have incomes of over £5,000 have received six times more than the half of the population whose incomes are between £1,000 and £2,000. We have seen in the past two-and-a-half years the most colossal redistribution of incomes towards the rich this century. Yet the Prime Minister wonders why, for the first time in our history, the Government cannot count on the support of the nation at a time of acute national crisis—and they cannot.
  In his article in The Times of 29th December, 1971, my hon. Friend the
  732
  Member for Oldham, West (Mr. Meacher), who has done so much to improve people's understanding about these problems, estimated that up to the end of 1971 the total effect of all the Government's policies, including their Budget and mini-Budget, was that the £1,000- £2,000 group had actually lost £15 per annum, whilst the £5,000-plus group had gained £1,258 per annum. The Secretary of State was given the opportunity to reply to that article in the same newspaper, but he did not reply to those figures.
  To make matters worse, this redistribution has been accompanied by an unprecedented extension of means testing. The Secretary of State said that there has been been only one. Has he forgotten the Housing Finance Act? There has been an unprecedented extension in means testing to restrict public expenditure. What is happening under the Housing Finance Act demonstrates beyond doubt that the purpose of these means tests is to restrict public expenditure
  The interaction between these policies and tax policies has created the poverty trap, the three bars of which—inflation, low tax threshold and means-tested benefit—prevent any escape for vast numbers of workers. It has been estimated that this year 6·3 million workers, of whom 3·3 million are women, receive basic pay of less than £20 a week. If the right hon. Gentlemen wants some examples I will gladly give him a few—agriculture, 178,000; catering, 258,000; clothing, 209,000; laundries, 54,000. There are many others.
  The pay rise of £3·30 a week for agricultural workers, which is not yet approved, leaves £19·50 as the minimum wage for a 42-hour week; that is 50p below the prescribed level for family income supplements of £20 a week for families with one child. If we take the Prime Minister's £2 across the board, we see that a man with two children earning £19 a week will be left with 37p, but a man earning £30 a week will be 7p a week worse off if he gets the £2. How right the TUC was not to fall for that one.
  Added to this deliberate diversion of incomes from the poor to the rich, the Government have presided over the

  733
  fastest rise in prices in our history. There have been 2½ years of galloping inflation with prices up by 18·9 per cent. in 27 months and food, to August of this year, up by 21·7 per cent. I see that the Leader of the House is writing that down. I should have thought he would have known that. Profits of food firms in the same period were up by 30 per cent.
  The speech on housing made by the hon. Member for Lancaster (Mrs. Kellett-Bowman) made me wonder whether the hon. Lady and I have been living in the same world for the last two years. Do I need to show her the headlines about the rising prices of houses?
  "South-East homes up by 47 per cent."
  That was at the beginning of the year. Under two-and-a-quarter years of Tory Government the land and house racket has been one of the greatest—
  Mrs. Kellett-Bowman: The greater part of my speech dealt with the social services and made passing reference to the speech of the right hon. Member for Fulham (Mr. Michael Stewart) on the question of the Housing Finance Bill. I pointed out in my speech that one council was selling some of its houses at a proper valuation at about £3,000.
  Mr. Short: The more shame to them. I regard it as sheer immorality to sell council houses when so many people are in need of them. The Government are deliberately encouraging higher prices. Next year there will be an increase in prices resulting from the imposition of VAT and our entry into the EEC. By ending deficiency payments, the Government will save £150 million to £200 million a year. This no doubt will make possible further tax concessions to their wealthy backers. But it is the housewife who will pay that £200 million across the counter.
  I went shopping with my wife on Saturday morning. We saw oranges and apples at 5p each; Lurpak butter at 24p a lb.; Wall's sausages at 29p per lb.; topside of beef at 58p per lb.—eleven shillings and sixpence in the old currency; lamb chops at 40p a lb.; potatoes at 2p per lb. I congratulate the right hon. Gentleman the Leader of the House on his new appointment, but I congratulate housewives even more on getting rid of him as Minister of Agriculture, Fisheries and
  734
  Food. He was a luxury we could not afford. Has he any idea of what these prices mean to the ordinary working-class housewife?
  The Lord President of the Council and Leader of the House of Commons (Mr. James Prior): Would the right hon. Gentleman in his turn give the House some idea of what we have done to get rid of deficiency payments? Will he give me one example of that?
  Mr. Short: I wish the right hon. Gentleman would listen to what I am saying. I said that the Government will save £150 million to £200 million on deficiency payments and that this will make possible further tax cuts for rich people.
  Do the Government know what has happened to prices this weekend? Does the right hon. Gentleman not realise that this weekend 5 per cent. has already gone on to prices? Does he know what these prices mean to the poor, to the under-£10- a-week household which spends 71·2 per cent. of its income on food, housing and clothing; or to the £10-£15-a-week household which spends 67·4 per cent. of its income on those three items? It does not hurt the £80-a-week family which, according to the Expenditure Survey, spends more on alcohol than the under£10-a-week household spends on clothing and well over what the £10-£20-a-week household spends on fuel.
  This kind of stark comparison underlines the gross injustice in the way in which we distribute our incomes in society. Budgets of this kind leave no elbow room at all. My hon. Friend the Member for Newcastle-upon-Tyne, West (Mr. Robert C. Brown) mentioned television licences. What happens in the kind of household he mentioned when the licence becomes due? How do they rake the money together to pay for it? What happens when the sitting room carpet wears out? There is no elbow room in budgets of this kind and these budgets on which many millions of our people live.
  We have heard a great deal about an annual review, and it was mentioned by the Secretary of State for Social Services in his speech today. Let me give him some more figures from the Department of Employment Gazette. In the 5¾ years of Labour Government the Pensioners

  735
  Index rose 21·1 points; in the two years under the Tories it has risen 32·1 points. Therefore, a two-yearly review under the Labour Government came after an increase of 8·7 points, and a one-yearly review under the Tories came after an increase of 16 points. It follows that there should be a six-monthly revision to do the same as the Labour Government did in reviewing pensions. By their tax policies and housing policy the Government have reinforced existing differentials of wealth in a way which will perpetuate the grossly impoverished groups in society.
  That is equally true of the Government's reinforcement of privilege in the education system. The major lesson in education which we have learned in the past few years has been the close connection between deprivation and educational achievement. The two Douglas Reports and almost every report that comes from the National Childrens Bureau point to a deep-seated handicap in our education system due to physical and cultural deprivation. The handicap drags on from one generation to another. The Child Poverty Action Group last year estimated that 2 million children are living below the level of poverty, as defined in "Circumstances of Families", 1967.
  When children are poor, they are less likely to benefit from their education. They go to poor schools in areas where they must live. They must live in them because their parents are poor. Their parents become poorer because of the areas in which they live. Whole families are caught in a cat's cradle of deprivation and poverty, and for many of them there is never any escape. Their education barely touches them. They take no GCEs or CSEs. They are more likely than other children to spend time in care. They are more likely to spend time in an ESN school or in borstal. They are more likely to be unemployed when they leave school. They are more likely to be chronic job changers. They will almost certainly suffer from a wage differential throughout their working lives.
  This is another poverty trap—children who are victims of multiple poverty. They have not a chance. Educational poverty reinforces physical poverty. The Plowden
  736
  Report of seven years ago was about that. That is why the Labour Government introduced a special building programme. That is why they started the urban programme. In the last few years every educationist worth the name has urged on the Government positive discrimination in the use of educational resources in favour of deprived areas and deprived children.
  I thank the Secretary of State for Social Services for what he has done in respect of playgroups. In the House on 21st April last year I advised the right hon. Lady the Secretary of State for Education and Science to do that. But she has not done it. In the past two or three weeks she has received the Halsey Report, which advised exactly the same course. Will the Minister tonight tell us whether the Government propose to implement the Halsey Report? The right hon. Lady has halved the number of nursery school places provided each year under the urban programme.
  The right hon. Lady's priorities—I am sorry that she is not present, although the Amendment mentions education—are the retention of the 11-plus, which is a major cause of working-class handicap; aid to the direct grant schools, and an overall priority for primary schools whether they are in Bournemouth, Blackburn or Bootle. She has done nothing to attack educational poverty where it is most acute. Indeed, she has done less than nothing. She has encouraged it by using her powers to retain the 11-plus. Educational poverty is added to physical and environment poverty, and the Government's policy is making no impact on it whatever.
  The Government demonstrate a superficial commitment to the relief of short-term poverty. The family income supplement is an example of a largely ineffective device introduced by them to do this. It has been estimated that there are 100,000 two-parent families on the low-incomes levels, with 325,000 children, earning less than the social security benefit level. Today the Secretary of State said—quoting figures which are, I think, still unpublished—that the number may now be less. The 100,000 figure is the latest that I have. My advice is that it is probably too low, and that the figure is higher.
  At the end of May 80,000 families—about 50 per cent. of those eligible—were

  737
  getting FIS. I believe that the Secretary of State's target was 85 per cent. but after nine months the trend has flattened out.
  The estimated cost of this device in 1972–73 is £8 million. Just imagine that: to the poorest of the poor a miserable little sop compared with the hand-outs which the Government are making to the higher income groups. Compare that £8 million to those who are in greatest need with the £300 million which is to be handed out in April next year.
  In judging its effectiveness we must ask ourselves whether FIS is reaching those in greatest need. I do not know. It looks as though the poorest families are concentrated in the 25 per cent. non-claimants, in the biggest FIS category. So to date, certainly, it has not been demonstrated that the poorest are getting it. They probably are not. The FIS experiment demonstrates once more that means-tested benefits are the crudest possible weapon for reaching those in need and that poverty cannot be abolished by selectivity.
  We now have the tax credit scheme, and we shall examine it with some care. But, here again, the illustrative figures given show the same regressive pattern, as in everything that the Government do. It will give £5 a year to the poorest 1 per cent. of the population, but £500 a year to the richest 1 per cent. of the population. My only comment on that today is that if the Government want to spend £1,300 million, why not spend it now in attacking poverty, and not wait five years to do it?
  In the few minutes remaining to me I propose to tell the Government how to spend it to make the maximum impact on the categories of poverty in Britain. There are five broad categories in which most people living in poverty are to be found—the retired, the unemployed, the sick and disabled, the low wage earners and the single-parent families. All, with the possible exception of the sick and disabled, are increasing in numbers.
  My seven proposals are as follows: first, the one measure which would make the biggest impact of all would be a national superannuation scheme with retirement on half pay, not in full benefit in 20 years, but now. Let us use part of the £1,300 million for that.
  738
  Secondly, add a disability supplement to the retirement pension. There are 1¼ million severely disabled people in Britain, according to "Handicapped and Impaired in Britain". Of these, 730,000 are old people, and many are poor. The best way to help them would be a non-means-tested benefit. This would make a far greater impact on poverty than the 80-plus pension. Some of the 80-plus are well off, but there are very few among the severely disabled. An allowance of £1·50 a week would cost £50 million per annum. That is not much, compared with £1,300 million.
  Thirdly, speed up the phasing of the disability pension. Do not leave the elderly to wait to the last to get a lower rate allowance. Move more quickly to the assistance of all the severely disabled.
  Fourthly, there is a big pool of poverty in the one-parent families. Recent reports of the National Children's Bureau have shown that children of one-parent families are particularly at risk. If the way out of poverty is, as I believe, to give an allowance above social security level, then an allowance as of right would be the answer.
  Fifthly, family allowances. I remind the Secretary of State of the letter to the Child Poverty Action Group of 1st June, 1970, when the right hon. and hon. Gentlemen were after votes. That promise has not been kept. Why not keep it now? To double family allowances would cost £300 million. To give an increase of 50p would cost £150 million. There is still a lot of the £1,300 million left.
  Sixthly, bring down unemployment. This would make the second biggest impact. The Government should do much more. I want to make one point here for a very special reason. The unemployed lose their entitlement after one year and are then forced to go on social security. I suggest that this be extended from one year to two years. The difference is that one is means tested and the other is not. Means testing contributes to the psychology of the matter, and that is an important aspect of poverty.
  My final point concerns the introduction of a wealth tax. My hon. Friend the Member for Oldham, West pointed to the £28 billion increase in the value of United Kingdom shares in the last

  739
  two years. Cannot we claw back some of this excessive accumulation of wealth? Cannot we allow the manipulators of the system to retain less and the people who produce the wealth in our community to get more? I believe that the time has come when the people of this country will not tolerate a gross mal-distribution of wealth which produces the obscenity of poverty in the midst of affluence.
  I hope the capitalist system will not endure for ever, but so long as it does endure, Government action must correct its grosser manifestations. This is the great divide between this party and the party opposite. We shall redistribute wealth radically in favour of the poor. The Government, by their nature, can only redistribute wealth in favour of the rich.
  9.31 p.m.
  The Chief Secretary to the Treasury (Mr. Patrick Jenkin): I must begin by correcting one small point which the right hon. Member for Newcastle-upon-Tyne, Central (Mr. Edward Short) made. It is not true to say that the Government side of the House ran out of speakers. We deliberately asked people not to speak in order that the hon. Member for Oldham, West (Mr. Meacher) should get into the debate because it was realised that he would make a notable contribution. I shall return to his remarks later.
  The right hon. Gentleman's philosophy, which he enunciated at the beginning of his speech, that if the rich become richer the poor must become poorer, is the philosophy of despair. I remember the long radio broadcast in 1970 of the right hon. Member for Coventry, East (Mr. Crossman) and the right hon. Member for Grimsby (Mr. Crosland), and throughout that broadcast was the recognition that one cannot deal with the problem of poverty except in the context of growth. The question of redistribution or otherwise has only the most marginal effect on the question of poverty. I reject that part of the right hon. Gentleman's philosophy.
  I agree with the right hon. Gentleman on one matter, and that is the importance of education in breaking the pattern of family deprivation to which my right hon. Friend drew attention in a notable
  740
  speech a few months ago. The fact is that under my right hon. Friend the Secretary of State education has prospered mightily. The school building programme in England is such that this year it will reach an all-time record on two counts. The total value of work to be started, some £253 million, is about half as much again in real terms as the average for the last five years of the 1960s.
  Mr. Edward Short Mr. Edward Short indicated dissent.
  Mr. Jenkin: It is no good the right hon. Gentleman shaking his head. It is true. A record £50 million is included in the improvement and replacement of the old primary schools. In the period 1972–74, in improving or replacing nearly 1,000 old primary schools we will be doing more in two years than in the whole of the six years of the last Government. This is in fulfilment of our election pledge to shift resources towards the primary schools. More important, it reflects our concern to give more of our children better education opportunities in modern well-equipped schools.
  My right hon. Friend has already made it clear that our next priority will be the expansion of nursery education, and her plans will recognise the benefits which an earlier start can give children, especially those living in areas of acute social need. So it is nonsense to accuse the present Government of doing nothing to improve the standard of educational provision for the under-privileged.
  My right hon. Friend the Member for Stafford and Stone (Mr. Hugh Fraser) developed his now well-known case against the value added tax. I believe that his fears are misplaced, and if this belief relegates me to the status of a Treasury shotgun, I will bear that with all the fortitude that I can muster. We are well aware of the possibilities that he mentioned. The Chancellor intends to take steps to see that the shopper has all the necessary information and that the traders play fair. I must tell him, firmly and finally, that my right hon. Friend has no intention of postponing the introduction of the value added tax.
  Mr. Hugh Fraser: But surely my hon. Friend and the Treasury Bench must face realities and see that what has happened

  741
  in Europe will happen here. The Government have done several U-turns: they should do a U-turn on this, too.
  Mr. Jenkin: That is not the Chancellor's intention.
  The speech of the right hon. Member for Blackburn (Mrs. Castle) was in her characteristic vein, but listening to her it was an effort to recollect that she was for six years a member of a Government who presided over our affairs in the matter of social security.
  The right hon. Lady strongly attacked means-testing. I read that at her party conference she said:
  "The Government have elevated means-testing into a way of life, proliferating means-testing at every opportunity."
  That is entering the realms of fantasy. What is the truth? The last Labour Government did not remove one of the means tests which they found on taking office and on the contrary they assiduously encouraged their use by local housing authorities. They themselves added one new means test, on rate rebates.
  What have we done? We have added one new means test, for the family income supplement. We have unified the housing means tests into a single rent rebate scheme, we have extended rent allowances to the private sector and we have put forward a tax credit scheme, one of the chief advantages of which is that it substantially reduces the numbers subject to individual means testing. I have no doubt that the right hon. Lady's party cheered her to the echo at Blackpool, but she must know, even if they did not, that she was talking rubbish.
  One has to remember that the Labour Party introduced one rather curious new non-means-tested universal benefit. In April, 1968, the right hon. Member for Leyton (Mr. Gordon Walker), when Secretary of State for Education, introduced free school meals for all fourth and subsequent children without proof of need. Perhaps this is what the right hon. Lady meant when she talked at her conference of the "distinguishing mark of the Socialist". That mark was not very distinguished and it did not last very long. It was the right hon. Member for Newcastle-upon-Tyne, Central who quickly though better of that scheme, and it disappeared a few months later. What a tan-
  742
  talising glimpse of the Socialist Nirvana that short spell must have been.
  But it does not stop there. The whole tenor of the right hon. Lady's speech and of this Amendment is that, since June, 1970, people have suffered disastrous cuts in their standard of living. That is just not true. Let me take the right hon. Lady's own case, that of a married man with two children under eleven—first, on average earnings. I will compare the positions in October, 1964, June, 1970, and September, 1972, for which we have the latest figures. I take into account family allowances, national insurance contributions, changes in taxation, school meal charges and a representative amount of health charges covering prescriptions, dental treatment and spectacles, and express all the figures on a constant price basis.
  Taking all these factors into account, the stark truth, however unpalatable it may be for hon. Members opposite, is that, between 1st October, 1964, and June, 1970, such a man enjoyed a real net increase in his income over the six years of only 3½ per cent. Since, June, 1970, in just over two years, the figure is 10 per cent. That is only 3½ per cent. better off after six years of Labour Government, but 10 per cent. better off after just over two years of Tory Government. It is, therefore, pure rubbish for the Amendment to talk in terms of "disastrous cuts" in the standard of living.
  Then the right hon. Lady said, "Yes, that is all very well for the average person, but what about people within the poverty trap?" We have looked at the figures for agricultural workers. A man whose wage rises from £16·20 to £19·50 loses FIS of 65p and pays 16p extra national insurance contribution, making 81p in all, and his net income rises from £18·76 to £21·25, an increase of £2·49. That is a man with two children of primary school age, and he does not lose any school meals allowance. Let us take the case of a man a little higher up the scale whose wage rises from £22 to £25·30. He still pays £1·43 in tax but 16p more national insurance contribution. His net real increase is £1·44. I did not understand the right hon. Lady's figures.
  Let us move a stage further. The Opposition say that people who are better off and higher up the scale have gained

  743
  much more than those lower down. We have examined that argument. I am sorry to disappoint the right hon. Lady but that is not true, either. If one assumes the same wage and price indices at all levels—I admit that this is a fairly rough-and-ready test—the figures show that the percentage increase in real terms has been greater at the lower end of the incomes scale than higher up. Let us take a range of earnings in October, 1970, from £15 a week to £200 a week, that is, up to more than £10,000 a year, and let us assume that it has all risen by the 25 per cent. average. The fact is that the TUC's evidence indicates that the lower-paid have done rather better and that salary earners as a group have done less well. But let us take the net incomes after tax and apply the price indices for two years, October to October, of those net incomes.
  We find that the smaller the income, the bigger the percentage increase has been. For a man on average earnings the figure is 9·3 per cent. For a man on just over half the average earnings, it is 14·3 per cent. For a man on £10,000 a year, it is 7·5 per cent. This has been achieved because we have given the biggest reliefs at the bottom of the scale—
  Mr. Dennis Skinner Mr. Dennis Skinner (Bolsover)rose—
  Mr. Jenkin: —lifted the threshold for tax and introduced the graduated national insurance contribution. When one adds to that the rent and rate rebates and the annual uprating of national insurance benefits, one finds that it is the sheerest nonsense to talk, as the Amendment does, about
  "massive redistribution of wealth in favour of the rich."
  Mr. Joel Barnett: Will the hon. Gentleman give way?
  Mr. Jenkin: No. I have a lot to get through. [HON. MEMBERS: "Give way."] I concede to the Opposition that we have been able to cut the top rate of surtax on earnings—I accept the right hon. Lady's figure—to 75 per cent. But that is still higher than almost all of our foreign competitors. I concede, too, that under unified tax we shall be ending the discrimination against savings incomes for those with less than £2,000 of such income and mitigating the differential above that level. But neither confisca-
  744
  tory rates of surtax, nor the extent of differential in incomes, made any sort of fiscal, economic or social sense.
  Here I come to the hon. Member for Fife, West (Mr. William Hamilton). I cannot confirm his figures, which I did not understand. But compared with the sums involved in the massive tax reliefs to wage earners, increases in personal allowances, cuts in indirect taxation, all the new benefits for the very old and the very poor, the chronic sick and disabled, all the extra money being spent on health and welfare services and primary education, and the massive sums involved in annual up-ratings of the national insurance pension, the cost of the surtax relief at one-third of the cost of unification—because that is all the cost to those above £5,000—the amounts are relatively tiny. Not all the phoney figuring of the hon. Member for Oldham, West and not all the contumacious eloquence of the right hon. Lady the Member for Blackburn can make it otherwise, try as they might.
  One reason why people lower down the income scale have done better in the past two years is that the level at which they begin to pay tax has been raised. I was astonished that low tax thresholds were made part of the Opposition's accusations. Let us consider what happened under the Labour Government. Successive Labour Chancellors failed to raise tax thresholds even to keep pace with the cost of living. By 1970 a three-child family started to pay tax at the standard rate on earnings of just over £16 a week. That is well below the supplementary benefit level. I regard that as a wholly indefensible state of affairs. I often suspect that Labour Health and Social Security Ministers did not know what their Treasury colleagues were getting up to.
  The figures that I shall give to the House, which I ask hon. Members to follow carefully, are comparisons based on the real level of the tax threshold, taking account of a rising cost of living. On that basis the stark facts are that the real level of tax thresholds fell significantly during the six Labour years but recovered sharply in the last two Tory years. The level at which a family with two children under 11 years started paying tax fell in real terms by 12 per cent. during the six years of Labour Government, yet it has risen by nearly 12

  745
  per cent. since 1970. The level at which a couple with four children paid tax fell by 23·2 per cent. during the Labour Administration. We have not yet made that up. Since 1970 it has increased by 13 per cent. The level at which a pensioner couple paid tax fell by 8·8 per cent. during the Labour years and it has risen by 14·8 per cent. in Tory years. In two years we have not only dramatically reversed the trend of lower real tax thresholds, which did so much to frustrate the efforts of Opposition social security Ministers; we are already well on the way to undoing the harm which Labour did in their six years.
  The importance of these matters is not only elementary justice to the poor and hard pressed, but it is essential if one is to take action in the short term to help poor families. We have been able to take such action by lifting the starting point for taxation so that there is now a significant gap between the supplementary benefit level and the present tax threshold. We made that gap and into the gap thus created my right hon. Friend the Secretary of State has inserted the family income supplement as an interim measure. That measure gives benefits of up to £5 a week and it is now received by 100,000 of the poorest families with children in the country.
  I have had occasion in the past to point out to the Labour Front Bench that the figures of the hon. Member for Oldham, West are of doubtful value. However, his right hon. Friends apparently do not take my advice and do not treat his conclusions with reserve. I read in the Press yesterday that the right hon. Member for Blackburn now relies increasingly upon the researches of the hon. Member for Oldham, West. I warn the right hon. Lady that the hon. Member does not cook the figures, he positively stews them. Whenever Blackburn and Oldham are together, they give a new meaning to Lancashire hotpot.
  Mrs. Castle: Before the hon. Gentleman gets further carried away by his contumacious eloquence, will he return to a little simple fact. He has had a great fill of self-amusement by denying that the figures exist which we have given about the poverty trap. If they are a creation of our imagination, can he tell us why the Prime Minister has announced special measures to prevent any increase
  746
  in wages having a disastrous effect on entitlement to means-tested families?
  Mr. Jenkin: I have never sought to deny—those who have heard me speak on this subject in debates on Finance Bills know that this is true—that, if means tested benefits are to be withdrawn as incomes rise, one is involved inevitably, as the Labour Government found, with problems of incentives. Hon. Members opposite have greatly exaggerated. My right hon. Friend gave figures this afternoon indicating that it is a very much smaller problem; but it exists. We are talking in terms of a few tens of thousands of people who are actually worse off when their income rises. This is why my right hon. Friend the Prime Minister has announced the 12-months period for three benefits.
  I must return to the hon. Member for Oldham, West, because his figures do not even pretend to be valid. For instance, his most recent articles have omitted altogether any of the cuts in purchase tax and selective employment tax. Yet at the same time the hon. Gentleman assumes five years of rent increases under the Housing Finance Act. The hon. Gentleman manages to allocate the whole of the corporation tax cuts to those individual taxpayers with incomes over £5,000. This is utterly ridiculous. It is wholly at odds with the weight of respectable academic opinion as to the effect of this. It entirely ignores the huge portfolios of the insurance companies, the pension funds, the trade unions, the unit trusts, and other institutional investors.
  The hon. Gentleman's methodology suffers from even more fundamental flaws. He purports to allocate the benefit of tax cuts and the burden of charges on a basis which is no more than pure hypothesis, and I think he would acknowledge that. The detailed statistics of income and expenditure patterns simply do not exist to enable this to be done. The hon. Gentleman assumes a static pattern of pre-tax income distribution which is not borne out by the facts. In the last two years wages have risen by about 25 per cent., dividends by only about 15 per cent. The hon. Gentleman assumes a static pattern wholly unaffected by the various fiscal measures the Government have taken, again an unreal assumption.

  747
  I could go on; but honestly the hon. Gentleman just is not worth powder and shot. He was effectively disposed by Professor Alan Day, one of our most respected economic professors at the LSE, who said this in a letter to The Guardian on 9th August:
  "What can be said with confidence is that Mr. Meacher's use of what statistics are available is grossly misleading. … The total effect is that Mr. Meacher's conclusions are practically meaningless."
  Mr. Meacher: I hope that the Chief Secretary will also quote at length my letter in reply which abolishes that assertion. I should like to write to the Chief Secretary on each of those points, which he will agree are technical and detailed. Does the Chief Secretary agree that from the rise in the value of United Kingdom Stock Exchange in the last two years of £28 billion the amount going to those with incomes of over £5,000—that is, those holding more than half of the shares individually held—was over £30,000, whereas the amount going to those in the lowest income group, namely those in receipt of family income supplement, was £150–300 times less?
  Mr. Jenkin: I read the hon. Gentleman's letter and I found it singularly unconvincing.
  Perhaps the most surprising passage in the Amendment is the charge that the Gracious Speech has no measure to reduce means testing and eliminate poverty. I suppose that the Labour Front Bench must have read the Green Paper on the tax credits scheme, but the hon. Member for Oldham, West even condemns that as a great bonanza for the rich.
  The hon. Member purports sometimes to speak on behalf of the Child Poverty Action Group. I remind the House of what that body said when the Green Paper was published:
  "The Group welcomes today's proposals. They show a willingness by the Government to make radical additions to the welfare state in a renewed attempt to abolish poverty."
  That is wholly justified by the facts.
  Bearing in mind the comparative records of the two parties as I put them before the House tonight, I was astonished that the right hon. Lady should last week have spent part of her time in trying to turn local authority social workers into Labour Party activists.
  748
  Ten days ago, speaking to the annual conference of the British Association of Social Workers at Scarborough, she said:
  "So my first message to you is that in your own professional interests you must get into the political fight."
  A little later she said:
  "Of course I am absolutely certain that all the intelligent people in this room will inevitably enter into one sector of the political fight."
  I say nothing tonight about the propriety of egging local government employees to enter the political fray against their own employers, although I must say that the propriety of that advice is a bit questionable. But I wonder whether the right hon. Lady would have supported the Islington social workers, when they manned the barricades erected against the Labour council's housing officials? Nor do I comment on her suggestion that it would be "in the professional interests" of the social workers that they should do this. What would be the reaction of the hon. Member for Rugby (Mr. William Price) if Tory Ministers started advising Army officers to join a political party in the interests of their profession?
  What I do cavil at is the right hon. Lady's assumption that joining the Labour Party will help the social workers to achieve their objectives, for if we look at their record—and the record is always more worth while than rhetoric—the message is clear. Under Labour the poor got poorer; the average standard of living grew more slowly; pensioners fared less well, the over-eighties were denied their pensions—and both the right hon. Lady and the right hon. Member for Newcastle-on-Tyne, Central voted against that pension, to their shame; the chronically sick and disabled had to wait for their attendance allowances. As John Hughes of Ruskin College wrote in that sad epitaph on Labour's social policy, "Labour and Inequality":
  "We cannot find any important example of relative improvement on the lot of the low-paid worker during the years of Labour Government up to 1969."
  So I say to the social workers: "why back failure?" In the last two years real tax thresholds have been rising where previously they were falling; standards of living of the average family have risen three times as fast as in the whole of the six years of Labour Government; pensions and national insurance benefits

  749
  are now being reviewed annually and today stand higher in real terms than ever before. Entirely new benefits for the very poor and the very old and for the chronically sick and seriously disabled have been introduced. There are higher income limits for free school meals and welfare milk. There is a fairer rent rebates scheme and a more generous rate rebates scheme. Looking to the future, there is the revolutionary tax credit
  scheme which will be the biggest, most effective attack on poverty in this generation. This Amendment is a farrago of nonsense, and it deserves to be consigned to oblivion.
  Question put, That the Amendment be made:—
  The House divided: Ayes 278, Noes 305.
  Question accordingly negatived.
  Main Question again proposed.
  It being after Ten o'clock, the debate stood adjourned.
  Debate to be resumed tomorrow.

TEACHERS (SUPERANNUATION)
10.14 p.m.
Mr. Brian O'Malley: I beg to move,
That an humble Address be presented to Her Majesty, praying that the Teachers Superannuation (Financial Provisions and Family Benefits) (Amendment) Regulations 1972 (S.I., 1972, No. 1092), dated 24th July 1972, a copy of which was laid before this House on 2nd August, in the last session of Parliament, be annulled.
I ought to begin by declaring an interest. For a number of years before coming into this House I was employed as a teacher. During that period I was a member of the National Association of Schoolmasters, and I have maintained a connection with that organisation in the intervening period. However, I make it plain from the outset that I am here today not as a spokesman of the association in any sense but as a spokesman of the Parliamentary Labour Party.
Perhaps it would not be out of order if, before I proceed further, I congratulate the hon. Member for Chelmsford (Mr. St. John-Stevas) on his new appointment to the Department of Education and Science. He is sitting shyly and coyly on the Front Bench for the first time and we wish him well for what we hope will be for him and the rest of the Government a short stay on that Front Bench.
I should like to recount briefly the course of events which led to the publication of this Statutory Instrument. The working party set up to consider the restructuring of teachers' superannuation first met during the period of the Labour Government, in April, 1970. Had that Government continued in office, the teaching profession which have been able to look forward today to better provision for retirement, ill health and widowhood than is envisaged in this Statutory Instrument and in the new Social Security Bill.
I say that because the amended teachers' superannuation schemes, with which the Statutory Instrument deals, are in no respect integrated with the national insurance provisions. Indeed, the integration envisaged by the Labour Government was completely rejected by the
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present Government and that decision has had and will have in the future dire results for the teaching profession.
The first result is that teachers are now being required to pay over ½ per cent. more in total contributions for their pensions than was envisaged at the time the working party was set up. In return for these larger contributions, teachers and their families will receive smaller total cover. This is particularly true in the case of widowhood and invalidity.
Let us compare the total provision for the widow of a schoolmaster, coming from both the national insurance scheme as envisaged by the Government in the Social Security Bill and the provision in the Statutory Instrument, with the provision that would have been payable under the Labour Government's proposals. One then sees how much bigger and how superior the benefits payable to widows would have been under the Labour Government's proposals compared with the present Government's proposals. Therefore, we are taking this opportunity of rejecting totally the superannuation strategy of the present Government of which this Statutory Instrument forms a part.
It is also the case that the teaching profession as a whole was deeply dissatisfied with various and major aspects of its revised superannuation schemes. It would, however, be ungracious to proceed in examining this Statutory Instrument without recognising that it brings some welcome and significant improvements in the provision for teachers' superannuation, widowhood and ill-health cover.
One must, however, point out that the teaching profession has had a very long wait indeed to get these improvements. I am not blaming the present Government specifically or solely for this. It arose partly from the fact that successive Governments had been engaged in a complete overhaul and reappraisal of their pensions and superannuation strategy. Nevertheless, it is true that while in the private sector improvements in pensions in many firms, certainly the best firms, have gone on apace, the teachers, because certain aspects of their schemes have been inferior to other schemes in the public sector, have suffered and lost

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by having to wait many years for this revision.
We should not allow this debate to pass without noticing that for the first time there is provision for a widow's pension of 50 per cent. of the man's entitlement. This is to be welcomed. Previously there was no provision unless the male teacher was prepared to pay an extra 2 per cent., making a total of 8 per cent., and even then the cover he received for that 2 per cent. was very poor. His widow received protection of only one-third of the husband's entitlement. Therefore, the Government and the working party are entitled to say that the 6¾ per cent. contribution which includes entitlement to widow's benefit means a contribution reduction for many teachers. The teachers have had to wait many years for this, whereas other public sector schemes have provided cover for widows.
There is a puzzling aspect of this provision. The Inland Revenue tax rules for occupational pensions allow tax relief on a pension up to the ceiling of the pension earned by the man to a widow with a number of dependent children. However, where there are no children this public service sector scheme, in common with the revised arrangements for schemes within the public sector generally, goes nowhere near the allowable tax ceiling. The Government have agreed in this case, as in others, that there should be a widowhood provision of 50 per cent., which is 16 per cent. below what is allowable under the Inland Revenue rules. It would be helpful if the Secretary of State would explain the Government's thinking on this matter and say why the pension for widows is well below the ceiling for tax relief applied by the Inland Revenue rules.
There have been improvements in the final salary assessment arrangements and there is a reduction in the qualifying period for a pension. However, the teaching profession as a whole has made it clear that it accepted what was put forward by the official side of the working party—which was dominated by the Department of Education and Science—not because it was satisfied but because it thought there was nothing more to come. As proof of that I quote from
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page 3 of the Report of the Working Party on Teachers' Superannuation:
"… the major consideration which induced the representatives of teachers to accept modified objectives was the pressure on them to reach agreement with the official side in time to allow the same improvements to be made in the teachers' schemes with effect from 1st April, 1972 as were being made at about the same time in other public service schemes."
From my own inquiries it seems that the teachers accepted the recommendations in the working party report for the improvements which are contained in this Statutory Instrument not because they were satisfied that they represented a suitably revised superannuation scheme but because the Government were putting the block on any further improvement which they still required. The teaching profession still has a number of aims which it would like to see satisfied and written into the superannuation arrangements.
When it is argued that teachers should be able to retire at 60 on full 40 years' pension, it is often said that this is impossible to achieve because young teachers do not come out of the training colleges at the earliest before they are 21 or 22. Therefore, the teachers have suggested a shorter accrual period for the maximum pension. This has not been the major objection by the teachers to the proposals in the regulations. The fiercest argument has centred on the financial basis of the superannuation schemes.
Teachers and local authority representatives have been united in their dissatisfaction with the financial arrangements on notional funding on which the scheme is based. I quote from page 9 of the working party report:
"The teachers' view was that they were not obtaining a fair return on the balances in the schemes … The local authorities agree with the teachers in contending that the balances in the schemes are not attracting a fair return."
From that basic dissatisfaction with the scheme, the teachers have argued that other injustices have occurred. One of the main areas of objection is that the level of contribution amounting to 6¾ per cent. is high by any standard in either public or private sector superannuation schemes, and I believe this to be a strong argument.
The Secretary of State must seek to justify, if she can, why members of the

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teaching profession employed in local government are being required to pay 6¾ per cent. of reckonable earnings while NALGO members pay only 6 per cent. for similar benefits. I appreciate that the right hon. Lady will say that the total new entrant cost is rather different for one group of people compared wth another. But if that argument is being pushed too far—and I believe that the Government are pushing it a little far—is there not an argument that every entrant should pay a different contribution rate?
It could be argued that the split of cost envisaged between employers and employees is not in line with the best modern superannuation practice. We know the difficulties confronting local authorities faced with heavy deficiency payments. The teaching unions and the local authorities say that those deficiency payments are to a large extent the result of the way in which the scheme has been notionally funded for many years. The teaching profession is worried not only that the local authorities are to pay heavy deficiency payments now but that, as the result of the continuation of the scheme on the present basis, further deficiencies will be built up for the future.
It has been argued that in estimating the new entrant costs the Government Actuary has calculated on the assumption that the fund will be properly invested. In practice the fund is not properly invested; it is notionally invested. Since it is not invested in practice, that inevitably means, unless someone can tell me that I am wrong, that at some stage in future the gap between the two different yields—the notional and what could have been achieved with funding—will show up in further deficiencies.
In these circumstances it is not surprising that the teaching organisations, which are professionally advised that the deficiencies could be cut substantially by other investment arrangements, have pressed for change. When they argue for funding—I am not doing that at the moment; I am stating the arguments put forward by the teaching profession—the Government are their best witness, because they have said "We will set up a reserve scheme for all people who do not have occupational pensions, and the right way for such a scheme is to have an independent board, including, for ex-
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ample, members from the CBI and the TUC, which will wholly fund the money coming into that reserve Government pension scheme."
The teachers are also bound to notice that the National Coal Board and the Post Office Corporation are now in process of funding and increasing parts of their investment income.
I do not suggest that tonight the House can come to a decision on this complex matter of whether the teachers' pension fund should be notionally funded, should be on a pay-as-you-go basis or should be fully or partially funded.
On 24th May my hon. Friend the Member for Bassetlaw (Mr. Ashton) in a Written Question asked the Secretary of State for Education and Science for a full investigation of the financial arrangements of the Teachers' Superannuation Scheme. He was informed by the then Under-Secretary of State that, in view of the working party's deliberations, he could see no need for any further investigation. That was a not unreasonable reply. But something significant has happened since 24th May.
The working party on teachers' superannuation was to look at the whole of the financial arrangements of the scheme. However, I understand that the prospect of any substantial change in those arrangements was utterly refused by the Government on 12th September, and the working party is now discussing technical and detailed actuarial matters related to implementing the scheme laid down in the Statutory Instrument. The teachers also object that their family benefits portfolio, which appears to have been highly profitable and well run, is being taken over by the Government and swallowed by the Treasury, and that the stage has now been reached where the Government have said "We are not prepared to discuss or negotiate further on this matter."
The Secretary of State cannot leave the situation as it is. I do not suggest that any of the three possible courses—funding, notional funding or pay-as-yougo—should proceed. I suggest that throughout the teaching profession there is widespread dissatisfaction with the way the superannuation fund is run. We really cannot leave the matter like this. We have not reached the end of the line. In a period when members of the

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electorate require a greater say in and a more democratic organisation of their affairs, the Secretary of State must move. The only thing that will satisfy the teaching profession as a whole would be a full, independent and expert inquiry into the whole matter. The right hon. Lady cannot continue to act unilaterally and independently of both the local authorities and the teaching profession. The dissatisfaction with this superannuation scheme will continue until such time as she makes a move in these directions. This is the major problem confronting her.
I hope that since we have given the right hon. Lady an opportunity to respond by praying against these regulations, she will now have something to say on the whole question of the arrangement of teachers' superannuation, because what is perfectly clear to us on these benches is that the position at the moment is far from satisfactory. For the reasons I have given, particularly at the outset of my speech, we intend to divide the House on this Prayer.
10.41 p.m.
Mr. Nigel Spearing: I support my hon. Friend the Member for Rotherham (Mr. O'Malley) in his remarks which were most comprehensive. I too have an interest in this matter, having contributed to the fund for 14 years. The House will find it a little ironic that having transferred to the system run by this House, I received unexpectedly not long ago a lump sum payment and it was explained in a covering note that this sum was a repayment to me for the extra payments I had made in order to give coverage to a potential widow of mine. If some untoward incident occurs in the electoral process under redistribution and I do not return to this place, and I rejoin the fund, no doubt I will have to pay back not only that sum but the sum that I have got in the meantime—
Mr. William Hamling: With compound interest.
Mr. Spearing: —with compound interest, as my hon. Friend says.
I may be wrong on the technical details, but at least that example shows how many teachers feel a justified grievance at the Government not having dealt with this matter in a straightforward and
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honourable way. I am afraid that the evidence which my hon. Friend has given, that the Government are no longer prepared to discuss the matter—they are, after all, in a strong bargaining position—will reinforce that point of view. In a matter like this, equity is fairly easy to judge. One can balance one factor against another and say "You have struck a reasonable balance; it could have been a little better for us but, on the whole, we think it is reasonable." That has not happened in this case. At such a time as this, in view of the general attitude of the Government to prices and equity in the economic affairs of the nation, it is to be regretted that they have not acted more equitably towards teachers.
I now turn to a point which was raised by my hon. Friend and to which I hope the right hon. Lady will pay attention. He pointed out that the scheme is not funded in the same way as superannuation schemes relating to other comparable groups of people, particularly local government officers. I had some correspondence on this subject with the former Under-Secretary, the hon. Member for Wokingham (Mr. van Straubenzee) and I should like to quote from a letter he sent me on 10th August, 1972. Referring to the new entrant contribution rate, the hon. Gentleman said:
"The determination has been made on the assumption of an actually funded scheme with average performance."
He did not quote any figure of return. I do not blame him for that, because it cannot perhaps be done with certainty. But he has maintained that this is a notionally funded scheme with average performance. If that is so, it is curious that the Treasury has had to cough up every now and again to meet the deficiencies. So perhaps the past scheme has had less than average performance.
Even if that were so, what does the hon. Gentleman mean by "average performance"? Does he mean the average performance of comparable funded schemes such as those of the National Coal Board or NALGO? This imprecision of phrase suggests that there is far more in principle behind this than the Government have yet admitted.
The same point is raised in the Written Answer which the former Under-Secretary gave my hon. Friend the Member for Bassetlaw (Mr. Ashton) on 24th May. In

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respect of funding as a principle, the hon. Gentleman said:
"I have seen no evidence that a change to real funding, to which I see serious objections would be in the interests of the teachers themselves."—[OFFICIAL REPORT, 24th May, 1972; Vol. 837, c. 421.]
Perhaps it would not, but surely the onus is on the Government to say why not. When someone is told "It is not in your interests to adopt this scheme", the reasons for that view should be made clear so that the person concerned can accept or reject them. I hope that the right hon. Lady will give us some of her serious objections—not those of her hon. Friend—to this principle.
If the Secretary of State cannot do so tonight—she might think that this point is a little obscure—it will show that the Government's thinking on this matter is even less fundamental than we had thought. I hope that the right hon. Lady can, because there are thousands of people whose security and that of their dependants rests on this scheme.
It is worth saying on this particular day that the Government must be seen to be fair in this. An evening paper article by one of their friends tonight says that the Government are not interested in equality, only in equity. They have not shown equity in relation to this scheme. I hope that the right hon. Lady will tell us why she thinks that the scheme is equitable, because hundreds of thousands of teachers think that it is not.
10.44 p.m.
Mr. Alan Haselhurst: I must voice some of the grievances which have been put to me by constituents. I have talked to teachers in my constituency about their anxieties on this scheme. I do not necessarily agree with all the points they have put to me but I have been impressed by their real concern. It is only right that their voice should be heard tonight, and from the Government benches.
I have been amazed at their strong representations. It does not make me quite as angry as it makes the hon. Member for Acton (Mr. Spearing) and I would not join him or the hon. Member for Rotherham (Mr. O'Malley) in directing any venom towards my right hon. Friend the Secretary of State. But the
764
teachers might be given some more assurances as to the longer-term future if they are asked to accept the scheme which my right hon. Friend wishes them to accept. There is no dishonesty or underhandedness in what my right hon. Friend has been doing, but more light should be shed on these matters in future discussions.
As to the particular figure which will be the share by the teachers towards their benefits, various comparisons can be and have been made. It is understandable that teachers will put forward the examples which most favour their case. However, I wonder whether the cost sharing on a fifty-fifty basis is the only possible way that it could be done. The best way of deciding this is not merely to say that the teachers have to fall into one category or another. It would be of greater benefit to teachers, and greater respect could be shown for teachers, if they were regarded as a case on their own.
We believe that the teaching profession is one of the important professions in our society. Teachers are entitled on merit to have their particular apportionment made. It is not entirely right, therefore, to be deciding it in relation to one particular group with which teachers might be conveniently compared. I respect the Government's arguments, which no doubt will be repeated tonight, that there is a peculiarity affecting the age spread of the teaching profession which, for example, would rule out the comparison with NALGO. Nevertheless, the teaching profession should be treated on its own and it should not be good enough, therefore, to say that a fifty-fifty cost sharing ratio is right simply because other bodies can be cited which achieve that same ratio.
Mr. O'Malley: I agree with much of what the hon. Gentleman has said. The point about the fifty-fifty contribution is that it is not the practice in good superannuation schemes to make that fifty-fifty split and the teachers have repeatedly pointed out—all hon. Members will have had letters to this effect—that the House of Commons scheme does not have such a split; and the former Leader of the House defended it on the basis that it was usual for the employer to pay more than the employee.
Mr. Haselhurst: I have given the hon. Gentleman an opportunity to make an additional point, but I accept his observation and I thought that was implicit in what I said. There are other schemes which do not stick rigidly to the idea of fifty-fifty cost sharing.
Mr. Peter Hardy: The hon. Gentleman seems doubtful about the people engaged in local government. Will he take the point that the majority of people engaged in education administration were themselves teachers and paid contributions to the teachers' superannuation scheme but that on entering education administration they would most certainly opt for the NALGO scheme and thus enjoy an easier life and pay a lower rate of contribution?
Mr. Haselhurst: I am being very generous in giving way. I have enabled the hon. Member for Rother Valley (Mr. Hardy) to make an individual point which he is hanging on to my speech although it could have been made in his own speech.
On the question of funding, about which teachers are greatly exercised, I hope that the Government will not simply say that difficulties of practice must always stand in the way of discussion of this matter. I do not see why it should not be looked at very carefully for the future. There are immense difficulties because this has not been implemented from the start, and to change over now would cause difficulties. But the phrase "practical difficulties" is sometimes advanced as an automatic defence mechanism when on its merits the matter could be looked at for the long-term future.
The trend of pension schemes today is in the direction of funded schemes. That is good sense when one is talking about existing pension funds. Undoubtedly many firms and organisations are examining their pension schemes and trying to improve them in that direction. I hope that the Government will not exclude such re-examination by the phrase "difficulties of practice".
Regarding the years of service before full pension entitlement is earned, we cannot say to teachers "It is practically possible after your training, providing
766
that you work after the age of 60, to achieve this qualification." There is a trend in our society towards a shorter working life. I do not believe that the idea of a 40-year qualification can be maintained indefinitely. I hope that my right hon. Friend the Secretary of State will not suggest that this qualification should be inflexible.
I have raised only matters which have been impressed upon me and with which I have some sympathy. I shall support my right hon. Friend tonight. I hope, however, that although the Government are making a reasonable response they will not say that this is the end of the story. I hope that my right hon. Friend will be able to convince the House, and convince me, that this is merely one staging post along the way and that various other matters which cause anxiety to teachers are not forgotten but will continue to be examined and discussed with teachers.
10.52 p.m.
Mr. J. C. Jennings: I must declare an interest. As the House knows, I have been a member of the National Union of Teachers for many years. I draw a teacher's pension and in that sense I have no financial interest because I no longer pay superannuation contributions.
This subject has a long history. When I first entered the House in 1955 one of the first Bills which I had to vote upon after the Summer Recess was the Teachers (Superannuation) Bill which was introduced by the then Minister of Education, Sir David Eccles, now Lord Eccles. I was constrained to vote against the Bill on a three-line Whip. That sealed my parliamentary life for many years.
Therefore, I have a longstanding and intense feeling about superannuation. Let us be honest with ourselves. An examination of previous legislation regarding teachers' superannuation shows that neither side of the House has honestly squared up to the fundamentals. It ill behoves the Opposition to cast aspersions upon the present Government. I have a long memory on this subject. When the Labour Government were in power they made no attempt to introduce any legislation to end teachers' superannuation contributions or any of the contributions

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that came either from the Government or local authorities.
These regulations are not wholly bad. There are some vast improvements—for example, terminal service. In the old days, terminal service used to be the average of the last five years' service. Then there was an improvement and the pension was based on the average of the last three years' service. That provision still applies, but the highest year's salary is taken as the sum upon which the superannution will be based. That is an improvement.
The main complaint over the years—by teachers in particular—has been that all the contributions from the various parties have been notionally funded; in other words, they have been funded theoretically. Theoretical figures have been produced. Year after year we have been told that there was a deficiency on the fund. We were not told, however, that there were theoretical deficiencies.
I detect some progress in the regulations. I have a profound admiration for my right hon. Friend the Secretary of State, as she is a first-class Minister. I should like to know whether Regulation 5—"General Account A"—is a step forward to a suspicion of real funding. It states:
"All sums payable to the Secretary of State in respect of contributions so payable after 31st March 1972 … shall be paid into a part of the General Account, to be called General Account A, which shall be kept separate from the rest of that Account ".
Is this a move in the right direction?
Teachers' great worry is that we—I still regard myself as a teacher, for I must sometimes teach hon. Members—must pay our contributions, the local authorities pay theirs and the Government pay theirs. I ask my right hon. Friend to look at this again and tell teachers that the Government will put all this money into a separate fund so that the Government know where they are actuarially. That would get rid of all ideas of notional funding and deficiencies, notional or otherwise. Then the public, teachers and everybody else concerned would know exactly where they stood. If contributions had to be increased because an actuarial deficiency was proved, teachers would be the first to face up to that.
10.58 p.m.
Mr. R. C. Mitchell: The hon. Member for Burton (Mr. Jennings) is a good teacher and I hope that his pupil on the Front Bench will heed his wise words.
The Minister must answer two points. First, why must the contribution from the teachers be 6¾ per cent. whereas in local government and many other funds it is 6 per cent.? When I was a teacher in 1956 we were told that "actual" deficiencies in the fund necessitated that we increase our contribution from 5 per cent. to 6 per cent. I could never discover where the theoretical or actual deficiences came from: it was all too complicated. I have not been able to discover today why it is necessary to increase the teacher's contribution from 6 per cent. to 6¾ per cent. I would not mind, but an eminent authority in the form of the President of the Institute of Actuaries has called the 6¾ per cent. contribution high by any standards. If he thought they were high, who are we to disagree?
Secondly, the Minister should say whether she intends to look again at funding. The concept of notional funding is a bit absurd. I quite agree that neither Government have ever agreed to commit themselves, but I hope that before long some Government will do so. We must look at the matter seriously, present the choice to the teachers and let them decide whether they want funding. It must be done not over the teachers' heads but in consultation with them. I therefore hope that the right hon. Lady will let us know something of her future intentions.
11.1 p.m.
Mr. Fergus Montgomery: I am sorry that on this occasion I have to cross swords with my right hon. Friend the Secretary of State, because I have a great respect for her. She has done a tremendous amount for education, and I agree with my hon. Friend the Member for Burton (Mr. Jennings) that there are great advantages for the teaching profession in what she is trying to do. My hon. Friend was quite right to point out that for Labour hon. Members now to adopt a holier-than-thou attitude is quite out of place.

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The hon. Member for Rotherham (Mr. O'Malley) started off with a great eulogy about what would have happened if his Government had remained in power but he is putting his head in the sand. I remember that at a teachers' conference when he spoke on the Crosland plan, as it was called, he got a stony reception, because teachers were dubious about it. In fact, one of the things that pleased a lot of people about the Tory victory at the last election was that the Crosland plan disappeared altogether.
In 1925 the Emmett Committee recommended funding, but the subject has never since been taken up by any Government. I am told that if we had had funding in the 'fifties and the 'sixties the fund would now stand at over £2,000 million.
The point stressed repeatedly from both sides is the dissatisfaction in the teaching profession today. Teachers see civil servants with a non-contributory scheme and local authority people having to pay 6 per cent. while the teachers have to pay 6¾ per cent. for exactly the same benefits. I therefore ask my right hon. Friend to look very carefully at this proposal.
11.3 p.m.
The Secretary of State for Education and Science (Mrs. Margaret Thatcher): The hon. Member for Rotherham (Mr. O'Malley) was kind enough to congratulate my hon. Friend the Member for Wokingham (Mr. van Straubenzee) on his very well deserved promotion to Minister of State for Northern Ireland. I certainly join in that congratulation but could wish that that promotion had come 24 hours later, because then my hon. Friend might have been doing the job I am now doing.
I also welcome my hon. Friend the Member for Chelmsford (Mr. St. John-Stevas), who will in future be doing the job I am now doing. But on a particularly technical subject, having, like the hon. Member for Rotherham, spent some time on national insurance, I thought it perhaps right that I should take on the task tonight. I will do my best to answer as many as possible of the questions which have been raised.
Let me clear up one matter at the very outset. I thought that the hon. Member for Acton (Mr. Spearing) rather implied that I had refused to see the working party. I have done no such thing—and
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I am glad to see the hon. Member indicate that he does not think I did. I am only too happy to see members of the Working party. I had hoped to arrange to do so before any debate took place on the regulations. In the event that was not possible, but I shall be seeing them later on.
We are really discussing the report of a working party, set up in April, 1970, consisting of representatives of teachers, their employers and representatives of the Scottish Office and my Department. By a large majority the teachers accepted the recommendations. The exceptions were the National Association of Schoolmasters and the Scottish Schoolmasters Association, who dissented, as they were perfectly entitled to do if they wished. The hon. Member for Rotherham suggested that pressure had been put on the teachers as a result of which they had agreed. With all due respect, I have never known teachers to agree to anything because of pressure from the Department if they fundamentally disagreed with it. I think they agreed because on the whole the package is a good one, and it is that total package that I have accepted.
The hon. Gentleman did a good deal of selective quoting. I should like to quote a passage towards the beginning of the working party's report; we must have been working from different documents. Paragraph 5 on page 2, dealing with preliminary considerations which were accepted by the working party says:
"First, the Pensions (Increase) Act 1971 has already ensured that the teachers' schemes will broadly protect the value of pensions after award against increases in prices.
It was agreed that the application of the Act to teachers pensions constituted a major improvement in the schemes (an improvement enhanced by the announcement in December 1971 that reviews would be annual and not biennial), and that this improvement would add appreciably to the cost of providing pensions increase, which is at present borne by the Exchequer."
That is the first point I wish to get across; all the increases for teachers' pensions after they have retired are borne not by the fund but by the Exchequer. The Government Actuary has calculated that that is equal to an extra 2·2 per cent. contribution. I am glad that the working party recognised that at the outset.
Mr. R. C. Mitchell: Will the right hon. Lady read the next sentence?
Mrs. Thatcher: Yes. It says:
"However, there was a difference of opinion between the official side of the working party and the teachers' side on the method of taking this extra cost into account, the official side contending that it could not be disregarded in considering the finances of the schemes and teachers' contributions, and the teachers' side arguing that since it arose from an item of general Government policy and was applicable to all public service pensions it should be so disregarded."
That guarantee does not necessarily apply to all funds. On the whole, it applies only to notional funds. I cannot think of one big actual fund to which that provision applies. It arose from the Government's general guarantee as a notional fund, a guarantee that does not apply where there are big actual funds.
Mr. Jennings: What my right hon. Friend says may be true, but her argument about vocational pensions and annual reviews and so on is entirely applicable to all public service pensions, including teachers and all public service employees, under the public service pensions Acts.
Mrs. Thatcher: But the pension schemes of many public service employees have notional funds and not actual funds. The local government fund is an actual fund and that provision does not apply to local government employees. It may be argued that local government employees are public service employees, but the provision does not apply to them in that way.
I wish to make it clear that from the beginning it has been a notionally funded scheme. The arrangement is that contributions from teachers and their employers are paid into the Exchequer and benefits are paid by the Exchequer. An account of income and expenditure is maintained and the balances are deemed to attract interest. Thus the scheme is run as though it is a funded scheme and it is notionally funded. The balances were made at the beginning to attract a fixed rate of interest of 3½ per cent. That was thought to be a better method in those days to protect the scheme from capital depreciation, and in the 1930s it did protect the scheme from capital depreciation.
772
By the time we came to 1956 the fund was in actuarial deficit. Rapidly increasing salaries had increased the cost of benefits to a point at which the credits, standing in the account fell short by £274 million of the total of £536 million needed to balance the scheme's actuarial liability. As those who are teachers know, there was a settlement made in 1956 which was really a three-part settlement. First, the new entrants' rate of contributions was put up. The new entrants' rate is the rate determined actuarially to be sufficient to support the stated level of benefits if paid throughout his career in respect of someone newly entering the scheme. That rate at that time was increased to 12 per cent.
At the same time the employers undertook to meet deficiencies which would arise in future and in addition there are the post-retirement increases. The deficiency payment has risen considerably. It is now equivalent to contributions of 2·5 per cent. and with the improvements would be equivalent to contributions of 3·15 per cent.
Before going on to that I should point out that since 1956 there have been new arrangements about the rate of interest. The rate of interest since 1956 has been much higher than 3½ per cent. It has been calculated since 1956, on new money entering the account since deemed to have been invested in long-term Government securities, and therefore the rate of interest credited to the scheme has varied from 4·9 per cent.—mostly above that—to the 1970–71 rate of 9·4 per cent.
Mr. Montgomery: So it should be.
Mrs. Thatcher: So it should be and so it is. It is quite misleading to think that the rate has been 3½ per cent.
Mr. O'Malley: Would the right hon. Lady care to comment on the estimate made by the actuary employed by the teachers' side of the working party that, had there been funding during the period in question, the deficiency payment of 3·3 per cent. required today would not be needed and would be much reduced—reduced by 2 per cent? Are those figures accepted or rejected by the Department?
Mrs. Thatcher: I cannot say whether the precise figures would be accepted. We would accept that had the whole

773
scheme been funded and had it been spread in investments precisely to the indices by which the £2,000 million has been calculated, which is not necessarily a correct assumption, it would have given greater payments than have been given now and the deficiency payments would be reduced. The deficiency payments are paid wholly by the local authorities and not the teachers so it would not therefore have affected the contributions which the teachers have to pay towards this scheme.
The crucial point in this kind of scheme is that it is affected by a Government guarantee to pay the benefits in all circumstances. The value to the teachers of such a guarantee will vary from time to time. When income is exceeding expenditure as it will when the teaching force is growing fast, any system will be buoyant although, as experience shows, not necessarily actuarially solvent.
The present rate of growth of the teacher force can hardly be maintained indefinitely and the expectation must be that in time the number of pensioned teachers will grow relative to the number of contributing teachers in the service and expenditure will consequently come to exceed income. At that point the guarantee will ensure that the Government will pay the benefits.
Some of the other schemes have been mentioned. The nationalised industries and the Post Office have actually-funded schemes and a similar arrangement is intended for the proposed State reserve scheme. In all these cases there is no Government guarantee and no direct contributions from general taxation.
It is alleged that having a notional fund has been damaging to the teachers' interests. A number of hon. Members have pointed out that local government services pay a lesser contribution of 6 per cent. There are some local government services which pay a higher contribution. The police services pay 7 per cent. Fire services also pay 6¾ per cent.—[HON. MEMBERS: "They retire earlier."] I agree. On the whole, local government employees retire later than teachers; that is to say, they pay their contributions for a longer period and draw their benefits for a shorter period. That is one of the factors affecting the contributions that they have to pay.
774
National Health Service workers also pay 64 per cent. So that figure of 6¾ per cent. is not necessarily an unusual one.
We have given very serious consideration to this matter, and I want now to return to the point made by the hon. Member for Acton about the 14·2 per cent. actuarial calculation for new entrants to the teachers' scheme. This calculation, which as far as I know is not disputed by anyone, is fully agreed not to be based upon notional funding. It is based upon actual funding, and the principle upon which it is based is that the Government Actuary is also responsible for a number of actual funds which he uses for this calculation, and he also has regard to the performance of the general indices of financial performance like the Financial Times actuary's index. So the 14·2 per cent. does not depend upon its being a notional fund. It would have been the same had it been an actual fund. Therefore the teachers do not suffer any damage in that respect because the scheme is a notional one. We then come to the kind of split that we have of the 14·2 per cent.
Before coming to that, however, there is one further point. The corresponding figure on a similar basis for local government funds is 12.3 per cent. The actuarial contribution for new entrants to local government would be 12·3 per cent. Of course, it takes into account their benefits, their length of service, retirement age, etc., but their 6 per cent. is about the same proportion of 12·3 per cent. as the teachers' 6·75 per cent. is of the 14·2 per cent. One could argue that the proportion to the teachers of the total is slightly more favourable than is the proportion to employees of local government in relation to what the employers pay.
I have referred to some other schemes. There are a number of points in detail, but I am afraid that they involve rather a lot of figures. May I go back now to the point of apportionment of contributions between employers and employees? A number of hon. Members have given a great deal of attention to it.
The figures that I use are again those of the Government Actuary in the report of the working party, because they cannot be disputed for accuracy and for giving the precise picture of the cost

775
of the teachers' superannuation schemes in terms of the Government Actuary's analyses of costs.
The opportionment agreed by the working party is that teachers should pay 6·75 per cent. and that employers should pay the balance of 7·45 per cent. Immediately the employers are paying more than the employees. Throughout the working party, the local authorities insisted on roughly equal contributions, so that even on the 14·2 per cent. which again is on an actual fund basis they are paying the higher amount—a contribution of 7·45 per cent. But this is not the end of the employers' contribution. They also have to pay a further 2·5 per cent. for the deficiencies of the scheme. That brings their contribution up higher and, in addition, as a result of the application of the improvements, they will have to pay a further 0·65 per cent. That means the teachers are paying 6·75 per cent. and their employers, the local authorities, are paying 7·45 per cent. plus 3·15 per cent. coming up to 10·6 per cent. In addition, the Exchequer pays 2·2 per cent. for post-retirement inflation.
The total cost of the scheme in terms of percentage contributions on salary is 19·55 per cent. of which the teachers are meeting 6·75 per cent. I am sorry there are so many figures but I hope that what I have said puts the matter into better perspective.
Mr. Peter Rost: Would not my right hon. Friend agree that the fact that the contributions by the State and by the local authorities is substantially higher than that paid by the teachers merely confirms the case put by hon. Members on both sides of the House that the scheme ought to be funded, and that if it were funded properly this liability would not accrue to the taxpayers?
Mrs. Thatcher: I think that if the scheme had been funded at the outset things would have been very different now. They would also have been very different in the 1930s as well. One cannot have the roundabouts and leave the swings. Nor can one ignore the actuarial calculations. In this House we have seen what happens to insurance companies which look only at income and not at
776
the liabilities they are building up as a result of the contributions and premiums which have been paid.
I think most of us would agree that had the schemes been funded at the outset the position just now, when we have a comparatively small number of pensioners to a large number of teachers—an increasingly young teaching force—the position would have been better than it is. But we would not necessarily say that it would be better if we had a very much larger retired force compared with the number of those who are teaching and who are training to come into the profession. Because those who are coming into teaching now will be drawing pensions as late as the year 2030, one has to take a long view of these schemes although, as we know, they are modified every few years.
I want to say something more about the funding aspect. It is not possible just to pay the total amount equal to the notional funding. The effect would be quite disastrous upon the Exchequer and, therefore, upon the economy and everyone else. In addition, a number of other schemes would want a similar arrangement made for them. The most practicable arrangement would be to start one's funding now with some contributions going towards a fund and not towards the payment of benefits from the Exchequer or the notional fundings. The problem again would be that that arrangement would have to apply to a number of other funds. It would mean in effect that there would be no contribution towards outgoings; we would have to meet those outgoings from the Exchequer while contributions were going to a fund. It is my advice that if we did this for all schemes which are at present notionally funded and started to convert them into actual funding, the cost would be very great, depending upon the rate at which it was done. It would come to hundreds of millions of pounds a year.
I want now to deal with the question of widows' benefits. That particular family benefit fund is under the control of a board of managers. It cannot be transferred without the consent of the board. On the whole, I think that 50 per cent. for a widow is in line with good private sector schemes and good public schemes as well. The Exchequer, from

777
1st April this year, has assumed the liabilities on the basis that it would, of course, also be assuming the assets. I hope we can come to some reasonable agreement about this. Most people would not wish the improvements to be held up.
The working party's report will give rise to four Statutory Instruments. Tonight's is the first. The improved benefits are already in payment, and if the Opposition were to be successful tonight in defeating the regulations no future payments of improved benefits would be made.
Mr. O'Malley: Do not be silly.
Mrs. Thatcher: I am sorry but they would not. Let me make it quite clear. If these regulations were annulled there would be no question of going back again to 1st April, 1972, because the whole question would be open again, and the hon. Gentleman knows it.
I will sum up the complex points I have been making. The existing notional fund arrangement gives to teachers the Government's guarantee that they will continue to receive the level of benefits appropriate to a public service occupational pension scheme of this type. It is common ground that these benefits are now being greatly improved. A valuable degree of inflation-proofing is provided by the Pensions (Increase) Acts.
The scheme requires from the teachers a contribution in line with the employees' contributions in comparable schemes and covers only about 40 per cent. or two-fifths of the total cost of the scheme, whether it be actually or notionally funded. For this purpose I am taking the figure most favourable to the teachers of 16·4 per cent., which is the new entrant contribution of 14·2 per cent. plus the Exchequer contribution of 2·2 per cent., leaving aside the deficiency contribution. The remainder falls on either the Exchequer or the employer, the latter bearing by way of supplementary contributions payments needed to bring the investment income up to the necessary levels. On the whole, this is not a bad deal.
I have tried to deal with the possibility of a change to a real fund. This is
778
hardly practicable or, at any rate, practicable only over so long a time-scale that at the very best any advantages there might be to teachers would be very long deferred. More important, the scheme would then lose the Government guarantee, including the pensions increase cover. The potential benefits of a funded scheme could hardly be expected to exceed the value of the guarantee of a favourable level of benefits and a reasonable inflation-proofing, backed by the whole financing power of the State.
I ask the House to reject the Prayer. The regulations which I have placed before the House are the first of a series of such Statutory Instruments designed to give effect to a package which will produce great improvements in the teachers' superannuation scheme benefits for England and Wales. There is, of course, a similar package for Scotland. The packages have been accepted by all the teachers' associations except the National Association of Schoolmasters and the Scottish Schoolmasters' Association.
If the House accepts the Prayer and annuls the first set of regulations, it will be depriving the teachers of a considerable measure of improvement in the terms of their superannuation which the vast majority of them clearly desire. The past payments we have made would stand—there would be no attempt to claw them back—but future payments under the scheme would have to fall and negotiations would have to start again from scratch. Any further agreement would have to operate from a date subsequent to 1st April, 1972. If the regulations are annulled we shall have to start all over again—and we started this working party in April, 1970.
It has taken two and a half years to get an agreed package, and if the hon. Gentleman puts that in issue he must understand that it will take a very long time to get agreement. He will not face the reality of the action he is asking the House to take. I cannot believe that more than a minority of teachers, having regard to the position of those now retiring, would wish to see this result, and I therefore ask the House to reject the Prayer.
Question put:—
The House divided: Ayes 178, Noes 183.

Division No. 2.

AYES

[9.59 p.m.

Abse, Leo

Douglas, Dick (Stirlingshire, E.)

Johnson, Walter (Derby, S.)

Albu, Austen

Douglas-Mann, Bruce

Jones, Barry (Flint, E.)

Allaun, Frank (Salford, E.)

Drlberg, Tom

Jones, Dan (Burnley)

Allen, Scholefield

Duffy, A. E. P.

Jones, Rt.Hn.Sir Elwyn (W.Ham, S.)

Archer, Peter (Rowley Regis)

Dunnett, Jack

Jones, Gwynoro (Carmarthen)

Ashley, Jack

Eadie, Alex

Jones, T. Alec (Rhondda, W.)

Ashton, Joe

Edelman, Maurice

Judd, Frank

Atkinson, Norman

Edwards, Robert (Bilston)

Kaufman, Gerald

Bagier, Gordon A. T.

Edwards, William (Merioneth)

Kelley, Richard

Barnes, Michael

Ellis Tom

Kerr, Russell

Barnett, Guy (Greenwich)

English, Michael

Kinnock, Nell

Barnett, Joel (Heywood and Royton)

Evans, Fred

Lamble, David

Baxter, William

Ewing, Harry

Lamborn, Harry

Beaney, Alan

Faulds, Andrew

Lamond, James

Benn, Rt. Hn. Anthony Wedgwood

Fernyhough, Rt. Hn. E.

Latham, Arthur

Bennett, James (Glasgow, Bridgeton)

Fisher, Mrs. Doris (B'ham, Ladywood)

Lawson, George

Bidwell, Sydney

Fitch, Alan (Wigan)

Leadbitter, Ted

Bishop, E. S.

Fletcher, Raymond (Ilkeston)

Lee, Rt. Hn. Frederick

Blenkinsop, Arthur

Fletcher, Ted (Darlington)

Leonard, Dick

Boardman, H. (Leigh)

Foley, Maurice

Lestor, Miss Joan

Booth, Albert

Foot, Michael

Lever, Rt. Hn. Harold

Bottomley, Rt. Hn. Arthur

Ford, Ben

Lewis, Arthur (W. Ham, N.)

Boyden, James (Bishop Auckland)

Forrester, John

Lewis, Ron (Carlisle)

Bradley, Tom

Fraser, John (Norwood)

Lipton, Marcus

Broughton, Sir Alfred

Freeson, Reginald

Lomas, Kenneth

Brown, Robert C. (N'c'tle-u-Tyne, W.)

Galpern, Sir Myer

Loughlin, Charles

Brown, Hugh D. (G'gow, Provan)

Garrett, W. E.

Lyon, Alexander W. (York)

Brown, Ronald (Shoreditch & F'bury)

Gilbert, Dr. John

Lyons, Edward (Bradford, E.)

Buchan, Norman

Ginsburg, David (Dewsbury)

Mabon, Dr. J. Dickson

Buchanan, Richard (G'gow, Sp'burn)

Golding, John

McBride, Neil

Callaghan, Rt. Hn. James

Gourlay, Harry

McCartney, Hugh

Campbell, I. (Dunbartonshire, W.)

Grant, George (Morpeth)

McElhone, Frank

Cant, R. B.

Grant, John D. (Islington, E.)

McGuire, Michael

Carmichael, Neil

Griffiths, Eddie (Brightside)

Mackenzie, Gregor

Carter, Ray (Birmingham, Northfield)

Griffiths, Will (Exchange)

Mackie, John

Carter-Jones, Lewis (Eccles)

Hamilton, James (Bothwell)

Mackintosh, John P.

Castle, Rt. Hn. Barbara

Hamilton, William (Fife, W.)

Maclennan, Robert

Clark, David (Colne Valley)

Hamling, William

McMillan, Tom (Glasgow, C.)

Cocks, Michael (Bristol, S.)

Hannan, William (G'gow, Maryhill)

McNamara, J. Kevin

Cohen, Stanley

Hardy, Peter

Mallalieu, J.P.W. (Huddersfield, E.)

Coleman, Donald

Harper, Joseph

Marks, Kenneth

Concannon, J. D.

Harrison, Walter (Wakefield)

Marsden, F.

Conlan, Bernard

Hart, Rt. Hn. Judith

Marshall, Dr. Edmund

Corbet, Mrs. Freda

Hattersley, Roy

Mason, Rt. Hn. Roy

Cox, Thomas (Wandsworth, C.)

Healey, Rt. Hn. Denis

Mayhew, Christopher

Crawshaw, Richard

Heffer, Eric, S.

Meacher, Michael

Cronin, John

Hilton, W. S.

Mellish, Rt. Hn. Robert

Crosland, Rt. Hn. Anthony

Hooson, Emlyn

Mendelson, John

Cunningham, G. (Islington, S.W.)

Horam, John

Mikardo, Ian

Cunningham, Dr. J. A. (Whitehaven)

Houghton, Rt. Hn. Douglas

Millan, Bruce

Dalyell, Tam

Huckfield, Leslie

Miller, Dr. M. S.

Darling, Rt. Hn. George

Hughes, Rt. Hn. Cledwyn (Anglesey)

Milne, Edward

Davidson, Arthur

Hughes, Mark (Durham)

Mitchell, R. C. (S'hampton, Itchen)

Davies, Denzil (Llanelly)

Hughes, Robert (Aberdeen, N.)

Molloy, William

Davies, G. Elfed (Rhondda, E.)

Hughes, Roy (Newport)

Morgan, Elystan (Cardiganshire)

Davies, Ifor (Gower)

Hunter, Adam

Morris, Alfred (Wythenshawe)

Davis, Clinton (Hackney, C.)

Irvine, Rt. Hn. Sir Arthur (Edge Hill)

Morris, Charles R. (Openshaw)

Davis, Terry (Bromsgrove)

Janner, Greville

Morris, Rt. Hn. John (Aberavon)

Deakins, Eric

Jay, Rt. Hn. Douglas

Moyle, Roland

de Freitas, Rt. Hn. Sir Geoffrey

Jeger, Mrs. Lena

Mulley, Rt. Hn. Frederick

Delargy, Hugh

Jenkins, Hugh (Putney)

Murray, Ronald King

Dell, Rt. Hn. Edmund

Jenkins, Rt. Hn. Roy (Stechford)

Oakes, Gordon

Dempsey, James

John, Brynmor

Ogden, Eric

Dolg, Peter

Johnson, Carol (Lewisham, S.)

O'Halloran, Michael

Dormand, J. D.

Johnson, James (K'ston-on-Hull, W.)

O'Malley, Brian

Oram, Bert

Orbach, Maurice

Ross, Rt. Hn. William (Kinmarnock)

Thomson, Rt. Hn. G. (Dundee, E.)

Orme, Stanley

Rowlands, Ted

Tinn, James

Oswald, Thomas

Sandelson, Neville

Tomney, Frank

Owen, Dr. Lavid (Plymouth, Sutton)

Sheldon, Robert (Ashton-under-Lyne)

Torney, Tom

Padley, Walter

Shore, Rt. Hn. Peter (Stepney)

Tuck, Raphael

Paget, R. T.

Short, Rt. Hn.(Edward(N'c'tle-u-Tyne)

Urwin, T. W.

Palmer, Arthur

Short, Mrs. Renée (W'hampton, N.E.)

Varley, Eric G.

Pannell, Rt. Hn. Charles

Silkin, Rt. HAn. John (Deptford)

Wainwright, Edwin

Parker, John (Dagenham)

Silkin, Hn. S. C. (Dulwich)

Walden, Brian (B'm'ham, All Saints)

Parry, Robert (Liverpool, Exchange)

sillars, James

Walker, Harold (Doncaster)

Pavitt, Laurie

Silverman, Julius

Wallace, George

Peart, Rt. Hn. Fred

Skinner, Dennis

Watkins, David

Pendry, Tom

Small, William

Weitzman, David

Perry, Ernest G.

Smith, Cyril (Rochdale)

Wells, William (Walsall, N.)

Prentice, Rt. Hn. Reg.

Smith, John (Lanarkshire, N.)

White, James (Glasgow, Pollok)

Prescott, John

Spearing, Nigel

Whitehead, Phillip

Price, J. T. (Westhoughton)

Spriggs, Leslie

Whitlock, William

Price, William (Rugby)

Stallard, A. W.

Willey, Rt. Hn. Frederick

Probert, Arthur

Steel, David

Williams, Alan (Swansea, W.)

Reed, D. (Sedgfield)

Stewart, Donald (Western Isles)

Williams, Mrs. Shirley (Hitchin)

Rees, Merlyn (Leeds, S.)

Stewart, Rt. Hn. Michael (Fulham)

Williams, W. T. (Warrington)

Rhodes, Geoffrey

Stoddart, David (Swindon)

Wilson, Alexander (Hamilton)

Richard, Ivor

Stonehouse, Rt. Hn. John

Wilson, William (Coventry, S.)

Roberts, Albert (Normanton)

Strang, Gavin

Woof, Robert

Roberts, Rt. Hn. Goronwy (Caernarvon)

Strauss, Rt. Hn. G. R.

Robertson, John (Paisley)

Summerskill, Hn. Dr. Shirley

TELLERS FOR THE AYES:

Roderick, Caerwyn E.(Br'c'n & R'dnor)

Swain, Thomas

Mr. James A. Dunn and

Rodgers, William (Stockton-on-Tees)

Thomas, Rt. Hn. George (Cardiff, W.)

Mr. James Wellbeloved.

Rose, Paul B.

Thomas, Jeffrey (Abertillery)

NOES

Adley, Robert

Cooper, A. E.

Grieve, Percy

Alison, Michael (Barkston Ash)

Cordle, John

Griffiths, Eldon (Bury St. Edmunds)

Allason, James (Hemel Hempstead)

Corfield, Rt. Hn. Sir Frederick

Grylls, Michael

Amery, Rt. Hn. Julian

Cormack, Patrick

Gummer, J. Selwyn

Archer, Jeffrey (Louth)

Costain, A. P.

Gurden, Harold

Astor, John

Critchley, Julian

Hall, Miss Joan (Keighley)

Atkins, Humphrey

Crouch, David

Hall, John (Wycombe)

Awdry, Daniel

Crowder, F. P.

Hall-Davis, A. G. F.

Baker, Kenneth (St. Marylebone)

Dalkeith, Earl of

Hamilton, Michael (Salisbury)

Baker, W. H. K. (Banff)

Davies, Rt. Hn. John (Knutsford)

Hannam, John (Exeter)

Balniel, Rt. Hn. Lord

d'Avigdor-Goldsmid, Sir Henry

Harrison, Brian (Maldon)

Barber, Rt. Hn. Anthony

d'Avigdor-Goldsmid, Maj.-Gen. Jack

Harrison, Col. Sir Harwood (Eye)

Batsford, Brian

Dean, Paul

Haselhurst, Alan

Beamish, Col. Sir Tufton

Deedes, Rt. Hn. W. F.

Hastings, Stephen

Bell, Ronald

Digby, Simon Wingfield

Havers, Michael

Bennett, Sir Frederic (Torquay)

Dixon, Piers

Hawkins, Paul

Bennett, Dr. Reginald (Gosport)

Dodds-Parker, Douglas

Hay, John

Benyon W.

Drayson, G. B.

Hayhoe, Barney

Berry Hn Anthony

du Cann, Rt. Hn. Edward

Heseltine, Michael

Biffen, John

Dykes, Hugh

Hicks, Robert

Biggs-Davison, John

Eden, Rt. Hn. Sir John

Higgins, Terence L.

Blaker Peter

Edwards, Nicholas (Pembroke)

Hiley, Joseph

Boardman Tom (Leicester, S.W.)

Elliot, Capt. Walter (Carshalton)

Hill, John E. B. (Norfolk, S.)

Body Richard

Elliott, R. W. (N'c'tle-upon-Tyne, N.)

Hill, James (Southampton, Test)

Boscawen, Hn. Robert

Emery Peter

Holland, Philip

Bowden, Andrew

Eyre, Reginald

Holt, Miss Mary

Braine, Sir Bernard

Farr, John

Hordern, Peter

Bray Ronald

Fell, Anthony

Hornby, Richard

Brewis, John

Fenner, Mrs. Peggy

Hornsby-Smith. Rt. Hn. Dame Patricia

Brinton, Sir Tatton

Finsberg, Geoffrey (Hampstead)

Howe, Hn. Sir Geoffrey (Reigate)

Brocklebank-Fowler, Christopher

Fisher, Nigel (Surbiton)

Howell, David (Guildford)

Brown, Sir Edward (Bath)

Fletcher-Cooke, Charles

Howell, Ralph (Norfolk, N.)

Bruce-Gardyne, J.

Fookes, Miss Janet

Hunt, John

Bryan, Sir Paul

Fortescue, Tim

Hutchison, Michael Clark

Buchanan-Smith, Alick(Angus, N&M)

Foster, Sir John

Iremonger, T. L.

Buck, Antony

Fowler, Norman

Irvine, Bryant Godman (Rye)

Bullus, Sir Eric

Fox, Marcus

James, David

Burden, F. A.

Fraser, Rt. Hn. Hugh (St'fford & Stone)

Jenkin, Patrick (Woodford)

Butler, Adam (Bosworth)

Fry, Peter

Jennings, J. C. (Burton)

Campbell, Rt. Hn. G.(Moray & Nairn)

Galbraith, Hn. T. G. D.

Jessel, Toby

Carlisle, Mark

Gardner, Edward

Johnson Smith, G. (E. Grinstead)

Cary Sir Robert

Gibson-Watt, David

Jones, Arthur (Northants, S.)

Channon, Paul

Gilmour, Sir John (Fife, E.)

Jopling, Michael

Chapman, Sydney

Glyn, Dr. Alan

Joseph, Rt. Hn. Sir Keith

Chataway, Rt. Hn. Christopher

Godber, Rt. Hn. J. B.

Kaberry, Sir Donald

Chichester-Clark, R.

Goodhart, Philip

Kellett-Bowman, Mrs. Elaine

Churchill W. S.

Goodhew, Victor

Kershaw, Anthony

Clark, William (Surrey, E.)

Gorst, John

Kimball, Marcus

Clarke, Kenneth (Rushcliffe)

Gower, Raymond

King, Evelyn (Dorset, S.)

Cockeram, Eric

Grant, Anthony (Harrow, C.)

King, Tom (Bridgwater)

Cooke, Robert

Gray, Hamish

Kinsey, J. R.

Coombs, Derek

Green, Alan

Kirk, Peter

752

753

Kitson, Timothy

Noble, Rt. Hn. Michael

Spence, John

Knight, Mrs. Jill

Normanton, Tom

Sproat, Iain

Knox, David

Noll, John

Stainton, Keith

Lambton, Lord

Onslow, Cranley

Stanbrook, Ivor

Lamont, Norman

Oppenheim, Mrs. Sally

Stewart-Smith, Geoffrey (Belper)

Lane, David

Orr, Capt. L. P. S.

Stodart, Anthony (Edinburgh, W.)

Langford-Holt, Sir John

Osborn, John

Stoddart-Scott, Col. Sir M.

Le Marchant, Spencer

Owen, Idris (Stockport, N.)

Stokes, John

Lewis, Kenneth (Rutland)

Page, Rt. Hn. Graham (Crosby)

Stuttaford, Dr. Tom

Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)

Page, John (Harrow, W.)

Sutcliffe, John

Lloyd, Ian (P'tsm'th, Langstone)

Parkinson, Cecil

Tapsell, Peter

Longden, Sir Gilbert

Peel, John

Taylor, Sir Charles (Eastbourne)

Loveridge, John

Percival, Ian

Taylor, Edward M.(G'gow, Cathcart)

Luce, R. N.

Pike, Miss Mervyn

Taylor, Frank (Moss Side)

McAdden, Sir Stephen

Pink, R. Bonner

Taylor, Robert (Croydon, N.W.)

MacArthur, Ian

Pounder, Rafton

Tebbit, Norman

McCrindle, R. A.

Powell, Rt. Hn. J. Enoch

Temple, John M.

McLaren, Martin

Price, David (Eastleigh)

Thatcher, Rt. Hn. Mrs. Margaret

Maclean, Sir Fitzroy

Prior, Rt. H. J. M. L.

Thomas, John Stradling (Monmouth)

McMaster, Stanley

Proudfoot, Wilfred

Thomas, Rt. Hn. Peter (Hendon, S.)

Macmillan, Rt. Hn. Maurice (Farnham)

Pym, Rt. Hn. Francis

Thompson, Sir Richard (Croydon, S.)

McNair-Wilson, Michael

Quennell, Miss J. M.

Tilney, John

McNair-Wilson, Patrick (New Forest)

Raison, Timothy

Trafford, Dr. Anthony

Maddan, Martin

Ramsden, Rt. Hn. James

Trew, Peter

Madel, David

Rawlinson, Rt. Hn. Sir Peter

Tugendhat, Christopher

Marples, Rt. Hn. Ernest

Redmond, Robert

Turton, Rt. Hn. Sir Robin

Marten, Neil

Reed, Laurance (Bolton, E.)

van Straubsnzee, W. R.

Mather, Carol

Rees, Peter (Dover)

Vaughan, Dr. Gerard

Maudling, Rt. Hn. Reginald

Rees-Davies, W. R.

Vickers, Dame Joan

Mawby, Ray

Renton, Rt. Hn. Sir David

Walder, David (Clitheroe)

Maxwell-Hyslop, R. J.

Rhys Williams, Sir Brandon

Walter, Rt. Hn. Peter (Worcester)

Meyer, Sir Anthony

Ridley, Hn. Nicholas

Walker-Smith, Rt. Hn. Sir Derek

Mills, Peter (Torrington)

Ridsdale, Julian

Wall, Patrick

Mills, Stratton (Belfast, N.)

Rippon, Rt. Hn. Geoffrey

Walters, Dennis

Miscampbell, Norman

Roberts, Michael (Cardiff, N.)

Ward, Dame Irene

Mitchell, Lt.-Col. C.(Aberdeenshire, W)

Roberts, Wyn (Conway)

Warren, Kenneth

Mitchell, David (Basingstoke)

Rodgers, Sir John (Sevenoaks)

Wells, John (Maidstone)

Moate, Roger

Rossi, Hugh (Hornsey)

White, Roger (Gravesend)

Money, Ernie

Rost, Peter

Wiggin, Jerry

Monks, Mrs. Connie

Russell, Sir Ronald

Wilkinson, John

Monro, Hector

St. John-Stevas, Norman

Winterton, Nicholas

Montgomery, Fergus

Scott, Nicholas

Wolrige-Gordon, Patrick

More, Jasper

Scott, Hopkins, James

Woodhouse, Hn. Christopher

Morgan, Geraint (Denbigh)

Shaw, Michael (Sc'b'gh & Whitby)

Woodnutt, Mark

Morgan-Giles, Rear-Adm.

Shelton, William (Clapham)

Worsley, Marcus

Morrison, Charles

Simeons, Charles

Wylie, Rt. Hn. N. R.

Mudd, David

Sinclair, Sir George

Younger, Hn. George

Murton, Oscar

Skeet, T. H. H.

Nabarro, Sir Gerald

Smith, Dudley (W'wick & L'mington)

TELLERS FOR THE NOES:

Neave, Airey

Soref, Harold

Mr. Bernard Weatherill and

Nicholls, Sir Harmar

Speed, Keith

Mr. Walter Clegg.

Division No. 3.]

AYES

[11.30 p.m.

Ashley, Jack

Hannan, William (G'gow, Maryhill)

Oswald, Thomas

Ashton, Joe

Hardy, Peter

Palmer, Arthur

Atkinson, Norman

Harrison, Walter (Wakefield)

Parker, John (Dagenham)

Bagier, Gordon A. T.

Hattersley, Roy

Parry, Robert (Liverpool, Exchange)

Barnett, Guy (Greenwich)

Hooson, Emlyn

Pavitt, Laurie

Benn, Rt. Hn. Anthony Wedgwood

Horam, John

Peart, Rt. Hn. Fred

Bennett, James (Glasgow, Bridgeton)

Houghton, Rt. Hn. Douglas

Pendry, Tom

Bishop, E. S.

Hughes, Rt. Hn. Cledwyn (Anglesey)

Perry, Ernest G.

Blenkinsop, Arthur

Hughes, Mark (Durham)

Prentice, Rt. Hn. Reg.

Boardman, H. (Leigh)

Hughes, Robert (Aberdeen, N.)

Prescott, John

Boyden, James (Bishop Auckland)

Hunter, Adam

Price, William (Rugby)

Brown, Hugh D. (G'gow, Provan)

Irvine, Rt. Hn. Sir Arthur (Edge Hill)

Probert, Arthur

Buchan, Norman

Janner, Greville

Reed, D. (Sedgefield)

Buchanan, Richard (G'gow, Sp'burn)

John, Brynmor

Rees, Merlyn (Leeds, S.)

Campbell, I. (Dunbartonshire, W.)

Johnson, James (K'ston-on-Hull, W.)

Roberts, Rt. Hn. Goronwy (Caernarvon)

Carmichael, Neil

Johnson, Walter (Derby, S.)

Robertson, John (Paisley)

Carter-Jones, Lewis (Eccles)

Jones, Barry (Flint, E.)

Roderick, Caerwyn E.(Brc'n&R'dnor)

Clark, David (Colne Valley)

Jones, Dan (Burnley)

Rose, Paul B.

Cocks, Michael (Bristol, S.)

Jones, T. Alec (Rhondda, W.)

Ross, Rt. Hn. William (Kilmarnock)

Cohen, Stanley

Judd, Frank

Rowlands, Ted

Coleman, Donald

Kaufman, Gerald

Sandelson, Neville

Concannon, J. D.

Kerr, Russell

Short, Rt. Hn. Edward (N'c'tle-u-Tyne)

Conlan, Bernard

Kinnock, Neil

Sillars, James

Cox, Thomas (Wandsworth, C.)

Lamble, David

Skinner, Dennis

Crawshaw, Richard

Lamborn, Harry

Small, William

Crosland, Rt. Hn. Anthony

Lamond, James

Smith, Cyril (Rochdale)

Cunningham, Dr. J. A. (Whitehaven)

Latham, Arthur

Smith, John (Lanarkshire, N.)

Dalyell, Tam

Leadbitter, Ted

Spearing, Nigel

Davidson, Arthur

Leonard, Dick

Spriggs, Leslie

Davies, G. Elfed (Rhondda, E.)

Lestor, Miss Joan

Stallard, A. W.

Davies, Ifor (Gower)

Lewis, Ron (Carlisle)

Steel, David

Davis, Clinton (Hackney, C.)

Lomas, Kenneth

Stewart, Rt. Hn. Michael (Fulham)

Davis, Terry (Bromsgrove)

Mabon, Dr. J. Dickson

Stoddart, David (Swindon)

Deakins, Eric

McBride, Neil

Strang, Gavin

de Freitas, Rt. Hn. Sir Geoffrey

McCartney, Hugh

Summerskill, Hn. Dr. Shirley

Dempsey, James

McElhone, Frank

Swain, Thomas

Dormand, J. D.

McGuire, Michael

Thomas, Rt. Hn. George (Cardiff, W.)

Douglas-Mann, Bruce

Mackenzie, Gregor

Thomas, Jeffrey (Abertillery)

Driberg, Tom

Maclennan, Robert

Tinn, James

Duffy, A. E. P.

McMillan, Tom (Glasgow, C.)

Torney, Tom

Eadie, Alex

McNamara, J. Kevin

Urwin, T. W.

Edelman, Maurice

Mallalieu, J. P. W. (Huddersfield. E.)

Varley, Eric G.

Ellis, Tom

Marks, Kenneth

Wainwright, Edwin

English, Michael

Marsden, F.

Walden, Brian (B'm'ham, All Saints)

Evans, Fred

Marshall, Dr. Edmund

Walker, Harold (Doncaster)

Fernyhough. Rt. Hn. E.

Mason, Rt. Hn. Roy

Watkins, David

Fisher, Mrs. Doris (B'ham, Ladywood)

Meacher, Michael

Wellbeloved, James

Fitch, Alan (Wigan)

Mellish, Rt. Hn. Robert

Wells, William (Walsall, N.)

Fletcher, Ted (Darlington)

Mendelson, John

White, James (Glasgow, Pollok)

Foley, Maurice

Millan, Bruce

Whitehead, Phillip

Foot, Michael

Miller, Dr. M. S.

Whitlock, William

Ford, Ben

Mitchell, R. C. (S'hampton, Itchen)

Willey, Rt. Hn. Frederick

Forrester, John

Money, Ernie

Williams, Alan (Swansea, W.)

Freeson, Reginald

Morgan, Elystan (Cardiganshire)

Wilson, Alexander (Hamilton)

Golding, John

Morris, Charles R. (Openshaw)

Wilson, William (Coventry, S.)

Gourlay, Harry

Moyle, Roland

Woof, Robert

Grant, George (Morpeth)

Mulley, Rt. Hn. Frederick

Grant, John D. (Islington, E.)

Murray, Ronald King

TELLERS FOR THE AYES:

Griffiths, Eddie (Brightside)

Oakes, Gordon

Mr. Joseph Harper and

Hamilton, James (Bothwell)

Ogden, Eric

Mr. James A. Dunn.

Hamling, William

O'Malley, Brian

NOES

Adley, Robert

Boscawen, Hon. Robert

Chataway, Rt. Hn. Christopher

Alison, Michael (Barkston Ash)

Bray, Ronald

Chichester-Clark, R.

Archer, Jeffrey (Louth)

Brewis, John

Clarke, Kenneth (Rushcliffe)

Astor, John

Brinton, Sir Tatton

Clegg, Walter

Atkins, Humphrey

Brocklebank-Fowler, Christopher

Cockeram, Eric

Awdry, Daniel

Brown, Sir Edward (Bath)

Cooke, Robert

Berry, Hn. Anthony

Buchanan-Smith, Alick (Angus, N&M)

Corfield, Rt. Hn. Sir Frederick

Biffen, John

Buck, Antony

Cormack, Patrick

Biggs-Davison, John

Bullus, Sir Eric

Crouch, David

Blaker, Peter

Butler, Adam (Bosworth)

Crowder, F. P.

Boardman, Tom (Leicester, S.W.)

Chapman, Sydney

Dean, Paul

780

781

Deedes, Rt. Hn. W. F.

Knight, Mrs. Jill

Rhys Williams, Sir Brandon

du Cann, Rt. Hon. Edward

Knox, David

Ridley, Hn. Nicholas

Eden, Rt. Hn. Sir John

Lamont, Norman

Roberts, Wyn (Conway)

Elliott, R. W. (N'c'tle-upon-Tyne, N.)

Lane, David

Rossi, Hugh (Hornsey)

Eyre, Reginald

Le Merchant, Spencer

Russell, Sir Ronald

Farr, John

Lloyd, Ian (P'tsm'th, Langstone)

St. John-Stevas, Norman

Fenner, Mrs. Peggy

Luce, R. N.

Scott, Nicholas

Finsberg, Geoffrey (Hampstead)

McAdden, Sir Stephen

Scott-Hopkins, James

Fisher, Nigel (Surbiton)

MacArthur, Ian

Shaw, Michael (Sc'b'gh & Whitby)

Fortescue, Tim

McCrindle, R. A.

Shelton, William (Clapham)

Foster, Sir John

McLaren, Martin

Simeons, Charles

Fowler, Norman

Macmillan, Rt. Hon. Maurice (Farnham)

Sinclair, Sir George

Fox, Marcus

McNair-Wilson, Michael

Skeet, T. H. H.

Gardner, Edward

McNair-Wilson, Patrick (New Forest)

Smith, Dudley (W'wick & L'mington)

Gibson-Walt, David

Madden, Martin

Soref, Harold

Gilmour, Sir John (Fife, E.)

Madel, David

Speed, Keith

Gorst, John

Mather, Carol

Spence, John

Grant, Anthony (Harrow, C.)

Mawby, Ray

Stainton, Keith

Gray, Hamish

Maxwell-Hyslop, R. J.

Stanbrook, Ivor

Green, Alan

Meyer, Sir Anthony

Stewart-Smith, Geoffrey (Belper)

Grieve, Percy

Mills, Peter (Torrington)

Stoddart-Scott, Col. Sir M.

Griffiths, Eldon (Bury St. Edmunds)

Mills, Stratton (Belfast, N.)

Stokes, John

Grylls, Michael

Miscampbell, Norman

Stuttaford, Dr. Tom

Gummer, J. Selwyn

Mitchell, Lt.-Col. C.(Aberdeenshire, W.)

Sutcliffe, John

Hall, Miss Joan (Keighley)

Moate, Roger

Tapsell, Peter

Hall, John (Wycombe)

Monks, Mrs. Connie

Taylor, Frank (Moss Side)

Hall-Davies, A. G. F.

Monro, Hector

Tebbit, Norman

Hamilton, Michael (Salisbury)

Morgan, Geraint (Denbigh)

Thatcher, Rt. Hn. Mrs. Margaret

Harrison, Col. Sir Harwood (Eye)

Morgan-Giles, Rear-Adm.

Thomas, John Stradling (Monmouth)

Haselhurst, Alan

Morrison, Charles

Thompson, Sir Richard (Croydon, S.)

Hawkins, Paul

Mudd, David

Trew, Peter

Hayhoe, Barney

Neave, Alrey

Turton, Rt. Hn. Sir Robin

Hicks, Robert

Noble, Rt. Hn. Michael

van Straubenzee, W. R.

Hiley, Joseph

Normanton, Tom

Vaughan, Dr. Gerard

Hill, John E. B. (Norfolk, S.)

Nott, John

Vickers, Dame Joan

Holland Philip

Osborn, John

Welder, David (Clitheroe)

Hornsby-Smith, Rt. Hn. Dame Patricia

Owen, Idris (Stockport, N.)

Wall, Patrick

Howell, Ralph (Norfolk, N.)

Page, Rt. Hn. Graham (Crosby)

Ward, Dame Irene

Hunt, John

Page, John (Harrow, W.)

Warren, Kenneth

Hutchison, Michael Clark

Parkinson, Cecil

Weatherill, Bernard

Iremonger, T. L.

Peel, John

Wiggin, Jerry

James, David

Percival, Ian

Wilkinson, John

Jennings, J. C. (Burton)

Powell, Rt. Hn. J. Enoch

Winterton, Nicholas

Jessel, Toby

Price, David (Eastleigh)

Wolrige-Gordon, Patrick

Jopling, Michael

Prior, Rt. Hn. J. M. L.

Worsley, Marcus

Kaberry, Sir Donald

Proudfoot, Wilfred

Wylie, Rt. Hn. N. R.

King, Evelyn (Dorset, S.)

Pym, Rt. Hn. Francis

Younger, Hn. George

King, Tom (Bridgwater)

Raison, Timothy

Kinsey, J. R.

Redmond, Robert

TELLERS FOR THE NOES:

Kirk, Peter

Reed, Laurance (Bolton, E.)

Mr. Victor Goodhew and

Kitson, Timothy

Rees, Peter (Dover)

Mr. Oscar Murton.

Rees-Davies, W. R.

Question accordingly negatived.

ADJOURNMENT
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Humphrey Atkins.]

INDUSTRY (NORTH-WEST KENT)
11.41 p.m.
Mr. Peter Trew: I welcome this opportunity of raising the question of industrial decline in north-west Kent. The north-west Kent area comprises the parliamentary constituencies of Dartford, which I have the honour to represent, and Gravesend. I am pleased to see my hon. Friend the Member for Gravesend (Mr. Roger White) in his place tonight. He will, no doubt, be seeking to catch
782
your eye later in the debate, Mr. Deputy Speaker.
North-west Kent has a proud industrial history. It was the home of the first British paper mill and it has for long been an important centre of cement manufacture and heavy engineering. But unhappily over the past few years it has seen a series of factory closures and redundancies. During the five years ending in 1971 there were 16 factory closures notified to the Department of Employment, involving a total of 2,350 redundancies. The effect of this rundown in the area has been most marked in the traditional industries in the area, namely paper and cement manufacture and heavy engineering.
During the nine years from 1961 to 1970 the number of jobs in those three

783
traditional industries declined from 21,800 to 17,200—a loss of 4,600 jobs, or very nearly one in five. Perhaps the most significant fact is that by far the greater part of those jobs were lost in the last four years in the period from 1966 to 1970. Despite this, the unemployment figures in north-west Kent have not reached the high levels that exist else-where in the country, or indeed in certain areas in Kent.
I am pleased to see here my hon. Friends the Members for Faversham (Mr. Moate) and for Canterbury (Mr. Crouch) because in their constituencies they have local unemployment problems which are very severe, about which they are rightly concerned. One reason why the unemployment figures are not as high as one might have expected is that some of the redundant workers have succeeded in getting other work locally, but despite this the number of total male jobs has still fallen over the years from 42,000 in 1961 to 40,800 in 1970.
Another reason why unemployment is not as high as one would expect is that many redundant workers have found work outside the area but within commuting distance and have continued to live in it. This was revealed in some significant figures given in a written reply by the Under-Secretary of State for Employment on 5th May. These showed that the percentage of males resident in Dartford and district and employed locally had fallen from 84 per cent. in 1961 to 80·3 per cent. in 1971. In the Gravesend, Swanscombe and Northfleet area the decline was even more significant—from 89·4 per cent. to 79·5 per cent. in both cases the tendency was accelerating during the later part of the period.
In other words, the character of northwest Kent is changing gradually from that of a thriving industrial area in its own right into a dormitory for other areas. This is happening because the declining traditional industries are not being replaced sufficiently by new industries. The reason is twofold. The first reason stems from the Government's regional policy. Quite rightly, the Government are concerned to stimulate industrial development in the depressed parts of Britain, a policy that I wholeheartedly support.
As a result of that policy, however, there is a tendency to regard the whole
784
of south-east England as a prosperous area which does not need development, which results in a tendency to overlook or give insufficient weight to the localised problems of areas like north-west Kent where there is a decline of traditional industry.
To be fair to the Government, they have been generous in their grant of industrial development certificates in the area, and we are grateful for that. But, sadly, this has not arrested the loss of jobs in the area.
Perhaps the main reason why there has been insufficient new industry is the negative planning policy of Kent County Council. This is typified in the statement on the North West Kent Draft Town Map, which is now under review, dated February, 1971. Paragraph 2.2.2 says:
"The policy for industrial development stated in the approved Thames-side Town Map will he continued in the North-West Kent draft Town Map, namely that new industry will not normally be permitted within the area of the map. Areas allocated for primarily industrial or warehousing purposes will be reserved primarily for the relocation of existing firms now inappropriately sited and which cannot move outside the draft town map area, and for any essential expansion of firms already tied to the area."
To be fair to Kent County Council, I think I speak for my hon. Friends representing Kent constituencies in applauding its initiative in appointing an employment opportunities officer to stimulate industrial development in Kent and provide job opportunities in north-west Kent. But it seems that he is having to work against the policies of his own council, which is making it more difficult to provide new job opportunities in that part of Kent.
There is no doubt that the area is declining. Figures show that the process is accelerating. This is unsatisfactory, for two reasons. First, it represents an under-use of the existing infrastructure. It is part of the Government's policy in development areas to build up the infrastructure and to spend millions of pounds in doing so. That is a sensible policy. Equally, however, it is not sensible to make insufficient use of the infrastructure that exists in other parts of the country. In north-west Kent we have roads, schools, hospitals and homes, all to support an industrial area. It seems sensible to make use of them.

785
Another reason why I believe that the planning policy being pursued by Kent County Council is unsatisfactory is that north-west Kent is ideally suited for industrial development in relation to the Common Market. It has good road links with the Channel ports and, through the Dartford tunnel, with East Anglian ports. It could also receive a great stimulus to industrial development from the building of the third London airport at Maplin Sands.
North-west Kent has reached the end of an era in its industrial history. Its traditional industries are declining and contracting. Mineral workings which have been very extensive in the area are being worked out. One result of that is that there are now 1,500 acres of derelict or damaged land in north-west Kent.
The area needs to be looked at afresh. It needs a face-lift and a new start. If the process of decline that seems to be in progress is not halted it could gain a momentum which may prove very difficult to arrest. Revamping north-west Kent and providing it with industry suited to the second half of the twentieth century poses a great challenge. My object in raising this matter on the Adjournment has been to bring the necessity of rising to this challenge to the notice of the Government and, I hope, of the Kent County Council. I hope that they will prove equal to it.
11.52 p.m.
Mr. Roger White: I am most grateful for the opportunity to intervene briefly in the debate. I congratulate my hon. Friend the Member for Dartford (Mr. Trew) on securing a debate on what is to us in north-west Kent a very important subject.
Our constituencies of Dartford and Gravesend adjoin each other and we have similar patterns of trade and commerce and a similar environment. We have relied in the past on basic industries of cement and paper-making. The paper-making industry has been contracting and the cement industry has been undergoing a period of automation. This has meant considerable unemployment in my constituency. The level of unemployment in my constituency is now a little higher than the average in the South-East.
The Government deserve congratulations on their flexibility on the issue of
786
industrial development certificates in the past two and a half years. However, the mere issuing of an I.D.C. is not the end of the story. The question whether those I.D.C.s are taken up involves a reflection of whether there is confidence among local businessmen about expanding business in the area. Just over 18 months ago we had the very sad case of the Inveresk Mills closing down, although that was followed—the news was received with some pleasure—by I.D.C.s being granted for a power station on the Isle of Grain and for a proposed oil refinery at Cliffe. While this certainly helps the construction industry, it is of only short-term benefit because once the oil refinery and power station are completed we then have to move over to other industries.
We in north-west Kent can become a springboard for the European Economic Community, and this is vital. Secondly, there is a necessity to encourage a diversity of small industries alongside the Thames and the Medway which will offset our problems. Over past years we have relied upon large industries such as cement and paper-making. We can solve our problems only after some measure of support is given by the Government and by local authorities to businessmen to encourage them to come into what I call the pocket areas in a Cinderella region of the South-East which enjoy no support in terms of development area or intermediate area status.
I remind the Under-Secretary that there is a feeling among the people of northwest Kent that the area is becoming a dormitory area of London. That is not part of their character or history. The people of north-west Kent are independent. They are a tough and hardy lot and they are prepared to work within their area provided that they are given the opportunity to do so.
11.55 p.m.
The Under-Secretary of State for Trade and Industry (Mr. Anthony Grant): I should like to start by congratulating my hon. Friend the Member for Dartford (Mr. Trew) not only on obtaining this opportunity to discuss north-west Kent but on presenting in such a persuasive and coherent manner the problems faced by his constituency and its neighbours.

787
I am grateful for the intervention of my hon. Friend the Member for Gravesend (Mr. Roger White). I entirely agree with what he said about the EEC and Government aids and diversity. As Minister with special responsibilities for small firms, I was particularly interested in his second point. If we had time, as I hope we shall on some other occasion, I could explain to my hon. Friend the enthusiastic action which the Government are taking regarding small firms which will be of great help to my hon. Friend's area.
The way in which both my hon. Friends have approached the matter is consistent with their activities in the past. I remember discussing some of these problems in the past with them when they came to see me, together with my hon. Friends the Members for Canterbury (Mr. Crouch) and Faversham (Mr. Moate), as a deputation last November. I also know that they met my right hon. Friend the Minister for Industrial Development as recently as June to talk about the paper industry which is so important in the area with which we are dealing.
I am sure my hon. Friends recognise that the Government are far from indifferent to the difficulties they have mentioned. We are of one opinion in thinking that male and total unemployment rates are too high in both the Gravesend travel-to-work area, which includes Dartford, and in Chatham, although in the former and figures are still fortunately below the national average. But we know that my hon. Friend the Member for Dartford is not concerned only at the present statistical situation but at what has led up to it and about the prospects for the paper and board industry in particular.
North-west Kent is a highly important centre for the United Kingdom paper and board industry. There is no doubt that the industry as a whole went through a bad period last year and during the earlier part of this year. This general recession arose from a shortage of orders and from keen import competition, particularly from EFTA countries. The inevitable result was a cutback in production leading to the redundancies from which north-west Kent, as well as other areas, suffered.
788
However, there are some indications, particularly from the fact that no large redundancies have been reported for some time—over six months in the case of north-west Kent—that the worst is over. On present indications the next year should show a significant improvement in the industry's situation.
A major factor is entry into Europe. I know that the paper industry expects to benefit from the progressive abolition of the Community's import duties, which should allow exports from this country of certain grades to improve materially. There is also the impact of the Special Relations Agreements which were recently concluded between the EFTA non-candidate countries and the enlarged Community. In the transitional period these agreements should benefit the British paper-making industry. The Government will be keeping the overall interest of the United Kingdom industry in mind in later negotiations on tariff levels and quotas.
I turn from the paper industry to the more direct activities of my Department. I am well aware of the feelings of many people in the area represented by my hon. Friend the Member for Dartford, and indeed others who represent non-assisted areas, about our industrial development certificate policy. I was glad that my hon. Friends the Members for Gravesend and for Dartford put this matter into perspective. The IDC policy is a vital part of our overall attack on regional problems. Necessarily the IDC control is strictly operated in the South-East Economic Planning Region, but the Government are well aware that some parts of this region have real problems. Therefore, the control is operated flexibly to take account of factors such as these. No IDCs have been refused for northwest Kent during the past year.
My hon. Friend will have noted the Government's decision in March to raise the exemption limit for IDCs in the South-East from 5,000 to 10,000 sq. ft. Those who criticise the policy in this area might recall that when we took office in 1970 the limit was only 3,000 sq. ft. What is more, certificates will in future be granted to firms which undertake a modernisation project with some modest increase in labour requirements.

789
With regard to the expansion of local industry, we are generally sympathetic, bearing in mind our obligations to the more serious difficulties of other regions, particularly the assisted areas and new and expanding towns. However, firms which can prove a tie to the South-East and this include service industries, are normally allowed some expansion in that area.
I have said that the Government have very much in mind the problems of north-west Kent, including the prevailing unemployment rates and the redundancies which have occurred in traditional industries such as paper and cement. The first point I should like to make on this is that, although serious, these are not problems which should be dealt with through the Government's regional policy. That policy must necessarily concentrate on the areas of greatest need which face not only substantial problems of industrial decline but difficulties arising from the remoteness, industrial dereliction, poor infrastructure, and so on, of those areas.
As I mentioned previously, the unemployment rates in the Gravesend travel-to-work area are below the national average and it is also a fact that the rate in Chatham, although slightly higher, is still below that in the intermediate areas elsewhere in the country. North-West Kent has a variety of industries, particularly in the manufacturing sector, and many of these are by no means those which are likely to be subject to decline.
More particularly, the area is undeniably very well located as a site for future industrial expansion, particularly with reference to our entry into the European Community, as my hon. Friend the Member for Gravesend recognised. The right answer for an area such as this is national economic growth. My hon. Friends know well the steps the Government have taken to bring that about. The measures we have taken to expand demand through reduction of taxation and to stimulate industrial investment through a nation-wide system of taxation allowances add up to the most comprehensive plan for growth that any Government have undertaken since the last war.
It would be wrong, therefore, to leave the impression that prospects for north-
790
west Kent are gloomy. Too often the decline taking place in traditional industries can obscure the growth prospects in other sectors. There is a positive as well as a negative side to the natural and inevitable process of industrial change. The basic fact is that the national economy has at last picked up and is moving forward again. The latest economic indicators show this and suggest that we are moving well in the direction of our 5 per cent. growth target. Both the CBI's Industrial Trends survey and the Financial Times monthly survey confirm that the economy is ail set for expansion.
There is already some evidence of this in north-west Kent. The rate of unemployment has, after all, fallen over the past year from 3·9 per cent. to 3·5 per cent. in the Gravesend travel-to-work area. Unfilled vacancies have risen since the winter. I am sure that this trend will accelerate now that we have a growth climate in the economy. Firms in the area will see the prospects open to them as a result of our entry into Europe and will now have, for the very first time, the benefit of free depreciation on plant and machinery and the 40 per cent. initial tax allowance on industrial building that we introduced nationally in March. I am confident that north-west Kent particularly, because of its favourable location, will benefit from the economic revival that the Government have worked so hard to achieve.
I know my hon. Friend appreciates that dereliction is a matter primarily for my right hon. and learned Friend the Secretary of State for the Environment, but he may rest assured that my right hon. and learned Friend will take note of his comments. I know that that Department and the Kent County Council are aware of the extent of the problem in northwest Kent, and a committee on minerals and planning control has been set up to examine the problem of surface mineral working in Kent. So I believe that my hon. Friend can take to his constituents a message of good cheer that the answers to the area's problems lie in national economic growth and expansion. These, I believe, are well on the way, and Kent will take advantage of them.
Mr. David Crouch: Before my hon. Friend concludes, may I draw his attention to some aspects of the problem of the whole of north-west Kent, and the whole of north-east Kent as well, which came up during the Committee stage of the Industry Bill? It was pointed out to the Government that apart from the responsibility of the Department of Trade and Industry there is also responsibility on the part of the Department for the Environment in the granting of office development permits. In these areas of declining industry and manufacturing there is the development of the service industries, and the responsibility for the issue of office development permits
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lies with other Departments as well. I hope that my hon. Friend will not neglect to draw this to the attention of his colleagues in the Government.
Mr. Grant: I certainly recall how forcefully my hon. Friend made this point in the Standing Committee. He put the case in that respect very well indeed. I assure him that I will call the attention of my right hon. and hon. Friends to what he says.
Question put and agreed to.
Adjourned accordingly at seven minutes past Twelve o'clock.

WALES
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