House Of Commons
Wednesday 13 April 1988
The House met at half-past Two o'clock
[MR. SPEAKER in the Chair]
NEWCASTLE UPON TYNE TOWN MOOR BILL [Lords]
Order for Second Reading read.
To be read a Second lime tomorrow.
Oral Answers To Questions
Trade And Industry
To ask the Chancellor of the Duchy of Lancaster what has been the increase in manufacturing profits and in manufacturing investment in the latest three years for which figures are available.
Figures for profits are available only up to 1986. Gross profits of manufacturing companies, including income from self-employment, at current prices increased by £2·2 billion in 1984, £2·3 billion in 1985 and £3 billion in 1986. Gross investment in the manufacturing sector, including leased assets, increased by £1·6 billion and £1·9 billion in 1984 and 1985. respectively, was unchanged in 1986 and is estimated to have increased by a further £0·8 billion in 1987.
Against the background of those figures, is the Minister not alarmed when, with such a growth in company profits, our manufacturing investment is still 11 per cent. lower than in 1979? Is the Minister not perturbed by the pathetic level of research and development in this country, which is lower than that in France, Germany and Italy and less than a third of the rate of increase in Japan since 1981? Does he accept that that low level of R and D is a major contributory factor to our poor level of investment in manufacturing industry? Will the Minister set up an inquiry to examine those issues and consider the impact on investment?
I will certainly not set up an inquiry. The hon. Gentleman seems to think that profitability and investment are somehow inconsistent with each other. Of course, profitability in manufacturing in this country is not yet back to the levels that it reached in the early 1970s. If one wants people to invest in industry, one has to show a return on it. If people can make more money by investing in the building society than in manufacturing industry, they will do that. Profitability is now increasing and has been increasing for some years. However, it still has some way to go before it hits the levels of the early 1970s. [Interruption] I am asked what went wrong. The answer is the Labour Government in the late 1970s.
Is it not a fact that manufacturing industry in the United Kingdom is now setting the pace in the Western world, unlike the time when overmanning in nationalised industries, paid for by the taxpayer, put those industries on a treadmill of failure? We have released those industries, and that is why the jobs that we are creating are real jobs, not overmanning manufactured jobs.
My hon. Friend puts his points robustly and well. The trend that I have disclosed is one of rising and increasing success for British manufacturing industry. It shows that not only profitability but investment, are increasing. It is encouraging that our investment intentions survey shows a further increase in investment this year of 16 per cent. with a further real terms increase in 1989. That is thoroughly good news.
In support of my hon. Friend the Member for Newcastle upon Tyne, North (Mr. Henderson), may I ask the Minister to consider the fact that in 1986 import levels in textiles, steel, chemicals and motor cars exceeded £6 billion? Against that information, is the Minister not being complacent, and will he listen carefully to what my hon. Friend has said, because the Government have surrendered much of British manufacturing industry?
I hear what the hon. Gentleman has said. Of course, I listen carefully to what anybody says on this important subject. Exports from this country have increased pretty dramatically. Many of the goods to which the hon. Gentleman referred are imported by British industry for use in British industry. About 75 per cent. of imports are for industry, not for consumers.
To ask the Chancellor of the Duchy of Lancaster if he will make a further statement on progress in implementing the Government's initiatives for inner-city regeneration.
I am pleased to say that excellent progress has been made in implementing the action for cities measures announced on 7 March. My right hon. Friend the Secretary of State for the Environment is finalising the boundaries of the Lower Don Valley urban development corporation and hopes to lay an order before the House next month. He is about to appoint consultants to report on the extension of the Merseyside development corporation. My hon. Friend the Minister of State, Home Office launched the first of 20 safer cities initiatives in Wolverhampton on 7 April. My hon. Friend the Minister of State, Department of Employment is to open the first of six new inner-city small firms service offices in Sheffield on 19 April. 1 took part this morning in Newcastle in the first presentation to encourage company involvement in urban regeneration which was attended by about 200 local business leaders..
I thank my right hon. and learned Friend for that reply and welcome the progress that has been made. Nevertheless, does he agree that resources for investment in the public and private sectors inevitably are finite? Does he accept that for property developers in particular the pickings to be gained by developing in the over-developed, luscious parklands of the south are far easier than redeveloping in urban areas of the kind to which he has alluded? Will he please get together urgently with my right hon. Friend the Secretary of State for the Environment to see whether we can add to the incentives that he has announced disincentives to develop in over-developed areas?
I am glad to say that the total level of investment in the United Kingdom economy, particularly manufacturing investment, is continuing to rise. I do not accept that the level of investment is necessarily finite. However, I understand my hon. Friend's anxiety about the pattern of development, and I am sure that he will welcome many of the measures that I have just announced, because they make it ever more attractive to invest and develop in parts of the country that previously were in decline. Those areas need new factory and housing development for the kind of growth that we are describing.
Does the Minister accept that for the regions and inner cities, particularly in the north and Scotland, to be successful, they will have to be given a fair share of the corporate headquarters and jobs that go with them? What steps does he propose to take to ensure a greater balance and distribution of those jobs rather than an excessive concentration in the south-east, to which the hon. Member for Christchurch (Mr. Adley) referred and by which the right hon. Member for Henley (Mr. Heseltine) is disturbed?
I agree with the hon. Gentleman that the difficulty is that a large proportion of companies tend to have their headquarters in London and the south. The geographical size of the United Kingdom is not so great that that problem cannot be overcome. In the end, it is for companies to decide where to locate their corporate headquarters. In that regard, Scotland has certain advantages over provincial England, and there are indeed more corporate headquarters in Scotland.
Does my right hon. and learned Friend accept that I do not wish to damage the scheme by praising it? I believe that what is being done in the inner cities is the result of one of the best and most robust measures that we have taken in this Parliament. Will he ensure that aid is provided to level old factories so that new industries can rise and thrive? That would be one of the most interesting and useful things that any Government could do for the midlands.
I am grateful for my hon. Friend's support and advice. I hope that we can help those involved in the Birmingham heartland scheme to achieve what he described in that large area of derelict land in west Birmingham. Everybody with an interest in Birmingham must want to see that area developed as rapidly as possible. We hope that Sir Reginald Eyre and his colleagues will be able to make rapid progress.
What is the point of breakfasting business men at £400 a head when the reality is that in a city such as Newcastle, where the Chancellor was this morning, there will be a loss of £2·8 million in purchasing power as a consequence of the changes in the social security scheme? Is not the combined effect of the Government's changes in the Budget and the social security scheme to take money from the deprived in the inner cities and give it to the affluent, who are largely in the south-east? Does that not mean that the effect of the Government's much touted initiative is to perpetrate a cruel and wicked charade?
I do not mind having my leg pulled about breakfasts, but this morning's presentation to the leading business men of the city was very professional. The hon. Gentleman will find that they were impressed by what they heard. They intend to build on what has been achieved with the new Metro centre in Gateshead and the new Burton Design Works in Newcastle. The economy of the area is reviving and will revive in the inner cities. I am sure the hon. Gentleman will welcome the fact that our changes to the rating system, particularly the non-domestic rate, will ensure a reduction in commercial rates in Newcastle of 32 per cent. in the near future. That policy benefits the north, largely at the expense of the south, in a way that he should welcome.
To ask the Chancellor of the Duchy of Lancaster what steps his Department is taking to help improve the quality of usage of information technology in British businesses.
My Department encourages British businesses to make efficient and effective use of information technology by a variety of means, including the encouragement of best practice, support for collaborative research and development and technology transfer. It is, of course, for individual firms in their particular circumstances to decide how best to make use of IT and so derive the best possible benefit from investment in the technology.
Does my hon. Friend agree that the contribution that the better use of information technology can make to the competitiveness of British industry is much under-estimated in this country? Does he also agree that, because the Government are major users of information technology to the tune of £1·5 billion a year, they can set a good example to British industry? Therefore, will he outline to the House how he is sure that his own Department is taking the correct decisions both at the point of purchase and after the event?
The best way of seeking our own departmental assurance is to take advice, where necessary, from experts and practitioners in the industry. I should like to reassure my hon. Friend that we do our very best to remain enlightened users of IT. The general impact of IT usage is a key-enabling technology which pervades all sectors of the economy. That is why my hon. Friend's question is so relevant. Certainly, to my knowledge, for the first time since the war Britain is now out-performing the Federal Republic of Germany in a crucial application area—the use of computer-aided design and computer-aided manufacturing equipment. We are now, in the first major investment programme since the war, outstripping the Germans to the tune of 8 per cent. market penetration. I believe that that is a very significant event.
Will the Minister nevertheless recognise that the failure to produce a follow-on programme for the Alvey programme and the substitution for it of the ESPRIT II programme within Europe has left a void in Government support, specifically for the application of new techniques for the British partners in international collaborations? Does he realise that that is losing the country a great deal of the benefit which, as he rightly said, we are fully capable of achieving from information technology if only we are properly organised, with the support of the Government?
We achieved final agreement for ESPRIT on Monday. The hon. Gentleman is correct when he says that there was no follow-up to the Alvey. He will know that there is a programme of about £84 million over five years, partly funded by the Science and Engineering Research Council and by ourselves, which is following up a number of Alvey initiatives. He will also know that there are a number of other programmes in electronics and information technology. We now have, subject to an additional review, the Gallium Arsenide programme, which has been complicated a little by the difficulties between the two participating companies. So we are following up Alvey in the right way in collaborative and pan-European research.
Urban And Rural Areas
To ask the Chancellor of the Duchy of Lancaster what assessment he has made as to what lessons derived from inner-city initiatives can be applied in other distressed urban and rural areas.
There are three clear lessons. First, the private sector has to he involved in regeneration measures. Public money should be used to bring in private investment. Secondly, efforts to encourage business, improve the environment and motivate local people are more effective when combined. This is why we have established city action teams and task forces to pull together Government effort in inner cities. Thirdly, action has to reflect local circumstances. We have therefore developed a range of measures—from urban development corporations to compacts between schools and industry—to respond to local needs.
Will my right hon. and learned Friend bear in mind that many of the economic and social problems of the inner cities are found on a smaller scale in many rural towns and rural areas across the United Kingdom? Will he therefore draw to the attention of local authorities in those areas some of the exciting solutions that he is finding in the inner cities?
I know that my hon. Friend's constituency suffers from a high level of unemployment. There are many similarities between the problems in Pembrokeshire and those in the depressed towns in the north and in the inner cities in parts of the midlands and the south. Therefore, I accept my hon. Friend's argument that many of the lessons we have learnt about how to stimulate new investment, new business and new employment could, with advantage, be applied to places such as Pembrokeshire.
Does the right hon. and learned Gentleman agree that one of the lessons to be drawn from the Leicester experience is the Government's inability to co-operate with and consult the local authority? That is why the inner city initiative in Leicester has been such a disaster.
I think that the inner city initiative in Leicester has been a considerable success, and that it is getting better, because we appear to be achieving a slightly higher level of co-operation with the local authority. It has something to do with the so-called new realism which is said to have been affecting the Labour party since the last general election. In so far as there has been unnecessary political dispute in Leicester, plainly I must assert and remind the House that it was wholly caused by the immediate hostility of Leicester city council the moment that we announced our initiative and before the Government agents had arrived.
Does my right hon. and learned Friend accept that the inner city areas that he is working so hard and with a degree of success to try to bring round have a great deal to learn from other areas in the country that have also been through depressed times? Will he take on board what has happened in my constituency and ensure that the lessons of Corby are applied in all areas that face high unemployment?
The amount of new investment and the collapse in the level of unemployment in Corby are quite spectacular. They are almost matched by the new investment in Scunthorpe and by the new investment in jobs in Consett, both towns having been affected by changes in the steel industry in the past. I agree with my hon. Friend that the success in Corby shows what can be achieved by towns elsewhere that face a severe economic crisis. We shall apply the lessons of Corby throughout the country.
What lessons has the Minister learnt from Scottish and Newcastle's approach to inner city initiatives, which was to take jobs out of a profitable brewery in Workington—a brewery that received Government grants over the years—and put them into Newcastle? Does he not understand that that constitutes the rape of Workington? It is a criminal act in a moral sense. That company has no right at all to act as a job thief and take jobs away from a profitable brewery in try constituency. Will he now intervene, whereas previously he refused to do so?
The hon. Gentleman must take up with the management his grievances about the decisions of Scottish and Newcastle Breweries. In my experience of the inner city policy, Scottish and Newcastle Breweries has been a very responsible company. It has worked closely with the Government at its Moss Side brewery in the middle of Manchester, where it received a large urban development grant and recruited and trained a large number of unemployed people from the deprived area around the brewery. It has been equally responsible in the north-east of England. The hon. Gentleman knows perfectly well that as a Minister I have no responsibility for the dispute in Workington to which he referred.
Will my right hon. and learned Friend bear in mind that Skelmersdale has very similar problems to Pembroke? In the last 12 months the level of unemployment in the new town has been reduced by nearly 1,500 and major steps have been taken to build new factories in the town. When the task forces in the inner city areas have done their job, will he bear in mind that they could do a great deal of good in places such as Skelmersdale and Pembroke and in other rural and urban areas that are not included in the inner city initiatives?
I share my hon. Friend's pleasure at the fall in unemployment in Skelmersdale and in the north-west generally. I agree that we have to look at the problems faced by all communities such as his in the north-west. We always envisaged that the task forces would be temporary in the cities, where they were established, and that they would aim to work themselves out of a job so that they could move to other parts of the country when they had carried out the necessary pump-priming in the inner city districts.
When the Chancellor of the Duchy of Lancaster considers expanding these schemes, will he take into account the role of local authorities? Many people are worried by independent reports about the urban development corporations and the task forces showing that, because of Government dogma, the best results are not being achieved. A major report, funded by the Government and local authorities, showed clearly that in the Sheffield scheme it would have been far better to have a partnership than to impose an urban development corporation. Some now say that the UDC could impede progress. Will the Chancellor and his Department have a word with the Secretary of State for the Environment to make sure that there is no imposition and that instead a genuine partnership is developed that involves the local authorities?
We achieve excellent relationships with local authorities of all political complexions in some parts of the country. I share the underlying assumption of the hon. Gentleman's question that it is desirable for the Government, local authorities and the private sector to work together.Although there is a difference in the conclusions arrived at for the redevelopment of the Don Valley, I do not believe there is any difference between the aims of the Government, the hon. Gentleman and the local authority. I believe that, in time, it will be realised that the Don Valley urban development corporation is of considerable benefit to Sheffield and south Yorkshire, and that it will prove of considerable advantage in redeveloping the land more quickly than the alternative proposals would have done.
To ask the Chancellor of the Duchy of Lancaster what representations he has received about exchange rate stability from manufacturing industry during the past 12 months.
My Department has received representations from a number of companies and trade organisations on the subject of exchange rates.
Does my right hon. and learned Friend agree that manufacturing industry greatly prefers stable to floating exchange rates and would like Britain to join the exchange rate mechanism of the European monetary system? Is he pressing that view on his colleagues in the Government?
We all wish to see a certain stability in exchange rates, because that is to the advantage of all international trade. However, given the present state of the international exchange markets, it is not possible to achieve complete stability. I have always found the EMS and the idea of joining it attractive. As my hon. Friend knows, the Government will decide whether to join it when the time is right.
Is the Chancellor of the Duchy of Lancaster aware that not many days ago, just before the Easter recess, we had a meeting here with the representatives of the hosiery and knitwear trade and the unions working in it? The right hon. and learned Gentleman, of course, was not present at the meeting, so I am telling him about it now. During those discussions the representatives mentioned not only the unfairness of competition but the financial instability in the exchange rate. When will the Government do something about the problem? Industry is crying out for stability to help it on its way to success. Will the Minister get off his backside and do something about it?
I am sorry that my duties as a Minister sometimes prevent me from pursuing my interests as a constituency Member and attending meetings with representatives of the hosiery and knitwear trade. I am delighted that the hon. Gentleman was there looking after the interests of my county and of those who work in the industry.Of course, we all desire reasonable stability in exchange rates. However, hon. Members must consider the state of the world exchange markets. No currency can be guaranteed stable exchange rates. Exchange rates have, in fact, been rather advantageous for the bulk of British industry over the past 18 months or two years, but some movements are inevitable, given the present state of international markets.
Does my right hon. Friend agree that, while it is obvious that industry prefers stable exchange rates, another perhaps even more important factor is the control of inflation? When the CBI next complains about the exchange rate going up in Britain, will he perhaps remind it that in Japan the yen has appreciated by 40 per cent., and that that country is still able to beat us in many of our export markets?
I agree with my hon. Friend. Germany and Japan do not seem to have suffered noticeably from having strong currencies over the past few years. My hon. Friend is also right that, when the level of interests rates is being set, a number of factors must be taken into account. One is the effect of changes on the exchange rate; another is the effect on internal demand, monetary policy and the inflation rate.
To ask the Chancellor of the Duchy of Lancaster when he last met the chairman of Rover plc; what subjects were discussed; and if he will make a statement.
I made a statement on 29 March on the subject of Rover Group privatisation, and I have nothing further to add.
Does the Minister accept that most people will judge the Government's sale of Rover by the extent to which British Aerospace increases volume car production and maintains—if not accelerates—the pace of design and engineering projects, including the crucial new Metro? In view of the reports in yesterday's and today's Financial Times, will the Minister make it clear that there is no question of the Government's allowing the EEC to reduce the amount of public money going into the new combined company, as that would be bound to have an adverse affect on investment and jobs?
There are European Community rules on such matters, and sensible discussions are now taking place between us and the Commission, which will reach their outcome in due course. The agreement that we have reached is subject to the Commission's approval, and to that of British Aerospace shareholders. We shall have to await the outcome of the discussions taking place now in Brussels on the first point.
Since, no doubt, the chairman of Rover demanded stable exchange rates, and since the Chancellor of the Exchequer has promised stable exchange rates to manufacturing industry, will my right hon. and learned Friend be good enough to guarantee to the rest of the community eternal youth?
I have no recollection of having promised stable exchange rates to anybody. I rather regret that it is impossible for any Chancellor of the Exchequer to achieve complete stability in exchange rates in present circumstances. We would be more interested in discussing with the Rover Group the terms upon which we negotiated the proposed sale to British Aerospace. I think that they are reasonable, that £800 million is a fair reflection of the debts that would be accumulated by Rover Group at the time of completion of the sale, and that the £150 million that BAe proposes to pay is a fair price for the Government's share.
When the Minister next meets the chairman of Rover plc, will he ask him when he intends to meet the trade unions? Does he agree that there was no consultation with the trade unions prior to the announcement of the bid by BAe—[Interruption.] Never mind the yahoos behind the Minister. The trade unions do matter to the people who work at Rover. We occasionally hear from the Tories that they matter. One of the Minister's colleagues behind him is nodding assent. Does the Minister agree that they matter just as much as shareholders? Will he ask the chairman to meet the trade unions to explain about the bid from BAe and where Rover fits into the picture?
As my hon. Friend the Member for Solihull (Mr. Taylor) was provoked into remarking a moment ago, not surprisingly consultation with the trade unions was no doubt complicated by the rather foolish strike that was taking place at Solihull at the time that the negotiations were under way. However, I am sure that if the hon. Gentleman puts his point to the chairman of the Rover Group he will be reassured about reasonable relationships with the trade unions. I suspect that large numbers of trade unionists inside the Rover Group rather welcome the proposed deal with BAe and think that it offers them a good stable future in the private sector.
When will my right hon. and learned Friend scrap the so-called gentleman's agreement by which we put up non-tariff barriers against Japanese cars? Is it not true that those non-tariff barriers benefit Japanese manufacturers by giving them a cosy high-price market in which to sell, compound the inefficiency of the British industry and cost consumers dear?
We keep such agreements under review inside the Government. I have considerable sympathy with my hon. Friend's point of view that, on closer analysis, such deals often turn out to be of considerable advantage to Japanese importers by guaranteeing higher prices for a lower volume of sales than they would otherwise be able to have.
Will the Chancellor clarify the precise allocation of the £800 million cash injection? Can he confirm reports that, depending on the definition of debts in the Rover Group's balance sheet, a surplus of between £43 million and £240 million will accrue to BAe? What guarantees can he give that that money will be invested in jobs and new vehicles, and not used to inflate BAe's share price?
The figure of £800 million was a reasonable estimate of the level of debt likely to be faced by the company at the time of completion of sale. I think that the hon. Gentleman has, understandably, been disturbed by some of the interpretations that have been put upon the Rover Group's annual accounts which were published recently. The figure of debt shown there was the figure at 31 December 1987, not at the expected date of completion of sale. The figure in the published accounts leaves out the provision that has already had to be made for restructuring costs that will be incurred following the changes made in Leyland Trucks. When one takes into account further additional losses likely to be made this year, one comes to the £800 million, which was the Government's best judgment.
Will my right hon. and learned Friend quickly resume the proper position of a Minister in the Department of Trade and Industry in relation to the Rover Group and advocate to the chairman of the Rover Group that he takes quick action to invest in Land Rover so that new models can be produced, so that spare parts can be provided to those who have bought from Rover in the past and so that service and marketing arrangements, which have been woefully inadequate, can be improved dramatically within the next nine months in order to make the industry one of the great growth industries in Britain?
I am sure that the proper role of a Minister of Trade and Industry is to leave such matters to the commercial judgment of the owners of the company, but I am sure that the chairman of the company would acknowledge the force of some of my hon. Friend's criticisms. Land Rover is obviously a very attractive part of the business. It should have a very strong future and I am sure that the present management, under new or present ownership, will take steps to ensure that its performance is everything that we would desire.
Returning to what the right hon. and learned Gentleman was saying a moment ago, is it not the case that, on any basis, the £800 million cash injection is a generous estimate of indebtedness and that it is certain to leave some surplus over and above the indebtedness of the Rover Group? In those circumstances, is not the failure to achieve any guarantees on investment, model development or jobs all the more extraordinary and lamentable? What was the right hon. and learned Gentleman's Department doing over the past few weeks? Was it conducting a genuine commercial negotiation on behalf of the taxpayer, or was it getting rid of Rover at any price?
I do not agree with the hon. Gentleman's assertion. In more detailed discussions with the European Commission, I trust that we shall be able to satisfy it that we are making reasonable provision.I am not sure what the point of the hon. Gentleman's attacks is. His comments slightly contradict those made a moment ago by his hon. Friend the Member for Oxford, East (Mr. Smith), who feared that there might be some reduction in the amount of public money going into the company. We are interested, not just in injecting public money into the company, but in making a reasonable and proper deal. The deal is based on what we think is a good estimate of the level of bank indebtedness of this company at the time of the likely completion of the sale.
Single European Market
To ask the Chancellor of the Duchy of Lancaster what representations he has received about his campaign to publicise the approach of a European single market.
We are continuing to receive a large number of representations, all of which warmly support our campaign to alert British business to the challenge of completing the single market. The major phase of our campaign starts with a national conference at Lancaster House next Monday, 18 April.
Does my hon. Friend agree that the concept of the single market will suffer if monopolistic concerns in Europe, such as airlines or steel producers, continue to operate cartels, unofficial or official, to the great detriment of users and, indeed, to employment?
One of the objects of the completion of the single market is to make sure that competition operates within the market to the benefit of consumers.
Would it not be to the advantage of British business if we had joined the exchange rate mechanism of the European monetary system by the time we join the single market? In that case, why is the Minister of Trade and Industry saying that the time is not yet right to join the EMS? Will he still be saying that in 1992, if he is still there?
It is not for people in my position to predict the future. My right hon. and learned Friend makes his point about when he thinks is the right time to join the ERM and no doubt those making the decision will hear what he says.
Have the Government made any attempt yet to estimate what are likely to be the massive savings that should be made in British Customs administration from 1992 onwards?
There should be significant administrative savings. There are also estimated to be significant economic advantages to the whole of the Community. A report by the European Commission indicates that there should be increases to the Community's GNP of about £140 billion. Obviously, that has a major advantage for us. To those who say that the advantages will go one way, I say that that is a sad reflection on the competitiveness of British business. I believe that British business is now well placed to benefit from the opportunities that the single market will offer.
Does the Minister remember all the public relations effort at the time of our original entry into the Common Market setting out the tremendous advantages to British industry? Will he check the figures and show the continually increasing deficit in manufacturing industry between Britain and other members of the European Community? Why the hell should we believe him this time when we know that the previous time—
Order. I thought that I heard a somewhat unparliamentary word—why on earth would be more appropriate.
I dimly remember in the recesses of my memory what was said about the Common Market in the early 1970s, although I was a very young man at the time. To those who say that British business would not gain from the single market, I say that they are quite simply wrong. The United Kingdom is already open for trade to a greater extent than the rest of the Community. It must, therefore, be in our interests to open up the rest of Europe for British business.
How on earth or how in hell can we have—
Order. Let us have it on earth.
How on earth can we have a single European market without harmonising indirect taxes?
I point out to my hon. Friend that the United States of America has had a very satisfactory single market for 200 years with some 50 different rates of sales tax in different states—not only different rates of sales tax, but quite often different systems of sales tax as well.
What will be the Government's response to the European Commission's insistence that the provisions in the case of Rolls-Royce and British Aerospace which limit foreign shareholdings to 15 per cent. should now be abandoned? Does the Government's enthusiasm for the internal market mean that they are ready to give up that essential protection for strategic British interests?
We shall continue to argue the British interest as strongly as we have in the past.
Will my hon. Friend also direct his information campaign to potential investors? Does he realise the importance that overseas companies attach to being inside the market by the time that it is completed? Is he aware of the studies that suggest that by the early part of the next decade a quarter of a million manufacturing jobs in Britain will be taken up by Japanese companies, an important proportion of which will be Wales? Is he aware that that is partly a consequence of the anxiety of those companies to be inside Europe before the internal market is completed?
My hon. Friend has made a very good point. We are already an extremely attractive environment for foreign investors. That is very much to the benefit of the United Kingdom. It has created many jobs especially, if I may say so, in manufacturing industry. I am sure that the consideration to which my hon. Friend has drawn attention is material.
To ask the Chancellor of the Duchy of Lancaster what was the output of the electronics industry at the latest date for which figures are available; and what was the comparable figure in 1979.
The index of production for the electronics and information technology industries was 170 in 1987 based on 1980 being equal to 100. This compares with 97 in 1979.
As imports of electrical goods have more than trebled since 1979, is there not a case for retaining the voluntary restraint agreements with regard to imports of electrical goods from the far east? Will not those imports pose a serious threat to our television tube and set manufacturers, as there is a surplus of production in Japan and a growing surplus of capacity in South Korea?
No. The increase in voluntary restraint agreements would cause immediate and long-term damage to the British economy. I want to stress to the hon. Gentleman that, if we consider the OECD group of countries as a whole, only Japan is improving its export-import ratio. Virtually all the others are falling. The export-import ratio in the United Kingdom fell by 17 per cent. It was also 17 per cent. in Germany. In France it was 21 per cent. and in the United States of America it was 40 per cent. There is a healthy increase in our electronic engineering output. If current trends continue, we can start to attack import penetration.
My hon. Friend will be aware of the growing use of electronic systems in companies such as British Aerospace in my constituency. Will he do all he can to communicate to his Government colleagues the need for the availability of trained manpower to exploit fully that important growth in our industrial world?
I chaired a skills shortage committee three years ago which was targeted on improving the level and supply of skills in those disciplines which my hon. Friend is anxious to see enhanced—electronic engineering and manufacturing systems engineering. Within the trade figures for the electronics sector, aerospace is excluded yet we export a lot of electronics within aerospace, whereas there is a huge Japanese surplus in consumer electronics. The situation in information technology as a whole is not as bad as the overall figures would appear to show.
Single European Market
To ask the Chancellor of the Duchy of Lancaster what studies have been made by his Department of the impact of the realisation of the Economic Community internal market in 1992 on the regions and nations within the United Kingdom; and if he will make a statement.
The completion of the single market means greater freedom of trade, and many studies from various sources have shown that this will bring benefits to all nations and regions within the European Community. We have commissioned few formal studies, but economic analysis is carried out within the Department of Trade and Industry in the course of providing advice to Ministers.
Will the Minister accept that the benefits, or disbenefits, of the single market depend very much on the distribution of those benefits among the multinational companies, the work forces and, in particular, the regions that will benefit? Does he agree that as part of the integration of the market there is need also for a parallel integration and enhancement of social policy, of social fund spending, and of regional investment?
The hon. Gentleman will know that it has recently been agreed in the Community that the structural fund should be doubled in the next few years, so the contribution made by structural funds to the regions of the United Kingdom will be increased. I hope the hon. Gentleman accepts that that will be beneficial. I take the point that he broadly makes, that success for regions depends on the distribution of benefits, but there is no reason why successful businesses in the regions of the United Kingdom should not benefit if they are competitive.
How resolute will my hon. Friend be before and after 1992 in asserting the proposition that the rates and scope of value added tax and other indirect taxes imposed upon the British people should be matters for the Chancellor of the Exchequer and this House and not for the Commission?
It will not fall to me to be resolute or irresolute about it, but I can assure my hon. Friend that the Chancellor of the Exchequer and the Prime Minister intend to be very resolute.
One of the possible effects of the operation of the internal market may he to allow into this country combustion-modified foam and other foams which—after February next year—it will be illegal to sell here. Will the Minister refute the statement issued by Conservative Members of the European Parliament that the British Government should go back on that commitment and accept lower safety standards, such as are currently allowed in Belgium, West Germany and Italy, so that when the internal market comes into operation such dangerous types of foam can re-emerge and be sold on the British market? Is it not a disgrace that this major step forward should be undermined by Conservative Members of the European Parliament?
I can assure the hon. Gentleman that we have no intention of going back on the decision which I announced in January about foam in furniture. Those regulations will apply to any furniture supplied in this country, no matter what its origin.
Has my hon. Friend noted that the Cecchini report, to which he referred indirectly in an earlier answer, suggests that the single market will add 5 per cent. to the gross domestic product of the European Community as a whole? Will he confirm that it is up to industry in the regions and in this country generally to take full advantage of the opportunities that he is drawing to their attention in the 1992 publicity campaign, and also that it is essential that the regions press for the continuation of this Government's economic policies, which make our country more attractive in the European Community than others?
The report to which my hon. Friend refers has not yet been published, but the Commission has previewed some of its contents, which show that there are major economic benefits to flow from the completion of the single market. My hon. Friend is absolutely right when he says that the success of this Government's economic policies has not only made the United Kingdom very attractive to investment but has made British business fitter, more supple, more resilient and better equipped to take advantage of the opportunities of 1992 than under any previous regime.
Are Ministers at all queasy about approaching the single market when our research and science funding is much less satisfactory than in competitor countries? How about inviting Sir George Porter to breakfast and answering his television lecture on Sunday night? Would the Minister be ready to do that?
Sir George Porter is very welcome to come and have breakfast whenever he wishes, and we would have an interesting conversation.In response to the first part of the question, no, we are neither anxious nor queasy.
To ask the Chancellor of the Duchy of Lancaster if he has any plans to further restrict the use of polystyrene, in the light of the latest research on fire risks; and if he will make a statement.
When polystyrene is used to provide a filling for an article of upholstered furniture it will be required, following proposals in the currently circulated draft regulations, to conform to the requirement for "other fillings", that is, other than polyurethane foam and latex rubber foam.
In view of the dangers perceived by fire officers and the general public in the domestic use of polystyrene foam, especially in ceiling tiles, does my hon. Friend have any plans to extend the furniture studies, which have already been so welcome, into the use of that foam, with a view to safeguarding the public against that fire risk?
As my hon. Friend will know, our attention is focused on polyurethane foam, given its toxic and occasionally tragically lethal capabilities. Our research on polystyrene is admittedly now some years old but comes from the Fire Research Station, and shows that when used as specified, polystyrene tiles are not a significant addition to the fire hazard. However, in the light of the correspondence that my hon. Friend has sent me and his comments today, I shall ask the Fire Research Station to update that earlier report to ascertain whether it can identify a significant hazard.
Is the Minister aware that many people are now very worried about the fire hazards of artificial materials? Will he run a campaign to make it clear to people whether their existing furniture and ceiling tiles are dangerous, for otherwise many people will continue to be utterly confused? They need such information to be able to take sensible and informed decisions.
I can understand the hon. Lady's concern. She will know that we shall be introducing the most rigorous fire prevention regime in the world for foam-filled furniture and furniture covers. We do not have recent information to show that polystyrene presents the sort of danger that the hon. Lady currently suspects. However, as I said earlier, to have complete peace of mind I shall ask the Fire Research Station to take another look at it.
To ask the Chancellor of the Duchy of Lancaster what representations he has received from private sector steel companies about the proposed role of British Steel in the private sector.
I have received no formal representations from private sector steel companies on this subject.
Does my hon. Friend accept that if we are seeking to establish a fair market in Europe it is important that the steel quotas should be abolished so that the efficient firms in our country can prosper?
My hon. Friend will be well aware that my right hon. and learned Friend the Chancellor of the Duchy of Lancaster is at the forefront of a campaign to do just what my hon. Friend wants.
Bearing in mind that the present level of profitability in BSC is only just a little above what Sir Robert Scholey says he needs every year for reinvestment, is it not obvious that the Government are rushing BSC into the private sector because Ministers want to get it off their hands before it is hit by the full impact of electricity price increases, which will reduce its competitiveness, and before it is thrown into a cut-throat price war in Europe following the abolition of quotas? What assurance can the Minister give the House that a privatised BSC would be able to prosper or even to survive in those circumstances, and without the kind of backing that its competitors in Europe will certainly get from their Governments?
We are entirely happy with the achievements of the chairman of British Steel, together with the work force. We are more than satisfied that the sort of effort that is being put into making the company successful now will help it to be just as successful when it returns to the private sector, where it belongs.
Is it not true that steel quotas cost jobs in the steel-consuming industries by pushing up the price of steel? Will my hon. Friend put up a firm fight against the European steel producers who are pushing for an extension of those pernicious quotas, which do our economy nothing but harm?
Is it not the case that in the Federal Republic legal action is being prepared, not only against Finsider, the Italian steel company, but against the British Steel Corporation? In view of that development, is it not reasonable to suggest that a proper response should be offered and any difficulties surmounted before any further progress is made along the course of privatisation?
I understand that the West German Iron and Steel Federation has complained to the European Commission about the Commission's approval of payments made to BSC between 1975 and 1985, which were approved by the Commission under the rules operating at that time. It is not a new complaint. Similar complaints have been made by German industry in the past and they have been rejected by the European Commission. It is, of course, for the Commission to consider the present complaint. We reject any allegations that illegal state subsidies have been paid to BSC in the past, since all those payments were approved by the Commission. BSC is now profitable and self-supporting.
We have been talking about the single market in the EEC. If BSC is returned to the private sector, will it not have to compete in unfair conditions in the sense that it has to face energy costs which are being used as a form of indirect taxation and to pad out the proposed privatisation, and rate support grant cuts which again are being used as a form of indirect taxation? That means that BSC will not he able to compete on equal terms. Or do the Government not care, once it is out of their control and responsibility?
These are matters for the British Steel Corporation. As I said earlier, we are satisfied with the judgment of the chairman, the board and the work force of British Steel about being able to cope, because they want to be returned to the private sector.
Advice And Debt Counselling Services
To ask the Chancellor of the Duchy of Lancaster what discussions he has had with credit companies, banks and other financial institutions about his suggestion that they should fund independent agencies to provide free money advice and debt counselling services; what discussions he has had with organisations currently involved in the provision of advice services; and what responses he has received in each case.
I have had a number of meetings with representatives of the financial sector at which I have stressed the importance of money advice and encouraged the principle of companies and associations providing financial and other support to voluntary bodies concerned with the provision of money advice. It is for these bodies to seek support from industry for specific projects.As I said in my reply to the hon. Member on 9 March, a number of money advice support projects have already been funded by the private sector through the National Association of Citizens Advice Bureaux, and others. I hope that this trend will continue.
Does the Minister not accept that that is a wholly inadequate answer and a complete abrogation of responsibility on his part? Does he not accept that, in view of the insultingly light answer given by the Secretary of State for Social Services, who is doing so much to increase debt problems, the Government as a whole have a responsibility to take positive action? Will he take positive action to persuade those to whom he is passing the buck that they should make a significant contribution if he continues to refuse to do so?
For one thing, we already provide substantial support to the advice services. We support them to the extent of some £9 million for central services. That was increased specifically for the purpose of providing information on the new social security system. I already do a certain amount to persuade the financial services industry to provide support in the way that the hon. Gentleman suggests. I seem to have been persuasive, because a number of projects are going ahead.
I thank my hon. Friend for his reply. While I do not agree fully with the argument of the hon. Member for Cardiff, South and Penarth (Mr. Michael), may I ask my hon. Friend to accept that the problem of debt is growing, for reasons which are multiple and complex, and that it is an important part of the responsibility of the private sector, which is generally offering the debt, to take action in the public interest? Will he reinforce with the private sector the importance of its part, in conjunction with him and others, in dealing with the problem?
It seems to me that it is not only part of the responsibility of the private sector, but is very much in its commercial interest to provide support for money advice services. The more people who are helped to resolve their debt problems, the more money will be recovered by those who lent money in the first place. Advice services to those bodies concerned with giving money advice might find it useful to approach, for example, the utilities which supply fuel on credit, which forms part of most people's debt problems.
Why should there be different laws for people and for banks in relation to debt? Why should banks be able to to go to the Inland Revenue and say. "We have run into trouble with debts abroad; can you give us £1 billion to spread among the top four banks?", while ordinary people who have got up to the neck in debt because of Government policy are told that they will have to find another loan? It is no wonder that the residual income which goes in debt payments for every family in Britain has risen to over 80 per cent., whereas it was just over 40 per cent. in 1979. We have a Prime Minister who preaches thrift and no borrowing, yet the country is up to the neck in debt.
For the vast majority of individuals, the increase in credit that has undoubtedly taken place has been wholly beneficial. It has enabled them to even out peaks and troughs in their household budgeting. I repeat that it has been wholly beneficial. But for a small minority of people, debt problems arise. It is for such purposes that money advice services exist.
Inner London Education Authority (Poll)
I beg to ask leave to move the Adjournment of the House, under Standing Order No. 20, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
As hon. Members will no doubt have heard, the parents of children in inner London schools undertook a poll to find out their opinions on the future of the Inner London education authority. Of a total of 265,596 ballot papers that were issued to parents—one on behalf of each child in an ILEA school—145,259 were returned. The parents were asked to state whether they were in favour of or against the transfer of education functions to inner London local authorities. Voting took place, and 8,004 voted in favour of a transfer, and 137,021 voted against a transfer. In other words, 94·3 per cent. of the votes were against the transfer, which represents an absolute majority of all those who were eligible to vote in the election, and 51·6 per cent. of parents of London children have said no to a transfer. The matter is urgent and specific simply because, halfway through the Committee stage of the Education Reform Bill, in the most cavalier fashion possible, the Government introduced an amendment to destroy the Inner London education authority and impose massive cuts on education spending throughout inner London. The Government even refused to meet parent delegations, refused to support the idea of the parents' poll, and did nothing but smear parents' efforts to conduct the poll. I remind Conservative Members that the Electoral Reform Society counted the votes. There can be no dubiety about that. The Government forced the issue through the House in a most disgraceful manner. We must debate the matter because the parents of London children have said clearly, emphatically and simply that they wish to retain a unitary education system for inner London. For the sake of the reputation of the House and of democracy in this country, it is now incumbent on the House to agree that it is necessary once more urgently to debate the future of the Inner London education authority so that the views of parents, who are anxious to protect their children's education, further and adult education and the principles of a free education service, can be properly debated and reflected upon in the House. I hope, Mr. Speaker, that you will be prepared to recognise the urgency and importance of the matter and will grant leave for a debate."the result of the London parents' poll and the future of the Inner London education authority."
The hon. Member has asked leave to move the Adjournment of the House, under Standing Order No. 20, for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
I listened with careful attention to what the hon. Member said. I regret that I do not consider the matter that he has raised as being appropriate for discussion under Standing Order No. 20. I have no doubt that the hon. Gentleman and the House will have further opportunities to debate the matter."the result of the London parents' poll and the future of the Inner London education authority."
On a point of order, Mr. Speaker. Of course we entirely accept your decision, but as we have just heard the most powerful expression of parent power that has ever taken place in any Western democracy, is it not appropriate for the Under-Secretary of State for Education and Science either to make a statement now or to inform the House that a statement will be forthcoming?
I have had no notification of a statement today.
Further to the point of order, Mr. Speaker. The proposal to abolish the Inner London education authority was never put to the electorate. The Government have no mandate for it. They did not include the proposal in the Education Reform Bill when it was first put to the House; it was introduced only after the Bill had been published. As you, Sir, may recall, we asked that, in the circumstances, the Government at least postpone the debate on the part of the Bill that related to ILEA until the poll had been properly conducted by the Electoral Reform Society so that the parents of London might have an opportunity to express their view. In line with the Government's—
Order. This seems to me to be an argument of Government policy and not a question of order. Will the hon. Gentleman come to his point of order?
As you, Sir, frequently and rightly say, it is your duty as the Speaker to sustain the democratic reputation of the House. No Member of this House, elected in a general election as recently as June 1987, has a mandate to abolish the Inner London education authority. Hon. Members who support that proposition said that they wished—
Order. We have a Standing Order No. 20 debate this afternoon. The hon. Gentleman must raise a point of order that I can answer. It is not right that he should seek an opportunity to make a political point on a Bill which has already received its Third Reading in the House.
I acknowledge that the Bill has received its Third Reading in this House: but it never received a first reading at the general election. We want to know whether you, Mr. Speaker, have received any representations from the Government seeking to make a statement, to reconsider the part of the Bill dealing with ILEA or in any way to reflect the democratic decision of the parents of inner London.
I repeat that I have received no such application. As I said to the hon. Member for Islington, North (Mr. Corbyn) a few moments ago, I have no doubt that this will be the subject of debate when the Bill returns from another place.
Foreign Nuclear, Chemical And Biological Bases (Prohibition)
Mr. Tony Benn, supported by Mr. Eric S. Heifer, Mr. Jeremy Corbyn, Ms. Dawn Primarolo, Mr. Dennis Skinner, Mr. Bob Clay, Mr. John Hughes, Mr. Harry Cohen, Mr. Bill Michie, Ms. Diane Abbott, Mr. Pat Wall and Mr. Dave Nellist, presented a Bill to prohibit by law the siting of nuclear, chemical and biological weapons under the ownership or control or joint control of foreign countries within the United Kingdom, the British Isles or British territorial waters or British airspace or bases; and for purposes connected therewith: And the same was read the First time; and ordered to be read a Second time tomorrow and to he printed. [Bill 138.]
Statutory Instruments, &C
That the draft Meat and Livestock Commission Levy (Variation) Scheme (Confirmation) Order 1988, be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Alan Howarth.]
Indecent Displays (Newspapers)
I beg to move,
The purpose of the Bill is to remove from newspapers pictures of partially naked or naked women in sexually provocative poses and to make the publication of such pictures punishable with a fine relating to the newspaper's circulation. The proposal follows closely the principle of the Indecent Display (Control) Act 1981, which lays down that pictures that might legally be allowed in magazines cannot be put on public hoardings. I believe that the same argument should apply to newspapers. I first introduced this Bill two years ago and you will recall, Mr. Speaker, that on that occasion the House—particularly a large rump of Conservative Members—misbehaved fairly grossly. With some Conservative support, we won the vote on that occasion, but the Bill failed because a succession of Conservative Members objected each time that it came up for Second Reading. They did not even have the guts to stand up and say who they were, but objected anonymously. I seek to reintroduce the Bill, partly because of the overwhelming support that the proposal has received since it was introduced. I have received more than 5,000 letters, the overwhelming majority from women but a significant number from men, supporting the proposal. Some of the letters are very moving and distressing. I have received about 12 from women who have been raped and who say that when they were raped the men said that they reminded them of a woman on page 3 or that they ought to be on page 3. I have received many letters from women who were sexually assaulted and who say that every time they are exposed to such pictures it reminds them of the assault and they find it extremely distressing. I have received hundreds of letters from women who speak about sitting on a bus or the tube or being at work and seeing men reading papers and making comments that offend them deeply. I have received letters from women who have had breasts removed because of cancer and who are deeply hurt when sometimes even their husbands buy newspapers and bring them into the home. I have received hundreds of letters from teachers who talk about children being asked to bring newspapers into school to cover desks during art lessons. They talk of little boys of six and seven giggling and joking over the pictures, while the little girls do not know what to do. That is some indication of the way in which such newspapers are helping to shape attitudes in our society. The last category of letters, and perhaps the most upsetting, are those from young women who were sexually abused as children and who talk about the way in which the man who abused them, often the father or a close relative, used such pictures and pornography to justify the sexual abuse. The overwhelming majority of those who write argue that the pictures degrade women and portray them as sexual objects to be used and taken whenever men feel the need to do so. It is the overwhelming view of those who wrote to me, and it is also my view, that the mass circulation of these pictures—we are talking about 10 million every day of every week of every year and about twice that number of adults and large numbers of children who see them—helps to create a sexual culture that encourages sexual assaults on women and rape and sexual abuse of women and children. The wide distribution of such pictures helps to legitimise the harder and nastier porn, the circulation of which is also growing rapidly in our society. Some of those who oppose my Bill argue that they have some sympathy for it but that it would be wrong to censor the press. I should like to address that argument. The British press is owned by a very small number of extremely rich men. It seems quite extraordinary to suggest that that small number of people can define freedom while the rest of us are not allowed to impose some constraints on what they print and circulate. Quite rightly, we have restrictions on material that excites racial hatred. We should also have restrictions on material that degrades women. It is far from certain that the readers of these newspapers want the pictures. Every easy-to-read newspaper in Britain carries such pictures, but only one of them, The Star, has ever consulted its readers. The majority of those who bought the paper and responded to the poll said that they wanted the pictures to be removed. The last time that I introduced my Bill it was followed by a campaign in one of our lowest level newspapers, the Sun, which wanted to stop "crazy Clare" from introducing the Bill. Readers were asked to send for car stickers and to write using Freepost to say how they objected to the Bill. Ever since that time the Sun has refused to tell anyone how many stickers were circulated and how many people wrote in. A small number of dirty-minded newspaper owners and editors who despise their readers think that they have to serve up such material in order to sell some of their nasty politics. It is not the wish of the people who buy the newspapers that such material should be widely circulated in our society. I hope very much that the House will overwhelmingly support this measure. I do not pretend that it will prevent all sexual attacks on women or stop the degradation of women. However, it would be one big step in that direction, and the House should be united in supporting it.That leave be given to bring in a Bill to make illegal the display of pictures of naked or partially naked women in sexually provocative poses in newspapers.
This is an intolerant measure and is typical of the authoritarianism we have seen in the modern Labour party. In this I have some sympathy with the right hon. Member for Chesterfield (Mr. Benn), because I am beginning to understand what he is saying about this trait in the modern Labour party.This measure sits ill with the Opposition's criticisms about the censorship of the press, the authoritarian attitude of Government Members or the Government's attitude towards the press. I hope that Opposition Members will think carefully about that before they vote on this measure. What upsets Opposition Members is that this matter is about choice. It is about the choice exercised freely every day by millions of people. As the hon. Member for Birmingham, Ladywood (Ms. Short) has admitted, millions of people in this country exercise their choice freely to purchase newspapers and to look, among other things, at whatever may be displayed in them. Perhaps more importantly, it is about the choice made by the young ladies themselves as to whether they display themselves in the newspapers. I wonder what it is that the hon. Member for Ladywood finds so objectionable about adult young ladies deciding whether they will exploit the audience for those newspapers. She has talked about the exploitation of them, but I wonder whether she had considered how successfully young ladies choose to display for profit whatever assets they possess and benefit and exploit the male population of this country. It may well be that she wishes to protect the wrong people. What distinction is made between the honourable place of the nude in the history of art and sculpture and the portrayal—[Interruption.]
Order. We often hear things in the Chamber with which we may disagree.
Name one painting.
For the benefit of the House I will name the sculpture "The Kiss" by Rodin, which is generally accepted as a great work of art and which portrays two naked people in an embrace.
Name one painting.
Why is it that the prurient minds of Opposition Members see unclad young ladies as being disgusting? [Interruption.]
Order. I am listening with great interest to what is being said, but I cannot hear properly if there are interruptions from below the Gangway.
I would cite further the works of Titian or Reubens and many other great artists who have portrayed through the centuries ladies in various stages of undress whose pictures have been regarded as art.The Bill is defective in its detail—[Interruption.] I do not know why Opposition Members are afraid to hear the argument. Perhaps they are embarrassed by what their hon. Friend is proposing.
What Titian painting is the hon. Gentleman talking about?
Will the hon. Gentleman settle down?
Order. All I can hear from below the Gangway is some chant about a painting. This Bill is about displays in newspapers.
The measure is defective in its detail because the hon. Member for Ladywood failed to tell us who will define what is meant by "partially clad". Who decides between clad, partially clad or unclad? More importantly, and perhaps more relevant, what is a sexually provocative pose? Perhaps the hon. Lady can identify or knows a sexually provocative pose when she sees one, but I do not know whether she expects the readers, editors or publishers of the newspapers so to do. She has not described in the Bill where the responsibility for the identification of "partially clad" or "sexually provocative" will lie.This is a grossly irresponsible and defective measure, and, for all those reasons, I hope that the House will reject it. It is intolerant and impractical and flies in the face of the freely exercised choice of most people in this country.
Question put, pursuant to Standing Order No. 19 (Motions for leave to bring in Bills and nomination of Select Committees at Commencement of Public Business):—
The House divided: Ayes 163, Noes 48.
Division No. 252]
|Abbott, Ms Diane||Foster, Derek|
|Allen, Graham||Fraser, John|
|Alton, David||Galbraith, Sam|
|Ashton, Joe||Garrett, John (Norwich South)|
|Banks, Tony (Newharn NW)||Gould, Bryan|
|Barnes, Harry (Derbyshire NE)||Graham, Thomas|
|Barron, Kevin||Grant, Bernie (Tottenham)|
|Beckett, Margaret||Griffiths, Nigel (Edinburgh S)|
|Beggs, Roy||Grocott, Bruce|
|Beith, A. J.||Hardy, Peter|
|Bell, Stuart||Hattersley, Rt Hon Roy|
|Benn, Rt Hon Tony||Haynes, Frank|
|Bennett, A. F. (D'nt'n & R'dish)||Heffer, Eric S.|
|Bidwell, Sydney||Henderson, Doug|
|Boyes, Roland||Hinchliffe, David|
|Bradley, Keith||Hogg, N. (C'nauld & Kilsyth)|
|Braine, Rt Hon Sir Bernard||Home Robertson, John|
|Bray, Dr Jeremy||Hood, Jimmy|
|Brazier, Julian||Howarth, George (Knowsley N)|
|Brown, Gordon (Decline E)||Hoyle, Doug|
|Brown, Nicholas (Newcastle E)||Hughes, John (Coventry NE)|
|Bruce, Malcolm (Gordon)||Hughes, Robert (Aberdeen N)|
|Buckley, George J.||Hughes, Robert G. (Harrow W)|
|Butler, Chris||Illsley, Eric|
|Caborn, Richard||Janner, Greville|
|Callaghan, Jim||Jones, Barry (Alyn & Deeside)|
|Campbell, Menzies (Fife NE)||Jones, Martyn (Clwyd S W)|
|Campbell, Ron (Blyth Valley)||Kilfedder, James|
|Campbell-Savours, D. N.||Kinnock, Rt Hon Neil|
|Canavan, Dennis||Kirkwood, Archy|
|Clark, Dr David (S Shields)||Lambie, David|
|Clay, Bob||Lamond, James|
|Iceland, David||Leighton, Ron|
|Cohen, Harry||Lewis, Terry|
|Cook, Robin (Livingston)||Litherland, Robert|
|Corbyn, Jeremy||Livingstone, Ken|
|Cormack, Patrick||Livsey, Richard|
|Cousins, Jim||Lofthouse, Geoffrey|
|Crowther, Stan||Loyden, Eddie|
|Cummings, John||McAllion, John|
|Cunliffe, Lawrence||McAvoy, Thomas|
|Dalyell, Tam||McCartney, lan|
|Darling, Alistair||McFall, John|
|Davies, Ron (Caerphilly)||McKay, Allen (Barnsley West)|
|Dobson, Frank||McKelvey, William|
|Doran, Frank||Madden, Max|
|Duffy, A. E. P.||Mahon, Mrs Alice|
|Dunnachie, Jimmy||Marek, Dr John|
|Dunwoody, Hon Mrs Gwyneth||Marlow, Tony|
|Eadie, Alexander||Martin, Michael J. (Springburn)|
|Eastham, Ken||Martlew, Eric|
|Ewing, Mrs Margaret (Moray)||Maxton, John|
|Fatchett, Derek||Meacher, Michael|
|Field, Frank (Birkenhead)||Michael, Alun|
|Fields, Terry (L'pool B G'n)||Michie, Bill (Sheffield Heeley)|
|Flynn, Paul||Michie, Mrs Ray (Arg'l & Bute)|
|Foot, Rt Hon Michael||Millan, Rt Hon Bruce|
|Forsythe, Clifford (Antrim S)||Moonie, Dr Lewis|
|Morgan, Rhodri||Smith, C. (Islton & F bury)|
|Morley, Elliott||Smith, Rt Hon J. (Monk'ds E)|
|Mowlam, Marjorie||Spearing, Nigel|
|Mullin, Chris||Squire, Robin|
|Nellist, Dave||Strang, Gavin|
|Nicholson, Emma (Devon West)||Straw, Jack|
|Oakes, Rt Hon Gordon||Tapsell, Sir Peter|
|O'Brien, William||Taylor, Mrs Ann (Dewsbury)|
|Orme, Rt Hon Stanley||Thomas, Dr Dafydd Elis|
|Parry, Robert||Turner, Dennis|
|Patchett, Terry||Vaz, Keith|
|Pike, Peter L.||Wall, Pat|
|Radice, Giles||Wallace, James|
|Redmond, Martin||Wareing, Robert N.|
|Rhodes James, Robert||Welsh, Andrew (Angus E)|
|Rooker, Jeff||Welsh, Michael (Doncaster N)|
|Ross, Ernie (Dundee W)||Widdecombe, Ann|
|Rossi, Sir Hugh||Williams, Alan W. (Carm'then)|
|Rowlands, Ted||Wilson, Brian|
|Ruddock, Joan||Winnick, David|
|Sedgemore, Brian||Worthington, Tony|
|Sheldon, Rt Hon Robert|
|Shephard, Mrs G. (Norfolk SW)||Tellers for the Ayes:|
|Short, Clare||Mrs. Ann Clwyd, and|
|Skinner, Dennis||Ms. Jo Richardson.|
|Smith, Andrew (Oxford E)|
|Adley, Robert||Heathcoat-Amory, David|
|Alexander, Richard||Hicks, Mrs Maureen (Wolv' NE)|
|Arnold, Jacques (Gravesham)||Holt, Richard|
|Atkinson, David||Jessel, Toby|
|Banks, Robert (Harrogate)||Johnston, Sir Russell|
|Beaumont-Dark, Anthony||Jones, Robert B (Herts W)|
|Biggs-Davison, Sir John||Kirkhope, Timothy|
|Blackburn, Dr John G.||Lawrence, Ivan|
|Brittan, Rt Hon Leon||MacKay, Andrew (E Berkshire)|
|Budgen, Nicholas||Moate, Roger|
|Butterfill, John||Oppenheim, Phillip|
|Carlisle, John, (Luton N)||F'aice, James|
|Carttiss, Michael||Redwood, John|
|Coombs, Anthony (Wyre F'rest)||Riddick, Graham|
|Coombs, Simon (Swindon)||Shaw, David (Dover)|
|Couchman, James||Shaw, Sir Michael (Scarb')|
|Day, Stephen||Stewart, Allan (Eastwood)|
|Emery, Sir Peter||Taylor, Ian (Esher)|
|Farr, Sir John||Tebbit, Rt Hon Norman|
|Fearn, Ronald||Warren, Kenneth|
|Fox, Sir Marcus||Whitney, Ray|
|Goodson-Wickes, Dr Charles||Wiggin, Jerry|
|Gregory, Conal||Tellers for the Noes:|
|Grylls, Michael||Mr. Eric Forth and|
|Haselhurst, Alan||Mr. Jerry Hayes.|
Question accordingly agreed to.
Bill ordered to be brought in by Ms. Clare Short, Ms. Jo Richardson, Mrs. Margaret Beckett, Mrs. Alice Mahon, Mrs. Ann Clwyd, Mr. John Battle, Mr. Bill Michie, Mrs. Ann Taylor, Mrs. Margaret Ewing, Ms. Diane Abbott, Ms. Marjorie Mowlam and Miss Emma Nicholson.
Indecent Displays (Newspapers)
Ms. Clare Short accordingly presented a Bill to make illegal the display of pictures of naked or partially naked women in sexually provocative poses in newspapers: And the same was read the First time; and ordered to be read a Second time upon 6 May and to be printed. [Bill 140.]
Social Security System (Changes)
I have received an enormous number of applications from hon. Members on both sides of the House to take part in the debate. It would be extremely helpful if both Front Bench speakers would make brief speeches and if Back-Benchers would confine their speech to five minutes. There is hardly a constituency that is not affected by the changes in one way or another. It is my wish that most of those who want to take part in the debate should be able to do so.
I beg to move, That this House do now adjourn.Leave having been given on Tuesday 12 April under Standing Order No. 20 to discuss:
Today we are debating the impact of the social security changes that have been phased in over the past fortnight. The Government claim that these changes represent the biggest upheaval in social security in 40 years. It is certainly the biggest upheaval since the Government came to power, but I would not want it to be thought that this Government have been idle over the past nine years. In that time they have abolished the link between pensions and earnings, which means that the pension for a married couple is £14 less than it would otherwise be. The Government have also abolished the short-term sickness benefit and the earnings-related supplementary unemployment benefit and they have taken what is left of unemployment benefit into taxation. They have repeatedly not uprated child benefit, so that it is now worth almost 10 per cent. less than it was worth in 1979, in real terms. They have removed the board and lodging allowance from all claimants under 25 on social security and, worst of all, over the past two years they have just about halved expenditure on single payments. That is quite a record. Against that background, it took real determination to succeed in devising a new system that was even more mean than the one that it replaced and that leaves some people even worse off than they were under the previous system. The question at the heart of the debate is how many are worse off. Everyone on the Treasury Bench, from the Olympian height of the Prime Minister to the humble and retiring manner of the Under-Secretary of State for Health and Social Security, the hon. Member for Derbyshire, South (Mrs. Currie), has asserted that only 12 per cent. will be worse off as a result of the changes. It may help if I clarify the basis of that claim. It is based on two sources of data. The first is a sample of claimants on supplementary benefit that was taken in February 1986, two years ago. The second is a family expenditure survey of data collected in 1985, three years ago. It is not a careful census of 8 million people affected by the changes. It is an estimate based on a sample that is small in relation to the millions affected, and it is a sample taken at a time so long ago that most of those who are now on social security were not claiming it at the time. It is also a calculation that wondrously treats the abolition of single payments as not being a cut at all. The problem for the Secretary of State and for his Government colleagues in defending that estimate is that no organisation that has studied the impact of last week's changes agrees with it. Ministers and this Government are the victim of their own arrogance. They arrogantly believe that nobody deserves to be listened to and taken seriously unless they are employed by and working within the Government. There was a superb example of that arrogance yesterday during the exchanges at Prime Minister's Question Time from the hon. Member for Mid-Worcestershire (Mr. Forth), who played such a distinguished part in our proceedings earlier this afternoon. When my hon. Friend the Member for Dundee, West (Mr. Ross) referred to the citizens advice bureaux and suggested that they were not militant, the hon. Member for Mid-Worcestershire interjected in his characteristically urbane fashion and said that they are all Trots. I am bound to say that that casts a new light on Sir Kenneth Clucas, the chair of the National Association of Citizens Advice Bureaux, new light that the security services would be interested in receiving, as Sir Kenneth was for three years a permanent secretary under this Government. It is a measure of the Government's lack of confidence that they have commissioned no research of their own into the effect of these changes. I suggest that they ought to look at the work of bodies that have carried out research into the changes, such as the Policy Studies Institute. They cannot all be Trots. Indeed, the Government commissioned research from the Policy Studies Institute. As the director of the institute pointed out last month, the Government have ignored all the results of its research in preparing the new social security system, even though the institute was considered to be reliable enough to be commissioned to undertake research. Last month, the Policy Studies Institute calculated that the losers are not 12 per cent. but 48 per cent. That may not be a reliable figure, because the PSI based its calculation on data supplied by the Department of Health and Social Security. Let me turn to the Oxford department of social administration, which wisely shunned information from the DHSS and carried out a study of 186 claimants in Oxford during the past month. It concluded that two thirds of them lose in cash terms, even if we do not count the abolition of single payments, and that three quarters lose in cash terms if we count the abolition of single payments. The research unit at Nottingham university has studied Nottingham on a ward-by-ward basis. Wandsworth has also been studied on a ward-by-ward basis on behalf of Wandsworth council—another well-known bunch of Trots. Both studies discovered that the losers outnumbered the gainers by 2:1. Since I represent a Scottish constituency, let me pray in aid Strathclyde social work department. It studied 200 claimants last month and concluded that 154 of them would be worse off in cash terms. Like the Oxford study, but unlike the Government's figures, that is not an estimate; it is a head count of real claimants from samples that date not from 1985 but from 1988. Ministers cannot even convince their own staff who daily see the claimants. Those staff, in advance of the changes, have insisted on floor to ceiling security to protect them from the frustration that they expect from claimants. Perhaps the unkindest cut of all comes from the Social Security Advisory Committee, set up by the present Government as a source of independent, authoritative advice which they could then ignore. Last week, the committee produced its annual report. The chairman, Mr. Peter Rarclay—another unconscious Trotskyist—put the losers not at 12 per cent., but at 43 per cent. That figure has since been quoted as that of the Social Security Advisory Committee. In fairness, it should be put on record that it is not the committee's figure; it is the Government's own figure. It dates from the tables produced by them in November, which showed that 3,650,000 claimants would be better off if they simply kept the old scheme and uprated it by 3 per cent. for inflation. With all its faults—with all the cuts that I paraded at the start—and not even taking into account the abolition of single payments, 3,650,000 claimants are worse off under the new scheme than under the old one. We can only conclude that Ministers consider that the principal fault of the old scheme was that it was too generous to too many people. Yet the Prime Minister persists in stating that 88 per cent. are better off, or no worse off. She reaches that simple conclusion on the basis that, although many people now have a lower entitlement to benefit, the DHSS does not actually take the cash away from them. Even the present Government shrank from that step. Instead, they simply let the benefit shrivel away with inflation. One claimant among that 88 per cent. is Mr. St. Clair, a resident of Cornwall. His wife had a stroke two years ago, and since then has been paralysed. The only movement that she can make is to blink her eyelids. Mr. St. Clair left work two years ago to nurse her. She cannot swallow, because she is totally paralysed, and therefore all her food must be liquidised, which is an expensive process. To be fair, the local DHSS staff appear to have pulled out all the stops to give Mr. and Mrs. St. Clair the maximum help. They currently receive £89 a week in benefit. Under the new rules, they are entitled to £70 a week. Of course, Mr. and Mrs. St. Clair are not losers. Their cash is not being taken away. Their benefit has been frozen at its present level until their new entitlement catches up, which at the present rates of inflation will mean their benefit remaining frozen until 1995. Nevertheless, they are among the 88 per cent. paraded as being no worse off. It is worse than that, however. Mr. and Mrs. St. Clair advise me that they live in a two-storey cottage. Every night Mr. St. Clair carries his wife up and down the stairs. He had arranged to buy a single-storey bungalow. An additional £9 would be paid to him by the DHSS to cope with the additional cost. Under the new rules, that £9 is not added to his cash benefit; it is only added to his notional entitlement under the new rules, bringing that entitlement up to £79—less than its present level in cash—and leaving Mr. and Mrs. St. Clair not a penny better off. The purchase of the bungalow has fallen through and, every night, Mr. St. Clair carries Mrs. St. Clair up and down the stairs. None the less, we are told by the Prime Minister and every Minister in the Government that Mr. and Mrs. St. Clair are not losers.The impact of the changes in the social security system.
This is a very complicated case. As the hon. Gentleman may appreciate, I had some dealing with it over a period. There is a conflict between the figures that I was given and those that the hon. Gentleman has given. I was told that, as the hon. Gentleman has said, until now the supplementary benefit payment to the St. Clairs has been £89·73 a week, but that income support has been awarded at £93 a week. There may be a reason for the difference between the figures, but I consider it only right that my figures should be put on the record.
I am obliged to the hon. Gentleman for his intervention. My figures, however, come straight from Mr. St. Clair, with whom I discussed the matter only last week. Of course, I shall be happy to check them again, but I assure the hon. Gentleman that when I last conversed with Mr. St. Clair he clearly believed that not only had he been left worse off and unable to purchase the house that he needed, but, without a shadow of a doubt, he was a loser in real terms from the changes brought in by the Government.There is, of course, an added lesson to be learnt from that case: that any disabled person now about to claim for the first time will start at the new levels of benefit. Just how hard they will be hit is shown by the study produced by 15 citizens advice bureaux, based on 80 claimants who came to the bureaux for two days in early March. Forty-four of them will receive lower benefits under the new scheme if applying for the first time after 11 April. Those who lose most are the old and the sick. That is not surprising, because a key feature of the new scheme is that it sweeps away all the extra additions for the special needs of the disabled and frail, such as diet, heating and laundry: all the additions to which a former Minister of State with responsibility for social security—now the Minister for Health—once referred in a television interview as the twiddly bits of the system. It is, of course, those "twiddly bits" that made life bearable for the disabled. Of 20 pensioners in the study, 14 will be worse off under the new scheme. Of 19 disabled claimants, 16 will be worse off. Again, those are not estimates. They are not based on a computer model. They are actual assessments of real claimants who came to those bureaux only a month ago. They are deeply disturbing figures, and they are even more disturbing given that every year one third of the claimants who come on to the books of the social security system do so for the first time. In other 'words, next April one third of all claimants of income support will be assessed under the new rules, and if the experience of the citizens advice bureaux is any guide, more than half those new claimants will receive less under the new system than they would under the previous system, with all its faults.
Will my hon. Friend bring to the Minister's attention the ending of the transitional protection arrangements that existed before the new schemes came in? One of my constituents, Mrs. Margaret Wells, is in a home for people suffering from senile dementia, and has only £400 in savings. However, she had to leave behind a terraced house that the DHSS estimates now to be worth more than £6,000. Her payments for her stay in the home are being cut off, and her relatives are being told that, because they cannot afford the extra £100 that they must find, they must borrow: they must go into debt to pay it. Is that the kind of thrift that the Prime Minister is advocating?
A number of my colleagues have encountered identical cases, including my hon. Friend the Member for Bishop Auckland (Mr. Foster), two of whose constituents have lost £140 a week—money that they required to meet the fees of their accommodation in residential homes. I know that the Secretary of State has received a letter from the Association of Hospice Social Workers asking to take up that point with him. I hope that he will tell us that he will do the association the courtesy, and show the courage, of meeting its members and considering their objections to a rule that is causing so much harshness.
No, I shall not give way. Mr. Speaker has very properly advised the House that many hon. Members wish to speak. I should like to proceed with my speech.There is common ground between the Government and the Opposition. Both sides accept that there are cash losers. Even the Prime Minister accepts that. Let us now consider who those losers are. Let us ask whether their losses are acceptable, even if they are only 12 per cent., or 960,000, a figure to which the Government admit. There can be few hon. Members who have visited their constituencies in the past fortnight who have not met some of those losers. Last weekend, in my constituency, I met a couple on invalidity benefit of £72 a week who have lost £11 a week in housing benefit—£44 a month. They have not £6,000 to their name. But 350,000 lose all their benefit and will experience an even worse impact on their living standards as a result of that rule. Yesterday, my right hon. Friend the Leader of the Opposition referred the House to the case of Mrs. Williams. Let me refer the House to the case of Mrs. Phillips of Crewe. Mrs. Phillips received £41 in state pension and £12 in interest per week—a grand sum of £53 weekly. She received the interest on a capital sum of £9,000. Because the sum is over £6,000, last week she lost all her housing benefit. That increased her rent and rates by £12 a week. Until last week, after housing and fuel costs, Mrs. Phillips was left with £33 per week for food, clothing and every other necessity. She is now left with £23 a week for those expenses. How many Conservative Members imagine that they could manage on that income per week? I know that some of them have had the courage to admit that they could not. I know that because some of them have been confronted by constituents hit by the new rule. I read in the press that the hon. Member for Mid-Kent (Mr. Rowe) has been advising those caught by the rule that they should put a deposit on their funeral with an undertaker in order to get below the £6,000 ceiling. There is a much simpler and more effective way of solving the problem of the hon. Gentleman's constituents, and that is for him to use his vote in the House, to which his constituents sent him, to force the Government to change a rule that he will not defend. Nor is it just those on housing benefit who lose. There are the 15,000 people who lose all social security because they or their partners work more than 24 hours a week. Among those 15,000 people are Mr. and Mrs. Godden, to whom I referred yesterday. Before I close, I wish to dwell on their case. Mrs. Godden suffers from multiple sclerosis. That is a degenerative condition. It will get worse, not better. Already Mrs. Godden can barely walk the length of her house. She has three young daughters, the youngest of whom is two years old and the oldest is eight years old. She has a mentally handicapped son who stays in a hospital during the week and returns home at weekends. For such a household she needs constant attendance. There is one solution—it is rapidly becoming the only solution available to the Goddens—and that is for Mr. Godden to give up his work and stay at home and for the family to live entirely on social security. Mr. Godden has chosen not to do that. To his credit, he has struggled to hold down his job—a job that involves him working six days a week from 9 am to 6 pm, for which he takes home £128 a week. Mr. Godden is precisely the kind of person whom Conservative Members constantly tell us they want to support—people who choose to work for a low wage rather than go on the dole. It costs Mr. and Mrs. Godden £120 to secure constant attendance while Mr. Godden works. The net gain from Mr. Godden's work is £8. Under the old rules, the Goddens qualified for social security of £48 a week. Now they do not qualify for a penny. There is another twist. The Secretary of State yesterday advised the House that their accommodation was rent-free. That is perfectly true. It is rent-free because it is tied accommodation. If Mr. Godden now gives up his job, as he may be obliged to do, the family will in turn be rendered homeless. Mr. and Mrs. Godden came to Parliament before Easter. They spoke to a press conference of the parliamentary lobby in the Palace—possibly the most hardened and cynical audience known to man. Nevertheless, it was obvious that they were moved by Mr. and Mrs. Godden's plight. It is the mark of a civilised and decent society how it supports families in Mr. and Mrs. Godden's position; how it helps them to struggle to hold together their marriage and their children to prevent them from going into care. That is the nightmare that haunts Mrs. Godden, because, by a wicked irony, she herself was brought up in care. I shall never forget the reception that her case received in the House yesterday. It was received on the Government Benches with laughter. What Conservative Members found funny was the Secretary of State's observation that the Goddens had been on holiday. They found it the biggest joke of the day that a disabled claimant had taken her children on holiday, as if people on benefit should be under a kind of house arrest. Yes, all right, Mr. and Mrs. Godden had a holiday. It lasted six days and it ended 12 days ago. They went to Plymouth to see Mrs. Godden's relatives. Mr. Godden is a caravan salesman. His company gave him free use of a caravan for a week. They parked it in a farmer's field at a rent of £2 a night. That, and the petrol from Bristol, was the entire cost of the holiday that Conservative Members found so funny. However, there is something that the Government have done to help the Goddens. It would be churlish of me not to refer to it before closing. As a result of the Budget, Mr. Godden's weekly net income has gone up to £130. He has gained £2 from tax cuts while losing £48 from benefit cuts. Here we come to the final and shaming contrast—the contrast between tax cuts in March and benefit cuts in April. There need not have been any losers from the social security changes. We know that the Government had the money to prevent there being any losers. We know that because the Chancellor found £2,080 million to give to 750,000 top rate taxpayers only last month. There was no talk of targeting there in the Budget speech; no talk of concentrating help where it was most needed last month. The Chancellor actually gave away more money to 750,000 of the rich than the entire increase in the social security budget for 12 million claimants. That tells us all that we need to know about the Government's priorities. This is a Government who help the rich and punish the poor, and it is against those priorities that we shall vote tonight.
It is extraordinary that the Opposition should call for an emergency debate—[Interruption.]
Order. The Opposition spokesman was heard in silence and I hope that the House will give an equally fair hearing to the Secretary of State.
As I started to say, it is extraordinary that the Opposition should call for an emergency debate on the social security changes as though anything that occurred on Monday had not been discussed and debated repeatedly—I am talking, Mr. Speaker, to the Opposition—and in minute detail, over the past months, and, indeed, years. In fact, the changes had been under scrutiny, in the House and elsewhere, since the review process started back in 1983 and 1984.For example, the Opposition will be aware that the Social Security Act 1986, which provided the legislative basis for the changes, was debated for over 234 hours—a similar length of time to that given to the equivalent legislation in the 1940s. In Committee, 162 hours were spent in 42 sessions considering 1,498 amendments. The changes—[Interruption] There is time for me to make all the points that I am seeking to make. The changes were incorporated in the manifesto on which the Conservative party won the election. Finally, the detailed regulations for the new schemes and other changes this month were the subject of numerous further debates here and in another place. Before I proceed—I shall endeavour to be as brief as I can in view of your comments, Mr. Speaker—I want to respond briefly to the detailed points on Mrs. Godden made by the hon. Member for Livingston (Mr. Cook). It is extremely difficult for those of us who are concerned about the genuine interests of benefit claimants, as I know the hon. Gentleman is, to seek to debate such matters across the Floor of the House. I sought yesterday, and I do so again now, to make certain that the facts were there—the facts that related to the inability of the local social services department and my Department to establish whether, on the Independent Living Fund or on additional facilities, the local social services could assist. In the light of the hon. Gentleman's comments it might therefore be useful again to remind the House of the inaccuracies in the report in one of yesterday's newspapers. The mobility allowance—[Interruption.] It is useful for the House to know the facts if an individual case is being raised. Obviously we all welcome the fact that the family receives £23·05 a week in mobility allowance, which was not mentioned. The general increase in benefits this week brought the total benefit income up to £117·30 a week. There was an increase in the husband's wages to £130 a week and, as the hon. Member for Livingston rightly said, there is no liability to pay rent or rates. There was also no mention of the presence in the home of a non-dependent son who is in full-time work. Together, those facts paint a different picture. After the changes this week, and prior to the application that will be considered under the independent living fund, Mrs. Godden has a weekly income of £247·70 for a family of five, with no rent or rates to pay, and a working son living at home. I am just reminding the House of the facts of the case. We should put the changes this week into context. The hon. Member for Livingston failed to address the real problems of the old benefit system. Indeed, by every—
I am grateful, not only for the Secretary of State giving way, but for his attention to detail. Will he confirm that of the £247 of which he spoke £120 has to be spent because of the constant attendance requirements of Mrs. Godden? That is the price of a mother having multiple sclerosis. The effective income of the family is not, therefore, £247 a week, but £127 a week.
If we want to be even more accurate, the right hon. Gentleman is right in that particular, but his facts are incomplete. He is right to say that the private domestic help that Mrs. Godden is receiving is currently running at a cost of £125·38 a week. The local social services have visited her since I spoke yesterday and have offered—[Interruption.]
Order. The Secretary of State was asked a question and he is now seeking to reply to it.
The social services have offered assistance with domestic help, which has been refused.The hon. Member for Livingston failed to address the real problems of the old benefits system. Indeed, by every comment and criticism that he makes of our changes, he implies that he would prefer to keep the old system in its old shape indefinitely into the future. If that is not his position, he holds out the absurd illusion that, in reforming a highly complex and frequently unbalanced structure into something more coherent and sensible, it is possible to leave everybody, even those who have benefited from the anomalies of the old system, just as well off as if the old system had been continued. Frankly, as all hon. Members know, that is a delusion. What were the problems of the old structure of benefits? First—this is something on which many people of all political opinions will agree—the old structure was not sufficiently responsive to changes in society and to changing needs. The 1985 Green Paper, which launched. the reform process, showed that there had been important changes in the characteristics of those in the lowest income groups over the previous decade or so. In particular, the growing prosperity of pensioners meant that there were far fewer of them in the lowest income group by the early 1980s than there had been 10 years previously. Indeed, on average, pensioners' net incomes rose by 18 per cent. in real terms. [Interruption.]
We cannot hear the Secretary of State.
Order. If the House is silent, hon. Members will be able to hear the Secretary of State.
Indeed, on average, pensioners' net incomes rose by 18 per cent. in real terms between 1979 and 1985; twice as fast as in the population as a whole, and very much faster than in the mid-1970s.
By contrast, the Green Paper showed an increase in the number of families, with children, on relatively low incomes and concluded that the social security system needed to be more responsive to their particular needs.
I should like to get further into my speech.Secondly, the old structure tended to lock recipients into dependency rather than to liberate them from it. Too many people were in a position in which, if they sought to improve their position or that of their families, they could find themselves worse off as a result. The absurdity of that situation can be shown in the case of a married couple, with three children aged three, eight and 11, paying average local authority rent and rates. Under the old structure, on gross earnings of £070 a week, they would have had, including benefits, a total net income of £111·80. However, if their gross earnings more than doubled, to £150, they would have been over £1 a week worse off. That was not only a ludicrous situation, but was deeply immoral. The system said, "If you want to better yourself, look to the state for help and not to your own efforts."
In addition to the complexities within each benefit, there was no real coherence between them, so that supplementary benefit and housing benefit—[Interruption.] I am trying to illustrate the kinds of complexities and problems that existed in the past in a way that I think most people would appreciate hearing. There was no real coherence between them, so that supplementary benefit, housing benefit and family income supplement each had its own rules and its own fine print to cover what were often much the same issues. It was a recipe for complexity, confusion and anomaly and it was emphatically not a satisfactory basis for the future.The need for reform was therefore clear. Huge resources were going into social security. In 1978–79, about £16 billion was spent on benefits, and in the last financial year that had reached over £44 billion. Even after discounting inflation, there had been a real terms increase approaching 40 per cent., or over £12 billion, at current prices, but despite that record expenditure, the system was clearly not working. The reforms introduced this month are designed to tackle those very real and pressing problems.
All three income-related benefits are now far more closely aligned, achieving greater coherence between the help available to those on low incomes, whether in work or out of work, improving work incentives—
and achieving a simpler and more straightforward structure.
Order. May I say to those hon. Members who are now seeking to interrupt that it takes time out of the debate and also takes time away from those who may wish later to make contributions.
The new structure will make it easier for claimants to understand what is available and what they should receive. Equally important, it makes it possible to ensure that resources are directed to the priority groups which need them most. For example, we are using this new flexibility to give particular emphasis to the needs of families with children.So far, I have spoken mainly—
about regular weekly benefits, but the system of one-off payments for exceptional needs was also included in the reform. The single payments scheme no longer achieved its aim—
What is the Secretary of State scared of?
nor did it direct taxpayers' money to those who needed it most. In particular, it was no longer a system of exceptional payments. In 1949, exceptional needs payments—
Order. The hon. Gentleman is one of those who have told me that they wish to take part in the debate. He cannot expect to intervene and also to make a speech.
As I was saying, it was no longer a system of exceptional payments. In 1949, exceptional needs payments were made at the rate of one for every 10 people on benefit. By 1979, that had become one for every three. Since 1980, the cost had been doubling every two years.
The facts in relation to the appalling old system are relevant.That was out of all proportion to the increase in the number of people on benefit. In place of single payments, we have therefore introduced the social fund. As the hon. Member for Livingston rightly said, this has attracted a great deal of comment, but let us keep it in perspective. Single payments represented a tiny proportion of the total expenditure on social security and the budget for the social fund will be at about the same level as the cost of those payments in the last financial year.
Rightly, in my view, the vast bulk of social security goes on regular weekly benefits.
Order. I must tell the hon. Member for Coventry, South-East (Mr. Nellist) for the last time that he must not persist in rising if the Minister does not give way.
Order. There is no challenge to that.
Order. I hope that the hon. Member for Coventry, South-East is not trying to ask his question through the Chair, which would be an unfair tactic.
Not at all, Mr. Speaker. My point of order is that if I rise every minute or every two minutes to ask the Secretary of State to give way, that is my perfect right as a Member of Parliament to try to put my point of view. This is the only chance that I get to ask the Secretary of State questions.
The hon. Gentleman has a right, but equally he is aware of the rules. If the Minister does not give way, or indeed if the hon. Gentleman is speaking and does not give way, another hon. Member seeking to intervene must not persist.
I want to consider the effects of the changes—this was the gravamen of the argument presented by the hon. Member for Livingston—on the incomes of claimants. Many scare stories have been thrown around on those effects and I want to clarify the position.I want, first, to refer briefly to the point raised by the hon. Member for Livingston when he referred to the Policy Studies Institute, the Oxford study, the Wandsworth study and others. One of the problems with most of those studies, as opposed to the Government's data, is that they—the PSI study is an example—underplay the spending on transitional protection.
Will the Secretary of State give way?
All the studies to which the hon. Member for Livingston referred—[Interruption.] I am trying to respond to the precise questions raised by the hon. Member for Livingston. All the studies in question made misleading comparisons by quoting average single payments figures for all income support families with children in the way in which the PSI did. They also misleadingly estimated single payments figures which predate the necessary changes made in 1986 and 1987.Perhaps I should now repeat the basic point that we cannot move away from an old, complex, unbalanced and ultimately unsatisfactory system to something—
fairer and more equitable without in the process having both gainers and losers, and in that respect I recognise the point made by the hon. Member for Livingston.What are the effects? I believe that the Government have been completely frank and open about the likely impact of the changes and we published detailed tables, based on the best available data, in 1985 and last October. We have shown the results in structural terms and in terms of the cash position of those on benefits at the time of change. I want to explain that distinction, because I accept entirely what the hon. Member for Livingston said when he claimed that this was a very important point.
Will the Secretary of State give way?
I am trying as courteously as I can to respond to the basic points made by the shadow Social Services spokesman.
Order. This is a very brief debate. In fairness to the whole House, I ask the House—
I asked the Secretary State to give way first.
Order. If the hon. Member for Coventry, South-East (Mr. Nellist) rises again and the Minister does not give way, I will have to ask him to leave the Chamber.
I am trying to address the very precise and important points made by the hon. Member for Livingston.The structural tables describe an essentially hypothetical position, as they compare the position of recipients as they will be this year with the position that they would have been in had the old system of weekly benefits continued completely unchanged, but uprated on 11 April in line with inflation. The tables are also hypothetical in the sense that they compare weekly benefit entitlement under the old scheme, had it continued, with the new scheme, but without taking account of the transitional protection which many beneficiaries will receive on top of their actual entitlement under the new schemes. I accept that that is an unavoidable difficulty with such tables, but it is important for anyone making serious comparisons or looking at the issue seriously to bear that point in mind. It means that, if used in isolation, the structural tables understate the true level of resources that the Government are committing to income-related benefits at the point of change.
The cash tables, which we have also published, give a clearer picture of the actual situation which real benefit—[Interruption.] I shall come in a moment to the precise figures which the hon. Member for Livingston rightly asked me to mention. The cash tables show the actual situation which real benefit recipients will experience this month.The tables show the numbers who see an increase, decrease or no change in their weekly income at the time of transition, taking account of the changes in rules and benefit rates and the transitional cash protection that we are providing for those in the most vulnerable position—those on income support who would otherwise be worse off. I expect that some of the confusion arises from a misunderstanding of the fact that, as the hon. Member for Livingston said, last October we published figures on both those bases. For instance, some have claimed to see an inconsistency between the Government's figures and those of the Social Security Advisory Committee. There is no discrepancy for, as the hon. Member for Livingston rightly said, the committee was simply quoting from the Government's structural tables. The hon. Member for Livingston claimed yesterday that the SSAC figures were new. We are discussing the very points raised by the hon. Member for Livingston yesterday. He cited the fact that the figures were new, in order to justify today's emergency debate. In doing so, I believe that he has shown once again that he does not read what the Government publish and that he has not taken in the figures placed in the Library—
I must now ask the hon. Member for Coventry, South-East to leave the Chamber.
Order. There is no point of order arising from this. Will the hon. Gentleman please leave the Chamber? If he does not leave the Chamber, I shall be forced to name him, and that takes time out of the debate.
There is no point of order. The hon. Gentleman should leave the Chamber.
On a point of order, Mr. Speaker.
I give the hon. Member for Coventry, South-East one more chance. Will he now leave the Chamber?
Will you answer a point of order, Mr. Speaker?
Order. I name Mr. Dave Nellist.
Motion made, and Question put, pursuant to Standing Order No. 43 (Order in debate),
That Mr. Dave Nellist be suspended from the service of the House.—[Mr. Waddington.]
The House proceeded to a Division—
(seated and covered)
On a point of order, Mr. Speaker. At the point when this Division was called and in the seconds thereafter the hon. Member for Sunderland, North (Mr. Clay) was distinctly heard to refer to you as a Tory stooge. In so doing he gave great offence not only to the House but to yourself. I think that this is an appropriate point at which to raise this matter and insist that some action be taken about it as soon as the Division is over.