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Commons Chamber

Volume 100: debated on Wednesday 25 June 1986

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House Of Commons

Wednesday 25 June 1986

The House met at half-past Two o'clock


[MR. SPEAKER in the Chair]

New Writ

For Newcastle-under-Lyme, in the room of John Golding Esq. (Chiltern Hundreds).— [Mr. Foster.]

Private Business

Blyth Harbour Bill Lords (By Order)

Order for Second Reading read.

To be read a Second time tomorrow.

Oral Answers To Questions


House Building (Brent)


asked the Secretary of State for the Environment if he will publish in the Official Report a table showing the number of house building starts, both private and public, in the London borough of Brent during 1985; and if he will make a statement.

The London borough of Brent reported 455 starts during 1985, the highest number since 1977. Of these, 188 were private sector and 267 public sector.

Is the Minister seized of the depth of the crisis in Brent, where only six local authority houses were built last year and where 18,000 people are on the waiting list? Is he aware that there are 650 homeless families? Does he realise that at least 4,916 families are on the high priority transfer list from high rise blocks? Every Saturday morning I am torn to pieces by the family and human tragedies of people who cannot face the problem of not having a roof over their heads.

I am not sure that the hon. Gentleman heard my reply. Starts last year were the highest since 1977. There were 455 starts in 1985, as against 111 in 1979.

The hon. Gentleman was right to say that there are some 600 families living in unattractive circumstances in bed-and-breakfast accommodation, but there are 825 empty dwellings in Brent's ownership, of which 319 have been vacant for more than one year and 180 for more than two years. Brent should bring those properties back into use.

Is there any arrangement whereby some of those seeking homes could move into the 1,500 houses that have been vacant in Southwark for more than a year?

Brent is entitled to nominate people, through the London area mobility scheme. Last year it had a quota of 568 lettings, but took only 263 of them. There is an opportunity for Brent to attack its housing problem by making fuller use of London's mobility scheme.

House Prices


asked the Secretary of State for the Environment what has been the percentage increase in average house prices in (a) Greater London and (b) the south-east of England in each of the three last years for which figures are available.

The rises in house prices in Greater London are estimated to have been 12 per cent. from 1982 to 1983, then 16 per cent. to 1984 and 14 per cent. to 1985. For the rest of the south-east, the estimates are 13 per cent., 13 per cent,. and 10 per cent.

Does the Minister realise that those figures compare with increases in average wages that are considerably below those levels— about 9 per cent., 7 per cent. and 8 per cent. for the same three years in Greater London? Does not that, coupled with unemployment that now puts 14 London constituencies in the top 50 for rising unemployment, mean that very few people can buy first homes in London? What will he do about it, and how soon will he provide the opportunity to purchase for those at the bottom end of the earnings scale or those who are not employed at all?

First, I invite the hon. Gentleman to join me in putting the maximum possible pressure on the boroughs involved to ensure not only that all the derelict land that they have is brought forward for housing but that they do not in any circumstances delay the planning process, which is one of the things that prevents proper new building taking place. I listened to what the hon. Gentleman said about the need to bring about more low-cost housing development. That is why we intend to do all that we possibly can to encourage shared ownership in the capital and the south-east.

Do not current house prices in the south-east make the £30,000 limit on mortgages for tax relief somewhat out of date?

Does the Minister recognise that his answer means that his Department should do what it can to encourage local authorities to build so that many people who are not in a position to buy are able to be rehoused by local authorities? Even if we take into consideration the number of empty properties — some of which are not being done up because of lack of cash—there remain hundreds of thousands who stand no chance of buying their own homes and who are in desperate need of local authority accommodation. Does the Minister associate himself with the insulting and offensive remarks that were made last week by the Minister for Information Technology? Are those his views?

I shall answer the hon. Gentleman's first question. The answer is very much in the hands of local authorities. The message of "build, build, build," helped throughout the 1960s and 1970s to bring about the problems that we have today. Build in haste, repair at leisure. There has been under-investment in housing repair. That is why we have so many empty houses in council ownership and why we have homelessness.

Green Belt


asked the Secretary of State for the Environment whether he intends to make any changes to the Government's policies on the green belt.

No, Sir. The policy on development in the green belt remains as set out in my Department's circular 14/84.

I am grateful to my right hon. Friend for his defence of the green belt. Can he confirm that where the local planning authority, the borough or district council, is opposed to the release of land from the green belt, such as in my own constituency, he will reinforce the stance of the council and not seek to release land against its wishes?

We must take into account the structure plans. Together with the green belt policy and the nature of any structure plans that are in existence, my role is to make an interpretation if appeals come to me.

My hon. Friend the Member for Hertfordshire, West (Mr. Jones) is lucky to know where his green belt is. My constituents and the planners who look after their interests have been waiting for months for the publication of the South Hampshire structure plan. Can my right hon. Friend give me any idea when that plan is likely to see the light of day?

Water Authorities (Privatisation)


asked the Secretary of State for the Environment if he is now in a position to state when he plans the conversion of the Thames water authority into a water supply public limited company; and if he will make a statement.


asked the Secretary of State for the Environment what progress he has made with plans to privatise the water authorities.

The Government intend to introduce legislation to restructure the 10 water authorities in England and Wales as water service public limited companies. They will then be floated when market conditions and the circumstances of the individual companies allow.

I thank my right hon. Friend for that reply. Will he use the intervening period to make it crystal clear that the 25 per cent. of the population who already get their water from private companies are not suffering deprivation, sewerage trouble, high prices, and all the other nonsense that is put about by the Opposition parties and the trade unions?

I agree entirely with my hon. Friend. He is right to draw attention to the position of the 28 statutory water companies, which supply about one quarter of the water in England and Wales, including large cities such as Newcastle and Bristol. The companies operate to the same tight legislative requirements as the water authorities on the purity of drinking water, and so on. They have an excellent record in maintaining standards of all kinds.

Is my right hon. Friend aware that the Thames water authority is ready, willing and, indeed, eager to become a public limited company and to do so on terms that will be favourable for both employees and customers? Can he confirm that the legislation that he will introduce will enable Thames to be privatised as soon as it wishes without necessarily having to wait until the other nine authorities are ready to go forward?

I agree with what my hon. Friend says about the Thames water authority. It is encouraging that there is competition from a number of water authorities to be first into the private sector. There is a reluctance also, I think, to be last into it. The order in which it will be right for the authorities to go into the private sector will depend on the state of readiness at the time.

Does the Secretary of State agree that the policy involves selling off the ownership and control of the River Thames from Teddington to Cirencester and Tewkesbury? Does he recall that in the debate on Monday his hon. Friend the Minister for Housing, Urban Affairs and Construction confirmed that the Government would welcome private overseas capital in a shareholding of that river? Will the right hon. Gentleman tell the House the maximum proportion that he envisages will be permitted to private capital? Is not the idea of the sale of the River Thames or any other river in the country to private ownership entirely against the views of the majority of people of this country?

I must correct the hon. Gentleman, in that Tewkesbury is in the Severn catchment area, although Cirencester is in the Thames catchment area. I must correct him also in another, more important, respect. I see no objection whatsoever to the import of capital into this country. Many of our industries rely on imported capital and many of our jobs rely on capital which we have exported overseas. I do not take the narrow, blinkered attitude that the hon. Gentleman takes to the free flow of capital in world markets.

Has not the Secretary of State just confirmed that the French could actually buy the North-West water authority and the Thames water authority, and that the British people could buy not only their energy but their water from the French? Does he really believe that the British people want that? Will he confirm that the so-called private water authorities are merely franchising companies which sell water which they get from the existing publicly owned water authorities and that not one of them is responsible for pollution or sewerage matters, in which there is no profit? If the water authorities are privatised, will the country not suffer as a result?

The hon. Gentleman knows that in many privatisations the Government have thought it appropriate to take a golden share to control the degree of foreign ownership. When the House considers the matter, we can discuss the pros and cons of such a policy on water. It is not something that can be taken away. It is not possible to close down the North-West water authority. I feel that the problem is nothing like as important as the Opposition seem to be majoring on.

It is true that private water companies do not perform the entire functions of the water cycle, but the functions that they do perform—I think the hon. Gentleman will accept this—are of a first-class standard.

Will my right hon. Friend have a word with his right hon. Friend the Secretary of State for Transport and ensure that he knows what will happen to the chairman of British Rail if he does not change his mind about the sale of French water on all British Rail trains? It is impossible to get English water on British Rail trains, except for cleaning one's teeth on the night train, which the chairman of British Rail said that it is the only thing that it is good for.

My hon. Friend invites me to talk to my former self, which is a temptation I must now resist. I suggest that it might be advantageous if we could get Malvern water on SNCF.

In view of the right hon. Gentleman's reply to the question about the speed with which some water authorities will be privatised, will be tell the House how charges will he levied on domestic consumers when the water authorities are in the private sector? If there is to be a delay in metering or initiating other services, will he agree to the private sector using the rating system to collect charges from domestic consumers?

The private sector has been charging customers for water for centuries in those areas where water is still under private control. There have been remarkably few complaints or questions asked about that practice. I do not see why that should not continue.

First, I take this opportunity to congratulate the right hon. Gentleman on his appointment to his important office. We are aware that behind his well-known eccentricities of view lies a fairly shrewed political brain. As he has referred to his tendency to talk to himself, I should advise him that many people in local government fervently hope that he will go on doing that, and leave them alone.

As for the right hon. Gentleman's proposals to privatise Britain's water resources, I remind him that even his own eccentricities cannot cover the fact that the Government are proposing to hand over water consumers to private enterprise monopolies without competition or choice. A rip-off of the taxpayers' assets is likely to be followed by a rip-off of water consumers. How can the right hon. Gentleman, of all people, possibly justify that?

I am grateful to the hon. Gentleman for his welcome to my sitting in this position. I can reciprocate by saying how pleased I am to find him sitting in his position, on the Opposition. and I hope that he will remain there for a very long time.

I am fascinated that in my new post I am to have the label "eccentric". I am used to having labels of one sort or another, so I say in gratitude to the hon. Gentleman that this one is much more acceptable than some I have had.

The hon. Gentleman has left out of account the fact that many companies have performed infinitely better in the private sector. I can compare this with British Telecom, where privatisation of what was nearly a natural monopoly has taken place. One cannot meet anyone who does not now remark how greatly improved telephone services are.

Local Authority Housing


asked the Secretary of State for the Environment when he next plans to meet representatives of the local authority associations to discuss ways of reducing the backlog of repair work identified in his Department's inquiry into the condition of the local authority housing stock in England.

I will be meeting representatives of the local authority associations to discuss various housing issues at the Housing Consultative Council meeting on 8 July.

Does the Secretary of State accept the Audit Commission's estimate that about £900 million is added each year to the council house repair bill? Does that not mean that, at the present rate of investment, it will take us about 90 years to bring all council housing up to an acceptable standard?

In view of the seriousness of the problem, what steps is the right hon. Gentleman taking to ensure that local authorities display greater interest in co-operating with the private sector in the repair and rehabilitation of council estates?

I have barely received, let alone had time to study, the report. If that proves to be the case, it must be said that local authorities have for many years failed to keep their housing stock in good order.

It is extraordinary that, after decades of managing local authority housing, local councils have now come along with a capital problem, which appears to be great, because of their neglect to keep rents at a level which would enable them to keep their houses in good order. Further evidence of that is the fact that spending per house on repair and maintenance and on capital improvements was abysmally low when we came to power. Since 1980–81 spending per house has gone up by 21·5 per cent. in real terms. We now have figures of £2·5 billion a year on maintenance. £1·2 billion on capital and £1·4 billion on revenue expenditure, which are far better figures than when we first came to power. It is that which has gone wrong in the past. Not enough has been spent to maintain the houses, and that is why we have such a bad situation of disrepair.

Is it not a national scandal that so many local authorities are keeping many council houses empty for so long? Is not their negligence contributing to the misery of homelessness? Does my right hon. Friend agree that one solution to the problem is to allow do-it-yourself experts who are waiting for council houses to take over those council houses for a rent-free period and do them up at their own expense, because the local authority would have left them empty in any event?

I agree with my hon. Friend. He has made a sound point. The fundamental problem is that those houses have been allowed to exist without being repaired and the local authorities have not had sufficient revenue to do so. Whether the repairs are done by allowing the tenant to do it at his own expense, or whether the tenant pays more so that the local authority can do it, is a secondary issue. The point is that it should never have been allowed to happen in the first place.

As the Government's own estimates of the backlog of repairs or cost is about £19 billion, how can the Government justify further constraint on money for repairs by local authorities?

I take seriously the appalling situation of disrepair in local authority houses. That is something I shall he looking at to see how we can best deal with it. I should have thought that the whole House would agree that we should not allow further disrepair. We should avoid the mistakes of the past in failing to maintain houses as we go along out of the housing revenue accounts.

Will my right hon. Friend consider allowing local authorities to use a greater proportion of their capital receipts, perhaps returning to the 40 per cent. level which was the figure until the beginning of last year, as a means of addressing this problem?

That is something that I am busy studying at the moment. The areas where the main disrepair has been allowed to grow tend to be in large municipal housing estates where there are small accumulated receipts. Areas where there are large accumulated receipts tend to be where the local authority has kept its housing in a much better state of repair. There is a serious mismatch between resources and needs.

Does the Secretary of State accept the need for substantial additional resources to be made available to those inner city authorities which have the greatest concentrations of problems? Will he possibly even consider using those capital receipts, which are available elsewhere, to help those authorities with the greatest need?

My hon. Friends will be delighted to hear that the Labour party thinks that the prudent housekeeping of many Tory district councils, which has resulted in accumulated receipts, should be forcibly taken away from them and given to spendthrift authorities which fail to keep their housing in good order.

Does my right hon. Friend accept that those local authorities which have gone out to private contractors to have the housing stock maintained have spent their money more effeciently and cost-effectively? Is it not a fact that one of the principal problems with the maintainence of the housing stock is the inefficiency of the direct labour organisations in many areas? Is that not aggravated by the refusal of Labour-controlled local authorities to accept the lowest tender from private contractors?

I do not believe that the reason my hon. Friend gives is the only one. It seems to me that the essential need is for a local authority to get itself sufficient resources and to use those resources to secure the greatest value for money possible, to make sure that its housing stock does not deteriorate. It is not only rates and grant that are available to a local authority; it is the tenants' income itself, which could be spent on the tenants' houses, if there was a proper level of rent.

May we take it that we have therefore elicited from the Secretary of State that he agrees with the Audit Commission that there is a crisis of serious proportions in the condition of our local authority housing stock? If that is so, and the right hon. Gentleman talks, as he did recently when he was appointed, of prudent housekeeping how can it be prudent housekeeping when local authorities which have a legacy of system-built houses and non-traditional homes are sometimes not allowed to spend their own money to keep together houses that are literally falling apart? Surely it is just ideological nonsense to suggest that any help from the public sector will not solve the enormous problem identified by the Association of Metropolitan Authorities, the Audit Commission and his own Department.

The hon. Gentleman must not put words into my mouth. I did not accept the Audit Commission's description of a crisis. As I said, I have not had a chance to study its report yet, and I am not commenting on it. I accept that there is a large element of disrepair in some local authority housing estates as well as in municipal estates. I should like to make just one point, that that disrepair should not have been allowed to arise. We have two things to do now. First, we have to see how best to clear up the areas of neglect of those local authorities. Secondly, we have to put it fairly on the line that local authorities should not allow further neglect and deterioration. Because several local authorities have neglected to keep their houses in a fit state for their tenants to live in the hon. Gentleman turns round and blames the Government. He should be blaming the local authorities, and he knows it.

It does us all good to have our names forgotten at times.

Will my right hon. Friend accept congratulations from the Conservative Benches on attaining his distinguished office, to which I am sure he will lend his originality and interest? We shall watch with fascination his progress. Does my right hon. Friend accept that one of the problems that we have is that many of us are exactly and entirely behind the sale of council houses, which gives people choice, but feel that that money should then be available to repair the stock of council houses? If we delay spending £250 this year, it will be £400 next year and dereliction the year after. Could we not encourage both sale and repair, which would be to the benefit of all the people?

I am grateful to my hon. Friend for his welcome and the even more attractive adjectives than those used by the hon. Member for Copeland (Dr. Cunningham). As Question Time goes on it gets better and better.

I agree with my hon. Friend that the combination of privatisation and repair of council houses is what we want, but on several estates the condition of the council houses is such that I do not believe that anybody would want to buy them as they are. That is a special problem, to which I intend to turn my attention, but let it be absolutely clear that I am saying only that I recognise that there is a problem in certain areas. At the same, time I believe that we must make sure that we do not get into a worse position, by ensuring that local authorities take their responsibilities seriously.

Local Government (Widdicombe Report)


asked the Secretary of State for the Environment when he proposes to issue the Government's response to the Widdicombe report on local government practices and procedures; and if he will make a statement.


asked the Secretary of State for the Environment when he proposes to publish the final report of the Widdicombe committee on local government.


asked the Secretary of State for the Environment what response he has received to the publication of the main report of the Widdicombe committee on local government.

The Parliamentary Under-Secretary of State for the Environment
(Mrs. Angela Rumbold)

I refer the hon. Gentlemen and my hon. Friend to the answer given by my right hon. Friend the Secretary of State to my hon. Friend the Member for Broxbourne (Mr. Rowe) on 19 June.

Why have the Government been so quiet about the publication of the report, given the enthusiasm with which they set up the inquiry? Is it because the Widdicombe report has tackled the problem of one-party domination in local councils, has supported democracy in local councils and has made constructive recommendations on how to strengthen them? Will the Government recognise that not only must they consult, but that there must be an early debate in the House and that they must act on the recommendations?

I am surprised that the hon. Gentleman believes that the report has been received quietly. It received wide coverage in the press and was welcomed widely by many people in local government. The report has responded fully to the concerns across party political lines that local democracy has been somewhat under threat in a few councils. As a result we have a good report, which contains about 88 proposals, which present a balanced and interrelated package. We shall have serious consultation on this matter.

Is it not true that the proposals to ban people of the rank of principal officer and above from effective political activity is the gravest attack on employment civil liberties since the banning of trade unions at GCHQ? Is it not true that the practice of party representatives attending council group meetings is almost as widespread in the Tory party as it is in the Labour party? The proposed ban is causing grave concern and disquiet. Will the Minister ensure that those aspects of the Widdicombe proposals which try to separate party politics from elected local government are rejected? If not, will she be consistent and demand the removal of the chairman of the Tory party from the Cabinet?

I do not accept the later part of the hon. Gentleman's question. The report will be subject to the fullest and widest consultation among all the parties concerned. On his earlier point about principal officers and above not being allowed to sit on local councils, I remind him that no civil servants are allowed to be Members of this House.

Did my hon. Friend notice the warm reception given to the report in The Guardian editorial? Will that encourage her to seek early legislation to deal with the worst excesses of political corruption, which still cause consternation in local government?

I understand my hon. Friend's anxiety about the worse excesses of political corruption. I read the warm response to the publication in The Guardian. I repeat that the package of 88 recommendations deserves sensible consideration and consultation before the Government take action.

Does the Minister support the idea of ending one-party policy committees on local councils? If so, how will that apply to the London borough of Newham, where all 60 councillors are Labour and there is no opposition? Why is it different for central Government as opposed to local government? If we open policy committee meetings in local government, why not open them in central Government and allow the Opposition into Cabinet meetings?

The House will not be in the slightest bit interested in my views on the report. My Department will be happy to receive the views of the hon. Member for Newham, North-West (Mr. Banks) on the report in due course.

Will my hon. Friend commend the members of the Widdicombe committee on an excellent job — at first sight — which demands much attention before we can make detailed comment? Will she note that the House would appreciate a full-scale debate in advance of the Government producing their proposals on Widdicombe, so that hon. Members can add their input to the important debate on the health of local government?

I thank my hon. Friend for his remarks and draw his attention to the response of my right hon. Friend the Secretary of State to my hon. Friend the Member for Broxbourne the other day, when he thanked Mr. David Widdicombe and his fellow committee members most sincerely for their report and commented that the committee's study had been thorough and that the report was impressive in the extent of its coverage and the scope of its findings.

As for a debate on the report, that is a matter for my right hon. Friend the Leader of the House.

Will the Under-Secretary accept that the sort of language that she is using and the fact that she is responding to the question lead us to conclude that Widdicombe will be quietly sidelined by the Government, probably because it offers no justification for the wilder allegations of the Conservative party about the state of affairs of local government in this country? For example, does the Under-Secretary accept the comment of Mr. David Widdicombe in his foreword:

"There is a solid base of normality in local government"?
Will the hon. Lady realise that we cannot accept not only the retention of personal surcharge, but its expansion to cover elected members in Scotland? We also cannot accept the proposal of Mr. Widdicombe's committee that chief executives should have extended legal powers over democratically elected councillors.

Widdicombe is disappointing because it has failed to address itself to the opportunity with which it was presented to strengthen and enhance local democracy in Britain.

The hon. Member has made the point well that, whatever my lack of seniority, there is considerable uncertainty about the responses of Opposition Members and my hon. Friends, which points to the need for serious consideration through consultation. I hope that that will be achieved in the responses of hon. Members and the many outside organisations and individuals who are interested in local government.

Inner Cities


asked the Secretary of State for the Environment what steps he is taking to encourage private sector involvement in the regeneration of the inner cities.

The Housing and Planning Bill will enable assistance to be given to regeneration carried out by the private sector.

I thank my hon. Friend for that reply, albeit ever so brief, but may I encourage him to go further and let us know about the prospects for more urban development corporations, what is to happen on urban regeneration grants and how decisions on that aspect will link with the announcement the other day of our right hon. and learned Friend the Paymaster General about inner cities?

The private sector created most of our great cities, and the private sector has a critical role to play in regenerating our great cities. That is why we are taking powers in the Housing and Planning Bill to pay urban regeneration grants. We are extremely grateful to all the Opposition parties for their support for those grants, which have also been welcomed by the private sector. Of course, urban development corporations are well worth considering, and we should perhaps be considering having more UDCs.

Does the Minister not agree that it might help to stimulate greater private sector investment in the inner cities if the Government looked again at whether VAT ought to be charged on building work in those areas and at the possibility of increasing the derelict land grant? Does the hon. Gentleman, have a word to say about last week's speech by the right hon. Member for Henley (Mr. Heseltine), who said that he was critical of the level of aid being given to inner cities by the Government?

We are spending at record levels on derelict land grants, and substantial amounts of derelict land—about 2,500 acres—are cleared in inner city areas every year. One problem is to make sure that something is put up on that land — houses or industry. We are trying, through urban development grants and the new urban regeneration grants, to attract as much private sector funding as possible. Our experience with the urban development grant shows that for every pound of public sector money put in, we attract between £4 and £5 of private sector money.

Will my hon. Friend confirm that even if the Government doubled the resources presently going into the inner cities that would not begin to meet the size of the problem involved in tackling the necessary works? Therefore, the only way is to attract private investment, and the best way to do that is not merely to consider extending the UDC concept to other parts of inner cities, but actually to create them, and with the same commitment that we had when we created the new town corporations.

I note what my hon. Friend, with his considerable experience of these matters, says. I know of no observer of the inner city scene, be it my right hon. Friend the Member for Henley (Mr. Heseltine) or anybody else, who believes that public money alone will lead to the regeneration of the inner cities. That is why we desperately need to attract private sector money into the inner cities. We are doing so. Urban regeneration grants will help. Urban development corporations may well help. My right hon. Friend the Secretary of State and I listen carefully to what my hon. Friend says.

Will the Minister pursue with the Chancellor of the Exchequer the abolition of the Treasury rule that forbids housing associations from tying in housing association grants with borrowing from the private market for the provision of rented accommodation? Does he agree that this is one of the biggest stumbling blocks to the expansion of housing association rented accommodation during a period of severe restriction on public expenditure? Will he act on that?

I note what the right hon. Gentleman, with his long experience of these matters, has said. We have received some very interesting proposals from the Housing Corporation about these points. Also, from time to time, happily, I have the chance of discussions with my right hon. Friend the Chancellor of the Exchequer.

When my hon. Friend is considering these matters, does he agree with me that the Henley approach is to be preferred to the Chertsey and Walton hypothesis?

I always listen carefully to all that my right hon. and hon. Friends have to say, and the speech of my right hon. Friend the Member for Henley was most thought provoking.

Does the Minister recognise that one very serious inhibition on small private investment in the inner cities is the great difficulty in places such as Brixton and Handsworth of obtaining insurance on business premises? Lambeth and Birmingham recently called a conference on these matters. What are the Government doing about it?

I am happy to say that my right hon. and learned Friend the Paymaster General is already looking at this issue in connection with the eight areas exercise. I think that that will produce some results in the not too distant future, which will be of great help right across the inner city scene.

Defective Housing (Basildon)


asked the Secretary of State for the Environment what recent representations he has received about repairing defective system-built housing in Basildon; and what action he proposes to take in consequence.

The Parliamentary Under-Secretary of State for the Environment
(Mr. Richard Tracey)

I have recently received a number of letters from my hon. Friend on behalf of his constituents and direct from owner-occupiers of houses built by Basildon development corporation, using the Lindsay Parkinson HSSB design. Recently I visited the area, together with my hon. Friend, and I hope to announce shortly what steps can be taken to assist.

I thank my hon. Friend and his Department for the assistance that they have so far been able to give to my constituents with their problems. I urge him to act as quickly as possible so that defective properties are repurchased, or the owners receive full compensation, or the properties are repaired, or are given a clean bill of health.

I appreciate the various remedies that have been put forward by my hon. Friend, but, as I told him recently, I shall be very glad to have a meeting with representatives of the Vange Action Group. I am very conscious of the need for an early decision.

May I say to the Minister with responsibility for sport that I hope that defective housing will be more successfully tackled than was the World Cup by the English football team? Serious though the problems may be in Basildon, may I make the point that this is a national problem and that it requires urgent attention and the provision of national assistance to local authorities and development corporations before the year is out?

I hope that the hon. Gentleman will not consider that I am giving him the elbow, but housing in this country is considerably better than much of the housing that I saw when I was in Mexico. Of course, the Government of Mexico are much more closely associated with the party opposite than they are with the party of this side of the House.

You are quite right, Mr. Speaker. The only housing that we know of similar to that in Basildon is in Watford.

Planning Decisions (Appeals)


asked the Secretary of State for the Environment if he will make it his policy to uphold on appeal the planning decisions of local authorities.

That is a relief. Is my hon. Friend aware that the answer given earlier by the Secretary of State to the effect that the green belt, if protected by the structure plan, is safe with him will be welcome to many hon. Members on the Tory Benches, especially in the light of a grotesque application in my constituency to which objection has been taken not only by Christchurch council but by Wimborne and New Forest councils and by Dorset county council? Will my hon. Friend bear in mind that if district councils, as planning authorities, backed by county councils, begin to feel that every time they refuse an application that is contrary to the structure plan and which affects green belt land, those decisions will be overturned by his Department, local government will be even more disillusioned about central Government? Surely none of us wants to see that.

My hon. Friend raises some interesting points. He will not expect me to comment on a specific case. He should raise the general aspect of this issue with my right hon. Friend when he and his colleagues meet him.

I was about to say that I was going to give the Minister an easy ball. There has been a settlement whereby the Globe theatre is likely to be built on the South Bank. If the matter of planning in respect of this comes before the Department of the Environment, can the House have the assurance that the Department will do everything it can to encourage the rebuilding of Shakespeare's Globe after 400 years?

I was privileged to be born in Stratford-on-Avon and I have considerable sympathy for anything, to do with William Shakespeare. I am sure that the hon. Gentleman fully realises that all material matters will be considered.

Is my hon. Friend aware that many local authorities are being forced to make planning decisions against their wishes? That is because under the rules, the circulars and the structure plans, they know that if the matter goes to appeal and they lose it is likely to cost a great deal of money. Will he seriously consider the question of my hon. Friend the Member for Christchurch (Mr. Adley)?

Since 1947 Parliament has provided a right of appeal to the Secretary of State against local planning decisions. In considering such appeals the Secretary of State will have regard to all material planning considerations. I repeat what I said to my hon. Friend the Member for Christchurch (Mr. Adley), that these general points should be raised at the meeting with my right hon. Friend the Secretary of State.

The Minister has done well, so far. In view of his sports portfolio, will he take an interest in the planning permission to redevelop Stamford Bridge and call that in so as to make sure that we preserve good football at Stamford Bridge?

I have once again to say that I cannot discuss the merits of any particular case at the Dispatch Box.

Palace Of Westminster


asked the Secretary of State for the Environment when he now expects the restoration of the exterior of the Palace of Westminster to be completed.

The current work on the Terrace elevation and Lord Chancellor's Tower should he completed in November. Plans for the next phase are under consideration and I hope to make an announcement later in the year. There is much still to be done and it will take a number of years to complete this massive task.

As the restoration work which has already been completed has done so much to enhance the architectural heritage of this part of London and proved such a popular tourist focus, we look forward with great anticipation to the completion of the work. May I, as a surveyor, ask my hon. Friend what stone cleaning technique he proposes to use for the remainder of the work —the wet or the dry?

My hon. Friend is right to say that the Palace of Westminster is a major tourist attraction and that it is right to show it at its best. As for cleaning techniques, he rightly says that there are two approaches, one wet, one dry. The wet one heals the affected areas by the steady application of dripping water and the dry one involves a vigorous attack with air and grit. I prefer the former.

Local Authority Services


asked the Secretary of State for the Environment how many responses have been received by his Department to the consultation paper, "Competition in the Provision of Local Authority Services", published in February 1985.

My Department had received more than 450 responses by 30 October 1985, and a list of the main respondents was placed in the Library on that date. One or two further comments have been received since then.

Will the Minister confirm that the majority of responses from councils of all political colours have opposed the compulsory extension of tendering? Is not the real answer to allow local councils to spend the money that they need to have the size of work force that they want to carry out their duties officially?

No, Sir. The responses were varied and wide and it would be quite difficult to determine whether they came down on one side or the other. There are clear signs that competitive tendering has helped to provide efficient and effective services and that it does not disturb the good running of local authorities.

Urban Programme


asked the Secretary of State for the Environment how many jobs have been created under the urban programme.

The urban programme has created or retained about 24,000 jobs each year through support to capital projects since it was substantially expanded in 1982–83, and projects approved for urban development grant should generate some 20,000 permanent jobs.

In the light of his reply, does my hon. Friend agree that well targeted—

We seem to be in the business of getting the wrong names today, but never mind.

Does my hon. Friend agree that, in the light of his reply, well targeted schemes to help inner-city areas are a more effective way in which to promote economic growth and to provide real jobs in the community?

My hon. Friend is absolutely right. We need the best possible targeting on inner city areas which are suitable for development. Above all else, we must concentrate on areas where there can be the type of regeneration that leads to successful job creation, such as the urban programme has been responsible for. My right hon. Friend the Secretary of State and I intend that, in future, the economic job-creating components of the urban programme will get an increased share of available moneys.

Does the Minister agree that one of the major obstacles in the programme is the need for money to be spent by the end of the current financial year? Is he aware that, by delaying approval, his Department is putting an intolerable burden on local authorities, which must ensure that they get their specifications and tenders out and that the work is done by the end of the year?

I understand that my Department's urban housing renewal unit has, with the co-operation of the hon. Gentleman's city council, recently approved a scheme for one of the big housing estates in his constituency. The council is confident of being able to spend that money. It just requires proper co-operation and planning between the Department and the council. We are very pleased to help in Hull, and I hope that the hon. Gentleman's constituents are also pleased.

Local Authority Land (Planning Permission)


asked the Secretary of State for the Environment if he will bring forward proposals to limit the power of local authorities to give planning permission over land they own.

In general, the present arrangements for making this type of decision appear to operate satisfactorily, but the Select Committee on the Environment referred to this matter in its recent examination of witnesses and we shall consider the matter again if it makes recommendations on it in its forthcoming report.

I am grateful to my hon. Friend for that reply. However, will he look at the general principle, because there is something seriously wrong? Would he not be concerned, like me, if a local education authority, such as Dorset county council, gave itself permission to sell a piece of land belonging to a school playing field despite the objections of all the other local authorities and eveybody interested in, or adjacent to, the project? That is a matter of concern, and I hope that my hon. Friend will look into it.

My hon. Friend will not expect me to comment on the particular case that he has raised. However, he can rest assured that we are sympathetic to his general point. Local planning authorities are, of course, answerable to their electorates for the way in which they discharge their responsibilities. They do not have complete freedom of action. However, my hon. Friend can rest assured that we shall consider the matter carefully.

African National Congress (Talks)

3.30 pm

(by private notice) asked the Secretary of State for Foreign and Commonwealth Affairs, if he will make a statement on the talks yesterday with the African National Congress.

At Her Majesty's Government's invitation, Mr. Oliver Tambo, acting president of the African National Congress, called on me on 24 June. I expressed grave concern at the continuing violence in South Africa and emphasised that violence could never lead to a solution to South Africa's problems. A suspension of violence on all sides was essential to create a climate for real dialogue and negotiations. I also stressed to Mr. Tambo the British Government's continuing commitment to the early and complete elimination of apartheid. It was a useful and candid exchange of views.

I congratulate the Minister on her courage in changing the Prime Minister's line by meeting Mr. Oliver Tambo. We, and the majority of British people, warmly welcome the Government's recognition, however belated, of the reality that the ANC speaks for the voiceless millions in South Africa.

Does the Minister realise that that historic meeting will be seen as little more than a gesture unless it becomes part of a process of dialogue with real opinion in South Africa —a country described by Mrs. Helen Suzman last night as being like a latin American dictatorship—and part of a process of pressure, through meaningful sanctions, on the economy of South Africa? Even today's edition of the Financial Times says that the policies of the Government in Pretoria have finally made sanctions unavoidable.

Will the Government now take steps to protect Britain's national interest and international responsibilities? At the EEC summit tomorrow, will the Government finally take a lead in abandoning their role as the last supporters of apartheid in the world, and instead put the maximum pressure on South Africa in order to prevent the bloodshed predicted by the Eminent Persons Group? If the Minister needs guidance at this difficult time in her dealings with the ANC, will she look to the bankers and business men, who also met Mr. Tambo yesterday, and will she reject with contempt the isolated, unrepresentative voices from the past which may come from the Benches behind her?

Our meeting yesterday was a further step in our efforts to promote dialogue and a suspension of violence, following the official-level contacts which took place in February, and subsequently. It is generally held that the African National Congress represents a large number of black voices but not exclusively. I shall quote what Mr. Nelson Mandela said to Mrs. Helen Suzman on 5 May:

"All groups across the political spectrum, including Chief Buthelezi's Inkatha, should be involved in negotiations for a new South Africa."
We cannot disagree with that sensible comment.

The hon. Gentleman asked for meaningful action. The European Council meets tomorrow and on Friday. My right hon. Friend the Prime Minister and my right hon. and learned Friend the Foreign and Commonwealth Secretary will have in mind all the possible meaningful action that might need to be taken. We are concerned about British interests—of course we are—but we also want to bring an end to violence and make a real start to dialogue and negotiations. We shall have no hesitation in leading the way, in the most effective way possible, to bring about an end to apartheid.

Does my hon. Friend agree that, while the ANC undoubtedly represents an important section of black African opinion in South Africa, it by no means represents the whole of that opinion, and perhaps not even a majority? Does my hon. Friend appreciate that her meeting with Mr. Tambo could have given the impression to moderate Africans, who are not pro-apartheid but are anti-ANC, that the British Government are coming down firmly in favour of regarding the ANC as the principal negotiating partner with whom Mr. Botha should be doing business? Will she take this opportunity to make it clear that we do not regard the ANC as the principal negotiating partner, but only one of many?

I can reassure my right hon. Friend that the African National Congress is indeed one of many. It is impossible to say exactly whether it represents the majority of black opinion, but as I said a few moments ago, it is clear that ANC leaders believe that other voices should also be heard in a dialogue between all peoples.

I do not think that the meeting that I held yesterday on behalf of Her Majesty's Government will give the wrong impression to other groups because I have always made it clear, as has my right hon. and learned Friend, that the dialogue has to be between all groups. The fact that Mr. Oliver Tambo was in London yesterday was a coincidence, so far as we were concerned, but it was an opportunity to open a dialogue which may be very valuable in bringing an end to violence and in making a start to dialogue and negotiation.

Is the hon. Lady aware that we welcome the meeting and the apparently constructive spirit in which it took place? Is the hon. Lady also willing to meet Dr. Allan Boesak of the United Democratic Front who is coming to, or might even be in, London? When the hon. Lady talks about the suspension of violence, does she realise that most of the violence is by the South African Government, with whom Her Majesty's Government are seeking a dialogue?

Any suggestions that Ministers should meet various people will be considered on their merits, as they occur and according to the situation at the time. Of course we condemn violence, from wherever it comes, because we firmly believe that no resolution of the awful problems in South Africa can be attained by continuing violence, whether it involves bombings in Durban, the awful bombings yesterday on Johannesburg, which we have condemned, or the earlier bombings on 19 May on Lusaka, Harare and Gaborone. They are all to be deplored.

Does my hon. Friend accept that many of my right hon. and hon. Friends believe that she was right to see the ANC, as an important voice to be heard at this time? Will she repudiate totally the comment from the Opposition Front Bench that our party is the last supporter of apartheid? Will she remind the Opposition Front Bench that it was this Government who managed to negotiate a settlement in Zimbabwe? Will she assure us that the Government, with our friends in the Commonwealth, will lead in taking any necessary measures to put all possible pressure on the South African Government to ensure the maintenance of the Commonwealth and the fundamental change needed in South Africa?

I wholeheartedly agree with my right hon. and learned Friend. We shall certainly never be lagging in our condemnation of apartheid. It is true that the settlement at the Lancaster house talks on Zimbabwe, however difficult it was to come by, shows good signs for the long term in bringing about the sort of multiracial society for which so many people in the Conservative party have worked so hard in the past.

Of course we want the Commonwealth to take a lead, and we want to take a lead within the Commonwealth. The most important action is to take effective measures, because to take measures that simply bring greater trouble would do no good, either for the Commonwealth or for this country, and certainly not for the black people of South Africa.

Will the hon. Lady continue to act with the courage that she demonstrated yesterday, and urge the Cabinet to ensure that any possible commission that involves Europe will consider sanctions as well as representations?

Will the hon. Lady deplore the actions of a regime that is obviously so insecure that not only has it cancelled its farcical press conferences but has felt it necessary to do what Mr. Gorbachev did not do — steal the shadow Foreign Secretary's camera?

I was not aware of the last violation of law that the hon. Gentleman mentioned.

Members of the Cabinet and my right hon. Friend the Prime Minister will go with an open mind and considerable information to the European Council, to our colleagues the leaders of the economic Seven and to the Commonwealth review Meeting to discuss in what effective way we can bring about a change of attitude by the South African Government.

Of course we deplore the actions of a regime that institutes a state of emergency with 180-day detentions. We have done that throughout, and we shall continue to do so. Representations are today being made to the South African Government, both in Pretoria and in London, about the state of emergency, the arrests and the detention without trial.

When carrying through Government policy after the interview yesterday, will my hon. Friend try to ensure that the Government do not find themselves isolated either from the Commonwealth or from the EEC in being unwilling to take the lead in positive action to show that we absolutely condemn the racist and repressive measures of the South African Government? We should be in the lead, not following.

I am grateful to my hon. Friend for what he has said. I shall draw his remarks to the attention of my right hon. and learned Friend the Foreign Secretary and of my right hon. Friend the Prime Minister.

Does the hon. Lady appreciate that violence by black South Africans cannot and will not be suspended until Nelson Mandela is released, and that peaceful negotiations cannot and will not begin until that happens?

The hon. Gentleman knows only too well that we have repeatedly called for the unconditional release of Nelson Mandela and other detainees, because we believe that that would release a man who could lead not only moderate opinion but some of those whose actions have become out of hand and who are under the control of no one. We hope that there will be an early unconditional release of Nelson Mandela and others like him.

Should not the Foreign Office be congratulated on the timing of this cautious preliminary contact? Will my hon. Friend remind the House of the number of other European countries that have made similar contacts with the ANC? Is it not especially farcical to compare the position in South Africa with that in Northern Ireland?

My hon. Friend is absolutely right to say that it is wrong to compare the position in South Africa with that in Northern Ireland, where there is a universal franchise. The same position simply does not exist.

Whatever contacts each country of the European Community — or, indeed, the Commonwealth — is seeking, they must be carried out in the manner that is most effective in bringing an end to apartheid.

Is it not a fact that, where there is no democracy and there is brutal and terrible repression of the majority of the people on a racialist basis, the majority are bound at some stage to fight back and to use violence? Is it not also a fact that the real violence, as the hon. Member for Berwick-upon-Tweed (Mr. Beith) said, was the state visit of Mr. Botha here, who was welcomed here not long ago by the Prime Minister against the wishes of the people? The Opposition welcome the discussions that the Minister has had with Mr. Tambo, but it is not sufficient merely to sympathise. We want economic sanctions imposed against South Africa to help the people of that country towards freedom.

I should remind the hon. Gentleman that only yesterday the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) said:

"I am grateful and flattered by the Prime Minister's interest … does she understand that the sanctions that will be most effective are not general economic sanctions but financial sanctions?"—[Official Report, 24 June 1986; Vol. 100, c. 177.]
That is the deputy leader of the Labour party. We understand the frustration of many people in South Africa, both black and white, but violence will not solve the problems of that country. An end to apartheid, however, will do a great deal to bring violence to an end. I remind the hon. Gentleman that dialogue means more than talking when suitable opportunities may occur to someone like Mr. Oliver Tambo; it means talking so as to influence the South African Government.

Will my hon. Friend explain why, if it is wrong to receive the PLO because it refuses to eschew terrorism and violence, it was right to receive the ANC, which openly espouses such action?

Our official-level contacts and my meetings yesterday constitute an attempt which Her Majesty's Government believe should be made to try to bring an end to violence and a start to dialogue. The contacts that have occurred in the past involving the middle east and the links that have been established are to that very same end, which is to bring an end to violence.

In the representations that have been made today by the Government to the South African Government in Pretoria and elsewhere, what reference was made to the 115 key trade union leaders, ranging from shop stewards to general secretaries, who are part of the 3,000 who have been arrested and detained in the past 10 days? Many of these trade union leaders represent workers in the subsidiaries of British firms. What representations were made to secure their release? Or are the profits that come from the £12,000 million investment of British companies in South Africa more important than the rights of workers in that country?

As far as I am aware, the representations are being made at this very moment in London and Pretoria. Representations are being made on behalf of all those who, under the state of emergency, have been arrested and detained, whether they be trade union leaders, church leaders, innocent churchgoers or anyone else.

Will my hon. Friend accept that she failed totally to answer the question of my hon. Friend the Member for Chichester (Mr. Nelson)? Do we now take it that the British Government will treat with terrorists?

As my hon. Friends have often said, we seek to promote dialogue to achieve negotiation. A man who certainly impressed yesterday with his total dislike of violence may indeed be able to help in that process towards dialogue and an end to violence. I have to say to my hon. Friend that I spent over half the time yesterday talking about the negative effects of violence and seeking not just to persuade but also to impress upon Mr. Tambo exactly how this, as well as any other violence, was exacerbating the situation. I believe that it was right to do so on behalf of Her Majesty's Government. We are in no way treating with terrorists. We are trying to solve a problem which the House believes has continued for far too long, and not trying to exacerbate it.

Opposition Day

17Th Allotted Day

Unemployed People (Mortgage Interest)

3.50 pm

I beg to move, That this House condemns the Government's proposal to halve mortgage interest cover for the unemployed and others for the first six months of supplementary benefit, which will sharply increase mortgage arrears leading to evictions and undermine home ownership by discouraging building societies from lending to low earners; and calls on the Government to withdraw this proposal in the interests of a policy for the family which guarantees security of tenure of the family home.

Recently, the Prime Minister trumpeted, again, her belief in a policy for the family. It is difficult to think of any policy more damaging to the family than that which threatens it with the loss of its home, yet that is exactly the effect of the Government's intention to halve mortgage interest payments for the unemployed for the first six months of supplementary benefit. It will sentence thousands to rising mortgage arrears and evictions as a penalty for being unemployed.

Instead of concentrating help on those in greatest need, as the Government claim is the object of their social security policies, the measure will concentrate maximum harm precisely at the point when people need help most— when people, through no fault of their own, lose their job. Contrary to everything that the Government claim they stand for, it will undermine home ownership by discouraging building societies from lending to those on lower incomes, and it will be the final nail in the coffin that ditches thousands who exercise their right to buy.

The Government seek to justify all that on two grounds. First, they say that the cost of mortgage interest payments to supplementary benefit claimants has risen rapidly to too high a level. That is due partly to the spread of home ownership which the Government have encouraged and is partly due to higher house prices, for which claimants can hardly be held responsible.

The truth is that more is being spent because there are more claimants, especially more unemployed claimants, and their needs are greater because house prices have risen much faster than inflation. That is not a reason for denying people such help.

The Government's second pretext for the measure is that the help given is so generous that people are better off out of work. That result is arrived at, I submit, by the use of figures so studiously contrived that the Government are implicitly admitting the implausibility of their case.

The Government, according to their note supplied to the Social Security Advisory Committee, took the example of a £16,000 mortgage, which they say is the average mortgage for a two-child family, and related it to a family on low earnings—£80 to £120 a week. Virtually nobody on earnings as low as that would have a mortgage of £16,000. It is only that thoroughly implausible combination which yields the conclusion which the Government are so determined to fabricate—that a man buying a house is better off out of work than in work. It is clear, to anyone who thinks about it for more than a moment, that the Government's figures and their conclusion are completely unreal.

Even if the work incentive argument had some force for unemployed claimants, it would be wholly irrelevant in almost half the cases. That is because a large number of owner-occupiers on supplementary benefit are not unemployed — they are pensioners or lone parents. In 1982, only 60 per cent. of owner occupiers claiming supplementary benefit were available for work. For the other 40 per cent., the discouragement to work argument, which is so precious to the Prime Minister, is irrelevant. I am well aware, of course, that the Government have tried to meet that objection by exempting pensioners from their proposals. But what about single parents and sick and disabled people? Are they to be sacrificed in the interests of the Prime Minister's obsession with the "why work" syndrome?

I put it to the House that the Government's case does not stand up to examination. The central principle called in aid by the Prime Minister in defence of this proposal in her letter to my right hon. Friend the Leader of the Opposition — it is repeated in the Government's amendment to our motion — points in precisely the opposite direction. In her letter, the right hon. Lady said:
"The aim of the main proposal … is to strike a fair and reasonable balance between the borrower, the lender and the taxpayer."
Is it striking a fair balance for the Government to save £30 million by cutting mortgage interest payments to the poorest people on supplementary benefit, while at the same time paying out £370 million in mortgage tax relief to the top earners on more than £30,000 a year? Is it striking a fair balance to select for cuts in mortgage interest payments the 90,000 households — the Government's figure—in poverty who are struggling to buy a house while, at the same time, those households getting mortgage interest tax relief at the top rate of 60 per cent., who also happen to number 90,000 households, are left to enjoy their privileges untouched? Far from striking a fair balance, I submit that these proposals will produce grotesque unfairness between those in desperate need facing eviction and those on the highest incomes who cream off ever bigger tax perks every year.

Like several other measures in the Social Security Bill, this proposal is almost universally condemned. A Child Poverty Action Group survey of the responses of 60 key organisations to the Green Paper found no support for the proposal, even from the Institute of Directors, which is well known for its support for the Government on almost everything else. The National Consumer Council in its booklet entitled "Behind with the Mortgage", which was published last year, states:
"The safety net provided by mortgage interest payments to those owners faced with unemployment or relationship breakdown is crucial in avoiding repossession and homelessness during the early stages of default when financial problems may escalate to such a level that it becomes impossible to recover from them."
The Building Societies Association, which is the body most concerned about this —it is very concerned—declared in last year's report entitled "Mortgage Repayment Difficulties" that cuts in supplementary benefit would lead
"to a much greater increase in arrears and repossessions."
The Institute of Housing, in its response to the Green Paper, asks that
"assistance with interest payments be continued at the same level for the meantime."
Referring to one of the other points which Ministers have used to mitigate the damage done by the proposal, the institute went on to say that it:
"considers it unlikely that mortgage insurance arrangements, in their present form and premium level, could fill the gap provided by supplementary benefit for either the long-term unemployed or low-income owner-occupiers."
The matter has been referred to the Social Security Advisory Committee, the Government's advisory body, but I think that we already well know its views. It stated:
"We do not think a scheme of this kind could be justified at all, unless the building societies and other mortgage lending bodies were prepared to give comprehensive assurances about the availability of rescheduling."
Of course, no such assurances have been given, and it is unlikely that they will be.

By far the most telling of all, in my view, is the report of the Department's own policy inspectorate which does not support the Government's case. Out of a sample of 330 claimants it shows that the average mortgage payment was £72 a month and supplementary benefit cover will now be withdrawn for nearly half that sum. The report is in the Library and many hon. Members may have seen it. However, one in four are paying between £100 and £250 a month. For them, with an average mortgage of about £15,000—if anything, that is a conservative figure—the interest payment is about £34 a week. Therefore, the Government are proposing to cut their weekly income by no less than £17. In the year-long bitter miners' strike the Government docked £17 a week off the miners. The Government are now transferring their vindictiveness to home owners and kicking the most vulnerable of them when they are down.

Further, there is no doubt that this measure will cause intense hardship. Already the trend for repossession is rising sharply, even before the measure is introduced. In 1979, building societies repossessed 2,500 homes and by last year, the number was seven times that at 16,500. Since, the Government's own admission—

Is my hon. Friend aware — I hope that he will go to Liverpool to see — that there are streets upon streets of houses in Liverpool where two or three years ago there were no "For sale" signs. Increasingly, people are now being faced with having to sell and if they cannot sell they are being faced with eviction. That is a growing trend, especially in an area such as Liverpool with its terribly high level of unemployment. This measure will increase that trend and make it absolutely appalling for the people in those areas.

My hon. Friend is correct. It is undoubtedly inner-city areas—Liverpool is as hard hit as any—that will bear the brunt of this measure if the Government are unwise and callous enough to put it through.

By the Government's own admision, 90,000 households will be affected by the latest proposal. Therefore, it must be certain that the rate of repossession and eviction— this is the point of my hon. Friend the Member for Liverpool, Walton (Mr. Heffer)—will double or perhaps increase by even more, to at least 30,000 to 50,000 a year. It is easy in the House to give simple figures of that kind, but those figures conceal an enormous amount of personal misery. I hope that all hon. Members will agree that there is little worse in human experience than being driven from one's own home.

The fact that that will undoubtedly happen is revealed by the DHSS policy inspectorate's own report. It found that more than a quarter of the claimants in the sample had already been forced to approach the lender for a reduction in their mortgage payments. However, only two thirds had been able to negotiate a reduction, usually for only three months at a time. All those people were asking was to be allowed to pay the whole of their mortgage interest. Imagine what would have happened if they had approached the lenders and said that they wanted to pay only half the interest. Even under the present rules one claimant had been forced to put his home up for sale, and two others were under pressure to do so. Surely, under these proposals, that number is bound to rise dramatically.

There are other less obvious but no less damaging consequences. If mortgage interest is not met in full for the first six months on benefit but instead the loan is rescheduled at a higher amount once the six months is over, which is what the Government are proposing and hoping, a claimant could well have less incentive to return to work. The rescheduled payment could have risen to a level difficult to manage on low wages, and I believe that there would then be a strong temptation to remain on supplementary benefit until a better paid job came along. I put that to the Government because it is very important to their case.

There is another irony in the Government's proposal, the whole aim of which is to save £30 million. It may turn out, even in financial terms, to be counter-productive. Mortgage arrears are increasingly a significant cause of homelessness. In 1985, one in every 10 families was homeless owing to mortgage arrears. That is double the figure of four years ago. Since many of those made homeless as a result of mortgage arrears end up in bed and breakfast accommodation—I submit that many of them will— the financial cost to the DHSS could easily turn out to be greater than the £30 million which it is hoped to save.

From that standpoint, the proposal to restrict mortgage interest payments through supplementary benefit presents a totally false economy, quite apart from the morality of it. I am simply talking here about the financial aspect. If the Government are determined to make savings in this area, a much fairer and more rewarding route would be to restrict mortgage interest tax relief to the standard rate. That would save £250 million, eight times as much as this proposal, without any of its immensely damaging side effects.

By contrast, this proposal will indirectly press building societies into restricting their lending to those in secure employment. It will discourage lending down market in all cases that are marginal or where people are at risk of unemployment. By the same token, it will also probably threaten the Government's inner-city initiative because building societies will be unwilling to invest in low-cost properties mortgaged with those risks. Furthermore, this proposal will ensure that home owners are treated significantly less generously in future than tenants. It is remarkable that we should have such a proposal from the Government and it is a discrimination which sits extremely oddly with the Government's constantly expressed policy of encouraging owner occupation as the preferred form of tenure.

If the Government genuinely believe that there is a problem of escalating benefit expenditure on mortgage interest, they should tackle its causes, which are high unemployment and high interest rates, rather than its symptoms. What is not acceptable, especially from a Government who like to talk of concentrating help on those in need and from a Prime Minister who likes to talk about a policy for the family, is a proposal which deliberately hits families precisely when they are most vulnerable. That is why we now unreservedly call on the Government to withdraw this proposal in the interests of a genuine policy for the family which guarantees that most priceless asset for all families, security of tenure in the family home.

4.7 pm

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

'congratulates the Government on the success of its policies to encourage home ownership; recognises the need to achieve a proper balance between the responsibilities of the borrower, the lender and the tax payer, and greater fairness as between those on Supplementary Benefit for short periods and those in low paid employment; and notes the proposals to this end that the Government has put forward for consultation to the Social Security Advisory Committee.'.
I feel bound to comment at the outset that there is something faintly ironic in the sight and sound of the hon. Member for Oldham, West, (Mr. Meacher) appearing today as the homeowners' friend. It is barely a year, if that, since the newspapers were full of stories, to the horror of his right hon. and hone Friends, of his desire completely to abolish mortgage interest tax relief. His dedication to that cause is a byword throughout the country.

I do not want to intervene but I must if the Minister is going to start his remarks with a deliberate fabrication of that kind. I ask him to withdraw. I never made any such allegation, I do not believe it, and I never said it. I remind him that we are not talking today about whether people are wealthy enough to receive tax relief at a certain level, but about people in desperate poverty and whether aid should be taken away from them, leading to eviction.

All I can say is that the hon. Gentleman succeeded in misleading a large part of the British press and most of his colleagues on his Front Bench by the proposals that he put forward a year or so ago. What is more, it is a matter of clear public knowledge that throughout the past six years the Labour party at national and, more important in this context, local level, has dragged its feet on the sale of council houses and on the increased right to buy that the present Government have ensured. Whatever else may be said about today's debate, the spectacle of the Labour Front Bench seeking to parade as the party of home ownership lacks a good deal of credibility.

My hon. Friend does not need to go as far back as the speech made by the hon. Member for Oldham, West (Mr. Meacher). Had he been present in yesterday's debate, he would have heard the hon. Member for Bootle (Mr. Roberts), speaking from the Opposition Front Bench, say that tax relief on mortgages of £12,000 or so was acceptable, but tax relief on mortgages verging on £30,000 was unacceptable, implying what the Labour party would do.

I did not have the privilege of hearing the hon. Member for Bootle (Mr. Roberts), but that would fit with the position that the Labour party adopted at the general election, which was one of hostility to the modest increase that the Conservative Government had made in the size of mortgages that could rank for tax relief. The fact is that the Labour party has consistently opposed almost every practical step that has been taken to encourage home ownership.

The truth is that we are having this debate today only because the hon. Member for Oldham, West has been frustrated in some of his ambitions in the past. If he had had his way, the people for whom he now claims to speak would not be receiving supplementary benefit for mortgage interest because he would have seen to it that they would never have become home owners in the first place. That is the reality of the position that the hon. Gentleman has sought to create. His appearance today is about as credible as Dracula turning up as a blood donor.

As I said when we previously debated this proposal, there has been no mystery about the Government's view that this area of the benefits system needed consideration and review, or, indeed, about the Government's thinking on what the conclusion might be. As I reminded the House on the previous occasion when we debated the issue briefly during the passage of the Social Security Bill, the Green Paper published almost exactly a year ago specifically said:
"The Government intend to discuss with building societies and other interested bodies arrangements whereby less of the burden—particularly for people on benefit for a short time — falls immediately and directly on the social security system."
That proposition was echoed in the White Paper at the end of last year, in which we said:
"The Government will continue to discuss with building societies and other major lenders what changes might be appropriate, including the possibility of a limit on the proportion of mortgage interest which would be met during an initial period in receipt of benefit."
My right hon. Friend the Secretary of State referred to the same matter when he gave evidence to the Select Committee on Social Services in January. It was raised in Committee on the Social Security Bill, a fact that the hon. Member for Oldham, West appeared to have forgotten on the last occasion when he spoke about the matter. The hon. Member for Derby, South (Mrs. Beckett) asked me about it, and again I specifically set out the nature and direction of our thinking.

What is more, far from seeking to disguise the fact that we felt that that area needed examination and what sort of examination we were undertaking, we took specific steps to amend the leaflets which, under the right-to-buy legislation, go to those inquiring about their right to buy. We amended the leaflet to draw specific attention to the fact that the Government had made the proposal. It was amended last year, to draw attention to what had been in the Green Paper. Indeed, an addendum note was added to it after the White Paper, to make it absolutely clear what the Government's thinking was.

Therefore, I refute any suggestion of the sort that has been made, to the effect that the Government have proceeded in a stealthy or underhand way. We have made our intentions clear to the House. We have made our intentions clear to those considering buying their property under the right-to-buy legislation. We are now proceeding in an absolutely normal, above board and straightforward way to put forward proposals for public consultation to the Social Security Advisory Committee. Of course, we shall consider its view.

My view on this potential Bill is well known—I think that it is somewhat less than satisfactory. As I understood it, many of us complained at the time that the social security payments going to people were not being used for the purposes for which the money was being given. They were being used for something else. If the money goes directly to a building society or the person who holds the mortgage, that is common sense because it stops people being dispossessed of their homes. Will my hon. Friend explain to some of us who are somewhat unhappy how he thinks it helps to add to people's worries at their most vulnerable time—their first six months of unemployment, which must be appalling? How can one explain to them that there is not a lack of generosity of spirit in the proposal, which is not what I would call good Conservatism?

I shall come directly to my hon. Friend's point, which is about the fairness of the system, and the balance between the claims of different claimants in the system — in this case, according to the time that they have been on benefit. However, I should like to make it clear that that issue is separate from that of whether this or any other part of the benefit system is abused. Abuse might occur within the present or future rules. That might happen because it is just as possible that half the interest will not get passed on as that the whole of the interest was not passed on. That problem needs to be addressed. However, that is separate from the broader issues that my hon. Friend has raised, to which I shall come in a moment.

My hon. Friend referred to the amended leaflet. Is it or is it not the Government's intention to renege on the undertaking given in the unamended leaflet to people who bought their homes, that if they received unemployment or supplementary benefit, the interest would be paid? Is it or is it not the Government's intention to renege on that undertaking, given in writing in the leaflet, on the basis of which people entered into commitments which otherwise they might not have entered into?

I appreciate the implication of my hon. Friend's question, but it seems to me that, as with any leaflet describing the benefits system, such a leaflet can be taken only as a description of the position at the time when it is published. I think that that is commonly understood.

I note my hon. Friend's point, and I was aware of his concern. I ask him to consider that the implication of his question, if carried to its logical conclusion, would go far wider than the specific issue of whether this part of the benfit system should be changed. In the situation that my hon. Friend adumbrated, a person's entitlement to supplementary benefit could be affected by a variety of changes. For example, the substantial increase in invalidity benefit that the Government made at the social security uprating before last, in November 1984, took many long-term sick and disabled people out of supplementary benefit because it increased their invalidity benefit. On the logic that my hon. Friend has been putting forward, that, too, could be construed as a change affecting their entitlement to the full payment of mortgage interest.

No one would claim to have been misled if a change is made from which he gains.

The basic fact is that, to be entitled to benefit for mortgage interest, one has to be on supplementary benefit. Therefore, the logic of my hon. Friend's implied position is that anything that changes the potential entitlement to supplementary benefit of someone buying his own house is to be treated in the way he has suggested. At the very least, I ask my hon. Friend to take account of that position, but above all I ask him to take account of the fact that leaflets, whether about the right to buy or describing the social security benefits system, can be taken only as a description of the position at the time when they are published.

Let me now refer to the proposals. I should like to clear one thing out of the way before I come to the proposal that is the main focus of the debate. I should make it clear that there are several other proposals in the draft regulations that have been put to the Social Security Advisory Committee, of which the House should be reminded. Two of these proposals are designed to be beneficial to claimants and I hope that they will be welcomed by the House in that respect.

The first is designed to ensure that a loan taken out to repay an earlier advance used to acquire an interest in a home or to carry out essential repairs or improvements to it will be eligible for benefit on the same basis as an original loan. That is entirely beneficial and I assume that Opposition Members and others will welcome that.

The second proposal is for a special disregard of income from mortgage protection policies to meet the balance of mortgage payments. That is a sensible and beneficial provision which must be considered in the context of the main proposal and which I am sure that the House will welcome.

There are also two other smaller proposals designed to allow greater scope to tighten up on the extent to which the benefits system helps to meet payments on loans taken out for business purposes or payments on very expensive or large homes with a high mortgage. It was implicit in the remarks made by the hon. Member for Oldham, West that it is reasonable—whatever else we may disagree about—to impose limits on a system which is primarily intended to help protect an individual's interest in the home in which he or she lives.

The Minister has referred to the Social Security Bill and the Government's thinking on certain aspects of the Bill. Bearing in mind the defeat that the Government suffered on the Bill in another place, and accepting the great anxiety of many people who would be adversely affected by the Bill if it is enacted, will the Minister take this opportunity to explain the Government's intentions about the proposals?

I am glad to see that you are smiling, Mr. Deputy Speaker. You will no doubt respond generously to my immediate evasion of the hon. Gentleman's request as that would take us well beyond the rules of order in the context of this debate.

I am happy to tell the House that the Government were not defeated in another place on the proposal that we are discussing today. This proposal was brought in in another place by a side wind. The proposal was not contained in the Social Security Bill as originaly drafted. It was introduced by a side wind.

That is an amendment that dragged the proposal into the context of discussion on the Bill. Their Lordships kindly did not press the matter to a vote and we were not defeated on the issue. I will not comment further on the other points raised by the hon. Member for Bradford, West (Mr. Madden).

I will not comment on them because to do so would be out of order.

I would now like to consider the principal proposal and the points of concern expressed by Opposition Members and by one or two of my hon. Friends. The main proposal, as the House is aware, is to limit the amount of supplementary benefit payable for mortgage interest to 50 per cent. of the total for the first six months on benefit for everyone under 60 years of age. The hon. Member for Oldham, West rightly acknowledged that that does not apply to people over pensionable age or to those slightly under pensionable age in respect of men.

Some people might have been led to believe, by the controversy that attended the matter when the proposal was announced, that we proposed to abolish supplementary payments for mortgage interest. Quite apart from the issue affecting those aged over 60, it is important to understand the limited nature of the proposals. They fully protect those whose claims continue beyond six months and they do not affect those over 60. Our estimate, as the hon. Member for Oldham, West has acknowledged, is that the proposals affect about one fifth of the expenditure in that area — £30 million out of a total of £150 million. They will affect some 90,000 claimants at any one time. The figure of £30 million compares with £9,000 million which is paid to building societies in mortgage interest. The 90,000 figure must be considered against the 6 million borrowers.

We have made it clear that when a claim lasts more than six months, mortgage interest would be met in full. Moreover, where the limitation has caused arrears and these are capitalised into a higher outstanding loan, the extra interest on the higher loan would also be met. That is specifically designed to protect the position of those whose claim does not turn out to be short term.

I must stress to my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) that, despite the numbers of people who, unhappily, are unemployed for longer periods, most spells of unemployment, even now, are relatively short. Approximately one quarter of the people who become unemployed leave the register within four weeks. Half leave it within three months and two thirds within six months.

My hon. Friend continues to raise more worries as to why the hell we are messing with this matter. If, on my hon. Friend's figures, most people are unemployed for only a short time, two thirds for this much time and one third for that much time, we seem to be causing a lot of misery, woe and concern for peanuts. Why are we doing that? I suggest that my hon. Friend should say little and try to get the proposals through.

I hope that my hon. Friend will not dismiss the point that I was trying to make, especially as the hon. Member for Oldham, West specifically said that in some cases these payments can amount to significant sums of money and run into hundreds of pounds a month. In fact, people would probably lose tax relief as a result of the hon. Gentleman's proposal. It is legitimate to ask whether mortgage payments for people with large mortgages and in normally well-paid jobs, who may simply be between jobs or unemployed for a short period, should be completely picked up on supplementary benefit from day one—

and paid for through the tax system by many people whose income over the year will be significantly less than those to whom the supplementary benefit payments are being made. An issue of equity is involved, especially when we consider people with large mortgages who are out of work for short periods. I hope that my hon. Friend the Member for Selly Oak will not dismiss that point.

I am grateful to the Minister for giving way after he has drawn our attention to the reasons why the House should not support those people who are unemployed and who probably vote Tory rather than for any other party. Is not the Minister misleading the House when he suggests that these unemployed people immediately become eligible for supplementary benefit? Many people do not become eligible for supplementary benefit for a long time. It is not a case of people with large mortgage payments opting out of jobs and opting on to benefit. These people will have suffered a considerable drop of income over a long period of time before they receive benefit.

That may be true in some cases but not in as many as I suspect the hon. Gentleman may think. It will, of course, depend on the amount of capital the person possesses and that may rule him out of supplementary benefit.

I am sure that the hon. Member for Birkenhead (Mr. Field), with his expertise, would agree that if someone—albeit with a large income but who may conceivably have mortgaged himself to a high level and does not have much capital—unhappily falls into this position, the existence of the large mortgage is likely to bring him immediately on to supplementary benefit. If he has a mortgage payment of £200 or £250 a month, his supplementary benefit entitlement would be some £250 and £300 a month or possibly more if he has two or three children. In those circumstances it is unlikely that any other entitlement to income would rule him out of supplementary benefit. He may well get immediate payment of supplementary benefit for mortgage interest from the outset because of the sheer size of the mortgage.

What the Minister says is true, but he still needs to explain to the House why the Government are bringing in a measure that will hit their supporters more than any others.

The Government have made it clear that one of their concerns is to ensure fairness between groups within the benefits system and especially for those who are in low-paid employment, but not in the benefits system. In addition, we are anxious to focus the available resources as effectively as possible on those who most clearly need help. That is the context in which our proposal is put forward.

My hon. Friend must accept that the Government's proposal will increase anxiety among the unemployed. It must do so. Even if, as my hon. Friend rightly said, most people are unemployed for a relatively short period, they do not know that they will be unemployed for only a short time. In two towns in my constituency where 41 per cent. of the men are unemployed, the Government's proposal is increasing anxiety enormously. Even if people want to sell their homes, they cannot do so because there is no market for them. There are at least half a dozen families in my constituency where the fathers commute 300 or 400 miles during the week to get jobs, while supporting their homes in my constituency. There is no way that my hon. Friend can get away from the fact that the Government's proposal will increase anxiety.

I recognise the force with which my hon. Friend speaks and we shall take account of his anxieties alongside the considerations that I am putting forward. I must ask him to bear in mind that mortgage payments can also be a source of anxiety to those in relatively low-paid employment, who will often be paying the taxes to meet the needs on which my hon. Friend focused.

It is right for the Government to consider the balance between the various considerations, and that is precisely what we are seeking to do. We think that it is appropriate to strike a balance—

Yes, but I had better not give way too often, because I am sure that a number of hon. Friends wish to take part in this debate.

I am grateful to the hon. Gentleman. He must know that low-paid workers are most vulnerable to unemployment and intermittent spells of unemployment. The Government's proposal will hit those people. Will the Minister please not talk about people with massive mortgages? Such people are usually wealthy and will often have savings. They will not be hit. The low-paid struggling to keep out of unemployment — possibly going in and out of unemployment—will be worried, frightened and hurt by the Government's proposal.

That group can find that they are worse off being in low-paid employment than being on benefit. The linking rule proposals accept that there is a problem about people who are in work for short periods. We have sought to ensure in the draft regulations that they will not be disadvantaged.

We are seeking to strike a balance between a variety of considerations, including the amount of help that borrowers can legitimately expect to receive from the benefits system in securing a capital asset that will normally grow in value, the guarantee that a lender should expect from the benefits system in protecting the loan that he advances and what it is reasonable to expect the taxpayer to bear.

We have sought a balance that takes account of what is reasonable and sustainable for the borrower. The latest estimate of the average payment of supplementary benefit for the first six months on benefit is £16 per week. On that basis, the average amount to be paid on an outstanding mortgage if a claim lasted for the full six months—as I said, many will not — would be about £200, which hardly merits the sort of language used by the hon. Member for Oldham, West.

I am sorry that my hon. Friend the Member for Selly Oak has temporarily left his place, because I wanted to tell him that another consideration is equity between home owners who are out of work and can receive full payment of mortgage interest from the first day on benefit and home owners in work, but on low incomes that may not be much above the benefits that they would receive if they were out of work.

The hon. Member for Oldham, West raised a number of issues in connection with the figures that we put to the Social Security Advisory Committee. I do not think that the hon. Gentleman questioned the validity of the figures, which clearly show that working families with a £16,000 mortgage, which is the average loan outstanding for such families, have an income while out of work that is appreciably higher than their income while in work if they are in the earnings range of £80 to £120 a week. As to whether those families are representative—a point raised by the hon. Member for Oldham, West—the available data show that there were 130,000 working families — with children—who have mortgages of over £10,000 and earnings below £150 a week. Of those families, 30,000 had mortgages of over £20,000. The problem of equity cannot be dismissed as a trivial one.

We also provided data for families with a £10,000 mortgage and they showed that for the earnings range £80 to £120 a week, income from supplementary benefit was very close to income from work. Whatever else Opposition Members say, I hope that they will recognise that a problem exists.

Alongside our proposals and some of the considerations that led the Government to put those proposals before the SSAC, I have tried to put to the House the view that anyone concerned with the equity of the benefits system and the balance of demands made on the taxpayer and on those receiving benefits must address a range of questions.

There are questions to be asked about whether it is reasonable that the taxpayer should pick up the whole of the bill for purchasing an appreciating capital asset from the first day on benefit, even for what may be very short periods and when many of those paying the bills may be little or no better off than those whose bills are being paid.

No. I have given way enough.

There are questions about whether it is right that lenders should expect or be given the guarantee that this part of the benefits system implies and about whether we should maintain a system that can undoubtedly contribute significantly to the unemployment trap, which all of us agree should be tackled. We must also ask how far such expenditure can be seen as a proper priority at a time when there are so many other pressing demands.

I say no more to the House than that those are problems which can and should be addressed within our overall plans for social security, which seek to make the system fairer between those who are in work and those who are out of work, to tackle the unemployment trap and, above all, to ensure that the huge resources devoted to social security are channelled as effectively as possible to those who most clearly need the help that the taxpayer can and should provide.

Our proposals seek to address those problems. They have been put forward for consultation in the normal way and we shall, of course, consider the outcome of that consultation carefully and fully before coming to any final conclusions. We shall also consider what is said in the debate. In that spirit, I invite the House to reject the motion and endorse the Government's amendment.

4.38 pm

I am one of the two Opposition Members who are vice-presidents of the Building Societies Association. It is not a financial interest, but merely an honorary job, and I would have mentioned it only in passing if the Minister had not tried to cover up one of the weakest cases that I have ever heard presented to the House by making an aggressive attack on my hon. Friend the Member for Oldham, West (Mr. Meacher) and the Labour party.

The building societies movement, started largely in the north of England, came from the pennies of the poor. It was a working-class movement of people who tried to buy their own houses to save themselves from being ground down by landlords. The Tory party tried to hijack the owner-occupier from the building societies. The Government's proposals show the House, the owner-occupier and the public just how thin is their real love of the owner-occupier.

This takes me back to my childhood. My father bought his house, but my father-in-law, who worked in the same factory, steadfastly refused to buy his house. He could have afforded it, because he had more money than my father. He was a plumber, whereas my father was a labourer and a chargehand. My father-in-law would not buy his house because of the fear that if he lost his job he would be unable to keep up the mortgage repayments. Because of his fear, he lived instead in a council house. The Government are bringing back that fear.

I am appalled by how little the Minister understands the psychology of somebody who suddenly finds that he is out of work. These proposals will attack, not the long-term unemployed, but those who are out of work for the first six months. The hon. Member for Delyn (Mr. Raffan) clearly understands this point. He told his right hon. Friend the Secretary of State for Social Services that when a man becomes unemployed he does not know whether he will ever find work again. If he is lucky, he will be in work again within three or six months. However, he does not know that. He may be out of work for ever. In a constituency such as mine, or the consituency of my hon. Friend the Member for Liverpool, Walton (Mr. Heffer), the likelihood is that if a person loses his job he will be out of work for ever.

Does the right hon. Gentleman agree that this measure discriminates most against those parts of the country that are hardest hit by unemployment? In my constituency a quarter of the labour force have lost their jobs in the last 15 years. These are the people who will be hit the hardest. They know that they will be out of work for at least six months. This measure will break their backs. They are desperately looking for jobs, but there are no jobs for them.

I am grateful to the hon. Gentleman for what he has said. He is another Member with sense on that side of the House. I hope that he and the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) will prevail upon the Government to drop these stupid proposals.

The reasons for the proposals have varied. The Green Paper "Reform of Social Security", volume 2, Cmnd. 9518, argued in paragraph 2.92:
"The government wish to introduce changes in the system to reduce the discouragement for owner-occupiers to return to work that can apply under the present interest payment commitment."
The Minister did not say that today. The spokesman for the Department of Health and Social Security did not say that either. The reasons that the Department gave were to
"reduce the inequity in treatment between home owners on benefit and those in work: share responsibility for helping those on benefit with mortgage liabilities between the state and the borrowers, and lending organisations; reduce the burden on the taxpayer; not affect long-term pensioners".
The Minister does not dare to say that the proposals will discourage owner-occupiers from returning to work, but that is precisely what they will do. If a home owner becomes unemployed because of the Government's policies, after six months the Government's darling is no longer loved. The home owner becomes a feckless individual who will not go back to work because he wants the state to pay his mortgage. That is precisely what the Government are saying in these proposals.

The Minister referred to the inequity between a person in work who is paying a mortgage and a person who, through no fault of his own, loses his job and is on the dole. I repeat that the most vulnerable time when he is on the dole is the first few weeks. His whole world collapses and he finds that he may also lose his home. The Building Societies Association and individual building societies say —the hon. Member for Delyn will appreciate this point — that when people become unemployed the vast majority of them will starve rather than reduce their mortgage commitments. They pay their mortgages up to the hilt and hope that their building societies never find out that they have lost their jobs. They are ashamed to be out of work. Above all else, they will try to keep a roof over their heads. The same is true of council tenants. Above all other expenses, they will pay their rent. That is an ordinary, working-class concept which the Minister probably does not appreciate.

I have already mentioned that the Minister referred to inequity. Let me therefore consider two semi-detached houses on a council estate. In one of the semi-detached houses there is an owner-occupier. He has been led—or misled—by the Government into buying his house. Next door, there is a local authority tenant. If the Minister is looking for inequity, he can find it there. The owner-occupier finds that, for the first six months, half his mortgage interest cover disappears at a stroke. However, the council house tenant next door does not find that half of the rent is taken away from his supplementary benefit.

I hesitate to push the anomaly too far. Knowing this Government, their next step will be to cut by half their payment of rent to council tenants who are on supplementary benefit. That is a glaring inequity. The owner-occupier will say to the Government — a Government who are proud of the fact that they introduced the right of ownership — "The chap next door was right. He is better off than I am. I was a fool to buy this house and to listen to you. Where do I stand now?"

The inequity goes much further than the full payment of rent. I understand that the amount that the DHSS allows a person who is on supplementary benefit for the maintenance of the insurance premiums on his home is £1·85 a week. The average cost, taking into account both maintenance and insurance, is at least £6 a week. Therefore, he is worse off even without this measure, which will reduce the amount of money that he receives.

I speak, not on the behalf of the association, but as a vice-president of the Building Societies Association. I deplore the cynical way in which the Government intend to halve mortgage interest cover for the first six months. They know perfectly well that building societies are mutual institutions and that they are also caring institutions, They care about their borrowers. If payments are missed for a few months because somebody is ill or out of work, all he needs to do is to tell his building society, and in 99 per cent. of cases the building society will look after him and say that it is a temporary lapse.

If the borrowers cannot meet their interest payments during the first six months, the Government hope that the building societies will carry them. They hope that the building societies will pick up the tab for the Department of Health and Social Security. I think that the building societies will do just that. However, it is both unjust and inequitable. It is inequitable because building societies are not companies. They are mutual institutions. Having picked up the tab, the building societies will pass it on to other borrowers and to investors. However, it gets the DHSS off the hook.

I thought that the Minister was going to say that people should insure against redundancy. I am glad that he did not do so. It is possible to insure against redundancy, but the problem is that those who insure against redundancy feel almost certain that they will never become redundant. The vast majority of borrowers do not take out that kind of cover. If a section of the community were to insure against redundancy, and they were almost certain to benefit from it, the premiums would be impossibly high and the ordinary borrower would be unable to afford to take out insurance against redundancy.

Is the right hon. Gentleman aware that at least one of the policies of that kind that I have seen offers insurance against redundancy for up for two years? It costs only £39, irrespective of the size of the mortgage, and covers the whole of that two-year period.

As the hon. Lady says, that is for a two-year period. A person who is taking on a mortgage and who takes out insurance usually takes out health and redundancy insurance. The insurance companies encourage people to take out health insurance as well. The hon. Lady said it costs £39 for two-year cover, but the vast majority of people do not take out such insurance and are unlikely to do it unless they feel that they are likely to become victims of unemployment.

The country at large believes that the Government have introduced this measure largely out of spite because of the way in which building societies behaved during the miners' strike. Miners are good customers of building societies. They are respected by the societies, and when the building societies knew that the miners were in a temporary difficulty they looked after them during the difficult period of the strike. I think that because of that the societies incurred the wrath of the Government. Many miners are owner-occupiers, especially in the north of England.

If the Government really believe that their darling owner-occupiers on whom they have prided themselves in the past are the feckless people that this measure suggests, and that they will not work because the Government are paying their mortgages, a simple remedy is available — treat mortgage interest payments for a person on supplementary benefit in the same way as rent payments are treated. That means direct payment of the interest to the building society by the agreement of the borrower and his building society.

I almost sought to intervene a moment ago, but restrained myself. The right hon. Gentleman missed the point in what he said about the expectations of the building societies in relation to those on benefits. Large numbers of people who may have similar difficulties with their mortgages may not be on supplementary benefit, and the building societies and mutual associations will readily and rightly help such people for the sort of time that we are talking about.

The right hon. Gentleman went further and praised the building societies for the help that they gave to the miners who were on strike for a long time. Is he saying that it is right for the building societies to be expected to assist people on strike, thereby depriving themselves of income, but entirely wrong to expect them to adopt a similar approach to those who are in difficulty for any other reason?

The Minister has misunderstood what I said, perhaps maliciously. Building societies are mutual institutions that are owned by their members, and the borrower is just as much a member as the investor. A different relationship exists between a building society borrower and any other sort of debtor. That is because he joined the building society when he became a borrower and is a member of that society.

If the Minister thinks that people who are unemployed are feckless and likely not to return to work, he could introduce a system of direct payment of interest to building societies in the same way as there is direct payment of rent to local authorities. Many building society borrowers would welcome that. They worry about their mortgages being paid and would voluntarily enter into such an agreement with the DHSS. Many of my constituents ask me whether they should write to the DHSS office about the direct payment of rent. They want to do that so that they can be sure that they will not fall into temptation and get into difficulties with their rent.

This is a miserable measure, which attacks people when they are most vulnerable. The Government hope that because they are caring associations the building societies will carry the cost. I hope that the Minister will not go ahead with his proposals and that he will listen not only to the Opposition but to the wise words uttered in interventions by his own hon. Friends.

4.55 pm

I welcome the new proposals that my hon. Friend the Minister has described — the proposals that cover further advances and mortgage protection policies. If it is necessary, I declare my interest as a director of an insurance broking company. The disregard for mortgage protection policies will be most useful. I have been kind so far, but I am afraid that I may not be so kind hereafter.

I should like to make three points about the Government's proposals. First, if the motive behind these proposals is simply the achievement of an economy I am totally opposed to them, because that reason alone would not be justification for the proposals. The figure that has been suggested is £30 million, but that theoretical projection is unlikely to be achieved, for reasons I shall give in a moment. I am just as anxious about what I would describe as the psychological effect of these proposals as about their practical effects—in exactly the way that my hon. Friend the Member for Delyn (Mr. Raffan) described the matter in his first intervention, when he spoke about the anxiety of unemployment.

My hon. Friend the Minister is right to be apprehensive about any disincentive to return to work in the existing arrangements. He pointed to the relatively favourable position of people on benefit when they were compared especially to low-income families that were in work. My own apprehensions are about exactly that effect being achieved by the proposals. It is possible for the scope of these proposed changes easily to be exaggerated —usually for political reasons, as happened during the speech by the hon. Member for Oldham, West (Mr. Meacher).

The proposals provide for a 50 per cent. reduction in the first six months; thereafter, interest payments will be met in full. I see that change during and after six months providing a positive incentive for exactly what my hon. Friend the Minister must not want to see. I anticipate that some of those who find themselves in this position will recognise the loss that they are incurring in the first six months on supplementary benefit and will be encouraged to prolong unemployment beyond the six months in an attempt to recoup what they initially lost. I am sure that the Minister does not want to see that, any more than any hon. Member would want to see it.

Worse still, that disincentive to return to employment might become a permanent feeling. I am sure that all hon. Members agree that we ought to offer every encouragement to the spirit of enterprise in people who, through no fault of their own, find themselves out of work.

I do not want to make any exemptions here, but of all the cases that would be covered, the ones that come most easily to mind are the cases of executive and middle management people and those making their way in careers that have been interrupted too early. In a positive manner we ought to offer them every encouragement for a return to work. We should not do that in a negative fashion but should seek to end the position of such people being a cost to the taxpayer. That is a desirable objective, but equally important is their own contribution to wealth production and the continued regeneration of the economy.

I accept my hon. Friend's perfectly reasonable concern for those who are unemployed and for the difficulties that they face. I am sure he would also wish to be fair to taxpayers. It would be wrong for the taxpayer to allow an unemployed person to benefit from a capital gain at the taxpayers' expense. Does my hon. Friend feel that a fairer way to deal with the matter would be for the person who needs to go to the DHSS for help with payments to agree to an entry being made against his land registry title to the effect that any capital gain acquired should be recouped by the taxpayer when the property is sold?

I am grateful for that intervention. I am aware of the need to be fair to the taxpayer. Nor should we ignore the comparison with people in low-paid work. We should do everything possible to encourage people back into work and to stop them being a cost to the taxpayer, but my hon. Friend's proposition of a notation in the land registry about any capital gain made for the relevant period would be difficult to achieve in theory, let alone in practice. People might try to sell their house in an area in which unemployment is felt heavily, but there may be no sale and no capital gain because others in the area are in the same boat.

The theoretical savings of £30 million will not necessarily be achieved. The right hon. Member for Halton (Mr. Oakes) spoke about transferring the burden from taxpayers to building societies. The saving will not necessarily be made, because most building societies will try to be as reasonable and helpful as possible to borrowers. It is likely that building societies will accept 50 per cent. of interest payments for the first six months as a matter of course, rolling up the rest of the payment until after that time, when the 50 per cent. saved would have to be picked up by supplementary benefit. The burden on building societies would be thus relieved, with no saving for the taxpayer.

There might be room for abuse in the present arrangements for supplementary benefit mortgage interest payments. That is less likely to happen when a person is unemployed and has no immediate prospect of employment than when a person is unemployed but has a reasonable certainty of employment before too long. Such a person might take advantage of the supplementary benefit payments to bear mortgage interest payments. Such cases are not likely to be many and the proposal of a six-month period to cover them is excessive. We are taking a sledgehammer to crack a nut.

I listened to what my hon. Friend the Minister said and I shall listen to the rest of the debate. I cannot promise that I shall be able to support him when the House divides, but we are talking only about proposals in draft. They have not yet received the formal consideration of the Social Security Advisory Committee. If they return to the House in anything like their present form, I would not be able to support them. It would be far better if they did not come back, and never saw the light of day.

5.4 pm

I agree with much of what the hon. Member for Cardiff, North (Mr. Jones) said. He advanced a potent argument about the psychological, as opposed to the practical, effect of these proposals. He also mentioned the disincentives that they might lead to. He rightly observed that building societies might mitigate the cost of mortgage interest by accepting only 50 per cent. of it for the first six months. His arguments led me to my original conclusion, that, as he said, we are taking a heavy sledgehammer to crack a nut.

The Minister started by belabouring the official Opposition Front Bench about their attitude to the sale of council houses. He rightly observed that the Government are intent on increasing home ownership. That being so, an increase under this Budget heading must have been inevitable. Between 1975 and 1983 expenditure on mortgage interest relief has increased more than seven times and expenditure on supplementary benefit has increased more than four times. What level of expenditure would the Minister countenance as reasonable? There must be an acceptable increase. The Government have to make a judgment about that.

The hon. Gentleman will have noticed that I did not refer to the level of expenditure at all in my speech. I put the weight of the argument on fairness, equity and incentives, which are the real points at issue.

If the Minister tells me that, I accept it, but I suspect that the Treasury saw the increase and obliged DHSS Ministers to make a change.

The Minister also said that there has been no mystery about how the proposals have been introduced. That is true for the proposal concerning mortgage interest repayments. I might have missed something, but I did not think that, when the proposals were first mooted in the Green Paper and then followed through to the White Paper, they would affect the disabled and single parents. The Minister referred, almost in passing, to the other two changes concerning home loans for business purposes and restrictions on unnecessarily high costs in relation to other housing in the area. I may have missed something, but I believe that neither of those changes saw the light of day until a few days ago. There is therefore an element of mystery.

The Minister's case was minimalist. The more I listened to it, the more I agreed with the hon. Member for Birmingham, Selly Oak (M r. Beaumont-Dark), who said that the game was not worth the candle in terms of the anxiety caused. In an intervention a moment ago, the Minister said that he is interested in equity. What representations has he had from low-paid workers that this is a monstrous inequity which they want put right? He said that this issue must be addressed. It sounds as though he as been forced, lobbied and pressed heavily by a group of people who consider themselves to be at a disadvantage. Has the Minister had any representations to that effect? I doubt whether he has. If he is interested in the equity argument, the answer is clear and is lying in his hand for him to use if he wishes. As was suggested to the housing benefit review team, he should apply standard housing benefit and extend it to mortgage interest payments to redress positively, not negatively, the question of equity.

The Minister said that the issue must be addressed. However, as I understand it, the concept of the welfare state is to make provision for unaccountable misfortune and circumstances that cannot be foreseen. A classic example would be people who suddenly and unaccountably lose their jobs. In such circumstances, for the welfare state to withdraw an element of support, as the Government seek to do, would run counter to the provision, thrust and principles of the welfare state.

This is a sneaky move in so far as the Minister is taking £30 million out of the budget of people who do not know that this may happen to them. It is a soft target, because who knows when he may lose his job or be caught by this provision? It is an easy cut to make because no organised lobby will protest against it, apart from Government Back-Bench Members, such as the hon. Members for Delyn (Mr. Raffan), for Selly Oak and for Cardiff, North, who are acutely on the ball in this regard.

This is a false economy. Have the Government taken into account the increase in housing benefit that will accrue as a result of the changes if arrangements are not entered into with building societies simply to roll over the payments, so that the supplementary benefit system will pick them up after six months? Surely people will be made homeless as a result. If they are made homeless, they will be priority cases for local authority housing, and that would lead straight to housing benefit applications and claims. Does the £30 million that the Government hope to save take into account the increased cost of housing benefit? If not, the Government have got their sums wrong.

The Minister and the Government generally have made great play of their consultations with the building societies and local authority associations. That was as far as we got in Standing Committee in terms of a positive response from the Government at any stage when the issue was raised. I have yet to see — again, I may have missed them — any results from the consultations that the Government had with the local authority associations or the building societies. I should be interested to read any exchanges, correspondence or minutes of meetings that suggest that any of the organisations were enthusiastic about or warmly endorsed this proposal.

The Government are making some play of the fact that mortgage protection policies are available to mitigate some of the worst effects of the change. As a practising solicitor before I became a Member of Parliament. I was involved with mortgage protection policies, so I know that they have extremely restricted provisions. Only the larger building societies offer them, and then only in restricted circumstances. The Government should not adduce them as a measure of protection available to people who would otherwise be hit by the proposals.

I have in the past seen the Minister persuade his Back-Bench Members with an almost impossible brief, but having listened carefully to him today, I think that he has signally, for the first time, failed to a greater extent than at any time during the two years in which I have been watching him.

5.14 pm

I have listened with interest to the comments made by the Opposition. I wonder whether hon. Members realise that it has never been automatic to pay 100 per cent. of mortgage interest. I have examined several Supplementary Benefits Commission reports, and I was interested to find that one of its annual reports drew our attention to the increasing cost of mortgage interest repayments. It stated:

"Our policy is to regard these outgoings … as reasonable for supplementary benefit purposes if they were reasonable at the time they were entered into. If they were not, the claimant is given at least six months to move."
That was from the 1979 report, Cmnd. 8033.

Even the Labour Government were being rotten to mortgage interest claimants on supplementary benefit. Any suggestion that is started to happen, or was proposed, under this Government is nonsense. Those rules have been in operation for a long time.

Does the hon. Lady accept that there is a difference between that provision, which remains part of the supplementary benefit scheme ensuring that excessive payments are not made to people who have overextended themselves, and which is a necessary safeguard, and a completely arbitrary cut, irrespective of whether outgoings are reasonable, which is what the Government propose?

Provided that the hon. Gentleman will accept—I am sure that he made a lot of fuss about it in those days—that the Labour Government did it, too.

That was the Supplementary Benefits Commission—

I am sure that the hon. Lady will get an opportunity to make her own speech later.

It is well to remind ourselves, if we may, of the genesis of these proposals. During the year-long miners' strike, striking miners did not qualify for full benefits. They managed very well on the supplementary benefit paid over for their mortgages. The building societies actively cooperated and colluded with them during that time. As a result, the DHSS, not the National Union of Mineworkers, was the main source of finance and support for the families of striking miners, and as a result extensively prolonged the strike.

My local pitmen were different from those who received such assistance in two ways: first, they had a ballot; and secondly, they voted to work and did just that. As a result, they had no extra help with their mortgages during those 12 months. They felt exceedingly badly about that. The strike should have come to a conclusion far sooner than it did, and had the building societies not acted as they did, I am sure that Mr. Scargill would have got his comeuppance much sooner.

It is also worth pointing out that this is the main form of assistance for housing that is still paid to the householder. Under housing benefit, council rents and rates are paid direct, and only private rental property allowance, which represents a tiny percentage of the total paid in housing benefit, is paid to the householder.

No. The hon. Gentleman, who is extremely talented and knowledgeable, will no doubt make his contribution in a few moments.

As the right hon. Member for Halton (Mr. Oakes) rightly said, we could tackle the problem differently. It might be better to change the rules and make them closer to those for other housing benefit claimants, so that supplementary benefit would be paid straight to the building society and could be used only against mortgage interest payments. That would achieve the objective of protecting a man's home without giving assistance and encouragement to industrial disputes. I commend that suggestion to the Minister. I understand from a written reply that it is already done for mortgage defaulters or others if it is
"in the overriding interests of the claimant or his family to do so."—[Official Report, 12 February 1985; Vol. 73, c. 158.]
We have that right and that power and, if we were being really hard-nosed, tough and aggressive during an industrial dispute, we might use that power once again.

We are a long way from the miners' strike, and it is unlikely that, at least as long as we have a Conservative Government led by my right hon. Friend the Prime Minister, there will be another miners' strike or another similar industrial dispute. I noticed that the teachers made sure that their pockets were not hit in any way during their strike and that they did not make any claims on the social security system.

The Government have three objectives, and they are all laudable: first, to reduce spending, which is something that we were twice elected to do. We have not been terribly good at it, but we intended to do it. The second objective is to encourage people to take responsibility for themselves and for their welfare. That is a necessary objective in a free society. The third objective is to avoid the disincentive of returning to work if the payment for that work is not sufficient to pay the mortgage. Some of those objectives have been welcomed by responsible bodies. In paragraph 337 of its fourth report of 1985, in which it responded to the Green Paper, the Social Security Advisory Committee said:
"We accept that for some claimants the present arrangements may operate as a disincentive"—
it gives an illustration of this—
"and that it is also questionable whether public funds should be used to help individuals acquire an appreciating capital asset whilst they are dependent on means-tested benefit."
A Building Societies Association report, published in January 1985, also recognised the supplementary benefit scheme as
"almost certainly the most generous in the world."
Therefore, we should recognise that some of the Government's proposals have had their supporters.

I am a little sceptical about the claim to save money. My hon. Friend the Minister will know that I always want to know what social security proposals will cost, whether we shall save anything, or whether they will — as is usually the case—end up costing much more. The first thing that I found was that the DHSS does not know how much it spends on this sort of benefit. In a written answer on 23 May 1986, which was addressed to the hon. Member for Shelter, the hon. Member for Fulham (Mr. Raynsford), it was announced that the DHSS knew the cost in 1983—£150 million—and thought that it knew how many people had claimed in 1984–277,000—but that it did not know the cost for 1984 or for 1985. I could lay odds that it does not know the cost now, yet mortgage interest information has been collected as a separate item since 1983. Somebody must know.

It is a little alarming that we should be asked to swallow whole the claim that a lot of money will be saved when the Government do not know the cost in the first place. I am also slightly sceptical about the suggestion that we will save £35 million. I hope that my hon. Friend the Minister can answer this point. He spoke about 90,000 people and a cost of £200 each. That works out at not £35 million but £18 million. In that case, it looks as though we are taking a substantial sledgehammer to crack a nut.

If it is only 90,000 people at any one time, it would be interesting to know how the DHSS reached a figure of £35 million, whether it has any idea of how many people will be affected, and if so, who. It works out that the figure is about £8 a week, but I am slightly sceptical, because the social security policy inspectorate, which did some research on this issue, found that the average payment for the entire mortgage was £16·64 a week in 1984. Of that, th amount for interest was only £12·11 a week. That suggests that we would be saving about £6 a week, not £8. However, I look forward to the comments of my hon. Friend the Minister.

My hon. Friend the Minister knows that I support almost anything that saves money on the social security bill. I just want to be sure that we do save money, and that the savings are not a chimera that will vanish if the essential administrative costs, such as finding out how much the darned thing costs in the first place, are added up.

The Government's proposals may well achieve other objectives that are less desirable, particularly to Conservatives. They may well discourage home ownership in some parts of the United Kingdom. I do not think that they would do so in my part of the United Kingdom, where unemployment is low, but they may well have an effect on some families who, until this Government came to power, had no choice but to be council tenants. I refer, for example, to single-parent families.

The social security inspectorate inquiry found that on the whole claimants had managed to negotiate and were able to maintain their payments. Thus, the proposals may not affect existing borrowers, but they may well affect potential owner-occupiers. We do not want to put people off from owning their own homes. In particular, we do not want to treat those living on council estates differently. But it just does not wash to argue that the proposals will make people homeless. We are talking about £6 a week, when somebody may be obtaining benefit of £100 or more. Thus, the proposals may well be neither here nor there in that respect, but the myth will have its effect, and that may well discourage the few people whom we most want to care for.

I support another suggestion that has been made. My hon. Friend the Minister will remember that I wrote to him at the time of the Green Paper to ask whether he was serious about the proposals. He told me that he was pursuing discussions with the insurance companies. I believe that we should chase up the possibility of getting proper insurance cover. This would probably save nearly all the £150 million which, back in 1983 at least, we thought the scheme cost. It would encourage more home ownership, because people would have some security. It would help to make people more responsible and would prevent funds being used during industrial disputes. The insurance companies would be exceedingly loth to pay out to a claimant who had himself been responsible for his circumstances.

I believe that we should make private redundancy and sickness insurance compulsory for all mortgage holders. There are already redundancy policies. The best ones seem to come from Yorkshire, where there seems to be some true grit. The Skipton building society is offering loans with a rate guaranteed to stay at 9·9 per cent. as long as people take redundancy insurance through General Accident and Life Assurance Corporation plc. The Scarborough building society is offering a mortgage care insurance scheme, providing cover against redundancy, sickness, or any other event that may prevent a borrower from working. That costs only £5 a month for every £100 of mortgage payment and works out at roughly £5 for every £10,000 borrowed, which is peanuts.

I have listened to the hon. Lady carefully, and she is making an important point. Does she accept that people do not make much use of such policies at present? If so, and the hon. Lady's suggestion is taken up, more people will have such policies and the premiums will go sky high.

On the contrary. I am not an expert on insurance, but, as the right hon. Member for Halton said, most of those who take out policies are those who face the risk of redundancy. If such policies are compulsory, the risks will be spread much more widely, so there will be no reason for premiums to rise.

The National Association of Estate Agents has a scheme entitled the redundancy mortgage protection scheme, which helps the borrower to pay his mortgage instalments for a period of up to two years. It covers endowment mortgages as well. It costs just £39 for the initial two-year period. Again, that is peanuts. If the cost of such schemes to the insurance companies is so low now, I cannot imagine that it would rise if all of us, even including hon. Members were protected similarly. I believe that the cost would fall and that it would be very good business. It is worth pointing out that all those schemes are much more generous than any scheme that the Government could afford.

I tried to find out how much business the insurance companies were doing, but that turned out to be difficult. because they cross-subsidise. However, according to figures published by the Association of British Insurers, premiums for permanent health and other long-term insurances in the United Kingdom, which would include this type of insurance, increased from £129 million in 1984 to £142 million in 1985. I bet that those firms would not accept that sort of business unless they found it extremely worth while.

I promise to be brief, and I am grateful to the hon. Lady. Are there any geographical differences in the insurance premiums that she has advocated at such length? If there are, I rather think that my constituents would have to pay higher premiums, because the current male unemployment rate in my constituency — unlike that in hers—is fully 26 per cent.

I take the hon. Gentleman's point. I cited the National Association of Estate Agents and its scheme. However, in many parts of the country, including the hon. Gentleman's constituency, housing is much cheaper, and mortgages are consequently much smaller. There may well, therefore, be some balancing out.

If we take the view that we do not allow someone on the road without compulsory insurance, perhaps we should not allow anyone to take out a mortgage without some compulsory insurance that has an element of protection against falling earnings. The Government could then leave the supplementary benefit rules intact, and could protect their caring image, which we are all keen they should do. The state would not be needed. We could save, not £18 million or £35 million, but perhaps more than £100 million of good public money. We could then put it to better use by making, for example, tax cuts, and by returning that money to the taxpayers' pockets.

Whenever an attempt is made to cut the take from the taxpayer by altering social security provison, Opposition Members react like a flock of radioactive sheep. They bleat