To ask the Secretary of State for Defence what is his Department's estimate of the number of people employed in the defence industry in the United Kingdom.

We estimate that approximately 500,000 people are directly or indirectly employed in the United Kingdom defence industry.

The Minister will know that there are many jobs in the defence industry, but does he realise that those jobs are most unfairly distributed? There is one post for every 300 individuals in the east and west midlands, one post for every 300 individuals in Wales, but only one post for every 700 individuals in the north of England and one post for every 130 individuals in the most prosperous part of Britain, the south-east of England. Will he consider the implications of distributing the jobs more fairly when he considers job cuts in the defence industry?

I was fascinated by the hon. Gentleman's statistics. They seemed to come from one who labours under the delusion that he is still an old-fashioned, unreconstructed, socialist planner. It is not the Government who direct where defence companies put their factories or locate their offices. Those decisions are taken by companies themselves. My Department places its contracts on a value-for-money basis with the best possible firms. That is the only correct policy for a Government Department to follow.

When the Minister considers not only the defence industry but the civilians in his Department, will he look at the implications of moving those people around the country as a part of "Options for Change"? Will he confirm that the cost of moving a person from one region to another has now risen to a figure in excess of £40,000? If that is the case, how can my hon. Friend justify concentrating the naval support command in Bath away from the north-east of England?

Unlike the previous questioner, my hon. Friend is at least right to concentrate on something for which the Ministry of Defence has responsibility—the location of its own personnel—although, of course, it is not directly related to defence industries. We are careful to take into account the costs of relocation, which are expensive these days. I cannot comment on the individual case raised by my hon. Friend, but we will certainly consider it in the light of his representations.

Is the Minister aware that with the cuts in defence spending, more than 100,000 men and women working in defence-related industries have lost their jobs and that many more face redundancy? Does the Minister feel no responsibility at all towards those workers and will he set up a defence diversification agency to ensure that the skills of those workers are retained for Britain's manufacturing effort?

That is another unreconstructed, old-fashioned socialist idea: creating a Government quango at the taxpayers' expense to do a job for which Governments are not qualified. It is not for Governments to direct companies on where they should diversify their efforts. I recognise the sadness that the hon. Gentleman feels about the loss of defence jobs, but, as he well knows, the strategic environment has completely changed. The figures that he quoted cannot be reconciled with those produced by the House of Commons Library, which show that not 100,000 but 52,000 jobs have been lost in the past two years. One job lost is one too many, but there is no point in crying for a defence diversification agency, which would only increase the amount of money that is wasted by Government.

My hon. Friend is, I am sure, aware of what the consequences would have been if the Labour party had been in power and had implemented its policy of reducing defence expenditure to the European average. What effect would that have had on defence jobs in this country?

My hon. Friend is right to point out that the policies of the Labour party, which proposed a cut in defence spending of one third, would have reduced jobs in defence industries by more than a third. About 150,000 jobs or more could have been lost in defence industries if its policies had been implemented.

To ask the Secretary of State for Defence what investigations he has undertaken into the incidence of desert fever.

There is to date no clincial evidence in the United Kingdom that the alleged complaint known as desert fever or Desert Storm syndrome exists as a separate medical condition. Statistics compiled by the Ministry show that, since the Gulf conflict, there has been no overall increase among serving service personnel in the incidence of the type of diverse symptons that are alleged to make up the syndrome. My Department will continue to investigate any information that is provided and to monitor all evidence bearing on the situation.

I am extremely grateful for that answer. The Minister will be aware that the United Nations Environment Programme and the United States Congress are extremely keen to monitor the results of depleted uranium shells that were left after the Gulf war. Will he give an unequivocal assurance that he will support on-site inspections by United Nations scientists and ignore the mealy-mouthed words of the Ministry's civil servants?

The hon. Gentleman's last few words serve neither him nor this issue well. This is a serious issue. We are trying to gather all the facts and information because we have an interest in all our personnel. It is in our interests that our serving forces and those who have left them are fit and well and stand no extra risk because of their experience. We will, therefore, co-operate with any investigations to try to ensure that there is not the risk that the hon. Gentleman perhaps believes there is.

Will my hon. Friend confirm that spent uranium shells were used by the United States, and did the British Government know that they were being used?

I can confirm that the United Kingdom used depleted uranium shells. We fired some 88 such shells during the conflict. The United States also fired depleted uranium shells, but perhaps I should say to my hon. Friend and the House that we use such sophisticated and effective ordnance if it is intended to save our lives. This ordnance is extremely effective and it gets through the toughest armour. Our lives were saved because of its use.

Will the Minister take this opportunity to apologise to service personnel who fought in the Gulf, but who were not provided with proper advice on the health and safety risks of depleted uranium? Following the admission in his letter of 13 July, will he come completely clean and set up an investigation into Desert Storm syndrome along the lines of that set up by the United States military authorities?

We have been open and honest throughout. I answered a question on the basis of the information that was given to me, and in all good faith. The following day, I discovered that the leaflet had not gone as far afield as I was told. I immediately gave the extra information to Members who had written to me. We were not forced into this. There has never been a cover-up. There has been a genuine search for information so that we can help people who might be suffering from what is suspected by certain newspapers and certain television programmes. All those who served in the Gulf who were most at risk—those who collected ordnance and those who packed the shells to bring them home because so few were used by us—were told of the risks, but, in the heat of battle, tank crews were not given the instructions, for the simple reason that time was tight. They had to use the shells to save their lives, and the risk was infinitesimal.

To ask the Secretary of State for Defence if he will make a statement on the effect of the proposals in his White Paper, Cm 2270, on the Eurofighter 2000 project; and if he will make a statement.

To ask the Secretary of State for Defence if he will make a statement on the implications of his White Paper, Cm 2270, for the Eurofighter 2000 project; and if he will make a statement.

The White Paper reaffirms our commitment to the Eurofighter 2000 project, which will be the cornerstone of the RAF's capability in the future.

Does my right hon. and learned Friend agree that that statement will be welcomed not only by the RAF, but by my constituents in Eastbourne who work for Computing Devices, a company which has won orders worth £20 million for the project? Will he reassure the House that production work on the project will be allocated between the partner countries on the basis of the number of aircraft ordered?

Yes, I can confirm to my hon. Friend that the project provides valuable work in his constituency and in the constituencies of many hon. Members around the country. I can also confirm that, when we come to the production stage, the precise aircraft number requirements of the various participating countries will be taken into account.

Does the Secretary of State agree that lessons must be learnt on how to look after the Eurofighter 2000 from the appalling fiasco involving the recent modification work that was carried out on the Tornado F3 —the Eurofighter's predecessor—by Airworks at RAF St. Athan? Will he confirm that the damage was discovered by aircraft technicians at RAF Leeming only as a squadron of Tornadoes was preparing to fly to Bosnia?

Will the Secretary of State further confirm that the technicians became aware of the huge quantities of aircraft Polyfilla known as Thiokol that had been used to cover up the damage when they took down the undercarriage just before the aircraft were to fly? Did that give a possible risk of the aircraft crashing in Bosnia?

The important point which the hon. Gentleman failed to mention was that the defects in the workmanship were discovered in the normal and proper way by the RAF. As a consequence, there was no risk to RAF personnel, and the work required to correct the defects is being undertaken.

In view of the volatile international scene and the near-certainty that substantial nuclear proliferation will occur over the next few years —not only in the CIS but through north Africa and the near east—does my right hon. and learned Friend think that it would be wise to provide an effective dual-purpose tactical air-to-surface missile system for the Eurofighter 2000?

Has my right hon. and learned Friend considered that system? Will he tell the House what the approximate cost would be for such a system, which could have a possible range of 500 miles?

My hon. Friend is correct to draw attention to the fact that proliferation could occur during the years that the Eurofighter may be in operation. That proliferation may not only be of nuclear weapons, but of other weapons of mass destruction. It is appropriate to consider that the Eurofighter should have proper equipment. The precise details of the equipment are being worked on. I acknowledge the relevance of the point made by my hon. Friend.

In view of the scandal that surrounds the Airworks F3 fiasco, will the Secretary of State consider for a moment putting the rest of market testing on hold?

The incident to which the hon. Gentleman refers has nothing to do with market testing, which has already produced savings of tens of millions of pounds for the RAF. Those savings enable them to carry out their responsibilities in an even more effective fashion.

I understand why the hon. Gentleman and his hon. Friends are hostile to the private sector making a full contribution to the United Kingdom's defence needs, but the hon. Gentleman does a great disservice to the RAF and to its interests.

Will my right hon. and learned Friend confirm that for EFA to do its job it must indeed have the right weapon for the sort of threats that we are likely to face in the next few years? Many countires are trying to acquire nuclear technology—some of them already have delivery systems. What studies will he instigate, as there was a complete absence of discussion of nuclear proliferation in the White Paper, to look into nuclear proliferation, so that these issues may be debated in the House?

As my hon. Friend is aware, nuclear proliferation is particularly relevant to the work being undertaken on the sub-strategic nuclear weapon and to any future for the WE177 freefall bomb. That work is now at an advanced stage and I would expect to report to the House on conclusions about the sub-strategic nuclear dimension in the relatively near future.

To ask the Secretary of State for Defence if he will list by English local authority (a) the extent of land held by his Department and (b) the amount or proportion of such land (i) in respect of which agreement on sale has been completed and (ii) it is proposed to sell by the end of 1993.

The total area of land held by the MOD in England on 1 April 1993 was 194,541 hectares, of which some 850 hectares has been, or is expected to be, sold in 1993. I am sure that the hon. Gentleman will understand, as he asked for a breakdown for each local authority, that it would take me the rest of the day to give a full answer. I have, therefore, taken the opportunity to put the figures, by county, in the Library of the House.

I am grateful to the Minister and I look forward to reading the figures. A parliamentary answer from the Minister last week showed that in the past four years the MOD's land holdings have increased by 1,242 hectares. There is enormous concern that the review of land holdings is not happening quickly enough. Counties such as Hampshire and adjacent counties in the south of England would benefit greatly if the land were released, thereby creating jobs and homes and allowing development to occur. It would also save the green belt and compensate for some of the jobs that are being lost in the defence-related industries.

The hon. Gentleman makes a fair point. Every year we have to look at what land we need and take into account the draw back of battalions from Germany and how to house and train them. The purchase of land is, therefore, a fluid issue. It is matched by land sales, because we are deeply concerned about the taxpayers' interests, so we have to ensure that when land that is not in use becomes available for sale it is sold at the best price.

This year, we will be selling £68 million worth of land, and selling 2,050 married quarters and making 200 sales of houses to civilian tenants.

My hon. Friend rightly refers to bringing British troops back from Germany. In that connection, will he please answer questions in future in acres, not hectares, so that we can better understand what he means? Will he recognise that the Russians have only 68,000 troops in the eastern part of Germany and that, we hope, by August of next year they will all be out? Would it not be wise to make land available in the United Kingdom for the eventual return of all British forces?

My hon. Friend's latter point must certainly be kept under consideration, because it is important. As for his former point, there are 2·2 acres in each hectare. I know that there is a lot of nostalgia about these things in the House—my hon. Friend can use any measurements that he chooses.

To ask the Secretary of State for Defence what is the current share of gross domestic product spent on defence; and what is the comparable figure for other North Atlantic Treaty Organisation countries.

United Kingdom defence expenditure in 1992 was some 4·1 per cent. of GDP, but is expected to reduce to 3·2 per cent. by 1995–96. Figures giving defence expenditure for other NATO countries as a proportion of GDP are included in the "Statement on the Defence Estimates 1993" on page 76. These range from 1·2 per cent. for Luxembourg to 5·5 per cent. for Greece.

I thank my right hon. and learned Friend for that detailed reply. Will he note my concern, and that of many of my constituents, that defence expenditure, as a percentage of GDP, is falling significantly at a time when, as I believe, many threats to our national security remain in prospect? Will he confirm, in particular, that the reserves remain a vital component of our defence forces? Will he pay tribute to those serving in Bosnia; will he offer encouragement and further resources to the men and women in Norfolk and elsewhere who give up their time to train and to serve the community so excellently in this way?

Defence expenditure is falling in the United Kingdom. It is also falling at a far faster rate in some countries of the former Warsaw pact, particularly Russia. As for the reserves, I am happy to confirm the inviolable role that they play. My hon. Friend will have welcomed our announcement some weeks ago that in future the reserves will have the opportunity to carry out operational work in peacetime, in the format that we indicated during the recent defence debate.

Will the Secretary of State confirm the figures of Malcolm Chambers of the university of Bradford, given in the July edition of "Parliamentary Brier'? He said that between 1988 and 1992, defence spending fell far more slowly in the United Kingdom than in our allied countries, and that we now spend 74 per cent. more than our western European allies. Is not that an example of the Government's overspending on militarism, and a lost opportunity to gain a proper peace dividend?

No, it is another example of the hon. Gentleman's muddled thinking. If he wants to examine the reality of the situation, he will find that Britain, France and Germany, in the past year, spent almost exactly the same amount on their defence forces. That is a far more accurate reflection of the security and defence interests of the most prominent members of the NATO alliance in Europe.

Does my right hon. and learned Friend recognise that the great naval base at Chatham had a very early peace dividend when, in the early 1980s, it lost 7,000 job opportunities at one fell swoop? Will my right hon. and learned Friend consider the centuries-old connection between Chatham and the Royal Navy and not close HMS Wildfire, and allow us to keep the RNVR as a last connection with our great naval tradition?

I fully understand the concerns behind my hon. Friend's question. As she is aware, the proposals on the Royal Naval Volunteer Reserve and the Royal Naval Auxiliary Service are currently out to consultation. We will look very carefully at representations, from Chatham and from any other part of the country that is affected by the proposals.

Defence expenditure in 1974–79 averaged 4·9 per cent. of GDP. Now it is 4–1 per cent. and is falling to 3·2 per cent. If current trends continue, does not the Secretary of State run the distinct risk of having his conventional defence policy unanimously approved by a Labour party conference?

I think that the hon. Gentleman can take some comfort from the fact that he will feel distinctly uncomfortable when he attends Labour party conferences. Indeed, his own Front Benchers, desperate as they are to try to appear respectable on defence matters, constantly come up against the massed ranks of the Labour party —if that is not an inaccurate expression—who still believe that there should be £6 billion worth of cuts in our defence expenditure, with all the consequences that that would have for the armed forces.

To ask the Secretary of State for Defence what plans he is making to improve the quality of housing for the armed forces; and if he will make a statement.

The three services have continuing programmes for the repair and modernisation of their housing stock.

Does my hon. Friend share my concern at the recent reports of unsatisfactory handovers and takeovers of service married quarters, which causes anxiety to the wives and families involved and has a serious effect on service morale generally? Does my hon. Friend agree that there are no insurmountable difficulties in transferring MOD housing stock to the private sector? If that were to happen, would not tenants get a much better deal?

Naturally, this is a matter which should cause serious concern because of the social implications for those who work in the forces. In recent years, great progress has been made in developing imaginative schemes to help serving personnel and their families to inhabit their homes and to take over their homes when they leave the forces.

The Ministry of Defence is working out on the concept of the new housing trust that was announced last year. That will offer exciting opportunities to improve the quality of life of our service men and women and their families. It would help the House if I put an explanatory note in the Library of the House to show the progress of the new housing trust in the private sector.

As the Government are so keen to support the principles of market testing, will the Minister undertake to consult service families in Cyprus, who are suffering a colossal level of condensation for three quarters of the year? Will he also consult families at Tidworth, who are currently accommodated in hovels—I used the word advisedly—and can hear the weather forecast being broadcast on small pocket transistor radios four doors away?

The Minister says that he is putting 2,050 married quarters on the market this year. Will they be at the top or the bottom end of the market? Will our service men and women be compelled to go on living in dog kennels?

The hon. Gentleman is absolutely right to raise the problem of sub-standard housing for service personnel wherever it exists. It is because of that problem that a continuing programme is in operation in all three services.

I am aware of the housing problem in Cyprus to which the hon. Gentleman specifically referred. Some 50 per cent. of those properties belong to the Ministry; 50 per cent. are tenanted outside. I know that dissatisfaction exists, and my noble Friend Lord Cranborne, the Parliamentary Under-Secretary of State, is examining the position. I will ask him to examine the Tidworth case as well. I also take on board the hon. Gentleman's final point.

Will my hon. Friend give urgent consideration to Ministry of Defence housing stock? While bearing in mind the need to maintain available housing stock to which to repatriate our troops, and to improve its quality, will he also consider whether surplus stock could be sold off—particularly the surplus stock at RAF Rissington in my constituency?

My hon. Friend is right: any surplus stock should be sold off. He should remember, however, that in March 1993 9,166 quarters were vacant, out of a total stock of some 71,000. Felexibility is needed, because of the movement of troops and other parts of the services—for instance, back from Germany and around the United Kingdom. We cannot sell every empty house; that simply is not possible.

To ask the Secretary of State for Defence what plans he has to encourage his Department to use the railways for the carriage of freight.

My Department uses the most convenient and cost-effective methods to transport freight, including railways, but has no plans specifically to favour the use of rail over any other method of transport.

The facts do not square with the Minister's answer. Can he confirm that, when the Government came to power, 38 Ministry of Defence depots has rail links with the main line? They have been progressively closed, however, and now only 21 are left. One of the closures was at Donington, in my constituency. Is it not ridiculous that, while the Department of Transport argues that freight should be transferred from road to rail, the Ministry of Defence pursues a clear and determined policy of transferring it from rail to road?

I am well aware of the hon. Gentleman's constituency point. He may take some comfort from the fact that a £10 million, two-year contract between the MOD and British Rail has recently been extended by a further year, to next June. Moreover, we use rail whenever it is sensible, practicable and economical to do so.

The hon. Gentleman should consider British Rail's freight transport policy, as it has changed its practices, which makes freight transport difficult, especially when an entire train has to be hired, rather than one or two carriages.

To ask the Secretary of State for Defence how many service men have been killed or injured in the last 10 years while stationed in Northern Ireland.

In the 10-year period up to 31 December 1992, 145 service men were murdered in terrorist-related incidents in Northern Ireland; a further 1,573 were injured.

Does my right hon. and learned Friend accept that soldiers in Northern Ireland must make rapid, life-or-death decisions in extremely difficult and dangerous circumstances? Inevitably, mistakes occur from time to time. Does my right hon. and learned Friend agree that, when a genuine mistake is made, soldiers should not be subject to the threat of criminal proceedings? Will he and his colleagues examine the present law and ensure that soldiers fighting the brutal Irish Republican Army do not do so with one hand tied behind their backs?

My hon. Friend raises an important point. There can be no doubting the courage and gallantry of so many soldiers in Northern Ireland. In 1992 alone, 356 awards were given for gallantry or meritorious conduct in Northern Ireland.

There have been occasions when individual soldiers have been charged with criminal offences. These are always difficult and sensitive issues, but I think that my hon. Friend would he the first to agree that our armed forces must operate under the same law of the land as the rest of the British public. It is for the courts to decide any case where a person, whether a civilian or a soldier, has broken the law of the land. The Army would be the first to insist that that should continue to be the case.

As many soldiers have been tragically killed along the border between Northern Ireland and the Republic of Ireland—including, regrettably, another one this week—is the Secretary of State surprised at the astonishment felt in Northern Ireland at his statement last week that there is now great co-operation between the security forces on both sides of the border? If he is correct, when the British forces are under attack across the border, why do the Irish Army still refuse to speak or communicate with the British Army?

The remark that I made was that co-operation between the British and Irish Governments on battling against the Irish terrorist menace is better than it has ever been in the past. That is something about which the right hon. Gentleman will not disagree. The fact that he may point out, quite correctly, that there is still considerable scope for further progress is something on which we both can heartily agree.

My right hon. and learned Friend knows well the determination of the British Army to eradicate terrorism. What talks is he having with the Northern Ireland Office to try to reduce the size of the British Army in Northern Ireland to its level of a few years ago? Will he insist that the British Army remains in support of the Royal Ulster Constabulary and locally raised defence forces in Northern Ireland?

The size of the Army contribution to Northern Ireland must depend on security considerations and on security considerations alone. I have no doubt that the defence of territory of the United Kingdom and its citizens must continue to be the first call on Her Majesty's armed forces. We will continue to discuss with the Northern Ireland Office whether there are ways of improving the use that is made of our armed forces in order to ensure that they, in co-operation with the RUC, can be as effective as possible in the battle against terrorism.

To ask the Secretary of State for Defence what recent discussions he has had with his United States counterpart concerning future defence procurement.

My right hon. and learned Friend the Secretary of State met United States Defence Secretary Mr. Les Aspin in April and May. They had wide-ranging discussions on defence matters.

I draw the Minister's attention to the clear message coming from the United States that Governments should do more to assist the defence industry to diversify. Many defence establishments are being closed or run down and people are being put out of work. Market forces alone will not provide the new jobs. There is a need for active Government intervention. Does he accept that simple message coming from across the other side of the Atlantic?

I certainly do not accept the message coming from the other side of the House on that matter. The hon. Gentleman praises the American announcements, but if he looked more closely at them he would see that they have been greeted by a great deal of quite knowledgeable criticism. In particular, I draw his attention to a recent article in The Wall Street Journal headed "The False Promise of Defence Conversion". It contained a great line from a senior defence official saying that the programme so far had been "unblemished by success." We should like to see a much more credible programme before a penny of taxpayers' money is put into it.

My hon. Friend has taken a number of important initiatives to let British industry know about the future defence needs of the country and the part that it can play. I congratulate him on that. Is he aware that, during the past few years, defence procurement as a proportion of our arms budget has fallen, and that if we are to have a smaller but meaner, tougher and better equipped Army, it is necessary for that trend to be reversed?

I am grateful for my hon. Friend's point. I should make it clear that the defence equipment budget remains, by any standards, a substantial one. In the current year, we expect to spend just over £9 billion, or 39 per cent. of the defence budget, on it. In view of the new strategic and security situation, that is a realistic proportion.

In the matter of defence procurement, is not the best way ahead to be found in the memorandum of understanding signed last week by the United Kingdom, France and Italy for the development and production of an anti-air warfare frigate to replace the type 42? Are not such procurement decisions important steps towards the common defence policy that the Maastricht treaty envisages?

We believe that that project is the right one. That is why we signed the memorandum of understanding. However, it is a most acrobatic leap, which only a dedicated Liberal federalist could make, from a simple procurement project to a common European defence policy. That is going a long and dramatic way, and I cannot go down the same road.

To ask the Secretary of State for Defence what are the current numbers of Royal Air Force officers of air rank, Army officers of general rank and Royal Navy officers of equivalent rank; and what were the comparable figures for 1988.

The number of two-star appointments in the Royal Navy at 1 April 1988 was 60 and at 1 April 1993 was 51. The equivalent figures for the Army are 83 and 77, and for the RAF 60 and 56. These figures include officers in NATO appointments, on training courses and on terminal leave.

Given the significant reductions in numbers that have taken place in service personnel over the past five years, does my hon. Friend agree that it is important for service morale that any future reductions are made on a proportional basis between senior and other ranks? What plans does he have up to 1995 to ensure that that principle is adhered to?

My hon. Friend is right. The number of service posts at two-star level and above has already been reduced by 15 per cent. since 1990, and by 1995 that figure will have risen to 24 per cent. For all of the forces overall —in other words, for all ranks—the figure between 1990 and 1995 will be 22 per cent. For their part, the Government have, over the same time scale, reduced the number of serving Ministers at the Ministry of Defence from four to three—a reduction of 25 per cent. The Opposition's policy is unclear.

Can the Minister explain why the Ministry of Defence is about to spend £2·5 million to recruit soldiers immediately after putting thousands of soldiers out of work under "Options for Change"? Is it not bad enough that we should be building submarines to sell them and refurbishing tanks to get rid of them without spending millions of pounds more of taxpayers' money to replace soldiers who have been made redundant? For all his excuses about balance of age and rank, has he not merely got his sums wrong? While I am on that subject, perhaps I should inform him that, with all its collective wisdom, the Ministry of Defence is still unable to figure out how many acres there are in a hectare: it is not 2·2, but 2·471.

The hon. Gentleman's knowledge of European affairs is clearly deeper than mine and I am grateful for the lesson. It is nice that he can teach me that, at least. As to the hon. Gentleman's other point, he must know that every part of the armed services needs new people of varying ages, qualities and ranks. We need a continuing review of our recruitment. Therefore, what he says is quite wrong. Furthermore, it is vital that we keep equipment tailored to meet the threats.

Will my hon. Friend accept that the shrinkage of the armed services under the "Options for Change" package has been widely understood, although there has been some detailed resistance? Are not the most important factors in ensuring that the morale of the armed forces is kept up and that they are dedicated to the activities to which they are directed an exact understanding of the strategic responsibilities that our forces are asked to undertake and a proper appreciation among the forces of the various threats that may come from nuclear proliferation causing the use of our rapid reaction forces?

My hon. Friend is absolutely right. If people were to dwell upon his words, they would find that they contain great wisdom.

To ask the Secretary of State for Defence how many members of the armed forces were made redundant in 1992; and how many he expects to be made redundant in 1993.

In 1992–93, 3,957 people left the armed forces on redundancy terms, of whom 95 per cent were volunteers. In 1993–94, 8,482 people will leave on redundancy terms, of whom 91 per cent. will be volunteers. Redundancy, restrictions on recruitment and normal early retirement or natural wastage are all being used to achieve the planned rundown in armed forces manpower which began in 1991. The Army will shortly be asking for further volunteers.

Will the Minister assure the House that he has consulted the Secretary of State for Employment before making redundancies on such a scale when, even on the Government's figures, there are nearly 3 million people unemployed? Will he please listen again to his hon. Friend the Member for Harborough (Mr. Garnier) and reconsider the proposed relocation of the Army records office from Leicestershire to Glasgow, which will cause nearly 200 redundancies in and around our constituencies if it takes place?

If the Army personnel office were to move to Glasgow, there would be considerable joy among people on the unemployment registers in Glasgow. We are in constant touch with the Secretary of State for Employment. However, we must not run our armed forces on the basis of the social conditions outside, but on that of the threat that they have to meet.

To ask the Prime Minister if he will list his official engagements for Tuesday 20 July.

This morning, I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.

Will my right hon. Friend confirm that today's report from the Confederation of British Industry, showing the fastest increase in retail sales for three years, is clear evidence of the recovery that is taking place in our economy? Are not those figures the results of an economic policy that is based on low inflation, low interest rates and falling unemployment?

It is a very encouraging report, and the sixth successive increase that retailers have reported. In the past week, we have seen inflation down, unemployment down, manufacturing up and now retail sales up. We have an excellent opportunity to build the lasting recovery that we all wish to see. I do not propose to put that at risk by burdening business with the extra costs that we have spent the past 14 years getting rid of.

Does the Prime Minister accept the opinion expressed by the great constitutional expert, Professor Dicey—[Interruption.]

Order. These interruptions use very valuable time.

I had thought that at least some of the hon. Gentleman and hon. Ladies on the Conservative Benches might have heard of him. Does the Prime Minister accept his opinion that

"the one essential principle of the constitution is obedience by all persons to the deliberately expressed will of House of Commons"?

By some time this evening, the European Communities (Amendment) Bill will have passed the Lords and Commons and will have Royal Assent. That is clearly the will of the House. Why is the right hon. and learned Gentleman seeking to obstruct it?

rose—[Interruption.]

Order. The House will come to order. There is a great deal of nonsense going on. [Interruption.] I shall remove some hon. Gentleman.

The right hon. Gentleman has answered a question that was not asked. It is a simple principle: does the Prime Minister accept the will of the House of Commons on whatever subject it is expressed? Can he say yes or no?

I might equally ask the right hon. and learned Gentleman—as I just did—exactly the same question, because the clearest possible way to express the will of the House is to pass an Act of Parliament, which will have been done with the Queen's Assent ratified by the close of business today. I repeat to the right hon. and learned Gentleman: after that Act has received Royal Assent, why is he seeking to obstruct it?

Does the Prime Minister not understand that the question before the House on Thursday night is required by the very Bill to which he has referred? Will he tell us whether the Government will accept the decision of the House whatever it is?

The right hon. and learned Gentleman knows that the House does not support the social chapter. The House genuinely wants the treaty that I signed, and I expect the House to reflect its genuine will in Thursday's debate.

Is my right hon. Friend aware that Hendon school in my constituency was one of the first schools to become grant maintained? Is he further aware that it is now heavily oversubscribed, and does he agree that what is good for Hendon is good for the country?

I think that up and down the country people have indicated that they are in favour of the principle of grant-maintained schools, which have shown that they are very successful. We believe that that choice should be available.

I understand why the Prime Minister will want time to study in full the Sheehy report on the police, but will he at least dispose of one of its recommendations now? Does he really believe that the battle against crime will be assisted by cutting our already undermanned police force by a further 3,000 as Sheehy recommends?

With respect to the right hon. Gentleman, he has misread the report. Sheehy does not recommend that. The Sheehy report is independent. We are examining it, and when we have examined it and consulted on it, we will reach conclusions.

Will my right hon. Friend join me in congratulating the Ministry of Defence on placing more than 90 per cent. of its defence procurement requirements with British companies to protect British jobs and British expertise? Will he please use his considerable negotiating skills to impress on the American Department of Defence that it is unacceptable that British companies are stopped by Acts of Congress from competing in the American market for the supply of items such as image intensifiers which are produced in Chelmsford, thus causing unemployment in a company whose product is the best in the country?

We believe in free trade and an open market in this as in other things.

To ask the Prime Minister if he will list his official engagements for Tuesday 20 July.

I refer the hon. Member to the answer I gave some moments ago.

Does the Prime Minister recall his aim of a nation at ease with itself? His Government are imposing 17·5 per cent. VAT on domestic fuel and attacking those who are on invalidity benefit, and now there is a cloud over state pensions. How does he reconcile that contradiction, as a nation can never be at ease with itself when there are such attacks on the underprivileged in society? I suggest that it might have something to do with his family's circus background—[interruption]

Order. This is Prime Minister's Question Time.

I suggest that at an early age the Prime Minister was taught to stand on his head—[interruption]

Order. As I have said, this is Prime Minister's Question Time; it is not an Adjournment debate.

I am afraid that I did not hear the concluding words of the hon. Gentleman's speech, but I heard the early part of it. He clearly neglected to mention that last week it was perfectly clear that VAT on fuel was also the policy of the official Opposition and the Liberal party. The official Opposition are still canvassing that. He also neglected in his catalogue many measures that have been taken to help people who are disadvantaged and to reduce tax levels for people on low incomes. Perhaps he should take a more rounded view.

To ask the Prime Minister if he will list his official engagements for Tuesday 20 July.

I refer my hon. Friend to the answer I gave some moments ago.

Is my right hon. Friend aware that some of us are very much opposed to the Maastricht treaty, but still believe that he scored a great personal and national triumph when he secured the opt-outs from the single currency and from the social chapter so beloved of the Labour party? Quite apart from the costs to industry and the loss of jobs, does he agree that the social chapter would reintroduce the corporatism that did such damage to Britain in the 1970s and before? Will he confirm that he has no intention of ratifying a treaty which contains the social chapter?

I am well aware of my hon. Friend's long-standing views on the European Community and his disapproval of much of the Maastricht treaty. While I do not share his views, I respect the strength and consistency of his feelings. I entirely agree with him about the damage done by the social chapter. It is an unemployment charter which will destroy our future prosperity. It will prevent the creation of jobs. It is a socialist charter and we want nothing of it.

In the light of the clear evidence that Lord Tebbit publicly encourages terrorism, which emerged yesterday when he spoke on television advising loyalist paramilitaries in Belfast that if they wanted to achieve their objectives they should bomb Dublin, and when last evening those same paramilitaries bombed the homes of my hon. Friend the Member for Belfast, West (Dr. Hendron) and two leading members of our party, will the Prime Minister now ask the Home Secretary to implement Government policy, issue an exclusion order against Lord Tebbit and send him to Northern Ireland?

I think that the whole House knows my right hon. and noble Friend very well. He has suffered violently at the hands of terrorists. All his political life he has been a vigorous opponent of terrorism. I may not share his every view, but I believe passionately that he is one of the strongest opponents of terrorism this House has seen now or at any stage in the past.

Will my right hon. Friend take some time to read the leader in the Evening Standard last week which ascribed to his leadership the low inflation, low interest rates and low unit wage costs which are leading Britain out of unemployment and into prosperity?

As my hon. Friend knows, I believe that our prosperity must be based on a low-inflation economy. It has not been easy to achieve; there have been many sacrifices made by many people and I repeatedly acknowledge that, but we have the lowest inflation rate for 29 years. We need to sustain it and build growth on that low inflation.

To ask the Prime Minister if he will list his official engagements for Tuesday 20 July.

I refer the hon. Member to the answer I gave some moments ago.

Did the Prime Minister find time to see last night's "Panorama" programme? If he did, he will have seen disturbing evidence suggesting that dental equipment can transmit the AIDS virus and that in America strong evidence suggests that it has already done so in some cases, and perhaps in many. As The Lancet states that more than 75 per cent. of all dentists in Britain do not routinely autoclave their equipment between patients, is it not time that we regulated and inspected our dentists in order to protect our dental reputation and our citizens when they go to the dentist?

The straightforward answer is no, I did not see the "Panorama" programme last night; nor has the hon. Gentleman's point been put to me previously. I have no doubt that my right hon. Friend the Secretary of State for Health will have heard about the programme and will be examining its findings.

To ask the Prime Minister if he will raise at the next meeting of the European Council the impact of the 1993 reforms of the common agricultural policy.

I have no plans to do so.

As Sir Simon Gourlay, the former head of the National Farmers Union, has condemned the common agricultural policy reforms as

"terminal insanity with staggering costs and red tape",

as common agricultural policy spending next year will be £29 billion instead of the £23 billion last year, as the mountain of cereals has broken all previous records, and as the average family is now spending an extra £20 a week on their food, might it be a possible compromise in a difficult week if the Government were to decide to postpone further transfers of sovereignty to Brussels until the common agricultural policy was scrapped or until individual member states could be excluded from it?

As my hon. Friend is a great expert on the European Community, he will know that breaking up the common agricultural policy would be incompatible with the treaty of Rome and with the completion of the single market. But the Government do believe that the common agricultural policy should reflect to a greater extent than at present the needs of the market, the interests of the taxpayer and the dual role of farmers as food producers and custodians of the countryside. In pursuing those objectives, of course we will listen to what Sir Simon Gourlay and many others have to say.

To ask the Prime Minister if he will list his official engagements for Tuesday 20 July.

I refer the hon. Member to the answer I gave some moments ago.

Will the Prime Minister take this opportunity to reinforce statements that he has made in the past that he will not introduce VAT on children's shoes and clothing and other zero-rated essentials?

When the Leader of the Opposition was asked about his tax proposals some time ago, he said very clearly:

"Most Chancellors won't tell you that. If you ask the Chancellor of the Exchequer what will be the range and bands…in his tax Budget he will say, 'Wait until the Budget'."

That was the right hon. and learned Gentleman's advice —the only wise advice that he has ever given the House.

I have to inform the House that I have selected the amendment standing in the name of the Prime Minister.

I beg to move,

That this House condemns the social policies of this Government which have resulted in an ever widening gap between the rich and poor, and the destruction of opportunity, and which threaten the security and prosperity of countless individuals and whole communities; and calls upon Her Majesty's Government to abandon plans designed to dismantle the welfare state and to force the vulnerable to pay a high price for the Government's economic failure.

The House will be aware that the Government recently produced a survey, covering the period 1979 to 1990–91, of households on below-average incomes. It is a document of some interest. It shows, among other things, that the 10 per cent. of households with the lowest incomes, after housing costs, have seen their incomes fall by 14 per cent. in real terms during that period. That is a decline, not relatively but absolutely, into poverty.

It is interesting to note that that group's share of national income fell from 4 to 2·1 per cent. The numbers dependent on income support in Britain have risen dramatically—from 4·4 million in 1979 to an estimated 10–3 million in the current year, over one in six of the population.

I mention those facts not as a form of special pleading for the detached and deprived, or as representative of any unrepresentative interest, because there is a wider problem that affects a large section of the population. It is that households in the bottom 50 per cent. of the distribution have seen their share of total income drop from 32 to 25 per cent. under the Conservatives, while the share of the top 10 per cent. has risen from 21 to 27 per cent., by almost a third.

Exactly the same pattern emerges on taxation, direct and indirect. The top 10 per cent. paid 32 per cent. of their gross income in taxes of all kinds, while the bottom 10 per cent. paid 43 per cent. The rich get richer, while the majority fall further behind. The truth is that the fiscal traffic is moving in exactly the wrong direction.

I concede immediately that we do not get the kind of extremes that are to be found in some of the poorer and third-world countries—wealth amid squalor—but for all that, life chances, choices, opportunities and confidence for many people in our communities are being destroyed.

It is no good dismissing social evils, as Conservatives sometimes do, because exceptional individuals can escape. For many—I suspect that this applies not just to hon. Members on the Opposition Benches—anger over the statistics that I have quoted is based on the bitterness of constituency experience.

In my city of Glasgow, for example, 78–4 per cent. of local authority tenants are on housing benefit. That reflects not some fecklessness on their part but Government policy that has forced up rents—and then the Conservatives have the cheek to complain about the numbers receiving help.

In Strathclyde, which is half of Scotland, 28 per cent. of all primary school children receive free school meals, and 36 per cent. of all primary school children in that region —I stress that I am talking about half of Scotland—qualify for clothing grant. That pattern can be repeated in every part of the country. Many of our communities are horribly scarred by the problems of unemployment.

I share the hon. Gentleman's concern about the large number of people on housing benefit. I remind him of some remarks of Patricia Hewitt, who yesterday said that there were some disincentives to people going back to work. Might not the operation of the housing benefit system be one of those disincentives, in the sense that people find that it is not worth their while seeking employment because they are receiving aid by way of housing benefit?

I should be delighted if the hon. Gentleman were worried about the impact of the Government's policy. He might like to read the document on the growth of social security, on which I have no doubt he has been briefed by the Department. He will learn that the growth in the cost of housing benefit is one of three subjects picked out as being of particular concern.

To be fair—I want to be fair—the document also says that it is a direct reflection of the Government's policy of forcing up rents in the private and public sector. The hon. Gentleman is absolutely right to worry about the disincentive effects of the present system, a subject with which I shall deal later. He should recognise the truth of what I am saying, and should also worry—perhaps he already does but, if not, I certainly hope he will—about the fact not only that are we in this unfortunate postion but that the Government are introducing a raft of policies which will reinforce and worsen it.

I do not intend to spend a great deal of time on this issue, because the arguments are familiar, but anyone considering the impact of the introduction of value added tax on domestic fuel on low-wage families and pensioners, anyone considering the 300,000 people on low pay who will be brought into the taxation system by the freezing of personal allowances, and anyone considering the impact of a 1 per cent. increase in national insurance contributions—a tax designed to discriminate in favour of the wealthy—will know that we are reinforcing with an almost perverse determination the divisions that are already built in to our society.

On 4 March last year, during the election campaign, one of Scotland's leading newspapers, The Herald, which is based in Glasgow, carried an in-depth interview with the Prime Minister. It pointed out, very fairly, that many of the policies being followed by the Government were increasing poverty in our communities. The Prime Minister challenged that and asked for examples.

Homelessness was mentioned, and the Prime Minister said, "But there has always been homelessness." Poverty was suggested as another example, and the Prime Minister asked, "What poverty?" That will be remembered by everyone in my part of Scotland. It is also an explanation of why the trends to which I referred are being reinforced —we have a Prime Minister who, faced with the social realities, thinks it is adequate to answer, "What poverty?" and then give a leaden collection of excuses.

The hon. Gentleman was referring to the household survey, but is he not being selective? Is he not forgetting what it was like when the Labour party was in power? The survey shows that only half of the bottom 10 per cent. had a telephone in 1979, whereas now three quarters have a telephone. Half now have a car, and 60 per cent. a video. He is being selective, and the figures do not support his argument.

No, I am not being selective. Apparently, the hon. Gentleman has been briefed by the defensive brigade. I have read the document with considerable care. As he will know, one of the defences offered by the Secretary of State for Social Security of the fact that the bottom 10 per cent. in terms of income distribution have seen their incomes fall by 14 per cent. in real terms after housing costs is that the figures are misleading because many new people in that group are self-employed.

By some chemistry, or with the magic of a good accountant, those people are able to return negative incomes to the taxman while enjoying a much higher standard of living than the average. That is perhaps one reason for the phenomenon to which the hon. Member for Bolton, North-East (Mr. Thurnham) refers, but it is a very odd explanation for the damning statistics that I have cited.

Of course I concede that the community's overall wealth and prosperity have increased, although not to such an extent that we can be complacent in relation to competitors. Almost uniqely in this age, however, the gap in Britain is widening. The gap between the highest and lowest paid is at its widest since 1886. If that is not a condemnation of what the Government have been doing, what is?

The Secretary of State for Social Security constantly tells us that we are engaged in a debate. I welcome that, and do not shirk that challenge. I am glad to question what is happening, but the debate should not be an invitation for the community or the Government to duck out of social commitments and responsibilities.

The Chief Secretary's review is, in a sense, an admission of failure. Whose fault is it that we are in such economic difficulties? It is a cause of endless argument.

Can the hon. Gentleman name a single advanced country that is not reviewing the problems caused by the remorseless growth of social security spending?

I shall come to that matter in a minute or two. [HON. MEMBERS: "Answer the question"] No. Let us look at our exact position, and we can then deal with that point.

Our present position is the departure point for the argument. We are undoubtedly in a financial crisis, and alibis have been coming forward in droves. The ex-Chancellor, the right hon. Member for Kingston upon Thames (Mr. Lamont), made an interesting personal statement in the House and blamed it all on Lord Lawson. Lord Lawson blamed Lady Thatcher. It took him 900 pages to do it, but he made a good case.

We have heard even more eccentric explanations. The Financial Secretary to the Treasury, who is unfortunately not present, said that it was all due to the yuppie revolution—the wheeler dealers in property of the 1980s, and the fast-move view that the best returns were to be found in trading financial assets. He went on to say that he now sadly recognised that all that was built on sand.

Everyone has someone to blame, which is particularly true of the Prime Minister, who blames everyone. I presume that, when he was Chancellor, he was merely obeying orders. He is now reduced to the most complete, but also the most desperate, legal defence: the refuge of every child in trouble, of merely saying "It wasn't me."

The problem—it is a real problem—is how to control the public sector borrowing requirement, which mysteriously inflated from a manageable, although not modest, election figure of £32 billion to a crisis-laden £50 billion-plus. I accept that the PSBR is too high. and recognise the need for a considered look at the DSS budget, but we must be satisfied that those who need help get it, and that the cash available is spent in the most sensible way. Above all, as a starting point we must ensure that the problem is in perspective.

We are helped in that matter—I pay tribute to the Secretary of State, because he has achieved one of his objectives. He published "The Growth of Social Security" at least ostensibly to ensure that the debate was well informed. I find it an extremely helpful document. Although it is helpful, it does not reveal the cataclysmic state of affairs in which the spin doctors and headline writers have invited us to believe.

There is always a featured figure, and in this case it was that the DSS budget would go up by £14 billion in real terms by the year 2000. That figure was prominent in the Department's press release, and I suppose that that is a triumph for the PR team. A PR team with the task of selling the Secretary of State for Social Security has a hard job, because of the product it is handling, but on that occasion it had some effect.

The test is that the percentage of GDP taken up by the social security budget is presently 12·3 per cent. The publication contains projections to the end of the century, the first of which, I freely concede, shows an increase in the percentage of GDP to 13·5 per cent. Naturally, that assumes that we continue to have 3 million unemployed and a low growth rate of some 2 per cent.

The second projection is of 2·25 million unemployed, which most of us would regard as less than a triumph, and a growth rate of 2·5 per cent. The percentage of GDP then remains stable. The third projection may be a little optimistic when we consider the Government's record, but other countries have managed to achieve it. It shows the GDP share dropping to 11–3 per cent.

When my hon. Friend sums up, will he point out that none of those other countries had £100 billion from North sea oil? The Government squandered that to keep unemployment at its present high level, when they should have invested it in the country.

My hon. Friend is right. That is a factor. No doubt there are special factors in every country. The Germans, for instance, have the problem of assimilating the former East Germany, and that may be a negative factor. However, the British Government had the windfall of North sea oil, yet they still performed miserably.

The point that I am making is simple to those who have read what the document says about the growth of social security: if one makes anything other than the most gloomy assumptions, it is not true to say that social security spending is out of control.

Another piece of evidence with which the Secretary of State will no doubt be familiar—it was given to me late yesterday afternoon in a parliamentary answer—is the fact that this year, assuming a balanced national insurance fund that meets its outgoings from its income, without the 20 per cent. float from the Treasury, the Department reckons that the combined employee-employer contribution would be 22–6 per cent. On the assumption that present policies will continue, the estimate for the year 1999–2000 is that the figure will drop to 20·5 per cent.

In other words, we can afford present policies at a lower cost in terms of the percentage of incomes paid in contributions. That fact surely puts some of the more excitable statements into perspective. If we are to have a constructive debate, let us not assume a consensus about, or even significant evidence for, some of the more excitable suggestions that have been made.

The key is economic performance and the growth rate. I am not prepared to assume at the start of the debate that we shall continue the undistinguished trudge of economic mediocrity that this country has managed so far, especially under the present Government, but perhaps for even longer. After 14 years of what we are told has been prudent management of our affairs by a party that believes that it is uniquely blessed with financial competence, where are we?

The other day, the Department of Trade and Industry offered in evidence to a Select Committee a list of 24 countries graded according to their GDP per head. We came 18th out of 24. Yes, we beat Turkey and Greece, and we managed to edge out Ireland on the tape. But we were beaten by everyone else; even Italy was showing us a clean pair of heels. And that is after 14 years of successful magic by Conservative Ministers.

In the Secretary of State's Mais lecture—he will not be surprised to hear that I shall say more about that shortly —he said that spending in Sweden on public protection was

"the drag anchor that made it one of the slowest growing economies in Western Europe".

All I can say is that, according to the DTI, Sweden is still comfortably taking us to the cleaners.

The hon. Gentleman said that we came 18th in a list of 24. Will he tell the House whether he thinks that we would be higher or lower in that list if we adopted the social chapter?

I believe that, although it may be comforting in the short term for one or two people with primitive Conservative views, it is a dangerous heresy to assume that it is impossible to have social protection for our work force and decent conditions for our people as well as economic success. I do not believe that, in order to be economically successful, life has to be nasty, brutish and short, although that seems to be the underlying principle on which people such as the hon. Member for High Peak (Mr. Hendry) proceed.

It is perfectly fair for the hon. Gentleman to remind us that we have been in power for 14 years. However, the time scale is interesting. It is not long since the dock labour scheme was finally abolished. The Labour party is struggling quite hard with the legacy of its trade union constitution, and such things take a great deal longer to shift than one might imagine.

If the hon. Gentleman is going to explain the entire record of the Conservative Government by reference to the dock labour scheme, he will soon be in considerable difficulty, even in the fortress that he probably represents.

I want to be helpful to the Government. My case is that surely even they can do better. However, I know that confidence is in short supply. For example, in his Mansion house speech, the Chancellor of the Exchequer said:

"a degree of cautious optimism is far from foolhardy."

My goodness, that will put a spring in the step and set the pulses racing. Even the stuffed shirts and white ties must have been astonished that, in the Chancellor's 12-page speech, no page was spoiled by reference to anything so unpleasant as the unemployment rate. Having said that, the Chancellor surely would not accept the gloomy message of despair that low growth and high unemployment is to be a semi-permanent state in the country.

Let me move on to the debate itself, which has become somewhat chaotic. The headlines give an odd impression of the extraordinary volley of attack on single parents, which some of us found rather distasteful:

"Single Mothers Out Of Firing Line".

"It's U-Turn No. 6—Crackdown on single mums' benefits halted".

"Major Overrules Another Minister".

There have also been all sorts of headlines about pensions:

"Tory plan to axe state pensions for better-off".

"Lilley tries to calm pension fears".

"Lilley on defensive on pensions".

There is an enormous amount of misrepresentation and misunderstanding. I am unashamed that I do not always know what is happening in Government. Perhaps the Minister will be able to tell me what the Chancellor of the Exchequer meant when he was reported on the front page of the Financial Times on 13 July—

The Financial Times is unreliable—it told people to vote Labour.

The hon. Gentleman says from the Back Benches that the Financial Times is not reliable. There really is a rebel in the ranks.

The Chancellor was reported as saying:

"The reason why public spending is rising remorselessly is partly the aging population and partly the increasing take-up of benefits."

The article continued:

"The latter factor was a desirable thing, but had to he re-examined in the light of the public borrowing,"

That is extraordinary. Did the Chancellor say what he meant?

Will the hon. Gentleman give way?

I will give way to the hon. Gentleman in a moment, because perhaps he will tell me the answer.

Did the Chancellor say what he meant? Did he mean what he said? Are the Government really going to run a campaign against the take-up of benefits? I have written to ask the Chancellor, and I look forward to the reply. If the hon. Member for Chelmsford (Mr. Burns) is a keen young Parliamentary Private Secretary in the Treasury, or something important like that, I will gladly give way so that he can tell me the answer.

I must disappoint the hon. Gentleman, because I am not a keen young PPS in the Treasury. Are the views on pensions of his hon. Friend the Member for Birkenhead (Mr. Field) an embarrassment to him?

I may, on occasions, look embarrassed, but not at the moment. I agree with the basic premise on which my hon. Friend wrote his pamphlet—we want an effective and strengthened occupational pension sector that is properly regulated and that provides prosperity for those who participate in it. At the same time, we want to maintain—as my hon. Friend made clear—a state retirement pension scheme to which all contribute and all draw as an essential part of everyone's planning for retirement. On that philosophical basis, I totally agree.

And all the rest?

I am not committed to all the detail in that document. It was a contribution to the debate. Of course, on the fundamental points, I have no quarrel with the areas that I have just outlined, which I have fairly summarised.

Let me ask about the Prime Minister in Tokyo. There were headlines as a result of what the Prime Minister said about the pensions nightmare. He said:

"The long-term trends were disastrous."

However, by the end of the century, which at least gives us some time to think, the cost of the basic state retirement pension is to increase from £25·5 billion to £25·8 billion in real terms—0·2 per cent. per annum. That is hardly a case for putting pensioners in the dock, as the Prime Minister tried to do today.

The Minister boasts about the rise in pensioner incomes. Of course I welcome that, but the Minister cannot take credit for it, because of his input on pension provision. There are 1·6 million pensioners still on income support, and every pensioner I know, including many experts, such as the actuaries Noble Lowndes and Partners Ltd., who published such figures recently, believe that the British pension is still at the bottom of the European league.

The one area in which the Prime Minister could have found it is in the growth in the state earnings-related pension scheme, which will rise by 14 per cent. in real terms by the end of the century. Surely not even the current Prime Minister can complain about paying out to people who have made prudent and proper provision for their retirement under such a scheme.

We are being misled in a wide range of areas, and the danger is that there will be an ill-considered conclusion that leads to an ill-defined and inappropriate package of cuts—an attempt to force vulnerable groups to contribute to a fund to bail out the Treasury for mistakes for which it was itself largely responsible.

May I move on to one or two points of importance? The first is what the Secretary of State for Social Security has been saying. I give him his full title, because in my view the objectionable nature of his theories is aggravated by the office he holds. He gave us an interesting lecture—the Mais lecture on 23 June—in which he advanced a new and harsh doctrine: do not argue that we cannot afford the present level of welfare spending because of our economic difficulties. He went on to argue that we shall never, and should never, afford the present level of spending, because a well developed welfare system is incompatible with economic success.

The Secretary of State went to Wales shortly afterwards, where no doubt he thought he would find a soulmate. The Secretary of State for Wales, proud of his new knowledge, may have been able to explain to the Secretary of State for Social Security how he got there. In any event, he went to Wales, and although I cannot obtain a text of his speech, he was widely reported as saying—this encapsulates the argument—that welfare spending at the present level throttles economic growth.

The Secretary of State may have been misrepresented, but I have read the Mais lecture, so I know that I have the thrust of it right. He lovingly spelled out his arguments. The Pacific rim was prayed in aid. It does not have well developed welfare services, which, we were told, is why it has been so successful. Perhaps Taiwan and Korea would put more emphasis on investment in new plant and machinery, in skills and in higher education, which makes even this Government's targets look ultimately inadequate and modest.

The Secretary of State went on to argue the secret of the success of job creation in the United States, which has out-performed Europe in the past 20 years, lay in the inadequacies of its welfare system. He instanced them. After all, he said, there is less generous unemployment benefit; there is no real equivalent of income support; and it is available to only a small group—ironically enough, single parents with dependent children. He went on to look admiringly at the right of American employers to hire and fire totally unfettered by the law.

That, we were invited to imagine, was the key to economic success. I think it is a digrace—I use the word in cold blood—that the man who is in charge of social security in this country has such a vision for the future of this nation. I wonder—it is, perhaps, a passing curiosity —whether he has considered the ultimate heresy in America of a minimum wage, and how on earth it can he so successful with a minimum wage.

When he talks about contracting out, has he considered why the Clinton Administration are desperately trying to solve the problems of a private insurance health service that is no longer serviceable? I accept neither his logic nor the politics of his position.

The other great cause, which I can mention only quickly in passing, came from what was hopefully described by those who took part as "brainstorming" at Chevening. The big idea is contracting out—contracting out of the state retirement pension and ultimately, we gather, from health and unemployment cover.

There are difficulties. We all know about the problems of exit control—the more people who contract out, the more today's income is reduced, while liabilities under the pension and benefit system remain unaffected. For the next 10 or 15 years at least—that will do fine for the sake of this argument—there will be an incompatibility between the long-term ideology of the Secretary of State and the short-term crisis management demands of the Chief Secretary to the Treasury.

As I have said before, and as the Minister knows, my objection is that, if we say to middle-income Britain, "Get out of the health service, get out of unemployment cover and get out of all forms of pension provision," we are moving inexorably towards a two-tier system—a safety net provision, with all the implications of stigma that flow from it. We will be moving towards a world where the gear is ill divided and where applicants' applications for benefits will be a surrender and an admission of defeat in the eyes of a large part of the community.

I say to the Secretary of State that all this creates a good deal of alarm, and a great deal of despondency. I have sympathy for the pensioner who today watches the state retirement pension falling as a percentage of male average earnings from 22 per cent. in 1978–79 to 16·9 per cent. today, and which is projected in parliamentary answers to decline further to a mere 7 or 8 per cent. in 2045. I have particular sympathy for pensioners who are angry when that fact is not explained, and when the tie-in to the retail price index is paraded as a caring triumph.

I have doubts, which are shared well beyond the House, about a Government who have a prominent supporter who has characterised a single parent as a mother with six children by four different men who does not know which child is which. I worry when I listen to the Secretary of State wowing a party conference with a famous speech about women becoming pregnant to jump the housing queue, as though it were the fashion in our community to lie back and think of a council house in an unpopular area and of a life on income support. The truth is that only one in 25 single parents is a teenager while over 70 per cent. of one-parent families result from a breakdown in a long-term relationship.

I am concerned for those who receive invalidity benefit, who can be dismissed all too easily as scroungers and layabouts. Of course, if there is abuse, it ought to be stamped out, but there are genuine concerns about the apparent plans of the Government to bring the benefit into the tax system, to cut or restrict eligibility and to reduce the level of benefit.

I warn the Government that it will be hard on those who are genuinely struggling with the effects of ill health to contribute the £500 million that taxing invalidity benefit would produce. That would mean 900,000 people paying a higher tax bill of, on average, £500 a yar. It would mean also 200,000 people being brought into the tax system who have no benefit other than invalidity benefit.

I shall refer to some departmental papers that have reached the public domain that concern the government's proposed reform. Does reform mean that a 55-year old builder who has angina and is unable to walk on the flat for more than 200 yards before he has to stop because of chest pains should be disqualified from invalidity benefit? If that is a triumph of reform, I suppose that I am against reform. But I do not accept that it needs to take that shape. I believe that reform can be based on sensible social priorities and make an improvement in the system.

The Conservative party is keen to claim the family as its political property. I believe that it has done all it can to undermine the stability of family life—or perhaps its policies have done so unintentionally. Does unemployment add dignity to a family? Does an income below the household weekly average of £250 do anything for stability? Two thirds of British families are below that level. Does an increase in the number of children who are living in poverty do anything for the role of the family? That number has risen threefold under the Government. I say that with no pleasure, and I recognise that there are questions that must be asked and answered.

The Labour party does not want to defend the status quo as an act of faith. Too much is wrong with the benefit system as it operates today, and I could give many instances—for example, the position of women in the system, with millions working part-time for low wages who have no entitlement to national insurance benefits. The system does not recognise sufficiently the contribution that is made by many women in the home as carers and of course in the workplace.

The very existence of the Commission on Social Justice is a mark of our intent and seriousness of purpose. The commission is independent, and it does not make policy for the Labour party. I hope that its role will be to stimulate and innovate, and it has made a good start.

Unlike the Government's review, the commission recognises and expects that employment, unemployment and associated problems are major factors which are linked to poverty today. We have started to lay the foundations for reform—the equal worth of all citizens, the ability of a citizen to meet his basic needs, access to opportunities—by analysing the troubles that this country faces. Those principles are important and highly relevant to our country, where the gap between those who have and those who have not is constantly increasing.

The Labour party is committed to searching for solutions. We will look for change, but change does not mean the abandonment of principles. The Secretary of State may be surprised, but I agree that £6·6 million is more than any Government would want to spend on support for single parents. But that should not be because single parents are a marginal group who are beyond the pale, or because they have lost all priority in the system. It should be because of the tragedy that 70 per cent. of single parents are trapped on income support, when the vast majority of them want to earn and to be financially independent. How we achieve that, and how we emphasise affordable child care, training and job opportunities, is the test of how we should deal with the problem.

I believe that work is the key. There must be opportunity in our society. I was much taken by a comment in a recent pamphlet by the Commission on Social Justice:

"Unemployment is not about why you lose your job, but about why you cannot get a new one".

It concluded:

"Paid work for a fair wage is the most secure and stable way out of poverty."

I agree. So would 3 million other people.

I believe that the emphasis should be on lifting the restrictions and limitations imposed by the poverty trap and life on benefit. I want to break this unpleasant stalemate, and encourage and enable the many who are trapped in the system to gain financial independence. Why, when a married man loses his job, is the family often better off if his wife gives up her employment, which may be part-time, and joins him in the dole queue?

I believe that fraud and abuse should be eliminated whenever possible. There is a clear duty to do that fearlessly and impartially. I object to the exaggeration, machismo and posturing at party conferences, with the Secretary of State appearing as Action Man. Why is fraud such a problem after 14 years with the Tories in charge? My constituents are getting no answer to that question.

I believe that occupational pensions make a major contribution to retirement. We look for early legislation based on the Goode committee report—it is patently necessary to increase the safeguards and to bring about a shift in favour of control by the beneficiaries. The present system demands that.

We believe that the basic state pension is a foundation on which all should be able to rely when planning their retirement. It should not be means-tested, certainly not on a grand scale by policies on contracting out designed to produce a walk-out by those schooled to think of a private purchase as better than, rather than complementary to, public provision.

We believe that the contributory principle should be honoured. It destroys confidence to know that Ministers have contemplated ratting on promises given to those who have paid over the years. Ministers have already done that on many occasions: the fixing of SERPS a few years ago, the disappearance of dependency additions for children in unemployment benefit—

Is the hon. Gentleman disowning remarks by Patricia Hewitt of the Commission on Social Justice, made on the radio yesterday, to the effect that the commission is reconsidering the whole contributory principle and believes that it has led to absurd results?

I have not read that quote—[HON. MEMBERS: "Ah!"] I am, however, glad that the right hon. Gentleman has mentioned it, because I do not think that a simple message has yet penetrated his head. [HON. MEMBERS: "Surely skull?"] I resisted the temptation, because I did not want to be offensive to the right hon. Gentleman.

He must recognise that, when I say that the Commission on Social Justice is independent, I mean that it is independent. So, although it may propose many things that we will want to adopt, there may be others that we will not want to adopt. We shall look at each recommendation on its merits. That may seem a remarkable fair-minded and independent way to proceed, and it may therefore be anathema to the political machinations of the right hon. Gentleman—but he must live with that.

Speaking of machinations and Machiavellian manoeuvres, I do not think there is a great deal of principle about a Minister who can cause a letter to be drafted to the Prime Minister saying that abating invalidity benefit at a rate of 50p in the pound above a given threshold raises difficult questions about the future of the contributory benefits system

"before we have fully thought through the direction that we want to take".

That certainly suggests that the right hon. Gentleman's constancy in defence of the contributory principle in public is not reflected in what is happening in private and in what may emerge from the desperate attempts to meet the Chief Secretary's targets for slaughter in the benefits system.

There is a fashionable heresy—one that many want to encourage—that there is no difference between the parties. I do not believe that that is true in the wider sense; I am certain it is not true of social policy, over which a major battle will be fought in the months that lie ahead. There is a real division between the parties.

I am not interested in reform based on the short-term dictates of the Treasury. We have a principled position, a clear view of the duty of the community to provide opportunity that allows the individual to flourish in a way that the unfettered market never will allow.

The Minister should talk to my constituents. I would not presume to judge the situation in St. Albans, but he can go to almost any large community in this country and talk to people who cannot buy into the marketplace—they could never get started up the financial ladder that would allow that. Such people have been deprived of educational opportunity; their talents have been lost to the nation because they have had to struggle with deprivation, a lack of income and the social pressures with which almost every Member of Parliament is familiar. I see it every day. I am ashamed of the record of all of us over the years, but I am more directly ashamed of a Government who, far from having struggled in vain, have not struggled at all.

We challenge the analysis that divides society into two thirds and one third: the syndrome of the underclass. We stand against the theory that those who are financially fortunate have no interest in helping those who are not. The truth is that two thirds of the families of this country have an income below the national average. For the great majority—I hope, for all—there is a common interest in acting together to raise standards and eliminate injustice. That fight is not being fought at the moment.

With today's weapons and tomorrow's vision, the Labour party will continue to struggle against want, disease, ignorance, squalor and idleness—the forces that still depress and destroy people. We must try, to the best of our ability, to liberate those people by providing them with opportunity and hope. We look forward to the challenge. With the support of the public, we will win where it matters most—at the ballot box.

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

'supports the Government's approach to the reform of social security, which is designed to improve the system, protect the vulnerable and prevent spending outstripping the nation's ability to pay: and deplores the scaremongering tactics of the Opposition, who cause unnecessary alarm to the least well off, elderly and disabled people, yet fail to produce responsible alternative policies.'.

Several weeks ago, I called for a debate on the future of social security, and that call has been widely welcomed. I have already received a number of interesting contributions, and I particularly welcome those from individual members of the Opposition. The hon. Member for Sheffield, Brightside (Mr. Blunkett) has had some sensible things to say on single parenthood. The hon. Member for Birkenhead (Mr. Field) has made some radical proposals on pensions. Even the Commission on Social Justice holds out the promise of constructive thinking, albeit postponed for another year.

I was delighted when I heard that the Opposition had chosen to spend a full day debating social security policy. I thought that at last we would hear some constructive proposals from Labour's official spokesman. Alas, my optimism got the better of my experience. What a disappointing speech we heard from the hon. Member for Glasgow, Garscadden (Mr. Dewar), what a wasted opportunity. He offered us not a single positive proposal. He could not rise above his normal litany of sanctimonious humbug, tedentious statistics and scurrilous scares.

That is not just my verdict. Writing in The Guardian about the contribution by the hon. Member for Garscadden to the debate, Hugo Young said:

"Labour's instant responses to everything Mr. Lilley has begun to venture bear all the hallmarks of a party incapable of addressing a long term issue if there's an easy and destructive short term point to score."

The hon. Member for Garscadden has accepted that the public sector borrowing requirement is too high and that he needs to take a considered look at the Department of Social Security budget. Nothing that he has said today would avoid the path to higher spending and borrowing.

Yesterday, Labour's Commission on Social Justice produced its first interim report. It is the first time that any party has contracted out its policy preparation. As it is the Labour party's first venture into privatisation, the Government have a vested interest in its success, to vindicate our principles. Alas, I found its first report rather disappointing. I shall go back to see whether there is more to be gained from it, but on first reading I could not see one ounce of fresh thinking—only the old tedious obsession with equality, a preoccupation with attacking the wealthy rather than relieving need, a trawl of all the old leftish critiques of social policy and a shopping list with implied demands for extra spending worth billions of pounds. There is not a single explicit proposal for saving, and not even any clear recognition of the need to curb the remorseless growth of social security.

The report is keen on numbers. It contains four objectives, five principles, 10 propositions, but not a single concrete proposal.

Does the Secretary of State really believe that the redistribution of income from the poor to the rich, which has been such a feature of his Government's period in office, is tedious?

The hon. Lady should realise that almost every group in society has improved its well-being under the Government. For example, the income of an unemployed person with two children has gone up by 10 per cent. in real terms. Furthermore, the Social Security Select Committee believes that income support levels are now some 15 per cent. in real terms above the level that the previous Labour Government thought satisfactory when they were in power.

I am discussing the first interim report of Labour's Commission on Social Justice. I suppose that a commission including seven left-wing professors was bound to be a bit short on reality and long on rhetoric. Rhetoric without responsibility has been the privilege of zealots throughout the ages. The report is full of glib but meaningless phrases. My favourite is Gordon Borrie's assertion:

"We must stand in the future, and then work out how to get there."

I am not sure that that is quite a fair description of the shadow spokesman on social security. He stands in the past and still has not quite worked out how he got there.

Those who understand Labour-speak tell me that all the cryptic language in the social justice commission's report contains coded messages that are all quite encouraging. They say that I should not despair of the social justice commission. It is gently nudging Labour towards reality, acceptance of a market economy, recognition that expenditure cannot outstrip the nation's ability to pay and all the other things that I have been saying in rather boring uncoded English.

I reaffirm that I shall be only too happy to consider any constructive contribution that it may make to the public debate for which I have called. One thing is certain: we shall not get any constructive contribution to the debate from the Labour leader, shadow Chancellor or shadow spokesman on social security, all of whom have shown themselves to be incapable of radical thought.

The hon. Member for Dagenham (Mr. Gould) writes in this week's New Statesman and Society:

"Smith is the prime exponent of the school that believes that Governments … should be harried—but on no account should the Opposition divert attention by offering anything positive of its own."

The hon. Member for Dunfermline, East (Mr. Brown) is assiduous in ensuring that his attempts to harry are devoid of any positive comments. That is why he has become universally known among the press corps as "Mr. Faxascare". He has devalued the currency of political debate so much that his words are now losing their value faster than the pound would were he ever to become Chancellor.

The future of the social security system is vital to millions of people. Nearly all of us depend on it to some extent at some period in our lives. Reform of the welfare state is most in the interest of those who most depend on it. The hon. Member for Garscadden, by rejecting constructive debate in favour of negative criticisms, as he did today, neglects the interests of those whom he claims to want to help. I shall not respond in kind.

We need a constructive debate on the future of social security, not just for financial reasons or because of the growth of dependency, but because the world has changed enormously since the Beveridge system was established. New needs have emerged that were scarcely considered when Beveridge wrote. The nature of old needs has changed as society has altered dramatically.

Does the Minister realise that many of our postbags are full of letters from people writing about this subject? I can give a number of examples, but will use only one. A constituent of mine receiving mobility allowance was suddenly turned down, although it was apparent that she was desperately ill. She managed to get to my constituency surgery with a great deal of help from her neighbours. After I had written, we eventually got an appeal, which she won and got her money back.

I have seen numerous cases where people have been turned down for invalidity benefit, mobility benefit, attendance allowance and so on; yet when we start scrutinising, we get the money for those folk restored. There must be a better system, which would not knock people off benefits when they are quite entitled to get it. However, since the Secretary of State has come in to run the show, our constituents have been suffering deeply. The Government have given the message to social security offices to make cuts. That is worrying. I shall give the figures to the Secretary of State. He has received many letters from me, and I shall continue to send them to him.

I shall certainly look at any individual cases that the hon. Gentleman cares to bring to my attention. I am sorry if individual constituents received wrong decisions. I am glad that those decisions have been put right by the independent adjudication officers and procedures. If those procedures need improving, the House will say that it is right that they should be improved. No edict has gone out to suggest that such wrong decisions should be given, and that would not be possible. The law has to be followed. The law on social security is laid down by the House and by the regulations that we, in turn, lay down under that law.

An informed debate needs information. That is why I have spelled out the facts in "The Growth of Social Security", and I am glad that the hon. Member for Garscadden found it useful. The Social Security Select Committee urged me to publish it and I was happy to respond to its request. The document makes the position clear. The social security budget is more than £80 billion a year. That is twice the size of the budget of the next largest Department. It is nearly one third of total Government spending. It is one eighth of gross domestic product. It means that, on average, it costs every working person £13 every working day to finance social security. Moreover, social security spending has been rising. It has risen by two thirds since 1979.

That growth has not been primarily due to the rise in unemployment. If we exclude all expenditure on unemployment, there was still underlying growth of spending on social security of 3 per cent. a year above inflation since 1979. The projections suggest that the underlying rate of growth—again, excluding unemployment—will be 3·3 per cent. a year in real terms up to the end of the century.

Does the Secretary of State agree that, according to his useful document, unemployment benefit expenditure is now more than £9 billion compared with £3·7 billion at the beginning of the Conservative Administration 14 years ago? Does he further agree that that represents a great deal of benefit expenditure but also a great deal of social insecurity? Will he spell out his assumptions about full employment and unemployment in the future? Does he agree that we need economic policies to create social security and not always so-called social security policies?

If the hon. Gentleman cares to read my Mais lecture, he will recognise that I accept that there is an important two-way link between social security and economic policy. It is important that they work in harness, and it is absolutely essential that we do all in our power, as we have been doing, to get unemployment down and deal with the real underlying problem, to which I shall come—which is the tendency for people to spend longer and longer on that benefit, rather than increasing the number of people to come on to it in the first place. I shall come to that issue later.

Will the Secretary of State give way?

No. The hon. Gentleman has had his chance.

Since I published the document, the Opposition have continued, as the hon. Member for Garscadden did today, to deny that there is any basic problem. I wish that they were right. It would be an immense achievement if the Government had managed to secure the absence of any problem in social security, as every other major industrial country faces such a problem, even though the hon. Gentleman appeared to be utterly unaware of it. They all freely admitted that at the G7 meeting in Tokyo.

Indeed, other countries that did not take some of the steps that we introduced in the 1980s, such as linking benefit rates to the cost of living rather than to earningss, face even tougher problems than we do. France has had to cancel a pension increase that was planned for this month. Three weeks ago, Germany announced a package of measures to cut £7 billion off its social security spending next year, including a 3 per cent. reduction in unemployment benefit rates, and a reduction in their duration.

Sweden, which had by far the most generous social security system, has found it a crippling burden. Public spending on social protection was more than a quarter of its gross domestic product. Few doubt—it is not just me —that that was the drag anchor that made Sweden one of the slowest growing economies in western Europe over the past two decades. Finally, last year it was faced with financial collapse and all parties agreed to a programme of wholesale reform. The Lindbeck report was commissioned and came up with some of the most radical proposals for the state's scaling down its activities in the social security sphere that any country has yet seen. Sweden was forced to announce an increase in the state pension age to 66, beginning almost immediately for both men and women and phased in over the next four years.

In this country, we have been able to avoid such arbitrary cuts in benefits because we have thought ahead. By means of this public debate, we intend to continue looking ahead so that we can make sure that we get it right.

I hope that I did not say that there were no problems in the longer term, but I did say that the problems were overstated. The Secretary of State will be familiar with table 6, to which I referred earlier. It says that, in case 1, there will be an increase, until the end of the century, in the percentage of gross domestic product going to his Department. As he knows, that is based on the assumption that unemployment remains at 3 million and growth at 2 per cent. Does he accept that there are two other projections—one producing stability and the other a cut? Is he ruling out the improved economic performance that would result in either of those two projections?

In case the right hon. Gentleman does not let me intervene again, let me ask a second question. I understand that his personal position is that we have to cut, not because of financial difficulties—as many countries have done—but as part of economic policy, because he believes that it makes for a leaner and more efficient economy. What does he think that the proper percentage of GDP should be?

I have no desire to cut. I wish to curtail growth in the system to ensure that it does not outstrip the nation's ability to pay. It manifestly has been doing that and, if we do nothing, it will continue to do so in the future.

The hon. Member for Garscadden says that we can ignore the underlying growth because of the underlying reduction in unemployment, which will dampen that growth. I maintain that we should look at the underlying growth. We should not allow a return to lower levels of unemployment, which we all wish and expect to see, to conceal that underlying trend. Indeed, we exclude expenditure on unemployed people from the Government's new control total because we believe that it is right, in the downswing in the economic cycle, to finance a rise in unemployment, and we rightly accommodate that rise for both economic and social reasons.

Therefore, it would be wrong to use a decline in unemployment as the economy recovers as an excuse to relax restraints on public expenditure during the recovery. It is clear that the underlying position of spending outstripping national income cannot be sustained indefinitely and that we ought to take action sooner rather than later.

The other reason that the hon. Gentleman gave us as to why we can evade any need for serious reforms is his claim, made also by the hon. Member for Croydon, North-West (Mr. Wicks), that we can curb the growth in social security spending by action elsewhere. Invariably, that means extra spending on training, investment in the infrastructure and similar measures. All those are desirable in themselves and they would have desirable consequences for social security. We should certainly continue to foster them by all the means at our disposal. However, on any reasonable prospect, they cannot be a substitute for structural reform of the social security system.

If social security spending continued to grow too fast, it would throttle economic growth—I said that it would, not that it had in the past—and pre-empt private and public resources for training, investment in the infrastructure and other desirable programmes. It is sheerest fantasy to suggest that we can significantly expand public spending in other Departments in the fond hope that that will reduce social security spending some time in the future. There is no escaping the need for structural reform of the social security system, both to contain spending and to ensure that the money is spent to the best effect.

The Secretary of State said that it was fantasy to believe that one could reduce social security spending by increasing expenditure in another Department. Does he recognise that reductions in spending in other Departments are increasing social security spending? What has been the increase in expenditure on housing benefit as a result of the direct policies of the Department of the Environment to cut grants and to force up rents? Will he assure us that the Government will not attempt to penalise tenants through cuts in housing benefit as a result of that shift in expenditure from the Department of the Environment to the Department of Social Security?

I did not say that it was impossible for the impact of spending in one Department to influence that in other Departments beneficially or adversely. I said that it is fantasy to suggest that there is scope for avoiding any need for reform of the social security system by spending more now in the hope that it will produce a reduction in future. Of course I acknowledge in the document that there has been a transfer of subsidy from bricks and mortar to individuals. That is sensible, because ultimately it means a better working housing market, and that means that individuals have more choice as to where they live and where they get the help, rather than being anchored to one building.

To make sensible structural reforms we need to understand where the growth in social security is coming from and why. The analysis that I published makes that clear. First, the growth since 1979 is not principally due to the growth in unemployment, as is repeatedly alleged. Total spending on all benefits to the unemployed is only 13 per cent. of the Department of Social Security budget. The rest of the budget has been growing at 3 per cent. per annum since 1979.

What about low wages?

Order. The hon. Member for Wallasey (Ms Eagle) must either try to catch my eye to make a speech or remain quiet.

Unemployment is falling, and as the economic recovery gains momentum we can expect it to fall further. In addition to the cyclical movement, however, there has been a longer-term trend in the length of time that people spend on unemployment benefit. Until the mid-1980s we were paying unemployed people to spend longer and longer on benefit. Arrangements for paying benefit had been divorced from job search. Rules requiring people to look for and accept available work had been enforced with declining vigour. Between the early 1970s and the mid-1980s the number of people referred for refusing available work and then denied benefit had declined by about 50 per cent.

Starting with the restart programme in 1986, however, successful policies have been introduced to keep unemployed people in touch with the world of work. During the 1980s the Government also sought to lighten the obligations imposed on employers. It was felt that, rather than protecting jobs, such burdens discouraged employers from taking on extra staff. As a result of those changes, Britain has had markedly greater success in generating private sector jobs in the 1980s upswing than previously or on the continent, and we are the only European Community country in which unemployment has fallen in recent months.

I am astonished that the Labour party should want to put that success at risk by imposing the social chapter on the United Kingdom. It is even more astonishing—but not surprising—that the Liberals, who have one representative in the Chamber, should join them, given that the Liberal leader has roundly denounced the contents of the social chapter root and branch.

We have shown the value of easing burdens on employers, of freeing up the labour market and of making unemployment benefits conditional, while providing active help to people to return to work. In doing so, we were acting in the spirit of Beveridge, because he foresaw making receipt of benefit

"subject to the requirement of attendance at a work or training centre after a limited period of unemployment".

The second clear conclusion from the document that I have published is that the expected growth in spending to the end of the century will not be due to the growing number of pensioners. The hon. Member for Garscadden was correct about that. Indeed, there is not expected to be any increase in the number of pensioners this century. There will be an increase in the second and third decades of the next century, which will obviously influence our decision on equalising the state pension age. That was what my right hon. Friend the Prime Minister referred to in Tokyo.

Claims that the Government are forecasting an increase in the number of pensions, and that consequently we shall target benefits to pensioners, are unfounded and are demonstrated to be so by the document that I published. I know that that will probably disappoint the Opposition and particularly the Liberal party, in their campaigning in Christchurch, but they cannot say that the document suggests that we shall focus adversely on pensioners in any way as a result of the review that I have initiated.

The Government have always attached the highest priority to improving the position of pensioners. Our policies have been outstandingly successful and we are determined to build on our achievements. First, we recently channelled to the least well-off pensioners an extra £1 billion over and above annual inflation increases since 1989. That included a £2 a week increase for single pensioners and £3 for a couple, above inflation, last October. This April, poorer pensioners gained a further £2·90 a week for a couple from abolition of any liability to the council tax.

Secondly, we have protected pensioners' savings by tackling inflation, which is now running at 1·2 per cent. a year, whereas we uprated benefits by three times that amount in April. Thirdly, we have kept interest rates above the level of inflation, so that pensioners get a real return on their savings—not a bogus income while their capital was being wiped out, as happened under the last Labour Government. Finally, we have encouraged individual provision for retirement, over and above that provided by the state. About 70 per cent. of new pensioners now have occupational pensions and nearly 80 per cent. have additional income from savings and investments.

New figures published today show the cumulative success of those policies in improving incomes in pensioner households. Average incomes in 1990–91 were about 42 per cent. higher than in 1979, after allowing for inflation, and incomes after housing costs were worth more than half as much again as they were in 1979—about 54 per cent. more in real terms.

The analysis that I have published shows that the growth in social security provision between now and the end of the century will come primarily from three main sources: invalidity and related benefits, expenditure on lone parents and housing benefit. Opposition Members may not like those facts to be spelt out but a sensible debate must focus on the facts, and those sources are where the growth is coming from.

The number of people receiving invalidity benefit has grown from 600,000 in 1979 to 1·5 million now and will have trebled by 1995–96. Yet the nation's health has been improving during that period. I challenge the hon. Member for Garscadden to clarify his remarks and tell the House whether he believes that we should ignore or accept that—or will he and the Commission on Social Justice review the future of that benefit?

I made it clear that we want to build hope and incentives into the lives of those trapped on invalidity benefit and that we do not want abuse of the system once we have decided what the eligibility principle should be. That includes single parents as well. Has the Minister recently re-read the evidence given to the Public Accounts Committee by Sir Michael Partridge, his permanent secretary, which made it clear that he believed that there was a strong link between the level of unemployment and the number of people on invalidity benefit? Is he now repudiating Sir Michael's opinions at that time?

We have spelt out clearly the relationship between invalidity benefit and cyclical forces in the very document whose publication the hon. Member welcomed —obviously Sir Michael Partridge had his input into it —but he has not answered my question. We all want to improve and lighten the lives of those on invalidity benefit. but does he believe that the present tests are acceptable, or would he review them and consider reforming them?

People are not trapped on invalidity benefit; they are meant to be on it because they are incapable of working. That is the basic criterion laid down by Parliament, and if the hon. Member does not agree with that—

I certainly agree. I am genuinely open to correction, but my understanding is that the outstanding feature is not the number of people who have gone on to invalidity benefit but the length of time that they have remained on it. Of course I accept that invalidity benefit is for those people who are unfit to work and are genuinely ill, and no one would object to that. I object to rewriting the rulebook, not because of any wish to deal with genuine social and personal problems but simply because the Chief Secretary tells the Secretary of State for Social Security what he must do.

The hon. Member continues to wriggle. The number of people on that benefit will have trebled from 600,000 to 1·8 million by 1995–96. I know of no other reason for examining whether it is being applied in quite the right way.

It is right to consider whether we can develop a more objective test of medical incapacity for work. I recognise that any objective measure is bound to be controversial. Wherever the threshold is set, it will be possible to highlight difficult cases that fall just short of it. However. it is implicit in any test, including the present one, with which Opposition Members seem to be satisfied, that some people will be found to be capable of work while others will he found to be incapable. It is surely better to have as objective a test as possible rather than to rely on an element of subjective assessment.

Is not one of the problems with invalidity benefit that some people on it have convinced themselves that they are incapable of improvement? They need to be given the opportunity to test themselves in some way without losing their eligibility for benefit. When challenged with work that they can manage, many people find themselves getting better physically and mentally.

My hon. Friend has hit on what may be a genuine problem in some cases. We want to encourage disabled people who can return to work to do so. That is why we established disability working allowance. We are keen to see how that benefit develops as the economy recovers and work opportunities increase. It is reasonable for disabled people to receive extra help to enable them to compete effectively in the marketplace.

As I have said, it is right to develop, if we can, an objective medical test. I certainly do not blame doctors for the apparent inadequacy of the present system of invalidity benefit. The rules are complex and doctors often feel themselves placed in an invidious position. Since we began tightening the way in which the current rules are administered, 300 doctors have contacted us to express their support for changes. It was not the Government but the magazine Monitor, which goes to 35,000 general practitioners, which carried out a survey of doctors, two thirds of whom said that they had given claimants sick notes knowing them to be capable of work. Hon. Members may rest assured that any proposals that we develop will be brought before the House for consideration.

It was also right to raise the issue of lone parenthood. For too long it had been deemed politically incorrect even to discuss the facts, let alone to reaffirm the value to children of being brought up by two committed parents. The number of lone parents rose from 570,000 in 1971 to 1–3 million in 1991, and 1 million of them depend on benefit. Fewer than one in four of them receive a penny of regular maintenance from the absent parent.

Total benefit expenditure on lone parents and their childen has trebled since 1979 to £6·6 billion. The hon. Member for Garscadden and his hon. Friends have tried to close the shutters on debate by condemning anyone who mentions lone parents of advocating

"Victorian morality and bully boy tactics".

Those are the words that the hon. Gentleman used when my right hon. Friend the Secretary of State for Wales and I raised the issue. That is nonsense.

We know perfectly well what a raw deal many lone mothers get. They are in that position through no desire of their own. They have perhaps been deserted by their husbands; they have been subjected sometimes to violence; and they are struggling to bring up their children without any support from the father. That is why we set up the Child Support Agency, which is dedicated to securing payment of maintenance from the absent parent. That objective has received widespread support from the general public, from lone mothers and from responsible absent parents. I remind the hon. Member for Garscadden that he has also supported it, although grudgingly.

It seems that I cannot do anything right. I feel like one of the victims of society. The right hon. Gentleman knows that I have always defended, sometimes under some pressure, the principle that a parent ought to contribute to the maintenance of his or her child. I am listening with interest and with some sympathy to this latest, and perhaps uncharacteristic, passage from the right hon. Gentleman. Does he agree that it is important, for the family's benefit and especially for the benefit of children, that some sort of disregard of income support is considered for single parents?

The hon. Gentleman has just demonstrated what I meant when I spoke about sanctimonious humbug. His assumption that no one else has any regard for the difficulties faced by people such as lone parents is offensive, and most people would find it hypocritical.

What is the benefit to the family?

The benefit is that maintenance payments are portable and help the mother to go back into work, which is what the hon. Gentleman said he wanted. It is right that in the first instance payment for supporting a child should be made by both parents. The taxpayer should step in only if the parents do not have the means to support their child. To suggest that such help should be additional is extremely perverse.

I should like to be quite clear on this important statement by the Secretary of State. He says that it is perverse to suggest that we should follow the example of Australia and some other countries in which there is some gain for the lone parent on benefit. At the moment, for 70 per cent. of those on income support, there is a straight pound-for-pound clawback. Is the Minister ruling out any change to that? If he is, he will increase the difficulties surrounding the system, which in principle is right. However, many of us have grave reservations about its practical impact.

It is right that in the first instance the parent and not the taxpayer should pay. To suggest that both should offer support and that it should be cumulative will not go down well with those who have written to me in droves and who overwhelmingly support what we are doing. The hon. Gentleman always tries to criticise and is muted in his praise of the system because the Labour party conference voted overwhelmingly against the Child Support Agency. The Opposition would prefer mothers to be dependent on the state and the responsibility of fathers to be taken over by the state. The hon. Gentleman would do better to condemn his party rather than trying to use moral blackmail on those who raise the issue while we are trying to he constructive about it.

Will the Minister please give way?

I will, but for the last time.

The right hon. Gentleman seemed to be glancingly critical when he spoke about the Secretary of State for Wales. Notwithstanding his response on that matter, does he accept that the Secretary of State for Wales caused a great deal of anger by his now famous speech about a housing estate in Cardiff? People of all parties in that part of Wales were greatly offended by the ill-informed and rather arrogant way in which his right hon. Friend sought to deal with the problem. Will the Secretary of State say specifically whether he intended to criticise his right hon. Friend?

I intended quite the reverse. I associated my right hon. Friend and myself with our common attitude to the problem, which is to recognise that there are different categories of lone parents. As my right hon. Friend said in his speech, many such parents did not bring their circumstances on themselves and their situation often reflects discredit on their husbands or partners. It is to my right hon. Friend's credit that he helped to raise the issue. I suspect that the overwhelming response in his mailbag, as it certainly was in mine, was to welcome the fact that the issue has been raised and that it is no longer treated as taboo.

The growth in lone parenthood is not primarily the result of more generous social security benefits. The ratio of benefit relative to earnings has not risen markedly in recent decades. More significant factors are likely to be the availability of housing. The hon. Member for Brightside has called for positive housing policies that do not encourage the belief that the only way to a home is having a baby. Does the Opposition spokesman on social security endorse or disown that statement?

My position is perfectly clear.

No doubt the hon. Gentleman's remarks will be obfuscating.

I find the personal remarks that the Secretary of State makes rather unfortunate; however, I shall take them up on another occasion, because he has raised an important point.

There has to be housing for families who find themselves without a roof. I would strongly object to the removal from the priority list, under the homeless persons legislation, of a family with a child simply because it happened to be a single-parent family, rather than what we all consider desirable—a two-parent family. The housing situation has to deal with social realities. [HON. MEMBERS: "Wriggling."] I am not wriggling out of anything, I am answering a question.

I do not believe that, in saying that I am giving any positive encouragement or assuming that anyone would take it as encouragement to have children—although there appears to be a mythical band of people who look at our convoluted housing allocation systems of our country and say, "We must have a child to get another 20 points on the list." It is a destructive myth.