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Orders Of The Day

Volume 15: debated on Wednesday 16 December 1981

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[7TH ALLOTTED DAY]— considered

Television Licence Fee (Pensioners)

4.30 pm

I beg to move,

That this House supports the view of the Director-General designate of the British Broadcasting Corporation that "some way has to be found of relieving pensioners of paying full television licence fees annually"; and calls upon Her Majesty's Government to consult with organisations that represent pensioners and their interest so as to determine the best way in which a concession can be provided, and to report its conclusions to this House within six months.
It is difficult to imagine a more emollient motion for a Supply day. The motion makes three modest requests, which are all easily within the Government's power. First, it asks the Government to accept
"that 'some way has to be found of relieving pensioners of paying full television licence fees'".
Secondly, it asks the Government to consult pensioners' organisations on how such a concession could be organised. Thirdly, it asks the Government
"to report its conclusions to this House within six months".
Bearing in mind the sheer modesty of the proposals, we are left baffled by the Government's obduracy in refusing even to contemplate them. The need for a concession seems obvious and overwhelming. The obvious and overwhelming argument for a concession will not be diminished by the Home Secretary telling us that the pension is upgraded each November to take account of the increased costs that pensioners have suffered in the preceding year. The pension may be upgraded next November, but the increased licence fee must be paid now.

On the Opposition Benches and, I believe, outside the House there is no faith in the willingness of the Government fully and honestly to recompense pensioners by restoring the full value of their pension, taking account of what they have lost during the previous 12 months. It is well known, although the Government continue to deny it, that at least 3 per cent. has been deducted from the pensioner's proper increase this year. That amounts to about £61 for a married couple, which is more than a full television licence fee. Surely a retrospective adjustment is necessary.

We believe—it is a belief that is clearly not shared by the Government—that television is the only sustained pleasure for many retirement pensioners. It is their single regular contact with the outside world. I appreciate that the same argument can be advanced for the chronically sick and disabled, but today, believing that the chains of Marley's ghost have not yet clanked loud enough in 10 Downing Street, we ask the Government to repent over only one issue, and that is the retirement pensioner. Therefore, the motion is limited to the pensioner.

We know from experience that for many retirement pensioners a fee of virtually £1 a week is more than they can reasonably afford. I concede at once, as did the director-general designate in the broadcast to which the motion refers, that the Government have recently extended the various easy payments systems which have been introduced for paying licence fees. No doubt those systems will help some, but they will not help the poorer pensioners who cannot afford to pay £1 a week any more than they can afford to pay £46 a year. There will be double inconvenience and double disadvantage if, as is the case, they are required to pay next year's licence now. Easy payments systems are always designed for licence fees to be paid by the poor in instalments, but in advance.

The House will recall that in April 1978 the then Home Secretary, my right hon. Friend the Member for Leeds, South (Mr. Rees), announced a major extension of the pensioner's concession. A year after that extension was announced we proposed, in the Labour Party's election manifesto, to continue the process that had been begun. We proposed that the phasing out of the licence fee for pensioners should be carried out within the life of the then forthcoming Parliament.

We call upon the Government not to implement that policy, but—we make a more modest request—to recognise that the pensioner can be helped in some way. It seems hardly credible in the House—it seems extraordinary outside—that a modest request for an inquiry to ascertain whether pensioners can be helped should be dismissed out of hand.

We accept that in an ideal world no concession would be necessary. In that ideal world the pension would be sufficient to allow for the normal payment for the licence fee and for everything else without hardship. It is the ambition of all to ensure that pensioners receive a pension that enables them to receive all the benefits that the rest of us enjoy without any concessions, but we are very far away from an ideal world, and in the world that we inhabit we are getting further and further away from the ideals that I have described. Indeed, the Government are doing all that they can to diminish the pension increase year by year.

It is no less than effrontery for the Government to table an amendment that talks about the real answer to the pensioners' problem being
"the maintenance of the real value of the retirement pension."
The Government have done less than virtually any other Government in the past 15 years to stick to that principle.

indicated dissent.

If the right hon. Gentleman, with his normal command of statistics, wishes to argue about the 3 per cent. shortfall and the £61 being deducted from pensioners, I shall be delighted to take issue with him. I thought that the right hon. Gentleman's trembling was an indication that he was about to intervene. It seems that I was mistaken. I look forward to learning what he has to say

The Opposition feel strongly that, in an ideal world, the retirement pension should be high enough to prevent the necessity for concessions. However, in the world that we presently inhabit, regrettably, the pension is not large enough to allow that to happen. Hence, the need for concessionary fares and rent rebates. The Opposition believe that it is only reasonable to extend the same principle, the same help and the same modicum of assistance until pensions can be raised to a level that makes such concessions unnecessary.

The Opposition are asking for further help for pensioners. We offer the Government some suggestions about how the revenue may be raised to help to meet the cost of this concession without increasing public spending. If the Labour Party were in the Government's position, it might feel that the economy demanded some public spending increases to finance such a concession.

I shall argue this case in the Government's terms to make their rejection of the motion seem all the more extraordinary. I shall offer the Government some suggestions as to how they can meet the shortfall in the licence fee revenue which would be the result of pension concessions.

I accept without qualification that the BBC needs to receive the equivalent of the income which the £46 licence fee will produce. One might argue, as I do, that the BBC made a good case for a £50 licence fee. I wish not to reduce the funds paid to the BBC, but to change the way in which they are collected. I wish the collection of the licence fee to continue in much the same form as now. I do not wish the Government to be responsible for funding the BBC. I believe that the licence fee is necessary to preserve the proper independence of the BBC, but there are significant disadvantages in financing the BBC through what amounts to a poll tax which falls equally on all television subscribers, rich and poor alike.

I do not believe that the best interests of the BBC are served by a poll tax. That point was made with some force by the director-general designate when I spoke to him yesterday. If we go on collecting the licence fee at a single rate, the time will eventually come—perhaps it has come already—when not enough will be collected properly to finance the BBC, because it will be felt to bear too heavily upon the poor and therefore the licence fee and the overall intake will be artificially held down.

I repeat, the same amount of revenue should be collected, but in different ways. I offer the Home Secretary some ways in which this might be done.

First, it is a scandal that television sets are being used all over the country for commercial purposes without those who own, use and profit from them paying a penny towards the licence fee and the upkeep of the British Broadcasting Corporation. I was told yesterday by the British Tourist Authority that there are at least 300,000 television sets in hotel bedrooms. As a hotel needs to take out only a single licence, virtually none of those sets attracts a licence fee.

I take one example. The Savoy hotel has rather more than 200 bedrooms and rather more than 200 television sets. I was reliably informed by that hotel this morning that it charges £85 per night for a double room. If it paid a proper licence fee for each of its television sets, the cost of a room would be increased by a little under 13p per night. I believe that the Savoy hotel could be required to pay a licence fee for each set without a deeply detrimental effect on the tourist trade or on any of the other matters that are wheeled out by vested interests as arguments for commercial organisations getting away scot-free.

I believe that there should be a commercial licence. If it were levied at the present rate on those 300,000 television sets, it would raise about £15 million. I go further. I believe that the commercial licence fee should be higher than the domestic fee. If a person owns a television set that is used for his own commercial purposes and profit, he should clearly pay more to the Government for the licence than should the family watching television at home.

I go still further. I would not limit this to hotels. There are organisations all over the country with dozens—perhaps hundreds—of television sets on their premises, ranging from the Shell building across the Thames to the Palace of Westminister, where I understand we pay a single licence fee. That is preposterous. Such people should pay a fee for each set, and I believe that they should pay more than the individual family at home.

Such a system would, of course, produce much complaint and a little inconvenience to some commercial organisations, but it would produce the revenue to subsidise the pensioners. I believe that an enhanced fee for all commercial use would produce as much as £50 million. That would be a start—but only a start.

I offer a further suggestion. We are trying not to lay down rules but to concentrate the Home Secretary's mind on matters which he might examine. A further suggestion for raising more revenue for the BBC is an exchange of income between the BBC and the commercial companies. If we gave the IBA 20 per cent. of the licence income, the IBA would have the power and influence that it desperately needs but does not have. If it had this money to spend on programmes through programme companies, it would have the teeth that many of us wish it to have. In return, the programme companies could be required to give 20 per cent. of their advertising revenue to the BBC. The extra revenue would give the BBC the strength, power and general income to make it far easier for it to allow a reduced licence fee to pensioners without detriment to its own organisation.

I do not ask the right hon. Gentleman to reveal a private conversation, but did he discuss this with the director-general designate of the BBC and, if so, what was his reaction?

No; that matter was not discussed with the director-general designate. The hon. Gentleman need not worry that he is intruding into a private conversation. Had it been a private conversation, it would not have been mentioned in the debate and the director-general designate's views would not have been broadcast on television and radio on Friday or have appeared in the motion. The proposal was put to me by other authorities on broadcasting, if I may so describe them, but in this respect at least the director-general designate is free of any guilt.

It is possible that, even with a substantial amount from the levy and a commercial licence at an increased rate, there might still not be enough to provide the concession for pensioners that I seek. I repeat the view expressed last week by the hon. Member for Staffordshire, South-West (Mr. Cormack). I believe that if there were still a shortfall, most families in this country would be prepared to contribute a little more in their licence fee to give the pensioners a fair deal, if that were the only way to do it. I believe that it would be right for the Government to suggest that, and that the response would be overwhelming.

I hope that in moving the Government amendment the Home Secretary will not exaggerate how much such a concession would cost or how great the increased contribution of other viewers would have to be if it were allowed. I know that the size of both the concession and the increase in other licence fees which might be involved depend to some extent on how the concession is calculated and who it is thought should receive it. The motion deliberately makes no attempt to commit the Government to a scheme which might frighten off their more timid supporters. We are asking the Government to examine all possibilities in good faith and with good will and to report their conclusions.

We concede at once that, however it is organised, any scheme to extend the concessions allowed to pensioners is bound to include anomalies—some real, and some apparent. Some pensioners who it is popularly believed should not receive the concession will receive it, while others who it is popularly believed should receive it will not. The Government cannot argue with any conviction that the objection to any scheme that we propose must be the anomalies which might be involved. If any scheme is anomalous and causes great anguish, anger and concern as a result, it is the present system of concessions for old-age pensioners. I think that all hon. Members would agree that perhaps the third or fourth most regular subject of their constituency mail is that raised by the pensioner who points out that a friend, a contemporary, a relation or a neighbour receives a concession while he does not.

On 5 March, my hon. Friend the Member for Rother Valley (Mr. Hardy) told the House of a block of flats in his constituency in which
"a pensioner living in a ground floor flat … receives the concession but a pensioner, in exactly the same circumstances and of the same age, living in the flat above can be denied it".—[Official Report, 5 March 1981; Vol. 1000, c. 406.]
The system whereby pensioners currently pay for their television licences is riddled with anomalies. One is the definition of what is appropriate property. Another is the distinction between local authorities which help pensioners—Clay Cross and Rotherham are first-class examples, but there are many others—and local authorities which do not. Every hon. Member must have had large quantities of correspondence from pensioners saying that they are badly treated because others who are identical in every circumstance receive concessions while they do not.

Will the right hon. Gentleman also define exactly what he means by a pensioner? Does he include Mr. Harold Macmillan? Does he mean every male over the age of 65 and every female over the age of 60? Does he include people on early pensions? Is any kind of means test involved? How do we distinguish the case of the family in which a pensioner lives? It seems important to define what he means.

I hope that the hon. Gentleman did not imagine for a moment that I did not intend to deal with the subject of qualifying categories. I shall come to that in a moment. When I speculate as to what those categories might be, however, it seems clear that in any concessionary scheme some people will receive a concession that they do not need. I need only to recall the Home Secretary's comment a few weeks ago, that if there were a concession for all pensioners my right hon. Friend the Leader of the Opposition would already be receiving it and he himself would receive it soon. I take it that the Home Secretary looks forward to receiving a free bus pass in a month or two. Despite the implication that he did not need it, I am not suggesting that he should not receive it. It is in the nature of the provision of welfare that sometimes it is received by people who do not need it. I regret that should be so, but I shall explain why we need it. It is one of the things that we have to face, one of the crosses we have to bear, one of the bullets on which we have to bite.

Before I move on to that aspect, I shall try to define the categories of persons who should receive the concession. There will be some anomalies, but there are anomalies in the present system, and they cannot be advanced as reasons for preserving the present system.

Who should receive the concession, and how much would it cost? The usual calculation is based on 6 million pensioner households. Full exemption for all those households would cost £230 million. That is the equivalent of a £69 licence fee for the rest of us if no household with a pensioner were required to pay for a television licence. The Opposition asks the Home Secretary not to phase out the pensioners' licence fee, but to look for concessions.

I note that the hon. and learned Member for Bradford, West (Mr. Lyons) is in his place. He will obviously be advocating the total abolition of pensioners' licence fees, because that was in the manifesto on which he fought the general election. I know that the Social Democratic Party believes, above all, in sticking to the manifesto. Therefore, I look to him for a robust demand for his election pledge to be fulfilled. I am asking the Government not to abolish the licence fee for pensioners but to examine the alternatives. I concede that if it were phased out completely, there would be a £69 licence fee for all families if the Government made no allowance for the commercial fee or for a contribution from the IBA levy.

I hope that the Secretary of State will not quote the £69 fee and the £230 million total. If he is anxious and determined to help pensioners, he can evolve schemes which, allowing for the commercial fee and the contribution from the IBA levy, would make a smaller demand on the licence fee in general.

For example, I would welcome as a small step in the right direction a simple exemption for households where the pensioner is the head of the household and responsible for the bills, and subsists on a pension. In short, the rich or the fairly rich young married couple who had a parent living with them would not necessarily be exempt, but an elderly woman who had a single daughter living with her and looking after her would be exempt.

I accept that that is not a perfect distinction—there will be some anomalies—but it would absolve from payment a large number of households—perhaps 4 million—in which the retirement pensioner had the prime responsibility for paying the bills and managing the limited money. It would provide a good deal of help for people who desperately needed it. I believe—and I hope the House believes—that while television may be a pleasure for some of us, and perhaps a flippant pleasure on some occasions, for old-age pensioners with little money to spend, confined to their homes, unable to enjoy other pleasures and with no opportunity to go out, it is a near necessity.

Is the right hon. Gentleman aware that under the previous Labour Government I tried to introduce a Private Member's Bill to relieve the institutes for deaf people of the need to pay the licence fee? That would have cost the Treasury £10,000 but the Government refused to give that concession to those people. Does the right hon. Gentleman think that deaf people do not consider television as vital to them as it is to pensioners? How can he defend the rejection of £10,000 for deaf people, but ask the House to support £200 million for pensioners?

If the hon. Gentleman had followed my perhaps over-convoluted argument, he would recall that I was not defending the £200 million. I was urging the Home Secretary not to quote that figure because my scheme—or a scheme—would cost much less. If the hon. Gentleman had been here at the beginning of my speech—I am sure that he was, but I cannot recall—he would remember two other things.

First, I gladly conceded that a wide spectrum of people could benefit under such a scheme. However, today we make a narrow call on the Government, in the obviously mistaken hope that they will respond to it.

Secondly, I told the House that the Government in which I served made substantial progress in this matter. We advocated concessions. I do not think that we are subject to legitimate criticism for not going far enough. I ask the Government to look at the ways in which necessitous pensioners can be helped to enjoy one of the few things that provide them with certain and continuing enjoyment.

My scheme—or any scheme—would involve some anomalies and administrative costs. It would involve industry paying a fraction more for television reception. It would involve the concession going to some people who did not need it, but it would bring such happiness and end much anguish for pensioners. Therefore the Government ought to agree to our modest request to examine the possibility of concessions. I am astonished, and many hon. Members will be ashamed, that the Government will not do that. No doubt many people outside will be horrified at the hard-faced way in which the Government have responded to our wholly moderate and reasonable motion.

4.56 pm

I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:

"this House endorses the Government's decision to increase the television licence fees to £46 for colour and £15 for monochrome on the basis that these will last for at least three years; and believes that the right way to help retirement pensioners is through the provision of a choice of methods of payment and the maintenance of the real value of the retirement pension'.
The House will recall that we had a short discussion on 1 December following my statement announcing increases in the television licence fees to £46 for colour and £15 for monochrome. Since those increases have given rise to this afternoon's Supply Day debate, I think it right that the House should bear in mind the nature and purpose of those increases.

It is my firm belief that the licence fee system, for all its difficulties, is the best available method of financing the services which the BBC provides and for securing the independence of the corporation. I welcome the fact that this view commands wide support, particularly from the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley).

In reaching the decision I announced two weeks ago, I considered it to be my duty as Home Secretary to strike a balance between the financial needs of the BBC and what is was fair and reasonable to ask licence fee payers to pay in present economic circumstances. I also saw it as my responsibility to do what I could to make the licence fee system work in the way that it should work. Its value lies in the way in which it distances the Government from the day-to-day affairs of the corporation and also in the way it enables the BBC to plan ahead. This value is greatly diminished if the BBC has to come each year to the Government asking for an increase in the fees. That is why I decided on an increase to last for at least three years. My intention is that the fees will be pegged at least until December 1984.

The increased fees will be taken into account in next year's uprating of pensions. Thereafter, until December 1984 at the earliest, although there will be increases in pensions in line with inflation, I intend there to be no increase in the television licence fees. I believe that there is a broad measure of agreement both with my three-year approach to the licence fee settlement and with the actual level of fee increases that I decided.

Even at the new levels, the television licence fees continue to give extremely good value for money. They represent a cost of less than 90p per week for colour and less than 30p per week for monochrome for two television services, four national radio services and many local radio services, whose quality, range and entertainment value are matched in few other countries and surpassed in none.

As I said two weeks ago, I fully appreciate that it is not easy for some people to find the licence fee in a single lump sum each year. I have been much impressed by the use that is being made of the saving stamps scheme. At present, about a sixth of all licence fee revenue is collected through this scheme, and it is clear that many people welcome the chance to spread the cost of the fee over the year. I recognise, however that this scheme cannot suit everybody, and two weeks ago I said that I proposed to introduce new ways of enabling people to spread the cost over the year, by means of instalments, including cash instalments payable over post office counters. These schemes cannot be introduced overnight into a licensing system which each year has to handle nearly 19 million licences, but I am determined that they should be implemented as soon as possible.

I say sincerely that I regard the right hon. Gentleman as one of the humane persons on the Government Benches. Will he concede that people who have to renew their licences tomorrow, for example, will not be able to avail themselves of the scheme but will be required to pay the full fee immediately?

Yes, that is true.

I come now to the question of concessionary licences. Whenever the licence fees are increased, there are understandably calls for free licences or reduced fees for pensioners—and, indeed, for other groups, such as the disabled. I must tell the House, however, that it would not, in my view, be right or responsible to go down that road.

I am not shaken in that view by the motion that the Opposition have tabled. When they had the responsibility for these matters, when they were in office, they did not take the opportunity to introduce concessions. The reason why they did not do so then was that they would have had to face the consequences. Even in the motion they have tabled, they do not face the consequences. They suggest consultations between the Government and organizations representing pensioners, as though the consequences of concessionary licences were confined to pensioners. It is important that I should put these consequences squarely before the House.

It would, of course, be easy for me to say that I shall have consultations at the same time knowing very well that some of the consequences of what I put before the House would have to be faced during the consultations. I do not believe that at the end a means would be found of meeting any of these difficulties.

Any scheme of concessionary licences would be bound to cost a lot of money. I shall go over the facts, and I shall not be deterred by the right hon. Gentleman from giving the figures as I believe them to be. The House and the country must have the figures plainly and clearly from the Government.

The Home Secretary said that his predecessor did nothing to extend the concessionary scheme. Is he aware that on 6 April 1978, in a written answer, at columns 159–60, of the Official Report his predecessor said that action would be taken that would nearly double the number of recipients of concessions? Surely the right hon. Gentleman does not mean to suggest that his predecessor did nothing to extend the concessionary scheme.

The Labour Government did not make the sort of concession that the Labour Party is now proposing—a complete concession for all pensioners. That is what the Labour Party put forward in its manifesto, but it was not carried out when the Labour Party was in office.

A free licence in all pensioner households—that is in any household in which a pensioner resides—would cost, at the present level of fees, about £800 million over the three financial years ending in March 1985—that is not counting the remainder of the current financial year. Half fees for pensioner households would cost about £400 million over the same period. Even keeping the fees at £34 and £12 would cost about £200 million.

It may be argued that a concessionary licence should be available, not for all pensioner households, but only for some—for example, for pensioners living alone or with another pensioner only. Simply keeping the fees at £34 or £12 for this group would cost about £120 million over three years. But how is the licensing system to distinguish between the pensioners entitled to a concession and those not entitled?

To make that distinction, and to ensure—as the rest of the public would be entitled to expect, particularly if they had to finance the concession—that it was not being abused, would involve costly and, I am bound to say, perhaps distasteful measures of certification and checking. There would be extra work, extra documentation and extra cost for the agencies that would be involved in certifying that a pensioner fell within the class of pensioners entitled to the concession. In many cases it might be impossible to issue a certificate without a visit to the home in question.

How would the cost of concessionary licences be met? First, I must tell the House that not enough money could be found from collecting fees for individual sets in hotels, as suggested by the right hon. Gentleman on the last occasion when the matter was debated, and, indeed, on this occasion. I am, as I have said, looking into the question, but the maximum that it would produce would be about £8 million a year.

A possible way of meeting the cost of concessions would be by direct Government grant. Such increases in public expenditure would not be acceptable to the Government. Moreover, partial reliance on direct grant would inevitably be the thin end of the wedge and lead to increasing reliance on direct grant. In this way, the value of the licence fee system as a method of financing the BBC so as to secure its independence of the Government would diminish and, in the course of time, disappear.

Some will argue that the revenue to finance concessions should come from advertising, but this would be to alter quite fundamentally the character of the BBC and the services that it provides to the public. Indeed, it would change broadcasting in this country in a way which I believe many people in this House would find unacceptable.

My right hon. Friend says that it would provide a worse service if the money were all raised by advertising, but that is precisely what we want, is it not? As it is, we have the whole nation glued to the idiot box.

That may be my hon. Friend's view, but it does not accord with the view previously expressed in the House by many hon. Members, which is that we value the services of the BBC on television and on radio. I believe that they are greatly valued. One of the arguments put forward in the debate is that retirement pensioners greatly value the services. One cannot ride both horses at the same time.

The hon. Member for Yarmouth (Mr. Fell) is a pensioner.

The only remaining way of financing concessions is by increasing the fees for those who do not benefit from the concessions. As I said two weeks ago, at the present level of fees, a free licence for households in which a pensioner resides would mean fees of about £70 for colour and £25 for monochrome for those paying for their licences. A half fee for pensioners would mean fees of perhaps £58 and £20 for others. Simply keeping the fees at £34 and £12 for pensioners would mean fees of £52 and £17 for everyone else.

Moreover, it is not simply a question of increasing the fees for those not benefiting from concessions, substantial as those increases would have to be. It is also a question of fairness. We feel, rightly, that we have a special responsibility for the welfare of pensioners. That is why the Government are committed to maintaining the value of the retirement pension. I deeply resent what the right hon. Gentleman said. Indeed, it is impertinent of him, with his Government's record, ever to suggest that the Conservative Government have not met their obligations concerning the value of the pension, as promised by the Prime Minister, and we intend to meet them in the years ahead. We have made that abundantly clear. We have done it in the past and we shall do it again.

Does the right hon. Gentleman agree that what he has just said is manifest nonsense, when inflation is at 12 per cent. and the pension has gone up by only 9 per cent.?

My right hon. Friend has made it clear that the shortfall will be taken into account in uprating the pension. We have said it perfectly plainly and clearly. We have done it over the years and we shall continue to do so.

There is no question of fooling people. The only people who tried to fool anybody were the Opposition, who tried to pretend that they did that when they manifestly did not. That is a commitment that we have honoured and will continue to honour.

By no manner of means can all pensioners be said to be in need of a free or even a reduced cost television licence. The hon. Member of St. Pancras, North (Mr. Stallard) referred to my hon. Friend the Member for Yarmouth (Mr. Fell) as a pensioner. Neither my hon. Friend nor the House would suggest that the rest of us should pay to give him a free television licence. Hon. Members would dislike it even more if, in about two years' time, they found themselves paying for me to have one. That would really stick in their throats.

Equally, there are many other groups who are no less deserving of our consideration than pensioners. If we go down the road of concessions, where is the line to be drawn? And what answer do we give to those who would have to pay increased fees to finance the concessions but who would find it no less difficult, and perhaps more difficult, to pay the licence fees than those benefiting from the concessions?

In the Government's view, it is better to give people benefits in cash, which they can spend in the way that they, rather than the Government, think best in the light of their individual circumstances, rather then benefits in kind where they have only the choice of taking them or leaving them. It is better to keep the base of the licensing system wide and the cost of the licences as low as possible for all than to narrow the base and raise the cost for some.

For all of these reasons, I come back to the point that I made at the beginning. I believe that it would he neither right nor responsible to introduce concessions. I do not see how we can both go down the road of concessions and preserve the licence fee system as the method of financing the BBC.

I will of course, if I have the leave of the House, answer some of the points that are raised in the debate and some of the other points raised by the right hon. Member for Sparkbrook.

No. I shall now finish my speech.

I believe, further, that the decisions that I announced two weeks ago to increase the fees so that they will last for at least three years will maintain that system and will maintain the independence of the BBC and the contribution that the corporation makes to our national life. It is on that basis that I commend the amendment to the House.

5.12 pm

I found the Home Secretary's speech extremely disappointing, particularly the part about letting people have the money in their pockets to spend as they wish. That seems to be exactly the message on which the Conservative Party won the last general election. It rings a little hollow in the country at present. I suspect that it might have been better to leave that part of his argument out of his speech.

What particularly disappointed me was the Home Secetary's obstinate refusal to consider the possibility—which is all that the motion calls for—of reduced television licence fees for pensioners, and the setting up of an inquiry into, or discussion of the present anomalies, and into the possibility of creating a system to ease the burden on pensioners of the proposed increase in the television licence fee.

I accept the Home Secretary's point that the official Opposition cannot brag about what they did in this matter. It was a very late conversion in the lifetime of the previous Government. It was about six weeks before polling day at the last election when the previous Government came to the view that there should be concession for pensioners on television licence fees. Certainly, they cannot claim that they were not aware of the pressure for that concession. I referred to it in my maiden speech in 1972, but many other right hon. and hon. Members on both sides of the House had been pressing in the 1970s for something to be done on this matter.

I read the Government amendment with great interest, and I am extremely sorry that they have declined to help in this matter.

If the hon. Member for Ormskirk (Mr. Kilroy-Silk) wishes to intervene, I am prepared to give way to him. Otherwise, he ought to stop muttering, because people will think that he is one of the qualifiers for the concession. He has been muttering like a decrepit geriatric in an old people's home. If he has something to say, let him stand up and say it.

It is a pity that the Government amendment does not allow for the sort of inquiry for which the motion calls. The amendment talks about the
"maintenance of the real value of the retirement pension."
The Home Secretary referred to that matter. But the Government are not, for the next 12 months, retaining the real value of the retirement pension. I am prepared to accept in good faith that the Government intend next November to restore its real value, but the fact is that for 12 months until next November the real value of the pension has been reduced by the Government.

As the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) said in his extremely constructive speech, the licence fee is being increased now. The Home Secretary has conceded that point. But the real value of the pension, which is what the amendment talks about, is not to come into operation until November 1982.

It is reasonable to deal with the value of the pension in the coming year, but to be fair—he is always fair—perhaps the hon. Gentleman will deal with the real value of the pension in the previous year.

I am not sure what the hon. Gentleman means. I am dealing with the present position. The amendment talks about maintaining the real value of the pension. That is not being maintained over the next 12 months; it is being reduced, in the Government's own terms, by 2 per cent., and in the view of many of us by 3 per cent. over that period. Therefore, I very much hope that during this debate the Government will reconsider their whole attitude to television licence fees and concessions.

Many inequities exist now. The principal inequity, to which the right hon. Member for Sparkbrook referred, could be considered by a committee of inquiry, or something of that kind, over the next six months—the principle that some pensioners get their television licence for 5p whereas others must pay the full amount. I totally support the point made by the right hon. Member for Sparkbrook about that matter. It is a bone of serious contention among pensioners, who consider it grossly unfair.

During the last seven days I have spoken to many pensioners who have told me that they receive their television licence for 5p and that they would be prepared to see a substantial increase in the fee that they pay if all pensioners were to get a reduced fee licence and thereby all paid the same amount. It is grossly unfair that some pensioners get their licence for 5p while others will now have to pay £46 for the same licence. I hope that the Government will look at the legislation which has given rise to this anomaly and which causes such deep resentment among pensioners.

A more important question than it has been in the past is that of refunds on television licences for the unexpired part of the period to which the licence refers. People emigrate; people die; people get rid of their television set. But they cannot get a refund on the unexpired portion of the licence.

I am not saying that everybody should be able to get a refund for a month or anything of that sort, but when a licence costs £46 a year—£4 a month—things are different. I wrote to the Home secretary in the past two months about a case in which at least 50 per cent. of the licence had not been used; the people involved intended to emigrate and, therefore, were robbed of £20. That does not happen with car licences, for example, because they can be taken out for three months, six months or for any period under 12 months. However, a television licence can be taken out only for 12 months and the odds are, except in rare cases, that once money is parted with it has gone, whether or not the licence is needed for the full 12 months.

When the licence cost £7, £10 or £12 it was trivial and not worth arguing about, but as it reaches £46—presumably in three years it will increase again—it becomes a problem. The inquiry called for by the Opposition could include such matters with the many other aspects.

So far, the debate has been on the economic argument. The argument for concessionary licence fees for pensioners is basically not an economic but a social argument. Often Governments take the view that the problem of age is the problem of poverty. There are other problems of age and one of the major problems is loneliness. Therefore, the licence fee argument should relate not only to the economic circumstances of pensioners, but to the social circumstances. The argument of loneliness is relevant.

Local government has done much to try to combat the problem of loneliness through luncheon clubs, old-age pensioner clubs, the meals-on-wheels services, visiting of old-age pensioners in the homes, warden services, and so on. Such schemes are designed not merely to assist old people, but to help break the periods of loneliness that old people—especially those living alone having lost their partners in life—have to face.

The television set is a further weapon in the fight against loneliness among pensioners. I plead with the Government to ensure that they do not price the television set out of old-age pensioners' homes. If they do that, they will do a great disservice to compassion and aggravate the growing problems among the increasing number of old-age pensioners.

I hope that even at this late stage the Government will think again on this matter, not merely in economic terms but with a view to ensuring that every pensioner can have a television set and that fewer pensioners sit at home this Christmas—as they did when telephone charges were increased—working out whether they can afford the new fee.

To many hon. Members £46 is chickenfeed. I make no secret of the fact that I could afford £46 more than once for a television licence fee. However, for a couple living on a pension, or for a pensioner living alone, £46 is a lot of money in one bite. I welcome all the Home Secretary's wonderful schemes allowing pensioners to pay weekly, buy stamps, and so on, but they need 12 months to prepare for that. If he could not do anything about a concession in the first two years of the new fee, he could at least try to implement one in the final year, because that would allow pensioners to prepare over 12 months for the increase that they would then have to face in 1984 or 1985.

I appeal to the Home Secretary and the Government to think again about the motion. Let us not argue on the basis of party politics or stances. Let us argue on the basis of compassion, the need for elderly people's comfort in their old age and their need to have weapons in their homes to combat loneliness. I am sure that if the Home Secretary could be persuaded to think on that basis he would see the merit of an inquiry into the matter, which is all that the Opposition motion calls for.

5.24 pm

I address my remarks to the serious anomaly, which was mentioned by the hon. Member for Rochdale (Mr. Smith), between pensioners who are entitled to the old person's home licence of 5p and those who will shortly have to pay the full licence fee, which for a colour set will be £46.

Nobody should underestimate the strength of feeling about this issue. It is almost invariably raised with me when I speak to pensioners' organisations and when I meet pensioners informally. Nobody should be too surprised about that, because everybody tends to consider his own situation not in isolation but in comparison with his peers.

The majority of pensioners have to pay the full licence fee and they regularly mix in community rooms and elsewhere with other pensioners who, for all practical purposes, are exempt from paying the fee. They naturally ask why that should be. That is a natural human feeling and even hon. Members are not exempt from having similar feelings. Therefore, nobody can be surprised that pensioners feel that way.

I know from my discussions with pensioners that that unfair distinction has become a considerable barrier between many of them. It has even broken friendships. It may be that those who do not regularly discuss issues of the day with pensioners do not fully appreciate how many of them feel very strongly about this matter. It is not an issue about which one reads in the press every day. Pensioners are not a strong and vocal pressure group with ready access to the media. However, nobody should ignore the strong groundswell that exists.

It is easy to understand how we have reached the present situation and how the special licence developed to its present form. I wrote about this matter 18 months ago to Lord Belstead and he replied that it exists
"not as a welfare concession, but because residents in certain homes were regarded as if they were exempt from taking out licences while those in other homes were not. A line had to be drawn between accommodation which could be regarded as 'home', so making it eligible for the licence, and ordinary dwellings which could not benefit."
The line to which my noble Friend referred has been moved over the years for understandable reasons. As it has been moved, it has extended the numbers of those entitled and, at the same time, has extended the scope for disgruntled feelings. Those entitled to a special licence are, generally speaking, those who have the benefit of a visiting warden. They very often have the good fortune to be provided with that facility but in many ways, financially and otherwise, are better off than others who, for example, live in private rented accommodation, which is often of a considerably lower quality and who may be cut off from the company of other old people. Therefore, although one can understand the logic that has brought about the present situation, there is little fairness about it.

I want to consider for a moment how we can do something about the inequity that has arisen. It should be accepted that any solution that required a loss of considerable revenue from licence fees could not be contemplated now.

However, my right hon. Friend the Home Secretary should not, as he has done in the past, turn his face against any solution that would involve some of those who enjoy the existing concessions having to give them up. My experience, which is similar to that expressed by the hon. Member for Rochdale, and was confirmed by the Calderdale branch of Age Concern, is that the present beneficiaries recognise that the present situation is unfair and unsatisfactory and they would rather be put on an equal footing with all pensioners, even if that meant that they would have to pay a little more.

I have suggested in the past that all pensioners living alone should be entitled to a voucher worth, say, one-third of the cost of a full licence, with the cost being offset by the abolition of the 5p special licence. However, I recognise the difficulties involved in that proposal and I have confronted some of the problems, which the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) was not prepared to do.

There would be accounting difficulties and administrative work in checking whether pensioners lived alone. There is not the slightest doubt that the potential For fraudulent claims would be considerable. Therefore, the idea of giving special hell) to pensioners living alone would be difficult to implement.

I am following the hon. Gentleman's argument carefully, because his sympathies are generally in the right direction. He refers to the possibility of fraudulent claims, but does he not accept that there is sufficient information available to avoid that risk? Pensioners receive rent rebates, rate rebates and other allowances. The necessary documentation exists. Perhaps the hon. Gentleman is overstating the possibility for fraudulent claims.

The hon. Gentleman seems to be suggesting that Government Departments should pass information about people to each other. I know that my right hon. Friend the Home Secretary takes a great interest in data protection and protection of the individual, and I would turn my face against the hon. Gentleman's suggestion. It is a proposition that should be avoided at all costs.

The 5p licence results in a £6 million loss of revenue annually. The creation of a scheme along the lines that I previously suggested would cost between £30 million and £35 million a year and, because of the present economic situation, such a proposal is probably not acceptable to the Government.

In any case, pensioners' organisations do not favour concessions in kind. They would rather that pensioners received an adequate sum and had the choice of how to spend it. A pensioner who does not like watching television or does not have the faculties to do so would gain nothing from a cheap television licence.

Therefore, I shall put a suggestion to my right hon. Friend which I hope he will be willing to accept. Every year pensioners receive a £10 bonus at Christmas. The figure has remained at £10 for several years. The scheme was dropped by the Labour Government, but it was resumed when the present Government took office.

I suggest that next year the bonus should be increased to £15, which would restore some of the value lost through inflation. It happens that £15 is the new cost of a monochrome television licence, and the Government should announce that the bonus is intended to cover that cost. If pensioners want to spend it in another way or choose to top it up to buy a colour television licence that is their prerogative.

If it is administratively possible, pensioners should have the option of taking the bonus in the form of a voucher that could be exchanged for a television licence when their existing licence fell due for renewal, rather than having the £15 paid over a post office counter. Such a proposition may have certain attractions for the Government, because it would enable the Chancellor of the Exchequer to hold on to the money for a little longer.

If pensioners had a voucher that could be exchanged for a television licence it would emphasise the change that the Government were making. I know that many pensioners, including those who have a 5p licence, would welcome such a change, even though it would involve the abolition of the 5p licence, which was introduced by a Labour Government and has become more trouble than it is worth.

I am in the curious position of sympathising with the Opposition's fairly moderate motion calling for consultations with pensioners, although I disagree with most of the speech of the right hon. Member for Sparkbrook, but of also broadly agreeing with the Government amendment calling for greater choice for retirement pensioners. That complements rather than contradicts the motion.

The amendment says that the right way to help pensioners is to maintain the real value of the retirement pension. I agree with that, and I assume that the Government also wish to maintain the real value of the Christmas bonus. My proposal would enable them to go some way towards that. If the Government were willing to adopt it they would meet their own objectives, my objectives and even, to some extent, the objectives of the Opposition.

The hon. Gentleman assumes that the Government want to maintain the real value of the Christmas bonus. Surely he is living in cloud-cuckoo-land. The £10 bonus was introduced in 1973 and at today's prices it is worth only £2.

The Government have done better than their Labour predecessors, who not only did not increase the bonus, but got rid of it at one stage.

I seek to be convinced that the Government take the problem seriously. I emphasise to the Home Secretary that the anomaly is the most serious issue. If he can persuade me that he appreciates its importance and is anxious to try to do something about it, I shall have no difficulty in supporting the Government's amendment.

5.37 pm

I shall be brief. The Government are defending an increase in the licence fee which many of us who are interested in the media and the health of the BBC welcome. The Home Secretary knows that a number of us wanted to see a radical shift in the power over licence fees away from the Home Secretary, because the political implications that can be involved in the run up to an election and the pressure that Governments can try to bring on the BBC are not good for democracy.

However, we would be ungrateful if we did not recognise that financing the BBC with a £46 licence over a three-year period is a move in the right direction and will give the BBC some security. It would have been the best of all worlds if there had been a "three wise men" formula and an inflation-proofed fee of £50, but perhaps that was hoping for too much.

Against that increase in the licence fee, we have to balance the Government's deplorable record on the BBC's external services. Even with all the unremitting pressure brought to bear on the Government, we have still not achieved as much as we wanted. That puts into context the Government's relationship with the BBC on more than one front.

My position is perhaps a little different from that of many of my colleagues. In my view, the BBC licence has been a security, the means by which we have had an independent and first-class service for many years. The whole population receives that first-class service. There is no better social service for the elderly than being able to sit in their homes and watch the high-quality productions that the BBC provides. It would be a poorer environment if elderly people did not have that service. It is a service which, per day and per programme, does not cost very much, compared with bingo, the cinema and a half-pint of Guinness. It is good value for elderly people. None of us is suggesting subsidies on Guinness, pictures or bingo at present.

However, the special position that we are arguing for old-age pensioners is somewhat dangerous. Let us examine the record. There have been attempts to correct anomalies, and those attempts have created worse anomalies. We need consider only the example given by my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley). The Savoy hotel pays only one licence fee, while people in sheltered housing had to pay one licence fee each. So we moved some way towards equity in exempting certain elderly persons' dwellings that looked a little like hotels. Nevertheless, there has been much discontent among elderly people.

Tonight we are asking the Home Secretary to look at ways and means of arriving at a more equitable solution, but let us consider what would happen if we exempted elderly people from paying the licence. Poor people in my constituency of Huddersfield, one-parent families, unemployed people and people on low and meagre incomes would come to my advice service in the town hall on Friday evenings and say "The people next door are wealthy retired people, and yet they pay nothing for their television licence". It is not a good idea to exchange one anomaly for another. I do not believe in moving from one anomaly to another.

That brings me to a more general position. I belong to a party that encourages dissent. I remember when this proposal was part of our manifesto. I would view with great suspicion anyone who agreed with 100 per cent. of party manifestos. There would be something strangely wrong with such a person—not altogether 16 oz, as they say. I disagreed with the election manifesto commitment in this respect, for the reasons that I have given tonight.

Not only would there be more anomalies, but there would be a society in which some people were independent and paid their way, while others had half-price terms on Thursday afternoons, if it was raining, some who had cheap bus fares at certain times of the day, and concessions for this and coupons for that. The hon. Member for Brighouse and Spenborough (Mr. Waller) wants to introduce yet another system, which would make the butter mountains, milk tokens and butter tokens look as nothing compared with the television token system, inflation-proofed or not.

I am against concessions that create two classes of people in our society. I disagree with the Government because they have started the old-age pensioner on a steady decline in income, because they will not automatically be proofed against inflation and rising wage costs. The best safeguard for old-age pensioners is to guarantee a good income, and not to give cheap goods, cheap butter, cheap meat or cheap television. That is not the way to achieve equity and equality.

My party should stand for a system that is fair for all. That is why I shall not support the motion in the Lobby tonight. I did not agree with the manifesto commitment. I do not like the slightly fudged motion before the House, and I shall continue to fight for a good income for pensioners and no concessions. Even if Disraeli said it, I believe in one nation, not two.

5.46 pm

On this subject I have received numerous letters, petitions—which I have already presented to my right hon. Friend the Home Secretary—and visits to my surgery at the town hall from all groups of pensioners. There is no doubt that pensioners feel very deeply about it.

It is wrong to believe that when people get old they become grasping vultures with their hands in the till for handouts. I have yet to meet a pensioner who wants his television licence to be free. I mean free, because 5p for some licences is such a small amount of money that many local authorities—indeed, most—do not bother to collect the 5p because it costs too much to collect. We have a society in which some have to pay the lot and others pay nothing. It sets pensioner against pensioner. When they meet at the shops, one boasts to the other "I do not have to pay", and the other says "It has gone up again to £46."

This situation cannot continue. It is no good my Government telling me and Opposition Members that it cannot be changed. If there is the political will within the Conservative Party, of course it can be done. I vote for what I believe is right. I am not stupid enough to go through the Lobby time after time if I believe that my Government's policies are wrong. Moreover, I have proved that on many occasions.

How can we find a solution? I was delighted to hear the director-general designate say the other morning that he thought that we should consider some form of concession for old-age pensioners. By that I am sure that he means a fair system. In my view, the House and the BBC could get away with increasing the licence for those who are paying nothing. I am sure that old-age pensioners, who love to pay their way and be independent, would agree if we carne up with a scheme, but to do that there must be the political will.

Let us consider one or two ways in which that could be done. When people set out to buy a television set, they find that a colour set costs much more than a black and white unit. It is wrong that for a colour set the licence should be £46, and for a black and white set it should be £15. Let me explain why I say that. The black and white set brings into the home the same artists, athletes, footballers, technicians, researchers, presenters and news readers. The deal is the same. The choice between black and white and colour is for the individual, if he can afford it. Families often rally round to help old mum and dad to buy a colour set. The social services would be forced to put more colour into the lives of old people if the licence for a monochrome set cost very little less than that for a colour set.

There are about 300,000 sets in hotel bedrooms. Multiplying 300,000 by £46 produces a figure of about £14 million. If one multiplies that by three years, the total sum involved is about £42 million. We could use that to provide concessions for old-age pensioners. If the monochrome licence were increased from £15 to £30, the yield would be 4 million times £15. I was speaking to the director-general of the BBC a fortnight ago and he said that there were 4 million monochrome sets in the country. If one multiplies £15 by 4 million over three years, £180 million becomes available.

When I spoke privately to the Home Secretary about this matter—[Interruption.] I do not mind mentioning that because the Home Secretary has declared an interest. I spoke of the matter in the Lobby, not at a private consultation in his room. He said to me "I am an old-age pensioner. Are you suggesting that I should have a concession?" I asked him who he lived with and he said "My wife." I asked "Is she an old-age pensioner?", and he said "She is, indeed." I said "That is very nice. Do any young people live in the house?" He said "No." I said "I would be delighted to give you a concession."

I shall explain. My in-laws live with me. It would be easy for them to obtain a concessionary licence and for me to dine out on it. Only a pensioner who lives on his own, or with another pensioner, should qualify for a cheap licence. When pensioners live with a younger person, the younger person should accept the responsibility for the television licence.

Old people believe that the present system is unfair, unjust and almost unbearable. We must have the political will to do something about it. I and others have made suggestions to the BBC about licensing methods. We have suggested that there should be no licence. The BBC believes that if that happened it would lose its autonomy and would have to beg the Government to increase its grant. That is the same as local government saying that it would lose its autonomy if rates were collected in a different way. I believe that to be nonsense, because there are many ways to operate such a scheme.

Members of the all-party pensioners group asked the BBC "Why not use advertising?" The BBC spokesman quickly said "We would debase television if we did that." That was based on a comparison with America, but in America there are about 13 channels, and advertisements come on every two minutes. I watched a play on American television once, and I could not tell the difference between the scenes in the play and the advertisements. Such a system would debase television.

A fairer comparison would be with ITV in Britain. Nobody would be unfair enough to say that ITV is not equal in every way to the BBC. Both the ITV and the BBC provide good services. We are lucky. I wonder whether there is enough advertising in the country to support the BBC. That would be my only reason for not saying to the BBC "Get some advertising and help us help the pensioners."

If we want to do something for the pensioners, we can if there is the political will. We make the decisions, whether or not the BBC likes it.

5.56 pm

The hon. Member for Brighouse and Spenborough (Mr. Waller) said that old-age pensioners could not answer for themselves because they did not have a strong enough voice. I do not know whether he meant that. I should like to correct the hon. Gentleman, because it is not true. I remind him of the recent pensioners' campaign when 1 million signatures were put on a petition. The hon. Gentleman should know about the National Federation of Old Age Pension Associations and its campaigns. Jack Jones, the ex-general secretary of the Transport and General Workers Union, is connected with the British pensioners trade union group. Age Concern, Help the Aged, the British Association of Retired Persons and other organisations have a tremendous voice. That voice is not reflected in Government policy, but it will be as the groups become more organised.

The Home Secretary was probably the worst offender in misrepresenting the shortfall. He and other hon. Members gave the impression that the Government are making up the shortfall and that pensioners are not losing anything. That is not true. The pension was increased by 9 per cent. this November. That was 1 per cent. below the estimated rate of inflation for the year November 1980 to November 1981. The Government said that they had over-estimated the rate of inflation by 1 per cent. in the previous year and had given the pensioners too much. A special piece of legislation was introduced to claw back the so-called 1 per cent. overpayment.

The pensioners did not owe the Government money, but the Government owed the pensioners money. Pensioners had already lost 95p a week for a single pensioner and £1·95 for a married couple, as a result of breaking the link with earnings. They lost £7·70 for a single person and £12·30 for a married couple because of the delay in paying the pensions. I say that to put in its true perspective the Home Secretary's statement about the shortfall.

The Government have made another miscalculation. Inflation is not 10 per cent. but 12 per cent. The Government say that that will be made up by next November, but they know that between now and next November there will be another increase in inflation. About half a million pensioners will be dead before then so they will never have the under-payment made up. It is silly to say that that is part of the Government's policy. I do not go that far, but it could be construed in that way, and it should be understood that the shortfall has never been made up since 1948.

Order. I am sure that the hon. Gentleman will come to the point about television.

I shall, Mr. Deputy Speaker, but the point I am making is important. The Home Secretary introduced the subject of the shortfall and I felt that it could be misconstrued if people outside the House got hold of the wrong end of the stick. How many times have we heard it said that pensioners are well off? The Home Secretary's remarks will be quoted to prove the point, but it is not true and that is why I want to make it clear that the pensioners are not as well off as they should be.

My final point on the shortfall is that when it is made up next year, or whenever, it will be on a lower base rate because the base has been depressed and the percentage increase will not take account of that. Although I should like to develop that point, I shall leave it at that.

My hon. Friend no doubt appreciates that the central plank of the Home Secretary's argument in refusing to meet the case put forward by my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) is that the Government allege that they are maintaining the real value of pensions. That is clear from the Government's amendment. My hon. Friend is, therefore, within his rights to challenge the Government's amendment.

I am grateful for that intervention. I was trying to be reasonable, but perhaps that quality exists only on the Labour side of the House. My hon. Friend is right that the point I make is relevant. It is even more relevant since so much play has been made with it. However, I shall say no more about the matter.

There is a more relevant issue. We can seldom discuss television licences in isolation, as has been seen in the debate. I can never talk about television licences for old-age pensioners without also discussing standing charges generally. I can never separate the two. I shall certainly support the motion because consultation is long overdue. On a rough calculation—I have probably underestimated—a pensioner in London using gas, electricity, water and a telephone pays about £117 each year in standing charges. If we add the television licence to that at about £50 for colour, the figure is £167—about £3·25 per week. That is the amount a pensioner pays in standing charges whether or not the services are used. I know that many of my constituents do not use anything like the amount of gas and electricity to justify what they pay in the standing charges. That is a considerable amount for pensioners. In my discussions with them they always enlarge the discussion to cover television licences because that is is important to them, and £3·25 a week is a hefty sum from an already depleted pension.

Those two issues are extremely relevant and I am sorry that the Home Secretary seems to have shut the door on discussions. The only bright light is that many Conservative Back Benchers who regularly attend the all-party group of pensioners do not take the same attitude. The Home Secretary is totally out of tune with many of his own Back Benchers who have a much more constructive approach and have been honestly seeking ways and means whereby a constructive solution can be found. The hon. Member for Huddersfield, West (Mr. Dickens) was, in his own way, seeking to do that. He is not averse to consultation and I hope that he will support the Opposition motion in the Lobby tonight. The motion is about the sort of consultation in which the hon. Gentleman and I have recently indulged with the director-general of the BBC. We were pleased that his successor-elect holds the same view and shares the concern of the BBC about licences.

I am pleased that no one has doubted the need for revenue for the BBC. We are not discussing the merits or qualities of the programmes—with some of the rubbish on television we would be here for a week if we did so. Indeed, an increase in the licence fee to £50 might have been justified provided that certain factors were taken into account. The BBC was entitled to ask for a higher fee.

I wish to cross swords with the Home Secretary on his claim that there is nothing wrong with the amount charged for the licence provided that pensioners are given easy payment terms such as hire purchase pay-as-you-go schemes and weekly stamps. I recently sent the right hon. Gentleman a letter—he has not yet replied—about a constituent who had been saving all year for a television licence. Her current licence expired the day after the announcement of the increase. On the day before the announcement when she would normally have bought her stamp, she was told that none were available and that the stamps were not in the post office. She is a fairly bright lady and she asked for that to be put in writing so that she could send it to me. She felt that the stamps should have been available. She was given such a note. When she returned to the post office a couple of days later she had to pay the increased fee. That is sharp practice which raises a number of doubts about the Home Secretary's glib remarks about the purchase of stamps.

What happens to all the anomalies and those people, especially the pensioners, who are caught when the fee is increased? Will the right hon. Gentleman recommend that interest be paid on the stamps that pensioners have bought for 12 months? The Government have the revenue, so why do not the pensioners have the benefit of any interest that accrues? We have not been told that that suggestion will be considered.

I have a number of suggestions to make, but the most important is the abolition of television licences. The general tax system could take care of the shortfall, which I am assured would amount to a 1p increase in income tax. However, the BBC and the pundits say that such a system would mean Government interference. They fear that the BBC would lose its independence. I am not convinced that that would be the case.

I have asked whether there is not a charter to protect the BBC from such interference. If it does not offer that protection, it should be strengthened. Such a charter must exclude Government interference. I have heard no good reasons why the television licence fee should not be included in the general tax system. A wise man—I do not know who—once said that broadcasting was too important to be left to the broadcasters. It might be useful to have a little interference from elected representatives who are aware of the views of consumers. I have yet to hear a reasoned argument that the abolition of television licences is a non-runner.

I hope that even between now and the end of the debate the Home Secretary will realise the benefit of holding discussions, even with Conservative Back Benchers—especially those in the all-party group—among whom he will find a great deal of sympathy for the pensioners' plight. Perhaps he will then agree to join in consultations with the various organisations concerned with the matter in the hope that we can reach a workable solution that will help not only pensioners but those in receipt of social security benefits and those on low incomes.

6.10 pm

Hon. Members know the interest that the hon. Member for St Pancras, North (Mr. Stallard) takes in the plight and difficulties that face people on low incomes, especially pensioners on low incomes. I followed the hon. Gentleman's arguments carefully. I hope that he will not think that I am any less concerned if I come to a different conclusion. I do not believe that the system is in nearly such a mess as one might imagine from what Opposition Members say to warrant the motion. If that was the case, hon. Members would have to show conclusively what was wrong.

It would have to be shown that the level of pension had fallen so far behind the rise in the cost of living over the past few years that special measures were required in respect of television licence fees and other costs that pensioners face. We would have to show that if pensioners' standard of living had fallen so far behind that of the rest of the community there was a need to examine what further help was required in respect not only of television licences but of other things that some hon. Members might think far more important.

I recognise that some people rely on television. They rely on it perhaps too much, but one cannot criticise them for doing so. Whatever their age, some people find enormous satisfaction in watching television. It compensates old people for loneliness. The argument is not merely an economic one. The question that arises is whether loneliness is enough to warrant the special action suggested by some Opposition Members at a time when many other social problems afflict the old.

Many categories of incapacity are probably more demanding of our sympathy than subsidising the licence fee for retirement pensioners, particularly as the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) did not disguise the fact that his proposal for a special licence for old-age pensioners was shot through with anomalies. That is known. The hon. Member for Huddersfield, East (Mr. Sheerman) was right in saying that some of the anomalies that have already arisen out of our sense of fair play have actually given rise to bitterness, criticism and envy among groups that have not benefited.

The right hon. Gentleman's proposal, by creating more anomalies, would make the situation worse. I believe that the general policy of Governments since the war has been correct. Where a general uprating of benefit helps old-age pensioners, this should be done. The richer pensioners, with bigger incomes, will pay tax, but old-age pensioners as a whole benefit and have the freedom of choice to use the money as they think fit. I was not an hon. Member at the time, but some hon. Members will recall the debate that took place after the war over the ending of tobacco tokens. Those who did not smoke felt hard done by: it was better to get rid of the tokens and to view the pension as a pension.

The Opposition's case is not well founded on administrative grounds or on compassionate grounds. There are plenty of other things that would benefit pensioners. The argument throughout the debate has centred on whether the Government have fulfilled their election promise to keep the pension in line with the rise in the cost of living. Is it claimed by the Opposition that the Government have decided to default on this promise? Is that really the suggestion? I do not believe it. I do not believe that Opposition Members really believe it. The figures do not confirm their view. Since the election, the pension has been increased by 51·8 per cent. If anyone can challenge those figures and prove them wrong, I shall withdraw. The rise in the cost of living since the election is 49·9 per cent. Why should anyone with any sense of justice or fair play wish to make any political point out of those figures? The pension has kept slightly ahead of the rise in the cost of living.

No one is arguing about the figures since the election. Between the pension increase in November 1978 and this November, the pension rose 2 per cent. more than the increase in prices. The reason, confirmed in answers given by Ministers, is that prior to the election pensions were raised in line with prices or earnings, whichever were the higher. In 1978, earnings were ahead of prices. The Opposition thought it was right that pensioners should share in the general increase in the standard of living for the general population. While the 2 per cent. figure is correct, the hon. Gentleman should not give the credit to the present Government.

I am not taking credit, I am stating a fact. The rise in the cost of living has been less than the rise in the pension.

The hon. Gentleman asked if the Opposition believed that it was the Government's deliberate policy to default on an election promise. I have to say "Yes." The Government introduced legislation to claw back what they considered to be an underestimate but they refused flatly, despite hours of argument, to introduce legislation that would make amends the other way. It is therefore deliberate Government policy to deal with the matter on one side but not on the other.

I am afraid that that is not the case. My right hon. Friend has made clear the Government's pledge for next year. The rise in pensions has been greater under this Government than the rise in the cost of living. That is a fact. There is no ground for trying to make a mountain out of this issue and trying to establish that a section of the community should have special consideration in respect of the television licence fee.

I should like to compare the value of the pension with the cost of a television licence. This is essential to the argument put by the right hon. Member for Sparkbrook. In real terms, the cost of a television licence to the pensioner has not increased. It has declined over the years. A smaller proportion of the retirement pension is now required to pay for a television licence than 15 years ago. The cost of a monochrome licence, expressed as a proportion of the retirement pension, is slightly under one-half of what it was in 1968—the year when a separate colour licence was first introduced.

It is the colour licence with which most people are concerned. The cost of a colour licence to a pensioner is less than three-quarters of what it was in 1968, expressed in terms of the value of the retirement pension. I respect the fact that a licence fee of £46 compared with £6 or £7 not many years ago seems an enormous increase. The perceived cost may appear high but the fact is that in real terms the cost is lower. Why should hon. Members seek to persuade my right hon. Friend and the Government to spend a great amount of time considering what to some extent is a non-problem. Some people might argue that it is not a problem and that there are plenty of other matters that should be considered to improve the lot of the retirement pensioner.

The motion proposed by the Opposition is perfectly fair. It is known that an instalment system will shortly be introduced. There have been advertisements from the BBC showing how people can buy tokens. Overcome by the spirit of Christmas, people can buy tokens for their elderly friends. The moral argument lies with those who, like the hon. Member for Huddersfield, East, want to get away from the begging bowl concept in relation to retirement pensioners whose sense of dignity and independence is not improved by extending concessions of this kind.

Another thread that has run through the debate is that of the BBC licence fee. The hon. Member for Sparkbrook drew attention to a conversation that he had with the director-general designate of the BBC. Later he went on to suggest—I asked him whether it was part of the conversation and he said that it was not—that one way of relieving the cost of financing the BBC would be for the IBA to give some of its advertising revenue to the BBC and for the BBC to give part of the licence fee to the IBA.

We have good value for money in British broadcasting because we have developed two systems, one of which is based on advertising where the market principle is usually predominant, although not always. When television companies try to renew their franchises there is a tendency to put out programmes with more minority appeal and less dependence on the market place and revenue.

Perhaps I should reveal that I have recently been appointed a non-executive director of London Weekend Television, but I have no knowledge of a commercial television company as it comes close to renewing its franchise. The dependence upon the market place has created a system of television which leads those who have been involved with the BBC, as I have, to conclude that one is working in a competitive market place.

The BBC must also pay attention to the market place. If it has too small an audience, people will resent paying the licence fee. The system of working for the public good has led the BBC to be extraordinarily courageous on many occasions regardless of the effect of the programme or whether it has a large or small audience. That is why the BBC has earned such a reputation. Sometimes it make us cross but on balance we should agree that the BBC is the finest broadcasting organisation in the world.

Such a cross-fertilisation of money as is suggested would lead to the worst of all worlds. Although such a mixed economy may work well in other areas, the present system has led to much competition between the two rivals and I would rather stick with it. I say to the hon. Member for St. Pancras, North that if an individual who is paying the licence fee writes a cheque or goes to the post office he knows that his money will go directly to the organisation. The BBC knows that if it wishes to have a battle with the Government, it can make an appeal to the licence fee payers. It knows its constituency and the size of it. If the money is paid into his general tax bill, it is lost sight of for ever. No one knows what happens when Ministers argue in the Cabinet about whether the rate of tax should be changed. Someone may say that the rate should be increased because of the extra money being given to the BBC. The arguments become muddled and politicised and a weak Minister may lose to a strong one.

We know that the licence fee is a direct charge between the individual and the corporation. Most people, if given a free choice in the matter, would rather pay the licence fee directly to the corporation than have their money sucked into the maw of the Treasury.

6.24 pm

I agree that the BBC provides excellent value for money. It has been dramatically under-financed for years and it deserves the increase in licence fees. Its production costs are a third of those in the United States of America and it is without parallel in the world. It runs not only two television channels but national radio networks and a series of local radio stations.

The debate is about pensioners and how much they should pay. One must remember, however the statistics can be interpreted, that for a pensioner today an increase from £34 to £46 seems to be enormous. Both in real and psychological terms the pensioner is appalled by the increase. As has been said, because there is a pre-existing anomaly whereby some pensioners pay very little, there is more resentment of the increase.

How does one tackle the problem? One way is to raise money from other sources. Hotel television charges have been mentioned. It is strange that an hotelier pays less in real terms for the one licence that he must buy than does the ordinary pensioner, because his expense is tax deductible. The Savoy hotel has been mentioned. The licence will cost the Savoy hotel less, because it is deducted from what would otherwise be net profit. There is something to be said for the argument that hotel companies should pay all or some part of the normal colour television licence fee for every guest room equipped with a television set. It would be less of an expense to the hotel than would at first seem to be the case.

I agree in part with the courageous speech of the hon. Member for Huddersfield" East (Mr. Sheerman). He pointed out the anomalies created by certain concessions. It is possible to have concessions that do not create anomalies if the matter is approached in a different way. However, it is fairly obvious that if one says that retirement pensioners should not pay the licence fee or should have a concession, one must ensure that the pensioner is the householder and that no salaried person lives with him. Where a husband and wife are householders, if the house is in the name of the younger of the two—who may not receive a pension—no concession would be available. Inspectors would be required to check fraudulent claims. Bureaucracy would be created, and I agree that such concessions produce many problems. Furthermore, they also produce widespread resentment among others who feel that they should have them.

Although I do not favour that kind of concession, the problem can be dealt with in other ways which do not produce a new bureaucracy and which treat everyone fairly. I suggest two methods. First, the Government could increase in real terms the retirement pension. Secondly, they could increase the Christmas bonus.

The bonus is £10. Reforming television licensing in hotels would bring in some money, but the proposal may involve a little Government expenditure. The Government could say that they were giving a specific increase above the £10 to all retirement pensioners, as they realised what the increased cost of the licence meant to them. An increase in the bonus of £6 would be half the increase in the licence fee. In a household with two pensioners, the total would be £12, which would cover the entire increase.

Pensioners who did not have television sets would also get the increased bonus, but so what? The system would involve no administrative inconvenience or additional bureaucracy. No one could complain. Pensioners would get the increase and would know that the Government were making a special case for them.

The other solution is to give more money to retirement pensioners generally. Whatever is said about Governments of all stripes, we can all agree that people who live solely on their retirement pensions have not found and do not find it easy. Many hon. Members wish to see pensioners have a better deal. The pension could be increased above the rate of inflation, for instance, and the money could be recouped in other ways, such as those outlined by the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) and others.

The increase in the monochrome licence fee of £3 will produce little revenue. The poorest members of society buy or hire monochrome sets. When the Home Secretary made the announcement, I asked whether it would be possible to freeze the monochrome licence fee. Among others, a lady in Sussex wrote thanking me for raising the question. She told me that she could not afford a colour television licence, so has to manage with a monochrome set.

It would not cost the Government a great amount to freeze the monochrome licence. Each year, more and more people change to colour television, so the number of people using monochrome sets is becoming fewer. The expense for the Government would, therefore, diminish. Most people would prefer a colour set, but some who are badly off cannot afford one. The Government should freeze the fee at £12, although others may argue that it should be scrapped altogether. The economic situation has gone from bad to worse since the Labour Party made its election promises, but the Government could make a concession on the £3.

The Home Secretary was keen to do his sums. He should compare the loss from forgoing the £3 increase with what would come in from licensing hotel television sets, and he may find that he could make a concession. A concession would show the Government's humanitarian concern. Governments should show their concern for the elderly. The hon. Member for Rochdale (Mr. Smith) said that there is a social problem. The loneliness of many old people is made tolerable only by being able to watch television, so there is a case for special treatment. A set may be a luxury for some, but for many others it is an essential social service and may do more for the quality of their lives than other social services.

I ask the Government sympathetically to consider the motion, which is moderately worded. A motion worded by the right hon. Member for Leeds, East (Mr. Healey) in 1980 urged the abolition of the fee for pensioners. In the face of the deteriorating economic situation, today's motion is a retreat and it recognises that things are difficult. The Opposition ask only that pensioners be consulted on ways to ameliorate the situation. If the conclusion was that it would not sensibly be done, the Government would have proved their stance to be correct and the Opposition to be wrong, but at least let us have consultation in view of the importance of the matter and the fact that pensioners are stunned by the heavy increase.

6.36 pm

I congratulate my hon. Friend the Member for East Grinstead (Mr. Johnson Smith) on his sensible speech, which struck the Opposition to silence. They implied originally that it was an enormous burden for pensioners to pay the licence fee, but it has been shown that the burden has decreased under Governments of both parties, although it is still a burden. The payment of what amounts to £1 a week from a retirement pension could cause difficulty.

I was much taken with the reasonable, reasoned, compassionate and caring speech of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), but decided that there must be something wrong with his argument. He is not asking the Government to do what the Labour Party promised. His request is more moderate. He merely wants discussions. I forgive him his temporary amnesia about the Labour Government's performance. However, if the Government accepted the motion, the newspaper headlines next day would read "Government accept need for a concession for old age pensioners".

I appreciate the fact that conceding discussions is not accepting the need for action, but there would be pressure on the Government to take action at the end. The organisation set up to discuss the matter would dream up a scheme, and the right hon. Gentleman could take great credit if the Government refused to act. He could say that they were hard-faced and did not consider the plight of pensioners. The word "hypocrisy" does not spring lightly to my lips and, therefore, I shall not use it, but it comes ill from a party that failed to take that action in government to suggest now, in a difficult economic time, that it should be taken, in part if not wholly, immediately.

I was much taken with the speeches of the hon. Members who could be described as the Laurel and Hardy of Huddersfield—my hon. Friend the Member for Huddersfield, West (Mr. Dickens) and the hon. Member for Huddersfield, East (Mr. Sheerman). My hon. Friend seemed to agree with the Opposition's view, but I agree entirely with the hon. Member for Huddersfield, East, who said that we should not be in the milk token business, the concessionary bus pass business or the concessionary television licence business. We should be doing what we can in difficult economic circumstances to make sure that the pensioner gets the fair deal to which the hon. Gentleman referred.

Every hon. Member, of whatever party, wishes to see the real value of pensions increased and the pensioner choose whether he wishes to have a television, go to the public house or go to a bingo hall. What concern is it of ours what people do with their money in that sense? We all know that it has not been possible, under Governments of either party, to do everything that we should like to do for pensioners.

The argument about percentages has been bandied back and forth in the House for years—whether we have done more or whether the Opposition have done more, and so on. Presumably we can go back to 1906 or 1911 if the hon. Member for Rochdale (Mr. Smith) wishes to join the argument. There is no point arguing about percentages. People outside this place are not interested in that. They are interested in why money is in the hands of the pensioners at the end of the week. Let us start talking in absolutes.

I agree with the hon. Member for Rochdale that this is not the sort of issue on which we should be scoring catty party points about whether there was a ½ per cent. here or 1 per cent. there in whatever year. That is pointless and stupid. While people outside the House may hear those remarks, I am very glad that they cannot see us making them.

Does my hon. Friend accept that at present we have a bitterly unfair concessionary system for pensioners?

I do not go as far as that. I agree that there are anomalies in the present system that require sorting out. I do not believe that we need a dramatic concession by the Government to say that they will look at these matters. They should be looked at during the normal course of day-to-day Home Office business.

There are reasons why we should be discussing the possibilities in detail. I take the view that we should not have concessionary television licences for pensioners, but other hon. Members take contrary views. I do not believe that a three-hour debate on the Floor of the House is the right way in which to discuss the matter in detail. I do not know whether the appropriate Select Committee has thought fit to take evidence over a long period on the matter. It will require a long-term solution—either my solution or that of the Opposition. The appropriate Committee could take evidence from a number of concerned people, including representatives of the Home Office.

I am told, although I cannot believe it, that Governments of either party do not like Select Committees because occasionally they put forward recommendations that are not satisfactory to the eminent gentlemen who run the business of the House and the country. I believe that a Select Committee would be a more appropriate forum for discussing the matter properly without party points necessarily having to be made. The Government would still be open to accepting or rejecting the recommendations of the Committee and could then debate a proper document on the Floor of the House, with all the evidence and facts available. We have talked today more about what we should like to believe is the case, and we should riot take a decision on that basis. I shall happily follow my right hon. Friend into the Lobby tonight.

6.48 pm

I wish to place one point on the record. There are, and have been over the years, remarkable excuses for not proceeding on the increasingly vexed subject of assisting pensioners. It is no good hon. Members—some of whom are so financially well lined that it is almost indecent for them even to speak on the subject—saying that we should give the pensioners the real value of their pensions so that they are free to do what they like with it. That has never been possible. Therefore, the alternative is to give an easement in kind by a concession that will remove some of the injustices.

The point that I wish the House to consider is simple, irrevocably clear and should concern every hon. Member. Under Standing Order No. 18(10) the House will be asked to vote the sum of £5,583 million in the Defence Estimates. To halve the television licence fee would cost £400 million, but tonight, without a debate, we are to be asked to approve £5,583 million for defence. I should have thought that the Defence Estimates were worthy of considerable debate. I do not stand for any weakening of our defences, but I wish to end the argument that we cannot afford what everyone outside the House believes to be socially good and justifiable.

Let us be honest with ourselves. This is not the place in which to argue the details of schemes. We should not tax ourselves with the question whether we can afford certain measures. Any hon. Member can use any argument under the sun on that assertion. We should be talking about the sensible distribution of the national income so that we obtain equity in our social and economic responsibilities.

Whatever subject we discuss, Ministers come to the House with briefs from their officials and, having arrived at a view, tell us that we cannot afford this or that. Opposition Members, with their Socialist commitment, should be talking more in terms of the distribution of the national wealth, so that our social and economic responsibilities can be seen to be treated in a valid and responsible manner.

I hope that I have put clearly on record the comparison between spending our time on a fiddling sum of £400 million and not debating the sum of £5,583 million in the Defence Estimates.

6.50 pm

I did not intend to speak in the debate. I have not spoken in any debate for some time. I am slightly nervous about suggesting that it might be sensible to get rid of the present system of funding the BBC, but I am now emboldened to do so.

The present system should be replaced by a television network financed by the sale of advertising time. That approach has been laughed at and not taken seriously. With respect to my hon. Friend the Member for East Grinstead (Mr. Johnson Smith), it is a mistake to laugh at such a suggestion. It is a mistake to refuse even to think of the easy way out of the problem facing us.

It is the easiest thing in the world to solve the problem. There is no need to take weeks to set up a committee of pensioners, as has been suggested by the Opposition, which will discuss the problem ad nauseam. There is no need for a three-line Whip on the motion and the amendment, both of which might be said to be unexceptionable. It does no harm to talk about the matter, but it is unnecessary to do so. We have only to accept what hundreds of millions of viewers throughout the world accept. I have no idea how it happens, but somehow they manage to survive. They accept television advertising and television which is funded by advertising. Of course, riot everybody agrees with that.

Most right hon. and hon. Members in the Chamber this evening have appeared on Anglia Television at some time. Anglia is probably the best private television company, financed by advertising, in the country. It is, therefore, perhaps an unfair example, and I am willing to accept that I am being unfair. The House is getting itself into a great lather trying to find a way of relieving pensioners of a small part of the enormous sum that they will be forced to pay for their television licences, but the solution to the problem lies within our grasp, and it is to introduce television financed by advertising.

My hon. Friend the Member for Huddersfield, West (Mr. Dickens) made a most amusing and interesting speech in which he said that the advertising revenue would be insufficient. My hon. Friend the Member for East Grinstead knows that shortly before television advertising was introduced there were doubts about the revenue that would accrue to the companies. Charles Hill, as he then was, said to me "The trouble is that the advertising industry will be unable to afford to set up these stations."

In fact, the television companies were vastly over-subscribed, and to have shares in a television company was to be given a mint. Television companies have never been short of money, as is generally known, and nobody will convince me that the BBC could not be financed by advertising revenue.

My humble appeal is that television, solely financed by advertising revenue, should be not laughed at, but seriously considered. Moreover, we should not laugh at the possibility of getting rid of the problems that we have been discussing this evening by getting rid of the franchising of the BBC in return for Parliament voting it enormous licence fees.

6.55 pm

We are discussing a serious problem, and in many respects I agree with the hon. Member for Huddersfield, West (Mr. Dickens). There are probably more letters in my postbag on concessionary licences than on any other issue, especially at this time of year. The elderly meet more frequently shortly before and after Christmas and they discuss licence fees generally. These discussions often lead to animosity among themselves because of the anomalies.

The Home Secretary talked about easy payment schemes. Why have these schemes been introduced? Their purpose is to ease the burden that falls especially on the elderly, certainly in the area that I represent.

There are some who ask "Why talk about concessions when we should be discussing increasing the retirement pension?" I should accept that approach if we knew that the pension link between prices and wages was to be reestablished and if the loss that pensioners have suffered since that link was broken was to be restored, but we know that the current pension is insufficient to overcome pensioners' problems.

Those who have a licence for colour television are having to revert to black and white television, and those who have a licence for black and white television are having to go without television. In my constituency it is clear that television is a necessity of life for many pensioners. In the present economic climate television is becoming a necessity for more and more members of the community.

The hon. Member for Huddersfield, West and I agree on the need for concessionary licences. As he is one of my constituents, he is familiar with conditions in my constituency. In many homes the fireplace is no longer the focal point. It has been replaced by the television. It is the most important item for those who are housebound and for those who have difficulty in getting about, especially in bad weather. In rural areas public transport has been curtailed by Government cuts and local government's lack of finances. For many of the elderly television is a source of pleasure and entertainment, a way of obtaining news and a stimulus for conversation.

There are purpose-built centres for the elderly in my constituency, and those who live in them receive concessionary licences. The residents of bungalows that are linked to a warden service similarly receive concessionary licences. There are many others who are debarred from the concession, including those in tenanted accommodation and owner-occupiers. There are other anomalies. Some local authorities have felt obliged to help pensioners in their areas who do not enjoy concessionary licences, but there is no uniform pattern. Those who live on one side of a street may enjoy the 5p licence, whereas those who live on the other side have their licence fees reduced by £7 or £8 because of local authority intervention. Those who live at the other end of the street may have no assistance, because of a local authority boundary.

In one instance that I came across, an 83-year old mother was living in upstairs accommodation that was not classed as part of a purpose-built dwelling although its dimensions and all the other features were exactly the same as the downstairs accommodation, which was so designated. The 83-year old's daughter, who lived downstairs, was able to enjoy a concessionary licence, while her mother was not. That is one of so many ridiculous anomalies that have come to my attention.

I was sorry that a Minister said on television that as this was the season of good will she hoped that the children would pay for their elderly parents' television licences. She forgot that the 3½ million unemployed will be hard put to do any such thing.

The Labour Party manifesto promised to phase out television licence fees for pensioners during the lifetime of this Parliament. That is not too big a burden for any Government. I hope that it will appear in the next Labour Party manifesto, but I hope, too, that the Home Secretary will consider it in that light. I do not ask him to abolish the fee immediately. If he will phase it out over a period, people will understand the position. We should then have the same for all. I accept that there will be fringe areas in which people may grumble, but one must start somewhere. We should start by phasing out television licence fees for old-age pensioners.

7 pm

The longer the debate continues, the more the existing anomalies are revealed. Any attempt to cobble up a scheme to give increased concessions for pensioners' television licences will simply create more anomalies.

My right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) referred to identifying necessitous pensioners. I am appalled to think that we might thereby introduce a further means-tested benefit. With the best will in the world, such a prospect fills me with foreboding. No section of the community suffers as much distress as old-age pensioners do at the prospect of applying for any kind of benefit that entails a visit from the local DHSS. I should say at once that, without exception, visitors from my local DHSS office are more than fair and helpful to all pensioner clients, but that does not stop an old dear from suffering an upset stomach and an attack of nerves at the prospect of a visitor arriving at her door.

Let no one misunderstand me. I am all for old-age pensioners enjoying a 100 per cent. concession on television licences. As we said in our manifesto, their television viewing should be free. To achieve that while still retaining television licences, however, will mean that many of my hard-pressed constituents will have to pay £70 instead of the present fee. Moreover, as my hon. Friend the Member for Huddersfield, East (Mr. Sheerman) said, we should be giving free television licences to many people who could well afford to pay for them.

There is only one solution to the problem of anomalies—to do away with television licensing altogether. Let the BBC be properly financed through taxation. Those with the biggest purses will then pay the biggest share, and the countless people who now view for nothing and never buy a licence will have to pay their way. The only way to prevent many old-age pensioners from being forced to send back their televisions because they cannot afford the licence fee is to do away with licences altogether and finance the BBC through taxation.

7.3 pm

The Opposition initiated the debate because of our deep and long-standing concern for retirement pensioners. We do not oppose the television licence fee as a method of financing the BBC. Nor do we oppose an increase in that fee, which I believe is the best value in the world for broadcasting. We accept that the BBC's total expenditure now exceeds £500 million and that it will continue to increase. We simply ask the Government to consult organisations representing pensioners to determine the best way to provide a concession and then to report back to the House. That is a reasonable, sensible and humane request.

The Government amendment appears to say that pensioners should receive no special help but should pay the fee out of the pension in their pocket. As many of my hon. Friends have pointed out, the money is simply not in their pockets. It is therefore an unreasonable, unrealistic and heartless amendment.

The Government seem not to appreciate the difficulties experienced by millions of elderly people with the existing retirement pension. My hon. Friends the Members for St. Pancras, North (Mr. Stallard) and Birmingham, Perry Barr (Mr. Rooker) have pointed out that the increase in the licence fee comes at the same time as a pension increase which is 2 per cent. less than the rate of inflation. The Government amendment, in referring to
"the maintenance of the real value of the retirement pension",
is therefore utterly deceptive. The pension today is less than one-half of the average gross earnings for a married couple and less than one-third of the average gross earnings for a single person, the latter being the aim of most pensioners' organisations. I cannot speak for Conservative Members, but we receive letters almost daily from constituents saying that they cannot manage on their pensions, as my hon. Friend the Member for Penistone (Mr. McKay) stressed.

We welcome the proposals to offer a choice of methods of payment, but they do not affect the main issue before us. Millions of pensioners cannot afford to choose how to pay, so choice does not come into it. Many hon. Members who have spoken, including my hon. Friends, have said that they would like to do away with concessions, handouts and Christmas bonuses. In an ideal world, nobody would wish either to give or to receive handouts, but in today's world some concessions for the elderly are necessary. Many of them do not have enough money for basic necessities, such as clothes, light, rent and food.

For these people, television is not a luxury. As my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) said, it is almost a necessity. As my hon. Friend the Member for Huddersfield, East (Mr. Sheerman) pointed out, it is not simply something that is nice to have, such as cigarettes, bingo or Guinness. For many of these people, the television in their room is their only window on the world. It is not simply a moving picture; it is there to educate, stimulate and inform them. Those are the objects of the BBC. It not only combats loneliness but provides the companionship that retired people need.

If the hon. Lady is so keen for pensioners to have this wonderful panorama of the world, why does she not wish them to have colour television, which would be the easiest thing in the world? Most of them have black and white television. The hon. Lady has referred to their poverty. I have said that they should pay no licence fee at all.

If the hon. Gentleman will wait, I shall come to that very point. If pensioners are to have visual and mental stimulation and to broaden their horizons, they certainly deserve colour television. The prospects for broadcasting are not static. They are dynamic and challenging. It is a medium which influences every man, woman and child. Within the next decade there will be more channels, more choice and major technological changes in television.

The chairman of the BBC, Mr. George Howard, has stated that we are on the brink of an explosion in broadcasting. Every retirement pensioner has the right to be part of that revolution and to benefit from those changes in enjoyment and instruction. Labour Members are pledged to phase out pensioners' licence fees completely.

My right hon. Friend the Member for Sparkbrook pointed out that his proposal for charging a licence fee on the estimated 300,000 television sets in hotel rooms would raise about £15 million. How does the Home Secretary arrive at his estimate of only £8 million? It seems to vary from that of my right hon. Friend. Will the Home Secretary tell us when the working party on the administration of the broadcast receiving licence system will complete its study of the matter and announce how it will be implemented?

I welcome the realistic and refreshing attitude of the director-general designate of the BBC to this matter. Mr. Alasdair Milne has shown commendable concern about the difficulties which will face retirement pensioners in meeting the increased cost of the licence. His words, quoted in our motion, are that
"some way has to be found of relieving pensioners of paying full television licence fees annually".
In one of his first interviews after his appointment, Mr. Milne suggested that the matter should be given priority.

The hon. Member for Huddersfield, West (Mr. Dickens) seemed to imply that black and white is good enough for retired people. Even if they could afford the £15—which is not always the case—why should they have to be satisfied with black and white, which is a second-class picture? They deserve colour in their lives, especially as most of them have little enough under the Government.

Hon. Members on both sides of the House rightly condemn the anomalies in the existing television licensing arrangements for pensioners. Those anomalies cause justifiable anger and resentment among pensioners. The debate has shown that the issue is not as simple as it looks at first sight. There are no easy solutions, and the hon. Member for Huddersfield, West made the problems more complicated with every sentence that he uttered.

That is why we are asking not only for help for pensioners but for the Government to consult pensioners' organisations to determine how a concession can be provided, to examine alternative methods and to report back to the House. The debate has shown a need for such consultation, which could produce a great deal of useful information.

The Opposition proposal is modest. It is designed to enhance the quality of life for retired people. People are living longer now and can expect decades in retirement. If they are physically fit, they need the mental and visual stimulation and company of television. It is an uncontroversial motion, and it is to the shame of the Conservative Party that it cannot see fit to support it. The case put by the Home Secretary was unconvincing and lacking in compassion and understanding for the needs of the elderly. The Labour Party is making a practical, realistic and humane proposal. I ask all hon. Members to support it in the Lobby.

7.13 pm

I sense that the House is anxious to come to a quick decision. There is another important debate to follow. For those reasons, I shall reply briefly. If I do not answer some of the points that have been made by hon. Members, I undertake to write to them in detail. That particularly applies to the hon. Member for Halifax (Dr. Summerskill) who asked me about the detail on costing of hotels. I shall write to her with full details of exactly how the figures were arrived at. I owe her that.

The hon. and learned Member for Bradford, West (Mr. Lyons) and my hon. Friend the Member for Bebington and Ellesmere Port (Mr. Porter) put their fingers on one of the great difficulties which I found last night when I saw what was described by the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) as "a modest motion". The hon. and learned Member for Bradford, West said that he would be content if the consultations proposed under the Opposition motion were to take place, and if at the end of those consultations it were reported to the House that there was no reasonable way of meeting the concessions. That would have been an easy road for me to go down, but it would have been false to the House, wrong and dishonest to accept the motion.

The words in the Opposition motion are
"so as to determine the best way in which a concession can be provided".
Once we go down that road a concession has to be found.

I note that the right hon. Member for Sparkbrook accepts that. The hon. and learned Member for Bradford, West cannot have what he proposed. I do not believe—and a good many hon. Members clearly do not believe—that such a concession could be found as a result of consultation. It would be totally dishonest to mislead pensioners in that respect.

The contribution of the hon. Member for Huddersfield, East (Mr. Sheerman) cancelled out that of my hon. Friend the Member for Huddersfield, West (Mr. Dickens). I do not complain about that; I am quite content.

My hon. Friend the Member for East Grinstead (Mr. Johnson Smith) made an excellent speech, which I greatly admired, and effectively answered the right hon. Member for Sparkbrook concerning the possibility of cross-fertilisation between the two different systems. Our public service broadcasting system has considerable value, because it depends on two different and separate systems, one dependent on licence fees and the other on advertising. It would, I believe, be a mistake to cross-fertilise.

The hon. Member for St. Pancras, North (Mr. Stallard) suggested the abolition of the licence fee, as did some other hon. Members. He said that he had never seen the case argued in depth, but it was argued in depth by the Annan committee, which concluded that the BBC should be financed by the licence fee. The Annan committee thought that a concessionary licence for old-age pensioners and others should not be introduced. My predecessor in office at the time accepted that view.

The Annan committee suggested that the present concession—I agree with my hon. Friend the Member for Brighouse and Spenborough (Mr. Waller) that it causes anxiety and irritation—should be phased out. It would be a hard-faced decision to take away something that people already have, and I do not think that it would be accepted by the House. That is the danger of going down the concession road. Even those who, like the hon. Member for Newcastle-upon-Tyne, West (Mr. Brown), would like to end the licence fee, do not favour the idea of concessions.

We have tabled an honest amendment which sets out the position fairly. I shall not go again into the arguments about the level of pensions, except to say that the Government are absolutely committed to keeping retirement pensions in line with the rise in the cost of living. We have made that abundantly clear and will stand by our decision. We are always ready to enter into consultations, but it would have been dishonest to accept what is admittedly a modest motion and then fail to come up with a satisfactory answer. I am glad to note that the right hon. Member for Sparkbrook agrees with me in that respect.

For those reasons, I ask the House to reject the motion and to support the amendment.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 241, Noes 296.

Division No. 30]

[7.20 pm


Abse, LeoEllis, R.(NED'bysh're)
Allaun,FrankEllis,Tom (Wrexham)
Anderson,DonaldEnnals, Rt Hon David
Archer, Rt Hon PeterEvans, Ioan (Aberdare)
Ashley, Rt Hon JackEvans, John (Newton)
Barnett,Guy (Greenwich)Fitch,Alan
Barnett, Rt Hon Joel (H'wd)Fletcher, L. R. (Ilkeston)
Beith, A. J.Fletcher,Ted (Darlington)
Bennett,Andrew(St'kp'tn)Foot, Rt Hon Michael
Bidwell,SydneyFord, Ben
Booth, Rt Hon AlbertForrester,John
Boothroyd, MissBettyFoster,Derek
Bottomley,RtHon A(M'b'ro)Foulkes,George
Bradley,TomFraserJ, (Lamb'th,N'w'd)
Bray, Dr JeremyGarrett, John (NorwichS)
Brown, Hugh D. (Provan)Gilbert, Rt Hon Dr John
Brown, R. C. (N'castle W)Golding,John
Brown, Ronald W. (H'ckn'yS)Graham, Ted
Brown, Ron (E 'burgh, Leith)Grant, George(Morpeth)
Buchan,NormanGrant, John (IslingtonC)
Callaghan,RtHonJ.Hamilton, W. W. (C'tralFife)
Campbell,IanHart, Rt Hon Dame Judith
Campbell-Savours,DaleHattersley, Rt Hon Roy
Canavan,DennisHaynes, Frank
Carmichael,NeilHealey, Rt Hon Denis
Cartwright,JohnHeffer, Eric S.
Clark, Dr David (S Shields)Hogg, N. (EDunb't'nshire)
Cocks, Rt Hon M. (B'stolS)Holland,S.(L'b'th,Vauxh'll)
Coleman, DonaldHomewood,William
Concannon, Rt Hon J. D.Hooley, Frank
Cook, Robin F.Horam,John
Cowans, HarryHowell, RtHonD.
Craigen, J. M. (G'gow, M'hill)Howells,Geraint
Crowther,StanHoyle, Douglas
Cunliffe, LawrenceHudson Davies, Gwilym E.
Cunningham, G.(IslingtonS)Hughes, Mark(Durham)
Cunningham, DrJ. (W'h'n)Hughes, Robert (Aberdeen N)
Dalyell,TamHughes, Hoy (Newport)
Davies, Rt Hon Denzil (L'lli)Jay, Rt Hon Douglas
Davies, Ifor (Gower)John.Brynmor
Davis, Clinton (Hackney C)Johnson, James (Hull West)
Davis, T. (B'ham, Stechf'd)Johnson, Walter (Derby S)
Deakins,EricJohnston, Russell(Inverness)
Dean, Joseph (Leeds West)Jones, Rt Hon Alec (Rh'dda)
Dempsey, JamesJones, Barry (East Flint)
Dewar,DonaldJones, Dan (Burnley)
Dickens,GeoffreyKaufman, Rt Hon Gerald
Dixon, DonaldKerr, Russell
Dobson,FrankKilfedder, JamesA.
Dunwoody,Hon MrsG.Leadbitter,Ted

Lestor, Miss JoanRooker, J. W.
Lewis, Ron (Carlisle)Roper,John
Litherland, RobertRoss, Ernest (Dundee West)
Lofthouse,GeoffreyRoss, Stephen (Isle of Wight)
Lyons, Edward (Bradf'dW)Rowlands,Ted
McElhone,FrankSever, John
McKay, Allen (Penistone)Sheldon, RtHonR.
McKelvey, WilliamShore, RtHon Peter
Maclennan,RobertSilkin, RtHonJ. (Deptford)
McMahon, AndrewSilkin, Rt Hon S. C. (Dulwich)
McNamara, KevinSkinner,Dennis
McTaggart,RobertSmith, RtHonJ. (NLanark)
McWilliam,JohnSnape, Peter
Magee, BryanSoley,Clive
Marshall,D (G'gowS'ton)Spearing,Nigel
Marshall, DrEdmund (Goole)Spriggs,Leslie
Marshall, Jim (Leicester S)Stallard, A. W.
Martin,M (G'gowS'burn)Steel, RtHon David
Mason, RtHon RoyStewart, Rt Hon D. (W Isles)
Maxton,JohnStoddart, David
Maynard, MissJoanStott,Roger
Mellish, RtHon RobertStraw,Jack
Millan, RtHon BruceTaylor, Mrs Ann (Bolton W)
Miller, DrM.S. (EKilbride)Thomas, DrR. (Carmarthen)
Mitchell, Austin (Grimsby)Thorne, Stan (PrestonSouth)
Mitchell, R.C. (Soton Itchen)Tilley,John
Morris, Rt Hon A. (W'shawe)Tinn, James
Morris, Rt Hon C. (O'shaw)Torney,Tom
Morris, RtHon J. (Aberavon)Urwin, RtHon Tom
Morton,GeorgeVarley, Rt Hon Eric G.
Mulley, RtHon FrederickWainwright,E. (Dearne V)
Newens, StanleyWainwright,R. (ColneV)
O'Halloran, MichaelWalker, Rt Hon H.(D'caster)
Orme, Rt Hon StanleyWeetch,Ken
Park, GeorgeWelsh,Michael
Parker,JohnWhite, FrankR.
Parry, RobertWhite, J. (G'gowPollok)
Pavitt,LaurieWhitehead, Phillip
Penhaligon, DavidWhitlock, William
Powell, Raymond (Ogmore)Williams, Rt Hon A.(S'sea W)
Prescott,JohnWilliams, RtHon Mrs (Crosby)
Price, C. (Lewisham W)Wilson, Gordon (DundeeE)
Race, RegWilson, RtHon Sir H.(H'ton)
Radice,GilesWinnick, David
Rees, Rt Hon M (Leeds S)Woodall,Alec
Roberts,Albert (Normanton)Wrigglesworth,Ian
Roberts,Allan (Bootle)Wright,Sheila
Roberts, Ernest (Hackney N)
Roberts.Gwilym (Cannock)Tellers for the Ayes:
Robertson,GeorgeMr. James Hamilton and Mr. Walter Harrison.
Robinson, G. (Coventry NW)
Rodgers, RtHon William


Adley, RobertBiffen, RtHon John
Alison, RtHon MichaelBlackburn,John
Amery, RtHon JulianBlaker,Peter
Atkins, RtHon H (S'thorne)Bottomley, Peter (WwichW)
Atkins, Robert (PrestonN)Bowden,Andrew
Baker,Kenneth (St.M'bone)Boyson,Dr Rhodes
Baker, Nicholas (NDorset)Braine,SirBernard
Banks, RobertBright,Graham
Bell,SirRonaldBrittan,Rt. Hon. Leon
Bendall,VivianBrooke, Hon Peter
Benyon,Thomas (A'don)Brotherton, Michael
Best, KeithBrown, Michael(Brigg&Sc'n)
Bevan, David GilroyBrowne, John (Winchester)

Buchanan-Smith, Rt. Hon. A.Hastings,Stephen
Buck,AntonyHavers, Rt Hon Sir Michael
Burden,SirFrederickHayhoe, Barney
Carlisle, John (LutonWest)Heseltine, Rt Hon Michael
Carlisle, Kenneth (Lincoln)Hicks,Robert
Carlisle, Rt Hon M. (R'c'n)Higgins, Rt Hon Terence L.
Chalker, Mrs. LyndaHogg,HonDouglas (Gr'th'm)
Channon,Rt. Hon. PaulHolland,Philip (Carlton)
Clark, Hon A. (Plym'th, S'n)Howe, Rt Hon Sir Geoffrey
Clark, Sir W. (Croydon S)Howell,RtHonD.(G'ldf'd)
Clarke,Kenneth (Rushcliffe)Howell, Ralph (NNorfolk)
Clegg, Sir WalterHunt, David (Wirral)
Cockeram,EricHunt,Jobn (Ravensbourne)
Colvin, MichaelIrving,Charles (Cheltenham)
Cope,JohnJenkin, RtHon Patrick
Dean, Paul (NorthSomerset)King, RtHon Tom
Douglas-Hamilton, LordJ.Knox, David
Dover,DenshoreLamont, Norman
du Cann, Rt Hon EdwardLang, Ian
Dunn,Robert (Dartforcy)Langford-Holt,SirJohn
Dykes, HughLawrence,Ivan
Eden, RtHon Sir JohnLawson, RtHon Nigel
Edwards, Rt Hon N. (P'broke)LeMarchant,Spencer
Elliott,SirWilliamLester, Jim (Beeston)
Eyre,ReginaldLewis, Kenneth (Rutland)
Fairbairn,NicholasLloyd, Ian (Havant &W'loo)
Fairgrieve,SirRussellLloyd, Petsr(Fareham)
Faith, MrsSheilaLuce,Richard
Fenner, Mrs PeggyMacGregor,John
Finsberg, GeoffreyMacKay, John (Argyll)
Fisher, Sir NigelMacmillan, RtHon M.
Fletcher, A. (Ed'nb'ghN)McNair-Wilson,M.(N'bury)
Fletcher-Cooke,SirCharlesMcNair-Wilson, P. (NewF'st)
Fookes, Miss JanetMcQuarrie,Albert
Forman, NigelMadel, David
Fowler, Rt Hon NormanMajor,John
Fox, MarcusMarland,Paul
Fraser, Rt Hon Sir HughMarlow,Antony
Fraser, Peter (South Angus)Marshall,Michael (Arundel)
Gardiner,George (Reigate)Marten, RtHon Neil
Gardner, Edward (SFylde)Mates,Michael
Gilmour, RtHonSirlanMaude, Rt Hon Sir Angus
Glyn, DrAlanMawby, Ray
Goodlad,AlastairMayhew, Patrick
Gow, IanMellor,David
Gower, Sir RaymondMeyer,SirAnthony
Grant, Anthony (HarrowC)Miller,Half (B'grove,)
Gray, Ham ishMills,Iain (Meriden)
Greenway, HarryMills, Peter (WestDevon)
Grieve, PercyMitchell,David (Basingstoke)
Griffiths, E.(B'ySt. Edm'ds)Moate, Roger
Griffiths, Peter Portsm'thN)Monro,SirHector
Grist, IanMontgomery,Fergus
Gummer,JohnSelwynMorris, M. (N'hamptonS)
Hamilton, Hon A.Morrison, HonC. (Devizes)
Hamilton, Michael(Salisbury)Morrison, Hon P. (Chester)
Hampson,DrKeithMudd, David

Myles, DavidSpence,John
Needham, RichardSproat,Iain
Nott, RtHonJohnStevens,Martin
Onslow,CranleyStewart, k.(ERenfrewshire)
Oppenheim, Rt Hon Mrs S.Stewart, Ian (Hitchin)
Page, John (Harrow, West)StradlingThomas,J.
Page, Richard (SWHerts)Tapsell, Peter
Parkinson, RtHonCecilTaylor, Teddy (S'end E)
Parris, MatthewTebbit, Rt Hon Norman
Patten, John (Oxford)Thatcher, Rt Hon Mrs M.
Pattie,GeoffreyThomas, Rt Hon Peter
Pawsey, JamesThompson, Donald
Percival,SirIanThorne, Neil(IlfordSouth)
Pink, R.BonnerThornton,Malcolm
Pollock,AlexanderTownend, John (Bridlington)
Porter, BarryTownsend, Cyril D, (B'heath)
Prentice, Rt Hon RegTrippier,David
Price, SirDavid (Eastleigh)Trotter,Neville
Prior, Rt Hon JamesvanStraubenzee,SirW.
Proctor, K. HarveyVaughan,DrGerard
Pym, Rt Hon FrancisViggers, Peter
Raison,TimothyWaddington, David
Rees-Davies, W. R.Waldegrave,HonWilliam
Rhodes James, RobertWalker, Rt Hon P.(W'cester)
Ridsdale,SirJulianWalker, B.(Perth)
Rifkind,MalcolmWalker-Smith, Rt Hon Sir D.
Rippon, Rt Hon GeoffreyWall,SirPatrick
Roberts, M. (Cardiff NW)Walters,Dennis
Roberts, Wyn (Conway)Ward,John
Rossi, HughWatson,John
Rost, PeterWells,Bowen
Royle,SirAnthonyWells,John (Maidstone)
St. John-Stevas, Rt Hon N.Whitelaw,RtHonWilliam
Shaw, Giles (Pudsey)Wickenden, Keith
Shaw,Michael (Scarborough)Wilkinson,John
Shelton,William (Streatham)Williams,D. (Montgomery)
Shepherd,Colin (Hereford)Winterton,Nicholas
Shersby,MichaelYoung,SirGeorge (Acton)
Silvester, FredYounger, RtHonGeorge
Sims, Roger
Skeet, T. H. H.Tellers for the Noes:
Smith,DudleyMr. Robert Boscawen and Mr. Anthony Berry.
Speed, Keith

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 32 (Questions on amendments) and agreed to.

Mr. SPEAKER forthwith declared the main Question as amended, to be agreed to pursuant to Standing Order No. 32 (Questions on Amendments).


That this House endorses the Government's decision to increase the television licence fees to £46 for colour and £15 for monochrome on the basis that these will last for at least three years; and believes that the right way to help retirement pensioners is through the provision of a choice of methods of payment and the maintenance of the real value of the retirement pension.

Council House Rents

I should inform the House that Mr. Speaker has selected the amendment in the name of the Prime Minister.

7.34 pm

I beg to move,

That this House condemns Her Majesty's Government for more than doubling council house rents since coming to power.
When the Government came to office in May 1979, the average council house rent stood at £6·40 a week. Two years later, by April this year, that rent had risen to £11·39—an increase of 78 per cent. Two weeks ago the Chancellor of the Exchequer gave the House to understand that in the coming financial year rents would rise by a further £2·50 a week. That would mean that they would go up to £13·59 a week—an increase since the Government came to power of 117 per cent.

However, it is certain that rents next year will rise much more that that, because the Chancellor took care to specify that the £2·50 average rent increase related only to what he called housing subsidy purposes. On the same day as the right hon. and learned Gentleman made his statement, the Secretary of State for the Environment issued what he described as a consultation document dealing with council house rents. As usual, the Secretary of State's use of the English language was idiosyncratic. His consultations with local authorities about rent increases is as genuine and meaningful as a consultation between Mr. Bumble and Oliver Twist about the size of the gruel ration.

It is significant that the Secretary of State's document emphasises, with underlined words, that the figure of £2·50
"relates exclusively to calculation of housing subsidy."
A draft letter attached as an annex to the consultation paper blurts out the truth. It says:
"in addition to housing contributions which are reckonable for subsidy purposes, local authorities will have to meet some further housing expenditure which is not reckonable and which will be financed by increases in rent".
The Secretary of State has not yet come clean about that additional figure, and the debate gives the Government the opportunity to do so.

Last year the Secretary of State told us that the additional rent increase not reckonable for subsidy would be 30p a week on top of the £2·95 increase that related to housing subsidy. In fact, that supplementary rent rise turned out to be not 30p, but 73p. If it works out the same this year, rents will rise not by the £2·50 a week that the Chancellor pretended, but by £3·20, to £14·59 a week. That will mean that in the first three years of this Government, council house rents will have been forced up by a monstrous 128 per cent—an average of 43 per cent. a year, compared with 11 per cent. a year in Labour's last three years of office.

The Government's intervention to push up council house rents is on a scale and of an intensity unprecedented in the history of public sector housing in this country.

To begin with, the Secretary of State made use of the rate support grant guideline, but he became worried that it would not provide the results that he wanted, so in last year's Housing Act he rigged the subsidy system to give him much greater power over rents than ever before. He achieved that through what the Act calls the "local contribution differential". That is a fastidious, Heseltinian euphemism. Plainly and bluntly it means "rent increase".

The Secretary of State assures local authorities that they are free to raise rents by whatever amount they choose or even not to raise them at all. For his part, he retains equal freedom to deduct from their housing subsidy the precise amount per council house per week that equals the rent increase that he requires. If they exercise their freedom not to raise the rent by this amount, he assures them again that they are perfectly free to make up the difference from the general rate fund. He, in his turn, is then correspondingly free to penalise them as overspenders. So in this best of all possible subsidy systems, everyone is free to exercise his freedom, but the Secretary of State exercises more freedom than anyone else. It is the council tenant who pays more and more rent year after year.

The result of all this freedom is that many councils are steadily amassing surpluses on their housing revenue accounts—or, to put it crudely, making profits out of their council tenants. Until the Housing Act 1980, it was illegal for local authorities to make profits out of their council rents, but the 1980 Act abolished Labour's no profits rule. Moreover, it allowed councils to transfer those profits to the general rate fund—or, again, to abandon the Secretary of State's discriminating use of language, to use the profits on their council rents to subsidise the rates of ratepayers who are not council tenants, and who have average household incomes 20 per cent. above those of council tenants. This year, according to the Chartered Institute of Professional Finance and Accountancy, 46 local authorities are doing precisely that, and the House will be neither surprised nor disappointed to learn that all of them are Conservative-controlled.

There is, for example, the district of South Oxfordshire in the constituency of the Secretary of State. Its average council rent is £15·30 a week—34 per cent. above the national average. These huge rents provide a profit of £407,000. All of this profit is transferred to the general rate fund, and this enables the lucky 8,665 council tenants of South Oxfordshire to contribute 90p a week each to reducing the rates of the other 35,000 ratepayers.

Let us take the example of Tonbridge and Mailing, in the constituency of the Minister for Housing and Construction. This year, the Tory council there put its rents up to £14·75 a week—29 per cent. above the national average. In doing this, it has accumulated a profit on council rents of over £1 million. Tonbridge and Mailing could have used that profit constructively—for example, to provide decent accommodation for homeless families. At present, the council exiles its homeless 20 miles away to Gillingham, where they are permitted to count their blessings in squalid bed and breakfast accommodation, the breakfast consisting of several days' provisions dumped outside the inmates' rooms in carrier bags.

However, Tonbridge council is more prudent than to squander its profits on council rents in this improvident manner. Instead, it uses most of them to subsidise rates. The 7,000 council tenants in Tonbridge each pay £2·30 a week extra to subsidise the rates of the borough's 23,000 other householders. These repulsive practices will proliferate as the Secretary of State forces rents higher and higher and as profits grow bigger and bigger.

The question is, has the Secretary of State the right to push up rents in this way, and have the councils the right to do it, even if the Secretary of State tries to make them? The Housing Act 1980 lays down the rules that the Secretary of State must observe in fixing the local contribution differential, alias the rent increase. It says that he shall have regard, among other things, to past and expected movements in incomes, costs and prices. In the last financial year, average weekly earnings rose by 13 per cent. The general index of retail prices rose by 12 per cent. However, council house rents soared by 48 per cent. So rents went up by four times as much as earnings or prices.

What about the coming year? The Act requires the Secretary of State to have regard to future movements in prices and incomes as well. The Government Actuary, in the report that he published earlier this month, tells us that the Government instructed him to assume that average earnings would go up in the coming year by 7½ per cent. As for prices, the Treasury stated a fortnight ago that it forecast an increase in inflation next year of 10 per cent. However, the increase in rents, even if it is just the £2·50 a week which the Government are so far ready to admit, will be 22 per cent.—more than twice the increase in prices, and three times the increase in earnings. If rents go up 70p as they did this year, the increase will he much more—28 per cent.

However, in his consultation document, the Secretary of State adds another factor which he says he will bear in mind when fixing the rent increase. This new criterion is what he calls in the document
"the relationship between the average levels of local authority rents and earnings".
The Secretary of State has got into the habit of pointing with scorn to the fact that, under the Labour Government, council house rents fell as a proportion of earnings. Personally, I believe that that is something upon which we should congratulate my right hon. Friends who were then in charge of housing. It is certainly undeniable that, when Labour came to office in February 1974, rents were 7·9 per cent. of earnings, and that by the time we left office five years later that proportion had sunk to 6·3 per cent.

This year, thanks to the actions of this Government, council rents have risen to 8·1 per cent. of earnings. If rents rise next year only by the £2·50 announced by the Chancellor of the Exchequer, rents as a proportion of earnings will be well over 9 per cent.—the highest proportion since the end of the Second World War. Of course, if they go up by more than that, as they certainly will, council rents as a proportion of earnings will rise to the highest level ever recorded.

These days, local authorities are increasingly, if reluctantly, tempted to have recourse to litigation. It would be an interesting experience if some local authority decided to test in the courts the validity of the Secretary of State's use of his power to raise the local contribution differential—if it accused him, in effect, of violating the very criteria which the law says that he must observe.

Another question mark hangs over these massive rent increases and over the disgraceful tendency of Tory councils to use their profits on council rents to subsidise their general rate fund. The Housing Act 1957, which is still in force, lays down that rents charged by the local authorities must be reasonable. That is in section 111(1) in case the Secretary of State wishes to refer to it. Case law, for example the judgment of Mr. Justice Romer in Belcher v. Reading Corporation, has established that local authorities, in fixing their rent levels, must consider the welfare of tenants on the one hand, and the interest of the ratepayers as a whole on the other. The judgment goes on to say that it is the duty of local councils to maintain a balance between those two sections of the community—tenants and ratepayers—so far as is possible.

Is Tonbridge and Mailing district council maintaining such a reasonable balance by charging rents 29 per cent. above the national average, and by using the large profits that it makes as a result to force council tenants to pay £2·30 each a week to subsidise the general rate fund? Again, it would be instructive if someone asked the courts to decide.

Why is the Secretary of State sailing close to the legal wind by forcing local authorities to push up rents by the highest amounts ever to the highest level ever? The answer is, quite simply, because he is determined to make huge cuts in subsidy and rate support grant as his contribution to the Chancellor's public spending cuts. This year, the Secretary of State has cut housing subsidies by more than £600 million. Next year, he will cut them by another £400 million. Soon the subsidies will be completely abolished. Already, half the metropolitan districts and almost all of the 296 shire districts are moving out of the subsidy zone. The cuts are being achieved at the expense of the poorest sections of the community.

The Minister might refer to the 22 per cent. of households which receive rent rebates and those which are helped out with their rents by the Department of Health and Social Security. He could throw in the misleading assertion that 25 per cent. of tenants have household incomes of £8,000 or more, disguising the fact that that is total household income rather than the tenant's income. However much the Secretary of State tries to conceal the truth, after allowing for rent rebates and supplementary benefits, the £2·50 rent increase alone adds up to a collective fine of £400 million a year on council tenants.

The rent increases are unnecessary, punitive and vindictive. We shall vote against them tonight.

7.50 pm

I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:

"this House approves the steps that have been taken by the present Government to reverse the unrealistic and wasteful rent subsidy policy of the previous Administration, to increase rent rebates significantly and to provide very many council tenants with the opportunity of owning rather than renting their homes."
The background to this debate is the total failure of the Labour Government, of which the right hon. Member for Manchester, Ardwick (Mr. Kaufman) was a member, to implement the rent policy to which they were supposedly committed—the right hon. Gentleman did not refer to that—and the absolute inevitability, as a result of that failure, of significant rent increases regardless of who won the 1979 general election.

The previous Government's rent policy—from which the right hon. Gentleman is inclined to dissociate himself, although he was a Minister in that Government, and which he has tried to rewrite tonight—was clearly set out in their housing Green Paper. It stated no less than three times that
"The Government consider that over a run of years rents should keep broadly in line with changes in money incomes"
I suggest that a period of a Parliament is a reasonable run of years. Yet, over the period of the last Parliament, rents, far from keeping in line with money incomes, totally failed to do so. Money incomes rose by more than 110 per cent. while rents went up by barely more than half that—by 65 per cent.

The wholly predictable result of the last Government's failure to fulfil their own rent policy was a massive increase in Exchequer housing subsidies which, in England, rocketed from £600 million in 1974–75 to more than £1,200 million in 1978–79—an increase in real terms of almost one-fifth.

Equally predictably, as local authorities found new building becoming more and more financially burden-some, capital investment plummeted. Public sector starts in Britain went down year by year after 1975, and, by the time that the Labour Party left office, they were the lowest in any year since 1945.

The consequences of the last Government's failure to fulfil their rent policy were equally serious at the level of the individual local authority. The fact that rents were not increasing, even in line with incomes, meant a massive financial burden being placed on ratepayers locally, as well as on taxpayers nationally.

Over the period of the last Parliament, ratepayers in Lambeth, for example, found that their rate fund contributions to the housing revenue account trebled. The ratepayers of Haringey found that their rate fund contributions more than trebled. The ratepayers of Manchester, including the right hon. Gentleman's constituents, found that their rate fund contributions to the housing revenue account more than quadrupled. The right hon. Gentleman said that his rent policies were worthy of congratulation. It will be interesting to know how many Manchester ratepayers appreciate the size of their rate fund contribution.

There was, of course, one member of the previous Administration who was prepared to question the good sense of this massive increase in expenditure on housing subsidies, though it seems that he was entirely ignored by his ministerial colleagues. I refer to the right hon. Member for Heywood and Royton (Mr. Barnett). Speaking on behalf of the previous Administration in November 1976, the right hon. Gentleman said:
"For the longer term, the Government has to make sure that all aspects of housing expenditure make the most cost effective use of limited resources. I am already on the record, for example, as questioning whether it is really the best use of resources in the longer term to subsidise council tenants to the extent of 57 per cent. of costs as we do at present. Last year's public expenditure White Paper set the very modest target of reducing this to 50 per cent. over a 5-year period."
The right hon. Member for Ardwick endorsed that White Paper. Even what was described by the former Chief Secretary as a "very modest target" proved to be way beyond the will of the previous Government. Far from rents gradually rising as a percentage of costs in accordance with the Government's policy, rents in fact steadily fell as a proportion of costs.

Instead of rents being 50 per cent. of costs when the previous Government left office, they were, on the same basis as in the calculation made by the former Chief Secretary, only 37 per cent. of costs. It is significant that if rents had been increased to 50 per cent. of costs, in accordance with the previous Government's policy, rents should have averaged £9·15 when the last Government left office. In fact, they averaged only £6·48—nearly one-third less.

The Opposition's motion refers to a doubling of rents under the present Government. The fact is that if the previous Government had actually fulfilled their own rent policy rents this year would be only 25 per cent. higher than in April 1979.

The net result was that by the time the last Government left office rents were at a lower proportion of earnings than at any time in the post-war period—at a huge cost to taxpayers and to ratepayers alike. It was, therefore inevitable that a substantial increase in rents would have to take place in this Parliament. The right hon. Gentleman's speech would have been greatly improved if he had had the candour to admit that, because it is generally recognised.

Significantly, at local level, councillors of all parties have shown infinitely more realism on this point than Opposition Members. It is notable that, on the information so far available, the average increase in rents that has taken place in each of the last two years has been broadly in line with the rent assumption made by my right hon. Friend. That shows that the general body of local authorities, Labour as well as Conservative controlled, has accepted the need to increase rents by broadly the amount that my right hon. Friend has suggested. That is as true this year as it was last year.

The rent increase assumed by my right hon. Friend for this year was £3·25. It is apparant that a great many authorities, of all political complexions, have decided that it is justifiable not merely to increase their rents by that amount but in many cases by an even greater amount than that assumed by my right hon. Friend. On the latest estimates derived from local authorities' own returns, rent increases in, for example, Salford, will mean an average increase for this year of £3·48 compared with last year—that is, 23p above my right hon. Friend's assumption. In Nottingham, the average increase is £4·05–80p above the assumption. In Watford, it is £4·28–£1·03 above the assumption. In Bolsover, it is £4·55–£1·30 above the assumption. In Wolverhampton it is £5·32–£2·07 above the assumption.

Nothing could illustrate more vividly or more practically the general recognition in local government—among local authorities of all political complexions—that the previous Government's rent policy was totally unrealistic and unsustainable and had to be reversed.

I am listening with interest to the Minister. I understood him to say that during the course of a full Parliament rents should increase roughly in line with costs. If my mental arithmetic is correct, surely, with the increases that he is suggesting this year and if Parliament runs for five years, we should then have a rent freeze for two years. Otherwise rents will be well in excess of costs.

The hon. Gentleman has misunderstood me. One of the basic reasons for the rent increases that we have had to make during this Parliament is that, during the last Parliament, the Labour Government failed to maintain rent increses in line with money incomes, despite the fact that that was their policy.

The right hon. Member for Ardwick in his speech made reference to the new subsidy system. It is difficult for him to complain about the new subsidy system because, with one exceoption, the mechanics are essentially the same as those featured in the abortive Housing Bill introduced by the Labour Government just before the last election.

The one respect in which there has been a material difference in the mechanism of the subsidy system in the 1980 Act from that in the 1979 Bill has been the abolition of the no-profit rule, which raised the question of what assumption should be made about the use of housing revenue account surpluses for the purposes of the rate support grant. My right hon. Friend intends to announce further details of the RSG next Monday.

That question has now been resolved. As my right hon. Friend's proposals paper for the 1982–83 rate support grant settlement makes clear, we do not propose next year to make the assumption that housing revenue account surpluses will be transferred to the general rate fund with block grant being reduced accordingly. Authorities may, of course, make such a transfer if they wish, and wilt not suffer any loss of block grant if they do so.

The only material point of difference now between the mechanics of the present subsidy system and that put forward by the Labour Government is in the abolition of the no-proft rule. I am in no doubt that that was the right policy decision. The Labour Government of 1966–70 did not consider it necessary to impose a no-profit rule, and no such rule existed before 1975. Its removal by the 1980 Act has given local authorities a significant increase in their financial flexibility and financial discretion, and I am not aware of any widespread demand among local authorities for the non-profit rule to be restored.

Turning to the rent assumption for the coming financial year, I cannot anticipate the outcome of my right hon. Friend's statutory consultations on his proposals for the determination of reckonable income for 1982–83.

I wish to make some general points. First, whatever the determination of reckonable income that my right hon. Friend finally makes for 1982–83, for almost 50 per cent. of the tenants in England and Wales the actual increase in the rent they pay will be either nil, if they are on supplementary benefit, or greatly reduced if they are on rent rebates.

There are currently 1,400,000 council tenants—more than a quarter of all tenants—whose housing costs are met through the supplementary benefit system. Those tenants will, in effect, face no increase in rent next year at all. In addition, there are almost 1,200,000 council tenants—almost another quarter—who receive help with their rent through rent rebates. For that group, 60 per cent. of any increase in rent will be met through the rent rebate system.

To illustrate how far up the income scale it is possible to claim rent rebate, I should point out that a married man with two dependent children paying the average rent would still be eligible for a rent rebate with earnings of £120 a week—well over £6,000 a year. The same person paying an above average rent would, of course, he eligible for a rent rebate at a still higher level of earnings. Thus, about half of all council tenants will have next year's rent increase met either in full or in part by either supplementary benefit or rent rebate. I should also point out that we have actually trebled the maximum amount of rent rebate payable and have extended eligibility for rent rebates to groups such as sharers and licensees who were not eligible for rent rebates under the Labour Government.

Surely the hon. Gentleman does not want to give the House the impression that those on rent rebates, apart from those who receive income from the DHSS, will be paying no increase at all. In fact, they will be paying a higher rent, though clearly not the full rent. The Minister should make that clear.

When the hon. Gentleman reads the Official Report he will see that I have made that extremely clear. I referred to the specific fact that those on rent rebates would have 60 per cent., not 100 per cent., of their rent increase covered by rebate.

Secondly, there is no evidence that council rents are currently out of line either with other rents in the public sector or with rents in the private sector for comparable properties. Council rents are still significantly below the rents already being paid in the new towns. Comparisons with registered rents for housing associations and in the private rented sector are more difficult, but the available information suggests that in most areas council rents are still somewhat lower than for comparable properties in the private sector.

Thirdly, there is an inextricable trade-off between expenditure on housing capital and expenditure on rent subsidies. It is absolutely inescapable that the greater the expenditure on rent subsidies, the less the expenditure for home improvement, new build, mortgages and so on. For the Opposition to foster the illusion that somehow rent subsidies can be allowed to soar without any consequence for housing capital is fundamentally dishonest and totally at variance with their own experience in Government. Indeed, in present circumstances, the Opposition's call for higher rent subsidies next year amounts in fact to a call for further capital cuts next year. That we wish to prevent, and I am sure that the House will welcome my right hon. and learned Friend the Chancellor of the Exchequer's statement on 2 December that next year that
"we hope to be able to maintain activity on public housing construction and improvement at approximately the same level as this year."—[Official Report, 2 December 1981; Vol. 14, c. 238.]
Fourthly, the criticisms that the right hon. Member for Ardwick expressed about rent increases for council tenants would, I think, be distinctly more convincing if he were equally critical of the savage rate increases that Labour councils are imposing on the very same council tenants. For example, in Manchester, the average increase in domestic rates this year was 35 per cent., resulting in an average increase in domestic rates for all householders, including council tenants, of £1·54 per week.

We should have heard far more from the right hon. Gentleman about the crippling rate increases that Labour councils have been imposing on their tenants and on all their other domestic and industrial ratepayers—a matter on which he was conspicuously silent. Of course, the huge rate increases that were imposed in April were not the end of the story—certainly not in the Greater London area. We now have the Labour-controlled GLC, with its supplementary precept, requiring yet further rate increases for council tenants and everybody else in London. Its latest precept represents no small financial burden for the individual ratepayer.

In the 26 weeks over which the supplementary rate was planned to be spread, it would have meant a further average increase in domestic rates of £1·15 per dwelling per week in Wandsworth, £1·36 in Islington, and £2·42 in both Kensington and Chelsea and in Westminster. The way in which the Opposition have gratuitously and unnecessarily added to the burdens of council tenants as ratepayers makes it sheer humbug for them to criticise the Government's policy on council rents.

Finally, the Government—unlike the Opposition—are offering council tenants an alternative to paying rent. We are giving council tenants the opportunity of ceasing to be tenants and the right to buy their homes—a right that the Opposition intend to remove from them. We are giving tenants who cannot afford to buy immediately the right to take out an option so that they can buy at a fixed price in two years' time—a contractual right that the Opposition have now, to their shame, said that they will dishonour.

The Labour Party's policy is to give those thousands of tenants who want to become home owners, but who cannot afford to buy in the private sector, no housing choice at all except to go on paying rent for the rest of their lives. We are giving council tenants a genuine choice between owning and renting. More than 400,000 tenants in England and Wales have now exercised their right of choice by applying to buy their homes including, I am glad to say, the constituency agent for the hon. Member for Bolsover (Mr. Skinner).

If the Opposition were genuinely concerned about helping tenants to avoid paying rent increases, they should be urging Labour councils up and down the country to process right to buy applications more quickly. They should also reverse their policy commitment to repeal the right to buy.

This motion brought forward by the Opposition is riddled with inconsistency. It was the previous Labour Government's rent policies that made significant rent increases under the present Government inevitable. The Opposition are imposing unprecedented rate and supplementary rate burdens on council tenants. Their policy is to give council tenants no alternative but to go on paying rent and to take away from them their right to buy their homes. I therefore ask the House to reject this motion and to support the amendment.

8.10 pm

The Labour Party is here to get a fair deal for tenants. No one else will do that for them—no other party, and certainly not the media. This is what Opposition Members should press this evening. The Minister has said that there is to be a £2·50 a week rent increase this year. My right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) said that this is more likely to be £3·20 a week, on top of the £5 in the last two years. This means an increase of £8·20 in three years. The Prime Minister tells us that her heart is bleeding for these people, the poorest one-third of the community, yet she and her Government do this to them.

There are three reasons why Conservative Party leaders are hostile to council tenants. First, there is an ideological objection. They hate council tenants and council housing. Secondly, they want to make working-class people, who are the main occupants of council houses, pay for the economic crisis. Thirdly, there is a deliberate attempt to force tenants who do not want to buy to purchase their own houses. Their rents will be raised so high that they become as much as the purchase price of the house.

Rates are also going up, thanks to the removal of grant by the Government. Rent and rates together account for huge arrears already. I wonder whether it is necessary for me to point out that this further increase will add to the arrears that local authorities, ratepayers and taxpayers have to face.

By next year, subsidies will virtually have been ended. At the same time, there has been a huge increase in the subsidy to owner-occupiers. I shall not emphasise any division between the two sectors. Both are suffering from the high interest burden. I suggest, however, that it is grossly unfair to remove entirely the subsidy from the council tenant at the same time as the owner-occupier's subsidy is raised to £1,960 million this year. This issue should be tackled not by removing the subsidy from the owner-occupier, except for those who receive 60 per cent. grant in tax relief, but by increasing the subsidy to the council tenant. The Minister's excuse is that a percentage receive rent rebates. That is true. They are not, however, complete rent rebates. They are only partial. And what about the high percentage who receive no rebate at all?

The Prime Minister said a fortnight ago that there was to be only a 1½ per cent. increase in the cost of living. I do not believe that. For hundreds of thousands or, indeed, millions of council tenants, their rent increase alone will be double the 1½ per cent. increase in the cost of living.

At the same time, the hopes of people getting a council house are going down. In the last three years the number of council houses started has declined from 67,000 to 47,000 and to 27,000. God knows what it will be next year.

What can tenants do about this? Their job is to explain to their neighbours—this is a job for tenants' associations as well as for Labour Members—that the blame lies entirely with the Government and not with the local authorities, which are being forced to play the Government's tune. The Minister has announced an average increase of £2·50 a week, although we know that it will be much more. The Government are increasing rents by that amount and at the same time removing subsidy to the extent of £600 million this year and £400 million next year.

I have discussed this matter with people in Salford. I challenge the Minister, who has spoken so complacently this evening, to visit a large council estate in Salford, Manchester or any other city affected and put the case that he has stated this evening. He would get a very rough reception, and deservedly so. One engineering shop steward in Salford said to me:
"The Tory bastards are raising rents again."
Many people share that view, but not every tenant knows the facts. They receive the rent increase notice or the rate increase notice from the council. Much of the blame will consequently be placed on the council. When councils increase rents and rates it is essential that they make it clear to the tenants and the ratepayers where the responsibility lies for the increase in rent and rates. I recognise that people will say that one has to be careful about what is sent out from the town hall, or the district auditor will be on one's track. However, I have seen statements from Sheffield and other authorities that make it clear that the blame is the Government's. I hope that other councils will make that equally clear.

Ten days ago 155 Labour Members signed an early-day motion putting the blame where it belongs, on the Government and urging a rent freeze. Hardly a newspaper in the country reported this. If it had been proposed by the Social Democrats the matter would have been front page headlines but because it was the Labour Party there was hardly a mention of it.

There are 6 million council tenants. With their families they amount to about 18 million people, of whom about 12 million have votes. I warn the Minister that there is not a marginal constituency in the country which could riot get the Tory Members and Tory councillors out if the facts were made known. I hope that those tenants will send deputations to their Members of Parliament when they are next in the constituency. I hope, too, that they will use their tremendous electoral power at the May elections.

Finally, I repeat that Labour's job is to protect tenants. No one else will do it, and I hope that this evening's debate and vote will be reported fully throughout Britain.

8.20 pm

I wish to destroy some of the points made by the hon. Member for Salford, East (Mr. Allaun). He said that the Conservative Government hate council tenants. That is not the case. He said that we were forcing them to buy their houses. We are trying to give them the right to buy if they so wish. I support the amendment, and I wish to point out that we are giving council tenants and new town tenants not only the opportunity but the right to buy their homes, whatever the council says.

The Government are compelling councils to sell, even those councils which do not wish to sell and said so in their election manifesto.

That is correct. What better attitude can the Government adopt? We have given the tenants the right to buy.

I deal next with the record of the Conservative Government from 1970 to 1974 and the Labour Government from 1974 to 1979. I wish to refer to the Department of the Environment's housing and constniction statistics. At page 148, in table 129, one sees that between 1970 and 1974 the Exchequer subsidy stayed at about 20 per cent. of the total income and expenditure on housing. However, from 1974 to 1979 under the Labour Government the percentage of Exchequer subsidy rose from about 20 per cent. to more than 40 per cent. In those five years wages more than doubled, but in money terms the subsidy went up five times.

What did that do to the housing market? It created a tremendous imbalance between council house rents and private sector rents. That sector has dwindled during the past 20 years. It has caused a differential between council house rents and housing association rents. It is only now that council house rents have come more into line with those in the voluntary housing association sector. It also created a tremendous deficit on various housing revenue accounts. Uneconomic council rents led people to continue to live in rented council housing and destroyed the private housing market.

The Government intend to correct those imbalances, so first we have housing association rents in line with council rents. The number of starts in the private housing sector is growing, although not quickly, while in the public sector there has been a fall.

The hon. Gentleman says "Of course", but if we start to balance the housing revenue accounts, and in some areas to create profits, that will mean that during the coming years it will be possible to build council houses. I do not wish to see another massive programme of rented council houses, but it will be possible to build them and for them to be economic in the rental that they attract. Surely Opposition Members would agree with that.

The insinuation behind the motion is that the Government have doubled council house rents during the past two and a half years. I wish to compare that with coal prices. Some of my constituents have supplied me with coal prices month by month. It is frightening that in February 1979 two bags of coal cost £4·11, whereas now similar bags cost £8·30. There has been more than a doubling of the price. Allied with that we have the high wage demands and settlements in the coal industry. Now we have local authority workers, with a Labour Party casting vote, getting more than the Government can afford and more than the 4 per cent. that the Government hope will be the guideline.

We have heard this evening that not all council house tenants are hit by a rent increase. The Chancellor of the Exchequer said on 2 December:
"Almost half of council house tenants receive help with their rents from rebates or supplementary benefits … the average level of council house rents today represents no more than 7 per cent. of average earnings."—[Official Report, 2 December 1981; Vol. 14, c. 243.]
I do not believe that, in today's market, that is out of line with what should be the position.

In the general election campaign the Conservative Party made it clear that we wished to bring back market forces in housing, that we wished to give people the opportunity to buy their homes. That was and still is electorally popular. We should witness the people who live in new towns and who, despite Labour councillors, wish to buy their houses. We are helping them to do that.

If council house rents are in surplus, that will have the effect of bringing down rates. In today's market, the Government must do everything possible to support industry. Therefore, if there is a positive balance on the housing revenue account that will tend to bring down rate demands for industrialists and thereby create more jobs. What better future can we expect?

I have full confidence that the Government are right to follow a market policy for council house rents. That is what people in Britain wish to see. They wish to pay a fair rent. In the past they have had heavily subsidised rents, at great cost to the Exchequer and the economy. We cannot go on living with that false sense of security. I wish to see council house rents increased regularly in line with earnings. That is the policy upon which the Government have embarked, and I support fully their activities.

8.27 pm

It is always tempting for opposition parties to oppose tough measures taken by those in power, especially when a significant issue such as council house rents is involved, because it affects many of our constituents. The Social Democratic Party accepts that it cannot insulate council tenants against price rises in society. Most council tenants to whom I have talked understand that council rents must move in line with prices generally.

If it is wrong to try to isolate council tenants from the reality of price movements, it is just as wrong to single them out for a disproportionate share of hardship. The Minister has not grasped the point about the impact of the rises that the Government are now imposing, set against a background of growing unemployment and falling living standards. The Government's action is much too sudden and severe.

In April 1980 the average council rent was £7·71. By April 1981 it had risen to £11·39—an increase of 48 per cent. The growth of average manual and non-manual earnings in that period was only 13 per cent. so people paying unrebated rent are very much worse off.

The average rent in Greater London in April 1980 was £10·17. By April 1981 it had risen to £13·05. If we add £2·50—the right hon. Member for Manchester, Ardwick (Mr. Kaufman) reminds us that there may be an additional increase, but let us give the Government the benefit of the doubt—it produces a national average of £13·89, which is an increase of 22 per cent. In London it produces an average rent of £15·55 or a 19 per cent. increase. The most optimistic forecast of earnings increases over the next year could not be more than 10 per cent., so again tenants paying unrebated rent will suffer a severe cut in living standards. Other prices are also rising—national insurance contributions, the general rate fund contribution and heating costs, which are important factors for council tenants.

As with the constituencies of other hon. Members representing inner urban areas, in my constituency there are many problems with condensation in council properties. Nine times out of ten I find that the problem is in bedrooms. Council tenants can no longer afford to heat more than one room—the living room. Black mould, fungus and other miserable evidence of condensation is found in bedrooms. When tenants complain to the local authority the housing officer comes round and advises them to switch on the heating and open the windows. One-parent families, elderly people and young couples on low incomes might as well be told to burn pound notes to keep warm, particularly with the expensive heating systems that many council tenants are locked into.

The growing problem of rent arrears will further increase as a result of the rises. Many tenants have the choice of paying their rent or having adequate heating. With rising heating costs and rents, they cannot afford both.

The Minister suggested that council rents were still well below private rents. The figures provided by the Association of Metropolitan Authorities suggest that nationally the current average fair rent is £12·90 a week. Fair rents operate over a two-year period and are phased in. As we know, the average council rent is £11·39, so it is £1·50 behind, but, if we add £2·50, it becomes £13·89, increased annually and not phased in. Council rents will then be ahead of the fair rent, which is not acceptable, especially when the Minister says that council rents should be realistic.

I agree with the hon. Member for Salford, East (Mr. Allaun) that Ministers should come and see for themselves. They should forget the beautiful semi-detached houses with green grass in front at Tonbridge and Malling and look at council estates in inner urban areas, with vandalised lifts, graffiti and the air of destruction that permeates many of them. With delays in repairs and so on, tenants wonder whether anyone cares about them. If Ministers had a look, they would not then say "Hard luck, lads, but it is only another £2·50 a week." That is merely adding insult to injury.

The Minister paid great attention to rebates, but they are not the answer to all the problems. If 40 per cent. of a gross rent rise will disappear in rebates, we should consider where we go from here. As the Minister said, 50 per cent. of local authority tenants are in receipt of either supplementary benefit or rent rebate. In some areas the percentage is a great deal higher. Knowsley says that 74 per cent. of its tenants are in receipt of housing assistance, and in Newcastle it is 65 per cent. In Greater London, between 1980 and 1981, we saw a massive rise in rent rebates. For example, in May 1980, 104,149 GLC and London borough tenants were receiving rebates. By April 1981 the number had increased to 139,731. That 34 per cent. rise in rent rebates alone in one year shows the scale of the problem. If we can say officially that 50 per cent. of tenants cannot afford to pay their rent, there must be something wrong with the level of rents. With growing unemployment and still higher rents, many more tenants will be forced to seek means-tested help.

The Minister will accept that there is a problem with take-up. Not every tenant knows what he is entitled to; nor can he fill in the forms or go through the administrative process.

There are short-term problems, too. People who are sick for a few weeks or are unemployed for a month do not qualify for rent rebate. There are administrative delays in local authorities. No one is a more powerful champion of local government than I am, but I have to accept that there are delays in calculating rebates and changes in rebates. It is a mistake to suggest that rebates are the answer to all the problems, particularly when we know that more staff will be involved in administering the operation, at a time when local authorities are being urged to reduce staffing levels.

I am old-fashioned enough to believe that fixing rents is a matter for local authorities. I vividly remember the right hon. Member for Bermondsey (Mr. Mellish) advising many of us in London in the late 1960s not to urge the then Labour Government to interfere to pre vent the Conservative-controlled GLC raising rents. He said that if a Labour Government stopped Conservative councils raising rents, the logical result would be that Conservative Governments would increase rents. He said that once Governments started interfering we would never get their sticky fingers off the issue of rent fixing. That is a lesson that some of us should have learnt. The fixing of rents should be considered in the light of local circumstances.

I agree with the right hon. Member for Ardwick about surpluses on housing revenue accounts. Virtually all the shire districts and half the metropolitan districts are now approaching surplus, and I am informed that even two London boroughs will be moving into surplus as a result of the current increases. Why should those authorities, which receive no Government subsidy and may lose out on rate support grant, need to increase rents? One is forced to the view that surpluses that are contributed to by council tenants will be used to offset the general level of rates in those areas. Given that there is considerable evidence that the average council tenant is less well off than the average owner-occupier—I accept that there are variations to that—we have a Robin Hood in reverse position if council tenants are to subsidise owner-occupiers and other general ratepayers.

I accept what the Minister said about the impact on capital. I understand that if we are to contribute more in subsidies to those who are already housed, fewer resources will be available for those who are not housed. We must always bear in mind the needs of those who do not have homes. There must be a limit to what we can reasonably expect council tenants to contribute. My colleagues and I in the SDP take the view that the Government have gone well beyond a reasonable limit over the last two years. Therefore, we shall vote against the Government's increases.

8.38 pm

It behoves the House to discuss rents arid council housing because it is an important subject. The hon. Member for Salford, East (Mr. Allaun) spoke about the many people involved. We must realise that our rent structure is in a mess. The Rent Acts give a false impression of rents in the private sector, and the public sector is highly subsidised. The whole issue is confused and it is difficult for the citizen in he private rented sector when he compares his lot with the lot of those in the public sector.

The previous Labour Government produced a document about the Rent Acts with an all-yellow cover. Whether that was symbolic or not, I am not sure, but they ran away. It was a worthwhile document on the rented sector, both private and public. We must look at the problem as a whole—as a problem of housing and housing needs. The question of rebates is vital. A tenant in work with a wife and two children, paying rent of £11·30 a week, with earnings of £80 a week now receives a rent rebate of £7·04 a week. He is therefore paying a rent of £4·26 a week. That is not an unreasonable sum for a man earning £80 a week. I am not trying to attack him; I am trying impartially to consider rents, rates and accommodation.

The hon. Member for Salford, East says that the Conservative Party is attacking council tenants. I have never heard such rubbish in my life. There are many good council tenants who feel that they should pay their corner the same as everyone else. They are delighted to be in their accommodation and they feel that they should pay their corner. One should not infer that all council tenants feel that they should be subsidised.

The hon. Member for Woolwich, East (Mr. Cartwright) said that he thought that council tenants should pay increased rents to help industrialists. That would mean that they would pay more than their fair share and subsidises those who are in a much better position.

I shall not become involved in an argument about whether council tenants are subsidising industrialists. That is not the point at issue. We are discussing the management of housing in our society, be it in the public or private sectors.

The rebate system which was set up by the Labour Party has been extended and about 50 per cent. of council rents are rebated. Council tenants are assisted either by the DHSS or by rent rebates. That is a good thing and I do not attack it. It is right and proper that certain individuals should be subsidised. However, we must understand the position of widows or young married couples who are struggling because of the limited availability of accommodation and who take private rented accommodation because that is what they want. They see tenants with large incomes occupying council houses. I am not attacking council tenants with good incomes, but when widows and young married couples know that large incomes are going into council houses they feel that those tenants should make due payments in rents for the value of the properties. There is nothing wrong with that view. It seems to be the basis for a just society.

We are discussing those at the top end of earnings. We are not discussing those at the lower end of earnings who are receiving subsidy either from the DHSS or from rent rebates. If it were felt that council housing should be provided only for those in greatest need, would we march people out of their homes? Will the Labour Party say to a council tenant "You cannot stay in your house because you now have a top-line job"?

No, I shall not give way; I wish to complete my argument.

It seems perfectly reasonable to charge an economic rent to those who can afford it and to provide subsidies for those in need. My right hon. Friend the Member for Worcester (Mr. Walker), who is now the Minister for Agriculture, Fisheries and Food, produced an excellent Act when the previous Conservative Government were in office. It moved the subsidy away from the property to the individual. It was the fair rents Act. Unfortunately, the previous Labour Government abolished that Act as soon as they came into office. The Act attempted to deal with the problem of housing subsidy and moved that subsidy from the property to the individual. I supported that move. It was a tragedy that the Labour Government did not allow that imaginative Act to remain on the statute book. It is a tragedy that it was not followed through.

The Conservative Party is in favour of the right to buy. That seems to be a crime in the eyes of Opposition Members. What is the matter with someone wishing to buy his own home? It is wrong that local authorities stop people from buying their own properties.

If the hon. Gentleman is in favour of the right to buy, is he prepared to extend that right to tenants of private landlords? Should we not treat people equally and even-handedly?

That sounds very exciting, but you and I contribute to public housing. It is not privately-owned property. It is owned by the community. It is paid for by your tax and mine. My decision is, therefore, to allow people the opportunity to buy it.

Order. It should be "the hon. Gentleman".

I am sorry, Mr. Deputy Speaker. The hon. Gentleman made his point and I am now trying to answer it. In one case, an individual has put his savings or whatever it may be into buying the property. In the other case, the community has bought the property. That is the important difference.

I am most obliged to the hon. Gentleman for giving way. I wish to put two points to him.

First, the private landlord in many cases purchased the property by means of a mortgage, thus receiving tax relief at the expense of the taxpayer.

Secondly, as the hon. Gentleman rightly says, public money has been invested in council housing. Why should we then sell public assets at a 50 per cent. discount? Is that not stupidity?

Of course it is not, because the public asset belongs to the community. You do not own the community.

Order. I am listening with great care. I think that it might be better if the hon. Member slipped back into the third person.

I am sorry, Mr. Deputy Speaker. I do not own that property. Nor does the hon. Gentleman. Is that better? We must get the argument into balance. We seem to become confused in dealing with the right to buy.

The question of surpluses on housing accounts was also raised. I am not one who believes that we should put surpluses towards the general rate fund. I have reservations about that. I believe that that money should be used to do up the houses. It is important to keep our housing stock in good condition. Far too much council housing is in a bad state. The surpluses should be used directly for the benefit of the generality of council tenants by doing up the housing stock.

It has been said that 1 per cent. of council housing stock is unoccupied. This is partly due to maladministration, but it is largely because it has not been done up and is in bad condition. We should press the Government to persuade local authorities to use their housing surpluses to do up their stock, thus bringing more housing into circulation and more benefit to those on the housing list.

I agree with the hon. Member for Woolwich, East (Mr. Cartwright) about the general management of council housing. Local authorities must consider whether they are really up to managing council housing. I ask that question in all sincerity. I am not sure that the job is not too big for them. They are very good with housing lists. The points system to determine who goes first and so forth is not bad. I do not deny that. In the actual management of housing estates, however, we have all heard about loos which have not been mended for weeks and problems of damp. The latter is generally known as "condensation". I battled for several years over the problems of a block in my constituency—I give the hon. Member for Swindon (Mr. Stoddart) credit for putting me right about who built it—because the council said that the problem was condensation. It was not until we brought in a surveyor that we found that there was a hole in the roof and the place was actually damp. I am no surveyor, but it was clear to me from the outset that it was damp.

The House must take on board this problem of housing management. It is perhaps not a job for local authorities. I should like the whole function to be shifted gradually to the housing association movement, as in my experience it is better at management and I feel strongly about this problem.

To me, the Government's proposals are not unreasonable. We are suggesting that those with higher earnings should pay a market rent for their property. That does not seem to be unreasonable, as long as we have, as we shall, the safeguard at the poorer end in the sense that those on lower incomes should get subsidy and rent rebate.

We are moving, consciously or unconsciously, in the right direction, where subsidy goes to the individual rather than to the property in which he is living. That is the way all subsidies and all help in our society should go, in housing as in anything else.

8.51 pm

The hon. Member for Reading, North (Mr. Durant) referred to council tenants paying the market rent. He has demonstrated how far the Tory Government would like to go in achieving a position where those who are not in receipt of rebate are paying the full market rent, or somewhere near it.

There are few hon. Members who have not been assisted by tax relief in buying their property. Those of us who are in receipt of mortgage tax relief are subsidised. It is not right to say that it is unfair and unjust that council tenants should also be subsidised. The two groups are assisted—rightly so—and there is no reason why it should be otherwise.

Today's debate is appropriate. Council tenants have been penalised and punished under the Government, and the latest proposed increase will mean that council rents will have risen during the three years of the present Administration by almost 125 per cent. That is why we say that council tenants are being penalised.

There are three reasons for the massive rent increases. One is clearly to reduce the subsidy for local authority housing. There is no dispute about that and it is part and parcel of the Government's policy to reduce the amount of subsidy going from central to local government.

Secondly, it is to encourage tenants to buy. If rents are constantly rising year by year, tenants will think that if they have to pay the same as they would if they bought they might as well buy. Thirdly, the increases are to justify the equally large rent increases in the private sector.

The sheer hypocrisy of the increases can be illustrated. The Prime Minister, the Chancellor of the Exchequer and other members of the Cabinet constantly tell working people that the normal wage increase should be 4 per cent. In the British Leyland and other disputes the point is constantly made that anyone who wants more than a 4 per cent. wage increase is being unpatriotic and doing a disservice to the country. If people accept less than 4 per cent., the Prime Minister and the Chancellor are happy.

If it is right, as the Government claim, that in the prevailing economic difficulties 4 per cent. should be the limit for wages increases, why should rents go up by at least 22 per cent. in the next financial year? What possible justification is there for the difference between the wage increase of 4 per cent. and the 22 per cent. minimum rent increase being imposed by the Government? What is more, we have read press reports that the Treasury wanted an even larger sum. It was not satisfied with the £2·50 increase. It wanted £3·50 or £4.

Reference is constantly made to tenants who receive rebates. Many of them will be paying increases in rent. What about the 50 per cent. or more of council tenants who will be receiving no rebate and who will be paying rent increases?

The Chancellor of the Exchequer refers to average incomes and says that council tenants will pay no more than 7 per cent. of average earnings, but all the surveys show that local authority tenants receive lower than average incomes. That is all the more reason why we should be greatly concerned about the rent increases that we are debating tonight, and the rent increases that have already occurred.

If the Government were to say that, although the increases are taking place, they are doing what they can to encourage house building in the public sector, that might be regarded as some justification—although I would not agree with it—for rent increases, but house building in the public sector is the lowest since the 1920s.

All over the country thousands of people are desperately waiting for accommodation, and because of Government policy they will have to wait much longer. Indeed, council house building is such a unique event these days that if one comes across it one tends to look twice. In my own local authority, in Walsall, the number of starts this year is 44, and most of it is sheltered housing. I doubt whether any Labour or Conservative Members could quote higher figures in their areas. The construction of council dwellings is virtually coming to a stop all over the country, so it cannot be argued that rent increases are necessary because of council house building.

It is true that council tenants may well blame the council and not the Government for the rent increases. That is all the more reason why Labour councils should, at every opportunity, quote what the Minister has said today or what the Secretary of State has said on other occasions, to show that the responsibility for the rent increases rests with the Government.

The usual reply to parliamentary questions about rent increases is that the Secretary of State is not responsible, but it is clear that the level of rent increases in the last two years has to a very large extent been determined by the Government, and as long as the Conservative Government remain in office that will be the position.

Two or three weeks ago there was a fairly large lobby of council tenants. They came to the House to protest against the rent increases that had taken place, and against the increases proposed from next April. I told the people to whom I spoke that if there had been stronger pressure in the last 12 or 18 months by the tenants who are so bitterly resentful of the increases the Government might have hesitated before imposing any further increase. My advice to council tenants is that they should be prepared to organise and to demonstrate their anger in a positive way.

I also reminded the tenants taking part in the lobby that the rent control and rent regulations that arose in the First World War were the direct result of protest and strikes. I think that they took the point.

Council tenants have had enough of massive rent increases. The Government have shown a completely insensitive attitude to the manner in which council tenants are being penalised. The best thing that council tenants can now do is to organise their protest in the most effective way. In my own borough, some tenants have refused to pay the rent increase. That may be right or it may be wrong. The Minister is aware that tenants have decided that, although they will pay the ordinary rent, they will not pay the last rent increase. There have been many examples of rent arrears in my borough, as there have been in the constituencies of many hon. Members.

When tenants rightly feel resentful of what the Government are doing, it is up to them to organise themselves, so that next year the Government will not come to the House and say that tenants are to pay yet another increase of £2·50 or £3 a week.

9 pm

I have been listening to the debate. One matter which concerns me most is the Government's failure to make absolutely clear what their policy is on the level of rent increase that they are to impose on council tenants. Their failure to do so is causing great confusion among local authorities, the local authority associations, and tenants. Local councils have to plan their budgets, so they should know just what they are planning for and they should be given time to make their plans. The Government are delaying their announcements and negotiations so much that councils and borough treasurers are put in an impossible position.

Council tenants have enough financial burdens to bear already and many of them are worried stiff because they hear all sorts of figures for what exactly the rent increases will be. Will the weekly rent increase be £2·50, £3·20, £4 or £5? They do not know because the Government are shilly-shallying around about the whole matter because the Cabinet is apparently split between wets and dries, and between those who want to clobber council tenants and those who have a little sympathy for them. I implore the Government to make up their mind and tell us the bad news as soon as they can so that local authorities know exactly where they stand.

I have had something to do with local authorities. I was once the chairman of a housing committee. On many occasions, I had the onerous job of examining the rent account and making adjustments to rents. However, I have always believed that it is the duty of a local authority to fix rents in accordance with the circumstances and the finances available through subsidies and rents.

I always found that the major reason for having to increase rents was interest charges, and but for the enormous increases in interest charges over a long time rents would not be nearly so high; nor would they have to be increased by so much and so often. We should get into our heads the fact that both council tenants and owner-occupiers pay a huge amount of their rents and repayments to the financiers, who never lay a brick, put on a roof, put in a bathroom or do anything else.

The truth is that council tenants, as well as owner-occupiers, pay huge sums to the moneylenders, who may be in this country or abroad. Ordinary people—most of whom want only a roof over their heads—are forced to pay an exorbitant amount out of their weekly or monthly incomes solely and simply to provide lush pastures and lush living for those who contribute nothing to the building and provision of their homes. One of the best things we can do for council tenants and owner-occupiers is to make a real bid to bring interest rates down to a realistic level.

I am following the hon. Gentleman's argument. From where does he think that the so-called financiers, or bankers—or whatever other term he cares to use—get the money that they use? Does it not come from ordinary people's insurance policies, savings, investments, and so on? Does not the money come from the investments of ordinary people?

A good deal of it is made from underpaying for the labour of others and then expecting a big interest charge and a great profit on doing so. Some people use the system and believe that money is an end in itself. One of the great problems in Britain is that money makes money, rather than production, be it production of houses, cars or anything else. That is why Britain is in its present desperate financial situation. That is being worsened daily by the present predatory Government.

I have heard some average rents being quoted. I think that the Minister for Housing and Construction mentioned 7 per cent. of average earnings. Perhaps it was 8 per cent.

I thought that I heard the Minister mention 7 per cent. I apologise to him. Someone said that it was 7 per cent.

Perhaps it was the Secretary of State. We could have no greater authority than the Secretary of State.

I find it very difficult to understand where the 7 per cent. figure comes from. Average earnings in my constituency are probably below those for the rest of the country. I could not be sure about that, but they certainly would not be above the national average. Tenants of council houses in my area are paying between £18 and £22 a week in rent. I am not all that good at arithmetic, but I make that more like 14 per cent. or 15 per cent. of income, rather than 7 per cent. People in Swindon, anyway, are being hit very hard by the high rents that they are paying. Such rents have been imposed mainly by the present Government. That is why the people of Swindon are always urging me to get the present Government out of office at the earliest possible moment.

I apologise for intervening when I have only just entered the Chamber. However, how many council tenants in Swindon are actually paying the nominal rent, and how many are in receipt of rent rebate or, in the private sector, rent allowance?

I would imagine that it is probably about the average. The Minister has already mentioned that figure. I have said that I believe that the task of fixing rents is best left to local authorities, which can do it on the basis of local circumstances. As it happens, if we were not charging so much rent, it would not be necessary for us to pay so many rebates. That stands to reason. I should have thought that it was self-evident. The hon. Member for Huntingdonshire (Mr. Major) does not appear to think so.

Most council tenants would prefer to pay the going rate if that was a reasonable rent, rather than to be recipients of what they see as a State handout, and what is often represented to them by some people as a State handout.

It would be quite unjust to accuse the Secretary of State of making a statement which he did not make. I misled my hon. Friend. It was the Chancellor, when making his statement, who said that the rent increases would be only 7 per cent. of average earnings—not that that has been repudiated by the Secretary of State.

If that figure has come from the deputy boss, it must be authentic. However, people in Swindon simply do not understand the 7 per cent. figure and following the debate I shall receive many letters from my constituents saying "What on earth are these people talking about? We know that we pay considerably more as a percentage of our income on rents than the Government claim."

Other hon. Members want to contribute, but I shall say a final word about the level of rents, which has already been touched on by my hon. Friend the Member for Walsall, North (Mr. Winnick), and about the Government's policy towards rents and incomes. I simply do not know how on earth the Government can expect to impose on my and other hon. Members' constituents a 4 per cent. increase in wages or salaries and expect them to pay swingeing increases in rent.

By imposing the swingeing rent increases, the Government are putting up inflation, which they say they want to cut. By that policy and others, they are imposing pressure on unions and wage earners to press for more money so that they can pay the additional charges for rents and rates. Let us make no mistake: the Government are putting the rates up and not the Labour local authorities.

The Government have just cut the percentage of rate support grant from 59·1 to 56 and, therefore, they immediately imposed an across-the-board increase of 3 per cent. or 4 per cent. on all ratepayers. The Government are imposing not only rent but rate increases. By that means, they are stoking up inflation and, at the same time, expecting trade unions and working people to hold their wage demands to 4 per cent.—thus ensuring a swingeing cut in their standard of living.

That policy simply cannot be made to stick and I urge the Government, even at this stage, to examine more thoroughly what they are doing to rents because they will find that, far from assisting their own position, they are worsening and exacerbating it, and causing hardship to many people.

9.13 pm

I am a little puzzled at the glibness with which the Minister admits that, even though we shall have rent increases, 50 per cent. of those affected will not have to pay the increases because they will be paid in subsidies.

My borough of Croydon has 22,000 tenants and the borough's estimates show that 7,000 will be on supplementary benefit and a further 4,130 will be receiving assistance through rebates. We should note the point made by my hon. Friend the Member for Woolwich, East (Mr. Cartwright). It seems a monumental folly to increase rents when half of them will be paid through the public purse.

My hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) has drawn my attention to the effects of the national regional rent facing councils which do not make a policy of increasing rents to a level that is not justified by costs. In many cases, councils have been required to increase rents beyond the level required to keep their accounts in balance. That seems to be a unique and monumental folly, because before real rent levels can be arrived at the whole rental system needs a thorough reappraisal.

We have heard tonight about gross family incomes. I suggest to Conservative Members that many of those incomes are ephemeral. Parents of teenage children know that their children will live with them for a few years and that, if and when they are earning, they will contribute to the gross family income. When the children leave to marry or set up home on their own, the family income will diminish rapidly. What will the parents, left with a considerably diminished gross income, do with a rent that is based on an income that lasted for only four or five years?

Many of the teenage children will not get jobs anyway.

That is true, but I am talking more of a society that Conservative Members would like us to believe exists than of the one that actually exists. We need a thorough reappraisal of the rental system and subsidies, not just for council and private tenants, but, in certain respects, for those with mortgages.

Liberals regard housing credits as a key part of proposals that would replace the present chaotic system of subsidies, rebates and means tests. The total of each person's credit would be assessed according to his or her various needs and where credits exceeded tax liability they would be paid in cash. For example, each householder paying rent to a landlord for his or her main residence would get a rent credit equal to the rent of the property let unfurnished, up to a certain ceiling.

The Government intend to increase rents, to save face in many cases, to increase the general rate profit and to subsidise many ratepayers who could afford not to be subsidised. We shall pay for those increases out of the public purse, because, as the Minister admitted, 50 per cent. of those who will face rent increases will have them paid from the public purse. That is a monumental folly and that is why the Liberals will vote for the motion.

9.16 pm

I apologise to the House and particularly to the right hon. Member for Manchester, Ardwick (Mr. Kaufman) for my absence during the earlier part of the debate. I hope that the House will accept that my previous contributions to housing debates show that I am not a conscript but a volunteer, and my absence was unavoidable.

I promise to be brief, because the hon. Member for Bootle (Mr. Roberts) has been waiting for some time and I have no intention of denying the House the opportunity of listening to what he has to say.

The hon. Gentleman offers an alluring prospect when he says that. I am not sure how one can attack a policy that does not exist, but I shall speak only briefly so that the hon. Gentleman may have the opportunity to do so.

Like the hon.Member for Swindon (Mr. Stoddart), I have had responsibility for both determining council rents and explaining to council tenants why it has been necessary to increase their rents. I agree with the hon. Gentleman that it is a painful business.

There is no immediate advantage to anyone, in terms of political popularity, in instinctively raising rents for an ideological reason. The hon. Member for Sheffield, Heeley (Mr. Hooley) laughs. If he thinks that anyone wins votes by raising council house rents, I should be obliged if he would tell me who he has in mind. If the policy is followed through, there must be a rationale behind it and I believe that there is.

The motion blandly states:
That this House condemns Her Majesty's Government for more than doubling council house rents since coming to power.
In isolation, that may seem attractive to hon. Members who wish to curry favour with council house tenants and to make a point against the Government, but if they were concerned about the needs and problems of housing over the past decade they would be better employed in condemning previous Governments and local authorities for their policy of deliberately maintaining rents at a low level, notwithstanding the rate-borne contributions which that required.

It has been my experience in inner London and from observation elsewhere that the almost inevitable corollary of a low rent policy is poor maintenance and a system of council house habitation that is not acceptable to many of the tenants who suffer it. That is the reality that substantially divides the parties. The Labour Party sees a considerable advantage—more political, I suspect, than housing policy advantage—in sustaining a general and wide-ranging policy of low council house rents.

I have never understood the logic of sustaining a significant differential between a house of a particular calibre owned by a local authority and a house of similar calibre owned by a private landlord. However, over the years that differential has opened up, and the net loss of rent income to the local authority has been met by ratepayers and taxpayers in terms of the taxpayers' contribution to the rate support grant.

One of the certain and inevitable results of that differential has been that in almost every great city there has been an accelerated demand for local authority housing—accelerated because of the artificially low rentals—and the acceptance by tenants of standards and conditions of tenure within local authority housing that are substantially lower than they would or should be prepared to accept, and which are tolerable only because of the low rentals. In my view, that provides a vast distinction between the private and the public sectors, and between the home owner and the council tenant. It is an artificial distinction, and the sooner it is removed from the landscape of our political affairs the better.

The raising of rents is an emotive matter. I understand the emotion that it raises at a time when there is, not a statutory, but certainly an implied intent by the Government to restrict wage increases to a nominal sum. Clearly, there is considerable resistance when the fixed expenditure of a family rises by more than a similar percentage. I have lived too long in places such as Brixton and inner London not to understand the resistance that follows from that.

In housing, emotion often dominates the argument at the expense of logic. The logic of what needs to be done in housing is a matter of prime concern. I understand the difficulties. No one who has been involved in housing for years could doubt them. However, if we are to find a medium-term solution that will remove many of the artificial divisions between the parties from the cockpit of party political dogma, then we must aim at what is surely a desirable policy—a higher standard of housing and, for those who can afford to pay, a higher rental to meet the costs of that higher standard of housing.

That is how I view the policy that the Government are now pursuing. Those who are able to pay should be prepared to pay an increase in rental, just as people in work should be prepared to pay a higher national insurance payment to assist those who are not in work and those who are in receipt of retirement pensions. There is no difference in logic there. When it comes to people who cannot pay, we should bear in mind that the purpose of the rent allowance system in the private sector and the rent rebate system in the public sector is to alleviate the most painful effects of lifting rentals from an artificially low level to a level that in logic and equity is acceptable to most people who view housing in a dispassionate manner.

The new Social Security and Housing Benefits Bill, now being steered through its Committee stage by my hon. Friend the Under-Secretary of State for the Environment, introduces a beast that we should have seen on the housing scene many years ago—a unified housing benefit that will provide a system in which many low-paid people will receive no rental or rate charge whatever.

One must bear in mind the reality of what is happening. People who are able to pay will be required to pay, and people who are unable to pay will continue to receive rebates or allowances according to the nature of their tenure. Then one can view the Government's policy in a more equitable light.

Let us consider the practical example of a married tenant with a wife who does not work, two children and an income of £80 a week—not a vast sum by today's standards but not an insignificant sum. His rent might be fixed at £11·30. On his income he would pay only £4·26 a week. That does not seem to be artificially high. I am sure that even the right hon. Member for Ardwick will concede that.

For years I have lived in areas with bad housing. I have lived adjacent to and in bad housing. I share with Labour Members the belief that the responsibility of housing authorities, the Government and the private sector is to clear away as fast as possible the slum dwellings in which so many of our citizens have lived for generations. However, I do not believe that we can sweep away those conditions when we artificially create a system that, for political or other reasons, sustains a substantial minority of the nation in houses for which artificially low rents are paid at the expense of other sections of the community.

When we remove these anomalies, we shall be in a better position to direct the nation's resources to the solution of our housing problem—which we all recognise—which all hon. Members wish to see cured as soon as possible.

I understand the pain and concern of many people who will have to pay higher rents in the coming year. I beg people to realise that those in genuine need will not pay increased sums. People who pay them, because they can afford to do so, will play their part in creating the pool of resources that will enable us to deal with our housing problems.

9.28 pm

The hon. Member for Huntingdonshire (Mr. Major) must have learnt his housing policies in the fun house of Blackpool if he believes that demand for council housing is the result of low rents. He obviously misunderstands the growing waiting lists, the clamour of the homeless ——

I must correct the first of the hon. Gentleman's misconceptions. I learnt my housing policies in the far-from-fun house of Lambeth. There are problems there. I lived in Lanbeth for 15 years in various properties, not all of which were salubrious, and I chaired the Lambeth housing committee for some years. I know the problems.

That lends more weight to my argument. Anybody who has witnessed inner city problems and claims that the growing waiting lists and the demands of the homeless knocking on the doors of local authorities have anything to do with low-rent policies is living in cloud-cuckoo-land. The hon. Gentleman must not try to justify swingeing rent increases and dramatic reductions in subsidy by such tautology.

Let us examine the figures. The Government are cutting dramatically subsidies to local authority housing. In 1979–80, at 1980 survey prices, £1,274 million was paid by the Government to local authority housing revenue accounts to subsidise council housing. The 1981–82 figure has been reduced dramatically to £665 million. That is a dramatic cut. Part of Government policy is to cut public expenditure in areas where it hurts most. More than 75 per cent. of the cuts in public expenditure have been in housing. That has hit new building and slum clearance, over which the hon. Member for Huntingdonshire shed crocodile tears. The cuts have hit local authority home loans, improvement schemes and every aspect of housing policy.

There was an argument in the Labour Party before the last election. Some people argued that we should cut subsidies for council housing and switch resources from subsidies, which keep rents low—or lower than they are now—to funds for housing capital expenditure and to build more houses or to improve older properties. That argument no longer exists. The Government dramatically cut subsidies and increased rents in many areas so that local authorities could begin to make a profit out of their council tenants, but at the same time they dramatically reduced the amount of money available for capital building, council house building and the improvement of older properties—so that argument does not hold water.

Conservative Members appear to ignore the fact that other sections of society are subsidised. Owner-occupiers are subsidised, and increasingly so, by income tax relief on their mortgage interest. I can give the comparable figure. I have already said that in 1981–82 a mere £665 million, at 1980 survey prices, will be paid in subsidies to local authority council tenants, but £1,285 million will be paid in tax relief on mortgage interest to owner-occupiers.

I do not suggest that owner-occupiers should be penalised or that that figure should be reduced. However, that money could be distributed more equitably, because the method used to subsidise owner-occupiers is based on the principle that the richer one is the more help one needs with housing, and the bigger the mortgages and the more tax one pays, the bigger the tax relief that one should get.

If there is nothing wrong with giving such subsidies to owner-occupiers, why should it be wrong to give subsidies to council house tenants to help them with their housing costs? As many of my hon. Friends pointed out, the lower income groups live in council housing rather than as owner-occupiers. It is sheer hypocrisy to suggest, as Conservative Members do, that there is nothing wrong with swingeing rent increases because the vast majority of council tenants, or more than 50 per cent. of them, are entitled to rent and rate rebates. The more that rents rise the more people will fall into the poverty trap and the more they will have to fill in forms to seek assistance with their rents from the DHSS or local authority housing departments. That is clear evidence that the rent increases proposed by the Government are not justified.

Many people in receipt of rent rebates or supplementary payments to help with their rents are elderly. I advocate—it is a personal view and not Labour Party policy—that if we want equity between council tenants and owner-occupiers we would be justified in having rent-free council houses for people of retirement age, or for people who have lived for, say, 20 years or mote in a council house. That would put them on the same basis as owner-occupiers who, having received subsidies for 25, 30 or 40 years to help them buy their houses, now own them and live rent-free.

That principle could be applied to the public sector so that council tenants would enjoy rent-free accommodation. Such a policy would destroy the main argument in support of the sale of council houses—that council tenants want to obtain the advantages of owner-occupation. The Labour Party should consider my proposal.

One of the arguments put forward by Conservative Members is that subsidies should go to the individual and not to the construction of houses. We have heard talk of an economic rent and a market rent. I do not believe that subsidies in housing should go to the individual. There was nothing wrong with the subsidy system that existed before the Secretary of State repealed it. Under that system about 66 per cent. of the cost of building local authority houses or improving older houses was paid in subsidy by the Government. Of course, the system was a little more complicated than that, because of historical calculations. However, if a local authority had a major housing problem and built many new houses, or improved older houses, 66 per cent. of its capital expenditure was provided by subsidy. That was a sensible system.

Charging an economic or market rent for a council house penalises people who cannot afford to pay. Those affected have to apply for a rebate and go through the means test. That is the wrong way to deal with the matter. In the owner-occupied sector, individuals—some of whom are well off—are subsidised. That is not necessarily a subsidy for the provision of new houses, because three out of every four mortgages relate to the purchase of existing houses which have increased in price because of market forces. That does not encourage the production of new houses or the improvement of older houses. There was nothing wrong with the previous system of subsidies related to the provision of new houses and the improvement of older houses, rather than to the individuals who lived in them.

I am painfully aware of the points made by my hon. Friend. Houses built before the turn of the century are in a thoroughly decrepit state. They are often lived in by elderly and sick people. The houses are often affected by intense damp. My hon. Friend was right to say that to increase the rent of those houses would be an intolerable imposition. I fully support his observations.

I am grateful to my hon. Friend for that intervention.

Conservative Members do not distinguish between an economic rent and a market rent. The economic rent for many thousands of houses is far less than that paid by many tenants. Houses built pre-war or immediately post-war cost about £400 or £500 each. The outstanding debt charges on them are negligible, as is the cost of maintenance and management. Therefore, the houses cost the local authority far less than it receives in rent. In general, rents increase to keep pace with inflation, even for older houses. Rent income from older houses is put into the housing revenue account to subsidise the building of new council houses. The vast majority of council tenants who face the £2·50 a week rent increase imposed by the Government will already be paying a rent in excess of the cost of the house to the local authority.

One of the advantages of the pooled rent system is that money from the older houses is used to help subsidise the building of new houses. It is wrong to penalise those who have lived in their homes and paid rent for 30, 40 or even 50 years. Indeed, Conservative members use that argument to justify their right-to-buy legislation. The tenants feel that they have already bought their houses through the rent that they have paid.

Conservative Members have made a bold attempt to justify the massive rent increases that have been dictated by the Chancellor of the Exchequer, simply to cut public expenditure because of the Government's doctrinaire monetarist policies. That attempt will rebound throughout the country on council estates in such places as Merseyside, Manchester and even the more prosperous South. People will realise that the Government, not the local authorities, are raising council rents. They will protest through the ballot box.

I am sorry that the hon. Member for Woolwich, East (Mr. Cartwright) has fallen into such bad company. I extend my commiserations, too, to the hon. Member for Croydon, North-West (Mr. Pitt), the new recruit, who, I am told, is on the left of the Liberal Party. Both are voting with the Opposition tonight against rent increases and against policies that Liberals in Liverpool and elsewhere are implementing.

9.40 pm

If I were asked to set the highest social priority for this country, I would make it housing. Housing underpins education and health. Bad housing undermines both. Housing is a fundamental social need. Its social implications should have priority over all economic calculations.

The Government have brought a trail of devastation through every aspect of housing policy. House building in both the private and public sectors has collapsed. The rate of improvements has gone down. Even so modest an objective as housing insulation has been attacked, and mortgage rates are at a record level. Now comes an attack on finances designed not to enable the housing revenue account to break even but to create a surplus to finance other expenditure. This is the most absurd approach to housing ever seen in this country.

An increase in the level of rents will prove damaging to the standard of living of the average worker. It will also run counter to the Government's economic policies. The average worker next year will face greater insecurity because of rising unemployment. He will have to face heavier charges for national insurance and also for rates as the central Government contribution is cut, an inflation rate of 11 per cent. or 12 per cent.—the forecast of most serious economic commentators—and on top of all that a £2 or £2·50 increase in rent. In the face of those increases, the Government tell the trade unions and organised workers that they must be content with a 4 per cent. average increase in wages.

The consequences of the Government's action will be to aggravate inflation and wage demands, increase industrial unrest and cause general damage to the industrial and social economy of the nation. This is an absolutely mad policy. It makes no sense in terms of social priority or in terms of economic priority. It is a policy that the Opposition are justfied in condemning. I shall certainly vote against this policy with the greatest pleasure.

9.42 pm

This has been a brief debate on a very important subject. Under this Government and as a direct result of their policies, council tenants now face another round of massive rent increases. Those increases mean that council house rents will have more than doubled under and because of this Government. The increases are unjustified and unnecessary. They will cause a great deal of hardship to many families.

We have become accustomed to general attacks from the Government on public sector housing. Over the past few years, there have been massive cuts in the housing investment programme of local authorities. On the direct instruction of the Secretary of State, local councils have had to stop virtually all new council building. Again, on the direct instruction of the Secretary of State, local authorities have been forced to sell council houses—in many cases, their best properties. If the Secretary of State has his way, we shall see, for the first time ever, a decline in the number of council properties as the Government force more sales and refuse to allow councils to build to compensate.

We are used to a tax on council housing by a Conservative Government, but we are now seeing a further and, even in the Government's terms, unnecessary attack on council house tenants. We are seeing another round of massive rent increases, which are wrong not only because tenants cannot afford them but because many—eventually all—local authorities will be forced by the Government to make a profit out of their council house tenants.

The increase being imposed on local authority tenants is £2·50. My right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) estimated that when the increase finally comes into operation a more likely figure will be £3·20. The Minister did not take the opportunity to correct or challenge that figure. We must assume that my right hon. Friend's calculations are correct and that council house tenants will face such an increase.

If that is the case, council house rents will have increased by 128 per cent. since the Government took office. The increase this year is 28 per cent. on top of last year's 48 per cent. increase. Yet, as my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) said, the Government are asking workers to accept wage increases of only 4 per cent. If rents were going up by 4 per cent., that would be an increase of 46p instead of the massive £3.20 that the Government are proposing.

The Government are fuelling inflation and hitting the worst off. They are not considering what tenants will receive for that increased rent. Will they get a better service, more improvements, more modernisation or quicker repairs? The hon. Member for Huntingdonshire (Mr. Major) mentioned the need for quicker repairs. I am sure that every hon. Member has a similar constituency experience, but under the Government there will be no improvement in the service to council house tenants. Quite the reverse, because the Government's pressure on local authorities is such that the giving is all one way—from the tenants to central Government, with local authorities being reduced to act as go-betweens which must do the work of central Government or face the penalties imposed by the Secretary of State.

The Government are forcing council tenants to pay more than twice the rent of two and a half years ago and the tenants will receive no benefit from that increase. It will be interesting—because the Government have said nothing about it this evening—to see what they intend to do about rents in future. Two Conservative Back-Bench Members made their positions clear. The hon. Members for Reading, North (Mr. Durant) and Chorley (Mr. Dover) said that we should have economic or market rents and that was the direction in which the Government should go. What will rent increases be in future? Is that the path down which the Government intend to go?

The Minister said, and the Government amendment implies, that rent increases do not matter because poorer tenants can receive rebates. It is true that the amount spent on rebates is increasing. It is increasing because rents are increasing and more people are entitled to rebates because they are suffering from the Government's general economic policy. They are facing more hardship, and many council tenants are falling into arrears with their rents.

The Minister has not dealt with the fact that the majority of tenants still do not receive rebates. Of those who do, the majority do not have all their rent paid. People get rebates only because their income is so low compared with the rent. If the Government claim that they have a good record on rebates, they should tell the House why last month's uprating of the needs allowance, on which rent rebates are based, fell short of the rate of inflation. They do not have a good record. It is untrue that they are helping poorer tenants.

In this brief debate my right hon. and hon. Friends have pointed out that the Government are happy to subsidise owner-occupiers buying their properties, yet they wish to remove all subsidies from poorer people in council housing. On average, owner-occupiers buying their houses on mortgage are nearly twice as well off as council tenants. The Government are willing to spend £2,000 million to subsidise owner-occcupiers, but by policies such as this they intend to withdraw all subsidies from council tenants.

The Government's policy on council tenants and rent increases can only be described as victimisation. They are showing their contempt for council tenants just as they show it for house building in the public sector. It is necessary to protect council tenants. Therefore, we shall vote against the Government.

9.51 pm

We have listened to predictable speeches from the Opposition, but the case that my hon. Friend the Minister for Housing and Construction made has remained unanswered.

My hon. Friend the Member for Chorley (Mr. Dover) made a perceptive speech and rightly reprimanded the Opposition for not implementing the policies to which they were apparently committed when they were in government.

The hon. Member for Woolwich, East (Mr. Cartwright) confirmed that at present council rents are lower than the fair rent charged by housing associations or the private sector, thereby demolishing the case that they are ahead of those of comparable properties. The hon. Gentleman also said that he would like local authorities to have the discretion to charge what rents they thought fit, but, as my hon. Friend said, many local authorities have already used the discretion to increase rents by a figure higher than that set out last year in the Government's document.

My hon. Friend the Member for Reading, North (Mr. Durant) rightly pointed to the generous rent rebate scheme. It is simply not true, as the hon. Member for Bolton, West (Mrs. Taylor) said, that the increases will bring hardship to many families, given the rent rebate scheme and the resources available through the DHSS. As my hon. Friend said, local authorities are now free to use the surplus on the housing revenue account, and we would not wish to stop them. He also mentioned voids. With over 23,000 local authority properties having remained unlet for over a year, we should concentrate on making better use of existing stock.

My hon. Friend also made a valid point about improving the quality of housing management. The Government are committed to doing that through the valuable work of the priority estates project, whose work we are anxious to see go from strength to strength.

The hon. Member for Walsall, North (Mr. Winnick) gave his implied authority to council tenants to withhold rent increases. If that was the gist of his speech, it was disgraceful.

The hon. Member for Swindon (Mr. Stoddart) seemed to want us to override the statutory consultations with local authorities by announcing here and now the HIP allocations. We do not propose to do that. We are consulting local authorities, and they would be offended if we adopted that course.

My hon. Friend the Member for Huntingdonshire (Mr. Major) made a sincere speech. He and I cut our political teeth on the housing committee in Lambeth 10 years ago. The situation there appears to have become dramatically worse since we left.

My hon. Friend said that there was no benefit to local authority tenants in a low rent policy, as it simply encouraged bad management and skimping on maintenance. He also mentioned the Government's unified housing benefits scheme which is now before a Standing Committee. It will replace the present system with a better one. Tenants will no longer be faced with a complex decision about which of the two methods of assistance to claim under. Bringing the two schemes together under local authorities will enable savings to be achieved in the number of civil servants.

My right hon. Friend the Secretary of State for Social Services made clear on Second Reading that the savings will be used to provide an extra £10 million towards the new unified scheme. So bureaucracy will be reduced and the resulting benefit will go to claimants, including council house tenants.

I say to the hon. Member for Bootle (Mr. Roberts) that the costs of owner-occupation have also increased over the last two years. He was misleading the House by implying that that was not the case. He made an implied threat to tax relief for owner-occupiers, as did the hon. Member for Bolton, West. At present, we cannot give a final figure. The figure of £2·50 is being discussed and my right hon. Friend will make a statutory determination in accordance with the legislation at the appropriate time. To suggest——

No, I shall not give way. I must make progress.

To suggest that this Government or any Government can be indifferent to the problems of about 4 million families who are local authority tenants is ridiculous. No Government can overlook such an issue and we do not propose to do so. If we had the attitudes that were ascribed to us by the hon. Member for Salford, East (Mr. Allaun), we would not have introduced the tenants' charter, which was blocked by the previous Labour Government.

The main benefit that we have extended to council house tenants is the right to buy. Surveys have shown that nearly 50 per cent. of council tenants would rather be owner-occupiers, and we have unlocked that door for them. The Opposition now wish to slam it back in their faces. They even want to cancel retrospectively options to purchase that were taken out legitimately under our Housing Act 1980.

At the heart of the debate has been the need to strike a balance between capital investment and subsidies. Every extra penny that is provided in subsidy means that some reduction has to be made in the housing capital programme. The hon. Member for Woolwich, East had the honesty to admit that. The actions of the previous Labour Government showed all too clearly where their priorities lay. Subsidies went through the roof, while building and the improvement programme went through the floor. It is high time that that trend was halted.

My right hon. and learned Friend the Chancellor of the Exchequer has already advised the House that, if the average weekly local income contribution were to be increased by £2·50, it would be possible to maintain this year's level of activity in terms of gross capital expenditure. It would be the first time that that has happened for six years. It would not only assist local authorities to make better use of their existing stock and provide new homes; it would also—I am surprised that it has not been mentioned—help stem the loss of jobs in the construction industry, which has been hard hit by the recession.

In reaching a conclusion on how to strike the balance, I ask hon. Members to reflect on the representations that they receive in their postbags and at their advice bureaux. How many complaints have they received from people about rent increases, and how many from people living in appalling conditions needing an improvement grant, from people looking to housing associations for help and from families hoping that a local authority will give them a mortgage so that they can buy their own homes? Rents in my constituency are at an above average level of £14.50 a week. The whole weight of representations that I have heard on housing are from the second group of people. It is they who would be clobbered by the Opposition amendment and by the early-day motion that has been signed by Front Bench spokesmen, which would totally demolish the capital building programme.

The evidence upon which the Opposition have rested their case is so flimsy that it would have been rejected instantly, even by Inspector Clouseau on an off day. Their case in a nutshell is that the relationship between council rents and economic indicators was right in May 1979, and that that magic formula should never be disturbed. We have shown that, by the criteria accepted by that Labour Government, council rents were artificially depressed by that date and that whoever won in 1979 would have had to increase rents substantially. The Opposition have not explained why, if £3·25 is an intolerable increase in the current year, over 50 Labour authorities have increased their rents voluntarily by a higher figure.

What greater proof could the House need that the Government's policies on council housing are winning support from all quarters than the news that the Labour Party agent in Bolsover has now taken the plunge and has decided to buy his own home? If our policies are good enough for him, they are good enough for the House.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 235, Noes 296.

Division No. 31]

[10. pm


Abse, LeoCunningham, G.(IslingtonS)
Adams,AllenCunningham, Dr J. (W'h'n)
Anderson,DonaldDavies, Ifor (Gower)
Archer, RtHon PeterDavis, Clinton (Hackney C)
Ashley, RtHon JackDavis, T. (B'ham, Stechf'd)
Atkinson, N.(H'gey,)Dempsey, James
Barnett,Guy (Greenwich)Dewar, Donald
Barnett, RtHon Joel (H'wd)Dixon,Donald
Beith, A. J.Dobson,Frank
Booth, RtHonAlbertDouglas-Mann, Bruce
Booth royd, M iss BettyDubs,Alfred
Bray, Dr JeremyDunwoody, Hon Mrs G.
Brown, Hugh D. (Provan)Eadie,Alex
Brown, R. C. (N'castle W)Ellis, R.(NED'bysh're)
Brown, Ronald W.(H'ckn'yS)Ellis, Tom (Wrexham)
Buchan,NormanEnnals, RtHon David
Campbell,IanEvans, Ioan (Aberdare)
Campbell-Savours,DaleEvans, John (Newton)
Carmichael,NeilFaulds, Andrew
Clark, Dr David (S Shields)Fletcher, L.R. (Ilkeston)
Cocks, Rt Hon M. (B'stolS)Fletcher,Ted (Darlington)
Cohen,StanleyFoot, RtHon Michael
Coleman, DonaldFord, Ben
Cook, Robin F.Forrester,John
Cowans, HarryFoster, Derek
Craigen, J. M. (G'gow, M'hill)Foulkes,George
Crowther,StanFraser, J. (Lamb 'th, N'w'd)
Cryer, BobGarrett, John (NorwichS)

Gilbert, Rt Hon Dr JohnOrme, Rt Hon Stanley
Golding,JohnOwen, Rt Hon Dr David
Graham, TedPalmer,Arthur
Grant,George(Morpeth,)Park, George
Hamilton, W. W. (C'tralFife)Parry, Robert
Harrison, RtHonWalterPavitt, Laurie
Hart, Rt Hon Dame JudithPenhaligon,David
Hattersley, Rt Hon RoyPitt,William Henry
Healey, Rt Hon DenisPowell, Raymond (Ogmore)
Heffer, EricS.Prescott,John
Hogg, N. (EDunb't'nshire)Price, C. (Lewisham W)
Holland,S.(L'b'th,Vauxh'll)Race, Reg
HomeRobertson,JohnRadice, Giles
Homewood,WilliamRees, Rt Hon M (Leeds S)
Howell, Rt Hon D.Roberts,Allan(Bootle)
Howells,GeraintRoberts, Ernest (Hackney N)
Hoyle, DouglasRoberts, Gwilym(Cannock)
Hughes, Mark(Durham)Robinson, G. (CoventryNW)
Hughes, Robert (Aberdeen N)Rooker, J. W.
Hughes, Roy (Newport)Roper,John
Janner,HonGrevilleRoss, Ernest (Dundee West)
Jay, Rt Hon DouglasRoss, Stephen (Isle of Wight)
Johnson, James (Hull West)Ryman,John
Johnson, Walter (DerbyS)Sandelson,Neville
Johnston, Russell (Inverness)Sever, John
Jones, Rt Hon Alec (Rh'dda)Sheerman,Barry
Jones, Barry (East Flint)Sheldon, Rt Hon R.
Jones, Dan (Burnley)Shore, Rt Hon Peter
Kaufman, Rt Hon GeraldSilkin, RtHonJ. (Deptford)
Kerr, RussellSilkin, Rt Hon S. C. (Dulwich)
Kinnock,NeilSmith, Rt Hon J. (N Lanark)
Lambie,DavidSnape, Peter
Leighton, RonaldStallard, A. W.
Lestor, Miss JoanSteel, Rt Hon David
Lewis, Ron (Carlisle)Stoddart, David
Litherland,RobertStott, Roger
Lyons, Edward (Bradf'dW)Straw,Jack
McDonald, DrOonaghTaylor, Mrs Ann (Bolton W)
McElhone, FrankThomas, Dafydd (Merioneth)
McKay,Allen (Penistone)Thomas, DrR.(Carmarthen)
McKelvey,WilliamThome, Stan (PrestonSouth)
McNally,ThomasTinn, James
McTaggart, RobertTorney,Tom
McWilliam,JohnUrwin, RtHonTom
Magee, BryanVarley, Rt Hon Eric G.
Marshall, D(G'gowS'ton)Wainwright.E. (DearneV)
Marshall, DrEdmund (Goole)Wainwright,R.(ColneV)
Marshall, Jim (LeicesterS)Walker, Rt Hon H.(D'caster)
Martin,M(G'gowS'burn)Watkins, David
Maxton,JohnWeetch, Ken
Maynard, Miss JoanWellbeloved,James
Mellish,Rt Hon RobertWhite, Frank R.
Mikardo,IanWhite, J.(G'gowPollok)
Millan,Rt Hon BruceWhitehead,Phillip
Miller, Dr M. S. (EKilbride)Whitlock, William
Mitchell, R.C. (Soton Itchen)Williams, Rt Hon A.(S'sea W)
Morris, Rt Hon A. (W'shawe)Williams, Rt Hon Mrs (Crosby)
Morris, Rt Hon C. (O'shaw)Wilson, Gordon (DundeeE)
Morris, RtHonJ. (Aberavon)Wilson, RtHonSirH.(H'ton)
Morton,GeorgeWilson, William (C'trySE)
Newens, StanleyWoodall,Alec

Wrigglesworth,IanTellers for the Ayes:
Wright,SheilaMr. Frank Haynes and Mr. Joe Dean.


Aitken,JonathanEmery, Peter
Alison, Rt Hon MichaelEyre,Reginald
Amery, Rt Hon JulianFairbairn, Nicholas
Ancram, MichaelFairgrieve,SirRussell
Arnold,TomFaith, MrsSheila
Atkins, RtHonH.(S'thorne)Farr,John
Baker,Kenneth(St.M'bone)Fenner, MrsPeggy
Baker, Nicholas (N Dorset)Finsberg,Geoffrey
Beaumont-Dark,AnthonyFletcher, A.(Ed'nb'ghN)
Bendall,VivianFookes, Miss Janet
Best, KeithFowler,Rt Hon Norman
Bevan, David GilroyFox,Marcus
Biffen,Rt Hon JohnFraser, Rt Hon Sir Hugh
Biggs-Davison,SirJohnFraser, Peter (South Angus)
Blaker,PeterGardner, Edward (SFylde)
Bonsor,SirNicholasGilmour, Rt Hon Sir Ian
Bottomley, Peter (W'wichW)Glyn, DrAlan
Bright,GrahamGow, Ian
Brinton,TimGower, Sir Raymond
Brittan, Rt. Hon. LeonGrant, Anthony (HarrowC)
Brooke, Hon PeterGray, Hamish
Brotherton,MichaelGreenway, Harry
Brown,Michael(Brigg&Sc'n)Grieve, Percy
Browne,John(Winchester)Griffiths, E.(B'ySt. Edm'ds)
Bruce-Gardyne,JohnGriffiths, PeterrPortsm'thN)
Bryan, Sir PaulGrist, Ian
Buchanan-Smith, Rt.Hon.A.Grylls,Michael
Budgen,NickHamilton, HonA.
Carlisle,Kenneth(Lincoln)Havers, Rt Hon Sir Michael
Carlisle, Rt Hon M. (R'c'n)Hawkins,Paul
Chalker, Mrs.LyndaHawksley,Warren
Clark, Hon A. (Plym'th, S'n)Heseltine,Rt Hon Michael
Clark, Sir W. (Croydon S)Hicks,Robert
Clarke, Kenneth(Rushcliffe)Higgins, RtHon Terence L.
Clegg, Sir WalterHogg,HonDouglas(Gr'th'm)
Cormack,PatrickHowe, Rt Hon Sir Geoffrey
Corrie,JohnHowell, Rt Hon D. (G'ldf'd)
Costain,SirAlbertHowell, Ralph (NNorfolk)
Cranborne,ViscountHunt, David (Wirral)
Dean, Paul (North Somerset)Jenkin,Rt Hon Patrick
Douglas-Hamilton,LordJ.Jopling,RtHon Michael
Dover,DenshoreKaberry,Sir Donald
du Cann, Rt Hon EdwardKershaw,SirAnthony
Durant,TonyKing, RtHonTom
Dykes, HughKitson,SirTimothy
Eden, Rt Hon Sir JohnKnox,David
Edwards, Rt Hon N. (P'broke)Lamont,Norman
Eggar,TimLang, Ian

Latham,MichaelRippon, RtHon Geoffrey
Lawrence, IvanRoberts, M. (Cardiff NW)
Lawson, Rt Hon NigelRoberts, Wyn (Conway)
Lennox-Boyd,HonMarkRost, Peter
Lester, Jim (Beeston)Royle,SirAnthony
Lewis, Kenneth (Rutland)Sainsbury,HonTimothy
Lloyd, Ian (Havant & W'loo)St. John-Stevas, Rt Hon N.
Lloyd, Peter (Fareham)Scott,Nicholas
Luce,RichardShaw, Giles (Pudsey)
MacKay, John (Argyll)Shepherd,Richard
Macmillan, Rt Hon M.Shersby,Michael
McNair-Wilson, P. (NewF'st)Sims,Roger
McQuarrie,AlbertSkeet, T. H. H.
Marten, Rt Hon NeilSquire,Robin
Maude, Rt Hon Sir AngusStevens,Martin
Mawby, RayStewart, A.(ERenfrewshire)
Maxwell-Hyslop,RobinStewart, Ian (Hitchin)
Mayhew, PatrickStokes,John
Meyer,Sir AnthonyTapsell,Peter
Miller,Hal(B'grove)Taylor, Teddy (S'endE)
Mills, Iain (Meridern)Tebbit, RtHon Norman
Mills, Peter (West Devon)Temple-Morris, Peter
Mitchell,David(Basingstoke)Thatcher, Rt Hon Mrs M.
Moate,RogerThomas, Rt Hon Peter
Montgomery,FergusThorne, Neil(IlfordSouth)
Morris, M. (N'hamptonS)Townend,John (Bridlington)
Morrison, HonC. (Devizes)Townsend, Cyril D, (B'heath)
Morrison, Hon P. (Chester)Trippier,David
Myles, DavidViggers,Peter
Newton,TonyWalker, Rt Hon P.(W'cester)
Nott, Rt Hon JohnWalker, B. (Perth)
Onslow,CranleyWalker-Smith, Rt Hon Sir D.
Oppenheim, Rt Hon Mrs S.Wall,SirPatrick
Osborn,JohnWaller, Gary
Page, John (Harrow, West)Walters,Dennis
Page, Richard (SWHerts)Ward,John
Parkinson, RtHonCecilWatson,John
Patten, John (Oxford)Wheeler,John
Pawsey, JamesWhitney,Raymond
Percival, Sir IanWickenden,Keith
Pink,R. BonnerWiggin,Jerry
Porter,BarryWilliams, D.(Montgomery)
Prentice, Rt Hon RegWinterton,Nicholas
Price,SirDavid (Eastleigh)Wolfson,Mark
Proctor, K. HarveyYoung,SirGeorge(Acton)
Raison,TimothyYounger, RtHon George
Rees-Davies, W. R.Tellers for the Noes:
Rhodes James, RobertMr. Anthony Berry and Mr. Robert Boscawen.

Question, That the proposed words be there added, put forthwith pursuant to standing order No. 32 (Questions on amendements).

The House divided: Ayes 290, Noes 235.

Division No. 32]

[10.15 pm


Amery, Rt Hon JulianFaith, Mrs Sheila
Atkins, RtHon H.(S'thorne)Fenner, Mrs Peggy
Baker,Kenneth(St.M'bone)Fisher, SirNigel
Baker, Nicholas (N Dorset)Fletcher, A.(Ed'nb'gh N)
Banks, RobertFletcher-Cooke,SirCharles
Beaumont-Dark,AnthonyFookes, MissJanet
Bendall,VivianFowler, RtHon Norman
Best,KeithFraser, Rt Hon Sir Hugh
Bevan, David GilroyFraser, Peter (South Angus)
Biffen, Rt Hon JohnGardiner,George(Reigate)
Biggs-Davison,SirJohnGardner, Edward (S Fylde)
Blaker,PeterGilmour, Rt Hon Sir Ian
Body,RichardGlyn, DrAlan
Bottomley,Peter(W'wich W)Goodhew,Victor
Boyson,DrRhodesGow, Ian
Bright,GrahamGrant, Anthony (HarrowC)
Brittan, Rt.Hon.LeonGreen way,Harry
Brooke, Hon PeterGrieve, Percy
Brotherton,MichaelGriffiths, E.(B'ySt.Edm'ds)
Browne,John(Winchester)Grist, Ian
Buchanan-Smith, Rt. Hon. A.Hamilton, Hon A.
Buck,AntonyHamilton, Michael(Salisbury)
Cadbury,JocelynHavers, Rt Hon Sir Michael
Carlisle, John (Luton West)Hawkins,Paul
Carlisle, Rt Hon M. (R'c'n)Hayhoe, Barney
Chalker,Mrs. LyndaHeddle,John
Channon, Rt. Hon. PaulHenderson,Barry
Chapman,SydneyHeseltine,RtHon Michael
Churchill,W.S.Hicks, Robert
Clark, Hon A. (Plym'th, S'n)Higgins, Rt Hon Terence L.
Clark, Sir W.(CroydonS)Hogg, HonDouglas (Gr'th'm)
Clegg, Sir WalterHooson,Tom
Colvin,MichaelHowe, Rt Hon Sir Geoffrey
Cope,JohnHowell, RtHon D. (G'ldf'd)
Cormack, PatrickHowell, Ralph (NNorfolk)
Corrie,JohnHunt, David (Wirral)
Costain, SirAlbertHunt,John(Ravensbourne)
Cranborne,ViscountJenkin, RtHon Patrick
Crouch,DavidJessel, Toby
Dean, Paul (NorthSomerset)JohnsonSmith,Geoffrey
Dickens,GeoffreyJopling, RtHon Michael
Douglas-Hamilton, LordJ.Kershaw,SirAnthony
du Cann, Rt Hon EdwardKing, RtHon Tom
Dykes, HughLamont,Norman
Eden, Rt Hon Sir JohnLang, Ian
Edwards, Rt Hon N. (P'broke)Langford-Holt,SirJohn
Emery, PeterLawson, Rt Hon Nigel
Eyre, ReginaldLeMarchant,Spencer

Lennox-Boyd,HonMarkRoberts,Wyn (Conway)
Lester, Jim (Beeston)Rossi,Hugh
Lewis,Kenneth (Rutland)Rost, Peter
Lloyd, Ian (Havant & W'loo)Royle, Sir Anthony
Lloyd, Peter (Fareham)Sainsbury,HonTimothy
Luce,RichardSt. John-Stevas, Rt Hon N.
Lyell, NicholasShaw, Giles (Pudsey)
Macfarlane,NeilShaw, Michael (Scarborough)
MacKay, John (Argyll)Shepherd,Colin(Hereford)
McNair-Wilson, M.(N'bury)Shersby, Michael
McNair-Wilson, P. (NewF'st)Silvester,Fred
McQuarrie,AlbertSims, Roger
Madel, DavidSkeet, T. H. H.
Marland,PaulSpeed, Keith
Marshall, Michael (Arundel)Spence,John
Marten, RtHon NeilSproat,Iain
Maude, RtHon Sir AngusStanbrook,Ivor
Mawby, RayStanley,John
Mellor,DavidStewart, Ian (Hitchin)
Meyer,Sir AnthonyStokes,John
Mills,Iain(Meriden)Tapsell, Peter
Mills, Peter (West Devon)Taylor, Teddy (S'endE)
Mitchell, David (Basingstoke)Tebbit, Rt Hon Norman
Monro,SirHectorThatcher, Rt Hon Mrs M.
Montgomery,FergusThomas, Rt Hon Peter
Morris, M. (N'hamptonS)Thorne, Neil (IlfordSouth)
Morrison, Hon C. (Devizes)Thornton,Malcolm
Morrison, Hon P. (Chester)Townend,John(Bridlington)
Mudd, DavidTownsend, CyrilD,(B'heath)
Myles, DavidTrotter,Neville
Oppenheim, Rt Hon Mrs S.Walker, Rt Hon P. (W'cester)
Osborn,JohnWalker, B. (Perth)
Page, John (Harrow, West)Walker-Smith, Rt Hon Sir D.
Page, Richard (SWHerts)Wall,SirPatrick
Parkinson, RtHon CecilWaller, Gary
Patten, Christopher(Bath)Ward,John
Pawsey, JamesWells,John(Maidstone)
Percival,Sir IanWheeler,John
Pink, R.BonnerWhitelaw, RtHon William
Prentice, Rt Hon RegWiggin,Jerry
Price, SirDavid (Eastleigh)Wilkinson,John
Proctor, K. HarveyWilliams,D.(Montogomery)
Rees-Davies, W. R.Young,SirGeorge(Acton)
RhodesJames, RobertYounger, RtHon George
Rifkind,MalcolmTellers for the Ayes:
Rippon, Rt Hon GeoffreyMr. Anthony Berry and Mr. Robert Boscawen.
Roberts, M. (Cardiff NW)


Abse, LeoAshton,Joe
Alton,DavidBarnett, Rt Hon Joel (H'wd)
Archer, Rt Hon PeterBennett,Andrew(St'kp'tN)
Ashley, Rt Hon JackBidwell, Sydney

Booth, RtHonAlbertHooley,Frank
Bottomley,RtHonA.(M'b'ro)Howell, Rt Hon D.
Bray, Dr JeremyHowells,Geraint
Brown, Hugh D. (Provan)Hoyle,Douglas
Brown, R. C. (N'castle W)Huckfield,Les
Brown, Ronald W. (H'ckn'y S)Hughes,Mark(Durham)
Brown, Ron (E'burgh,Leith)Hughes, Robert (AberdeenN)
Buchan,NormanHughes, Roy (Newport)
Campbell-Savours,DaleJay, Rt Hon Douglas
Carmichael,NeilJohnson, James (HullWest)
Cartwright,JohnJohnson, Walter (DerbyS)
Clark, Dr David (S Shields)Johnston, Russell(Inverness)
Cocks, Rt Hon M. (B'stol S)Jones, Rt Hon Alec (Rh'dda)
Cohen,StanleyJones, Barry (East Flint)
Coleman,DonaldJones, Dan (Burnley)
Cook, Robin F.Kaufman, Rt Hon Gerald
Cowans,HarryKerr, Russell
Craigen, J. M. (G'gow, M'hill)Kilfedder,JamesA.
Cunliffe, LawrenceLambie,David
Cunningham, Dr J. (W'h'n)Lamond,James
Davies, Rt Hon Denzil (L'lli)Lestor, MissJoan
Davies, Ifor (Gower)Lewis, Ron (Carlisle)
Davis, Clinton (HackneyC)Litherland,Robert
Davis, T. (B'ham, Stechf'd)Lofthouse,Geoffrey
Deakins,EricLyons, Edward (Bradf'dW)
Dean, Joseph (Leeds West)McCartney,Hugh
Dempsey, JamesMcDonald, DrOonagh
Dixon, DonaldMcKay, Allen(Penistone)
Douglas-Mann,BruceMcTaggart, Robert
Dunnett,JackMagee, Bryan
Dunwoody, Hon MrsG.Marshall, D(G'gowS'ton)
Eadie,AlexMarshall, DrEdmund(Goole)
Ellis, R.(NED'bysh're)Marshall, Jim (LeicesterS)
Ellis,Tom (Wrexham)Martin,M(G'gowS'burn)
Ennals, RtHon DavidMaynard, MissJoan
Evans, Ioan (Aberdare)Meacher,Michael
Evans, John (Newton)Mellish, RtHon Robert
Faulds,AndrewMillan, RtHonBruce
Fitch,AlanMiller, Dr M. S. (E Kilbride)
Fletcher, L. R. (Ilkeston)Mitchell, Austin(Grimsby)
Fletcher,Ted (Darlington)Mitchell, R. C. (Soton Itchen)
Foot, RtHon MichaelMorris, Rt Hon A. (W'shawe)
Ford, BenMorris, Rt Hon C. (O'shaw)
Forrester,JohnMorris, RtHon J. (Aberavon)
Foulkes,GeorgeNewens, Stanley
Fraser, J. (Lamb'th,N'w'd)O'Neill,Martin
Garrett, John (NorwichS)Orme, Rt Hon Stanley
George,BruceOwen, Rt Hon Dr David
Gilbert, Rt Hon Dr JohnPalmer,Arthur
Golding,JohnPark, George
Graham, TedParker,John
Grant,George(Morpeth)Parry, Robert
Hamilton, W. W. (C'tral Fife)Penhaligon, David
Harrison, Rt Hon WalterPitt, William Henry
Hart, Rt Hon Dame JudithPowell, Raymond (Ogmore)
Hattersley, Rt Hon RoyPrescott,John
Haynes, FrankPrice, C. (Lewisham W)
Healey, Rt Hon DenisRace, Reg
Heffer, Eric S.Radice, Giles
Hogg, N. (EDunb't'nshire)Rees, Rt Hon M (Leeds S)

Roberts, Ernest (Hackney N)Stallard, A. W.
Roberts,Gwilym (Cannock)Steel, Rt Hon David
Robertson,GeorgeStoddart, David
Robinson, G. (CoventryNW)Stott.Roger
Rooker, J. W.Strang,Gavin
Ross, Ernest (Dundee West)Summerskill,HonDrShirley
Ross, Stephen (Isle of Wight)Taylor, Mrs Ann (Bolton W)
Rowlands,TedThomas, Dafydd (Merioneth)
Ryman,JohnThomas, DrR.(Carmarthen)
Sandelson,NevilleThorne, Stan (PrestonSouth)
Sever, JohnTilley,John
Sheldon, RtHonR.Torney,Tom
Shore, Rt Hon PeterUrwin, RtHon Tom
Silkin, RtHon J. (Deptford)Varley, Rt Hon Eric G.
Silkin, Rt Hon S. C. (Dulwich)Wainwright, E. (Dearne V)
Skinner,DennisWalker, Rt Hon H.(D'caster)
Smith, RtHonJ. (NLanark)Watkins, David
Snape, PeterWeetch,Ken
Spriggs, LeslieWhite, Frank R.

White, J.(G'gowPollok)Winnick,David
Williams, Rt Hon A.(S'sea W)Wright,Sheila
Williams, Rt Hon Mrs (Crosby)
Wilson, Gordon (DundeeE)Tellers for the Noes:
Wilson, RtHon Sir H.(H'ton)Mr. George Morton and Mr. James Tinn.
Wilson, William (C'trySE)

Question accordingly agreed to.

MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to, pursuant to Standing Order No. 32 (Questions on Amendments).


That this House approves the steps that have been taken by the present Government to reverse the unrealistic and wasteful rent subsidy policy of the previous Administration, to increase rent rebates significantly and to provide very many council tenants with the opportunity of owning rather than renting their homes.

Civil Supplementary Estimates, 1981–82


That a further supplementary sum, not exceeding £2,502,604,000 be granted to Her Majesty out of the Consolidated Fund to defray the charges for Civil Services which will come in course of payment during the year ending on 31st March 1982, as set out in House of Commons Papers Nos. 44 and 66.

put and agreed to.

Defence Estimates, 1982–83 (Vote On Account)

Question put,

That a sum, not exceeding £5,583,613,000 be granted to Her Majesty out of the Consolidated Fund, on account, for or towards defraying the charges for Defence Services for the year ending on 31st March 1983, as set out in House of Commons Paper No. 42.

The House proceeded to a Division—

Mr. Berry andMr. Boscawen were appointed Tellers for the Ayes but no Member being willing to act as Teller for the Noes, Mr. Speaker declared that the Ayes had it.

Question accordingly agreed to.

Civil Estimates, 1982–83 (Vote On Account)


That a sum, not exceeding £27,667,591,700, be granted to Her Majesty out of the Consolidated Fund, on account, for or towards defraying the charges for Civil Services for the year ending on 31st March 1983, as set out in House of Commons Papers Nos. 43 and 45.

put and agreed to.

Bill ordered to be brought in upon the foregoing Resolutions by the Chairman of Ways and Means, the Chancellor of the Exchequer, Mr. Leon Brittan, Mr. Nicholas Ridley, Mr. John Bruce-Gardyne and Mr. Barney Hayhoe.

Consolidated Fund

Mr. Barney Hayhoe accordingly presented a Bill to apply certain sums out of the Consolidated Fund to the service of the years ending on 31 March 1982 and 1983:And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 37.]

Education (Assisted Places)

10.30 pm

I beg to move, That the draft Education (Assisted Places) (Amendment) Regulations 1981, which were laid before this House on 2 December, be approved.

It is just over two years since this House first debated the provisions which were placed on the statute book in the Education Act 1980 for the establishment of the assisted places scheme. That scheme is now fully operational and is already benefiting the first year's intake of over 4,000 pupils. Tonight we are debating various amendments to the principal regulations governing the scheme, mainly in preparation for next year's intake. As we agreed during the passage of the Education Act 1980, these regulations have been laid in draft and need the approval of this and the other House before they can be made.

Before turning to some details of the scheme as it now stands, I should like to remind the House of the scheme's purpose. It is to give able children from less well-off families the opportunity of attending good independent schools with distinguished sixth forms and to widen the educational opportunities available to those children by helping with the cost of tuition fees where parents cannot afford the full cost.

After the regulations governing the scheme were approved by Parliament last November, participation agreements were negotiated with 220 schools in England and nine schools in Wales. The English schools contracted to offer 4,455 places for pupils aged between 11 and 13, and 984 places for sixth formers. Welsh schools offered 116 places at 11 to 13, and 34 sixth form places. Overall, 46 per cent. of the places offered were for boys, 40 per cent. for girls and 14 per cent. at mixed schools taking both boys and girls. The hon. Member for Newham, South (Mr. Spearing) was concerned in Committee to secure that there should be a balance between boys and girls and an even distribution.

In England, schools received on average between four and five applications for each of the assisted places offered for 11 to 13-year-olds—a total of roughly 17,000 applications. Disappointingly, however, there were only about 1,000 applications for sixth form places, that is, roughly one for each of the places available. I shall comment later on why that happened.

The individual schools considered those applications and, by their usual means, selected those pupils whom they considered most likely to benefit from the education available. The parents of those pupils were required to declare their income in the previous year and to provide documentary evidence of that. Pupils who were considered academically suitable and whose parents' income was below the appropriate threshold were offered assisted places.

In September this year 4,185 pupils took up assisted places in England. A total of 3,660 of assisted pupils were aged between 11 and 13. The remaining 525 assisted pupils were sixth formers.

Against the background of what I have said so far I should like to report on an area which has been of much concern to Labour Members. In earlier debates they stated at some length that the scheme was really intended to help fairly well-off families who would send their children to independent schools anyway. We refuted that view then and I am pleased to report that, in the event, we have been able to achieve what we have always said was the scheme's objective—to help the less well-off. In the first year of the scheme, one-third of the places were awarded entirely free because of the low income of families. Two-thirds of the assisted places went to pupils from families with incomes below the national average. Only 6 per cent. of the assisted pupils are from families whose income exceeds one-and-a-half times the national average family income. This is a major achievement. Despite the doubts of Opposition Members, we have shown that with a properly designed scheme it is quite possible to help the less well-off benefit from the education provided at good independent schools.

I have looked at the list of applications. The parents come from all walks of life—shop assistants, bus drivers, agricultural workers, postal workers, nurses, one-parent families and the unemployed. I do not think that the rich—such as Members of Parliament—are included in that list. I am sure that that will win approval from both sides of the House.

Another matter which exercised Opposition Members was the proportion of assisted pupils who would be drawn from maintained schools. I am pleased to say that of the first year's intake of assisted pupils, more than two-thirds had spent at least the previous two years in maintained schools. Again, the facts show that the scheme has achieved what we intended. It has widened the range of educational opportunities open to less well-off families who could not previously have contemplated sending their sons or daughters to the independent school of their choice.

'Before turning to the amending regulations before the House, I must say that most of the figures I have mentioned relate to England only. The out-turn in Wales was, however, remarkably similar—the same proportion of places filled, the same shortage of sixth form applicants, the same proportion of pupils drawn from maintained schools, but an even higher proportion of pupils from low income families who have received entirely free places. The proportion of free places differs from one area to another.

The amending regulations before us tonight draw largely on our experience of the first year of the scheme, on which I have just reported. I shall describe the main provisions of the draft regulations, and if there are detailed queries which hon. Members wish to raise during the course of the debate, I shall attempt to answer them at the end.

The main provision in the draft amendment regulations is the revaluation of the income scale on which parental contributions are assessed. That takes account of inflation. Regulation 10 increases the income disregard in respect of dependent relatives to £800. That is a proportionately larger increase than inflation during the past year and reflects our concern that the assessment of parents' income should make proper allowance for the number of dependants in each family. Because of that increase, the revised threshold levels for the income assessment scale which we propose in regulation 12 are correspondingly lower than if they had been revalued directly in line with inflation. The shape of the assessment scale, however, remains the same, with a very steep gradient once income levels rise above the national average. Had there been a slower rise, people with higher incomes would have been advantaged. We want assistance to go to those who need it.

Taken together, the increase in the dependants' allowance and the revaluation of the income scale fully reflect the increase in average incomes since the previous regulations were made. That will ensure that parents' contributions to tuition fees remain the same in real terms.

The second amendment which I should draw to the attention of the House is regulation 4. That corrects a technical error in the original regulations. It has always been the Government's intention that parents' income should be assessed gross, without deductions for superannuation contributions, mortgage interest and the other allowances made for tax purposes. The original regulations were drawn up with that objective in view. However, it has recently come to light that the regulations' reference to tax law concerning superannuation contributions was incomplete. Regulation 4 remedies the omission from 1 January. For the school term just ending, parents' income was assessed on the basis that the regulations achieved the objective. Consequently, some parents will be entitled to a small refund so that their contributions for that period are in line with what the regulations actually said. The Department will be arranging for those refunds to be paid through the individual schools as soon as possible.

The only other significant amendment is to the residence requirement for assisted pupils. Regulation 7 will reduce the period of ordinary residence normally required from three to two years. Because the length of residence is measured on 1 January preceding the September in which the assisted places would be taken up, that reduces the period of residence effectively required from three and three-quarter to two and three-quarter years, which is more in line with residence requirements for other purposes. Residence has to be proved before the date of entry to the school. Regulation 7 also exempts refugee children from the residence requirement in line with a similar concession made in respect of eligibility for student maintenance awards.

The remainder of the regulations are tidying-up amendments that one would expect in the first year of the operation of a new scheme.

The actual regulations are necessarily rather technical but cover issues which are straight forward and are difficult to see as controversial. I would like, however, to return to an issue not covered in the regulations before the House tonight and which arouses a little more passion. Hon. Members would be disappointed if some passion was not aroused. I speak about the question of local authorities' power to veto the transfer of pupils from maintained schools to assisted sixth form places at independent schools in the scheme.

Hon. Members will recall that my right hon. and learned Friend the then Secretary of State, who is present for the debate, included that power of veto in the regulations governing the scheme following strong representations by local authorities that sixth forms in some maintained schools might be rendered unviable if there were unrestricted transfers to assisted sixth form places. In the event, authorities' fears were proved to be unjustified. This was partly because we limited to a maximum of five the number of assisted sixth form places at individual schools in the scheme. Nevertheless, even in these changed circumstances, authorities collectively vetoed something like 100 potential sixth-form transfers. Many other applications were never made because of statements by local education authorities that opposed, except in the most exceptional circumstances, the acceptance into the assisted places scheme of sixth formers transfering from lower forms outside.

The requirement in the regulations that authorities approve sixth form transfers necessarily gives them the right to say "No" as well as "Yes". In particular circumstances, I accept that a negative decision could be justified if it affected the viability of courses taking place in local maintained schools. It was for that reason that these arrangements were made. However, it seems that a number of authorities refused most, if not all, applications for sixth form transfers, even though those transfers would not have rendered any of their own sixth forms unviable. Many of these authorities made their hostile attitude well known locally at an early stage to deter parents; and the threat of a blanket veto must have had an inhibiting effect on parents and thus been a contributing factor to the disappointing number of applicants at sixth form level. My right hon. Friend the present Secretary of State has considered very carefully the use of the veto for purposes other than that for which it was intended. In particular, he has considered the strong arguments put forward by some that the local authorities' power of veto should, in consequence, be withdrawn.

My right hon. Friend has concluded, however, that it would not be right at this stage to penalise, because of the behaviour of a few authorities, the many by which the veto is valued as a power of last resort and which have used the veto responsibly. It is, therefore, proposed that the veto be retained for the second year of the scheme.

My right hon. Friend nevertheless remains concerned that, in a few areas, children have been denied reasonable access to assisted sixth form places by their authorities' use of the veto. He hopes that in the light of their experience this year, those authorities will use the veto with rather more restraint in 1982. The Department will be monitoring the situation closely and will be ready to look at individual cases. Unless it appears that those few authorities' practices in this matter have changed significantly for the better, I think it most unlikely that my right hon. Friend would be prepared to propose the retention of authorities' power of veto on transfers to assisted sixth form place for the third year, notwithstanding its value as a safeguard in particular cases for the generality of authorities.

The question of costs is regularly raised. There is sometimes argument about the recoupment figures. I have been supplied today with figures in relation to secondary schools in one authority and another when a pupil transfers. Up to the age of 16, the cost in secondary schools is £1,004. Over the age of 16, basically at sixth form level, the cost is £1,623. I have made inquiries today about fees for Manchester grammar school where a large proportion of the pupils are in the sixth form because of the method of recruitment. The fees are between £1,300 and £1,400. The idea that more money is being spent because more pupils have assisted places does not stand up. I have given those figures before.

Right hon. and hon. Friends and I have always supported the assisted places scheme. If someone on this side of the House disagrees with that view, we tolerate him. We may even buy him a drink and encourage him. We do not indulge in diatribes against each other, as happens with the Opposition. We are concerned about the fact that in many inner cities the opportunities for working class children are not as they used to be or what most hon. Members would wish. That is a fact that Opposition Members have refused to accept, and the emperor's clothes have never been seen to be withdrawn.

It must be realised that no two comprehensive schools are identical. Each comprehensive school reflects its catchment area and its staff. The gap between the best and worst schools academically is very often as wide as the gap that used to exist between grammar and secondary modern schools. That is also a reality that Opposition Members will not face. It is a painful reality, but it is always a good thing to face up to it and decide what one must do about it.

The gap could be widened by setting up centres of excellence in the maintained sector. It is logical that some people should oppose the assisted places scheme by saying that centres of excellence should be introduced. But to say that we should continue with an ever-widening gap between the poorer and the better comprehensive schools, where able children may not be given the opportunity to continue their education, would deprive the poorer child of opportunities which all hon. Members would wish him to have.

To clarify the matter and to save time later, will the hon. Gentleman state whether, when talking about the possibility of centres of excellence within the maintained sector, he is advocating a return to selection at 11-plus?

I am sorry that people are stuck in their train at the 11-plus. There are hundreds of ways in which we can introduce centres of excellence. One must consider other countries. I returned yesterday from India, where I saw what they were doing in schools. Centres of excellence have been introduced all around the world. Only in Britain do we have parties such as the Social Democratic Party and the Alliance, which oppose the assisted places scheme. All around the world people are realising that able children or those with special or less talents often need special tuition if they are to give their best to society afterwards.

I am not talking about a return to the position as it was before. We should never say that we have reached the buffers at the station and that there will be no change. Obviously, if we have compulsory housing and people are sorted out so that catchment areas are the same everywhere—as suggested by the Labour Party—that is one solution. However, if that is what Labour Members wish to say, they should do so during an election campaign. Otherwise, there will not be equal intakes at neighbourhood comprehensive schools.

I refer in conclusion to the unity of the Labour Party and the Social Democratic Party on the issue. The old and the new Labour Parties do not seem to differ. I have some evidence here from the right hon. Member for Crosby (Mrs. Williams)—[HON. MEMBERS: "Where is she?"] Far be it from me to say that she is absent. She said that she opposed the assisted places scheme, as does the SDP. Also, from what I believe to be SDP policy—[HON. MEMBERS: "What?"]—It is rather tame, but it certainly exists.

The Minister should put his glasses on.

Stronger glasses may be necessary, as the hon. Member for Holborn and St. Pancras South (Mr. Dobson) says. May I say that we are pleased to see him on the Opposition Front Bench.

The paper states:
"In view of all this there should clearly be no element of public support for these institutions and existing support should be withdrawn."
Presumably that would mean the end of assisted places.

The assisted places scheme is not to prop up independent schools. Because compulsory comprehensive schools have not worked so well in some areas, the queue for independent school places is probably longer than it has ever been. Labour Members have done the recruiting. Sixth forms in the old direct-grant schools were the most distinguished that we had. Overall, their results were better than those of the public schools. However, the Labour Party made sure that only children of parents who could afford to pay had the advantage. It was selection by the purse. Now others can at least be offered the same opportunities, although the Labour Party tried to destroy the social and economic opportunity. It has often done similar things. The people whom it represents believe that it is on their side, but in fact it holds them down, and we are rectifying that situation.

What part of education, or what individual, school, parent or teacher does the hon. Gentleman believe that he is helping by his constant denigration of the schools that serve the community? If the hon. Gentleman's criterion for success is examination results, year on year in CSE and GCE O- and A-level results continue to improve, which utterly contradict his view of our schooling system.

We have many good maintained schools. I and my wife went to such schools, as did my children. Primary schools have improved, but a large number of secondary schools do not give the ultimate opportunity to the academic child.

The hon. Gentleman talks of results, but the Labour Party stopped parents from learning the results of individual schools. They kept them blindfold for fear of what they may find out in certain cases. They voted against the measure time and again.

It may hurt, but the hon. Gentleman cannot defend himself by one word cries in the night.

No. I am still replying to the hon. Member for Bedwellty (Mr. Kinnock).

We have many good schools, but they should not blind us to the fact that in certain areas—certainly in some inner city areas—the opportunities are not what we would wish.

Let me illustrate my point by quoting an area less prejudiced than Britain. Last week I was in Rajkot in Gujerat. India has a long Socialist tradition, which is one reason why I chose the example. At Rajkumar college, a big residential school, 10 per cent. of the intake—[Interruption.] The hon. Member for Holborn and St. Pancras, South may laugh. The Gujeratis who live in his constituency will know where the college is.

Ten per cent. of the intake are being paid for by the Government as merit scholarships, because they believe that the opportunities there should be available to children from poorer homes.

The Minister castigates us about the publication of examination results. Will every school participating in the assisted places scheme be compelled to publish its examination results in full?

Yes. They are bound by the same publication regulations as State schools. I believe that they will have to provide parents with the same information as the State sector.

We see this scheme not as replacing in any way the maintained sector and the academic standards within it, but as a scheme that gives opportunities to certain children, who will not otherwise have them, to join distinguished academic schools and sixth forms so that they can develop themselves to the full, which I believe should be the desire of all hon. Members.

10.55 pm

When the assisted places scheme was introduced it was opposed by the Labour Party and by practically every respectable, responsible educational organisation. It remains opposed by those organisations and by the Labour Party. It was opposed because, by siphoning off a limited number of children, it was a threat to the standard of maintained schools. It was also believed that it would be socially divisive and that ultimately the better-off, not the poorest, would benefit.

Anyone who wishes to cast any doubts on that should bear in mind that it was intended from the outset that about 40 per cent. of the pupils making use of the assisted places scheme should have attended fee-paying schools. The Minister confirmed that about 30 per cent. of the children benefiting from the scheme—if they are benefiting—have come from fee-paying schools. There are not many poor people who manage to send their children to fee-paying preparatory schools.

The Minister said earlier this month that the overall cost of the scheme would be £3·2 million this year, despite the fact that he said on 13 January that there would be a cash limit of £3 million on the scheme. He has already exceeded his cash limit. The Opposition find it ironic that ever more severe cash limits should be imposed on the maintained sector of education while the Minister is allowed to get away with adding another £200,000 to the cost of the scheme, though he made his estimates only a few months' ago.

The excess over the cash limit is greater than it first appears. It was originally intended that £3 million should fund the State's contribution to no fewer than 5,500 assisted places, but it is now funding only 4,185 places. We need an explanation from the Minister. One possible explanation is that private school fees have increased and that that has taken away a chunk of his budget and has led him to exceed his cash limit.

The Minister tries to tell us that the £3·2 million is not extra education spending, because when the children concerned move out of the maintained sector into the private sector, in some way the maintained sector will save £3·2 million. That is nonsense. On his own admission, one-third of the children are already in fee-paying schools and are therefore likely to continue their education in fee-paying schools whether or not the assisted places scheme is operating. That is no saving for the maintained sector.

Even more important is the fact that there will be no savings to local education authorities when children move into the assisted places scheme, because they will be taken out of the schools in ones and twos and, at most, five pupils will move out. As far as we know, no local education authority will sack teachers or close classrooms on the basis that it has moved one, two, three or four children to schools in the assisted places scheme. Consequently, there will be no savings. We are getting double expenditure, because local education authorities are not able to save anything but a few pounds worth of books from any of the children who are being shifted to assisted places in the private sector. That is a further misleading aspect of the Minister's view that we need to expose.

The regulations deal with various legal technicalities that have shown up to be wrong in the scheme, but their real intention is to maintain the real value to parents of the fee remission arrangements. What curious priorities the Government have. The real value of unemployment benefit has not been maintained. The real value of supplementary benefit has been reduced. The real value of retirement pensions, despite the Prime Minister's promises, has been cut, and deliberately cut. Student grants are to be held to an increase of 4 per cent. Government fundings of local authorities in the forthcoming year will be reduced from 59 to 56 per cent. They are not keeping up with the rate of inflation. Indeed, they are deliberately being brought down below it.

We understand that teachers in the maintained sector are faced with a pay increase maximum—it has been laid down by the self-same Government—of 4 per cent. What sort of priorities do the Government have when they are prepared to maintain the real value of the remission arrangements for a privileged group of parents while everybody else can just get knotted?

What are the Government's education priorities? They can find £3·2 million to assist a limited number of pupils but they have said—apparently quite proudly—that they will not find a penny to fund any extra spending by local education authorities on the special needs of the handicapped. The result is that the aspects of the Education Act 1981 that refer to the specialised needs of handicapped children are just dead letters on the statute book. That is because there are no resources to put them into operation.

We are faced with severe cuts in the maintained school sector, and some higher education establishments and universities are facing the closure of individual departments. For example, Aberdeen university is contemplating having to sell off—no doubt to some fancy millionaire in the United States—valuable parts of its library collection, which it has built up over several hundred years, to get itself out of the temporary problem that has been imposed by the Minister and his colleagues. If there is no cash limit on fee remission, why should there be a cash limit on other aspects of education?

We have heard a great deal from the Minister about those on average pay and below average incomes, but it must be said—I must be careful, because I am not accusing any school of not doing its job properly—that the vetting of the applications and the declarations of income is done by the schools that are involved. I wonder now many of them are geared properly to vet someone's complicated statement of family income. All that we were told by the former Secretary of State for Education and Science, the right hon. and learned Member for Runcorn (Mr. Carlisle), was that the running of the scheme is left basically to the integrity of the schools that are involved. I am not casting any doubts on their integrity, but it seems that some doubts might be cast on the integrity of some of the applicants, although I am not suggesting that we should cast doubt on the integrity of all of them.

It would be interesting to know how many assisted places have gone to children of people who are self-employed and allegedly on low incomes. I acknowledge that many of the self-employed are badly off, but it is a notorious fact of our society that a considerable number of the self-employed somehow manage to reduce their taxable incomes to levels that are difficult to reconcile with their personal standards of living. There must therefore be problems for schools in carrying out the vetting process.

It would be interesting to have these figures from the Government, because many of the self-employed do not agree a figure for a particular year's income until two, three or even four years later. Will the schools be allowed to accept estimated figures that have not been approved by the Inland Revenue? If so, what arrangements are being made to recoup money if it is subsequently found that the estimate was wrong in a direction advantageous to the parent?

No doubt the Minister will attempt to deal with that when he replies, or he may say that he needs notice of the question.

Some of the other changes show how irrelevant the regulations are to the educational problems of the majority of our children and schools. Why is the length of residence requirement reduced from three years to two? Have the Government received numerous representations from EEC nationals or EEC bureaucrats saying that they cannot get their children into the scheme because they are not here for long enough? The Minister owes the House some explantion of that.

Why does the same not apply to students? Why will they still have to be in this country for three years before they acquire residential qualifications for university and grant purposes, when people sending their children to private schools under this scheme have to wait a shorter time?

Another factor likely to present considerable problems for schools involved in the scheme is the vetting of applications from some of the strange-status foreign applicants who come forward. It is difficult enough to sort out the British taxation system. The Saudi taxation system or the total non-taxation system for people employed by the EEC would almost certainly be beyond the comprehension of the bursars of most of the schools involved.

To show the irrelevance of the regulations to the needs of the country, I recommend to the Minister regulation 13(2), which reads:
"After sub-paragraph (f) of the said paragraph 3 there shall be inserted the following provisions:—
'(g) in pursuance of section 37 of the Finance Act 1980(a) (relief for losses on unquoted shares in trading companies), or
(h) in pursuance of Chapter II of Part IV of the Finance Act 1981(b) (relief for investment in new corporate trades),'."
Having read that about 15 times and sought advice on it, I discovered that it was actually a tightening-up of the scheme and not a relaxation. Nevertheless, I cannot imagine that the children of any poor families in Toxteth or Brixton who want a better education are likely to be affected by absurd taxation technicalities of the kind contained in the regulations. It is absolute lunacy.

The Minister says that he is concerned about the future of ordinary children in inner cities. I spent about an hour and a half this evening in my constituency at the Christmas show of a mixed comprehensive school—mixed in sex and mixed in race. That school is full of teachers who are doing their level best to provide a decent education for the children for whom they are responsible. There are parents living near the school and farther away from the school who are desperate to help those teachers to improve the standards in the school and to make sure that all the children in the school—not just the high-fliers—get a better start in life than our education system has been providing. I then come back here and I am faced with the absurdity of these minor changes to the squalid scheme which the Minister has supported all along and still supports.

The real intention of the scheme is to offer a limited number of children the opportunity to join what the Minister sees as the elite. The history of our country in the twentieth century shows that that elite has been useless, incompetent and irrelevant to the needs of the nation that it was allegedly leading. If the Minister wants the scheme to add to the numbers in that elite group, he ought to do something about improving its performance. The sort of people that he is trying to creaste by the scheme have let this country down at every turn and have led us into the position that we are in today. It is for that reason that the Labour Party is pledged to abolish the scheme at the first opportunity as a first step towards the elimination of the private sector in British education.

11.12 pm

I can think of no better way of starting a speech on education than by recalling the words of my hon. Friend the Member for Brent, North (Dr. Boyson) when the Education (No. 2) Bill was being considered. He said that our concern was to make the assisted places scheme liberal, to ensure that it would help children who would not otherwise have an opportunity of attending that school. As usual, my hon. Friend has tonight summed matters up in a nutshell. It means that at least 60 per cent. of the assisted places being offered by a school must go to children who have spent at least two years in the maintained sector.

It is also important to remember that the assisted places scheme directs help to children, as distinct from the school, which was certainly not the case under the old direct grant system.

I was a little concerned about the Minister's remarks this evening about the veto. When he refers to 100 places being vetoed, he is really talking about 100 children being deprived of an opportunity that is almost unequalled. I do not necessarily share his sense of contentment about that. To let things continue in the present fashion, even for another year, is a little hard, to say the least.

It is right to examine the scheme in the light of the Labour Party's doctrinaire proposals for education. For example, the Labour Party argues the case for the total abolition of private education, and goes as far as to say that independent school fees should be made illegal. That is spiteful and dogmatic, and I do not see why parents should not be allowed to spend their money as they wish.

The assisted places scheme will provide a great deal of additional freedom of choice and opportunity. The added choice that is provided by the scheme will ensure much greater opportunity for children. I am convinced that that is a positive benefit and is in no way divisive.

The hon. Member for Holborn and St. Pancras, South (Mr. Dobson) said that the scheme would be divisive. I cannot see it, indeed quite the reverse. I believe that it will act as almost a form of cement in bringing together people from different groups and backgrounds. To that extent, it will be very worth while.

As for some of the hon. Gentleman's scathing remarks about the public school system, many other hon. Members, on this side of the Chamber at least, are not products of that system, but we recognise that it has value. It is wrong to dismiss the public schools in one cavalier sentence as the hon. Gentleman did.

It is worth recalling that, if those children who are taking advantage of the scheme were not in the scheme, they would require educating and would be a direct charge on the education budget. People talk about money being made available to a privileged group, but that same group would in any case be a direct charge on the educational budget.

The costs are not excessive. They start at about £3½ million and rise to a maximum of about £12 million in the third year, which covers the lifetime of this Parliament.

Those children who otherwise could not have attended assisted places schools will derive substantial benefit from the scheme. As I have said, it will ensure that there is a much better social mix in those schools. I should have thought that that would receive favourable comments from Opposition Members. So often they argue the case for social engineering—the term they use so much. Here is a perfect example of social engineering in practice. At least they should commend the scheme for that, if for nothing else.

My hon. Friend the Minister referred to helping children in inner city areas. I support his view. Parents who wish to opt out of the local neighbourhood comprehensive school should have an opportunity of so doing. This system will allow them to move to another type of education.

The scheme is safeguarded by a means test. Despite the scathing remarks of Opposition Members, a means test is a means test, and it works efficiently. Criticism has been directed at means tests in other areas, particularly in relation to social security benefits. When we argue about a means test for social security benefits, some members may say that means tests are appalling and should be withdrawn. Yet when a means test is introduced in this sector, we are told that it is worthless. Hon. Members may not be two-faced, but this is clearly another example of some of them facing two ways. They should make up their minds. Is a means test what it says, or is it something that can be dismissed? They cannot have it both ways.

If the hon. Member listens a little more closely, he will find that the Labour Party is against regressive means tests. Regressive means tests are those that if, applied to people who are already poor, further impoverish them, which is a regression, and if applied to people who have no need of assistance, further advantage them, which is regressive. That is why we are against those means tests.

I am grateful for the hon. Member's intervention. Normally his interventions are useful to the House, but in this instance I do think that he is telling us anything that we do not know. None the less, as a point of clarification for his hon. Friends, it may be useful.

It is worth remembering that, although places have been made available at boarding schools, there is no provision for the payment of boarding fees, although certain schools have elected to pay the cost of boarding.

The scheme adds a new dimension to the education scene. It will help those who are able to derive benefit from the type of education that is offered at certain schools. The scheme should by applauded and welcomed. It should not be denigrated as many Opposition Members are endeavouring to do.

Many parents will make sacrifices for their children—as parents have done from time immemorial—some seeing the assisted places scheme as a means of obtaining a different form of education for their children. They see it not as elitist but as different and as providing their children with a form of education that will suit them. That should be encouraged.

My hon. Friends and I believe that the greater choice that we can give parents, the better. That is part of the parents' charter introduced by my hon. Friend the Under-Secretary. The Government's efforts in education should be applauded and it is small-minded and spiteful of the Opposition not to recognise the worth of the scheme. The Opposition Benches are now sparsely populated and perhaps we can see what real importance they attach to education.

11.20 pm

It is probably appropriate that the public school system is defended by the hon. Member for Rugby (Mr. Pawsey), but he should bear in mind that, in many ways, Dr. Arnold was a wise and far-seeing man who would be appalled at the prospect of British education which calls on his name in vain.

I remind the hon. Member that the people of his town turned on the good doctor in his younger days as a dangerous revolutionary. He was regarded in the way that some have recently regarded A. S. Neill. He was an innovator who, I believe, would be appalled by what is happening today.

The assisted places scheme is an effort to perpetuate the academic, social and establishment elite. The Government propose bad amendments to a bad order, which arose from a bad scheme contained in a bad Act. The Under-Secretary is attempting to put back a clock that has not advanced far enough.

The hon. Gentleman referred in passing to regional distribution. I suggested in Committee that that distribution of places was likely to be uneven and would probably be concentrated in the North-West. Will the hon. Gentleman tell us how it has worked out? The schools that have opted for the scheme are mostly not the so-called public schools of myth and fiction, but the direct grant schools that have gone independent. The scheme applies less to the "top 50 public schools" than to those of the day grammar school variety which were common in the 1930s.

Has the Under-Secretary conducted any survey of how schools select pupils for places? What sort of examinations are they setting? What sort of curriculum is demanded and to what extent does entry depend on interview, either of the pupil or the parents? There is a possibility that it is selection at least as much of the parents as of the pupils.

The hon. Gentleman referred to recruitment and quoted figures for the sixth form of Manchester grammar school. It would be more appropriate if he mentioned figures for secondary school third and fourth years. Presumably there are many more pupils in that age group than in the sixth forms. As the hon. Gentleman chose to use the sixth form figures, the House may have reason to ask for more general figures.

The Under-Secretary made a remark that reveals some of the reasons and the poverty of thinking behind the scheme. No one in the House would deny that there is such poverty. It is something that all of us would like to see eliminated, and it is the right hon. Gentleman's duty to see that it is eliminated. Unless he does so, he is not doing his duty by the House, by the country, or—more particularly—by the pupils who, he believes, are missing out.

The hon. Gentleman said that it is the right of every pupil to have the opportunity to experience "the ultimate academic opportunity". What is "the ultimate academic opportunity"? Is it the opportunity to become a PhD? I suppose that some people would say so; I would not. In any case, education is surely not about "the ultimate academic opportunity", although it may include that as one of the factors.

When the right hon. Gentleman speaks about centres of excellence, suggesting that we have a few chosen centres in the inner cities, he is turning his back on what should be the principle of any Minister of Education in any Government—that every school in the land is a centre of excellence, and that every pupil who goes to that school has the opportunity of having an education which is. geared to his or her unique needs. Those needs are partly academic and partly scholastic. However, that is only part of the story. It is the obsession of the hon. Gentleman and his right hon. and hon. Friends with academic excellence alone, withdrawn and separated from much other experience of life, that has caused the gaps in society and some of the difficulties that we are facing today.

The education philosopher, Professor Tawney—I know that the Minister does not dismiss him entirely—summed it up when he said in the 1920s that what a wise parent would wish for his children so the nation should have for all its children. The right hon. Gentleman's scheme goes nowhere towards that. Indeed, it suggests that the solutions lie in opposite directions. Labour Members disagree, and that is why we oppose these bad amendments to a bad scheme by a bad Administration who do not believe in education for all.

11.27 pm

I shall follow the hon. Member for Newham, South (Mr. Spearing) in what he said about wanting every school to be a centre of excellence. I have spent a lifetime in the maintained sector teaching children from the age of 5 up to students on honours degree courses. What is important in education is not just the academic opportunity that is offered by an institution but the opportunity to mingle with people outside the social and economic group to which the parents belong and to get away from the geographical location where the parents are settled. It is the intermingling of people that is important. That is the greatest weakness of the neighbourhood school, and it was the greatest strength of the old grammar school, even though it had other weaknesses.

It was for that reason that I welcomed the original legislation which provided for the assisted places scheme. I welcome the amending regulations tonight, because the fact that they are brought forward is evidence that the Government are determined to take a scheme which, although controversial, is supported by many people. As long as we have a scheme, we want it to work as efficiently and as successfully as possible. No one wants a failed system of education. I am glad that the Government are proposing these amendments to ensure that the scheme operates as fairly and as efficiently as possible.

I have a number of points to make about the scheme as it will be amended. One, which I raised on Second Reading, relates to the age of operation of the scheme. I note that it will apply not only to pupils who have reached 11 years of age but pupils who may not have reached that age but would be educated with pupils of 11 years of age.

That is still a rigid age distinction. Many independent schools do not have a natural break in their intakes at 11 years of age. Their natural breaks occur at 8 and 13 years of age. The present system tends to disadvantage children who have gone through the maintained sector and who seek to come in at 11 years of age, whereas children who have gone into the independent sector at 8 years of age, or earlier, have the advantage of being geared to the school's requirements.

I think that there is a strong argument for the introduction of legislation to permit pupils to be recruited into the independent school system at 8 years of age, and above, because they would then come in at a point at which the courses naturally begin. That would be a marked advantage.

If the hon. Gentleman wishes to see the social mix about which he is talking, surely he would ban entrants from private schools at preparatory school age from coming into the school at 11 years of age.

No. That is not a logical conclusion from what I said, although it may be a conclusion. The logical conclusion is that the independent schools, by virtue of the geographical range from which they draw their pupils, create the social mix that I am seeking. There is great competition for the limited number of places in independent schools. I suggest that those who have not been in the independent school sector before the age of 11 will not have followed the curriculum directly related to that sector because there is no natural break at 11 years of age. The hon. Gentleman must accept that on this occasion he is wrong.

My second point relates to parental contributions. The hon. Member for Holborn and St. Pancras, South (Mr. Dobson) used the phrase "privileged parents". I hope that I have not misquoted him. I take strong exception to that phrase. The only privilege that such parents have is that of paying on average between £5 and £6 a week for their children's education in addition to their contributions to rates and taxes. It is grossly misleading to suggest that parents who can benefit under this scheme can be wealthy. A wealthy parent cannot benefit under this scheme. Some parents make no contributions; others make sizeable contributions. Anyone who can remotely be described as being wealthy cannot be included in the scheme.

I have the honour to represent a great naval port, but it is a centre of low wages because it has been dependent on the Royal Navy and the dockyard for many years. It is not an area of great wealth, but, within Portsmouth, there are three excellent independent schools, and those schools are heavily over-subscribed from a basically working class population. Parents make sacrifices to send their children to the schools of their choice. In addition to paying all or part of their fees, they have to bear the expense for travelling to more distant schools.

Does the hon. Gentleman agree that some of those parents, without putting an exact percentage on it, do not pay the fees of these schools at all? They are paid by myself and himself, and the taxpayers at large, in the sense that those parents are members of the Royal Navy and they get allowances from the public purse to enable their children to attend these independent schools?

This is certainly so. The majority of parents, however, are sending their children to independent schools at their own expense. My point is that while it may be true that some parents send their children to school at no great sacrifice, in cities such as Portsmouth virtually every parent who sends his or her child to an independent school is making a sacrifice. These parents have to accept the full burden of paying for the rates and taxes that provide the educaton system in the maintained sector.

As one who has spent a long time as a practising teacher I take exception to comments from the opposition Benches to the effect that in some way, if children are taken out of the maintained sector, it is in no way a benefit. I have heard a great deal about the rising numbers in classes being a great burden upon teachers. If a class is reduced, however, this is said to make no difference. I suggest that the removal of pupils from a class must undoubtedly ease the burdens on the teacher, if it is only by way of the level of marking or by reducing the range of ability in the class. It must mean that there is less pressure on school libraries and the laboratories in those schools, and on those practical subjects that benefit from having reduced numbers. It must be directly advantageous. There is no doubt that parents are making a sacrifice and a contribution to reducing demands within the maintained sector.

I give the fullest welcome to the regulations and ask the Minister to take on board the idea that perhaps the requirements for entry might in future, when funds are more generously available, be made much more flexible.

11.37 pm

I want to make a comparatively boring speech——

—about some of the details in these regulations. This scheme is a dog's breakfast. It was introduced with a great fanfare and prepared by highly paid civil servants with enormous expertise, yet within a year the Government have to bring acres and acres of small print back to us, changing all the rules that they had worked out. That does not say very much for the preparation of the scheme in the first place.

I am not the expert on the scheme that the Minister is. I can never remember whether it is the English system that is cash-limited or the Scottish one. What are the Government doing running two completely different schemes, one cash-limited and the other not? May we have some explanation of this and of what led the Government to decide to run two wholly different financial structures for the schemes in Scotland and England?

Earlier, I intervened on the subject of examination results. I may be wrong and the Minister may be right, but I ask him to assure me that this year all the examination results of the schools in the assisted places scheme are available to parents who want to apply to those schools. If the Minister says "Yes" I shall be interested. If that is not so, when will the examination results of all the schools in the scheme be available? What action does the Minister intend to take if the schools decide, as the headmasters' conference decided, not to publish examination results as a general rule? That matter should be cleared up, although I might be wrong about it.

The nub of the issue is the Government's desire to have centres of excellence because the State system is not good enough. By questioning Ministers in the Select Committee we discovered that one of the reasons why the State system is in difficulties is that first the Labour Government and then the Conservative Government agreed with the local authorities in the 1970s that if rolls were falling it was unreasonable to reduce funds pari passu, exactly at the same rate as the falling rolls and that some cushion was needed. Otherwise, as the inspectors' report made clear, standards would fall because a smaller plant, as it were, has greater difficulties with which to contend.

It is not true that standards improve when the number in a class is reduced. Problems are caused by a reduction in the number of teachers and sometimes no teacher is available to teach a particular subject. There was full agreement between the Government and local authorities in 1979 that a cushion was needed. In their election manifesto and in their Green Paper the Government stated that their policy was to improve education standards. Their policy is no longer in that form, because they know that they are no longer improving standards because they have taken away the cushion that used to be available to help State schools with falling rolls.

A contributing factor to falling rolls is the assisted places scheme. If it did not exist, more youngsters would be in State schools. I do not say that that is the biggest reason, but it is an element. The Government are operating a self-fulfilling prophecy. They admit that they are imposing a real cut in standards in the State sector, and then they say that because they have imposed that cut they must take some of the children out and put them in private schools, which will result in a further cut in standards in the State sector.

Much is made of the 4,000 children who have moved from maintained schools to independent schools under the scheme. Does the hon. Gentleman or my hon. Friend know the overall figure for children in maintained schools? Is the hon. Gentleman in favour of schools publishing examination results? I thought that he used to be against it.

I have never been against schools publishing examination results, but I think that they should do it in the same form and in the context of everything that goes on in the school. The publication of the bare examination results sometimes gives a false picture.

Can the Minister escape from the charge of creating the situation which he says the assisted places scheme is meant to remedy? That is a major charge against him.

Everyone knows that fiddling takes place with both student grants and assisted places scheme grants. Usually, if Parliament votes money, it is—[Interruption.] Much as I am interested in what the Government Whip has to say, I want the Under-Secretary's attention, because I shall ask him a specific question. Indeed, it would be nice to have his attention. If public funds are voted, there should be accountability. To whom are the private schools accountable? Does the Public Accounts Committee have the right to examine the matter? Does the Comptroller and Auditor General have the right to walk into the bursars' offices of schools and check, on a random basis, whether the income of parents has been properly calculated? That is important. Student grants are assessed by Local education authorities, which are public bodies subject to the district auditor. Public accountability is built into that system. Under the Industry Act, when private firms receive public money there is a system of accountability. The Department concerned sends its accountants in to examine the books.

The assisted places scheme represents the only arrangement under which taxpayers' money is flowing into private institutions, with no system of accountability. Does the district auditor have any standing? I am sure that the principle of Parliament voting money is that it should be accountable. I heard nothing on Second Reading, in Committee, on Third Reading or during debates on the first and second sets of regulations to show that the Government are even remotely interested in accounting for that public money. I want to hear the Under-Secretary reply to that point.

When the Under-Secretary revs up from 10 mph to 100 mph, it is a good sign that he is hiding something. He did that with a rapid statement that the ordinary residence qualification is being reduced—for no good reason—from three years to two years. We went through that whole rigmarole with student grants for further and higher education, which brought great hardship to overseas students. The Government imposed the ordinary residence test, as opposed to the residence test, which has now been tested twice in the courts. It may have to be tested again to determine the meaning of "ordinary residence".

The position for further and higher education is clear. I thought that the Government were lining up the qualifications for the assisted places scheme grants with those for further and higher education. Why have they suddenly introduced a different qualification'' Is it something to do with a single child of a Eurocrat in Brussels? I am deeply suspicious that it is something to do with some EEC mobility promise. I want an explanation of the reduction from three years to two years for the ordinary residence qualification.

It is suggested that the State saves the money spent on this scheme and that there is therefore no extra cost. A third of these youngsters are children who would not have gone to State schools. We are paying parents who would have paid anyway. That is the whole object of the private education exercise. Parents who pay want to buy three or four years of university education, amounting to £6,000 to £10,000-worth of public money that is provided by the poor who do not send their children to university.

The motive is the same in the assisted places scheme. At least one-third of the money flowing into the scheme is not money that would have fallen on the public purse. It is simply a subvention to the middle class. At a time when cuts are taking place right across the board, this is the least defensible and the most absurd piece of public expenditure.

11.51 pm

In the three minutes available to me I should like to inform the hon. Member for Holborn and St. Pancras, South (Mr. Dobson) that I have heard his speech before. I have heard it from many members of the Labour Party in an education committee not 110 miles from this Chamber, at public meetings and on university campuses. I have listened to the verbal knee-jerk reflexes of those, like the hon. Gentleman, who utter words such as "elitism" and "envy". It is the usual terminology that surrounds the language of class warfare. It is encountered head-on in education debates.

I suppose that education debates reflect the clash between those who are the behavioural scientists of this world and those who believe in individualism, corresponding to the political philosophies of our two parties. The hon. Gentleman took matters too far when he described how teachers were doing their level best within the system in spite of the assisted places scheme.

The hon. Gentleman reduced still further the level of his contribution when he cast aspersions on the integrity of parents who may fill in forms. He even managed a crack about foreigners that included the Saudi Arabians.

The hon. Member for Lewisham, West (Mr.Price) posed a question about examination results. If he wants an answer, he should perhaps consult his hon. Friend the Member for Bedwellty (Mr. Kinnock) who will no doubt be familiar with the controversy in Wales, where there is some concern about the decline in the standards of O and A-level passes.

The hon. Member for Lewisham, West referred to falling rolls in the State sector and claimed that the scheme threatened the integrity of some schools. If any school is threatened by the tiny reduction in numbers caused by the transfer of pupils between schemes, as outlined by the Minister, the school must have considerable difficulties. It may be a school, if I dare say this, that is looking for excuses.

The debate has shown again the Labour Party playing snakes and ladders with education policy. The problem is that Opposition Members seem always intent to kick away the ladders.

11.55 pm

I shall answer as many questions as possible during the time available. I shall read those questions that I cannot answer and send a note later to those who asked them. Many of the questions were interesting.

The first question was in an intervention by the hon. Member for Lewisham, West (Mr. Price). He asked about the publication of examination results in the assisted places schemes compared with the State sector.