House Of Commons
Monday 22 October 1979
The House met at half-past Two o'clock
[Mr. SPEAKER in the Chair]
Earl Mountbatten Of Burma
I wish to inform the House that on the occasion of the death of Earl Mountbatten during the recess I sent a telegram of condolence to Her Majesty on behalf of the House, to which Her Majesty was graciously pleased to reply. I also received on 31 August a copy of the resolution passed by the Parliament of New Zealand relating to the same matter.I believe that the House would wish the text of these messages to be entered in the Journals; and I shall see that that is done.
Oral Answers To Questions
Nationalised Industries (Consumer Protection)
asked the Secretary of State for Trade if he is satisfied with consumer protection in the nationalised industries.
The effectiveness of the present arrangements for protecting the consumer interest in the nationalised industries is now the subject of long overdue review. I will bring to the House any proposals for improvements after full consultation with my colleagues with responsibilities for the nationalised industries.
I thank my right hon. Friend for that answer. Does she agree that consumers who have to deal with State monopolies have little or no choice on many occasions and therefore need extra protection?
I entirely agree with my hon. Friend that we are dealing with an area where consumers are captive. As my hon. Friend says, they either have no choice or it is limited. That is why in the Competition Bill we are introducing two important provisions to protect consumers of nationalised industry goods and services and examining consumer protection generally in that area.
As consumer protection is now non-existent in the private sector, is not the need to resuscitate the Price Commission long overdue?
Far from consumer protection being non-existent, consumer power will be fortified by strengthening competition policy.
Is my right hon. Friend aware that the inquiry into British Rail's commuter services under the new powers which she announced during the recess is welcome? Will she confirm that consumers will have an opportunity to give evidence to such inquiries?
I am sure that the Monopolies and Mergers Commission will be receptive to any information that comes its way. The process cannot, however, commence until we have Royal Assent to the Competition Bill.
Price Commission (Investigations)
asked the Secretary of State for Trade what were the price increases under investigation by the Price Commission in May of the current year.
When this Government took office, the Price Commission was investigating price increases proposed for petrol, beer, water, bread, gas and electricity.
I thank my right hon. Friend for that reply, but is she aware that some of us have noticed that many of these highly emotive prices were frozen just before or during the election? Will she tell the House what has happened in each case since then?
A number of people have noticed the coincidence to which my hon. Friend referred. During the investigations the Commission allowed the full increase in petrol prices, recommended higher increases in gas and electricity prices than those asked for by the industry, sanctioned a 12 per cent. increase in water charges and an increase in the price of bread of 1p for a large loaf and ½p for a small loaf. On beer prices, the brewers concerned independently volunteered to me that they would be holding their prices for a good deal longer than the Commission requested. From that it can be seen that the only function of the Price Commission was to disguise inflation in the short term.
Order. I appeal to right hon. and hon. Members to ensure that we have short questions and answers on our first day back.
Does the Minister accept that the brewers are one of the largest paymasters of the Tory Party? Is that one of the reasons why they are being allowed to increase the price of the working man's pint by 2p or 3p?
For the hon. Gentleman's information, the largest paymasters of the Tory Party are the people who work in the constituencies to raise money. The two brewers concerned in the Price Commission investigation announced that they would not be increasing prices until January.
Half of the industries reviewed by the Price Commission in May were nationalised. Can my right hon. Friend therefore confirm that nationalising an industry does not protect the consumer against price rises?
My hon. Friend has drawn attention to an important point. It is in areas where the nationalised industries are involved that prices have risen most quickly through lack of competition.
asked the Secretary of State for Trade when he expects retail prices to return to a single figure rate of inflation.
asked the Secretary of State for Trade whether he is satisfied with the present rate of increase in retail prices.
Inflation was already in double figures and rising when this Government took office. Prices had more than doubled in five years. It will take time to correct the deteriorating situation caused by many years of Socialist incompetence and mismanagement.
As the Conservatives fought the last election on the slogan that they would reduce the cost of living, is it not appalling that they should have deliberately taken actions that have led to a doubling of the rate of increase? Their actions are increasing the cost of living rather than reducing it.
We made no forecasts at all for inflation when we fought the last election. In fact, our actions were in complete contrast to those of the previous Chancellor of the Exchequer who forecast a rate of inflation of 8·4 per cent. but presided over an increase in the rate to 25 per cent.
Is it not perfectly clear that the Government's fiscal policies are pushing the inflation rate nearer to 20 per cent. so that working and retired people are paying dearly for the rich man's Budget introduced by the Chancellor?
It is perfectly clear that with the single exception of the Budget action, which was more than compensated by a reduction in income tax, virtually every price increase that has occurred since the election was already in the pipeline when the previous Government were rejected by the electorate.
Whatever policy is adopted on inflation, will my right hon. Friend undertake that in no circumstances will he revive anything like the previous Government's Price Commission which presided over the largest recorded increase in prices in living history?
As the former Secretary of State for Prices and Consumer Protection said, the Price Commission was never intended to be an agency for holding down the retail price index. I believe that the Price Commission led to enormous bureaucracy for British industry and had virtually no impact on prices. There is no question of reviving it.
Is it not the case that, after 18 months of the last Labour Government, in August 1975 the rate of inflation in this country was 29·6 per cent?
It is true to say that prices rose faster during the period of the last Labour Government than in the whole of our recorded history. The present Government hope to do rather better than that.
The right hon. Gentleman said that the then Opposition made no forecast about inflation before the last election. Is he not aware that in a Tory Party press release the plan to double the rate of VAT was described as "a Labour lie"? These sentiments were repeated in the Daily Mail. Will the right hon. Gentleman now concede that the biggest single factor in price increases has been the decision of the Government to double the rate of VAT? So much for Labour lies.
VAT was not doubled.
Is it not correct to say that the rate of inflation has increased by 60 per cent. over a period of four months and that this is a disconcertingly rapid growth? Perhaps the right hon. Gentleman would do better to tackle rampant inflation than what he calls the disconcertingly high growth of rampant consumerism.
May I remind the hon. Member that the former Chancellor actually said in this House that if the earnings outturn in this country was to be 15 per cent.—in fact it is 16½ per cent.—it was inevitable that price increases would be in double figures? He also said that all the gains that the previous Government had made in conquering inflation would be cancelled out as a result. Those were the statements of the hon. Member's own Government.
On a point of order, Mr. Speaker. In view of the unsatisfactory nature of those replies, I give notice that I shall seek to raise this matter on the Adjournment at the earliest possible opportunity.
Retail Price Index
asked the Secretary of State for Trade what is his estimate of the level of the retail price index in six months and 12 months time, respectively.
asked the Secretary of State for Trade if he will publish forecasts for the trends in retail and wholesale prices during the next year.
My right hon. Friend the Chancellor of the Exchequer will shortly be publishing an updated forecast for the economy, including the outlook for inflation.
Does the right hon. Gentleman accept that very many ordinary people in this country now see inflation as a runaway train? They have absolutely no faith in monetary policy alone as a means of controlling inflation. Will he accept that, whatever reservations there may have been about the Price Commission, at least it was some evidence of an interest in the problem? There is no such evidence of any interest on Government Benches at the moment.
I agree that it is extremely worrying that the inflationary expectations are so high. However, I do not believe that the system of price controls of the Labour Government had any impact on prices at all. May I remind the hon. Gentleman that all that the Price Commission Act ever attempted was to defer price increases for three months. If he is suggesting that that gave confidence to the British public when, in fact, prices doubled during Labour's five years in office, I fail to see his argument.
Does the right hon. Gentleman agree that the VAT increase has deliberately put up prices and that this Government are responsible for that? It is no good his wriggling on that question.
Certainly the increase in value added tax has added to the RPI, but I am sure that the hon. Member will recognise that all the indirect increases in the Budget, including VAT, were more than offset by the reduction in personal income tax.
Does my right hon. Friend think that those hon. Members opposite who have come here, fresh from the triumphs of Brighton, to try to blame the Government for all our economic evils after they have been in office for such a short time, are either fools for failing to remember that we have had five years of Socialist profligacy from which we are trying to recover, or perhaps knaves for deliberately trying to mislead the people about the Government's attempts to equate national earnings with national income? Which does my right hon. Friend think they are—fools or knaves?
They are all worried about reselection.
I do not think that hon. Members opposite are either fools or knaves. I think that they have learnt nothing and, as usual, have forgotten everything.
Order. For the sake of the record in future debates, I wish to put on record my ruling that there are no fools or knaves in this House.
Will the Secretary of State explain why he has answered question No. 4 when all he said was that the Chancellor of the Exchequer would give an answer? Does the Secretary of State agree with The Economist, and is he taking action under the Official Secrets Act over the leak about his Permanent Secretary?
My Permanent Secretary has been an enormous help to me, as I am sure he was to the previous Minister. I saw the article in The Economist. I can only say that I could not be more delighted to answer questions on prices so that I can explain to the House and to the country our appalling inheritance from the last Government.
United Kingdom—European Community (Trade Balance)
asked the Secretary of State for Trade what is the present imbalance of trade between the United Kingdom and her EEC partners.
The United Kingdom's published crude trade deficit with the EEC in the third quarter of 1979 was £607 million, on a seasonally adjusted basis. Because of various distortions to the figures so far this year, this is likely to understate the underlying deficit.
Does the Minister agree that if we excluded oil and food the position would be much worse for this country? Can he offer any hope that in the future our trade with the EEC will be in balance?
I accept the first part of the hon. Member's remarks, but I must point out that our trade with the EEC is the fastest growing part of our trade. Germany is our biggest trading partner. France is third, the Netherlands fourth, Ireland fifth and Belgium and Luxembourg are sixth. Our main trading partners are now the EEC.
Does my hon. Friend agree that it is no use having a very large volume of trade if one is constantly in deficit?
The answer to improving our balance of payments figures with the EEC is better performance and better productivity, which are our responsibility and not that of our partners.
asked the Secretary of State for Trade what is the present inflation rate.
asked the Secretary of State for Trade what is the current year-on-year inflation rate for wholesale prices; and by what proportion it has changed since 3 May.
asked the Secretary of State for Trade what is the present annual inflation rate expressed as a percentage of the rate on 3 May.
asked the Secretary of State for Trade by what percentage the rate of inflation has increased on that obtaining on 3 May.
asked the Secretary of State for Trade what has been the increase in retail and wholesale prices since May.
The retail price index has increased by 8 per cent. since May and by 16·5 per cent. over the last 12 months. Wholesale prices have increased by 17 per cent. for industrial inputs and 14½ per cent. for outputs over the year to September 1979. In May the figures were 9·7 per cent. and 10·4 per cent. respectively. The rise since May has been 5¼ per cent. for inputs and 6¼ per cent. for outputs.
I propose to call first those hon. Members whose questions are being answered.
In view of her reply, will the right hon. Lady persuade her right hon. Friends to withdraw the Competition Bill since the evidence of the last few months shows clearly the need to strengthen the Price Commission rather than to abolish it?
The evidence of the last few months shows nothing of the kind. As the rate of inflation was approximately as high, or even higher, than at present during more than half of the period when the last Labour Government were in office, and since I do not recall the hon. Member for Farnworth (Mr. Roper) asking vehement questions about prices then, I must conclude that his concern about prices is determined by which Government happen to be in power.I can claim a greater consistency. I was concerned then, as I am now—and even more so since the higher prices which consumers are now having to pay are the direct result of the complete failure of the last Government's policies.
Does the right hon. Lady accept that her reply is a disgrace in the light of her party's stance at the last general election? Is she aware that most people believe that the sweetness of her promises then have turned sour? Will the right hon. Lady resign?
No, Sir. The only thing that I predicted during the last general election campaign was that many price increases in the pipeline would have to come through after the election. I was absolutely specific about those increases. At the time that I made those forecasts, which have proved to be correct, the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), who knew of the increases, said that there was no prospect of a further inflationary outburst. That is typical of the political dishonesty which characterised the last Labour Government's disastrous prices record.
Is the Minister's indifference to the galloping rise in inflation on all fours with the recent statement by the Secretary of State which expressed contempt for what he called "consumerism"? By that I assume that he meant the interests of consumers. Is it the Government's policy to show contempt for consumers?
The hon. Member is wrong on two counts. First, my right hon. Friend made no such statement. Secondly, I am not impervious to the present increases in prices. Price increases were not invented on 3 May. A rising inflationary trend was clearly established before we took office. The trend is caused by the excessive growth in the money supply and real earnings at a time of static productivity. We have taken steps through our economic policies to halt the growth of money supply. Halting the growth in earnings depends largely on a responsible acceptance of economic realities.
Since the Opposition do not seem to understand, will my right hon. Friend stress again that the Price Commission made no discernible difference to price inflation and that the country is now paying the bill for the incompetence and weakness of the Government led by the present Leader of the Opposition earlier in the year?
My hon. Friend is absolutely right. Nobody can be satisfied with the current rate of inflation. However, it is certain that if the Labour Party had won the election and had attempted to meet even half of the spending commitments in its manifesto, income tax, VAT and prices would be much higher than they are today.
Does the right hon. Lady remember coming to my constituency when the rate of inflation was in single figures and slamming the then Labour Government? Will she come to Swindon, go round the shopping centres and explain why inflation is double what it was when she last visited Swindon? Perhaps this time she will give me notice that she is coming.
I am most moved by that delightful invitation. I shall be pleased to accept it. I shall, indeed, be in a position to say why, when I last visited the hon. Member's constituency there was single figure inflation. I insisted that it would not last for long and that as soon as the election was over the profligacy of the last Labour Government would have to be paid for. That is exactly what is happening today.
Does my right hon. Friend recall that she told the hon. Member for Farnworth (Mr. Roper) that Labour Members had suddenly appeared on the Opposition Benches for Question Time to ask about prices although we never heard from them when the Labour Government were in office? Could this be because of bullying by the NEC at Brighton? Would it not be helpful and fair to those hon. Members if we kept a league table of how they perform?
I am always grateful to my hon. Friend for his helpful contributions.
Does the Minister agree that her early prices record made a major contribution to her party losing its deposit in the Manchester, Central by-election?
I certainly do not. I shall not accept lectures about rising prices from any Labour Member who supported a Government who more than doubled prices and, moreover, managed to achieve that gruesome record when world commodity prices, exclusive of oil, were rising by less than 2 per cent. a year. The only thing that the Labour Party can teach anyone about prices is how to double them.
Will my right hon. Friend help Labour Members by reminding them that a Labour Government managed to achieve a VAT rate of 25 per cent. which was 66 per cent. higher than it is at present?
I am sure that the House will have noted that.
When does the Minister expect inflation to be down to single figures again?
I am extremely flattered by the presence of the Leader of the Opposition. This Government are not in the business of making wrong forecast after wrong forecast and misleading people over and over again as did so frequently the previous Chancellor of the Exchequer, Mrs. Shirley Williams and the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley).
If the right hon. Lady cannot give us a date, can she say whether her party's policy is to reduce inflation to single figures? If so, will that be in the lifetime of this Government?
The right hon. Gentleman's supplementary question would have been more appropriate during exchanges on question No. 3.
Is it not a fact that between 1974 and 1979 even the Oxford University Press edition of "The Story of Moses" more than doubled in price?
My hon. Friend is right. That was among many items which more than doubled in price.
Scotch Whisky (Tariff Barriers)
asked the Secretary of State for Trade what action he is taking to secure the removal of tariff barriers which discriminate against Scotch whisky.
The ratification of the agreements reached in the GATT multilateral trade negotiations will lead to significant reductions in the tariffs on whisky in a number of important overseas markets, particularly in the United States.
Will the Government ensure that the achievements of the previous Government will be implemented from 1 January of next year to ensure that there is no more encouragement to the export of bulk-blended whisky rather than bottled whisky to the United States? Furthermore, will the Minister urge the industry to end once and for all the scandal of the export of bulk malts to Japan, which is costing thousands of jobs in Scotland?
The hon. Gentleman should know that, subject to the satisfactory conclusion of negotiations on one or two small points, the Government intend to work hard to get the MTNs ratified so that they can come into effect on 1 January. I am sure the hon. Gentleman is aware that the export of bulk whisky is a controversial issue. Even the sector working party could not make up its mind about the matter. However, it is clear that any attempt to change the present arrangements would be against our GATT commitments.
With the prospect of Greece becoming a member of the EEC, will the Secretary of State press the Greek Government to remove the discriminatory price controls on Scotch whisky in Greece?
Retail Price Index
asked the Secretary of State for Trade what estimate he has made of the effects on the retail price index of the price increases already in the pipeline at the time when he took office.
asked the Secretary of State for Trade what has been the effect on the current retail price index of the price increases which were in the pipeline when he took office.
asked the Secretary of State for Trade what is his latest estimate of the effect on the retail price index of the June 1979 Budget measures.
asked the Secretary of State for Trade by what percentage the increase in value added tax has raised retail prices since the June Budget.
With the exception of the switch to VAT, which accounts for 3½ per cent. on the RPI, and other budget changes, which account for a further ½ per cent., all of which have been wholly offset by substantial income tax reductions, virtually every other price increase reflected in the latest RPI was already in the pipeline when the Labour Government was rejected by the electorate in May.
Does not my right hon. Friend agree that his answer exposes the bogus character of the Opposition's protest on prices? Will he confirm that inflation, as an annual rate, has risen each month for the last 12 months and that the rising trend is attributable entirely to the previous Government's policies?
Inflation was already in double figures when we became the Government, and factory-gate prices have been rising during the year. Under the previous Administration the value of the pound was halved, unemployment was doubled and the national debt was nearly doubled. One would have imagined that the Leader of the Opposition would have kept in his seat during this Question Time.
I propose to call first those hon. Members whose questions have been answered.
The previous Chancellor of the Exchequer stated that if earnings rose by more than 15 per cent. prices would inevitably rise. Does the right hon. Gentleman agree with that statement?
I agree entirely with the former Chancellor's forecast that, where wage increases of 15 per cent. were achieved in the former year, the RPI would increase by 13 per cent. In addition to that, there are the 4 per cent. increases resulting from the Budget changes which, as I have said, have been more than offset by income tax reduction.
Does the Secretary of State agree that it is even more extraordinary that the Leader of the Opposition should have intervened when the present rate of inflation is less than two-thirds of the maximum rate that was achieved under the previous Government? Does he also agree that it is important to stress the way in which the change from direct to indirect taxation both increases incentives and helps the balance of payments because VAT is zero-rated?
Certainly that change increases incentives and provides more personal choice. It is worth reminding the House that in the first Budget of the previous Government not only did their increase in indirect taxation add 3¾ per cent. to the RPI but income tax was increased by 3p. In their second Budget they added 2½ per cent. to the RPI and increased income tax by a further 2p. The memory of those actions will not be forgotten by the British people and certainly not by the House.
The Minister has just claimed that all but 4 per cent. of the RPI increase was already in the pipeline by the time his party took office. Therefore, it should be simple for him to forecast when those prices in the pipeline will come out. Will the Minister now tell us when the RPI will stabilise and return to single figures?
As I have already said, it will take time—[HON. MEMBERS: "How long?"]—to correct the deterioration that has been caused by five years of Socialist incompetence and mismanagement. I remind the hon. Gentleman that his party was in power, and that is one of the reasons why the country has been in such a dreadful state, for most of the past 15 years.
Does my right hon. Friend agree that, in the light of comments made by my right hon. and hon. Friends, the best advice that could be given to the Labour Party is contained in the lines of Alexander Pope:
"Let such teach others who themselves excel. And censure freely who have written well."
I am delighted that a poet has joined my right hon. and hon. Friends. I hope that we shall hear more quotations from Alexander Pope in the future.
In answering questions about the retail price index, the right hon. Gentleman has not mentioned the tax and prices index once. Is that because he is as contemptuous of it as is the rest of the House?
The tax and prices index has risen by 14·1 per cent. according to the last figures and it has been a useful addition to our statistical armoury. [Interruption.] It is fascinating to have a Question Time in which the Leader of the Opposition and two former Treasury Ministers have taken part. In due course, I shall be quoting from articles by former Treasury Ministers in The Guardian and other newspapers. Those articles have been most enlightening for all of us.
Does the Secretary of State agree that the party points that the Opposition are trying to score have little relevance outside the House? The message that should be going to the country from both sides of the House is that the only way to get inflation down is by improving productivity and increasing production from the whole of British industry.
I agree entirely with my hon. Friend. The key objectives which we have to meet in our economic policies are, first, to bring back a climate of incentive into our society and, secondly, to create room within the total resources generated by the economy for the wealth-creating and investing private sector which produces more jobs and more wealth. That has not been the case in the last five years.
Does the right hon. Gentleman agree that something we might have heard from him is a little more frankness about his position and that of his right hon. and hon. Friends during the last election? What promises did he make about an increase in VAT during his election campaign?
I had a most delightful little campaign in West Cornwall. I enjoyed it very much and, like most of my hon. Friends, I nearly trebled my majority. I do not recall making any forecasts about VAT. My constituents are more interested in other things.
asked the Secretary of State for Trade what discussions he has had with the chairman of the Price Commission following the publication of the Competition Bill.
asked the Secretary of State for Trade when last he met the chairman of the Price Commission.
My right hon. Friend has not met the present chairman, Mr. Leslie Pincott, since he took office on 1 August.
Will the Government reconsider their insane proposal to scrap the Price Commission? It is the only body with any power to control prices, which are now rising at over 16 per cent. If the Government decide to go ahead with that proposal and abandon even the pretence of fighting inflation, will not the Minister be ashamed to remain a member of, probably, the first Government to almost double the rate of inflation in their first six months of office?
The hon. Gentleman ought to have heard enough this afternoon about the appalling record of the Price Commission to make him realise that his question is inappropriate. The Government believe that the best check on price increases is vigorous competition within a framework of strict economic and monetary policies. The Competition Bill, which the House will be debating tomorrow, is an important first step in this direction.
Is the hon. Gentleman aware that Scottish and Newcastle Breweries, with a declared profit of £35 million, have increased the price of beer by 3p a pint? Is he aware that if the Price Commission had been in operation that increase would have had to be referred to it? How can we overcome these difficulties?
I am not aware of the specific circumstances to which the hon. Gentleman has referred, but he will understand that the operation of the Price Commission, with its effect upon company resources, investment and jobs, was very damaging to industry in general and had a harmful effect on confidence in industry. That is why we have moved quickly to abolish the Price Commission and to restore confidence to industry.
asked the Secretary of State for Trade if he is satisfied that his Department is kept sufficiently well informed of consumer views.
As I announced recently, I am taking steps to broaden the base from which information is drawn about consumer views and interests.
Does my right hon. Friend agree that there has been a plethora of consumer advice from many diverse sources, ranging from the Office of Fair Trading and citizens advice bureaux which are very good, to bodies such as the National Consumers' Council, which is pretty useless, and that the public are beginning to get confused? Will my right hon. Friend consider consolidating all that activity in one body, perhaps a jazzed-up citizens advice bureau?
I am sorry to disappoint my hon. Friend, but that is not something which I am considering at present. However, I am pleased that I have been able to widen the constituency from which I can draw information about consumers by adding to it many hundreds of thousands of consumers in women's institutes and the National Union of Townswomen's Guilds. Labour Members who sneer at those bodies are insulting many of their own constituents. These are commonsense, down-to-earth ladies. I am extremely grateful for their support and help.
Will the right hon. Lady show a little more compassion in considering the consumer views that are sent directly to her? Does she recall that I sent to her the case of a small phial needed by cancer sufferers who have a colostomy? She gave me the dusty answer that, although the price had increased by 70 per cent., competition would bring the price down. Is she not aware that in that commodity there is no competition? Will she do her homework a little more effectively?
I remember the hon. Gentleman's letter, but he will be aware that it is not possible for me to intervene in individual cases, however sympathetic I may feel towards them.
asked the Secretary of State for Trade what has been the overall cost of the Price Commission to the taxpayer since it was first set up.
Up to the end of March 1979, approximately £35 million at out-turn prices.
Can my hon. Friend tell the House what return the electorate had for its £35 million? Did the Price Commission—contrary to the prediction of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley)—have any effect in reducing the rate of inflation and did it have any other effect on the economy, or was it just an expensive piece of window dressing?
The answers that my hon. Friend has heard this afternoon have illustrated the minimal effect that the policies of the Price Commission had on prices. I have mentioned the damage done to industry as a consequence of those policies.
Why are the Government so scathing in their condemnation of the Price Commission? Is not the Minister aware that there are countless examples of the Price Commission having controlled the price of an article to the distinct advantage of the housewife, whom we are supposed to be protecting? Is he not also aware that there is one outstanding example where the Price Commission, in agreement with an industry, secured a substantial refund for the consumers of that industry?
The hon. Gentleman is a victim of his party's propaganda. The Price Commission ordered a restriction on prices in only a small minority of cases and the effect of such restrictions was for only a temporary period. The effect was merely temporarily to delay a price increase.
asked the Secretary of State for Trade whether he will make a statement about the effects of the Price Commission on prices and investment over the past two years.
As my right hon. and hon. Friends have already made clear, we consider that the Price Commission has had a minimal impact on inflation since the enactment of the Price Commission Act 1977. At the same time, the legislation has seriously harmed jobs and investment prospects and imposed unnecessary burdens on industry.
Has not management time been expended on the activities of the Price Commission, diverting management from increasing productivity, which is the only way in which we shall get prices down?
My hon. Friend is right. The Price Commission cost £35 million in direct costs but it also cost hundreds of millions of pounds in wasted management time taken up answering unnecessary queries.
Are not the Government appealing for restraint in wage increases? Did not the submission of price increases to the Price Commission have the effect of restraining those increases? If there is to be a free-for-all in prices, will there not also be a free-for-all in wages?
The hon. Gentleman is putting forward a very strange argument, which is that the existence of a body which is of no consequence and does nothing to restrain prices should be used as a means of holding down wages. I do not see the sense of that argument.
Would it not help the House if the Minister were to place on the record the exact cost to British industry of the Price Commission?
That would be a most interesting exercise, but I suggest that it would be as big a waste of time as a great many of the activities of the Price Commission.
Can we get away from sterile and totally unprovable arguments about the Price Commission? Will the Minister answer a slightly different question? When the Price Commission is abolished who will perform its efficiency function? Who will tell companies such as British Oxygen that if they stopped theft they would not need price increases?
I suggest that the hon. Gentleman attends tomorrow's debate when we shall be concluding the Second Reading of the Competition Bill. Then all will be revealed to him.
European Community (Council Of Ministers)
asked the Secretary of State for Trade when he expects next to meet his EEC colleagues.
Either my right hon. Friend or myself attends meetings of the EEC Foreign Affairs Council when trade matters are discussed, as do our counterparts in most other member States. The next Foreign Affairs Council is 29 October to 30 October, and I will be attending it.
When the hon. Gentleman meets his EEC colleagues will he make clear that, because of the enormous imbalance in trade between the EEC and ourselves and because of the huge subsidies that Britain is giving to the other member countries, the British people are increasingly mystified about what benefits they are supposed to be getting from our membership of the Common Market?
As I pointed out in answer to an earlier question, the EEC is far and away our biggest market. Our trade is growing more quickly with that market than with any other market. The answer to improving our performance inside that market lies in our own hands—through better industrial performance at home.
When my hon. Friend goes to Brussels, in whatever capacity, will he take an opportunity to speed up the attempts to harmonise the processes of members of the EEC for dealing with oil pollution at sea?
I know my hon. Friend's keen and well-informed interest in this subject and I take note of what he has said.
Mr. Peter Jay. [Interruption.] I apologise to everyone. Mr. Douglas Jay.
Does the hon. Gentleman think that the common agricultural policy, which the Conservative Party foisted on this country, has helped to keep down prices?
The right hon. Gentleman knows that his question is a matter more for my right hon. Friend the Minister of Agriculture, Fisheries and Food than for me. However, the Government have made clear that they are not satisfied with the working of the CAP and they seek reforms.
Will the Minister take the opportunity at the meeting to which he referred to press the Government of France about their attitude towards the import of sheep meat and the detrimental effect that their attitude is having on sheep producers in Wales and the United Kingdom generally?
The hon. Gentleman has identified an important matter. My right hon. Friend the Minister of Agriculture, Fisheries and Food has the support of all his Community colleagues in pressing the French to acknowledge the ruling of the European Court and to do their duty in opening their market to our sheep.
Price Increases (Notification)
asked the Secretary of State for Trade what information he obtains about individual price increases since the revocation of price increase notifications under the Price Commission Act.
Individual price increases of public concern will, by definition, be known to me.
Is not the abolition of notification part of what the Secretary of State called the abolition of administrative bumf? Is not the truth of the matter that by abolishing both notification and the Price Commission the Government's policy is a combination of impotence and ignorance?
The effect on the retail price index of the abolition of the Price Commission will be negligible. As only companies with a turnover of £15 million in the manufacturing industry and £12 million in retail trade had to pre-notify price increases, they were not representative of the whole picture. In any case, as the Price Commission, on its own reckoning, was able to intervene in less than 1 per cent, of the pre-notified price increases, the effect on inflation generally was negligible.
Can the right hon. Lady explain how the Price Commission managed to do so much damage to industry if it had so little effect?
There is a perfectly simple explanation. The uncertainty created throughout industry was where the damage was done. It was not the price controls themselves but the uncertainty that they caused that undermined business confidence and prevented investment.
Motor Vehicles And Components
asked the Secretary of State for Trade what is the balance for the combined values of trade in motor vehicles and components for the first nine months of the current year.
Trade figures for motor vehicle manufacturing in the first nine months of 1979 are not yet available. The balance of trade for the first six months shows a deficit of £461 million.
Does my right hon. Friend agree that that is a most disturbing development? For the first time there is an adverse balance on the combined products of the industry. Does he further agree that the answer to that situation lies not in import controls but in increased production and new models? Will he therefore consider lending his voice to those who are urging the British Leyland work force to accept the company's plan for new models and increased production, against the advice of their shop stewards?
I certainly share my hon. Friend's desire that the arrangements that are being suggested should be viewed favourably by the British Leyland work force. I do not wish to be drawn further into this question at present because it is clearly in a very delicate position. The deficit on motor vehicles and components is a most worrying development. We had a very substantial surplus in this area of industrial activity only a year or two ago. The turn around is very serious.
Is it not characteristic of our membership of the EEC that we continue to have a deficit in virtually every area of activity? Is not the only solution to regulate our trade by some sort of quota arrangement so that we may make up the deficiencies of private enterprise of the past and invest in our motor industry and components supply industry so that we may effectively compete in world markets? Until that investment is made and until BL is given the green light to go ahead with investment we shall continue to see our motor industry sink in much the same way as our motor cycle industry.
It is not clear to me why the hon. Member for Keighley (Mr. Cryer) should imagine that putting up quotas and other controls against imports of goods would make our manufacturers more competitive. I cannot accept that argument. Such a move would also limit the choice of people in this country who want a choice of goods. It would put up the prices of goods in the domestic market. I remind the hon. Gentleman that a third of our gross national product goes into exports—a greater proportion than that of any other major country in the world? How can he imagine that we should continue to export a third of our GNP if we started putting up barriers against other people's exports to us?
Bearing in mind that this country is committed by both philosophy and international agreement to free trade, will my right hon. Friend go further and confirm that the only way in which we can rescue ourselves from our industrial malaise is by increasing our productivity and our exports? Is he aware that 13 French cars are exported to us for every one of our cars exported to France?
Over the years successive Governments have looked at every policy option. Some Governments have looked at every gimmick. However, in the last resort the only answer is for there to be an increase in productivity and output here at home. There is no other solution.
Does the Secretary of State agree that no Minister of the Crown seems eager to get involved in British Leyland at the moment? Does he accept that there is little point in asking Leyland workers to accept the massive sacrifices proposed by the chairman of the company when the Secretary of State for Industry will give no indication that if they make them they will then get the money?
It would be a strange world if people were to advance money for a project before the project existed. Until British Leyland makes up its mind on how it is to go forward in the next few years there is nothing for that company to discuss with my right hon. Friend.
Offshore Oil Spillage
asked the Secretary of State for Trade if he is satisfied with the ability of his Department effectively and efficiently to deal with offshore oil spillage; and if he will make a statement.
My Department is structured to make a prompt and effective response to any oil spill which threatens major pollution of our coasts or waters. Whilst I am satisfied with this ability, no Government can guarantee that no oil will come ashore from such a spill.
I thank my hon. Friend for that reply which may or may not give satisfaction to those who have heard it. Does he not agree that there is a need to develop alternatives to detergents upon which his Department relies so heavily at present? In this regard will he or one of his colleagues agree to inspect some technology that has been developed by a company in my constituency which manages to lift oil from water and which his colleagues at the Department of the Environment have already inspected and approved?
I appreciate my hon. Friend's constituency interest in this problem and the interest of his constituency companies in trying to solve it. I believe that representatives of those companies met Admiral Stacey this morning. He heads the marine pollution control unit. I hope that these technical points were put to him. My hon. Friend the Under- Secretary of State for Trade will be very happy to discuss these matters with my hon. Friend.
asked the Secretary of State for Trade when he expects to lay regulations concerning the safety of furniture from hazards by fire.
I hope to lay a draft of the proposed regulations on the ignitability of upholstered furniture before each House of Parliament by the end of November.
Does my right hon. Friend agree that, although we all want to see increased safety in furniture, as elsewhere, cost factors are immensely important, and that if she accepted the advice that she has been proffered by some quarters totally to ban plastics in furnitures the effect on the price of furniture would be astronomical?
My hon. Friend is quite right. Whereas I am absolutely determined to cut down the number of tragedies arising from the type of fire that is characteristic of polyurethane foam, I am advised that it is far more likely to be effective and less expensive to contain the inflammable contents by having a covering or an interlining which has a very low level of ignitability, rather than to ban the foam itself, which would push up the price of furniture considerably.
asked the hon. Member for Wokingham, as representing the Church Commissioners, how many homes the Church Commissioners are providing for Vietnamese refugees; and in what locations; and what is their policy for providing further help and advice.
The terms of reference of the Commissioners, like those of other charitable bodies, are strictly limited and do not, by statute, extend to the provision of free housing or other services for refugees, however sympathetic individual Commissioners may be.
I am most grateful for the answer given by my hon. Friend. Is he aware that London church members are pressing local authorities to provide accommodation for the boat people? Will he therefore consult his colleagues, the Church Commissioners, to see whether accommodation can be made available for letting at reasonable rents to the boat people in the London area, thus leading the way and perhaps setting an example to other landlords?
The amount of suitable accommodation available in central London is less than is commonly supposed, and there are very great pressures on it. However, in the light of my hon. Friend's representations I shall gladly have an examination made to see whether any contribution can be made to what I quite understand is a human problem.
(by private notice) asked the Lord Privy Seal if he will make a statement on British food aid and other assistance urgently required to relieve the critical famine situation in Cambodia.
Her Majesty's Government announced on 6 October that they had decided to supply rice worth £1 million for distribution in Cambodia; subject to parliamentary approval, to provide the equivalent of a further five million United States dollars for use by international relief agencies in Cambodia; and to provide an RAF Hercules aircraft to carry vehicles from the United Kingdom to be used for food handling and distribution in Cambodia.The RAF Hercules has been making daily flights between Bangkok and Cambodia since 13 October, carrying vehicles and food. These flights have now been extended until mid-November.
Does the Minister accept that, with the prospect of hundreds of thousands of people, perhaps more, dying of starvation during the next few weeks, it would be disgraceful if insistence on continuing to recognise the appalling Pol Pot regime delayed or hampered the arrival of supplies of food and other assistance from this country? Are the Government prepared to increase the amount of money so far allocated for aid? Are they prepared to make part of it available through Oxfam, which has done a magnificent job? Will the hon. Gentleman look into the possibility of providing more transport to get the food where it is needed? In many ways transport is in as desperate short supply as the food itself.
The question of recognition of one side or another in Cambodia has had nothing to do with decisions that the Government have taken about the provision of aid. Those decisions have been taken on humanitarian grounds alone.As for the amount of aid, I think that we are doing pretty well. We are providing about £4 million-worth of aid. We announced this even before the official appeal by the International Committee of the Red Cross and the United Nations Children's Fund, and it compares favourably with what other countries have announced. With regard to Oxfam, no decisions have yet been taken—apart from the provision of the Hercules—about the channel through which our aid will be provided, but I have received a request from Oxfam for some of the aid to be channelled through it. I applaud the action that it is taking. In speaking of transport, the hon. Gentleman correctly identified what is at present the main problem—logistics. We think that we are doing pretty well with the supply of the Hercules, the provision of which has now been extended for a further period. This has been very much welcomed by those in Cambodia and elsewhere in the area who are responsible for moving the food aid.
Whilst I fully support the Government's decision on humanitarian grounds, to send food aid to Cambodia, may I ask my hon. Friend whether we or any of our friends have any machinery on the ground to offer some hope that a large part of the aid will in fact go to starving refugees and not to the military forces?
That is one of the problems. It has been in the minds of the various organisations concerned with making sure that the aid actually reaches its destination. The ICRC and UNICEF are now satisfied about that, as is Oxfam. It was very soon after the ICRC and UNICEF announced that they were so satisfied that the Government responded with their offer of aid.
Whilst I welcome the initial Government response, made with the background of the tremendous public concern and pressure in this country, may I ask the Minister a little more about the distribution and the way in which the aid is being channelled? He said—as we know—that UNICEF and ICRC are to receive some of it, but is not the important thing now—particularly in the light of the discussion by the EEC Foreign Ministers in Dublin this weekend, and what they have said—to use fully the agencies that are able most effectively to channel the aid to the starving people who need it? Does not that mean that the Minister and the Government should be extremely responsive to the request by Oxfam, which has proved to be a really effective channel?Can the Minister give an assurance today that he will consider the Oxfam request, which is paralleled by requests by other non-governmental organisations in Europe, to channel a considerable proportion of the British Government aid through it, as the most effective agency at the moment?
I agree with the right hon. Lady that the important thing is to ensure that the aid arrives at the proper destination—the starving people—by all possible means, in as large quantities as possible and as soon as possible. The evidence that I have is that the ICRC and UNICEF operation is now going effectively. They are satisfied that the aid is reaching its destination. They hope by the end of this month to have delivered 10,000 tons of aid and to double that figure next month.I talked twice with Oxfam—once in Singapore and once in London, last week. I applaud what it is doing. I am following with close attention its efforts to set up an international consortium. As I have said, no decision has yet been taken about the channels through which our aid will go, but I am bearing in mind the Oxfam request. I repeat that it is important that there should be close co-operation between all organisations, whether Oxfam or United Nations organisations.
May I pursue that matter for a moment? I appreciate what the hon. Gentleman has said, but time is of the essence. It looks as though it may take a little time effectively to organise the channelling of food aid to ICRC and UNICEF. Oxfam is doing it already, but has run out of money. If Oxfam can be provided with extra money quickly, it can get the food in quickly. That does not prejudice what decision might be taken later about the UNICEF-ICRC aid.
One of the main problems at present is the logistics problem. That is why our Hercules aircraft is so important. In general, that is a more important problem than the availability of food.The ICRC-UNICEF operation is now going fast. It is now taking in more aid than the Oxfam arrangements. That does not mean that I am excluding Oxfam. When we are making up our minds about the channels through which we shall send our aid, we shall have to take into account a number of factors—for example, the ability of the organisation concerned to mount a sustained and large-scale operation to get the aid in. Another factor is whether the organisation concerned will be sending its aid in to all parts of Cambodia, regardless of the regime under which the starving people may be living.
The Minister tried to intimate that the amount of aid that arrives has little to do with which regime is recognised, but the international agencies have themselves suggested that until we dissociate ourselves from the Pol Pot regime, which has been responsible for 2 million deaths in extermination centres, the Heng Samrin regime in Cambodia will not allow the maximum amount of aid to reach the 3 million people who may well die there during the coming 12 months.Will the Minister ensure that in her discussions with Chairman Hua next week the Prime Minister will place on the agenda as an urgent item the whole question of the dissociation of the Republic of China and the United Kingdom from the Pol Pot regime and the acceptance and recognition of the Heng Samrin regime, which controls 90 per cent, of the country and 90 per cent, of the people in Kampuchea?
I repeat that the issue of which regime in Cambodia the Government recognise has had nothing to do with the Government's decisions on aid, which have been taken solely on humanitarian grounds. Britain still recognises the Pol Pot regime. It was recognised by the previous British Administration. I cannot understand why some seem to be enthusiastic about the Heng Samrin regime. Heng Samrin was a political commissar and a divisional commander under Pol Pot and his regime. However, that is not the issue. My information is that in the areas controlled by the Heng Samrin regime the aid is reaching its destination. That is the important matter.
This is an extension of Question Time. I shall call those hon. Members who have risen and occupants of the Front Benches before bringing this subject to a conclusion.
Does the Minister accept that the previous Government recognised the Pol Pot regime because, for better or worse—in fact, very much for the worse—it was at that time in effective control of Cambodia? What possible excuse is there for persisting in recognising a barbaric regime that now controls only a fragment of the country. If the hon. Gentleman cannot bring himself to recognise the alternative regime, why did he not support the Indian initiative at the United Nations—namely, to withhold recognition from both parties?
The issue is not recognition of one regime or another, but aid. However, the Heng Samrin regime came into Phnom Penh on the back of the Vietnamese Army. If the Vietnamese Army were withdrawn, it may be that it would collapse. The Pol Pot regime is still recognised by many non-aligned countries, including all the ASEAN countries, so we are not alone.
I leave aside recognition of the Pol Pot regime, as none of us would wish to use starving children as a political gambit. It seems that the Government have moved from their position of three months ago. Three colleagues and myself asked for help to be sent to Kampuchea and it was said that there was no money or food available to give help. The Government have moved from that position to a more tenable one of giving some help. Is the hon. Gentleman's mind still open to increasing that assistance, no matter what aid other countries are giving, instead of smugly suggesting that £4 million compares favourably with the value of aid given by other countries? After all, the British people spend on cigarettes on a Saturday night the sum that we are giving to hundreds of thousands of starving men, women and children in Cambodia.
It is unreasonable to suggest that the Government are being smug. We have done extremely well. Our immediate response with the Hercules aircraft has been much appreciated in the area, as has our offer of £4 million worth of aid. We shall continue to follow the situation as it evolves.
Is my hon. Friend aware that unless Her Majesty's Government have changed the criteria for recognition of a foreign regime it is totally incomprehensible that we should accord official recognition to a barbarous regime that controls such a tiny portion of Cambodia? Can we not withdraw recognition from both odious set-ups?
The Government made it clear that recognition does not imply approval. As my hon. Friend will know, the previous Administration raised the question of the inhuman behaviour of the Pol Pot regime before the United Nations Commission on Human Rights. They were supported by the then Opposition. Recognition has nothing to do with the provision of aid.
I think that the whole House will agree that relief should not be made contingent upon recognition of either of the claimant regimes. However, the Minister has put the House in something of a dilemma in understanding the Government's doctrine on recognition. If recognition does not imply approval, and if the Pol Pot regime controls 10 per cent, or less of the territory of Cambodia, how can the hon. Gentleman possibly continue according recognition to an odious regime?
The policy that the Government are pursuing on recognition is identical with that pursued by the previous Administration, which recognised the Pol Pot regime. The control of territory in Cambodia in May was exactly the same, or more or less the same, as it is now. If the right hon. Gentleman wishes to explore the Government's policy on recognition in general, that is another issue and no doubt he will pursue it.
That will not do. When recognition was accorded to the Pol Pot regime, irrespective of the feelings about that Government, it was because it controlled the whole of Cambodia. However, Pol Pot no longer has that control. Therefore, why should the Government continue to accord it recognition?
The right hon. Gentleman should know the principles that successive Governments have followed for many years on recognition. We are following those principles precisely. I have stated that the Heng Samrin regime took power on the back of the Vietnamese Army. If that army were withdrawn, the Heng Samrin regime might collapse.
Fuel Costs (Assistance)
With permission, Mr. Speaker, I wish to give the House details of the steps that the Government propose to take to help poor families with their fuel bills this winter.When we came into office we found that no provision had been made by our predecessors in public expenditure plans for any help in the coming winter. So we have given careful consideration to what might be done against the background, on the one hand, of the difficult economic situation and, on the other, of a year in which disposable income from employment and benefits is keeping pace with the overall rise in fuel costs. We recognise that fuel bills can be a real worry for the poorest families, particularly the elderly poor and families with young children. We therefore propose to concentrate our help this winter on elderly people and families getting supplementary benefit and family income supplement. With the agreement of the Supplementary Benefits Commission, we propose that from 12 November all supplementary benefit householders with a child under 5 and all supplementary pensioner householders who are over 75, or who have a dependant who is over 75, should automatically receive the basic rate of heating addition of 95p a week. Many of the pensioners will already be getting such an addition, but for those who are not, it will mean extra benefit, over a full year, of nearly £50. We estimate that about 110,000 pensioners and about 150,000 beneficiaries with young children will receive this increase. It will not be possible to implement the increase from 12 November but arrears will be paid from that date as adjustments are made. Second, we wish to give extra help to poor families in work where there are children. Accordingly, we are today laying regulations which, subject to parliamentary approval, will result in all families in receipt of family income supplement getting an additional £1 per week from the uprating due in November, on top of the increases already agreed by the House. Wider coverage is appropriate for FIS because, unlike supplementary benefit, the scheme has no other special provision for extra help with fuel bills. If approved by the House, the extra £1 each week will benefit about 85,000 working families. Over the 12 months from November 1979, these proposals will give about £5 million to supplementary pensioners, about £6½ million to those on supplementary benefit with young children, and about £5 million to FIS beneficiaries. Costs falling in the current year will be charged to the Contingency Reserve for 1979–80. We are living in an era of high-cost energy and we cannot shield the whole population from that even if we wanted to. The Government are, however, aware of the need to take the cost of energy into account in developing their social policies, and we will keep under review the range of help available to assist poor consumers with fuel bills. The measures that I have announced will concentrate worthwhile help this winter where it is most needed. I feel confident that hon. Members on both sides of the House will welcome them.
The Secretary of State for Social Services has again failed to fight his corner in the Cabinet on behalf of those whom he is supposed to represent—the poor, the sick, the elderly and the unemployed. Under his proposals 345,000 families will benefit, as opposed to 5 million families under Labour's previous proposals. The cost of the scheme—£16½ million—is very different from the bill that the previous Government met last winter, of £45 million. The increased electricity charges—18·9 per cent, in June this year—will mean that the average quarterly bill will go up by at least £5. In view of that increase what will happen to elderly persons aged between 65 and 75? What about the pensioners whom we helped over the difficult period? What happens now to the people on rent and rate rebates? I presume that the Minister will tell them not to turn up at the post offices with their books, as there will be no money for them this winter.What will happen if there is a bad winter, when people will feel rising costs—those rising costs having been deliberately created by the Government to help higher-rate taxpayers? The poor and the sick must meet the costs. Are there any emergency proposals in case there is a bad winter? Is the sum of £16½ million, to which the Minister referred, all new money? What will he do about the code of practice? Will he ensure that that is carried out? The Minister stated that the previous Government made no provision for this winter. Over the past three years the Government made increasing sums available. When he was at the Department of Energy, my right hon. Friend the Member for Bristol, South-East (Mr. Benn) brought forward £35 million. A decision had been taken by the Government to continue the scheme this winter.
With respect, the right hon. Gentleman is confused about the Government to which he is referring. I understand his points.The previous Government made no provision in their expenditure plans. As the right hon. Member for Bristol, South-East (Mr. Benn) will recognise, that Government were exceedingly careful to give no commitment in public about continuing their scheme. Therefore, they are hardly able now to criticise what we have done. On the contrary, we are concentrating help on the families where the need is the greatest, and giving worthwhile help to them. How does the Labour Party seek to defend a scheme that puts £5 into the pockets of school leavers who are on supplementary benefit and living at home? How can it defend a scheme that puts £5 into the pockets of elderly people living in part III accommodation when there is no obligation for them to hand the money over to those paying the bills? The previous Government's electricity discount scheme was widely criticised, not least by those seeking to defend the interests of the poor. We aim to provide worthwhile help for people in the greatest need. The amount of £16½ million is new money, which is being found from the Contingency Reserve. The code of practice is a matter for my right hon. Friend the Secretary of State for Energy. That is being kept under review. It is regarded as an important part of the protection of poor consumers. As to the question of a bad winter, I said that as a general part of our social policy we would continue to keep under review the question of help with fuel bills for the poor.
The Minister said—
On a point of order, Mr. Speaker. It appears from what the Secretary of State said that the electricity discount scheme, which has been in operation since 1976 under the responsibility of the Secretary of State for Energy, is not to continue. No reference was made to this in the statement. Are we to understand that the electricity discount scheme is to be discontinued? Is that the way in which to treat the House?
The right hon. Gentleman knows that that is not a point of order for me. He has managed to jump the queue by asking a question.
Will the Secretary of State say what conversations he has had with his opposite number in Northern Ireland, bearing in mind that the price of gas in Northern Ireland is three times greater than in the rest of the United Kingdom, as we were not given a supply of natural gas? Electricity is more costly in Northern Ireland. What arrangements will be made for the poor, the sick and the unemployed in Northern Ireland?
My right hon. Friend the Secretary of State for Northern Ireland has been fully associated with all the work that has been done on this subject. The Northern Ireland scheme is not the same as that in the rest of the United Kingdom. It follows the Great Britain measures but in addition provides for a £15 lump sum payment to those on supplementary benefits, family income supplement and housing allowances. The hon. Gentleman rightly gave the reason why there must be a more generous scheme in Northern Ireland. Domestic fuels cost a great deal more in the Province than in Great Britain.
Would it not be more honest for the right hon. Gentleman to tell the House that the electricity discount scheme operated over the past three winters, which gave real help to a group of people hard pressed by increasing fuel prices, is being abolished—in a year when oil prices went up three times, when electricity prices are going up as a result, when the rate of inflation is going up in parallel, and in its place is being substituted a scheme that is worth about a quarter as much, in cash terms? The sum of £45 million, updated for inflation, would be about four times the amount announced today. Is the Minister aware that the Government announced today that they have chosen a group of people, many of whom are locked into all-electric flats and have no alternative fuel supply, who are on rent and rate rebates, and who are to be driven into real poverty and hardship this winter? Is that not a reflection of a state of priorities of which any Government should be absolutely ashamed?
I defend entirely the priorities in the scheme that I announced, namely, for those over 75 on supplementary benefit and for families on supplementary benefit with children under 5 years of age. That is where the top priority goes.The right hon. Gentleman would be on stronger ground in criticising what the Government are doing if he had given any indication that money was to be provided under the public expenditure White Paper or if he had given any public commitment to introduce it. As it is, the previous Government did neither. They are not entitled to criticise.
Is the right hon. Gentleman aware that on the record over three years running, in each year, never promising for the future, we renewed and expanded the schemes, and that this year it would have been the priority of any Cabinet with human concern not just to continue but to expand the scheme and to prevent people from being driven to destitution by the increase in electricity prices that they must pay this winter? What has been done is a disgrace.
On a point of order, Mr. Speaker. Does membership of the Front Bench extend to the third row of the Opposition?
Order. It is a matter within my discretion. I know that from time to time hon. Members are irritated when they see that happening on the other side of the House, but it works both ways. If the hon. Gentleman will wait I am sure that the same will happen on the Government side before Christmas.
Is the Minister aware that when the electricity discount scheme was introduced it was taken up by only 70 per cent, of those eligible, and that the administrative cost was 10 per cent, of the scheme? This means, by simple arithmetic, that only 60 per cent, of the money available was reaching the target. Does he not recognise that this is squandermania, even by the usual Socialist standards, and that his proposals will reach the target of helping those in real need?
My hon. Friend is quite right. In the first year—the only year for which there were any figures—the take-up of the electricity discount scheme was probably a little over 60 per cent. No one knows what it was later on. The administrative costs of the previous Government's scheme amounted to no less than £4 million. We estimate that the administrative costs of our scheme will be one-tenth of that figure—£400,000.
Does the Minister recognise that it would be quite a sensible change of policy to make the benefit system the main vehicle for help with fuel bills, if it were being done on a scale comparable to what has gone before and if the main categories of people who ought to be receiving benefit were all within reach of the scheme?Does the Minister also realise that unless his Government maintain a much stronger commitment to fuel conservation measures through their housing programmes, there will be many people for whom this benefit will be derisory, because it will not meet the real additional energy costs that they are having to face?
I am grateful that the hon. Gentleman, as the Liberal spokesman, welcomes the fact that this is seen as a matter of income support and is not designed to enable the Secretary of State for Energy to show himself as a champion of the poor. It is to be seen primarily in a social security context, and that is how the Government are judging it. Questions on home insulation are for my right hon. Friend the Secretary of State for the Environment, but we are maintaining the programmes that we inherited from our predecessors.
Does the Secretary of State realise that in my part of the world the electricity discount scheme was very well received by many pensioners and others who benefited from it? There will be tremendous anger that it is being dismantled in this summary fashion. Does the Minister accept that there will be discomfort and perhaps even death by hypothermia as the result of lack of adequate finance for electricity costs? The Minister must realise that in certain parts of the country, in a cold winter, this will bite hard into the heating standards of our folk. Is the Minister prepared, and are the Government prepared, to accept the consequences of their skinflint action?
I do not accept for a moment that this has been decided in a summary fashion. On the contrary, it has been under very careful study by my right hon. Friends and myself over several months. I recognise that there will be disappointment on the part of those who received help in previous years and who will not be helped under this scheme. I do not need to remind the House that we are in a period of very considerable stringency on public spending. We found ourselves with public spending programmes that predicated a rate of economic growth that simply is not there, and have had to cut our coat according to our cloth. The fact that we are making available roughly £17 million to help the families who are in the greatest need is a measure of the Government's concern for the poor.
Order. I had intended to call those hon. Members who have risen. I will adhere to that and call them. Mr. Emery.
Will the Secretary of State make quite clear that the scheme that he is now introducing is automatic and that the help will go automatically to all the people in the categories that he has announced? Will it not be the case that the supplementary benefit officers will still be able, in the categories between the ages of 65 and 75—or in the case of anybody else who would qualify for supplementary benefit—to ensure that people are able to draw the full allowance of 95p a week if there is need for it? Will he agree, there-fore, that the concept that we are being hard-hearted or casting people out is absolutely incorrect?
I am extremely grateful to my hon. Friend. He is absolutely right. As I said in my statement, many pensioners are already getting the heating allowance. From next month the rates will be 95p at the lowest level, £1 ·90 at the medium level, and £2 ·85 at the top level. Those are substantial helps for those who need them, whether they are living in houses that are abnormally difficult to heat or for any other reason.
Will the Secretary of State recognise that the major difference between his proposals and those of the Labour Government is in the sphere of the lump-sum payment? Many poor families find it very difficult to meet the electricity bill when it arrives. It is very difficult for them to put money aside out of weekly income. In my constituency and in other areas of inner London, over 25 per cent, of people were receiving help in the form of lump-sum payments. Given that many families on supplementary benefit are left out, as well as many pensioners on supplementary benefit, will the Minister acknowledge that, whatever sort of winter we have, many poor families will either have to do without electricity—and we know, from what is to happen later in the week, that they will no longer be able to afford paraffin—or to face having their electricity cut off at a time when they are in most desperate need of warmth, and fuel for cooking?
The Government recognise that big winter fuel bills can cause problems for the poorer families. The hon. Gentleman will know that the gas and electricity industries operate a wide range of schemes to help people to spread their bills over the year. We are certainly concerned to see that these schemes are made as widely available as possible. My right hon. Friend the Secretary of State for Energy is encouraging the industries to consider extending the schemes and making new schemes available, because the concentration of bills in the winter quarter can cause considerable difficulties. The hon. Gentleman has made a perfectly clear point, but it is for the fuel industries to help the majority of people to overcome this difficulty.
Is not the Minister aware that an increasing number of families—especially those living in council houses with electrical heating—simply cannot afford to use the heating and that, especially with old people, there is a real risk of hypothermia? Will the Minister therefore reconsider his callous decision to scrap the previous Labour Government's generous fuel discount scheme, or is he trying to surpass his 1974 effor by telling people to brush their teeth in the cold as well as in the dark?
I do not know whether the hon. Gentleman has recognised that the average payment overall under the last Government's scheme—spread, as it was, across a range of people, some of whom could by no stretch of the imagination be said to be in need of it—was about £7·50. The average payment to be made to the groups that we have selected for help under the scheme will be about £50. Surely it is better to give really worthwhile help to the people who stand in the greatest need than try to spread the butter too thinly across a much larger number.
Is the Minister aware that the biggest single problem that elderly people face is in meeting heating costs? This evening there will be utter disbelief throughout the country when elderly people understand what the Minister has told the House. He seems to be in some confusion. The electricity discount scheme and the heating allowances were totally separate schemes, and there was no restriction on them. Now there is a restriction to the age of 75. Will the Minister spell out to the House and to pensioners what kind of provision there will be for pensioners well below the age of 75 who will most certainly have very great difficulty in paying their electricity and other heating bills this coming winter?
The hon. Gentleman does not seem to have borne in mind that next month there will be an increase in the pension and in other long-term benefits of about 19½ per cent., which includes an amount to make up for the shortfall in the increase last year given by the previous Government. For the period over which the forecast had to be made, the level of fuel prices has risen less than that. I made this point in my statement. It is not correct to say that pensioners will face even tougher fuel bills this winter. As for the future, I have given an undertaking that we shall keep our policies under review, but concerning the past year the hon. Member's general point is not correct.
What kind of Tory justice is it that can give so much to the rich in the Budget and take away the electricity discount scheme, which has provided assistance for so many in the community? How many will be sent to hospital? How many elderly, aged and poor people will die this winter because of the right hon. Gentleman's statement?
The hon. Gentleman will no doubt enjoy his exaggerations. However, they bear no relation to reality, and he knows it.
Is the right hon Gentleman aware that his decision will lead people in my constituency to choose between paying the electricity bill and being warm and paying the rent? If they do not pay the rent, they will be turned out and be homeless; if they do not pay the electricity bill, they will be in danger of suffering from hypothermia. My constituents will be not disappointed; they will be disgusted and dismayed that yet again the Government have chosen to take from the poor to give to the rich.
There is nothing in my statement about giving anything to the rich. Is the hon. Gentleman seriously telling the House that in a year when incomes from employment have gone up and when incomes from benefits will have gone up by at least 17½ per cent., or 19½ per cent, in the case of long-term benefits, an annual payment of about £7·50 will make the difference between starving or paying the rent? The hon. Gentleman should get a little sense of proportion into the matter.
Is the Secretary of State aware that the special scheme that he has just announced will help less than 2 per cent, of all retired people? What does he suppose the other 98 per cent, will do?
We aim to concentrate the help on the very old, where it is widely recognised that the problems of cold are more seriously felt.
Order. I do not think that the hon. Member for Birkenhead (Mr. Field) was standing when I said that I would call those hon. Members who had been rising. It would be unfair to the House if I extended the list, unless, as it is the first day back, the House were generous.
Does the Minister agree that the poor are again on the receiving end of his cruel logic, which is that under the guise of concentrating help on those in greatest need, those who receive help, whose numbers are fewer than under the previous schemes, will receive less help individually both in real and in money terms?
No doubt we shall have an opportunity later in the Session to explore these matters. The fact is that under my right hon. and learned Friend's Budget last June, with the tax changes that were made and the benefits increases that were announced, the great majority of people will actually be a little better off.