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Commons Chamber

Volume 4: debated on Wednesday 6 May 1981

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House Of Commons

Wednesday 6 May 1981

The House met at half-past Two o'clock


[MR. SPEAKER in the Chair]

Private Business

British Railways (Pension Schemes) Bill

Considered; to be read the Third time.

Western Isles Islands Council (Berneray Ferry) Order Confirmation Bill

Considered; to be read the Third time tomorrow.

Oral Answers To Questions


Water And Sewerage Charges


asked the Secretary of State for the Environment what progress he has made in considering alternative methods of charging for water and sewerage.


asked the Secretary of State for the Environment whether, in view of the special burden of the large increase in water rates on low-income families, he will now consider alternative methods of charging for water.


asked the Secretary of State for the Environment what representations he has received for the inclusion of water rates in the rebate scheme.

With permission, I will answer this - question and questions 8 and 10 together.

The National Water Council has concluded that the best way to alleviate the present sense of unfairness about the charging system is to extend optional metering to domestic households. Where this option does not exist at present the council recommends that water authorities should draw up a timetable for its introduction in the next few years.

The council also concluded that, despite the representation which both it and the Government had received, the present legislation does not allow means-related rebates for water services and it reaffirms its belief that assistance to consumers should remain with the social security system.

Many people will look upon that answer as disappointing, because it costs £60 to instal a meter and a large amount of money to service it. Does my hon. Friend agree that water rates are the unfairest burden of an unfair rating system, that the water authorities are not sufficiently accountable democratically and that the Government are committed to doing away with the present abhorrent rating system? Will he, as a start, consider the possibility of transferring the water rates to general taxation where the cost will amount to less than 1 per cent. of VAT? That would prove far more reflective of people's use of water, because those who bought most would use most. At the same time the water authorities would be put under a better system of democratic control.

Order. Question Time must not be used to argue a case. It is unfair to other hon. Members.

The Government share my hon. Friend's concern to see water rates reduced. As a result of our action in the spring, water charges estimated for the following year were reduced by £87 million in consumer terms. We are also seeking to implement a fairer system of charging based on voluntary metering. A transfer to general taxation would be inconsistent with the Government's policy of seeking to make regional water authorities more accountable. It would indicate less efficiency, and there would be a significant increase in value added tax.

Order. I propose to call first those hon. Members who have tabled questions 8 and 10.

I thought that it was customary to notify hon. Members if their questions were being linked with others.

As the increased water rate imposes a heavy burden on widows, pensioners and those on low incomes just above the supplementary benefit level, will the Minister reconsider his decision and include water rates within the rate rebate scheme, which would at least help poorer people?

It has been the Government's policy to see that water, like other energies, is charged for according to consumption. The difficulties of those who are unable to meet the charges should be alleviated through the supplementary benefit scheme. I fully understand the hon. Gentleman's anxiety.

I apologise for failing to notify the hon. Gentleman of the bracketing of the questions.

As many people, rightly or wrongly, believe that a metering system would be fairer than the present system, does my hon. Friend agree that the real cost is not that of the water itself, but that of getting the water from its source to the home? It therefore matters little, if charges are levied through a metering system, whether a household uses 10 gallons or 1,000 gallons of water a day.

My hon. Friend is right. That is why we favour optional metering, which provides a choice. In many cases that might not be a desirable solution. My hon. Friend is also right in saying that the cost of what comes out of the tap is less than the cost of the capital works involved.

Although metering might be the long-term answer, surely the Government can do something about people who, like myself, have to pay a water rate for a building that has no water or sewerage system, but only water coming off the roof into the drains. It is nonsense that one has to pay the full rate for that service. Cannot some legislation be arranged to prevent that?

I accept that the hon. Gentleman has a point about the disposal of surface water only, but he will appreciate that the water authority that operates in his area, as in others, has to pay for the disposal of foul water, from whatever source.

Does my hon. Friend accept the argument of the hon. Member for Southampton, Itchen (Mr. Mitchell) that elderly people, particularly those living on their own, find the present method of charging for water grossly unfair? Since the best that my hon. Friend seems able to do is to offer voluntary metering, will he consider making a grant to elderly people who wish to install meters?

The best and fairest solution seems to be to change from the basic rateable value system to payment by other means. Gas, electricity and water should be paid for on the basis of consumption, and the benefits available under the social security system should be used for redress.

As there is a combined charge for water and the disposal of sewage, does the Minister suggest that sewage disposal should be metered? Is it not crazy that many of my constituents pay twice as much for their water and sewage disposal as for their general rate because the rebate applies to one and not the other?

The hon. Gentleman will be interested to know that some water authorities propose, by some means, to measure sewage and effluent discharges from houses. There are ways in which that can be done, although not in the way that the hon. Gentleman suggests. We must ensure that the consumption of water and the disposal of foul water is charged for realistically, but I appreciate the difficulty.

Will my hon. Friend consider using new technology for metering? Is he aware of new systems that would make metering much cheaper? Will he also consider establishing a water consumers' council? If we are to be chained to the present system, should not the consumer have a voice in what happens?

My hon. Friend will recall that the majority of the members of water authorities are from elected bodies. The Government believe that the needs of the consumer are met in that way. However, I note my hon. Friend's suggestion. I accept that there are many aspects of the problem. The Water Research Centre is examining the new technoloy.

When the Minister considers how water authorities should bill consumers, will he reflect on the outcome of the recent diktat by the Secretary of State? Will he also reflect on the words of the chairman of the Thames water authority when he complained that the Secretary of State had insisted that more risks should be taken and that standards of service were no longer sacrosanct? Will he condemn the policy that forces authorities to jeopardise the health of consumers as the price for fiddling the books?

I repudiate the suggestion that to reduce consumer charges from a 19 per cent. increase to a 13 per cent. increase is fiddling the books. It is a genuine attempt by the Government to ensure that consumers get a fair deal and value for money. We shall continue to pursue that policy.

Council House Sales


asked the Secretary of State for the Environment how many council houses have been sold since the passing of the Housing Act 1980; what is the average discount given to those who have purchased them; and what percentage of the total are flats.

Figures are collected quarterly. In the second half of 1980, 34,100 local authority dwellings in England were sold at an average discount of 40 per cent. It is estimated that nearly 2½ per cent. of the dwellings sold were flats. Figures for the first quarter of 1981 are not yet available.

Do not the figures reveal that few flats are being sold? Does the Secretary of State accept that only the best council houses are being sold at give-away discounts? Is he aware that that is creating ghetto housing, since the worst houses are being left in the public sector?

The figures show nothing of the sort. They show that up to now completions for the sale of flats under the right-to-buy policy have not taken place. Under the earlier enactment of that policy few councils sold flats. I understand that many right-to-buy applications are for flats. If the hon. Gentleman is so concerned about our policy of selling council houses, he should accept that it is a popular policy with people who want to buy their homes. The real criticism should be made of Labour-controlled authorities which are trying to frustrate the Government's mandate.

Does my right hon. Friend agree that Parliament has given tenants the right to buy and that it is intolerable and undemocratic for local authorities to seek to frustrate that right? Will my right hon. Friend confirm that any local authority tenant has the right to apply to buy his council home? Will he ensure that tenants' rights within the law are upheld?

Tenants' rights within the law will certainly be upheld. Any council tenant can apply, and a large proportion of them have the right to buy. That right to buy was enshrined in the mandate under which the Government came to power.

Is not the Secretary of State forcing tenants to buy by raising rents? Secondly—and I ask the Minister to answer—does he intend to impose an additional rent increase beyond the current £3·25 by a further removal of subsidy?

The hon. Gentleman is aware that each year the Government reach conclusions about the public expenditure balance. The Government will continue to do that, just as the previous Government did. Today is not the right time to discuss the relative balance between one factor and another. The hon. Gentleman is aware that the policy of selling council houses has nothing to do with future levels of rent increases. The Labour Party is always calling for improved standards of maintenance for council houses, without realising that rent payments have to be made to cover the costs.

In support of my right hon. Friend's earlier statement, may I ask whether he is aware that in the London borough of Havering the majority of tenants applying for purchase live in flats? Does he agree that that is evidence that the premise behind the original question is false?

I agree. The first indications are that there has been a significant increase in the number of applications to buy flats, which were not previously available for sale.

Council House Rents


asked the Secretary of State for the Environment what representations he has received on the Government's statement on council rents increases for 1981–82.

Some 570 letters on the subject of council house rent increases have been received since my right hon. Friend made his housing statement on 15 December.

Why has the Secretary of State been so strangely and untypically quiet recently, particularly about rent increases? Could it be that, although county councils have no direct responsibility for rents, he believes that what is said on the subject might rub off and have an effect on the county council elections tomorrow? Will the Minister come clean and be honest and admit that the vast increases in rents, which many people in the Northern region will find difficult to meet, are due entirely to Government policy?

The hon. Gentleman must realise that the previous Government's policy was to increase rents in line with earnings and that they failed to discharge that policy. In four out of their five years the increase in rents was below the increase in earnings. As a result, the relationship between earnings and rents is now one of the lowest on record. In 1980–81 rents were 6·5 per cent. of earnings. If the hon. Gentleman is exercised by the number of letters that we have received—about 570—he should know that we have received nearly 10 times that number from council tenants wishing to buy their council homes. That suggests that council tenants are less concerned about the level of rents than about being frustrated by Labour councils in their right to buy.

Will my hon. Friend confirm that at least 45 per cent. of council tenants do not have to meet any rent increases in full, and that 25 per cent. do not have to meet any increase at all?

My hon. Friend is correct. About 46 per cent. of local authority tenants receive help with their rents. Of those, more than 1¼ million will have to pay no increase in rent because they receive supplementary benefit. More than 1 million tenants will have about 60 per cent. of any increase met because they receive rent rebates. The Government extended the rent rebate system in the Housing Act 1980. More recently, we increased the maximum ceiling for rent rebates in London to £35 a week and to £30 a week outside London. That provides real protection for people on low incomes.

On the subject of council house rents, will the Minister reflect on an answer that he gave during the previous Environment Question Time, on 1 April, when he said that last year Manchester provided £37 million for its housing revenue account from the rates? As a Manchester ratepayer, I know that that figure is wrong by £10 million. The figure is £27 million. Will the Minister take this opportunity to correct that error?

I assure the hon. Gentleman that I shall look into the matter, but the figures that I gave were closely checked by my Department. I assure the hon. Gentleman that the burden of rates in Manchester over many years has had a serious effect on small and medium-sized businesses in that city.

Local Authorities (Planning Departments)


asked the Secretary of State for the Environment if he will advise local authorities to review their staffing establishment in their planning departments.

I am constantly reminding local authorities of the need to review their staffing levels and make reductions in all departments, including planning, if the Government's expenditure targets are to be met. The net effect of the changes that we have introduced to make the planning system more efficient should be a reduction in the overall numbers of staff required.

Does my right hon. Friend recognise that ratepayers, particularly in large cities, will welcome any reduction in the extent and scope of planning procedures? Is my right hon. Friend satisfied that private firms are being used sufficiently by local authorities in their planning procedures?

I am grateful to my hon. Friend. There are many opportunities in the public sector, including local government, to use the private sector on a larger scale. I agree that the extent to which local government keeps down rates will have a direct beneficial effect on investment and job creation. One cannot help noticing that Labour authorities are largely bent on increasing rate levels to unjustifiable levels.

Is my right hon. Friend aware that East year about 8,000 houses in the principal towns and cities were demolished because of planning approval, and that at the same time, according to the second land utilisation study, about 60,000 acres of good agricultural lard were destroyed because of urban sprawl resulting from planning decisions? Is my right hon. Friend happy about that arrangement?

My hon. Friend raises two important issues. There is, unavoidably, a certain amount of demolition of old and inadequate housing, particularly in urban areas. There is no way to escape the irreducible minimal destruction that takes place. Wherever possible, we want property to be restored. That is happening with the new freedom that local government has to apportion its housing allocations more to renovation and improvement than to the new build that characterised earlier programmes.

On the second question, I am aware of my hon. Friend's concern about land in the countryside that could be protected if better use were made of urban land. He is aware of the initiatives that have been taken by the Government to put mechanics on the statute book, for the first time, to enable much publicly owned land to be driven into the market place, where more profitable use can be made of it.

Is the Secretary of State aware that, although some of us share his apprehension about what has happened, we hold his Department partly responsible because when a clearance order for demolition is submitted it must always have his Department's permission? Can the Secretary of State assure the House that when planning matters are being considered every effort will be made to ensure the complete impartiality of those who are employed as servants and agents of councils?

I have no doubt that this country enjoys as impartial a Civil Service and local government service as it is possible to find anywhere in the world. I would defend that statement against all arguments. However, we all realise that the demolition of large parts of our inner cities went too far. With hindsight, we should probably have pursued other policies. I believe that we are right to have moved the emphasis away from demolition to rehabilitation.

Is my right hon. Friend aware of the number of planning staff that are required to monitor our elaborate building regulations? Can he say what measures are being considered by his Department to simplify the regulations?

My hon. Friend will be aware of the announcements that we made about the simplification of the planning system and the new regime that we propose to introduce for building regulation procedures. I have not sought to give specific directions to local government about the ways in which it should seek to economise on staff. I have given general directions. I think that it is right for individual authorities to pursue their own staff economies as their local priorities demand. I have no doubt that there is still room for considerable economies.

Will the Secretary of State advise his hon. Friend that good agricultural land is consumed and developed, not because of the existence of hundreds or thousands of planners, but because of the demand that exists because agricultural land may be cheaper than inner urban land? The planning legislation is grossly inadequate to afford proper protection for good quality land in many areas.

I do not agree that planning procedures are inadequate to protect land. A rigid system of planning constraint exists, particularly for green belt land—and rightly so—and it is administered by my Department. However, another phenomenon causes even greater concern, namely, that it is easier to use agricultural land because it has few constraints or past dereliction associated with it. Too often we have gone for the easy option of agricultural despoliation, as opposed to reclamation in inner cities, where large acreages of publicly owned land have not been used because of the apparent difficulties of using it. I want to reverse that policy.

Allerdale District Council


asked the Secretary of State for the Environment if he will undertake a review of the housing investment programme allocations for Allerdale district council.

No, Sir. Allerdale district council was given a fair share of the housing resources available for 1981–82.

Is the Minister aware that the HIP allocations to Allerdale have been cut since 1979, when they were £5·6 million, to just over £3 million this year? Is he further aware that that has destroyed the new start of the Allerdale district council's construction programme, cut to shreds its improvement programme and greatly damaged the possibility of Allerdale being able to provide for the 2,170 people who desperately need accommodation?

We understand what the hon. Gentleman is saying. Allerdale's allocation for 1981–82 is generous in the difficult circumstances of the year. Its percentage share of the regional total has increased significantly, and it could be topped up with right-to-buy receipts.

New Towns (Defective Houses)


asked the Secretary of State for the Environment when he expects to receive a report from the National Building Agency on claims made by new town authorities under section 10 of the New Towns (Amendment) Act 1976, in respect of design defects in houses transferred to them; and when he anticipates he will be in a position to come to a settlement on this issue.

I refer the hon. Member to the reply that I gave to my hon. Friend the Member for Welwyn and Hatfield (Mr. Murphy) on 27 April.

Does the Minister recognise that as councils cannot remedy all the defects in new town houses, which are causing great inconvenience and hardship to many residents, his reference of the matter to the National Building Agency means that those defects will have to go unremedied for several years? Does he accept responsibility for that? As he is so anxious to save public money, will he say how much this study, which is merely a delaying action, will cost?

I have told the hon. Gentleman ad nauseam that we are discussing this matter with the Association of District Councils. I have said over and again in the House that we have made it clear that if authorities proceed with urgent repair work it will not prejudice their claims for assistance.

Is the Minister aware that it is costing Sedgefield district council about £15 million to do all these repairs, and that such money is not available to a district council? Is he further aware that there is a widespread belief in all the district councils concerned that he is dragging his feet? When will he draw these negotiations to a close?

The hon. Member doubtless chooses to forget that these defects did not occur during the past two years. He also chooses to forget that my Labour predecessor delayed making a decision because no Government could accept at face value all the claims without an investigation of the public interest.

Is my hon. Friend aware that the reference to the National Building Agency is welcomed by the majority of Members who represent new towns? Does he realise that, at the end of the day, when the transfer takes place, there may be some unforeseen defects in the properties—for example, the problems with cladding that have occurred after 10 years with the tower blocks? Will there be some safeguards to deal with any unexpected defects?

We shall consider my hon. Friend's point. However, it is right to say that the houses were handed over by the Government to local authorities at an advantageous price.

Is not the saga of the frustrated section 10 claims a disgrace and a scandal? Should not the Minister shoulder a major share of the blame for the delays caused by his continual attempts to restrict the criteria for claims? How does he expect new town councils to deal fairly with inherited problems when they have been dealt with so unfairly in the HIP and rate support allocations?

With limited exceptions, the criteria for judging claims were those laid down by the hon. Member for Greenwich (Mr. Barnett).

Does the Minister realise that it is almost two years since he and I discussed this matter in an Adjournment debate? Does he recall that during that debate he conceded that Peterlee new town in my constituency was the worst affected new town in Britain? Is that not evidence of a scandalous dragging of feet? Does he also recall telling the Easington district council that it would be reimbursed and could get on with its work? Is it not true that it has not yet received a penny? Is not the answer to set a target date for the report, so that some resources can be made available to the new towns?

The hon. Gentleman is aware that I have already said that the National Building Agency report will be available next May. We shall take a decision as soon as possible thereafter.

Council House Sales (Sheffield)


asked the Secretary of State for the Environment if he will take steps to ensure that the Sheffield metropolitan district council no longer obstructs and threatens council house tenants who wish to purchase their homes and carries out the steps and requirements of recent legislation designed to promote the sale of council houses.

I refer my hon. Friend to the statement I made in the House on 15 April. The Department wrote to Sheffield on the same day to give formal warning that my right hon. Friend is contemplating using his powers of intervention and seeking by 13 May the latest information on progress by the authority. If it then appears to my right hon. Friend that Sheffield's tenants have, or may have, difficulty in exercising the right to buy effectively and expeditiously, a notice of intervention will be served on the council.

I welcome the statement made on 15 April. Has my hon. Friend had time to study the dossier given to him by Conservative councillors outlining the appointment of people to dissuade tenants from buying their houses and also dealing with the difficult issue of the intimidation of those who want to buy their council homes? What reaction has he received from Sheffield?

My right hon. Friend the Secretary of State has not yet received a definitive reply from the city of Sheffield. We have been assured that it will be sent to us by the due date. The papers referred to by my hon. Friend have been studied. As I have said, if a local authority can recruit staff to dissuade people from exercising their right to buy, it must have sufficient staff to help people obtain their legal rights.

Does the Minister remember that I recently sent him a petition with 20,000 signatures about council house rents? Does he remember saying that he had nothing to do with the matter and that local councillors raised rents? Did he think that we would accept that? Does he recall that the council has repeatedly pointed out to him that it has 27,000 people on the housing list, that the list is developing, and that he has cut down its staff while expecting it to have sufficient staff to sell council houses? Cannot the council legitimately complain that it costs money to obtain staff? Does he accept that the hon. Member for Sheffield, Hallam (Mr. Osborn) has no contact whatsoever with council house tenants and just does not understand the issue?

My hon. Friend the Member for Sheffield, Hallam (Mr. Osborn) is as closely associated with his electorate as the hon. Gentleman is with his. Because of my hon. Friend's representations, we are aware that almost 4,000 tenants in Sheffield have applied to buy their homes. The latest figures available from the local authority show that at the beginning of April precisely five houses had been referred for valuation, no offer notices had been served and no completions had taken place. That is why a letter has been sent to the Sheffield city council saying that the Sectretary of State will intervene if satisfactory replies are not received by 13 May.

Council House Sales


asked the Secretary of State for the Environment what is his estimate of the total income from council house sales in 1980–81 that councils will be able to devote to new house building.

It is for individual local authorities to decide what proportion of their accumulated unspent housing and non-housing capital receipts at 1 April 1981 they devote to new house building in 1981–82.

Does the Minister realise that his response is misleading? Is he aware that if we allow for a 40 per cent. average discount—as the Secretary of State mentioned earlier—for the 50 per cent. of the takings which are trousered by the Government, and take into account that 60 per cent. of council tenants seek a council mortgage to buy their properties, that means that less than 10 per cent. of the total proper valuation of the houses sold is available to councils to spend on new house building and rehabilitation?

That does not match up with my figures for receipts of certain local authorities from the sales of council dwellings last year. Six authorities had more than £2 million each from the sale of council dwellings during the first nine months of last year. They are all Conservative authorities. That shows vividly that the Labour authorities which failed to sell during the last financial year have suffered a self-imposed cut in their housing programmes.

Does my hon. Friend agree that if the colleagues of the hon. Member for Holborn and St. Pancras, South (Mr. Dobson) were to encourage their tenants to buy council houses, rather than try to obstruct them in doing so, they would have more money available for new house building?

My hon. Friend is right. It is not only the question of the sale of houses to sitting tenants, but the possibility of selling land which scores 100 per cent. if a local authority wishes to increase its capital receipts. There are considerable examples of large areas of valuable land throughout Britain in local authority ownership which could be sold. That fact has been exposed by the land register that my right hon. Friend the Secretary of State is compiling.

Does the Minister seriously believe that sufficient funds are coming in from the sale of council houses to compensate for the loss of homes caused by public expenditure cuts? Has he had time today to read the report of the Catholic Housing Aid Society about the state of Liverpool's housing stock? Does he believe that the money collected in receipts in Liverpool alone will be sufficient to compensate for the loss of money available to local authorities?

I hope that the hon. Member for Liverpool, Edge Hill (Mr. Alton) will make every effort to ensure that in Liverpool and elsewhere the sale of council houses progresses as rapidly—[Interruption.]—as possible.

The hon. Member for Bolsover (Mr. Skinner) really must try to restrain himself. It is discourteous and unfair to other hon. Members if he continues to talk as I heard him talk.

On a point of order, Mr. Speaker. My hon. Friend the Member for Bolsover (Mr. Skinner) merely said to the hon. Member for Liverpool, Edge Hill (Mr. Alton)—

When an hon. Member has been called, any sedentary interruptions are out of order. We have allowed a great many to pass, but it is unfair when they are constant.

Will the Minister come clean and tell the House to what extent he challenges the assumptions made by my hon. Friend the Member for Holborn and St. Pancras, South (Mr. Dobson)? Does he disagree that only one-third of council house sales will be funded by other than local authority mortgages? Does he disagree that the average discount will be 40 per cent.? If he does not disagree with those assumptions, how can he dispute the figure put forward by my hon. Friend that only 10 per cent. of the proceeds of council house sales will be available for investment?

If the hon. Gentleman reads the written answer that I gave to the hon. Member for Holborn and St. Pancras, South (Mr. Dobson), he will note that there is a detailed breakdown of the assumption for housing capital receipts for the financial year 1981–82. It is a breakdown of £413 million. That was based on the assumption that about 120,000 sales would be completed in that financial year. By 31 December 1980 120,000 right-to-buy applications had been received. If local authorities do not complete those sales, the responsibility will be that of the authorities.

On a point of order, Mr. Speaker. I have been in the House since 9 o'clock this morning, but it was not until 10 minutes to 3 o'clock, when I arrived in the Chamber, that I was notified that my question, No. 10, would be coupled with No. 1. I have not had the opportunity of speaking to question No. 10.

If the Department of the Environment did not notify the hon. Gentleman in time, I shall allow his question to be called at the end of Question Time.

Planning Applications


asked the Secretary of State for the Environment if he is satisfied that local planning authorities generally are adopting positive attitudes in determining planning applications, with particular reference to the location of new housing sites.

I am satisfied that many authorities are adopting a positive approach but there is still much scope for improvement.

Does my right hon. Friend agree that there is strong evidence that certain local planning authorities have been far too negative in exercising development control procedures? Does he agree that, once it is accepted that a particular development should be on a particular site, planners could be much more positive in meeting applicants and making decisions on vehicle access points or the width of pavements? This assumes even greater importance when the planning applications relate to houses or housing estates.

My hon. Friend has great knowledge of the working practices of individual authorities when dealing with these issues. It is impossible to give a general answer to his question because working practices are so different. However, I am concerned about the general issues that he has raised with me. I hope that he will accept my assurance that I shall consider what he has had to say sympathetically.

Is my right hon. Friend aware that one of the least positive attitudes in planning concerns the change of use for buildings for industrial purposes? Does he recall that this was the subject of circular 22/80 from his Department? What is really infuriating is that this negative attitude appears to be taken by the inspectors appointed by my right hon. Friend's Department. Will he bring to their attention the need, at a time of high unemployment, to give the maximum assistance to change of use for industrial and commercial premises?

I hope that my hon. Friend will be kind enough to let me have any examples where he feels that the inspectorate is not complying with the circular that I issued. It is my intention that my inspectors should uphold the policies set out in the circular.

New Towns (Housing Assets)


asked the Secretary of State for the Environment whether he has yet determined the financial terms for the transfer of housing assets in second generation new towns; and if he will make a statement on the issues so far unresolved.

My right hon. Friend is considering the position in the light of the Association of District Council's reaction to the proposals we put forward. Our intention is that transfer should not place a major burden on the receiving authority and it is largely a question of deciding how this should be done in the light of the new housing subsidy system.

I thank my hon. Friend for the constructive remarks and positive attitude that he displayed this morning on repairs and staff. Does he accept that news of his proposals has not, for instance, reached the Redditch district council? There is great concern about the terms and time of transfer. Will he take this opportunity of confirming that he would approve of an agency agreement in the absence of any agreement on terms of transfer being reached in the near future?

Negotiations take place between the Government and the Association of District Councils. I cannot say what communications the association has had with individuals, although one member of Redditch council is a member of the committee that negotiated with me. I can only assume that the association has not yet put a view to individual authorities. I have already said to my hon. Friend that we would not oppose agency agreements as a transitional stage.

What guarantee can the Minister give that the same disgraceful delay will not take place over the settlement of the financial arrangements for second generation new towns as has taken place over the settlement for the transfer of houses in first generation new towns, to which we have already referred during Question Time in respect of section 10 grants?

There are two reasons why this will not happen. First, we anticipate that the overwhelming bulk of the stock will be in good condition when it is transferred. Secondly, we firmly believe that if the association had accepted the offer that I made to it several months ago the issue could well have been settled.

Empty Domestic Properties (Inner London)


asked the Secretary of State for the Environment what is the latest estimate of the number of empty domestic properties owned by local authorities in inner London.

The latest estimates of the number of empty council dwellings owned by local authorities in inner London are contained in the authorities' HIP returns for 1981–82 and they show the position as at 1 April 1980. A copy of each authority's HIP return is in the Library.

Is my hon. Friend aware that I have not had the chance to go to the Library to look up the figures? However, I am aware that they run to several thousands. Is he aware that the Labour Party's GLC manifesto calls for a massive programme of new building? Is not that a hollow policy when there are thousands of empty properties controlled by Labour councils in inner London?

I am sure that my hon. Friend will, wish to spend the early hours of the morning reading the HIP returns. It might help him if I remind him that Lambeth had 3,100 empty properties, that Islington had 2,800, that Southwark had 2,700 and that Hackney had 2,300.

Has the Minister any powers under existing legislation to compel the Wandsworth borough council to rent the many council homes that it has been holding empty for many months in a futile attempt to sell them?

Wandsworth has had a remarkably good housing record and I see no reason to join in criticism of it.

Does my hon. Friend agree that, in the unfortunate event of a change of control of the GLC in the near future, one possible slight benefit might be that the leader of Lambeth council, who has such a great knowledge of managing empty properties, will be in an excellent position to do something similar within the GLC because of his party's rates policy, which will lead only to more empty properties in London?

If the leader of Lambeth council does to the GLC what he has done in Lambeth, Heaven help the ratepayers of London.

Will the Minister accept that many of the vacancies result from the lengthy delays on the part of many local authorities of all political persuasions in reletting empty properties? Will he acknowledge that this causes great resentment among those on waiting lists? Will he take steps to try to encourage local authorities to cut through their bureaucratic processes? Finally, will he accept that we might get a better use of the existing housing stock if tenants are given a greater element of choice so that they are able to live in properties in which they wish to reside rather than have local government officers telling them what they should have?

I remind the hon. Gentleman that quite recently the housing services advisory unit produced a report called "Reducing the Number of Empty Dwellings''. It is a constructive document dealing with how the number of vacant properties could be reduced. Of course, local authorities could follow the excellent homesteading scheme that was introduced by the GLC.

The Minister has given us the figures of empty domestic proerties in Labour-controlled Lambeth and Islington. What is the number of such properties that are owned by the Tory GLC?

On a point of order, Mr. Speaker. May I advert to the answer to question 16?.

Order. I hope that the hon. Member has a point of order that I can rule on.

I hope so, but it remains to be seen. How can the House be protected from deceptive answers? The Under-Secretary of State must have known that 6,000 houses were empty.

Rate Support Grant


asked the Secretary of State for the Environment by what percentage he estimates that the shift of rate support grant from district to county councils will increase the total grant paid to county councils in England in 1981–82 compared with 1980–81.

Block grant is paid to each authority individually. In 1980–81 most of the previous grant nominally paid to districts was passed on to counties through the precept. When this is taken into account, there has been a shift of an estimated 0·47 percentage points from districts to counties in shire areas and 1·08 percentage points in metropolitan areas.

Is not the shift in Government grant in favour of the county councils, which is equivalent to county rates of as much as 78p in the pound in Lancashire and Northumberland and 80p in the pound in Cumbria, deliberately designed to coincide with the county council elections and to disguise bad financial management by outgoing Tory county councils?

The hon. Member will be aware that the Labour Government took £350 million from the provinces to concentrate it in London. I have readjusted that balance this year, as I believe it to be fair in the light of the new measured needs of individual authorities. The hon. Member will be interested to learn that Humberside was a grant loser and has still managed to reduce its rate levels in a way that Conservative authorities have proved is possible.

Has my right hon. Friend's attention been called to the decision by the valuation court in the matter between Westminster council and Imperial College, London, whereby the rateable value of Imperial College has been substantially increased? Has he realised the serious implications of that for all universities and colleges of higher education?

That is a most important matter. I shall take an early opportunity to consider those implications with my other colleagues, who will be as interested as I in the outcome.

Why is the right hon. Gentleman deliberately concealing the information which he has locked away in his Department about the number of Conservative-controlled county councils which have budgeted to overspend on his spending targets and which could be liable to his penalties? Is not he conducting that discreditable cover-up to prevent the voters in the county elections learning that, because of those prospective penalties, a vote for the Conservatives tomorrow means higher rates, because there will be a claw-back through those penalties, worse services and more redundancies than have so far been brought about by all the Tory councils?

Obviously the right hon. Gentleman has woken up to the fact that there are some elections tomorrow. He must be aware that Labour parties that are trying to take over the control of councils are already planning supplementary rates to finance inflationary policies which have done so much damage to the areas already controlled by the Labour Party. He must already be aware that I have not sought to conceal figures. The right hon. Member for Manchester, Ardwick (Mr. Kaufman) must be aware that I would have been able to provide more information about the level of expenditure in local government in the present budgeted year but for the fact that when I examined the detailed figures in the last few days I found that some authorities had still not sent in their returns. I discovered which authorities were involved. The principal authorities were Labour-controlled Leeds and Hackney. I asked whether the returns of those authorities had come in and discovered that they had come in that day. The outstanding authority that came to my mind at that time was Bolsover.

As the right hon. Gentleman now admits that he has the returns from every Conservative-controlled county council, will he tell us about the budgets of those councils? How many have overspent his 5·6 per cent. target, and how many will be subject to his penalties? Do not voters tomorrow have the right to the information which he is suppressing?

The voters tomorrow will know all too well that the increases in rates this year in Labour authorities have been at twice the rate of those in Conservative authorities. The one thing about which voters tomorrow can be sure is that if they want their rates to increase they should vote Labour.

My hon. Friend is absolutely right. There is no faster way to ensure the destruction of the industrial economy than to put up the rate burden to a degree which industry cannot afford.

On a point of order, Mr. Speaker. In view of the 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.

Sporting Activities (Gleneagles Agreement)


asked the Secretary of State for the Environment what arrangements are made for consultation between Her Majesty's Government, the Sports Council, the Central Council for Physical Recreation and the governing bodies of various sports when sporting events are planned that might contravene the Gleneagles agreement.

Responsibility for arranging sporting events lies with the independent governing bodies and/or their member clubs. All are familiar with the terms of the 1977 Commonwealth statement and know that the Government will always offer advice on its relevance in particular circumstances. There is no formal consultative machinery.

Is it not time that the Minister realised that merely going through the motions of quoting the Gleneagles agreement is beginning to be regarded as a wink and a nod to go ahead? Is it not time for more attention to be paid to the political and economic ill effects upon this country of those sporting links, let alone the possible loss of the Commonwealth Games—or are free Christmas holidays in sunny South Africa now regarded as being more important?

I do not know what was the point of the hon. Gentleman's final remark. The governing bodies and the clubs know the position relative to our duty under the Commonwealth statement. Since the Government came to power we have reaffirmed the position and made it clear where we stand. There is nothing more to be done except for the governing bodies to take advice.

Does not my hon. Friend agree that it might be better for everyone concerned and that it might also save the taxpayer money if those bodies were closed down altogether?

My hon. Friend has misunderstood. One cannot close down the Football Association and the Rugby Union. That is not the way sport works in this country.

I appreciate that the Minister has written to the Welsh Rugby Union criticising the possibility of the Welsh Academicals going to South Africa. Will he contact the Ministers in the Welsh Office, who do not appear to have been informed of this, as they have allowed representatives of the South African rugby organisation to meet in the Welsh Office?

The hon. Gentleman is misinformed. I have been in touch with the president of the Welsh Rugby Union and he knows the Government's views about the Welsh Academicals.

Is my hon. Friend aware of the widespread satisfaction that the Irish Rugby Football Union has refused to be bullied by the Irish Government and is continuing with its policy of sending a team to South Africa this weekend? Is he further aware that in this instance Ireland is united—the 26 counties of the South and the six counties of the North?

My hon. Friend is entitled to his opinion, but it is not one which I share.

House Building


asked the Secretary of State for the Environment what are the latest house building figures, starts and completions; and if he will make a statement.

The seasonally adjusted figures for England for the three months December 1980 to February 1981 show that there were 32,500 housing starts and 48,900 completions. The number of starts showed a 14 per cent. increase on the figure for the previous three months.

There is bound to be an increase on the worst figures which we have had during the past 50 years. [HON. MEMBERS: "Question".] Is the Minister aware that those scandalous figures are set against a background of 300,000 building workers in the Tory dole queue, about 600 million bricks in stock and brickworks closing down amongst the 7,000 firms which went bankrupt last year, and at least 1¼ million families looking for a roof over their heads? What a way to run a Department and a country. Do not those figures show that the Government are more concerned about inciting people to buy nuclear shelters than about providing families with roofs over their heads?

Does the Secretary of State agree that the private sector house building figures are more important than the public sector figures? Will he confirm that there is a 25 per cent. increase in the number of private houses started this year?

The House will be pleased to note the forecasts of the house building industry, to the effect that house building in the private sector will rise by 20 per cent. this year and is likely to rise by a further 20 per cent. in the following year. The House will understand that the figures for new construction in local authorities may be disappointingly low, but that is because local authorities are now spending more money on renovating their existing stock.

Will the right hon. Gentleman draw aside the veil over the information that the Under-Secretary of State refused to give about vacant council properties in London and reveal to the House that the Tory-controlled GLC has 6,000 vacant properties? As the right hon. Gentleman is ready to accept forecasts about private building, will he tell the House whether council house starts in England in 1981 will be as many as 15,000 or whether the number will be the worst for 60 years?

The right hon. Gentleman will have heard clearly what I said. House builders have only forecast their figures. Individual local authorities make their own judgments and will make their own forecasts. If the right hon. Gentleman is concerned to see a larger council house building programme, I would welcome his support in persuading those Labour authorities that are denying themselves the resources by not selling houses to speed up the process.

I promised to call the Minister to answer question 10, standing the in the name of the hon. Member for Pontefract and Castleford (Mr. Lofthouse), at the end of Question Time.

Water And Sewerage Charges


asked the Secretary of State for the Environment what representations he has received for the inclusion of water rates in the rebate scheme.

The National Water Council has concluded that the best way to alleviate the present sense of unfairness about the charging system is to extend optional metering to domestic households. Where this option does not exist at present the council recommends that water authorities should draw up a timetable for its introduction in the next few years.

The council also concluded that, despite the representation which both it and the Government had received, the present legislation does not allow means related rebates for water services, and it reaffirms its belief that assistance to consumers should remain with the social security system.

Finally, I apologise to you, Mr. Speaker, and to the hon. Member for Pontefract and Castleford (Mr. Lofthouse) for not advising him of the bracketing of his question.

Will the Minister accept that his answer will disappoint my constituents, particularly the lower-paid workers? Is he aware that if the change to metering will cost the tenants money, the lower-paid will not be able to afford it? Will the hon. Gentleman therefore consider replacing the water authorities with a democratically elected body?

We have no intention of abolishing the water authorities. The majority of the members of the authorities, including the Yorkshire water authority, are drawn from elected bodies. Any problems that the lower-paid may have over the cost of changing to metering are best left to the social security system. The change to metering will be a slow process, but the choice will be offered.

On a point of order, Mr. Speaker. My hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse) said earlier that he had not been notified that his question was to be grouped with other questions. You will recall that much the same happened to me recently when my question was No. 9 on the Order Paper. Hon. Members frequently have other matters to attend to before coming to the Chamber for Question Time. Are the Government being inefficient and incompetent, or are they following a deliberate policy? Such problems did not arise under the previous Government. Should not Departments notify hon. Members whenever questions are to be taken together?

It is in everyone's interests for hon. Members to be notified when this happens. Normally, they are, but human errors do occur and sometimes the notice does not arrive.

I repeat that it was an error by my Department, for which I have apologised. It was not deliberate, and we shall do better in future.

Local Authority (Empty Properties)

3.34 pm

I beg to move,

That leave be given to bring in a Bill to give local authorities and certain other public bodies a duty to maximise the use of empty residential property in their ownership and to prohibit the demolition of buildings before public inquiries.
Having listened to Ministers during Question Time, I expect their support in the Lobby if there is a Division on this motion. The proposed Bill tackles the scandal of houses being empty when there are many homeless families. Clause 1 would read:
"It shall be the duty of every local authority to consider the short-term or temporary or emergency housing needs of their district and for that purpose to use or facilitate the use as living accommodation of vacant property held or acquired for development, rehabilitation or non-housing purposes."
Many local authorities and other public bodies own residential properties which are empty awaiting improvement or demolition and which could be occupied until required. Local councils purchase property in advance of road, educational or city centre development and homes stand empty, sometimes for years, if the schemes are delayed or even cancelled. With limited expenditure, such property could be used by single people, co-operative housing groups or even homeless families.

The problem is more acute now than ever before. The Government's cuts in housing expenditure and their recent moratorium on house building and improvement mean that many more properties that have been acquired by councils and housing associations are standing empty. There is suddenly no money to improve them, because the Government have switched off the tap. In 1980, 100,000 publicly owned houses in England and Wales were empty, waiting to be altered and redeveloped. About 30,000 were in London, and about 23,000 were empty for more than a year. In that year, 30,000 families—which is a massive number—were accepted as homeless by local authorities. About 6,000 are living in bed and breakfast or hostel accommodation. To keep a family in such accommodation costs £100 a week, and these families could easily be accommodated in short-life housing, saving the ratepayers a considerable sum.

Councils may ask where the money is to come from to unbrick, repair and upgrade empty properties, but in the end it would save money as it costs about £3,000 a year to keep a house empty, including lost rates and rent and the cost of boarding up.

Local authorities are rightly concerned about standards and do not want single people or homeless families to be housed in substandard accommodation. Unfit houses should be demolished if they cannot be satisfactorily improved, but many empty public properties would provide decent accommodation. They are often acquired not because they are unfit to live in but because of development schemes. Many can be put into a decent condition with minimum expenditure. Grants for short-life houses are still available from the Housing Corporation, although, regrettably, even that money has been cut by the Government, whose only answer seems to be to keep public housing empty until it can be sold. Consequently, houses stay empty.

Councils are also concerned about obtaining vacant possession when the properties are needed for the purpose for which they were acquired, but the Housing Act 1980 allows licences to be issued for short-life houses instead of establishing tenancies in certain circumstances. The Housing Emergency Office, which is a Shelter-backed organisation, states that it has always been possible to guarantee vacant possession of properties let on short-life terms.

In addition to putting a duty on councils to consider using empty property and to develop short-life housing schemes, the Bill would outlaw prior demolition—that is, where councils acquire houses in order to demolish tern for some development scheme to go ahead and actually demolish, gut or break up the houses in advance of the Secretary of State's public inquiry to consider whether the development should go ahead. In this way, councils destroy good housing in an attempt to pre-empt public inquiries. If the proposed development is then not approved by the Government, we have derelict, tinned-off sites and houses are needlessly demolished. The unnecessary destruction of good homes is as scandalous as houses being kept empty when thousands of people have nowhere decent to live.

I shall give some examples, first, of the type of people who could benefit from short-life housing schemes, and, secondly, of properties acquired and kept unnecessarily empty. Seventy single men in Kensington and Chelsea will soon be in need of housing because the local authority is about to make them homeless. Within the authority's area is a hostel, owned by the GLC and managed by the Stonham housing association, which currently provides accommodation for 70 single men. Money has been promised by the Housing Corporation for modernisation of the hostel in 1982–83, but the local authority has decided, at a closed meeting, to develop the site for commercial purposes. Kensington and Chelsea could have had a hostel free. Instead, 70 men will be homeless.

Where can those people go? They could find houses empty in my constituency of Bootle. In the centre of the old town, further city centre redevelopment was cancelled in 1973 and 1974 and houses are still standing empty as a result. They could go to Liverpool where, after 7 May, when the Labour county council cancels the inner ring road, residential property now standing empty can be used. In London, among the many houses standing unnecessarily empty are numbers 1–11 Lockside Cottages, Narrow Street, E14. Those six cottages, owned by the British Waterways Board, have been empty since 1970, when the nearby lock was filled in, and left to rot, as they are now doing. The 70 people being made homeless could live in Bromley Street, E1. The GLC acquired that street, with more than 80 houses, in May 1971. After constant bureaucratic muddles and mistakes, which seem to be a speciality of the GLC, those properties—now grade II listed buildings—still stand empty awaiting improvement.

I hope that all Members will support the proposed Bill, which is designed to destroy the problem of empty properties existing side by side with homeless families. I do not pretend that, if implemented, it would solve the nation's housing problems. Waiting lists are growing; homelessness is increasing. Only a sustained programme of council house building and improvement can solve the nation's housing problems. But the Bill would make a contribution to the solution.

There is nothing more annoying for people who want homes than to see houses standing empty. I hope that on this occasion the Government will put their support and their votes where their campaigns have been. They have criticised Labour local authorities, but some of the worst local authorities keeping properties empty are Tory controlled. The Government have not yet taken action to ensure that empty properties are improved and used because the money has not been available.

Question put and agreed to.

Bill ordered to be brought in by Mr. Allan Roberts, Mr. Robert Kilroy-Silk, Mr. Jack Straw, Mr. K. J. Woolmer and Mr. Frank Dobson.

Local Authority (Empty Properties)

Mr. Allan Roberts accordingly presented a Bill to give local authorities and certain other public bodies a duty to maximise the use of empty residential property in their ownership and to prohibit the demolition of buildings before public inquiries: And the same was read the First time; and ordered to be read a Second time upon Friday 19 June and to be printed. [Bill 137.]

Orders Of The Day

Finance Bill

(Clauses 1, 4, 19, 23, 27, 29, 88, 89 and 122; and schedules 1, 2 and 11.)

Considered in Committee [Progress 5 May]


Clause 1

Spirits, Beer, Wine, Made-Wine And Cider

3.45 pm

I beg to move amendment No. 53, in page 1, line 21, leave out '"£18·00" and "£0·60"' and insert '"£15·00" and "£0·50".'.

The effect of the amendment would be to increase the excise duty on beer by 15 per cent., which is roughly the rise in the cost of living in the relevant period. It would add about 1½p to the price of beer compared with an increase of 4p announced by the Chancellor of the Exchequer in his Budget. As hon. Members are aware, the Chancellor announced an increase in the duty on spirits of 60p and in the duty on wine of about 12p per bottle. The increase of 4p on a pint of beer is staggering in terms of the percentage rise that it represents. The 60p per bottle on spirits represents an increase of just under 15 per cent., the 12p increase on wine about 17 per cent., but the 4p per pint on beer represents an increase of no less than 38 per cent.—twice the rate of increase on wine and spirits.

The amendment, which seeks to index the duty on beer as well as on wine and spirits, would achieve fairness as between those three categories of drink instead of being wholly discriminatory against beer. The Committee will know that beer is by far the most popular drink in this country. It is drunk by people of all social classes, but unquestionably it is the drink of working men and women— the same working men and women whom the Prime Minister and her colleagues so assiduously courted from 1974 to 1979. They were promised substantial cuts in direct taxation and no doubling of value added tax. Indeed, they were promised more jobs, as the hon. Member for Horncastle (Mr. Tapsell) reminded the Chancellor only last Thursday.

Yet, with the exception of the unemployed, it is those same working men and women who have been hit hardest of all by the activities of the Government. The Government have forced up indirect taxation. Yesterday we witnessed an extraordinary performance by the Financial Secretary, wriggling as usual and trying to pretend that the increase in VAT from 8 per cent. to 15 per cent. did not amount to nearly doubling VAT. In seeking to prove that proposition to my hon. Friend the Member for Edinburgh, Central (Mr. Cook), the Financial Secretary had the extravagance to include in his calculation not only those goods which before the Budget were taxed at 8 per cent. and at 12½ per cent., but even those which were not taxed at all. He said that if one included goods that were not taxed at all before, and those which were not taxed at all after, the May 1979 Budget, then with some arithmetical gymnastics, and presumably some "massaging" through the Treasury computer—I understand that that is the vogue word in the Treasury nowadays—the increase was not a doubling but only from 5 per cent. to 8 per cent.

The British people, particularly working people, know differently. They know that the increase was virtually a doubling. In addition, they have had to suffer an increase in direct taxation and substantial increases in the price of essentials. Their rents have increased by at least £3 in the past year and more the previous year. There have been increases in their mortgages, despite the recent welcome reduction in interest rates. There have been increases in the price of domestic fuel—in gas, electricity and heating oil—as well as in the price of petrol and in fares.

Living standards for all working people on average wages have been squeezed dramatically by the Government, and they will be squeezed even more. For the additional 1 million people who have lost their jobs during the past year, living standards have dropped catastrophically, not only because of the increased prices of essentials, which unemployed people still have to buy—Conservative Members seem all to often to forget that—but because of the cuts in the real level of benefits.

On top of all those increases in prices and in direct and indirect taxation which have hit working people and the unemployed, the Government seek to tax and tax again one of the few pleasures that are left to them under Conservative rule in 1981. The price of drink in the pub, a club or at home has been forced up and up. Last year, the Government imposed an increase of 2p a pint on beer, and this year they have increased it by 4p. We do not know whether that 4p increase is only the first instalment, because during the last week's debate on diesel fuel the Chancellor announced a concession which will cost £85 million. He said that the country would have to pay for it. Despite repeated efforts by many hon. Members to discover how the Chancellor intended to meet that £85 million shortfall, no information was forthcoming.

Will that shortfall of £85 million be met by another 1p on a pint of beer? We remain perplexed. When Conservative Members gave notice that they might rebel on the petrol and derv increases unless there was some concession, the Chancellor had from 16 March until last Thursday to work out the concession as well as how to pay for it. However, he offered no information on how the concession would be paid for.

Perhaps the Minister of State will now say whether the Government intend to add another 1p on a pint of beer, because conveniently that would bring in another £95 million which would pay for the concession which the Chancellor has made. Alternatively, do the Government propose to add another 17p on a bottle of wine? That would also bring in the £85 million which the Chancellor now says he needs.

As a result of the increase in the price of beer which has already been announced, and other cost increases which have fallen on brewers and other industrial companies, the price of a pint in a public bar has rocketed. In May 1979, in the halcyon days of the Labour Government—by God, they look like a golden age compared with the hell experienced under this Government—a working man could buy a pint for 36p. By last year, the Tory Government, who claim to work in the interests of the country as a whole, had forced up the price to 44p. By November, it had gone up to 51p, and now my friends who go into public houses tell me that a typical pint cannot be bought for less than 56p or 57p.

Well, perhaps in the hon. Gentleman's area beer costs even 60p a pint. I bow to his superior judgment. In two years, the price of a pint has risen by 20p, from 36p to 56p—an increase of at least 60 per cent. The beer drinker has consistently been hit twice as hard as the wine drinker or the spirits drinker. Beer drinkers have been discriminated against not only this year, but in previous years. Overall, the duty on beer has increased by 66 per cent. in two years, while the increase in wine and spirits has gone up by less than half that figure.

Let us compare the Conservative Government's record with the Labour Government's record. The Labour Government were concerned to protect domestic industry, such as the brewing and whisky distilling industries, and during their period of office the duty on wine rose significantly more than the duty on spirits and beer. If we take an index of 100, in 1974, spirits went up by 160, beer by 188 and wine by 237.

When Labour Members claim that the Conservative Party is a narrow, class party, Conservative Members hold up their hands in innocence and refuse to recognise the image that we offer of them. We accept that some Conservative Members still believe that the ghost of Disraeli is around the corridors of Conservative Party headquarters. However, a party must be judged on its deeds, not on its words, history or fantasies, and in every area of economic decision making we find that the Conservative Party has acted in its narrow, class interests and has taxed the poor to help the rich.

I hope that the hon. Gentleman realises that many Conservative Members drink beer and that many Conservative supporters outside also drink beer.

Of course I realise that, but I am sure that the hon. Gentleman accepts that drinking habits tend to be a matter of social class. I can assure him that not much wine is drunk in the working men's clubs in my constituency. I dare say that not much wine is drunk in the working men's clubs of his constituency. If the hon. Gentleman is saying that drinking habits are homogeneously shared across social classes, that is an even greater argument for the equal and fair treatment of beer alongside spirits and wine. There can be no argument on fiscal or other grounds for discriminating against beer.

As I was saying, in every area of economic and fiscal decision making, the Conservative Party has favoured the rich and hurt the poor. It has given massive tax handouts to the rich at a time when in area after area it has taxed those who are least able to afford it.

The hon. Gentleman has alleged that at all times the Labour Party cares for the poor and the Conservative Party cares only for the rich. In case he does not remember, I remind him that in 1975–76, the Labour Party refused to pay old-age pensioners their £10 Christmas bonus.

The hon. Gentleman should not swap tales about Labour's record on old-age pensions compared with the record of the Conservative Party. I distinctly remember the Labour Government refusing to pay the £10 bonus. I also remember that in July 1974 the Labour Government gave pensioners the largest increase in pensions they had ever received. I remember, too, that in 1975 it was written into the law that old-age pensioners should receive an increase in line with prices or earnings, whichever was the greater. I remember that the present Government shamefully removed the link between earnings and prices and the old-age pension.

In addition, they have extended 52-week years to 54-week years. On old-age pensions, above everything else, our record stands up to examination compared with the record of the Conservative Party.

I am not saying that the Conservative Party has never cared about working people. There was a time when it followed the advice of Disraeli and was concerned about one nation—for example, under Harold Macmillan. However, the Conservative Party has now become an extremist and doctrinaire party which has retreated into representing its narrow, class interests.

One consequence of the higher tax on beer has been a drop in consumption and less employment in the brewing industry. In March 1981, there was a drop in brewing of 17½ per cent. compared with the same month in 1980. That has meant a drop of one-fifth in the number of bulk barrels produced. If we take the quarterly figure this year and compare it with last year we find that there has been a drop in production of 6½ per cent., and that is before the full effects of the Budget increases are taken into account.

Almost weekly, we read of pubs closing, working men's clubs in difficulties and jobs being lost in the brewing industry. Brewing is an important industry, especially to many working people for whom it is their livelihood.

4 pm

In 1979, 68,000 people were employed in breweries. The big 10 national and regional breweries employed ¼ million people. However, employment in the brewing industry, as narrowly defined, has dropped by 10,000 since the general election. that is a drop of 13 per cent. in the number of those employed in the brewing industry and compares with a 4 per cent. drop during the five years of the last Labour Government.

Of course, brewers are yet another group of industrialists who have discovered that their least successful investment was the one that they made in the Conservative Party. The hon. Member for Bath (Mr. Patten) should know about brewers because I believe that he worked at Conservative Central Office and the brewers paid his wages. No group of industrialists has been more generous or consistent in its donations to the Conservative Party. Indeed, of the top 10 regional and national breweries, only three failed last year to give anything to the Conservative Party. One brewery, Allied Breweries, gave £62,000 to the Conservative Party and to its various front organisations.

I am proud to say that one of the breweries that failed to give a penny to the Conservative Party was Matthew Brown, which is based in my constituency. It is also one of the few breweries not to have declared any redundancies. It is interesting to note the relationship between the amount of money invested in the Conservative Party by brewers and the increase the following year in their profits. Indeed, a new economic law can be pronounced, namely, the more money that a brewery puts into the Conservative Party, the less well the shareholders do. Greenall Whitley did not give any money to the Conservative Party and showed a 40 per cent. increase in its pre-tax profits. Matthew Brown showed a 17·1 per cent. increase in its pre-tax profits. However, Allied Breweries put massive sums into the Conservative Party and showed a measly increase of 0·6 per cent. in its pretax profits.

Is not the hon. Gentleman clearly illustrating that the Conservative Party pays less regard to the money that it receives from brewers and acts more in the interests of the country? It would be a good thing if the Labour Party adopted the same attitude towards trade unions.

I had expected that reply from a Conservative Member. None of the brewery company directors who put money into the Conservative Party in 1979 and few industrialists anticipated that the economy would go this way. Indeed, on 12 June 1979 the CBI said that the Budget was one of opportunity that would lead to a regeneration of British industry. The directors were fools to put their money into the Conservative Party, just as they were fools in their judgment about the Government's likely performance.

Having established that the increase is highly discriminatory against beer drinkers it is important to examine the reasons for it. One argument in favour of increasing the price of alcohol by disproportionately raising the tax on it is to try to achieve a drop in consumption in the interests of health and of securing a reduction in alcoholism.

I am sure that all hon. Members are concerned about the rise in reported alcoholism over the past few years. They will also be concerned that new groups, which were not high in the league tables, appear to be coming into them. I refer particularly to young people and to women. That is a matter of genuine concern.

It is argued that the real price of alcohol should be increased or brought up to the level that existed some years ago. We accept that the real price of alcohol has dropped. It is argued that raising the price would deter heavy drinking. Indeed, there was a debate on that subject in last year's Finance Bill Committee. A notable contribution was made by the leader of the Scottish puritanical party, my hon. Friend the Member for Edinburgh, Central. He spoke powerfully about the need to check the growth in alcohol abuse by raising prices.

We understand that the Government are concerned about the relationship between the price of drink and alcoholism. In a leak to The Sunday Times of 14 November 1980 we were told:
"A consultative Green Paper will be issued early next year, aimed at arousing public concern and support for tougher action … To remedy this increased ease of purchase, much stiffer taxation policy is being urged. As Mrs. Thatcher is strongly opposed to direct tax rises in next year's budget"—
we knew about that, but despite our opposition such rises have taken place—
"indirect taxes look increasingly certain to take the strain, with alcohol and tobacco in the forefront."
It is said that pricing policy is considered crucial. The leak promised that there would be a Green Paper. Perhaps the Minister will tell us where it has got to. The Government have become so leaky that they now regard a chat with a Lobby correspondent as equivalent to a Green Paper. Some of us prefer to get our Green Papers from the Vote Office than from the cuttings service of the Library. I hope that the Minister will reply.

We know that the Government are concerned, just as we are, about this matter. There is some evidence to show that in other areas such as Scandinavia, efforts have been made to control the consumption of alcohol by price. However, it should be borne in mind that the Scandinavian experience is not unequivocal. Scandinavia has a serious drink problem, although there is a law that requires the price of alcohol to be raised in line with general prices.

Earlier today I had an opportunity to talk to a Swedish trade union leader. He said that the Swedes had been so worried about the drink problem that the measure was one of the few that had had all-party agreement for many years. Between 1922 and 1955 alcohol was rationed and each person was issued with a ration book entitling him to three litres of hard spirits a month. That amount seems unlikely to deter the heavy consumption of spirits. Even in the House of Commons with its slurred reputation for drink, there are few hon. Members who get through that amount. However, I exclude my Scottish friends from that statement.

Whatever view one may take about the relationship between price and alcohol consumption, and even if it is unquestioningly accepted that the price of alcohol should be increased to deter heavy consumption and ill health, there is no justification for this increase. It doubles the increase on beer compared with wine and spirits. If the price of alcohol is to be increased on order to deter consumption and alcoholism, it is only logical that the price of the harder forms of drink—wine and spirits—should be increased more severely than beer. However, perverse as usual, the Government are placing far more duty on beer than on wine and spirits.

From my hon. Friend's reading of the reports of the proceedings on last year's Finance Bill did he notice that the Minister admitted that the Government were increasing the tax on beer to a greater extent than that on wine because of a decision of the EEC court? As a result of a complaint from the French, the court invited the British Government to even up the taxes. That is why the brewers have been treated in such an ungrateful manner.

That is one reason. However, there is another. Increasing the duty on beer raises much more revenue than increasing the duty on wine. The Government are avaricious and are ever ready to take hard-earned money out of people's pockets and to put it into the Exchequer. The hon. Member for Hertford and Stevenage (Mr. Wells) may laugh. He and other Conservative Members went round the country preaching Conservative propaganda about tax cuts. I have not had the benefit of reading his election address to the people of Stevenage, but I am sure that he said that if the Conservative Party was returned to office income tax would be cut and VAT would not be doubled.

If I am wrong the hon. Gentleman will correct me. That was written in the Conservative manifesto, but in reality the Government have increased income tax and direct taxes far more than previous Governments. Moreover, they have taxed the poor savagely, so that people now come into the income tax thresholds when they are receiving only 38 per cent. of average earnings. That is far below the figure achieved in any year of the Labour Government.

In my election address to the people of Hertford, Stevenage and Ware I did not refer to VAT. The hon. Gentleman will recall that that discussion was initiated by his party. An accusation was made, too.

The hon. Gentleman implied that we misled people at that election. In sharp contrast to the aim and objectives of the Labour Party, which is avaricious in its taxing policies, the aim of our party is to reduce taxation. However, we have increased taxation in the Budget. Does that not prove to the hon. Gentleman that, far from being dogmatic, the Government are pragmatic in dealing with the problems that they face? I invite him to agree with that even though it is against the objectives of the Government when they came to power.

I have heard many arguments for the Government's twisting and turning record for the past two years, but that takes the biscuit. If the hon. Gentleman is so proud of the pragmatic nature of the Government—I cannot say that I have noticed their becoming pragmatic—why did he not say in his election address "We might increase taxation or reduce it. We might double VAT or reduce it. We are not sure. It all depends"?

On a point of order, Mr. Weatherill. The debate should be taking place on a comparatively narrow point. It is being extended far beyond the amendment.

Order. I am grateful for the hon. Gentleman's help. The amendment refers to duties on beer. The hon. Member for Blackburn (Mr. Straw) was deflected by allowing an intervention. He should return to discussing the amendment.

Order is a matter for you, Mr. Weatherill, but it hardly lies in the mouth of the hon. Member for Gillingham (Sir F. Burden) to complain about our getting back to the point when he raised the issue of the Christmas bonus and pensions. If the Government accept our amendment—as we expect that they will—they may say that they want to raise income tax even more. The Government's election manifesto, on which the hon. Member for Hertford and Stevenage stood, said:

"We shall cut income tax at all levels to reward hard work, responsibility and success; tackle the poverty trap; encourage saving".
They have tackled the poverty trap: they have made it deeper and wider.

Order. That is what I was hoping would not happen. The hon. Member must return to the question of the duty on beer.

I shall, of course, get back to that matter, Mr. Weatherill.

My hon. Friend the Member for Newham, North-East (Mr. Leighton) made an intervention which was directly in order. There are two reasons why the Government have been forced to increase beer duty. One is that because of their economic policies they decided that they were strapped for revenue and increasing the duty on beer was one of the few ways in which they could raise money. There is no doubt that taxing beer is an easier way to raise revenue than many other methods.

I hope that the Minister will explain whether the estimates of yield given by the Chancellor in his Budget Statement on 10 March take into account the already substantial drop in beer consumption. What estimate does he make over the next 12 months about the elasticities involved? Also, will he explain a strange sentence in the Chancellor's speech when he said that the yield of the various increases in drink duties would yield £500 million in 1981–82 and £515 million in a full year? The Budget took place before the fiscal year 1981–82 began. I do not understand how the figure is £500 million for one full year and £515 million for the following year. What is the Government's estimate of the yield? In the light of the 6½ per cent. drop in consumption so far, is it likely to drop further, especially if there is a bad summer?

4.15 pm

In our view the rates should be increased only in line with inflation. The difference, which would be about £200 million, should not be made up elsewhere. We object to the deflationary nature of the Budget. Any decision of the Committee that moderates the deflationary nature of the Budget, together with the fact that £5,000 million will be taken out of the economy, is to be welcomed. However, if hon. Members decide that the extra £200 million should be found, there are other ways that would hurt the better-off rather than those who are poor and would be far better than taxing beer. It would be better to load the tax on wine rather than beer because, on the whole, wine is consumed by people in higher income groups and, moreover, is not made in this country.

The Government cannot, however, load duty on wine, despite the fact that that is the fairest and most sensible action to take for British drinkers and British industry, because of the Common Market's harmonisation rules and the Government's failure to stand up for British interests in the EEC institutions. In one sphere after another the Government claim stalwartly to defend British interests, but behind all the rhetoric the reality is concessions and humiliations all down the line. We see it in agriculture where the British Government have allowed other countries, especially France, to get away with near murder.

On a point of order, Mr. Weatherill. The hon. Gentleman is wrong to talk about agriculture under a clause dealing with beer.

I thank the hon. Gentleman for his help. I am listening carefully and the hon. Member for Blackburn is deploying an argument.

I accept that I may have strayed a little earlier, but my remarks are germane and central to our argument. The Government have accepted all sorts of humiliations on agriculture. The Minister of Agriculture has not told us how the French Government, in clear contradiction to article 93 of the EEC treaty, last December announced aid of 4,100 million francs to French Farmers over and above the assistance provided by the common agricultural policy. In clear breach of the EEC rules those aids were announced by President Giscard D'Estaing to gamer the votes of French agricultural workers. Those aids are still being paid.

Ministers have not told the House how the French and Belgians are still going ahead with massive schemes of aid to their textile industries—again, in apparent breach of EEC rules. However, the Minister of State told us how the Government will comply abjectly with the initiative on harmonisation on wine. That was debated in the House on 3 December.

Order. The hon. Gentleman should deploy these arguments on clause stand part. They will be more appropriate when we deal with wine and other items.

My comments are central to the argument because the harmonisation initiative requires that the ratio of the rates of duty on wine and beer should be reduced from 5:1, as it was before the Budget, to 3:1. That means that the Government had to reduce the rate of duty on wine or increase the rate on beer. The Government increased the rate on beer in order to comply with the harmonisation rules.

In the debate on 3 December the Minister of State made it clear that the Government were moving towards compliance with the ratio which is based on an assessment of the alcoholic content of wine and spirits. The EEC claims, under its ridiculous rules, that because the alcoholic content of beer and wine is in a ratio of 3:1, the duties should therefore be in the same ratio.

My right hon.Friend the Member for Llanelli (Mr. Davies) questioned the Minister of State about the effects of accepting that ratio. The Opposition said that the clear effect would be to add 4p to the price of a pint of beer. The Minister of State replied:
"The right hon. Member for Llanelli misunderstands the position. It could happen on certain broad limits on the beer-wine ratio … there are about three or four possible permutations."—[Official Report, 3 December 1980; Vol. 995, c. 606.]
An article in The Economist at about the same time said that, according to the Minister of State, the ratio could be put into effect in one of three ways—by raising the duty on beer by 4p a pint, which would yield an extra £440 million to the Treasury, by cutting wine duty by 19p a bottle, which would cost £50 million in lost revenue, or by raising beer duty by ½p a pint and cutting wine duty by 17p a bottle, which would be financially neutral to the Exchequer. The article concluded:
"But there should be no panic buying of beer, or popping of champagne corks in celebration. Whichever solution is adopted, it will be phased in over seven years."
The Government tell the House and the British press that they will stoutly defend British interests. Indeed, as late as 17 April we read in the excellent Agence Europe reports from Brussels that the Government had asked for a further delay in the consideration by the European Court of Justice of the cases involving the high tax charged on wine in the United Kingdom compared with that charged on beer, so that the Government could present reports. The Government have been making noises in Brussels and telling British newspapers that they will stand up for British interests and have offered soothing words to the brewers, saying that the increases will be phased over seven years, but during that time they have been preparing, and are now implementing, the full increase, not in seven years and not even in seven months.

The Government said that it would take many years to implement the harmonisation initiative, but they have implemented it with a vengeance and in a way which causes the maximum harm to British drinkers and British industry and the maximum benefit to the drink industries of Italy, Germany and France. That might just be bearable, even to those of us who object to our membership of the Common Market, if other members of the EEC had played the game. But in February 1980 the European Court issued a decision against France, Italy, Ireland and Denmark, saying that their excise duty regimes discriminated heavily against whisky.

The court may pronounce, but only domestic Governments can act. As far as I have been able to ascertain, the decision of the court, taken well over a year ago, has still to be implemented. It is said that Italy has changed the State prices of strong spirits, but France has adopted measures, including only a partial change this year, that will take two years to come into effect. The changes proposed by Denmark are still the subject of discussions with the Commission.

Another aspect that is often overlooked is that, despite the requirement of the EEC directive that there should be a clear ratio between the duty on beer and that on wine, I understand that there is no requirement on countries to have a duty on wine. It is only if they impose such a duty that there has to be a ratio between that and the beer duty.

At the end of last year, Germany and Italy were insisting that we should raise our duty on domestically produced beer, but they had no duty on their domestically produced wines. Is that still the case? Does the Minister of State agree that it is a scandal and an outrage that Germany and Italy should insist that we increase the price of beer to our consumers, causing great damage to our drinkers and our domestic industry, while those countries are allowed to get off scot-free, because there is no requirement on them to tax their wines?

My hon. Friend is right to ask the Minister of State for that information, but should he not also ask the absent Liberal Party and the one SDP Member who is in the Chamber to point out that, as they are 110 per cent. pro-Common Market, they are 110 cer cent. in favour of the rooking of the British public? My hon. Friend should blame not only the Government, but the SDP and the absent Liberal Party.

The Liberals are well represented by their surrogate, the hon. Member for Gateshead, West, (Mr. Horam) who will no doubt speak for them. It will not lie in the hon. Gentleman's mouth to complain too much about a further iniquity of the Common Market, since he was one of those who forced us into it.

As a matter of historic record, I voted against entry into the Common Market.

I am pleased to hear that the SDP is as catholic as the Labour Party, but I wonder why the hon. Gentleman joined the SDP. I shall look forward with interest to finding out whether his party follows his advice rather than that of the right hon. Member for Plymouth, Devonport (Dr. Owen).

The 40 per cent. increase in beer duty is wholly unjustified. It hits at one of the few pleasures left under this Government and puts up the cost of living. It has been forced on the Government partly because they prefer to tax working people to pay for tax cuts for the rich and partly by their slavish adherence to the Common Market and their refusal to stand up for British interests. We shall oppose the increase and we invite other hon. Members to do so.

The intervention of the hon. Member for Hertford arid Stevenage (Mr. Wells) intrigued me, because I was born in Hertford and I had relatives in Ware in the hon. Gentleman's constituency. I remember that when I was a lad the great thing about Hertford was the number of pubs in the town. In Maidenhead Street there was a pub next to a shop next to a pub next to a shop next to a pub. It was that sort of street and most of Hertford was like that.

I doubt whether the people of Maidenhead Street and Fore Street in Hertford will be loudly singing the praises of the Government's decision to put up the price of beer by 4p a pint. Like other workers, they like their pint after a hard day's work, and that is the important point which my hon. Friend the Member for Blackburn (Mr Straw) was making.

Beer is the drink of most ordinary working men on building sites, in coal mines, in shipyards, on the roads and in the fields.

When they come back from a hard day's work they like to wet their whistle and they go into the pub on the corner for a pint or two. There is nothing wrong with that but it is a bit grim when they are faced with an increase of 4p per pint, because that is what it means.

4.30 pm

It has been said that Conservatives also drink beer. Of course they do. I do not think those Conservatives are enthusiastic about it either. I am sure they will be just as angry and fed up as beer drinkers who vote Labour.

The whole thing is a conspiracy against the Labour Party. [Interruption.] Some hon. Members say, "Ah". The brewers have been great contributors to Tory Party funds. Rather like the builders, they must be a bit fed up and wonder what they are getting for their contributions. There are Labour clubs throughout the length and breadth of the country. Although we get a political levy from trade unions, much of the finance for the Labour Party at local level comes from contributions from Labour clubs. If the price of beer is increased, less is drunk and smaller contributions are made to Labour Party funds which makes it much more difficult for us to fight the Conservatives. That is what is behind this increase in duty.

In all seriousness the increase in duty will affect Labour clubs. The people who go there are not buying as much beer because they cannot afford it. We must consider the 2½ million unemployed. Those who come from areas of high unemployment are finding it difficult anyway to buy their pint; with the increase of 4p it becomes even more difficult for them.

I am not going to join in the debate about the Common Market. I do not like talking about it and I wish we were not in it. It would be much better if we did not get involved in such discussions. What I am concerned about is the effect of the increase in beer duty on the lives of ordinary working men and on those who have retired. There has been a reference to the effect on pensioners who watch television and then go off to the local pub or Labour or Tory club to have their pint. As each pint costs 4p more, the pensioner has not two, but only one.

That is the sort of answer which the Government have to economic problems. They wish to place the burden on the shoulders of ordinary working men and women. I am not a great beer drinker; I have never taken much to beer. I do not mind paying a few pence more for what I drink. If I am going to have a glass of wine I am happy to pay the extra. But this is an added burden for the working chap who is suffering because of the policies of the Government. I hope that every Member, including all the Conservatives who drink beer, will stand up for the working class and support the amendment.

I thought the hon. Member for Blackburn (Mr. Straw) sparked off an interesting debate leading to interventions. Rutland is famous for its independence and because it used to be a county. What is not so generally known is that it is also famous for its beer. We have a very good small brewery, Ruddles. Its beer can be bought in London and it is infiltrating all over the South of England. It has not yet found its way into the House of Commons. I put in a claim for it but I am told that there are so many different beers in the House of Commons put there at the request of Members that there is hardly any room for more kegs.

Is it better than McMullans, which is made in Hertford? That is a very good beer.

I have never had McMullans. Ruddles is better than some of the lagers which are frequently advertised on television. We do not need television advertising; we can sell it without any difficulty. It is available even in supermarkets.

I lean towards the beer drinker. I like a beer myself. I intervened earlier because I thought the hon. Member for Blackburn was being grossly unfair when he said that hon. Members on this side of the House do not drink beer. Plenty of them drink beer. Millions of Conservatives will be going to the polls tomorrow to vote Tory; they will be having a beer before they go or after they have voted. Whether they will be having a few beers on Friday to cheer themselves up or to drown their sorrows we are not sure; we will wait and see. I would rather my right hon. and learned Friend had been able to manage his Budget without putting 4p on beer.

The one thing the hon. Member for Blackburn did not tell us was where the money was going to come from if the amendment was passed. I think the cost would be £200-odd million. When the Chancellor gave the concession to those of us, including myself who tabled an amendment in relation to duty on derv, he announced that in due course there would be a replacement tax. We do not yet know what it is going to be. The hon. Gentleman said that it might be 1p more on beer. I hope not. He also said that it might be 1p on one-armed bandits which would affect Labour clubs, Conservative clubs and other clubs. In so far as people would be spending more on one-armed bandits, they would have less to spend on beer, so either way it would hit them.

When there is a large public sector borrowing requirement, if the Government want to avoid increasing income tax or putting up national health insurance too much they have to get revenue somewhere. We fought the election on the principle that people should have more money in their pocket in take-home pay and should have to pay more in tax on what they spend rather than the other way round. I stick to that policy, although it has slipped a bit. The Government are moving in the right direction.

The Government have been in office for only two years although it may seem longer. As long as my right hon. and learned Friend the Chancellor can promise me that in the next three years we are going to have further reductions in income tax so that people have more in take-home pay, we will not object to an increase in the duty on beer.

The official Opposition would have done almost the same if they had been in Government. They might have had to put twice as much on the price of beer, because the extra expenditure that they present to the Government week by week would require such a large increase in revenue that the tax on beer would have to be increased rather than reduced.

I am as unhappy about increased taxes, including the increase on beer, as anyone else, but if there has to be an increase in taxes, it is better for it to be on optional expenditure than on necessities.

I must remonstrate with my former colleagues on the Opposition Front Bench, particularly with the hon. Member for Blackburn (Mr. Straw) who moved the amendment. It is disappointing to go through all these conventional hoops all over again. What have the Opposition done during this series of debates on the Finance Bill?

The right hon.Member for Stepney and Poplar (Mr. Shore) in his speech on the Budget put forward a whole raft of public expenditure proposals—with some of which I agree—which would involve higher public expenditure. In the debate on the Finance Bill the Labour Opposition have promoted a series of measures to decrease taxation. First, they wanted to bring down the petrol and derv duty to 8p in the pound. Then they wanted to index the tax threshholds fully and to reinstate the lower rate band. That was a controversial measure in the previous Labour Government; there was considerable disagreement between the Chancellor of the Exchequer and the Prime Minister at that time. Now they come on to beer. Where is the arithmetic? When shall we know the arithmetic behind this massive increase in public expenditure on the one hand and this series of attempts to decrease taxation on the other hand?

Nothing so far has been said about whether the arithmetic adds up or does not add up. The hon. Member for Blackburn will recall the speech made by his right hon. Friend the Member for Stepney and Poplar on the Budget. That was followed by a speech made by the right hon. Member for Down, South (Mr. Powell) who commented on the way the bill was added up. He invited the right hon. Member for Stepney and Poplar to intervene and tell him what was the arithmetic. He speculated that the proposals put forward by the right hon. Gentleman on that occasion would add £15 billion to the public sector borrowing requirement, and he asked the right hon. Gentleman to say whether he disagreed. But the right hon. Member for Stepney and Poplar did not comment.

It was not. The hon. Member for Down, South made a very telling point. No attempt was made by the Labour Party to give any details of the arithmetic. All the Opposition say is that there must be vastly increased public expenditure and greatly decreased taxation. They never say what the final sum will be. When challenged to do so by the right hon. Member for Down, South in a negative but brilliant speech, the right hon. Member for Stepney and Poplar sat mum. He may be acting under instructions. I remember, when I was sitting on the Opposition Front Bench during a debate initiated by the Liberal Party, the Shadow Cabinet could not make up their minds about an incomes policy, so I was not allowed to speak in the debate. I was roundly condemned for being like a Trappist monk. The right hon. Member for Stepney and Poplar may be in that position; he may not be allowed to say what the figures are.

It is time that the Labour Opposition made some comment on this aspect. I am making this point not in favour of the Conservative Party but on behalf of ordinary people who want to know how this adds up.

Am I to assume, on the basis of the argument of the hon. Member for Gateshead, West (Mr. Horam), that Professor David Marquand, who used to be a member of the House of Commons, is right in saying that the hon. Gentleman's views are not similar to Mrs. Williams' views, because she argues the case that is being put forward by the Prime Minister?

That is a poor intervention by the hon. Member for Liverpool, Walton (Mr. Heffer)—

4.45 pm

I am seeking to reply to the hon. Gentleman. I am not arguing in favour of the Government's policies. I have spoken against them in this series of debates, as have other hon. Members from the Liberal Party and the Labour Party. All I say is that it is about time we got away from the conventional game we always have in debating the Finance Bill of asking for cake and wanting to eat it at the same time.

Does the hon. Gentleman still agree with the view he expressed last year in Committee on the Finance Bill when he said that he was certain it was a badly chosen time to increase Excise duties as the Government had done. I know that the hon. Gentleman wore a different hat last year, but he was the same person. Does he still take that view?.

I assure the hon. Gentleman that the Opposition are under no instructions to remain silent about our alternative policies. There is no reason why the hon. Gentleman should study the press releases which I put out, but with my colleagues in Opposition I have issued several statements about alternative policies and they have been tasted and worked through the Treasury's economic model. Whenever we seriously attempt to work out the costings we are derided by Government supporters. Serious efforts are being made by the Opposition and inside the Labour Party to cost the proposals

There was no reason why my right hon. Friend the Member for Stepney and Poplar (Mr. Shore) should reply to the right hon. Member for Down, South (Mr. Powell). What the right hon. Member for Down, South said was so self-evidently preposterous that it needed no answer. The right hon. Member for Down, South will admit, if it is put to him, that he was taking the cost of an expansionary Budget over four or five years and suggesting that that would be the cost in one year. That is how he reached his figure of £20 billion.

On a point of order, Mr. Weatherill. I am listening to the debate to see what is the difference between the Social Democratic Party's view of beer and the Labour Party's view of beer. I am worried that no one else seems to be able to join in this private discussion.

I feel that I have been generous in allowing such a long intervention.

If the hon. Member for Blackburn has these figures, why does he not bring them out in the debate? I have seen no costings, although I have looked back through all the debates. I have been present at most of the debates since the Budget. The arithmetic of the Opposition's amendments, combined with their expansionary proposals, has not been presented to the House of Commons in a thoroughgoing manner. I see nothing in Hansard to contradict that.

I will give the hon. Member for Blackburn credit for being an improvement on his Leader. He said that he would wish to increase the impost on wine to make up for the revenue that would be lost on beer if the amendment were carried. He must know that that is a preposterous proposition, because wine is a much smaller source of revenue than beer. The amount raised from beer could not be raised from wine. It is not a practical proposal. He also has to consider buoyancy.

The hon. Gentleman referred to that matter but the Committee has heard nothing profound from him. Has the hon. Gentleman done any calculations? Is he simply not telling the House about them because they do not sound very good? The proposal that he put forward does not bear examination. The Labour Party is refusing to make choices.

I supported strongly the case made yesterday about the Government's failure to index the tax threshold. That is the most serious consequence of the Bill. It will have devastating effects on low-paid workers. I thought that the Opposition combined well to make a forceful case against the Government. Ministers have not replied to the real charge about the increase in the tax burden that results from this and previous Budgets. The Government have failed lamentably to answer the real challenge on the extent of the tax burden and the degree to which it has fallen on the shoulders of those least able to bear it.

However, the revenue for the expansionary measures supported by the Opposition—I agree with some of them—has to be raised somehow. A choice has to be made of the measures to be taken to raise the revenue to pay for the expenditure. Hon. Members have not heard from the Opposition where their choices lie. The right hon. Member for Ashton-under-Lyne (Mr. Sheldon) was challenged directly yesterday by the Financial Secretary to the Treasury. The right hon. Gentleman refused to reply when he was asked whether the Opposition would have foregone the attempt to raise the threshold on income tax if their amendment on the petrol increase, which I supported, had been passed. The Opposition were not making choices.

If we are to have honest debates which fill the Chamber more than this debate, and more than yesterday's debate did when the main Opposition party had to whip in people to speak, and which command the attention of people both inside and outside the House, we should discuss matters more frankly The Opposition are simply going through the motions. I know that the Opposition have a new team. I was a member of the old team last year. I had hoped that the new team would be more original than simply to go through the hoops of putting forward amendment after amendment which do not add up to a convincing policy.

I should like gently to draw the hon. Gentleman back to the subject of beer. He has mentioned that he was a member of the old team. I presume that I was a member of the old Back Bench team. Last year, we debated a similar issue. I made a speech in which I chided the Minister for not putting up Excise duties by more than the amount he proposed, particularly in relation to spirits. If the opportunity arises, I may make some remarks about wine later this evening.

In last year's debate the hon. Gentleman said that it was an extraordinarily badly chosen time to increase Excise duties. If the hon. Gentleman is to make a speech attacking the official Opposition, he has an obligation to explain what great revelation has occurred to him between last year and this year that transforms what, last year, was an extraordinarily badly chosen moment into what he now says is the correct time to increase Excise duties.

The hon. Gentleman must be aware of the answer. We argue that there should be increases in public expenditure to deal with the present economic problems. We want to be less deflationary than the Government. We believe, like the Labour party, that there should be an increase in public sector projects. Those projects have to be paid for. I have stated in the House that I would have raised the standard rate of income tax to pay for some of these projects. That would be more expansionary and prove more helpful to industry than the Government's deflationary methods. The hon. Gentleman cannot argue the point he has made.

Order. I am sorry to interrupt again, but we are getting away from the amendment, which is concerned with beer and not the general Budget strategy. Will the hon. Gentleman please return to the question of beer?

Certainly, Mr. Weatherill. I believe that the argument about the EEC is a little spurious. The Government have increased the tax on beer by the amount in the Budget because they needed the revenue. That is the brutal truth.

If one has to raise revenue, I would rather raise it by this means than by failing to index the tax thresholds. I voted in favour of the Labour Party amendment yesterday. If I have to choose between the two—

I cannot give way to the hon. Gentleman. You are already looking at me askance, Mr. Weatherill. The hon. Gentleman has already intervened.

Order. It will help everyone if the hon. Gentleman addresses me and confines himself to the subject of beer.

The argument about the EEC is thin. It is obvious that the Government raised the tax on beer because they needed the revenue. If the Labour Party had won the last election and had been confronted with the same problem of EEC harmonisation, I doubt whether it would have behaved very differently from the Government. These identical problems arose over tobacco taxation in the lifetime of the previous Labour Government. For the Opposition to pretend that they would have behaved in a radically different manner when confronted with these problems is less than honest. I do not think that it is a good point to raise the EEC issue. We have to face reality.

If hon. Members, like me, want higher spending on public sector projects to help to reflate the economy—I am prepared to accept a higher public sector borrowing requirement than the Government—the fact still remains that revenue has to be found somewhere. I am more prepared to find it by increases in some Excise duties than through a failure to index the income tax thresholds. I supported the main Opposition yesterday, but I see no case for supporting this amendment today.

I am a little diffident about intervening in what has become an interesting and perhaps even perceptive and illuminating debate involving the hon. Member for Gateshead, West (Mr. Horam), representing the Social Democratic Party, and various Opposition Members. I believe that the hon. Member for Gateshead, West, with all the detachment that he can now bring to the debate, was able, in his encounter with the hon. Member for Edinburgh, Central (Mr. Cook), to illuminate some of the central problems that bedevil the Opposition.

I hope, Mr. Weatherill, that it will not be taken as a criticism of the Chair when I say that we have had a fairly wide-ranging debate. At times, it might have escaped the attention of the Committee that we were debating amendment No. 53, designed to reduce the proposed increase in Excise duty on beer to 15 per cent., which would have involved, as the hon. Member for Blackburn (Mr. Straw) stated, an increase of 1½p instead of 4p on a pint. I do not know whether the hon. Gentleman was disposed to emphasise that this would have involved a loss of revenue of £240 million. The hon. Gentleman candidly admits that fact.

As the hon. Member for Gateshead, West reminded the Committee, we have to consider the revenue implications of these amendments. I emphasise to my hon. Friend the Member for Rutland and Stamford (Mr. Lewis) that no hon. Member, certainly none on the Government side, is particularly anxious to introduce any tax or duty. There may occasionally arise external reasons for doing so. However, our Finance Bill debates are essentially concerned with the balance of taxation. As the requirements of Government increase and since we are less ready to borrow than previous Administrations, we must scratch around for increases in revenue. One of the areas that we chose was the duty on alcohol and in particular on beer.

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The hon. Member for Blackburn phrased his attack in three ways. He said that the increase would hit one of the few pleasures left. That was a slightly apocalyptic view of what is happening in Britain. The hon. Member for Isle of Ely (Mr. Freud) could tell the hon. Gentleman a thing or two about the pleasures left throughout our happy isle. The hon. Member for Blackburn was partly supported by the hon. Member for Liverpool, Walton (Mr. Heffer), who always makes powerful contributions to our debates. However, he has a romantic view of British life. His emotions are fixed where Wat Tyler's were before he was struck down. The hon. Gentleman regards beer as the prerogative of the ordinary working man. I have news for the Labour Party. The ordinary working man—and I resent the narrow interpretation of that phrase—has broadened his tastes. He is enjoying wine, and I am delighted.

We are not aiming at the ordinary working man, but we must consider how best, in a difficult time. We can increase our revenues. It might be thought that we are singling out beer. The proposal in clause 1 increases the duty by 38 per cent. I remind the Committee of what the right hon. Member for Leeds, East (Mr. Healey) did in April 1975 since I want to demonstrate that there is noting socially divisive about our proposals and that we are not singling out any group of our fellow countrymen.

The right hon. Gentleman increased VAT. He increased the basic rate of income tax from 33 per cent. to 35 per cent. He increased the duty on beer by 2p—a 40 per cent. increase. The increased duty on beer in 1975 was proportionately perceptively greater than the increase proposed this year.

It was a 40 per cent. increase on the previous duty.

I shall remind the Committee of the Labour Administration's curious record. For example, the duty on beer was increased by 35·7 per cent. in 1974. In 1975 it was increased by 46·2 per cent. We propose an increase of only 38 per cent. I concede that the increase tailed off in 1976–77 and that there was no increase in 1978–79. We are redressing the balance. We are bringing back the real rate of duties to what it was under the Labour Administration.

Let us put the problem in perspective. The right hon. Member for Ashton-under-Lyne (Mr. Sheldon) will recall the increase in beer duties which he supported. In his Budget Statement the then Chancellor, in the ringing phrases to which he is prone, said:
"Now, however, when I am forced to call for general sacrifices, when rich and poor alike face increases in essentials like rent and rates and fuel prices, it would clearly be wrong to leave untouched such forms of consumption as smoking and drinking, when the effective tax burden on them would otherwise continue to fall. Instead of changing the rate of VAT on these goods, I have decided that the duties should be increased to give precise effects on the bar or retail prices of all these goods across the board. I hope it will be appreciated that the size of these increases reflects the fact that in the circumstances of this Budget the alternative to them would have been either a higher target for the revenue from direct taxation or an increase in the standard 8 per cent. rate of VAT."—[Official Report, 15 April 1975; Vol. 890, c. 305–6.]

Is the Minister of State aware that some Government Back Benchers at that time thought that their Ministers were not listening enough to their own supporters?

History might vindicate the hon. Member for Walton, who has always taken an idiosyncratic line. I shall leave him to justify his part in supporting or not supporting the Labour Administration. I want to put the problem in its true historical and political perspective.

In putting the problem in its true perspective, the Minister quoted the former Chancellor of the Exchequer. We are objecting not only to the increase but to the particularly heavy impost on beer.