Commons Chamber

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House Of Commons

Friday 8 July 1994

The House met at half-past Nine o'clock

Prayers

[MADAM SPEAKER in the Chair]

United Kingdom (Inequalities)

9.34 am

I beg to move,

That this House expresses concern at the growing inequalities between richest and poorest in Britain today and draws attention to the recent report of the Institute for Fiscal Studies entitled 'For Richer, For Poorer: the Changing Distribution of Income in the United Kingdom 1961–1991'; expresses its belief that gross inequalities contribute to economic inefficiency; draws attention to the inequalities which particular groups including the disabled experience; believes that a whole range of measures and policies are needed as well as a change of direction in existing government policy if the problems of inequalities and lack of opportunities are to be rectified; and calls on the Government to introduce urgent policies of a fiscal, economic, social and educational nature in order to bring such a change in direction about.

Having been given the opportunity to introduce a motion of my choice, there are two reasons why I decided to speak about inequalities in Britain, lack of opportunities, and the huge and growing gap between richest and poorest in our society.

First, recently, a number of excellent and telling studies on the subject have been published. My motion refers to one of them—the report of the Institute for Fiscal Studies entitled "For Richer, For Poorer", which received considerable publicity and attention when it appeared a month ago.

My second reason is more fundamental and is rooted in my role as a Member of Parliament. It relates to my experiences in my constituency in the area, where I was born and grew up and which I have represented 15 years—first in the European Parliament and, since 1987, in the House. Witnessing the growth in inequality and poverty in my constituency is the more fundamental reason for tabling my motion. I see more poverty and inequality today in my constituency than I remember at any other period in my life. Unemployment and poverty seem more deeply rooted now than at any time since the 1930s.

I am sure that all right hon. and hon. Members are profoundly attached to their constituencies. That feeling can turn to anger and frustration if we feel that the living and working conditions in our constituencies, or in the country as a whole, are worsening.

Perhaps the hon. Lady could set some parameters. What is her benchmark of poverty today, bearing in mind that living standards have increased substantially over the past 10 years?

I have only just begun my speech, and I will answer that point later.

When one sees, as I do, constituents who are constantly finding it difficult to make ends meet, for whom the day-to-day business of living is financially difficult and who are never able to afford treats or extras, that is close to poverty. The relentless grind that many people have experienced probably since the first recession in the early 1980s is difficult for them to tolerate. If, after I have developed my argument, the hon. Lady wants to intervene again, I shall be happy to allow her to do so.

The facts of the growth of inequality in Britain cannot be disputed. The Institute for Fiscal Studies report revealed that poverty has trebled during the years of office of this Government. It is described as a widening of the gap between rich and poor which is unprecedented in modern times. Inequality in the distribution of incomes increased dramatically during the 1980s, having previously fluctuated over only a small range since the early 1960s.

During the past 15 years, the richest 10 per cent. became almost twice as well off. The number of people in Britain with an income below half the national average more than trebled, to 11.4 million—one in five of the population. That occurred even though between 1961 and 1967 that category fell numerically and there was a drop in inequality in that particular era.

Perhaps not unexpectedly, there has been a growth in poverty among those out of work, especially among the long-term unemployed. When people are dependent on benefits which are then squeezed, their position becomes even more difficult. However, what has been most staggering during the 1980s has been the growth in poverty among those in employment. Many of us are deeply worried about that phenomenon.

The problem of low pay is well documented by various organisations with a remit to study the matter, such as the Low Pay Unit and the National Association of Citizens Advice Bureaux. I commend their work. As we know, the global figures translate into local examples. Over the past two or three years, I have had contact with my local jobcentres to see what sort of jobs were available. What I discovered was quite alarming. For example, a year ago there was an advertisement for a security guard on a 70-hour week at a rate of £1.85 per hour. What sort of wage is that for anyone to keep himself on, let alone a family? The job of a security guard is often difficult, if not downright dangerous. I am not sure how many hon. Members would want to do such a job for such long hours and for such little pay.

Of course, it is not just the level of pay that is at stake; it is the difficulty that such people then have in trying to contribute towards a better future for themselves. I do not know how people in such employment can find the money to pay into a personal pension scheme. The problem is that not only is someone working for low pay here and now, but he has little financial security to look forward to in the years ahead. That greatly worries many of us. Another job advertisement in the same batch a year ago was for an assistant hairdresser—a 39-hour week for £35, which is less than £1 per hour.

This week, I took the opportunity to find out from the same jobcentre to see the current jobs on display and it did not appear to me that matters had improved. One of the advertisements, again for a security guard—although without experience—quoted a wage of £1.40 per hour. It was for full-time hours with night shifts to be arranged. Another advertisement for a security guard, on the slightly better rate of pay of £2.30 per hour, said that the guard would have to work throughout the north-east and that the duties included patrolling, gatehouse duties and retail shops. It said that the preferred age was 30-plus. Many of us do not like age discrimination in job advertisements. Someone over 30 would be a mature worker, yet all that was being offered was £2.30 an hour. Such wage rates are unacceptably low, do not give people any job security and cannot be defended. I hope that they will not be defended by Conservative Members.

Those local examples are backed-up by the work of organisations such as NACAB, which has produced a series of brilliant reports over the past three years describing the problems of low pay and insecurity in employment. One report entitled "Hard Labour" was published in 1990; another entitled "Not in Labour" deals with the discrimination experienced by pregnant women in employment; and there is another, more general, report on unequal opportunities. All those reports would make excellent reading for hon. Members.

The "Hard Labour" report gives examples of various cases that have come to the attention of bureaux throughout the country. I shall cite two of them. The first is from a bureau in Yorkshire, which had a client who worked in a video shop from 10 am to 8 pm with no meal breaks. That contravenes the Shops Act 1950, but the woman was too scared to do anything about it in case she lost her job. That is a real threat, especially as the rules governing unfair dismissal are very much loaded against the employee who feels that he has been unfairly dismissed.

The second case comes from a bureau in Dorset. A supervisor in an amusement arcade was continuously on duty, without an assistant, for a shift of 13 hours. Not surprisingly, during that time he needed to use the toilet. While he was away a window was broken and his employer made a deduction of £40 from his wages, probably in contravention of the Wages Act 1986. When the NACAB client challenged the deduction, he was dismissed without notice.

It might seem incredible that those examples can be found in a civilised country, but they are really only the tip of the iceberg in that NACAB report. There have been some changes to employment protection since the report was published—I shall refer to those later—but nevertheless we know full well that the problems of low pay and sometimes appalling working conditions still very much exist, as is shown by the advertisements in my local jobcentre this week.

People on benefits and out of employment have also felt the pinch during the past 15 years. Pensioners, especially those who are entirely dependent on the state pension, have lost out because of the breaking of the link between pensions on the one hand and prices and incomes on the other—[Interruption.] Conservative Members are expressing disagreement, but it has been calculated that the Exchequer saved £5 billion from the breaking of that link.

For the sake of accuracy, will the hon. Lady remind the House that, although it was a Conservative Government who broke the legal link between the two factors, it was the Labour Government who found themselves unable to honour their link? Is it not more honest to have a system that we can live up to and pay for rather than introducing a link to push pensions up and then having to break it? If the hon. Lady doubts the accuracy of my remarks, she will find that they are well attested.

The purpose of my motion is to show that inequality in Britain has widened dramatically over the past 15 years. The Government sat back and allowed that to happen. I do not believe that a Labour Government would have presided over a growth in inequality such as there has been over the past 15 years.

I am sure that, like me, the hon. Member for Teignbridge (Mr. Nicholls) has to confront many articulate pensioner groups who know very well the records of both the last Labour Government and this Government and who feel that they have lost out dramatically over the past 15 years.

Does the hon. Lady think that pensioners were better off in the late 1970s when inflation was running at 25 or 26 per cent. and the value of their savings plummeted, which meant that many of them were left in abject poverty?

Given the overall situation at the time, I think that pensioners were better off. The pensioners to whom I speak strongly confirm my impression.

Conservative Members are simply unwilling to face reality. I do not claim that all previous Governments' record on equality was excellent, but the growth in inequality has been flagrant in the past 15 years and it seems to have been pursued as a deliberate act of policy.

In many ways, people face a kind of nightmarish board game in their personal lives. A single, unemployed person might go three places forward on discovering that his local council has, after all, found him accommodation, but might go back four places when the Department of Social Security says that it cannot lend him any money for the basics that would enable him to become established in that accommodation. An old person might go forward three places on discovering that he is eligible for a bus pass and can travel around, but back four places because he is too frightened to go out. A parent might go three places forward on discovering that he has been granted access to his child at weekends, but back four places when he discovers that he simply cannot afford to see his child. That is particularly topical following our moving debates on the Child Support Agency and its effects.

Many young people find it difficult to enter full-time education. They might go three places forward when they are given a place on an education course, but back four places when they learn that no grant is available, that they will have to take out loans because of their straitened financial circumstances or that they will not have access to housing benefit. They may go back even further if they believe that a life of debt faces them, particularly as employment opportunities are so limited for many students.

The growth in inequalities in Britain has not been reflected in other European countries. The extent of the growth of inequality in Britain is well out of line with other countries. Earlier this year, an interesting article by Andrew Glyn of Corpus Christi college, Oxford appeared in The Guardian. It said that the years of Conservative Government in Britain had seen an increase in inequality which is striking not only in itself but which seems larger than in any other European country. He supported his argument with an interesting table comparing United Kingdom and European inequality in employment rates, unemployment rates, unearned to earned income change, the ratio of women's pay to men's pay—the gap is. significant and larger than the European average—the definition of poverty according to Council of Europe standards and how that works out in terms of the percentage of the population, the top income tax rates and the changes in top income tax rates and in the share of the top 20 per cent. of incomes in the past 15 years.

The suggestion that gross inequality exists in Britain compared with the rest of the European Community is extraordinary. Does the hon. Lady accept that this country has more people in jobs than any other European country?

As part of my motion is about the poverty of people in employment, the hon. Lady's intervention hardly undermines my argument. Our unemployment rate between 1979 and today compares unfavourably with most European countries. Some countries, such as Germany, have experienced recession in recent years, but, none the less, in the past have had far lower unemployment than us.

Germany has undergone huge economic turbulence because of reunification with East Germany. Three per cent. of GDP was transferred from one part of Germany to another. The hon. Lady, if she is fair minded, will agree that we have not had to deal with such an economic transfer. Credit should be given to Germany for managing to cope with that.

The hon. Lady seems to imply that there are no data to back up my arguments comparing United Kingdom and European inequality, but I was quoting from a detailed article containing plenty of evidence by an academic at Oxford university. The hon. Lady may contest it if she wishes, but she would have to do so in as detailed a way as the article, which would not be possible in an intervention. I am not sure whether she will be able to do it if she wishes to speak later. The article contains a deltailed, worked-out argument with many references and it cannot be dismissed lightly.

Andrew Glyn concludes:

"But the greater inequality, apart from an appalling human cost, represented not economic efficiency but the systematic squandering of economic potentials manifested, for example, by unemployment, by the growth of low productivity employment encouraged by low pay, and by manufacturing industry failing to invest while dividends rocketed."

Those issues can be taken up later.

Wages differentials have widened dramatically in Britain, whereas they have remained constant or have fluctuated only marginally in other European countries. On many occasions in the House, we have been told about the tremendously inflated salaries that are paid to people at the top of the scale while a growth in low income has occurred at the bottom of the scale. So many examples are already well known, some of which—those involving chairmen and chief executives of privatised water companies—have hit the headlines.

Only yesterday in The Independent I read yet another couple of examples. The contract of John Bellak, chairman and chief executive of Severn Trent Water, was terminated this year, but he received £512,000 in compensation and pension contributions, according to the company's latest annual report. He also received £226,000 in share options and £230,000 as company chairman. Bob Thian, chief executive of North West Water, where some employees face cuts of up to £6,000 a year because of job restructuring, received £674,000 when he left the company recently.

Such examples will hardly encourage a belief among people, particularly those on low incomes, that the Government are committed to wage equality and wage fairness. Ministers have failed to speak out against such irresponsibility and find it particularly difficult to speak persuasively against boardroom excesses which offend the British people's basic sense of fairness.

Many ex-Cabinet Ministers are among the beneficiaries of such decisions: Lord Tebbit, as Secretary of State for Trade and Industry, privatised British Telecom and he is now on its board; Lord Walker, who, as Secretary of State for Energy, privatised British Gas, is now on its board. There are many other examples, including Lords Young and Lawson and, indeed, the former Chancellor of the Exchequer, the right hon. Member for Kingston upon Thames (Mr. Lamont).

In view of that record, it is very difficult for Conservative Members to speak out against such excesses, but I hope that some of them will do so because they set a terrible example to the rest of the country, especially when the Government are so keen to promote wage restraint, although some of the people at the bottom of the scale need immediate help in the short term instead of being subject to wage restraint or wage reductions.

At key moments, the Government have appeared deliberately to foster the growth in inequality. I well remember the public's reaction to the Budget introduced by Lord Lawson in 1988, which seemed to promote inequality through the huge tax relief given to people at the top of the scale. The British people's reaction was hostile. The growth in inequality was bad in itself, but the Budget was also disastrous economically because it helped to fuel an inflationary import-led boom and, I believe, bore a great share of responsibility for the recession into which we plunged before our European partners.

One glaring weakness in the Government's arguments over the past 15 years is that if deregulation, low wages and poor working conditions are prerequisites for economic success, how was it that, after 10 years of that unpleasant economic medicine, we were the first in Europe to plunge into a lengthy recession? That fact is all too frequently forgotten when Conservative colleagues extol the advantages of a deregulated, low-wage economy.

There is an extraordinary contradictory belief that giving people at the top more money will encourage them to work harder, but only by giving people at the bottom less money will they be encouraged to work harder. That is a logical absurdity, and one which most people appreciate.

The Government still appear to believe that the trickle-down theory works and that if the majority of people are better off, it will automatically help those at the bottom. However, the theory has been shown not to work. During the United States presidential campaign, when people fortunately recognised that the theory did not work, trickle-down economics were described as "voodoo economics".

I refer the House to another article by Andrew Glyn of Corpus Christi college, which also appeared in the national press. It was entitled

"Why an unequal Britain is paying the price for the 'efficiency' fallacy".

It is an important article which disproves the link between low pay and economic success. It refers to the fact that, across the industrialised countries as a whole, there is no macro-economic evidence to support the argument that greater equality is detrimental to efficiency. If anything, the article says, the opposite is true. It states:

"The fastest growing economies in the 1980s were also the more equal societies. We all pay for inequality—in higher taxes, poor health and high crime. From education to inheritance, from cradle to grave, inequality is a burden we cannot afford.… The problem is that while the medicine of inequality has been applied, the disease of economic underperformance has got worse."

Growth under this Government since 1979 was lower than that achieved under Labour in the 1970s.

Andrew Glyn's arguments are very telling. That we all pay for inequality is proved by the fact that so many people who are in work but on exceedingly low incomes can make ends meet only by getting support from the state. The state recognises that, but we all have to foot a substantial bill because many employers pay such low wages. In the end, therefore, such policies are self-defeating, or even worse.

It is absurd to continue to peddle the belief that Britain can compete only through deregulation and that cutting wages and removing social protection will enable us to compete on cost with low-wage economies such as China and India. I do not believe that such crude deregulation is the way to deliver a high-wage, high-skill economy, which is what I hope that we all want. Slashing prices by cutting wages, training and investment may appear to deliver some kind of short-term advantage, but only at the cost of long-term economic and social decline. Our economy has been described, rightly, as a "closing down sale in a bargain basement".

The United Kingdom is in danger of having the worst of both worlds—the worst of the high levels of unemployment currently to be found in Europe, but also the worst of the US-style low-wage employment and rising in-work poverty, which is why I believe the problem of inequality is so severe today.

The hon. Lady has tried to paint a dismal picture of this country's performance over the past 15 years and has produced a great many statistics to try to back up her argument. Surely, however, the real measure of success is the number of consumer goods that people have in their homes. Why is it that in 1979 only 39 per cent. of the bottom decile—or 10 per cent.—of the population had central heating, which is generally regarded pretty much as a bare necessity, whereas today a very respectable 69 per cent. of that bottom 10 per cent. has it?

I am surprised that the hon. Gentleman refers to heating in a debate on inequality, especially when the Government's decision—

Answer the question.

It is true that many homes have central heating and regard it as a basic necessity, but I refer both hon. Gentlemen to the fact that, since the Government imposed value added tax on domestic fuel, many people can hardly afford to run their heating systems. If they would care to come to my constituency surgeries and listen to those who cannot pay their fuel bills, they might not take refuge in average figures. The Government's decision to charge VAT on domestic heating has a much worse effect in the less warm parts of the country. In my experience, the people who have most difficulty with heating bills tend to live in poorer, draughty accommodation, which makes the problem even worse. In some parts of the country, people have to have their heating on for almost all the year, or certainly for nine months at the very least. No matter how many times hon. Members care to take refuge in average figures, I can assure them that there is an enormous problem in the country as a whole because people cannot afford to run their heating systems.

Does the hon. Lady accept, first, that fuel costs have been reduced because of privatisation and, secondly, that pensioners have had an increase written into their new pension rates for VAT on fuel?

As the hon. Lady knows, the Opposition were keen to ensure that the measures taken to help pensioners and those on benefit should be as generous as possible. We do not think that they are. I am sure that the hon. Lady understands that there is also a real problem for those who are above benefit level but who are still badly off, such as the people I have described today who live on low incomes and who find it extremely difficult to meet any increases in fuel costs. I should like the Government to do a great deal more than they have done in creating jobs in energy efficiency and in ensuring that so many of the draughty homes which are lived in by some of the poorest in the land are made much more energy efficient. That would mean that those people would not have to fork out the large amounts that they are trying to find at present.

I am sure, therefore, that the hon. Lady will give a warm welcome to my right hon. and learned Friend the Chancellor's Budget in which he doubled the home energy efficiency scheme to help precisely the people whom the hon. Lady is describing—the poorest and pensioners who live in low energy-efficient households.

I welcome any change, but I believe that the measures do not really meet the scale of the problem. Until they do, and until I no longer come across constituents who face the problems of high fuel bills in draughty accommodation, I will continue to raise the issues I am raising today.

The growth in unemployment and in long-term unemployment have contributed to real social divisions. I come from a part of the country where, at one time, a few staple industries provided employment for the majority of the working population in the area. Many of those industries have collapsed since 1979, particularly in the first recession which we experienced from 1980 to 1983. Although there was a kind of boom, a rather inflationary boom, after 1983, many parts of the country did not really benefit from that upturn in the economy. I refer particularly to the areas that were dependent on the older staple industries and where, although some new industries have come in—I strongly welcome that—there have not been enough new industries to take up the slack in employment opportunities.

In certain estates and certain urban areas, the majority of people have been out of work for 10 years or more. Children are growing up in households where there is no experience of employment. That is deeply worrying. It has contributed to the growth of what we call the underclass—an unpleasant term in itself. That lack of employment has contributed to the growth of certain types of crime. Before Conservative Members jump up and ask whether I am saying that the unemployed are criminals, I say that the answer firmly is no. I see too many unemployed people who are the victims of crime rather than the perpetrators of crime. However, we all know that where there are deep social divisions, where there is high unemployment and where there is a growth in inequality, as can be seen in many countries across the world, one has a society in which, unfortunately, certain types of crime, such as theft and car crime, tend to flourish.

Does not the hon. Lady agree that, far from people committing crimes because of poverty, crime is often related to factors such as greed and trying to fuel a drugs habit?

The salaries and pay-offs to which I referred earlier illustrate the concept of greed rather more than do my comments about the least well-off in society. Although Conservative Members are always resistant to the idea of there being a link between crime and social divisions, that view is, fortunately, not universal. I remember reading a speech by Baroness Denton in which she said that there was a clear link between social division, social decay and crime levels. I welcome the fact that some Conservatives are prepared to look at the issues as they are rather than as they would like them to be.

An unequal society in which there are gross inequalities of income distribution generates ill-health, not just for the people who are least well off. As has been proved in various studies—I refer to the article by Richard Wilkinson—unequal societies are often more conflictual and more stressful societies. That adds up to a considerable cost to the health system.

It is depressing, but not surprising, that Britain has increasingly suffered from many of the American-style social problems that accompanied the rise in wage inequality in that country. We have rising drug-related crime and rising lawlessness in our inner cities, infant mortality rates higher than those in comparable countries and more spending on ill-health and crime prevention as a result. All those issues need to be taken very seriously.

I am not surprised that one or two hon. Members who have intervened have implied that I have been talking on a gloom-and-doom basis. I am rather surprised that no one his yet used the time-honoured words, which Conservatives so often like to use about the Opposition, that I am talking Britain down. I do not believe in talking Britain down, but I believe in looking the problem in the face. The problem is not that we are talking Britain down, but that the Government are letting Britain down. They are letting the people of Britain down by their actions and by the way in which they have allowed inequality to grow in the past decade and during the whole time in which they have been in office.

Recent decisions have made things worse. The Government's decision to abolish the wages councils, for example, has reduced wages in various sectors. The Low Pay Network, in a fairly detailed study accompanied by a survey, concludes that the abolition of the wages councils has resulted in a substantial drop in pay rates across various sectors of the economy. The study refers to the retail sector, hairdressing, the clothing industry and the hotel and catering industry. The Government must pay particular attention to that study if they are to do something about the problem of low pay.

Will the hon. Lady give way?

I will not give way again to the hon. Member for Sutton and Cheam (Lady Olga Maitland). I have given way to her on four or five occasions. She seems to be a regular attender of Friday morning debates so she will, I am sure, hope to speak herself. In view of the number of interventions by the hon. Lady and the possibility, if she catches your eye, Madam Deputy Speaker, of her being able to make a speech, she will have ample opportunity to make her views heard.

The hon. Lady has strikingly referred to her area as having once had a number of staple industries which provided a lot of employment. She said that they had declined and that they had been replaced, but not adequately. Can she explain to me, in terms of her motion, how what she is recommending would do anything to promote economic prosperity and more jobs for her region? What is the link?

I am glad that the hon. Member for Monmouth (Mr. Evans) made that intervention. I am coming to those points shortly.

I have referred to VAT on fuel, so I shall not make further reference to it. I also referred briefly to the Child Support Agency. After we had our debate on Monday, a constituent came to my constituency office. He is an example of a classic case in which the CSA has simply proved to be the straw that breaks the camel's back. I implore the Government, therefore—we have here today the hon. Member for Bury, North (Mr. Burt), who is the Under-Secretary of State for Social Security with special responsibility for the CSA—to listen to all the cases that we have brought to their attention and to realise that we are talking not about an isolated number of cases, but about a huge number of cases in which people really feel that the CSA is the last economic straw that they can bear. I am not surprised that not only have there been suicides, but many people have felt suicidal as a result, including a constituent who came to my office this week. He would want his case to be referred to as one that shows the kind of hardship that the CSA creates.

Inequality affects many different groups in Britain today. Inequality affecting the disabled has exercised the attention of the House on many occasions in recent weeks and it is possible that other hon. Members will want to refer to that issue again today. I repeat the frequent demands of Labour Members that the Government accept the private Member's Bill, the Civil Rights (Disabled Persons) Bill, currently before the House, that they do not block it further and that they give the disabled, who have been subject to gross inequalities over a long time, some hope of Opportunity for the future.

There is also gross inequality between women's and men's average incomes, as I am sure all hon. Members recognise. That is especially true of many women in part-time and poorly paid jobs. Indeed, surveys show that if we continue moving towards equality for women's pay at such a slow rate, we shall almost be near the beginning of the 22nd century before it catches up with the average pay for men. I have also referred to the difficulties that men encounter in areas of the country such as mine. Indeed, in the intervention by the hon. Member for Monmouth, reference was made to the fact that not enough new industries have replaced the older industries, which have declined in areas such as mine.

It is interesting to consider some of the industries that have come to the north-east, especially Nissan in Sunderland, which is close to my constituency. It has brought some welcome jobs to the area and I am encouraged by the fact that the management of Nissan do not accept the deregulated, low-wage approach of the Government. Indeed, in evidence to the Select Committee on Employment, Nissan said clearly that it believed that the low-wage, low-skill approach to the economy was the route to economic disaster. It is also greatly encouraging that Nissan believes that the provisions of the European social chapter would not present it with any difficulties, because, in all cases, it already exceeds its provisions.

There is a great deal of hidden employment as well, especially in an area such as mine. Many women would like to work, but do not register as unemployed because either they do not have the possibility of working, due to lack of child-care facilities or being unable to afford those facilities, or because they live in areas of high unemployment and the chances of employment are so poor that it is not worth registering.

Let me also refer to the discrimination and inequality experienced by people from ethnic minorities. It remains true that wages and unemployment rates among members of ethnic minorities are highly unequal. Unemployment rates for ethnic minorities are more than twice the rate of the white population and the wages of some minority groups are persistently lower. We must look at that problem closely.

I imagine that Conservative Members may well say that we must aim for flexibility of work. I strongly support flexibility in the workplace, as do many Labour Members, but we do not support the situation where flexible working practices—part-time working and so on—amount to a lifetime of penalty rather than a lifetime of opportunity. In the right circumstances, flexible working, part-time working and different work patterns can be a tremendous opportunity for people, but, all too often, especially in the constituency cases with which I have dealt, people in such new employment patterns seem to be badly paid. Indeed, they are not only badly paid, but, as I said earlier, have few pension rights and entitlements and little financial security to look forward to.

What should be done about this situation? One of the most important things to do is simply to recognise the extent of the problem. There is a real problem in Government circles of people failing to appreciate the scale of the difficulties that are experienced by people out there, across the whole country.

I well remember an impressive report prepared by the Church of England entitled "Faith in the City". It was greeted by the then Prime Minister as Marxist and its contents were dismissed. I believe strongly that those working in churches are in an excellent position to experience the extent of the problems of inequality in our society because they tend to be based in inner-city areas where they encounter such problems at first hand. It is not only a few turbulent priests in the Church of England who are criticising Government policies in that respect. Recently, the new president of the Methodist Church made similar comments, as have members of the senior establishment of the Catholic Church. It is such a common pattern that it cannot be dismissed as the rantings and ravings of a few ideologically motivated clerics.

We also need a much bigger job creation package than anything we have seen up to now. [Interruption.] Indeed, it was extremely welcome that, after 10 years of saying nothing about full employment, we managed to get some kind of commitment to it from Ministers. That was a welcome change and we had not heard it for a long time from the Government. My hon. Friend the Member for Dunfermline, East (Mr. Brown) has, for example, called for a new environmental task force for young people which could combine training with environmentally based community projects.

I feel strongly about jobs in the environment. An enormous number of jobs can be created in environmentally related projects, partly in tackling pollution. It is sad that, despite the fact that the Government gave the privatised water companies a green dowry at the time of privatisation to bring our water standards up to European Community standards, there has been a failure to spend that money to bring the water quality up to the required standards as quickly as we would like and, more astonishingly, we have seen an attempt by the Government to repeal the European quality standards which they gave the privatised companies money to meet.

rose—

I am sure that the hon. Lady will have an opportunity to speak later.

Therefore, jobs in energy-saving projects and jobs in producing environmental technological equipment are also important. One of the areas in which Britain is failing to create jobs is in trade with the newly democratic countries of central and eastern Europe. Trading between those countries and our country is miles behind the volume of trade that the Germans, the French, the Italians and even the Dutch have managed to build up with those new countries. One important area of work would be in helping those countries, in a kind of trade and aid package, to meet some of the higher environmental standards which they need to meet in future.

One almost needs an environmental Marshall aid plan to tackle some of the problems in those countries. Such measures could create jobs in Britain because, as we know, many firms are capable of producing environmentally friendly equipment, such as equipment to curb emissions from power stations. Government Departments, especially the Departments of Employment and of Trade and Industry and, perhaps, also the Foreign and Commonwealth Office, should look at that area together much more closely than they seem to have done.

We must make fairness the central principle and guiding light of social security and tax policy. The Labour party is committed to progressive taxation, which is important for the future.[Interruption.] We need a fairer tax system so that we can bring an end to pensioner poverty and discrimination and improve public services. It is—[Interruption.] I hear the cries that are so frequently emitted during debates of this sort.

How much?

Exactly. Conservative Members want to know exactly how much money is involved, as if I, in introducing a Back-Bench motion, could give a detailed account of a Labour Government's first Budget. Conservative Members know that such an expectation would be entirely unrealistic. I shall not get worked up about that.

Will the hon. Lady give way

I merely say—

Just answer the question.

Order. Seated interventions are not helpful. If the hon. Gentleman wishes to intervene, he should do so in the proper way.

Thank you, Madam Deputy Speaker. As I have given way on many occasions, it is rather difficult to put up with so many seated interventions. I have extended to hon. Members the courtesy of allowing them to intervene. I am anxious to bring my remarks to a close.

It is extraordinary that Conservative Members should ask where the money is to come from. When the Government took office, they enjoyed a tremendous windfall from North sea oil. Previous Governments had not received such revenue and did not expect it. None of us knew that that would happen. The Government have had huge opportunities, especially when they ran tremendous Budget surpluses—they have been frittered away—to put into effect many of the measures that we are calling for 15 years later. There have been 15 years of wasted opportunity when money was available. That is extremely frustrating for those of us who have been putting forward the policies that I have outlined for so many years. It is absurd for Conservative Members to talk about money not being available when they had money and failed to use it to tackle the problems that I am describing. Indeed, they have presided over a period when the problems have become much worse.

I have talked about the problem of poverty and work, low pay and poor working conditions. I admit, however, that there have been some improvements over the past two or three years. Almost all these improvements have come about because of commitments arising from European directives. There are European directives that give employees the right to a written statement setting out their terms and conditions. Although the Government tried to water down the directive on maternity rights, it has helped some women at work in Britain. There was the recent and very welcome court judgment that the Government's policy towards part-time workers unfairly discriminated against women. Some of the extraordinary and glaring inequalities that faced part-time workers must now be redressed. Those are three examples of improvements that have been made or are being made. That has happened or is happening because of our European commitments.

It is no coincidence that the Government, having been forced to sign directives and, having failed to implement them, want to escape from the European social commitment so that, presumably, they will not be forced to introduce modest improvements in future. That is a disgrace.

Will the hon. Lady give way?

I am concluding my remarks, so I shall not give way again.

I want to ask a question that arises from the hon. Lady's remarks.

No.

There has been a great deal of rhetoric from the Government over the past 15 years. It has been designed to try to appeal to people. The Government have sought to persuade them that they are committed to a better society. We all remember the previous Prime Minister, Lady Thatcher, who even compared herself to St. Francis of Assisi when she assumed office. The present Prime Minister talked about a country at ease with itself. He has talked also about a classless society. Yet after 15 years we have a growing and alarming crisis of inequality in our country. If the Government are not prepared to convert their rhetoric—it is entirely unconvincing in the light of their record—into reality, they should resign and give way to a Government who will.

10.33 am

First, I congratulate the hon. Member for Gateshead, East (Ms Quin) on bringing the motion before the House. I do not make a point of being in the Chamber on Fridays, but it struck me that she had tabled an interesting motion, and a brave one. I congratulate her on choosing the subject in the first place.

I do not entirely accept the hon. Lady's conclusion. I am sure that that will be a relief to her and no surprise. I am pleased that she has brought the subject before the House so that we can debate it.

The logic that runs through the hon. Lady's remarks is that in some way inequality, which is avoidable, runs through our society and permeates it. She suggests that it is almost built into the very structure of society. I do not accept that analysis.

We have a Prime Minister who was brought up in circumstances of some poverty. He went to a grammar school, but did not go to university. My right hon. Friend is now the Prime Minister. Shortly, he will be joined, as it were, by a new Leader of the Opposition. The hon. Member for Sedgefield (Mr. Blair)—assuming that it is he—was public-school educated. Both men—I say this in an unpartisan way—will be holding their offices because of their conspicuous talent. The fact that they came from different walks of life did not hold them back in our society and prevent them from fulfilling tasks that matched their abilities. The idea that inequality runs through the whole of British society in some avoidable and structured way is one that I cannot accept.

I completely part company with the hon. Lady when she says that she believes passionately and sincerely that if we could only bring about total economic equality, we would suddenly have paradise on earth. She referred repeatedly to the gap that exists between rich and poor. She made the classic error of saying that the Government have given tax handouts to the rich. I know of no tax handout from the Government to the rich since 1979.

The Government have certainly enabled the rich to keep more of their own money than hitherto. The idea that taxing the rich by levying 89 per cent. income tax on earned income and 98 per cent. on unearned income—in one inglorious year the Labour Government imposed a surcharge, which meant that on the top slice of income the rich paid 104 per cent. income tax—benefits the poor is potty.

The hon. Lady does not have to take my word for that assertion. I am sure that she will not do so. I invite her to study the Inland Revenue's statistics, which show the proportion of the tax take that is contributed by the richest members of our society. The figures are straightforward. In 1979, the top 10 per cent. of rich people—the wealthiest 10 per cent.—paid about 35 per cent. of the total income tax take. This year, they will be paying about 45 per cent. There is no magic about that. If we tax people at punitive rates, they will avoid tax, go abroad or not work.

When I started my working life as a lawyers' clerk, there were some barristers who I would seek to instruct, only to be told, "Mr. So-and-So is not available on Thursdays and Fridays." In my youthful naivety, I asked why that was. I was then told, "Mr. So-and-So does not work on Thursdays and Fridays because it is not worth his while to do so. He works only on Mondays, Tuesdays and Wednesdays." That is what happens when you overtax the rich. The result is that the rich contribute less to the total tax take.

Before the hon. Gentleman becomes completely carried away with the problems of what the super-rich do with their money, perhaps he will explain why in the past 15 years the number of homeless people has risen, why the poorest 10 per cent. of households are 14 per cent. worse off than they were in 1979 and why 3,000 people sleep on the streets of London every night because they have no homes to go to?

As for the hon. Gentleman's last assertion, he well knows that it is not true. The rough sleepers initiative has cut dramatically the numbers of people sleeping rough on the streets of London.

That is because the Government stuffed them in hostels.

The hon. Gentleman always phrases his remarks in such eloquent terms. I shall leave that point for the moment.

I was dealing with the far more serious arguments that the hon. Member for Gateshead, East was advancing. She says that because the gap may have increased between rich and poor, that is a bad thing and something that bears down heavily on the poor. Some years ago, I was involved in a venture to ensure that a heart operation was carried out on a child from a third-world country. The father of the child was a naval commander in the navy of his country. He had an engineering degree. In terms of what that country had to offer, he was one of the rich people in it. In his country, the gap between that man's life style and the life style of those at the bottom of the heap was immeasurably greater than any gap in this country. The problem was that it was completely impossible to have a life-saving operation performed on his child in that country. He simply could not afford such an operation and there were no surgeons there capable of performing the operation anyway.

That man's child had to come to this country because, no matter how relatively poor one is in this country, there is a free national health service. It would have been complete nonsense to tell that man that the gap was in some way relevant to the welfare of his child.

Poor people do not have to use the gap to pay for the things that they need in their lives; they need money in their hands. What matters to the poor is not the difference between the rich and the poor, but how much money the poor have. However one considers the statistics, the position of the poor in this country, relative to their previous position, has never been better. That is because sufficient tax is generated within our economy to leave an incentive for the rich to earn and pay their tax and to generate enough tax to be spent on social benefits across a wide range of necessary items.

The hon. Member for Gateshead, East (Ms Quin) tried to make her case by referring to inequalities in respect of a security guard earning £1.85 an hour. That is obviously a low wage. However, a great many people know from experience that low pay is better than no job. Many people who experience a period of low pay move on to better-paid work in the end.

The hon. Member for Gateshead, East must face up to the fact that some people who earn low wages of the kind she referred to simply do not have the talents to offer to earn more. Let me give the hon. Lady what I hope she will feel is a perfectly fair example. Like all of us in the Chamber, the hon. Lady receives a Member's salary of £30,000 a year. Some people would say that that is not a great deal of money, but to the sort of people who come to my surgery and who go to the hon. Lady's surgery, £30,000 a year is a staggeringly large sum.

The hon. Member for Gateshead, East could certainly do a job which paid £1.85 an hour. However, I am not automatically or axiomatically convinced that someone earning £1.85 an hour could do her job as well as she certainly does it. That may seem a harsh and unkind thing to say, but it is realistic.

That leads me to another point. The hon. Member for Gateshead, East referred to the earnings link for pensions. She talked very eloquently about how the Government have broken the earnings link with regard to old-age pensions. She seemed to be holding out to pensioners the prospect that a Labour Government would one day produce an earnings link. However, there used to be such a link. It was introduced by the previous Labour Government—and what happened? In three of the four years in which the Labour Government had an opportunity to apply the link, they broke it.

When the Labour Government were criticised by their own Back Benchers for breaking that link, I recall that Lord Ennals, who was then Secretary of State for Social Security, was pinioned at the Dispatch Box for having failed to honour the legislation which his Government had introduced. He fell back on a statement which, even among us politicians, sounded lame in the extreme. He said, "My obligation in law is to consider the figures. My obligation in law is not to get it right." Honest politicians are led to that kind of subterfuge and double talk when, for the very best of reasons, they try to produce a structure which the country is simply unable to afford. That again is something which the hon. Member for Gateshead, East must face up to.

We live in a country where, under this Government at least, one recognises that inequalities will exist in the sense that talent is unequal. I think that I am right to say that the hon. Member for Gateshead, East has degrees from two universities. That is excellent and it says something about her academic attainments. I do not have degrees from a university. I did not go to a university. However, what unites us both is that we have been brought up and live in a society in which, irrespective of our talents, we can make the most of them.

We can all think of particularly hard cases—and that is hardly surprising in a population of 55 million—among our friends, relatives and the people who visit our surgeries. We can think of cases in respect of which life seems to have treated people very unfairly. If one comes from a stable home, of course one has a much better start in society than someone who does not come from a stable home. All those hard cases do not for a moment alter the fact that we live in a society of which we should be proud.

We live in a society in which, from the cradle to the grave, we have universal health care. We live in a society in which, whatever we may think about its standards from time to time, we have universal education. We live in a society in which the poorest members have benefits provided for them at a level which would be unthinkable for many of the richest people in other countries. It is about time that we faced up to those facts and admitted that one of the reasons for all that is that we do not pretend that the equalisation of people, with a range of diverse talents, is something that can be achieved or, if it could be achieved, would benefit the people in our society.

One need only consider the situation that used to exist in the former Soviet bloc countries to understand what happens to the very poorest, the most inadequate and the least talented members of society when one tries to produce that kind of economic straitjacket. I do not accept the idea that inequality runs through the system in this country in a way that damages the poor and which could be prevented.

However, there is a sense in which there is inequality in our society. There is a paradox. The Government have been in power since 1979. They have done many things which people thought were inconceivable. It would have been remarkable if anyone had said in 1979 that the trade union movement could be confined to barracks and to those tasks it should perform instead of trying to take over the governance of this country, but that has happened. There has been an explosion of home ownership under this Government. Council house sales have taken off. For the first time in their lives, ordinary people have been given the ability to earn, to build up capital, to build up their own homes and have tax rates which give them an incentive to work and not to cheat. All that amounts to a remarkable transformation.

The Labour party's current pitch is no longer red in tooth and claw socialism. It is, "We are Toryer than thou." There can be no finer compliment for what the Government have achieved than the fact that the future leader of the Opposition is trying to convince everyone, to the terror of people like the hon. Member for Islington, North (Mr. Corbyn), whom I greatly value, that he is really a Tory at heart.

Will the hon. Gentleman give way?

I will give way to the hon. Gentleman in a moment.

There can be no finer tribute to the Government than that. The paradox is that, while all that has been happening on a national stage, the vice and cancer of political correctness has been beavering away. The inequality is that, in some peculiar way, the views, standards, decencies and common sense among the vast majority of people in this country, which are never articulated, but exist none the less, are being subverted by a tiny group of people who take unto themselves the right to set a political agenda without any reference to what people want.

That inequality runs through many strands of our national life. We can see it in the way in which language is used. We are no longer supposed to refer to chairmen. It probably says something about the incipient sexism of the left that it thinks that the title "chairman", which actually links women to humanity, should be replaced by addressing them as a piece of furniture.

Even if we move beyond the nonsense of non-sexist manhole covers and the fact that the Equal Opportunities Commission has been described as having its base in Personchester, we reach a stage where, in respect of language, the views and attitudes of the majority are thought to be inferior and have to be replaced.

The hon. Member for Gateshead, East referred to discrimination against black people as another example of the inequalities in society. An advertisement, placed I think by Greenwich borough council, appeared recently in a newspaper. It read:

"Black Social Worker

Specialist in Adoption.

The Adoption Team is seeking qualified and experienced Black Social Worker to contribute to the good Adoptive Services offered by the Agency."

I toyed with the idea, but in the interests of good order did not do it, of reading that advert out and using the phrase "white social worker", and then saying that I saw nothing improper in that, simply so I could then bask in the howls of indignation from the Opposition Benches. However, on looking more closely, I realised my error and saw that the advert referred to "a black social worker".

If anybody dared to place a newspaper advertisement calling for a white social worker, there would be an outcry, and the Commission for Racial Equality, as quick as a flash, would create absolute mayhem. Of course, it does not matter because the advertisement was for a black social worker. Can hon. Members imagine the damage that is done when the host community see such advertisements? What good does it do the ethnic minority to have fear inflamed among the host community?

What host community?

I will give way to the hon. Gentleman in a moment.

That inequality is far more dangerous than anything that we heard about from the hon. Lady.

The hon. Gentleman's remarks are becoming extremely offensive to a large number of people in this country. [Interruption.] I am not bothered personally, I just think that the hon. Gentleman is offensive to many others. Perhaps he would care to reflect for a moment. He used the term "host community". A large number of black people were born in this country. They are second or third generation of their parents or grandparents who migrated to this country. They would find it offensive that the hon. Gentleman uses terms such as "host community".

The hon. Gentleman should understand that local authorities of all political persuasions advertise for black adoptive parents because of the problems of racism, the alienation of black families and black communities, and the feeling that black people, when talking about adoption or black children, would like to be able to talk to a black social worker. Is that really so wrong or so bad? Should not we at least recognise the depth of racism and the alienation that exists among people in those communities? The hon. Gentleman's arrogance seems to know no bounds.

The hon. Gentleman is the genuine and uncleaned-up version of the unreconstructed left. All that he has to do on Monday is to read Hansard and substitute the word "white" for the word "black" and then wonder about the matter. Here we have the typical attitude of the left in trying to ban even the use of certain words. The hon. Gentleman criticised me for using the words "host community" because it might offend people of second and third generation. He must understand the damage that such an advertisement would cause in a country of perhaps 22nd-generation people, who know—and they are right—that if it said, "White social worker required", it would cause outrage. That is inequality, and it needs to be dealt with.

Let us consider what has happened in other ways. For example, I refer to the legislation which first decriminalised homosexual acts between consenting adults in private, which was introduced for perfectly decent and tolerant reasons—that what adults do in the privacy of their own bedrooms which does not cause damage or offence to anybody else should be no business of anyone else. That was the aspiration, but what has happened since? We now live in a society in which even some Conservatives seem to be frightened of saying that a homosexual couple living together, be they male or female, are not in a normal, stable situation which is not in any shape or form comparable with a heterosexual marriage.

What sort of unequal society are we living in when a High Court judge can think it appropriate to grant custody to a lesbian couple who, although they represent themselves as a couple, both claim lone parent supplement? How can that contribute to equality in society when the views of the minority are imposed on the majority? I cannot think of a more unequal way of proceeding. It is very dangerous indeed.

For example, I now refer to the inequality that arises when what one might call minoritarianism is dumped on the country. What on earth is happening when 90 per cent. of people in this country who identify themselves as Christians—not card-carrying Christians; not people who are on social terms with the Bishop of Birmingham, but people who regard themselves as Christians—suddenly find that Christianity is to be taught in schools only in conjunction with the teaching of a number of other faiths? Yes, that is appropriate in certain areas, but why on earth have people in rural areas such as Teignbridge to be told that the faith which they have held dear and which their grandparents and forebears have held dear for hundreds of years are to be taught in the wilds of Devon, together with Buddhism, Sikhism and so on?

I find the hon. Gentleman's line of argument rather interesting and extraordinary, but I want to make sure what he is saying. He referred to the judge who made the controversial decision on what he thought was the best interests of a certain child. Is the hon. Gentleman saying that the interests of a minority should not be protected at law because they might be unacceptable or strange to the social customs of the majority?

If any society which has any confidence in itself, and this society should have sufficient—[Interruption.] The hon. Gentleman might not agree with me, but I am sure that he will want to give me a hearing. A society should have sufficient confidence, in the way in which it rules and regulates its own affairs, to make certain judgments. This House exists to make certain judgments about the way in which we conduct ourselves. I will now answer the hon. Gentleman's question directly. I find it truly stunning that a lesbian couple should be treated as though they are running a unit which is equivalent to a heterosexual marriage. I find that deeply offensive, and the vast majority of people in this country would also regard it as bizarre. Not many people have this forum or my arrogance or confidence to make that point, but I have no doubt how people are thinking about that matter.

We need a number of things. We certainly need Ministers such as my hon. Friend the Minister who have the confidence to resist the siren move toward acceptance of ideas such as lesbian couples being completely normal. We need Ministers who, when working within the system, can make sure that they can resist the loving embrace of the civil service. We need hon. Members who realise that the standards of morality that they bring from their constituents, friends, relatives and supporters can be carried through into legislation. We need hon. Members who are prepared to articulate that interest.

We need police who have the confidence to believe that when they apprehend criminals those criminals will be treated properly. We must abhor the situation in which, years after the murder of PC Trevor Blakelock, when there were 200 witnesses to a murder that was committed by 12 people, the only people before the criminal courts in relation to that monstrous crime are the two policemen who investigated the original offence.

We need a society, a political system and a governing body with the confidence to say that we have been brought up in a fine, decent country which, even now, is probably the finest place in the world to live. We need the confidence to assert the standards of morality that enable us to savour that. That is the sort of equality that I look for, not the economic mishmash of the hon. Member for Gateshead, East.

10.56 am

I am not quite sure of the protocol, Madam Deputy Speaker. There is to be a statement at 11 o'clock. Will I be able to resume my speech after that?

Yes. The debate will be interrupted at 11 o'clock for the statement, but the hon. Gentleman will then have the right to continue his speech thereafter.

We have had an extremely interesting debate so far. I am grateful to my hon. Friend the Member for Gateshead, East (Ms Quin) for the terms of her motion, and I look forward to hearing a Conservative Member address the issues that she has raised. I look forward also to hearing the Minister, one of the rare Ministers who knows of life from north of Watford to Oxford, inform and entertain us.

I draw attention to page 4049 of today's Order Paper on which a motion stands in my name for debate in October. The subject of that motion is relevant to today's debate. Line 5 of the motion refers to a

"ballet of their non-managerial employees".

The correct word is "ballot". I am grateful to the Clerks for their help in wording the motion. Of course, ballots are dear to Opposition Members—they are the quintessence of democracy; they allow everybody to be equal in an organisation or before the law. Of course, Conservative Members are practised in and at home with ballet. There is a considerable difference between the two words. I hope that before the motion comes before the House it can be reworded.

I shall try to begin my speech by referring to the earnings dispersion league table in the report of the Organisation for Economic Co-operation and Development on employment outlook published in June last year. That showed a considerable increase in earnings dispersion in the United Kingdom since 1979—a date chosen by the statisticians of the OECD, who were unaware of any events that might have taken place in 1979. The OECD report shows that whereas in the United Kingdom there has been a dramatic increase in—

It being Eleven o'clock, MADAM SPEAKER interrupted the proceedings, pursuant to Standing Order No.11 (Friday sittings).

Sports Council

11 am

With permission, Madam Speaker, I should like to make a statement about the future of the Sports Council of Great Britain.

On 9 July last year, I told the House that we were suspending proposals to replace the Sports Council with separate United Kingdom and English bodies while we took a fresh look at structures for the future administration of British sport.

We have reaffirmed the conclusion of our 1991 policy review that the combination of Great Britain and England functions in the current Sports Council hinders their effective development. We, therefore, intend to set up two new bodies to be called, respectively, the United Kingdom Sports Council and the English Sports Council. England will thus be in the same position as Scotland, Wales and Northern Ireland.

The UKSC will consist of 10 members: an independent chairman, the chairmen of the four home country sports councils, one representative each of the British Olympic Association, of amateur non-Olympic sport, and of professional sport, and two independent members with strong sporting credentials, one from a professional and one from an amateur sporting background.

The UK Sports Council will be very different from what we rejected last year: different in its relationship to the home country councils, in its functions and in its size. On the international scene, it will represent the UK; it will seek to increase greatly the influence of the UK in international sport; and it will co-ordinate policy for bringing major international events to the UK. In national affairs, it will not have a supervisory remit, but it will oversee those areas where there is a need for UK-wide policy—for example, on doping control, sports science, sports medicine and coaching. Home country councils will, however, be responsible for the delivery of those policies.

We should like the UKSC, among its early tasks, to see whether it is sensible to identify possible further areas where sports policies may have application across the UK as a whole; where there may currently be areas of unnecessary overlap and duplication; and whether it may be sensible to administer, in consultation with the home country councils, grant programmes for bodies or policies that have a UK or GB remit. The Government also wish to see the establishment of an effective British confederation of non-governmental sports interests. We shall invite the UKSC to consult the various interests and to bring forward proposals on the subject.

As to the national lottery, the home country councils will be responsible for distribution, but the UK body will offer expert advice on applications of UK importance under the directions that Ministers have issued, or will issue shortly, to their respective councils under section 26 of the National Lottery etc. Act 1993.

A small permanent staff will provide a secretariat and lead policy working parties of home country representatives. Drawing in that way on the expertise of the home country councils, and resourcing them accordingly, I envisage a staff for the UKSC of about 20. That contrasts with the proposed staff of the abandoned UK Sports Commission of 180.

I now turn to the new English body. The English Sports Council will have 15 members: an independent chairman, five ministerial appointees from the regions, three representatives from the membership of the Central Council of Physical Recreation to represent an Olympic, a non-Olympic and a professional sport, and six independent members.

The present Sports Council spreads itself too thinly and operates in a series of areas more appropriate to other agencies. The new English body will have a sharper focus, concentrating its resources on an increased programme of direct support to the governing bodies of sport, to help the grassroots, and on services in support of sporting excellence, including the national sports centres currently administered by the GB council.

There will be a substantial redeployment of resources away from bureaucracy, and away from programmes that do not reflect the new focus. In particular, the new body will withdraw from the promotion of mass participation, informal recreation and leisure pursuits and from health promotion. Those are laudable aims, but they are secondary to the pursuit of high standards of sporting achievement. In due course, those changes will allow us to give much greater help to our most important national sports. It will be for the new body to decide those sports, but I would expect it to concentrate, although not exclusively, on about two or three dozen.

In return for greater financial support, governing bodies will be required to prepare clear plans with specific targets for the development of their sports, from grassroots to the highest competitive levels. Those plans must include programmes for strong and effective links with schools and youth organisations, to make the most of the talent of young people. That will reinforce the Government's wider initiative to re-establish sport in schools, and lay the foundations for future sporting success. We shall also seek to ensure that the bodies make strenuous efforts to involve private finance in their funding plans.

Reform is also needed in English regional organisation. We want to see continuing working relationships at regional level between the Sports Council, local authorities and other agencies. But the present structural relationship between the Sports Council's regional offices and the regional councils for sport and recreation—RCSRs—gives rise to confusion over roles and responsibilities, and to concern on grounds of financial accountability, bureaucracy and duplication.

The regional offices of the Sports Council should be more clearly identified with the implementation of national sports policy. It is also very important that there is a clear distinction between them and other regional organisations currently in membership of the RCSRs which may be applicants for national lottery funding. The present formal linkage with the RCSRs will, therefore, cease and Ministers will no longer make appointments to them. To secure the necessary regional dimension to the formulation and implementation of the policies of the English Sports Council, Ministers will appoint independent nominees in each region, as previously they appointed the RCSR nominees. Five of those ministerial nominees will be appointed in rotation to serve on the English Sports Council, thus strengthening the two-way flow of advice and understanding between the Sports Council nationally and in the regions. I am sure that local authorities will still wish to develop wider regional leisure strategies with other regional interests, and will, therefore, want to set up such future machinery to this end as they judge appropriate.

I shall appoint consultants to examine the entire range of the current Sports Council's functions in the light of the broad policy framework that I have set out today, and to make detailed recommendations for the structure and staffing of the new bodies. In reviewing functions, I shall ask consultants to identify those that should be discontinued and those that are suitable for market-testing or contracting-out. We will take a decision on the precise timing of implementation in the light of those recommendations, but I should expect that to take place during the next financial year. The costs of new arrangements will be met within present planned provision.

The Secretary of State has today written to the chairman of the Sports Council inviting views on the proposals by 30 September. A copy of his letter has been placed in the Libraries of both Houses. I have also written to the British Olympic Association, the British Sports Forum, the Central Council of Physical Recreation and the local authority associations seeking their views.

The Opposition breathe a sigh of relief that, at long last, a statement on the future of the Sports Council of Great Britain is being made. The sporting world has waited an almighty long time for it to be born; its gestation period beats that of an African elephant, which is a mere 22 months. The sporting world has waited three years for the delivery. Nevertheless, the Opposition welcome what the Minister has stated today.

We do not appreciate, as the House does not appreciate, that, once more, a statement on sport has been made on a Friday, interrupting an important debate, when many hon. Members from both sides of the House who care about sporting issues are on their way to, or in, their constituencies, oblivious of the fact that a statement is being made. I at once absolve the Minister of marginalising sport by both making the statement so late and making it on a Friday. It is more likely that his ministerial colleagues in the Treasury and the Cabinet Office are more culpable than he.

The Opposition start from the basic premise, and we are joined, I am sure, by the sporting world, that the time has come for a new sports structure. The present structure is ill-defined and in many ways confusing. Having said that, and before I refer to specific proposals, I think it right to compliment Sir Peter Yarranton and his staff at the Sports Council, who have undergone a difficult period and laboured in trying circumstances in the past three years. Morale must have been difficult to sustain.

The Opposition welcome the UK Sports Council. We have argued for one for many a long year. We may argue about its precise size, but we are certainly disappointed that the Minister chose to disregard the advice of the noble Lord Howell and myself that the Minister himself should chair the new council and give the necessary direction to that new body, not as a hands-on Minister but as a directional Minister who could ensure that the new council fulfilled the objectives set by him and by the House. What kind of chairman, in his absence, is the Minister after? We hope that he intends to appoint someone of international reputation. Will he be a professional? Will he be paid?

We are pleased that the composition of the English Sports Council will recognise the CCPR, Olympic and non-Olympic sports and, for the first time, professional sports. Perhaps the Minister will elaborate on that matter. Perhaps he will also elaborate on his point about the Sports Council spreading itself too thinly. We are pleased that the regions' role will be strengthened in his proposals.

In view of the poor track record of the Government on their appointments to non-governmental bodies, will the Minister assure us today that his appointees will be appointed on their merit and not on their political affiliation?

Will the hon. Gentleman elaborate on the role in the United Kingdom Sports Council of the doping control unit, the National Coaching Foundation and sports science expertise, which come under the current Sports Council? We should like to know how the Minister intends to avoid duplication in each of those matters, with home country sports councils running separate services.

Will the Minister state where the central policy unit will be housed? We believe that it is an important unit. Is the Minister satisfied that the good work of the current Sports Council in preparing for the distribution of the lottery funds will not be disrupted by his statement today and that an effective mechanism for the distribution of funds to sport will be in place by the end of the year? How many redundancies does the Minister envisage will result from his proposals? Will they be voluntary?

Does the Minister accept that his statement will be a great disappointment to those engaged in children's play? They were looking to him in his statement today to reinstate the importance of children's play and to reverse the downgrading of it by his predecessor some time ago.

Finally, I hope that the Minister will extend his consultation period beyond 30 September. After all, we have waited three years for a definitive statement and we are already in the summer holiday period. That makes it difficult for the sporting world in a mere 83 days to have a meaningful dialogue with the Minister in that period.

Finally, finally, Opposition Members welcome much of what was contained in the Minister's statement, but regret the missed opportunities that I have mentioned. I hope that, on reflection, the Minister will adjust his sights accordingly.

First, I thank the hon. Gentleman very much for the general welcome that he gave to so much of what we propose in this fairly radical restructuring of the Sports Council. As he said, it really was needed. I am grateful for the all-party support that he has given. Of course, I share the hon. Gentleman's views about making the statement on a Friday. The fact of the matter is that, as I am sure all hon. Members will understand, at the end of the summer term, when so many statements have to be made, I had the choice of making an oral statement on a Friday or not at all. So I thought it better to have a Friday statement than none at all.

The hon. Gentleman said that a long time had been taken for a statement to be made. It is almost exactly a year since Friday 9 July last year, when I announced the abandonment of the old UK Sports Commission. It has taken a year because I have used the intervening time to go round every sports region to speak to every member of every sports region, as well as to meet in my office the British Olympic Association, the CCPR and so on. It has been a thorough review. I hope that we have used the time well.

I should like to say how very much I agree with the kind words spoken by the hon. Gentleman about Sir Peter Yarranton as chairman of the Great Britain Sports Council. He and his colleagues have done a marvellous job. I congratulate them on what they have achieved.

The hon. Gentleman asked what kind of chairman of the new UK and English Sports Councils we shall be looking for. We will look with an open mind at everyone whose name is put forward. As for the pay, which the hon. Gentleman properly raised, it is our intention to pay the chairman, as Sir Peter and his deputy are paid. We are certainly looking for someone who has a high-quality name, who will be recognised nationally and will help to achieve what I want to see. I want this country to be influential again in international sport.

The hon. Gentleman mentioned professional sport. He welcomed my putting professional sportsmen on both bodies. I believe that the time has come to do so. It is ludicrous, when professional sport is so dominant in Britain, that we do not have people on the boards who can specifically speak for professional sport. We have had one or two individuals before such as Trevor Booking, the chairman of the current eastern RCSR, but we want them on the bodies specifically to represent professional sport and the attitudes of those involved in it. That is an innovation which will be widely welcomed.

I believe that the Sports Council has spread itself too thinly in the past, partly because Parliament has laid too many different jobs on it. When one considers that the current spending of the Sports Council is about £50 million a year and that local government in England alone spends £1.25 billion, one can see that the Sports Council money is small by comparison. Therefore, it has to be concentrated.

The ministerial nominees will certainly not be appointed for political reasons. I have not the slightest idea how any of them votes. I have never asked them and I do not care. I want people who will drive forward the cause of sport in this country. The new UK Sports Council will examine sports medicine, sports science and coaching, because it is clearly important that they are co-ordinated across the United Kingdom and that there is no duplication. That will be a prime job of the new UK body.

The lottery will not be disrupted. The lottery part of the new GB Sports Council is already up and running. It will not be interrupted. It will continue into the English body.

The number of redundancies will not be known until the consultants have a look at the particular parts of the current GB Sports Council and what will be transferred to the new English Sports Council. I hope that it will be possible to make the redundancies voluntary.

Children's play is but one element of the work of the current Sports Council. We will consider whether its continuing role in the Sports Council fits in with the more sharply focused view that I want the Sports Council to take. Certainly many people say that the role of children's play is not suitable for the Sports Council, but we will look at it carefully in the light of what I have announced today.

The hon. Gentleman asked me to extend the consultation period. It will go up to 30 September for formal consultation, but, thereafter, we shall have further consultation on the points that are made by various bodies with members of the Sports Council and others.

rose—

Order. After those initial exchanges, I now look for brisk questions and for brisk answers from the Minister.

My hon. Friend's statement is a welcome clarification of the situation. He will be aware of the uncertainty felt, not only by staff of the Sports Council but by many outside—something which I am sure he has heard plenty about from Sir Peter Yarranton, to whom I also pay tribute. I am pleased by the leaner and fitter format that he has proposed, which is very welcome. I especially welcome what he said about the regional councils and regional sport—

Order. When we have a statement, the whole idea is that Members can question the Minister.

On the national lottery, my hon. Friend said that the present work will continue. Can he guarantee to the House that it will not lack staff to deal with the many applications that will undoubtedly be made for national lottery funds? I hope that the Sports Council will be able to set an example to the various other organisations distributing national lottery funds, which will be considerable.

I thank my hon. Friend for his welcome. Yes, the lottery division of the present Great Britain Sports Council will proceed fairly seamlessly into the English Sports Council. There will be no difficulty.

I welcome very much the setting up of the streamlined United Kingdom Sports Council. Can the Minister clarify whether there will be any more resources for school sports associations, which are keen to get sport going among our young people? Why does he not think that the Minister should chair the new forum? That is the only way in which we will get it to be really accountable to this Parliament.

I thank the hon. Lady for her kind welcome, which I very much appreciate. Her first question is very important. I said that we would be asking governing bodies to make absolutely clear in their business plans what proposals they have for links between schools, other youth groups and sports clubs outside schools, but in the community. We may be saying rather more about that if and when we make an announcement about sport in schools.

On the hon. Lady's very kind suggestion that I should be chairman, which the hon. Member for Stalybridge and Hyde (Mr. Pendry) also mentioned, without undue modesty I can say that the fewer politicians and ministerial nominees, the better. I look to the new chairman to provide firm and strong leadership for British sport.

I welcome my hon. Friend's statement. Is he aware that I am the president and chairman of two school sporting bodies, and that I took five coaching certificates and coached in five sports in addition to academic teaching for 23 years? I have a great interest in the field—all amateur, unpaid.

Will more top sportsmen come from schools and clubs as a result of my hon. Friend's excellent work—the Brian Laras and Sebastian Coes of this world—and will it give a special opportunity for all children to enjoy and take part in sport? Will he support the payment of teachers who coach, as well as putting money into clubs to coach children, as the Select Committee on Education, Science and the Arts recommended two or three years ago?

My hon. Friend's qualifications are extremely impressive—I did not know the depth of the detail—and I will undertake to add him to the list of people I consult on the details of this statement.

As for more sportsmen coming through schools, that is my aim and I believe that it will be helped by the statement. I will consider my hon. Friend's third question.

I do not have a CV and I do not want to interfere in the love relationship that the Opposition Front Bench and the Department of Heritage have entered into this week. How will the six independent members of the Sports Council be appointed and whom will they be independent from?

They will be appointed by the Government and be independent from the Government. They will also be independent of vested interests in sport. For example, the British Olympic Association will, quite rightly, have a member, and amateur non-Olympic sport will have another. By independent members, I mean people who are independent from those particular sections of the sporting community.

My hon. Friend referred to ministerial appointees. Does he plan to use their talent in particular ways and perhaps to use it more than it has been used in the past?

That is a very interesting question. Yes, is the short answer. When I got this job, I was struck by the fact that I did not know what the ministerial nominees were supposed to be telling me, or what I was supposed to be telling them. When I went round the regions I was extremely impressed by their talents. As a minimum, first, I want to get five of them on to the English Sports Council, so that we have proper regional influence in that council at a national level and a two-way flow of information and experience. Secondly, I want to meet all the nominees in each region and also to meet all of them together at least once a year, so that we can have a two-way flow of advice.

Does the Minister see, as a result of the changes, more money going to the regions for the provision of sporting facilities and involvement in sport? Does he see a role for the Sports Council in providing a replacement for Wembley stadium, which would provide this capital and the country with a national stadium worthy of the 21st century?

On the first part of the hon. Gentleman's question, I certainly see more money going to grassroots sport in the regions. One of the troubles with the present Sports Council—terrific as it has been in so many ways—is that too much money has been spent on publications, pamphlets, conferences and seminars and too little has been going directly to sport. I want to change that and focus the money going to sport in the regions.

I have received representations about Wembley stadium. I will consider them and make an announcement on another occasion.

Can my hon. Friend explain whether national lottery funds will be available, through the new United Kingdom Sports Council, for both the revenue side and the capital side of sports projects?

The money will be distributed not by the UK Sports Council, but by the English, Northern Ireland, Welsh and Scottish councils, but the UK Sports Council will obviously give expert advice on matters that have a United Kingdom-wide application.

On my hon. Friend's important point about capital and revenue, there will be an opportunity for revenue funding to come from lottery funds, as long as it is part of a capital project. There cannot be such funding from the lottery where no capital sum has originally gone into a project.

Last week, while you were enjoying the air at Wimbledon, Madam Speaker, I had to put up with the recorded version of that great event because I was at an athletics meeting in my constituency, where a very important question was raised which is appropriate to this statement. In my region, one of the concerns that have been expressed is that the previous body failed properly to evaluate the strategic needs within the regions and to identify areas where gaps in provision existed. Will the Minister confirm that part of the work of the new regional body will be to undertake that strategic review and fill in those gaps, wherever possible?

Yes. The hon. Member makes a very good point. Almost the main reason why I want ministerial nominees to continue, but to be attached to the sports council for the region, is exactly that—so that there is a direct flow of information up to the national body from the grassroots about what is needed there and back again, to ensure that national policy is practised in the regions. That is a very good point and I hope that I have met it by what I have proposed.

May I congratulate my hon. Friend on his moves to re-establish sport in schools? It is certainly desirable that our children should be fitter, healthier and more competitive. Where will the headquarters of the new sports councils be located and where will the English Sports Council be located? Will he consider moving it out of London?

I thank my hon. Friend for her comments on the importance of competitive team games in schools. The headquarters of both the United Kingdom and English councils will be in London—but in different buildings, so there will not be too cosy a relationship. My hon. Friend's interesting suggestion that the English Sports Council's headquarters might be moved out of London in future is certainly possible. I will look to the council to come forward with proposals, if it so wishes—provided that they are cost effective.

To whom or to what will the real estate and other properties of the present Sports Council be transferred?

All the national centres in England will, as my hon. Friend would expect, go to the English Sports Council. The centre in Wales, at Plas y Brenin, will also go to the English Sports Council because of a complicated legal ownership arrangement. It will be up to the English Sports Council to say in future that it does not want to run national centres but to privatise or sell them. It is up to the council to make proposals in due course.

I welcome my hon. Friend's announcement that he will consider private finance in relation to the new councils' funding. How does he expect to ratchet in private finance to ensure the best value for every pound spent of public money?

As my hon. Friend knows and emphasises by implication, we are extremely keen to attract private finance on every possible occasion. A good example is the current sponsorship scheme whereby the Government match pound for pound up to £3.5 million, grossing £7 million, to be pumped into sport. That is a paradigm of what we would like to see in the new body.

I congratulate my hon. Friend on his statement and on the proposal to reduce the number of bureaucrats in the new UK body from 180 to 20. Can he assure me that the money saved in that way will be pumped back into grassroots sports?

Yes, I certainly can. My hon. Friend makes an extremely important point which goes to the heart of our attempts to concentrate, target and cut out peripheral activities in leisure and recreation—important as they are—and concentrate on sport. We will cut the money out of bureaucracy and put it straight into sport itself.

Thank you all for your co-operation.

United Kingdom (Inequalities)

Question again proposed.

11.31 am

Thank you, Madam Speaker, for allowing me to rejoin this important debate. We heard a fine speech from my hon. Friend the Member for Gateshead, East, who constructively set out the problems that worry many Labour Members and which have certainly concerned me since entering the House two months ago. If I had to sum up the root cause of the pain and distress that come to my attention at my surgeries or in correspondence from my constituents, it would be growing inequalities in our country.

Next Thursday, 14 July, the French will celebrate the 205th anniversary of their revolution, which inscribed in world history the concepts of liberty, fraternity and equality. These days, I yield to no one in my admiration for attacks on political correctness, but perhaps we should use the word "solidarity" instead of fraternity.

The Government have been taking our liberties, destroying our solidarity and increasing inequality. We are all born unequal, live unequal and die unequal—but some are more unequal than others. For 15 consecutive years, it has been the Government's project to increase inequality. Some people—including my hon. Friend the Member for Islington, North (Mr. Corbyn)—may passionately believe that a fully equal society can be created on Earth. I do not share that opinion.

Does the hon. Gentleman agree that God has clearly not been reading the socialist manifesto, as He continues to create people unequal?

If the hon. Gentleman returns as regularly as we all should to the Book of Genesis, he will find a paradise created on Earth, which for thousands of years has set the guidelines for socialism and equality.

I share the view expressed earlier that Britain is a far richer and more productive society than ever before. Why are those increased riches and productivity so unequally shared? Why have other countries that have become richer and more productive in the past 15 years been able to ensure a fairer and more equal sharing of their increased riches?

Before the statement, I referred to the OECD report, which was a forerunner to the Institute for Fiscal Studies report to which my hon. Friend the Member for Gateshead, East, referred. That report, published in "Employment Outlook" in June 1993, shows that whereas there has been a decrease in earnings dispersal—a technical term meaning who has the cake and the butter in our society—in Japan, Germany and the Netherlands in the 1980s, the sharpest increase ever in OECD history was recorded in Britain. It is interesting and important to note that societies that set a goal of equality in their policy framework turn out to be high-performing economies.

The earnings of Britain's top 10 per cent.—the deciles, to quote the new word that has crept into economic discourse—between 1980 and 1992 increased 51 per cent., while the bottom one tenth, or poorest, saw their earnings increase just 11 per cent. That shows a 4:1 ratio between the top one tenth and the bottom one tenth, which is a clear statistical indication of growing inequality in Britain. Also in the 1980s, although the years do not match exactly, in Italy and Germany the gap between the bottom 10 per cent. and top 10 per cent. of earnings stayed constant or even narrowed.

It is not simply a question of economics. We must move the debate beyond statistical exchanges on deciles, poverty, absolute poverty, and whether or not more households have central heating. I am delighted that there is more central heating in the homes of Britain, but I remain worried about the one third of the population who are without it. I would find it hard to believe that any hon. Member has not seen constituents at his or her surgery who cannot meet their fuel bills. To have central heating in one's home but to be unable to afford using it is an expression of the inequality that worries Opposition Members. There is inequality also in education and in the absence of adequate nursery provision. We have the same number of people going to university as our leading competitors, but in the Netherlands—which produced Mr. Ruud Lubbers, the would-be President of the European Commission, according to the Prime Minister—49 per cent. of the work force have technical or craft qualifications whereas the figure in Britain is only 27 per cent.

Will the hon. Gentleman give way?

I am sure that the hon. Lady will have a chance to make a speech. Given that the statement and questions lasted 40 minutes, I do not want to take up too much time. I may give way later, but it might be more helpful if I were to finish, to give other hon. Members a proper chance to speak consecutively, in joined-up sentences.

Korea and Malaysia devote 22 per cent. and 18 per cent. respectively of public expenditure to education, while the UK spends only 12 per cent. UK Government spending on education as a percentage of gross domestic product declined from 5.4 per cent. in 1979 to 4.8 per cent. in 1991. At the same time, Government support for private school fees increased from £3 million in 1982 to £76 million in 1992. That is an example of the growth in inequality in education.

There is inequality in the way that we are governed. There are now more Tory placemen and women appointed to Government-established quangos than there are democratically elected local councillors.

There is inequality in our very political structure. Long gone are the days when Conservatives sat for northern or industrial seats—the Minister, the hon. Member for Bury, North (Mr. Burt) is an exception—or, indeed, had any real knowledge of poverty and inequality. Gone are the days when service in the armed forces at least facilitated some contact between the ruling classes and the ordinary people.

The hon. Member for Teignbridge (Mr. Nicholls) referred to the trade union movement as being confined to barracks. I am not sure whether he served in the armed forces, but that expression refers to a punishment—to a denial of rights because of some breach or dereliction of duty. Not a great deal of passion has been aroused in this debate, but I have to tell the hon. Gentleman that some of us find it deeply arrogant—and oh so typical—that the 7 million members of our trade union movement should be considered to be people on punishment parade, confined to barracks and not allowed to play a part as equal citizens in the labour market and the world of work.

The inequalities in our government, education and economic systems relentlessly feed upon themselves. We must deal with the important question of what produces inequality. Although I would argue—and my hon. Friend the Member for Gateshead, East correctly asserted—that, in part, it is a deliberate Government policy, some market, global and technological changes are also having an enormous impact. In 1992, 4,000 employees at the General Motors Vauxhall plant in Luton produced 170,000 cars. That is a doubling of output per worker since the 1980s, which I welcome. However, their wages have not risen by anything remotely like the increase in productivity.

In the United States—the figures are roughly comparable with those for the UK—productivity grew between 1980 and 1990 by about 4 per cent. per annum, but the real take-home pay of workers in the manufacturing sector decreased by 3.5 per cent. In theory, any decline in the wages of workers in industrialised countries should be offset by an increase in the wages—the purchasing power—of workers in the newly industrialised countries, especially in Asia. Investment and technology have poured into countries such as Mexico, but the purchasing power of Mexican workers has declined by up to 50 per cent. In Malaysia, a country which is rocketing up the productivity and output tables, the take-home pay of the industrial worker is stagnant or even declining.

That is an important point in the debate on inequality, because, throughout most of the 20th century, whether under Conservative or Labour Governments, there was a narrowing of the gap in equality because increases in productivity were matched by increases in pay. To put it crudely, workers have been able to buy what they make or use the services that they provide. Now, the productivity-pay link has been broken, partly because of globalisation factors and partly because of technological change. As yet, we have not found a method to pay everyone in employment sufficient to sustain a decent standard of living.

I accept that this country has a lower level of unemployment than some of our competitors, but all the new jobs are part-time. [Interruption.] The majority of those jobs are part-time and at pay rates insufficient to sustain a full and normal family life. Indeed, I seem to recall that either the Secretary of State or the Minister made just that point in an important speech recently and said that the absence of a male breadwinner was having a serious impact on the quality of family life. We have to find the mechanisms to deal with that. It will be as great a problem for the next Labour Government as it has been for this Government, or should have been had they ever sought seriously to deal with it.

It appears to me that we tackle the problem of inequality through a mixture of policy, precept and example. The steel industry is of great concern to my constituents, who read with some shock this week that the chairman of British Steel has been awarded a 54 per cent. pay rise. That takes his pay this year to 33 times the average earnings of a steel worker. Of course, a steel worker gets reasonably good money—about £15,000 a year or £310 a week—but the Latin American ratio of 33:1, which is increasingly evident in pay rates, will corrupt and corrode the sense of community and relationship needed to make our work forces perform competitively and with team spirit and co-operation.

Does the hon. Gentleman accept that such pay rises give young people entering the industry the ambition to become the chairman of British Steel? Does he further accept that in his ideal economy such a large industry would be nationalised, whereas it is in fact in private hands and contributing to taxation and revenue to help the very poor people whom he says he wishes to help? Those nationalised industries that used to be a drain on the nation's resources are now contributors—the blood suckers have become the blood donors.

I could enter into a debate about how to make a great deal of money in a very short time through contacts, knowledge—

And property speculation.

I leave it to my hon. Friend to deal with the unpleasant remarks of the hon. Member for Rutland and Melton (Mr. Duncan).

The hon. Gentleman was quite wrong in his assertions. In 1960, Italy's gross domestic product was half that of Britain. Since then, there has been wide public ownership in Italy while Britain has privatised its great industries. Italian GDP has now moved ahead of Britain, which is slipping down every international comparative league table for the rich, the middling rich, the-not-so rich and the poor alike.

As I said, the chairman of British Steel has had a 54 per cent. pay increase—bringing his earnings over the steel workers to the Latin American ratio of 33:1—while his employees have had to be content with 3 per cent. That may encourage the one man or woman in a million who aspires to be the chairman of a great company, but it will do absolutely nothing for the thousands of people in Rotherham who would rather work in a small, middling or large company, have a good job, apply their skills and talents and have a wage sufficient unto their needs.

The figures for Rotherham are extremely stark. We are told that Britain is back in the middle of an economic boom and is out of recession, that Britain is leading the way and Europe is in the doldrums. Yet between May 1992 and May 1993 the number of income support claimants in Rotherham rose from 33,000 to 37,000. Children receiving free school meals—that necessary but unpleasant aspect of charity, as some boys and girls line up to be identified as the new victims of Tory policies—has risen from 7,000 in 1991 to 9,000 this year. No parent likes to mark their child out by claiming free school meals, but that is the record of growing inequality in just one constituency.

Rotherham has adopted an anti-poverty strategy and it has proved to be one of the most impressive in Europe.[Laughter.] Conservative Members may laugh and scorn, but their natural supporters in the chamber of commerce and business community of Rotherham—there were only 2,000 Tory voters in Rotherham at the last election, but that was an aberration; they will come back—support the anti-poverty strategy.

On a tiny budget of less than £250,000, the anti-poverty unit has been able to undertake a wide range of initiatives. It has set up a credit union, encouraging local savings and loans clubs in the poorer areas, and the Rothercard, a discount scheme which allows low-income households to benefit from high street shopping, low-cost sport and recreation. It has initiated community projects such as a newspaper in Canklow, a community advice centre in Ferham and a "community chest" fund in Dinnington in the constituency of my good and hon. Friend the Member for Rother Valley (Mr. Barron). It has taken redundancy action and other concrete, small-scale initiatives to help to combat inequalities in my constituency. I commend this approach quite seriously to the Minister.

Such problems will continue for many years, so I invite the Minister to organise a European conference to examine other and similar initiatives. I know that my friends in Rotherham would give the Minister a warm welcome if he would care to cross the Pennines to see an example of South Yorkshire initiatives in action.

It is a Rotherham problem and a national problem, but the debate must be set in a world context. The hon. Member for Teignbridge referred movingly to a man from the third world who had to bring his child to Britain for an operation, but his country might be able to afford its own national health service if its debts were cancelled and the banks took their fangs out of the third world and allowed it to develop properly.

If the third world were given fair terms of trade and encouraged to develop, more doctors and professionals would stay in their own countries, rather than many of them having to come to the north to find a good job and adequate income. Growing inequality will continue in our country while we have growing inequality in the world.

We need a social clause for the new World Trade Organisation so that world trade contributes to a win:win situation, enriching all those who participate, rather than, as world trade has for the past 15 years, increasing wealth for the north with some increasing wealth for take-off countries, but worse inequality and poverty for many countries in the rest of the world.

We may not make the poor rich by making the rich poorer—I see smiles on the faces of the rich on the Conservative Benches—and the failure of communist countries proves that quite conclusively, but we can make the poor a lot less poor by making the rich accept that they are part of a community with equal responsibilities and equal duties even if they have unequal privileges.

We have already heard, and it is a well-known fact, that when tax rates are reduced, the amount that the rich contribute to the tax take increases. Surely what is important is the amount of money available, not the size of the gap. That is the case that the hon. Gentleman must answer.

If the hon. Gentleman had listened to my speech he would know that that is precisely the point that I am seeking to make. Every economy that seeks to keep the ratio between what the top and bottom earners as narrow as possible, such as Japan—

Why?

I shall answer that. The top executives of Sony, Nissan and other great Japanese companies earn between seven, 12 or perhaps up to 15 times as much as their workers.

Is the hon. Gentleman aware of recent economic papers on the effect of the Laffer curve on Japan and how it is believed in Japan that those penal rates of higher taxation are depriving the Japanese economy of a chance to keep ahead in the longer term of South Korea and Hong Kong, where tax rates are much more equal?

What is worrying Japan is that, by the year 2020, about 40 per cent. of the population will be 60 or over. It is facing the problems of a maturing economy and demand for social provision. Less than one in five houses is connected to a mains sewer. Hon. Members who have visited Japan will know how crowded and inhospitable much of ordinary life is in Japan. That is what is concerning policy makers in Japan. I study Japan quite closely, but I have yet to see any strong evidence that anybody seriously involved in Japanese policy making is concerned about tax rates, which are lower than most of those in west Europe.

Perhaps the most dominant feature of Japan, Singapore, Korea and the successful economies of the past 50 years has been their much narrower ratio between the earnings of the broad mass of employees and the top bosses. It is a culture of fair pay and investment rather than the rentier culture which increasingly dominates our unequal society.

As someone who lived in Singapore for two years, I can bear witness to how successful its economy is. We should watch it as we consider how to structure our own. The hon. Gentleman has already admitted that one does not necessarily make the poor richer by making the rich poorer, yet everything else that he has said today conflicts with that admission. Should not he be mindful of the fact that if the spontaneous order of a society is interrupted and if equality is forced on that society, it inevitably reduces that country to poverty, as history shows? Perhaps he should remember that Shakespeare said

"untune that string,

And hark! what discord follows".

I am also an admirer of much that has been achieved in Singapore—it is strong on discipline, clear about chewing gum, utterly opposed to smoking and very keen on short hair. They are all values which Singaporeans enforce with some vigour. Of course, Singapore is a society shaped by the great secretary of the Fabian society at Cambridge, Lee Kuan Yew. For some of us who know that country, we see it as a Fabian society on earth with slightly better food, but, alas, with a cultural and moral order with which I am not sure that Conservatives could live. I am surprised that the hon. Member for Rutland and Melton managed to live there for two years, and I congratulate him on giving up his Toryism, his Englishness and his sense of spirit and fun. However, I know that Conservatives will go to any corner of the earth to earn money.

You asked me for concrete policies and pledges—

Order. I was not being asked. I think that the hon. Gentleman has perhaps forgotten the rule.

Forgive me, Madam Deputy Speaker. I believe that I heard such calls from the Conservative Benches, and I refer them to my ten-minute Bill on page 4049 of the Order Paper. However, I suggest the following general remedies. Yes, let us copy countries that are currently more successful—

Cuba.

For God's sake, the hon. Gentleman is driving Britain to Cuba. There are parts of my constituency where I suspect that the quality of life is worse than in Cuba and certainly a lot less warm. As Conservatives create an unequal Britain, they may find that they are met by a revolt such as that which swept Mr. Castro, a friend of my hon. Friend the Member for Islington, North, into power 30 years ago. Let us copy and learn the lessons of the most successful countries such as Germany, Japan and the dynamic Asian countries. In each of those countries, one finds that the notion of preventing inequality where possible is built into public policy.

Let us link the future of work and the time spent at work to the technology necessary to produce what our country wants. If we want to ensure that earned income provides the economic wherewithal for the majority of citizens, we need a new concept of pay, productivity and output. We should use the market as a servant, not a master. Taxation should be based on the ability to pay, but let us set a target for equality.

I was delighted to hear that, in a speech to the Trades Union Congress on Tuesday, the Secretary of State for Employment, in what was otherwise a rather vacuous speech, referred to full employment as something which the Government should support. I invite the Under-Secretary of State for Social Security to join the Secretary of State and add equality to full employment.

Above all, we must avoid the Latin American road down which we are going, and even the north American road. In the cities of north America, as in Latin America, no one can walk the streets at night. Drug taking, prostitution and criminality are the norm. We must also avoid the creation of a handful of super-rich and a middle class that often lives in anxiety and insecurity.

The hon. Member for Rutland and Melton quoted Shakespeare. In response, I shall quote Francis Bacon who some say may even have written the quotation used by the hon. Gentleman. Bacon said:

"Of great riches there is no real use, except it be in their distribution; the rest is but conceit."

Conservatives are arguing for inequality, presiding over a country growing more unequal; in inequality matched only by their conceit.

I conclude by joining in the hope expressed by my hon. Friend the Member for Gateshead, East that there will soon sit on the Government Benches people who have learned the lessons of successful economies, and will put the building of equality back into public policy and make Britain a fairer, better and wealthier place for us to live in.

12.5 pm

It is a pleasure to participate in this important debate. Having listened to the speech of the hon. Member for Rotherham (Mr. MacShane), it is refreshing for us to learn that even the gilt-edged face of the new Labour party speaks just as much nonsense and waffle as the old, unreconstructed face of the Labour party sitting directly behind him.

The hon. Member for Rotherham spoke of a target for equality. I look forward to that thought being developed by the Labour party in the next two years, but I stand before you, Madam Deputy Speaker, as a disappointed person this morning. Having read the motion tabled by the hon. Member for Gateshead, East (Ms Quin), which refers to a range of measures and policies that are needed and a change of direction in existing Government policy, I thought that we would hear from her a list of well thought-out, constructive proposals as to how we might deal with the problems facing some people in the country.

I place on record the fact that I accept that some people require help and that we should give that help with compassion and understanding. However, the important thing is not simply to stand up in forums such as this and utter fancy words; the important thing is to suggest proposals, policies and measures that can help.

I noted down carefully the five solutions that the hon. Lady suggested to help the people whom she described as living in deprivation and suffering inequality. She said that recognising the extent of the problem was the first step. I agree that the first step is always to recognise the problem, so let us give her that one for the purposes of a quiet life.

The hon. Lady's second solution was a job creation package, but what does that mean? What are her specific proposals? How much would they cost? Is she suggesting a programme to be funded by national Government out of taxpayers' income? What is a job creation package? She gave us no idea.

Thirdly, the hon. Lady talked about creating a new environmental task force, but she did not say who would fund it, how much it would cost, what it would do or how it would create jobs or help people on lower incomes. It was a fancy phrase with nothing behind it.

The fourth solution was to help south American countries more. She called for some kind of Marshall plan, but did not say how it would help the people of Britain. As one of my colleagues rightly said, such a programme would surely cost us money and be a greater burden on our taxpayers, thus enabling us to do less for our people. It did not make sense.

The piece de resistance was the call by the hon. Member for Gateshead, East for fairness in our social security policies. She gave no specifics and she did not explain what she meant. She did not say how we could better target help or resources. I am afraid that it was the same old meaningless platitudes. We have not heard a single solution this morning.

Much of the speech by the hon. Member for Gateshead, East was a discussion of the whole issue of what she called "wage inequality". In other words, some jobs pay more than others. She did not tell us this morning who should decide how much each job should pay. What should we do about wage inequality? The market says that a certain job should pay a certain rate. What should we do to equalise that with other jobs which the market says should be paid at a lower rate? The hon. Lady gave us no answer.

Was the hon. Lady talking about direct Government intervention? Does she believe that we should say to an employer, "No, that is not the right rate for the job. You must pay more or less. You must be in line with other professions and other trades"? What was the hon. Lady talking about in terms of the solution to wage inequality? I am afraid that she did not say.

The hon. Gentleman spoke of the Government setting wage limits. How can Railtrack and the unions come to any agreement when the Government have interfered quite crudely in setting the wages that railway signal workers will earn?

The hon. Gentleman knows very well that that point is a world apart from what I have just described—the suggestion that the Government should intervene to decide what every job or sector of job should be paid. We are talking about the Government being prudent with taxpayers' money in insisting that public sector employees should not be paid more than they can earn in increased productivity.

Does the hon. Gentleman consider that the Government are prudent with taxpayers' money when they give so much of that money to people who are on such low incomes from their employers that they are forced to claim state benefits? Does he think that it is fair to subsidise employers who pay Scrooge wages?

It was important that family credit and other forms of social security payments were put in place by this sensitive and caring Government to ensure that every person and every family who can at present attract only a low-paid job have their income made up to a reasonable level by the taxpayer. I consider that to be a reasonable and right response, which is far better than the response at which the hon. Lady hinted, although she did not describe it clearly, of a national minimum wage. Opposition Members must begin to live in the real world. A national minimum wage would undoubtedly cause unemployment for thousands of people because employers could not afford to increase their wages to that extent.

I place on record my strong support for the outstanding speech by my hon. Friend the Member for Teignbridge (Mr. Nicholls). In many respects, it was the speech that I had thought about making myself. He spoke about the great inequality being perpetrated on the majority of people by tiny minority interest groups. The tail has been wagging the dog for far too long. We are now entering a time when the dog wants to respond. Over the past 30 years, the pendulum has swung in favour of those minority groups, who are a tiny fraction of the nation. The pendulum has swung too far and will return with interest.

Let us have no more empty rhetoric such as the motion. Let us have firm and constructive policies which seek to deal with some of the remaining issues. Over the past 15 years, our Government have a record of which we can be proud. Ordinary families on average earnings are now £83 per week better off than they were in 1978–79, after tax and inflation are taken into account. Real incomes are up sharply for vulnerable groups, including 40 per cent. real income increases for pensioners. As has already been said—this is important—the top 10 per cent. of taxpayers now account for 45 per cent. of the income tax take, compared with 35 per cent. in 1979. That is a record of which we can be proud.

The issues of inequality need to be addressed. I believe that the philosophical approach to the subject is as follows. We must put in place opportunities for people. We must remove barriers which might prevent access to that opportunity. We must encourage people to seize that opportunity, but then each one must decide for him or herself. We cannot live people's lives for them. What does this mean in practice?

First, in practice, we are talking about access to decent education. The Government reforms of the past few years have been striving to create an improved education service and there are now many signs that this important policy reform is beginning to bear fruit. The national curriculum is now widely accepted as improving standards. We have stressed the importance of assessing pupils at regular stages and the importance of parental choice. We have pursued the popular policy of allowing good schools to expand. We have delegated to schools the way in which they spend their budgets through LMS—local management of schools. We have pursued the important policy of grant-maintained schools which allow parents, teachers, governors and headmasters far greater choice and a far greater say in how schools are run. Access to education is improving under this Government.

Secondly, our reforms of health care are designed to improve access to health care free at the point of need. They are beginning to work. Some 1 million more patients are being treated than ever before. We all know that there is no bottomless pit of resources, yet demand for increasing health care is infinite. The Government are responsible in seeking to bring to the surface the costs of various types of treatment and in seeking to improve efficiency in the health service. Those are very necessary reforms which guarantee the survival of the health service free at the point of need. To go blindly on pouring in more and more taxpayers' money without reforms of efficiency and careful costing would lead to the service's ultimate demise.

The third point is access to a reasonable job. It is important for any Government to get the economic framework of the country right. How we rejoice, therefore, in the fact that, since December 1992, 300,000 people are now back in work. How important it is that the Government proceed with the reforms in industry and in business to deregulate, to improve competitiveness and to continue the revolution with our supply side reforms. Those factors are important in creating jobs. Today, we can congratulate ourselves on our low interest rates, our low inflation and our competitive pound. We have in place an economic framework that is likely to produce the sustained economic growth which will be so important to people over the next few years.

Fourthly, there must be access to decent and affordable homes. Over the past three years, 170,000 new social homes have been created by housing associations. Housing associations are now the major provider of social housing and we are revitalising the private sector at the same time. For all those reasons, we have a record of which we can be proud in terms of offering opportunities to people. We have given them access to the things that they really care about—a job, a home, education for their children and health care in times of need.

There is a whiff of hypocrisy in the air this morning. The motion, which calls for greater equality, simply does not ring true. There is not much equality in Monklands district council. There was not much equality for pensioners in the late 1970s when roaring inflation at 26 per cent. ate into their life savings, forcing many of them to live in abject poverty. There was not much equality of opportunity for council tenants when the Labour party fiercely opposed the right for them to buy their own council houses, which was a great success. There was not much equality of opportunity in access to health care when the previous Labour Government had to cut their hospital-building programme when they ran out of money.

Fine words are simply not enough. What is important is that any Government run their economy efficiently and competently, creating access for their people to opportunities of housing, jobs, education and health care. In all those areas, the Government can be proud of their record. We, at least, have practical policies to enable our citizens to gain access to opportunity. How much more they respond to that than to the empty, meaningless platitudes which drift across the Chamber from Labour Members.

12.20 pm

I congratulate my hon. Friend the Member for Gateshead, East (Ms Quin) on moving the motion. There is no doubt that it raises issues of genuine importance which are, to be fair, although one would not guess it from some of the speeches, of concern to the whole House and, indeed, to the country. My hon. Friend the Member for Gateshead, East put her points with clarity, ability and sound sense.

The distinguishing feature of some of the speeches is their sense of unreality. There has been a lot of charging at windmills; setting up targets which are purely imaginary. I ought to make it clear that very few Labour Members—I shall not be dramatic and say none, but few individuals, certainly not the party as a whole—believe, as Conservative Members seem to think that we do, that we should have equality of income. Of course, there is no question that the Government should regulate everyone's wages so that everyone was paid the same or that that should even be the theoretical, desirable end to our economic life. There is no question of that at all.

Similarly, it is sometimes suggested that we do not believe in the importance of individual initiative or the duty of individuals to better themselves and, in doing so, to help better society as a whole. Of course that is important, but we argue—it is closely related to poverty—that, if one looks round our community, one sees that we have created circumstances, and the situation has worsened greatly in recent years, whereby people cannot exercise individual responsibility because they are trapped, either financially or, very often, socially, in situations which literally destroy life chances. That means that people of genuine ability and aspiration cannot make progress in society. It is not an abstract argument about salary levels or resources in that narrow sense; it is an argument about opportunity in society and what happens when that opportunity is left to the unregulated market, when people cannot better themselves. I want people to better themselves. I am consciously struck almost every time that I am in my constituency by the number of people who do not have that opportunity, and it is against that lack of opportunity that myself and my hon. Friends are protesting.

One of the concerns among Conservative Members is that the well-meaning beginnings of the hon. Gentleman's thinking convert into a practice which ends up malign. A fine example of that is in Labour-controlled local authorities, where one sees his kind of dogma put into practice. Would he therefore comment on today's Evening Standard, which cites an example of that dogma put into practice, about which the social services inspectorate has said:

"Children in care"—

the sort of people that the hon. Gentleman most cares about—

"were prey to paedophiles, pimps, pornographers and drug-pushers because of the political dogma"

in the local authority of Islington?

No, I would not care to comment in any way on a caried story in the Evening Standard, which is a synopsis of a report I have not read. Of course, if there is abuse in any part of the public service, it is a serious matter and ought to be eradicated.

On the statement on the health service and the complaints procedure yesterday from the ombudsman, the Prime Minister fairly said that if there are problems and there are feelings, we ought to address them. The same applies in any other part of the service. In my local authority—it is typical of many—the struggle is not to create inequality, but to try to overcome it. It is a matter of trying to provide participation, mixture of tenure and opportunity for people who live not only in houses in the public sector, but often in poor housing conditions in the private sector.

I turn briefly to some of arguments that have been adduced. As the hon. Member for Rutland and Melton (Mr. Duncan) has intervened, may I say to him—no, it was not him; I apologise. He will be terribly insulted and I fear that I shall him hurt him terribly because I have confused him with the hon. Member for Teignbridge (Mr. Nicholls).

He is a good thing, too.

Well, that is another disagreement that we shall pursue on another occasion.

It seems to be important to make the point that the fact that the present Prime Minister came from modest financial circumstances or that exceptional people in exceptional circumstances can move to the top is not a complete answer to the problems that I have been outlining and, therefore, it is irrelevant to the main thrust of the argument. I do not want the debate to sink in a welter of statistics. To the credit of some Conservative Members—the hon. Member for Teignbridge is an example—who have spoken, may I say that there has been no real attempt to say that the gap between rich and poor has not been widening in recent years. That gap is self-evident to anyone who looks at the facts—and, strangely enough, there are people who still try to do so.

I remember a report of an interview in the Glasgow Herald on 4 March 1992 given by the Prime Minister. It lives in my memory and I have used the example on a number of occasions. He was asked specifically about poverty in Scotland, although no doubt his reply would have been the same about every part of the country. His reply was "Poverty, what poverty?" He went on to say—I hope that I am not presenting the argument unfairly—that, of course, poverty was relative, that the definition of poverty was shifting and that, as the Government increased income support and benefit rates, they increased the number of the poor. Therefore, the Prime Minister said that it was unfair to charge them with growing poverty levels because they were, in that sense, the victims of their own generosity. I do not accept that argument.

I heard the Prime Minister repeat that argument on "Channel 4 News" on—I think—8 June. It was put to him by the interviewer that, under his Government, the rich had got richer and the poor poorer and it was suggested that that was an inescapable conclusion from the facts. The Prime Minister showed every wish to try to escape from that conclusion and, indeed, described the evidence for such an assertion as very suspect. I have a little passing sympathy with that because, of course, most of the evidence comes from Government statistics. However, on the whole, I am prepared to accept them.

The Under-Secretary of State will be familiar with, for example, the annual survey of households with below average income, which his Department produces, which suggested that, if one took the bottom 10 per cent. of households—I am sure that he will deal with it and put his gloss on it—there was some evidence to suggest that there has been an income fall in real terms for the bottom 10 per cent. of households since 1979 after housing costs. It was a much more modest fall, but still a fall, if one takes the income figures before housing costs.

My hon. Friend the Member for Gateshead, East properly referred to the evidence produced by the Institute for Fiscal Studies. It suggested that there had been—the word is fairly used—a "dramatic" increase in the number of families whose income is less than half the national average. Even if we move away from the dramatic edge of poverty to mainstream Britain, that suggests that there are many people who have fallen back and are in a much less comfortable position than before.

If Conservative Members were defending a situation in which the gap between rich and poor had opened because of a genuine free market—for example, if individuals had shown exceptional ability and had capitalised on it without any artificial aid or assistance and had pulled away from the ruck—that would be one state of affairs, although we might wonder about the desirability of it. That, however, is not the state of affairs. The reason for many inequalities is the Government's deliberate fiscal policy.

We are talking about something that has been created as an act of policy and not as the natural order of events. Fiscal traffic has been moving in the wrong direction. That suggests an indifference to the distribution of income at best, or possibly a malevolent interest in it. That is unfortunate. I shall not engage in a volley of statistics, but if we consider the direct and indirect tax take from the wealthiest 10 per cent. of people since 1979 as a percentage of gross income, it is clear that it has fallen. As for the bottom 10 per cent., the take has risen quite sharply.

It is right that income tax as a percentage of income has fallen, but that is not true in terms of total tax, even before the big hike of recent times—the dramatic reversal of election promises. Even before that hike, the tax burden as a whole had increased under the Government. It has increased disproportionately for those who were already at the bottom of the heap. That is unfortunate. That is not the natural order of Adam Smith economics; it is the result of a social policy that has had unfortunate consequences. That is why Opposition Members are entitled to protest.

As the hon. Gentleman agrees that the top 10 per cent. of income tax payers are now paying more as a proportion—

Less.

No. As I understand it, as a matter of income tax revenue, the top 10 per cent. of income tax payers are now contributing more revenue as a proportion of income tax to the public purse. Does the hon. Gentleman agree that it would be self-defeating for any Government of any political persuasion to increase the 40 per cent. tax band? If he does not agree, will he explain why?

I am much more interested in what we do about the bottom than about the top. The gap is an important factor, and I am interested in the social consequences of it. We should be worried about the additional burdens which have had to be faced by those at the bottom of the heap.

I have not heard the hon. Member for Monmouth (Mr. Evans) speak before, except for his interventions this morning. I suspect that he is interested in marginal tax rates. He will know that in 1993-–94, according to the Department of Social Security, there were 230,000 lone parents in work and 270,000 married couples who were paying 75p in the pound or more as a marginal rate in tax deduction and benefit loss. If I were to suggest that we should introduce a top marginal rate of 75p in the pound, I suspect that the hon. Gentleman would be burning the pews in the Chamber and declaring the proposal to be one of the greatest political outrages committed by doctrinaire socialists that there has ever been. He is happy, apparently, to live with a system that imposes such a rate of taxation on some of the poorest in society as a disincentive to bettering themselves, which we all want them to have the chance to do. Perhaps the hon. Gentleman should worry slightly more about that.

It is not the Labour party alone which is worried about these matters. I do not know the reading habits of the hon. Member for Monmouth, but I would guess—this is to his credit—that he reads the Financial Times fairly regularly. If so, I recommend to him Tuesday's leader—he may have read it—which was headed, "The wages of inequality". It refers to an excellent piece of research work that was undertaken by the Institute for Fiscal Studies. I apologise for the technical talk, but the institute took the 90th percentile of the distribution of income and compared it with that of the 10th. It was found that the gap between the two had widened significantly.

Conservative Members may say that that does not matter, but the Financial Times believes that it does. I suspect that the Government are beginning to have some conscience about it. If so, that is to be welcomed. The Financial Times is suggesting that steps must be taken to do something about that problem. No doubt the hon. Member for Monmouth enjoyed the point made in the Financial Times that, in those circumstances, the Labour party's minimum wage proposals might become defensible. Perhaps we had better do something about the problem before the hon. Member for Monmouth has to embrace the minimum wage as a means of dealing with the issue. I know that the hon. Gentleman would find that ideologically uncomfortable, to say the least.

The hon. Gentleman made an appeal to the House as though the Financial Times was some great Tory capitalist paper. He may recall that, at the last general election, the Financial Times called on people to vote Labour. It is not only pink in colour; it is often pink in its views.

I am glad to know that the hon. Gentleman, who I am sure reads the Financial Times, does that only to know what the enemy is saying. His was an interesting theory. Whatever else the Financial Times is, it is a sensible and sophisticated commentator on such issues. I merely pray it in aid to suggest that the problem of the growing gap, and possibly even the growing absolute poverty, in this economy is not something which sensible people want to sweep away in the way suggested today.

The gaps are not just appearing in work. There is undoubtedly evidence, which I welcome, that retired people are on average now enjoying many more resources and a higher quality of life. That is largely because of the maturing of state earnings-related pension schemes and occupational schemes and because of such things as approved private pensions. It is not happening because of direct help from the Government.

As the Minister is aware, the basic state pension, as a percentage of average male earnings in November 1979, was 20.4 per cent. It was 15.9 per cent. in April 1993 and it is probably below that now. Even if there has been a general increase, sadly a large number of pensioners, probably about 1.6 million, are having to depend on income support, a means-tested benefit which is often resented, as a means of keeping body and soul together.

I sometimes think—and this may be a comment on me—that I have never had to do what so many of my constituents whom I meet have to do, and that is hope that I do not have an unexpected bill of £30, £40 or £50. My constituents just cannot find such sums. That is an inhibition and a cause for worry, the like of which I have been fortunate enough never to experience. However, I am aware of the fact that things that I would take in my stride as a minor inconvenience or irritant become towering problems for a large number of my constituents who are living, in that practical sense and applying that practical test, in the very shadow of poverty.

Would the hon. Gentleman be kind enough to give us a benchmark to show what he means by poverty, bearing in mind that, up and down the country, people living on income support and benefits still have microwaves, televisions, freezers and so on in their homes? Does he agree that it is a problem not so much of people living on a set income, but of how they manage their budgets? A person in one flat may manage perfectly adequately while someone else may not. Surely we need to teach people the art of household management.

The hon. Lady cannot rely on the fact that some people are feckless and do not manage a low income skilfully or that they are not graduates of the Micawber school of economics in the way that the hon. Lady would like.

I accept the point made by the hon. Member for Sutton and Cheam (Lady Olga Maitland) that one could refer to a range of benchmarks, some of which are open to counter attack. We could refer to income support level and then say that we could raise income support which would bring more people into poverty. We could refer to half national average income, but national income changes and shifts and may be too generous. The hon. Member for Sutton and Cheam may think that this is odd, but I like to consider the drift. We must consider the problem in social terms.

With regard to income support levels, for a husband and wife with two children under 11, if we consider income support levels as a percentage of average earnings m this country, that family would be living on one percentage point above one third of average earnings. I believe that the figure is 34.2 or 34.3 per cent., according to the latest parliamentary answer that I have seen. The figure has been declining because, of course, it has been tied to the retail prices index and not to average earnings, which, on the whole, have been out-pacing it.

More than 15 per cent. do not reach income support level because they are repaying social fund loans or for a variety of other reasons. In my experience, that is a very tough level at which to live; it leaves very little room for comfort.

One worry—I am sure that the hon. Lady will worry about this matter when she thinks about the figures—is that several things that the Government are doing will make the situation worse for people who are living on benefit. One simple headline figure is incapacity benefit. Of course, some savings will come from excluding from benefit people would have received invalidity benefit under the old system. Even those who climb through the hoops and jump the hurdles and receive the new benefit will find that they have a much lower income level than they would have had in the old days.

We are not talking about pennies, as the hon. Member for Sutton and Cheam will know. There will be savings of £415 million in 1995–96, £1.2 billion in 1996–97 and £1.7 billion in 199–98. Those substantial sums are being taken out of the limited pool of resources for helping those who are not in work and who are certainly living in poverty. That is of considerable concern for me as a constituency Member.

Will the hon. Gentleman give way ?

I shall press on because I must stop very soon.

My concern is not about playing the numbers game—many ingenious people play it better than I would and with considerably more staying power—but about the social fallout that I see around me. I pray in aid as evidence a speech that was made by someone whom I do not normally call to my help on such occasions, the right hon. Member for St. Albans (Mr. Lilley), the Secretary of State for Social Security.

Hear, hear.

I hear loyal noises from the Conservative Front Bench about the right hon. Gentleman's excellence and worth. The hon. Member for Bury, North (Mr. Burt) might have been present when the Secretary of State spoke at the Birmingham diocesan conference on 20 June. He talked about social instability, in particular the breakdown of marriages, a subject in which he is particularly interested and about which he is particularly concerned. He picked out as the main economic cause of the problem the low wages that are now being earned by unskilled workers. Even people in work are now being forced on to a wage which I would regard as a very good definition of poverty if one of the consequences of it was that it produces such stresses and strains that it threatens the stability of marriage and of the family unit.

I cannot think of a better definition of damaging poverty than that if one is in full-time work and earning so little that it is reasonable to think that one will find it difficult to sustain one's family and the personal connections that are such an important part of a family unit. That is what the right hon. Member for St. Albans said at the diocesan conference in Birmingham the other day. It is remarkable testimony to the difficulties that we are in. They are not people on income support or benefit; they are above that, but are still in that position. Conservative Members have said what a wealthy society we have. That we have people in that situation tells us something about the social damage that has resulted from our fiscal and social policies.

I have with me a newspaper cutting—it is perhaps a little out of date—which I came across by chance when I was cleaning out some papers, and, knowing that I would speak in this debate, I kept it. It is a report in The Guardian of 6 January 1993. I do not necessarily endorse it, but again I remind the House of what others think. The article stated that Professor Brian Robson

"The Government's leading adviser on urban policy warned yesterday of a 'nightmare scenario' in which inner cities became ghettos of poor and disadvantaged people guarded by armed police while better-off neighbourhoods hired their own armed guards."

I do not endorse the language. If hon. Members say that when people like me draw attention to social dangers we are exaggerating, they should think of statements such as those made by impartial figures who are considered worthy of being placed in positions of importance and being made consultants by the Government.

When the hon. Gentleman is devising his future benefits policy, will he target what will inevitably be limited resources specifically at groups in society who need those resources or spread them thinly among every conceivable group?

I have made it clear in the past that I recognise that targeting is bound to be part of social policy. We cannot implement the policy in any other way. There are certain sectors where one does not target, except in a narrow sense—clearly, child benefit is targeted because people have to have children before they can receive it, but that is playing with words. I defend the principle of child benefit. I defend the principle of a universal state pension as the foundation on which we should all build for security in retirement. If the hon. Gentleman is asking me whether I would target for other special interest groups, of course I would. It would be silly not to do so. It is attractive to talk about a basic income for every citizen, but the arithmetic is harsh, and I do not think that many hon. Members would see that as a practical proposition.

Exciting changes are on their way, we understand. I suppose that it would be too optimistic of me to think that the Under-Secretary of State might give us a glimpse into the future. A barrage of briefings is taking place among the heavy press. The Secretary of State for Employment is committing the Government to full employment—a plank of policy that has been derided over the past few months when it has appeared on Labour party platforms. Last Sunday, The Sunday Times said that the policy was purely in response to the Labour leadership contest. If so, it shows that democracy in the Labour party has desirable spin-offs in other places.

We are also told—perhaps the Under-Secretary knows about this more directly—that, at a cost of about £1 million, family credit is to be extended to childless couples and single people. We are told that there will be wage top ups and wage subsidies. We are told that there will be changes in the national insurance contribution system that will do something about the weighting in favour of those who are better off currently built into the banding of the system. Those changes are designed to help those at the bottom of the scale.

Judging from what I have heard this morning, I know that such changes will come as a deep shock and will be anathema to Conservative Members. I hope that what we have heard is true, not because I endorse the proposals in principle and detail now—I do not know exactly what will be produced—but if the proposed changes constitute moves to tackle the sort of problems that my hon. Friend the Member for Gateshead, East has properly drawn to our attention, I welcome them. I look forward to receiving further details, and perhaps a few more tasters and trailers, from the Under-Secretary over the next few minutes. The subject is of great interest to us.

I am not concerned with deciding whether Mr. X, Mr. Y or Mrs. Z gets so much money. I want to get away from a definition of poverty that destroys life chances and leaves people with self-fulfilling prophecies of failure in terms of education and employment and which, on occasions, literally shorten life expectancy. It is no exaggeration to say that.

The hon. Member for Sutton and Cheam may be interested to know that a year ago—the picture has not changed—a report from the Greater Glasgow health board, in whose area my constituency falls, stated that the mortality rate for males between 16 and 64 years of age in Glasgow was 20 per cent. worse than the Scottish average. The Scottish average is considerably worse than the British average. That is an historic fact, but we still have to live with it.

I found it startling that the chief medical officer was predicting that those differentials would continue to increase for the foreseeable future. We now have figures that we used to imagine would exist only in the old eastern Europe. The chief medical officer said that the figures were caused by deprivation, poverty and the financial climate in which families had to live. I am tired of seeing such effects in my constituency. I am tired of kids—who I know are as able as kids who live two or three miles away down the road who, due to their economic circumstances and the encouragement that they receive, will go to university—leaving school at the first opportunity, never entering university and perhaps never even entering the job market. If there are signs that the Government are beginning to catch up with some of those problems, I shall be delighted. I hope that the debate will encourage the Government in doing that. However, I am cautious in my expectations because I have looked at the record and seen just how disappointing and perverse it has been over the past 15 years.

12.49 pm

I have enjoyed the debate so far because the subject was well raised by the hon. Member for Gateshead, East (Ms Quin), whom I congratulate on her choice of motion. Inequality genuinely concerns all of us. I am grateful for the speech made by my hon. Friend the Member for Teignbridge (Mr. Nicholls), the sensitive contribution of my hon. Friend the Member for Plymouth, Sutton (Mr. Streeter) and for regular interventions from other hon. Friends. I am also grateful for the speeches that we have heard so far from Opposition Members. Some I had slightly more sympathy with than others.

I shall deal with some of the comments made by the hon. Member for Glasgow, Garscadden (Mr. Dewar). He rightly identified the dilemma not only for us in Britain but, I suspect, for many countries around the western developed world. In the midst of industrial progress, which has been remarkable in the 20th century, there are still in many countries which count themselves as wealthy, the leaders of which are meeting today in Naples, pockets of deprivation which are almost the same as 100 years ago, certainly in location if not in intensity. I listened with sensitivity to what the hon. Gentleman had to say.

The hon. Member for Rotherham (Mr. MacShane) raised his banner for the industrial north. I am glad to support him in that. Rotherham and Bury have many connections, mainly through tremendous battles in the 1960s between our respective football clubs. Trips to Millmoor or Gigg Lane regularly resulted in scores of 4–5, 5–4 or 4-all draws. Tremendous stuff. My father and I and many people in Bury remember those matches well.

The hon. Member for Rotherham called for me to set up a conference in Rotherham. I am ahead of him. Part of my remit in the Department has been to look after matters related to low income and poverty. I have been as connected as I could be to Poverty 3, the European anti-poverty programme, and with anti-poverty groups working in the United Kingdom. My Department sponsored a seminar held in Manchester in March this year to consider the effectiveness of those strategies. I attended a similar conference in Bath two or three weeks ago at which we discussed with the statisticians how we might draw some better conclusions and targets for that work in the future.

The problem with Poverty 3 and probably the reason why it has not yet been extended into Poverty 4 is ensuring that it does a worthwhile job. The aims and aspirations are entirely well meaning, but, as several of my colleagues have said, we need to do more than that. The conference was designed to do that. I have no doubt that, in due course, I will be back in Rotherham at some stage. It was kind of the hon. Gentleman to make the offer.

I enjoyed the speech of the hon. Member for Gateshead, East. Her concern is plainly honest and sincere. Her rage at inequality arouses passion, but, ultimately, like my hon. Friend the Member for Sutton, I was left dissatisfied. You know me, Mr. Deputy Speaker. I hope that my concern about the issues that have been raised this morning matches that of any Opposition Member. I read New Statesman and Society, I am a member of Amnesty International and I am still a communicant member of the Anglican church—three institutions which are slightly leftward-leaning to a greater or lesser degree. I lean leftwards to a tiny degree within the Conservative party, but I am not a socialist, partly because of speeches like that of the hon. Member for Gateshead, East. Having been led so far up the hill, ultimately there is nothing there.

The hon. Lady did not give solutions to the problems. She dare not give the solutions because, although there are answers, they are not socialist answers.

The hon. Member for Gateshead, East spoke of wage inequality, but dare she go further and commit herself—not her Front Bench or party, because I understand the position—to a minimum wage, and say how much it should be? She spoke of the link between pensions and earnings. Dare she go further and commit herself to a restoration of that link? I am afraid that unless one follows up one's concerns, one is left very much up in the air with the rest of us.

I am tempted to say that the policies of the hon. Member for Gateshead, East are rather like some of the lists that one occasionally sees in Private Eye. For example, "Labour policy on inequality: No. 1, become aware of inequality; No. 2, talk about fairness; No. 3, spend money; No. 4, er…; No. 5, that's it." Until we get a little more, that remains the feel.

The hon. Member for Gateshead, East dealt with a broad sweep of economic and social policy and covered some other items. She clearly feels that income inequalities are a bad thing. But one man's income inequalities are another man's pay differentials. We used to hear a lot from the Opposition Benches and the trade unions about the need to preserve pay differentials and reward skills. At what stage does recognising one man's difference in ability stop being a good thing, which is a differential, and become a bad thing, which is inequality?

Bill Jordan, the president of the Amalgamated Engineering Union, has made it clear that his union would oppose any "squeeze on differentials". He said:

"if the price of a minimum wage is wage restraint for higher paid workers, then our answer would be no".

I suspect that there is a measure of realism in that remark, as there was in the remarks of the hon. Member for Garscadden when he dealt with the subject. That demonstrates how hard it is to be precise and to tackle inequality realistically, and it is why our more practical approach is better.

Much was made of the report, which was published at the beginning of June by the Institute for Fiscal Studies, under the programme of studies on the distribution of income and wealth sponsored by the Joseph Rowntree Foundation. It examined changes in the distribution of incomes between 1961 and 1991. The House will not be surprised if I make a few comments on that and try to provide, not a gloss, as the hon. Member for Garscadden suggested, but some greater clarification of statistics that are difficult to interpret.

Alongside that report, Dr. Stephen Jenkins of Swansea university published a further report on income in the 1980s. Both studies draw on the same data as the Government statistical service report on "Households below Average Income", published in July last year and covering the years 1979 to 1990–91. As the Central Statistical Office announced on 30 June, the new edition of those statistics will be published next week, on 14 July. That brings the comparison up to 1991–92.

The Institute for Fiscal Studies report indeed describes a widening of the gap between the top and the bottom of the income distribution in the last decade, as compared to previous decades, and discusses the factors behind it. The general thesis is not new, although the IFS has provided some useful new insights into what has driven the changes. Members on both sides of the House have given their views at length.

To my mind, the key finding in the report is not the change in income share of different population groups, but the massive increase in average earnings in the past decade, compared with the preceding 20 years.

Page 19 of the report shows that, in 1961, the average household income was £140. In the 10 years to 1971, it had crept up to £165—a growth of 18 per cent. In the decade from 1971 to 1981 average income, on that measure, grew even more slowly—by 13 per cent. From 1981 to 1991, however, average income soared to £258—a growth of no less than 39 per cent. in a single decade. Put another way, the report tells us that average incomes grew by more in the past 10 years than in the whole of the previous 20.

That is a significant achievement—the product of successful economic and fiscal policies. It is the context in which all the study's findings on changes in income distribution have to be seen. During a time when there was such a dramatic rise in average income, it should come as no surprise that the income of different groups grew at different rates. The Government make no pretence of that fact and do not try to hide it.

The report by Professor Stephen Jenkins, published alongside the IFS report as part of the same research programme, goes into more detail about incomes in the 1980s. It shows that average incomes grew in real terms for all types of family in the population. Growth was not confined to particular groups. Couples with children saw their income rise 34 per cent, while that of pensioners went up 38 per cent. The hon. Member for Gateshead, East was asked by one of my hon. Friends whether she really believes that pensioners were better off in 1979 than they are now. Loyally, she said yes—but in her heart, she knows that she is wrong. On average, pensioners as a group are 42 per cent. better off in real terms, and 54 per cent. better off after housing costs, than in 1979. Sixty one per cent. of all pensioners and 69 per cent. of recently retired pensioners have an income from occupational pensions. The life of pensioners has changed. One has only to travel around the country to see some of the things that pensioners are now able to do.

More telling is the fact that the bottom decile of income distribution 20 or 30 years ago included a fair whack of pensioners, but today they are moving out of it. That is not to deny poverty, but whereas 20 or 30 years ago we thought of the pensioner as a single unit—always poor and in difficulty—that is no longer true. That group has changed dramatically and the distribution of wealth within it has grown significantly. Pensioners are a key group in terms of the past 20 to 30 years.

Unemployed families saw a growth in their income of 30 per cent. I repeat that last point. The independent research found that the incomes of families with no full-time worker rose 30 per cent. The incomes of less well-off pensioners and those in work with relatively low levels of pay have also gone up in real terms. An unemployed couple on income support with two children are better off in real terms by £22 a week than with equivalent benefits under the previous Labour Government.

I will expand on other aspects of the IFS report which the hon. Member for Gateshead East did not emphasise. The report is clear about the importance of the social security benefit system in reducing inequalities in income. It shows that the social security system in the 1980s contributed more greatly to reducing inequalities than in previous decades.

The report also recognises that information about incomes at the very bottom of the income scale is uncertain. I hoped to provide that clarification to the hon. Member for Garscadden, with whom I discuss so much. I am sorry that he is temporarily absent, but no doubt he will read my remarks and we shall discuss them next week. The difficulty of interpreting statistics at the bottom decile is at the heart of the argument. Determining the living standards of that group is particularly difficult, and there is some reason to believe that those low incomes understate true living standards. We have been making that point for some time.

Income alone is not an accurate measure of living standards. As the official "Households Below Average Income" statistics show, between 1979 and 1990–91 the possession of consumer durables among the least well-off increased dramatically—nearly three quarters have central heating, more than half have video recorders and almost one half have cars.

Both the HBAI and the Institute for Fiscal Studies point out that self-employed people who report nil incomes or losses are a significant factor in widening inequalities because they are heavily represented in the bottom decile. They also reduce the apparent level of income in the bottom 10 per cent of the population. If the self-employed are excluded, the income of the bottom decile is raised 8 percentage points.

The numbers in that group have risen dramatically since 1979 because of changes in employment, but the majority of that growing group with apparently no available cash are still able, on expenditure measures, to spend more than the national average. The picture is distorted. If one sets up a business, one may declare no income the first year, so the statistics show no income—but one's expenditure continues through normal drawings and everything else.

Who are the people in the bottom 10 per cent? Earlier this year, the authors of the IFS report gave a lecture brilliantly and imaginatively entitled, "Why Peter Lilley Was Right". [HON. MEMBERS: "Hear, hear."] I commend that sentiment to the House. In that lecture, they gave illuminating figures about the occupations of people at the very bottom of the income scale. They showed that more than 100,000 of them were farmers, 40,000 were taxi drivers and an amazing 12,500 were chartered accountants. That is just fantastic. It shows that if we extrapolate numbers from a small sample and multiply them across the country, we get the sort of distortions I mentioned. The figures for low income and their composition must be treated with caution. The one factor that people in those occupations have in common is the ability to control the presentation of their income.

The clear message in all the income analyses is that the vast majority of people in the United Kingdom have enjoyed dramatic increases in their incomes since 1979. Incomes have grown at different rates, but that is consistent with a society that rewards individual endeavour and where everyone has the opportunity to do well.

There are some extreme examples of problems with that. The hon. Member for Gateshead, East referred to water board officials and one or two other cases. I do not like what happened. That is my personal view and it may not be shared by my colleagues. Some things give a sense of aspiration a bad name. Sometimes, something is seen to be so chronically unfair that it is hard to justify. That does not mean that a market society is wrong; that people should not have legitimate aspirations to do well; or that people in business, who sometimes operate under a high degree of risk, should not prepare a secure future for themselves and their families. Nevertheless, there are sometimes sets of figures that just do not make one feel right. I do not know much more about the case raised than what I have read in the newspapers, but it made me feel uncomfortable.

Does my hon. Friend agree that people should be able to earn whatever is considered reasonable in the circumstances provided that their companies are successful, but that what are not acceptable are large severance payments where the companies under their management have actually declined?

Hear, hear.

My hon. Friend puts the point well and it is obvious that his sentiments are shared by many of our colleagues. It says a little more about the market system than does the case raised. Some people feel that the system has its boundaries.

At the beginning of my remarks, I said that I hoped I cared and felt as strongly about these issues as does any Opposition Member. How would I respond to the difficulties raised by the hon. Members for Gateshead, East and for Garscadden? Recognising the diversity of human talent and ability, I believe that it is right for societies to develop so that talent and ability are used for the good of all.

A proper system of reward for endeavour which benefits the whole of society inevitably means that people are rewarded differently. Therefore, a society that must be unequal in that sense is acceptable provided that, first, all people have the opportunity to take part in that society. There will be occasions on which Government intervention is necessary to ensure that those opportunities are provided. Secondly, all people should be able to participate in the increasing wealth of society, even if not equally. I am offended if the latter does not happen.

I believe in and support the sort of policies that the Government follow because we are determined to ensure that issues such as persistent unemployment, which deny people the opportunity to participate, are seriously and genuinely tackled. It is because the Government's policies can tackle matters in the way that I have described that I believe we can do the job better than the Opposition could.

Let us consider what the Government have done and how they have tackled some of the important issues that are symptomatic of the problems raised by the hon. Member for Gateshead, East. Many of the income statistics quoted today reflect the damaging effects of the recession and, above all, the rise in unemployment. However, that is not a British phenomenon; it occurs in all OECD countries. Who is coming out best? Who is working hardest to overcome the problems? Our Government's economic policies are delivering growth and low inflation. Unemployment has fallen by more than 300,000 since 1992 and continues on a downward trend. Inflation is at a 25-year low. Interest rates have halved since 1990, helping industry and providing an extra £37 a week for the average mortgage-holder. We have created a flexible labour market.

Much was said about wages. The hon. Member for Rotherham mentioned the excellent speech of my right hon. Friend the Secretary of State for Employment. He would have no difficulty in lining me up on his side on that issue. At the same conference, Howard Davies, director general of the Confederation of British Industry, was asked to go through the issues that he felt were crucial to creating full employment and, of course, he tackled wages, saying:

"In the number three slot, the graveyard of English batsmen over the years, and perhaps the graveyard of this point, I put wages. As William Brown says 'hopes of full employment…are forlorn unless labour costs per unit of output can be kept in line with those of our competitors'. And even now, wages are rising more rapidly here than in most other developed economies."

The OECD also, crucially, raised wage flexibility.

I say to the hon. Member for Gateshead, East that that poses her party more problems than it poses us. We recognise that jobs count and that having a job is better than not having one. We recognise that, at difficult times, jobs might be created offering low wages as a lead on to something else. None of us wants a perpetual, low-wage economy—that is not Britain's future—but, if we are to fight off foreign competition and build a better society in which more people have a part, it is essential that the wage and job structure remains flexible to market needs. The sort of equality and help that the hon. Lady wants at the lower end cannot be produced artificially. It will be produced only by industries staying in business, doing better and giving more rewards to all their employees.

I am grateful to the Under-Secretary for giving way. I agree with Howard Davies's statement, which he repeated at the Trades Union Congress conference on Tuesday. It was central to the argument that I advanced. Although wages from full-time employment in Britain in the 1980s rose far more dramatically than in other OECD countries, our unit labour costs rose far more significantly than those of our main industrial competitors. Baroness Thatcher introduced free collective bargaining, and, in the absence of pay policy, inequalities have risen dramatically.

I am not particularly sure what line the hon. Gentleman would like me to go down. I am not sure whether he is arguing for pay policy.

indicated assent.

There we are. We are beginning to build some planks of Labour's next election manifesto. Pay policy is back and I wait with bated breath for my long-time colleague, the hon. Member for Islington, North (Mr. Corbyn), to give his version of the manifesto and to tell me how many votes he will give the hon. Member for Sedgefield (Mr. Blair) in the forthcoming election.

Artificial constraints on labour markets will not provide the sort of society that hon. Members want. The OECD highlighted the flexible labour market being pursued by Britain as one of the key policies that would contribute to growth in wealth in the next 20 or 30 years. We have sought to improve wage flexibility, to strike a balance between job security and the pressures of the market and to move from passive income support to more active measures to help unemployment.

Those matters are particularly within my remit and touch on some of the comments of the hon. Member for Garscadden, who looked for some chinks of lights from me on how the Government might develop. One sees more chinks of light on what our policy might be in The Sunday Times than we ever get from the Opposition of what they might do.

It is best to consider what we have done in the past two or three years in the benefit system to try to create the bridge between dependency on benefits and getting back to work. That is proving to be a key issue. I have noticed in my two years in this job that social security systems around the western developed world have been changing. They are no longer regarded in isolation or in relation to what they do to protect the poor at a particular time, but are considered increasingly in the light of how they bring people back into the economy and how they ensure that people do not remain excluded—a term whose use I fully understand in this context—from the rest of society. If the benefit net is something into which people sink and out of which they have difficulty in climbing to get back into work, we all have problems. It has been recognised in various countries, whether they have right or left-of-centre Governments, that it is a problem to be tackled. It has been part of our job in the past few years to tackle it head on, and my right hon. Friend the Secretary of State has advocated such action.

A key objective of social security policy is now therefore to ensure that there is always a financial incentive to move into employment and that the transition from dependency on state benefits to financial independence is as smooth as possible. Maintaining work incentives in the benefits system is very much a question of achieving the right balance between providing for the most needy while not removing the financial incentive to work and between providing support for those working on low wages while also seeking to reduce dependency on benefits.

Our policies in recent years have been aimed at maintaining the correct balance. Before 1988, we reckoned that around 60,000 people were no better off in work than on income support—they were caught in the unemployment trap. The reforms and restructuring that we carried out then have ensured that almost everyone gets a return from work.

Since then, we have introduced a number of further measures to tackle this problem, including the restructuring of benefits paid to the unemployed and low-paid, especially those families with children. The cornerstone of those measures was the introduction of family credit. I regret the hon. Lady's reference to it, because it does not depress wages. It is not paid to everyone, but only to those with families. It now helps to boost the incomes of more than 500,000 working families with an average award of £47 per week. Recent independent research showed that couples in work with family credit were on average £18 a week better off than when out of work, and lone parents were £30 a week better off.

However, not everyone is able or in a position to take up work. That is why the Government have spent millions of pounds protecting the incomes of the most vulnerable. Since the 1988 reforms, extra help worth more than £1 billion a year has been provided to low-income families with children and pensioners. Indeed, a typical unemployed family with children receiving income support has seen a real-terms increase of nearly 24 per cent. since 1979.

The Minister said that he wishes to see a reduction in dependence on benefits, especially among people in work, but how does he envisage that happening, given the downward pressure on wages to which I referred? Some wages are as low as £1.85 an hour or even £1.40 an hour for security guards, for example. How does he believe that people in those circumstances can lessen their dependence on benefits?

The hon. Lady makes a fair point, but how are we to respond? If we were to remove family credit, for example, in those circumstances, I do not believe that such firms would suddenly offer higher wages. Firms will pay only what they regard as sensible, according to the sort of work in which they are involved. If we continually increase benefit levels and make it more difficult for people to move into even low-paid work, they become stuck. Improving benefit levels does not help with that problem.

Wages will rise as unemployment continues to fall and employers realise that in order to attract people to work they must pay proper wages. It would be a dereliction of our duty if we sought artificially to withdraw support and protection from people who need it. We find that family credit is working as a bridge to get people back to work. I did not hear an answer from the hon. Lady to that problem, and I do not believe that the answer that I suspect that she would favour—the introduction of a minimum wage—would do the job.

In conclusion, I should like to widen the debate slightly, as one or two hon. Members tried to do. Equality in British society is not merely a question of facts and figures and economics, although they are important. Governments must not stifle opportunity. To operate otherwise would mean imposing state controls and reducing choice which, ultimately, results in a levelling down of performance. Wherever there have been societies which have tried that approach—perhaps the hon. Member for Islington, North will be able to enlighten me if I am wrong—they have failed.

The report by the Institute for Fiscal Studies, which is cited in the motion, makes some especially telling points about the impact of pay policy in the 1960s and 1970s on reducing growth.

How do we encourage the policies that will foster equality of opportunity? Education is one method. In the early 1980s, there was growing recognition that while the brightest of our youngsters were able to achieve more than those on the continent and in the United States, our average and below-average children were not keeping pace with their European and world counterparts. This Government were determined to address that. We instituted the reforms in education which are designed to improve the abilities of all our youngsters and to help them to compete. What chance would there be of equal opportunity if those attempts had not been made?

We should remember that many of the problems could be laid at the door of the reforms of education in the 1960s when there was no measurement of what was actually achieved by pupils and thus a slow sliding down of the educational attainment of our pupils was accepted. The number of 15-year-olds who achieve five or more GCSEs increased by a quarter between 1989 and 1993. The number of 17-year-olds achieving two or more A-levels has almost doubled since 1980. A record 70 per cent. of 16-year-olds go on to further education compared with 27 per cent. in 1979. We all know what the expansion of higher education has been under this Government.

The hon. Member for Rotherham mentioned, fairly casually, that the OECD report said, that we now had as many people in higher education as other countries in Europe. In 1979, we definitely did not have. We were well behind and it is this Government who have addressed that. That is real equality of opportunity.

The education reforms have done well because, we understand, the hon. Member for Sedgefield is taking a keen interest in one of the grant-maintained schools. That must be good news. To the hon. Gentleman's great credit, he has also commented favourably on a number of reforms introduced by the Government.

When the right hon. Member for Islwyn (Mr. Kinnock) was leader of the Labour party, I always remember his being asked during an election campaign whether there was anything that the Conservatives and Margaret Thatcher had done that he admired. He said no. To his credit, the future new leader of the Labour party, the hon. Member for Sedgefield, has been honest enough to say yes, there are things that even he thinks are right. We think that there are a lot more. At least politics in this country is moving on if some Opposition Members recognise that changes have taken place for the good, produced by this Government. I am pleased by that.

One of the other things in which equality comes in firmly, which we have done right, but which was fiercely resisted by the Opposition, is the reform of trade union law. What equality was there when people stood in the car park and put their hands up to go out on strike? People who did not were watched, known, seen and handbagged with a bag of stones. We ensured that there were individual postal ballots which enabled the individual trade unionist to have as much power as the trade union leader. That is equality. Who fought for that? It was the Conservatives, not the Opposition.

It would be nice if the reform had been taken still further and if each Labour Member used one vote in the forthcoming Labour leadership battle. How many votes do they have? There is equality for some, but not for others. We have Jeremy "Five Votes" Corbyn and Denis "Four Votes" MacShane. That is not equality.

That is a stupid point.

The hon. Member for Garscadden says that it is a stupid point. It is not. I reckon that if we are talking about equal societies, what is sauce for the goose is sauce for the gander. The hon. Member for Pontypridd (Dr. Howells) has said that he feels that it is fair to use one vote. It would do much more for Opposition Members to espouse such views than to go on at us about inequality.

I would be rather more impressed by the Minister's remarks if there were a wider franchise for the leadership of the Conservative party. At least we have enfranchised literally millions of people who support, and who are actively involved in, the Labour movement. The Conservative party has taken no such steps. Yes, it is possible that some people have more than one vote, but at least we have a democracy, unlike the Conservative party.

Like the Labour party, we have an electoral college. In our electoral college, there is one vote for each Member. That seems pretty democratic to me.

The debate has been extremely good. In its most serious moments, we have recognised that we deal with problems in our constituencies which worry us all and to which society, over the past 100 years, has not found the answer. We have not found the answer to the problem of how, as wealth increases for the majority, we ensure that some people do not miss out for a whole variety of reasons. This Government have sought, previous Governments have sought and future Governments will seek ways in which to ensure that everyone is included in society. We will keep working on that.

Most crucially, the Labour party has tried to use selective figures from a number of sources to paint a too-depressing picture of a divided British society. The facts do not support its pessimistic view. Through policies adopted by this Government, the vast majority of people have seen their incomes rise, the less well-off have shared in that prosperity and the vulnerable have been protected. That must remain the aim of a Conservative Government: to see as many as possible in work; to protect those who cannot; to strengthen individuals so that they are better able voluntarily to give their time to build communities; to develop an economy that is determined to recognise the real world—not hide from it—and to prepare their people through training and education properly and honestly for that world. Any arrogance or conceit that goes with wealth is not part of that philosophy, for we are all equal in the sight of God, nor is any artificial bar to the legitimate aspirations of families and individuals to prosper. It is because there are better answers to the problems illustrated by the motion of the hon. Member for Gateshead, East that, although I listened to her argument with interest, I failed to be convinced by it.

1.25 pm

The Group of Seven industrial leaders are meeting today and over the next few days in Naples and I should like to think, although I suspect that it is a faint hope, that they will leave the conference hall for an hour or two to visit the slums of Naples, to see what inequality is about in what is supposed to be a successful western European economy. I also hope that, in their deliberations, they will think about some of the effects on the poorest people in other parts of the world of the policies pursued by a very small number of industrial countries—the way in which poverty is visited on sub-Saharan Africa by the GATT deal and the imposition of poverty wages on countries that are trying to get out of the debt crisis.

The debate is about inequality in Britain and I suppose that we have seen the two faces of the Tory party. The hon. Member for Teignbridge (Mr. Nicholls) is a sort of Old Testament figure in political thinking. He positively glories in inequalities between the rich and poor in the country. Then there is the rather more sympathetic approach of the Minister. But the two faces add up to exactly the same thing, because they have supported a Government and their policies which have deliberately created further divisions in the country in the past 15 years. There is no mistake about that.

When I leave the House at the end of this debate, I shall go to my constituency, I shall hold my weekly advice surgery and I shall see a sense of desperation on the faces of those people who come to see me. Will they ever manage to get out of a one-bedroom flat where they are trying to live with three children? Will the council ever be able to offer them another flat? Will they get a transfer to a housing association place? Like councillors and others, I shall do my best to try to help them, but I know that, at the end of the day, the chances of many of them ever being able to get out of their problems are very slight because no houses are being built for rent. The private rented sector is simply closed to them because the rents have been decontrolled and a one-bedroom flat costs at least L150 a week in a poor area of London. They are in the ghetto trap; they are in the poverty trap.

In my surgery, I shall also be able, as could any other person, to look at the health inequalities which exist. Why do children from poor working-class families tend to have more bronchial problems than children from middle-class families? Why is the life expectancy of a company director 10 to 15 years greater than that of someone who sweeps the roads or who collects the refuse from our homes? Why is there a growth of inequality in our society? When I intervened earlier on the speech of the hon. Member for Teignbridge on the question of the people sleeping on the streets of London, all he could say was that a lot of hostels are being built, so that those people may be taken off the streets of London. Frankly, it was due to the embarrassment of the Government that those people were taken off the streets of London—it was nothing to do with solving the housing crisis. We have a terrible housing crisis and a terrible sequence of inequality of living in our society at the present time.

There are other areas of inequality—not only in health or housing, but in education and expectations. Anyone who goes, as I do, around schools often, will meet children of eight, nine, 10, 11 and 12 years old who are full of optimism, hope, ideas and expectations. They want to be doctors, lawyers, vets, meteorologists, physicists, engine drivers, bricklayers or carpenters—they want to do all sorts of things in their lives. In other words, they want to achieve. Similarly, their parents want them to achieve. When these youngsters reach the age of 14, 15 or 16, they find themselves living in a community where at least a fifth of the working population is registered as unemployed and where many others are not even allowed to be so registered. It is then that the sense of despair and hopelessness begins to set in.

The ideas are formed that perhaps there will not be a job, that perhaps they will not be able to afford to receive a university or polytechnic education, that perhaps that sort of life will not be available for them. There starts the spiral of decline and despair. That is followed by a rise in crime generally, drug addiction and prostitution. Anyone who lives or works in an inner city area, or represents one, is aware of that and understands it only too well.

The complacency with which the Government present their case is breathtaking. They are entirely out of touch with the reality of life for so many people, who are leading a worse and worse existence with higher and higher levels of unemployment.

What are the prospects for those who get jobs? They are faced with the deskilling of the economy. We have lost so many skilled jobs, including jobs in engineering, over the past 15 or 20 years. The privatisation programme has made British Steel a phenomenally successful private enterprise company. But who is paying the costs of unemployment? Who is paying the costs of redundancy? Who is paying the social costs? We all know the answer—the rest of the community.

The Government talk about incentives. Apparently, the heads of the privatised industries require phenomenal salaries to do their jobs. They need the incentive of being able to earn £300,000 a year plus share issues, performance bonus payments, a free car and a free home. They probably do not even pay their water rates. Such people need incentives to work and produce.

On the other hand, there are those who sweep the streets for a local authority, cook meals in a school canteen or old people's home and provide the necessary care assistance for disabled people. Apparently, the incentive of high wages is not for them. Instead, they face the stick of compulsory competitive tendering, which means that their job is sold to the lowest bidder—some spiv company—every four or five years, when local authorities are forced to put out their services to competitive tendering.

Conservative Members may smile and think that it is all rather funny. They should try to understand the feelings of someone who has given a lifetime of work in a local authority garden, for example, or tending a cemetery, looking after an old people's home or working in a hospital. Such people have given a great deal. Indeed, they meant to give a great deal. They want to continue to do so. Instead, they are told, "Sorry, you are dispensable. Your job is on sale. We shall see if anyone is prepared to do it for less than you." So the cycle of despair and decline continues.

How would Conservative Members feel if they had to suffer that indignity after they had given 20 years' service to a local authority or health service? It is an indignity. It is a disgrace. A disgusting process is being implemented. Incentives for the rich, sticks for the poor. That is the argument that Conservatives advance.

The Government tell us that high economic growth is achieved through a process of inequality. There is no evidence anywhere to sustain that argument. In Britain, employers pay less in tax and social contributions than most other employers in Europe. Wage levels are lower than those in most other countries in Europe and unemployment is high and rising.

It is lower here than in most other European countries.

With 25-plus changes in the method of calculation of unemployment statistics, I am unsure whether unemployment is higher or lower here than in other European countries. There is no common base for the measurement of unemployment.

I do know, however, that the attacks on trade unions, compulsory competitive tendering and the abolition of wages councils, along with the removal of any sort of wage protection and the introduction by the Prime Minister, when he was a Minister at the Department of Social Security, of the actively-seeking-work formula have meant that many people are forced to work in low-paid jobs. We know that 40 per cent. of the work force is now in either short-term contracts or in part-time jobs.

We do not live in a particularly health society. The knock-on effect of that is the current level of crime, misery, hopelessness and suicides. There have been 1 million recorded crimes so far this year in London alone. While I recognise that that is not all due to unemployment and to poverty, there is a cause and an effect. There is a link and it is about time that some people recognised that.

I find it baffling when the right argues that we can no longer afford the welfare state or to sustain the present level of state old age pension. In an attempt to unbaffle myself, I read an article the other day by the president of the Adam Smith Institute, a man who glories in the name of Dr. Madsen Pirie. The article was fascinating. Dr. Pirie writes quite well. He can spell and his grammar is excellent. The former Prime Minister would be proud of him. With regard to the welfare system, Dr. Pirie stated:

"There is one central problem which lies at the heart of the system. It is this: 'Anything you do to relieve distress will instigate more of the behaviour which caused the distress."'

In other words, if we have unemployment benefit, people will become unemployed to obtain the benefit. If we have child benefit, people will have more children to obtain that benefit. Presumably the same argument applies to disability and sickness pay. That is an extraordinary argument. Dr. Pirie then uses his argument to justify wholesale privatisation of the welfare state through the encouragement of private insurance and private pension schemes. That appears to be the strategy which the Government are following.

One might describe that strategy as successful if one believes in the objective behind it. As my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) said, in the past 15 years the value of the state pension has fallen from more than 20 per cent. of average earnings to 15 per cent. According to the Minister, it will be at a nugatory level by the turn of the century. I assume that he means it will be below 10 per cent.

That drop has occurred because of the break with earnings that occurred in the 1980s and the rigging of the retail prices index. I wish that the previous Labour Government had achieved more on pensions. I wish that they had increased pensions much more. However, the Labour Government passed the 1975 legislation, according to which the state old age pension was to be linked to prices or earnings, whichever rose by the larger amount in that particular year. That is how the 1975 legislation was worded. It was not worded in the way described earlier. However, in his first Budget after the general election in 1979, the Chancellor of the Exchequer, Lord Howe, described breaking that link as his greatest achievement.

It is claimed that average pensioner income has increased by up to 38 per cent. The figure seems to increase by 1 per cent. whenever the Minister makes a speech. It used to be 33 per cent., but it has increased to 38 per cent. in only a matter of months. I thought that the stock market had been declining, but that is the main source of the increase in the average income for pensions to which the Minister refers.

It is true that many pensioners have occupational pension schemes. Some have private pension schemes and some have savings. However, they are taxed on those savings and on that income. The Minister completely fails to appreciate the fact that many pensioners, particularly women pensioners, do not even qualify for the full state pension when they become eligible for a pension. Very few women, particularly older women pensioners, have access to occupational pensions. Desperation and poverty among older women pensioners are growing. Those pensioners are becoming more desperate.

The solution to the problem must be a much higher basic state pension. However, the Government propose to phase down continually the value of the state pension and of SERPS. They are spending £9 billion to promote private pension schemes through a process of subsidy and promotion. As a result, 1.5 million people have left SERPS and entered the private pensions industry. I am worried about the security of many of those private pension schemes and the lack of democracy in the way in which they are run; there is no democracy or guarantee in the way in which private pension schemes are run.

In addition, there has been the nonsense of the imposition of VAT on fuel. That obviously affects low income earners or low income households the greatest. It is another poll tax and it is totally unfair. The compensation system is unfair. It will result in deaths from hypothermia. It is a totally wrong form of taxation. The compensation system does not work. Two million people are signing yet another petition for the removal of VAT on fuel. I hope that they are successful in achieving their target number of signatures, and I hope also that they are successful in mounting a campaign to force the Government not to go ahead with raising VAT on fuel to 17.5 per cent. in this year's Budget, prior to abolishing it altogether. Frankly, it is wrong.

We must now consider what is happening to the welfare state. The Government suddenly say, I do not know on what basis, that we can no longer afford the present level of the welfare state, and that the economy is held back because of it. Such thinking was behind opposition to the social chapter, and it is that, in effect, we must privatise welfare by encouraging people to take out private insurance and private pension schemes and have two tiers of welfare.

The arguments that the Government use now about not being able to afford welfare are exactly the same as their predecessors used against the introduction of the state old-age pension in 1908, and they were probably used in opposition to the Poor Law before that. They were certainly used against the universal welfare state of the late 1940s. According to the Government's very own publication entitled "Containing the cost of social security—the international context", social protection expenditure by Britain is nowhere near the highest in Europe. There are much higher levels in Luxembourg, the Netherlands and Germany. If we examine the sources of contributions to social protection expenditure, we find that employers' contributions are among the lowest in Europe, and they are seeking to make them even lower in future. The Government's argument is designed to break the universal welfare state to which we have become accustomed.

The hon. Gentleman referred to Europe. He will appreciate that almost all European Union countries are taking steps to cut their welfare states simply because they realise that they have grown too much.

The words "almost all" and "cut" are rather relative terms. They are not very precise and not very accurate, either. Nearly all other countries start from a much higher base. In Sweden, parents are allowed 60 days sick leave a year to look after children who are ill. That is regarded as very important for parents and children. Sweden has a much more advanced system of social security than this country. In Sweden, the proposed reduction in holidays is very small compared with the wholesale cuts that are proposed in this country. The same cock-eyed economic thinking seems to imagine that all that matters is reducing welfare expenditure and that, somehow or other, everything will be all right.

The main plank of what the Government have done in the past 15 years has been to lower rates of taxation for the very rich, to increase taxation for the poor and to promote inequality to an incredible extent. The richest are 65 per cent. better off and the poorest are 14 per cent. worse off than they were 15 years ago. The idea that the trickle-down theory works is peculiar and perverse—that is, the idea that if we allow the rich to become as rich as possible, they might employ more gardeners and maids and we will solve the unemployment problem. The Government have destroyed the economic manufacturing base that the wealth of this country relied on, in favour of the speculative and spiv economy.

We will not have a more equal society and a more equal world merely by promoting the idea of a market economy. We can do so only by providing a decent level of social protection and also decent housing, education and health services for the people of this country. Reports on the way in which the health service operates show that queues are becoming longer, the quality of service in many areas is becoming worse and inequalities in health are growing.

Housing inequalities are becoming worse. Various bits of housing legislation are designed not to increase access to housing but to reduce it. More and more people now live in ghettos of very poor quality housing from which there is no possible escape. We also have an economic strategy which apparently is that if it is making money, it is probably all right, never mind the quality or what it is doing. Such thinking led to the de-industrialisation of many areas of this country.

I hope that, instead of that, we can look forward to saying that we want to live in a society where all are equal. I make no bones about that. I should like to see much higher levels of taxation for the very rich in our society. They have had an easy ride for the past 15 years. I should like a society where not as many people did not have to pay tax because they were too poor to pay it, as at present. I should like much higher levels of social investment. I should like a society that planned for its future, rather than leaving everything to the vagaries of the marketplace.

We live in a crazy world where the poorest are getting poorer and the richest are getting considerably richer. The undoubted benefits of technology are not being passed on in the way of a shorter working week or an improved life style for the poorest people. Those benefits are being used to make a great deal of money, causing inequality and alienation in our society.

Those who preach such gobbledegook economic policies find that they do not work. There was plenty wrong with the political and economic systems of eastern Europe and the Soviet Union, where plenty of mistakes were made and there were ludicrous degrees of centralisation. But those countries are now receiving, via the BBC Marshall plan for the mind and other such plans, the message that all that matters is a free market economy, with mass unemployment, beggars on the streets and high levels of prostitution. There has to be a more civilised way of organising life than the methods of the Government in this country and a number of other Governments.

Those of us who believe in equality do so because we believe in socialist values and ideas—we do not apologise for that. We believe in it because it is the only way to unlock all the talent. How many brilliant writers and scientists are wasting away because they did not get a chance at school or a college place and are living in poor conditions? The waste of talent, and human and other resources, which are used to control people rather than liberate them, is phenomenal.

Today's debate is welcome for the opportunity that it provides to discuss these issues. I congratulate my hon. Friend the Member for Gateshead, East on promoting the debate and allowing us to place on record our belief that the inequalities of Britain must be removed if we are to live in anything resembling a happy and harmonious society.

1.47 pm

We have just been reminded in clear and certain terms that the hon. Member for Islington, North (Mr. Corbyn) represents the authentic voice of the Labour party. He said that there was plenty wrong with the economies of eastern Europe and the former Soviet Union. I find it deeply morally shocking that the evil tyrannies of the east should be dismissed in such trivial language.

One of the most poisoned political ideas of the 20th century has been the concept that the state has a right to enforce equality of income or equality of wealth. Before the hon. Member for Gateshead, East (Ms Quin), who introduced the topic with charm and effectiveness, wonders why I put that so strongly, I shall tell her. No doubt she would regard the inquisition as something to do with a bleak, dark age when the organs of the state and the church enforced similarities of belief with all the force of the state. She would deplore that. Those of us who stand for liberty reject also the idea that the state should use its power and force to confiscate incomes for no other purpose than a vindictive vendetta against one section of the community.

The answer to the debate has been spelt out by my hon. Friend the Member for Teignbridge (Mr. Nicholls). The statistics are clear. When we look at the proportion of the income tax take of the top 10 per cent., the top 1 per cent. or the top 5 per cent., now and in the late 1970s, we see clearly that the top 10 per cent. is now contributing 45 per cent. of the income tax take compared to 24 per cent. 15 years ago. That is a staggering statistic.

My hon. Friend the Minister explained that average earnings have risen. The top 10 per cent. is contributing a larger slice, and the freedom and opportunity now available to the self-employed—not just those employed by large monolithic corporations, but small business men, professionals, those in enterprise companies who work hard and expect a return—have allowed them to prosper over the past 15 years. We now know clearly what the Opposition would have to offer them if the Labour party ever came to power again—political persecution based on some perverted doctrine of the community.

The hon. Member for Gateshead, East said that the top tax rate of 40 per cent., which was introduced in the 1988 Budget, was wrong. She would not answer—understandably in her position—what rate she wished to increase it to. The hon. Member for Glasgow, Garscadden (Mr. Dewar), who spoke on matters which were safe Labour party topics, avoided that vital and fundamental question. Apparently, no explanations will be given if they can possibly be avoided.

What would be the purpose of increasing the top tax rate from 40 per cent. to 60 per cent., 80 per cent. or the 93 per cent. rate imposed by the Labour party on what it used to call "unearned income"? The fruits of people's life savings, money saved rather than spent, the hard work of a lifetime were traditionally called "unearned income" by the Labour party. There can be no economic purpose of raising the top rate of tax. There can be no benefit to the Government and no benefit to those who benefit from the welfare state. If we increased the rate, we would simply reduce the amount of money that the Government had to spend on the welfare state.

Does my hon. Friend agree that the effect of increasing the top rate of tax to the sort of rates that he described would be, first, to drive businesses and their executives offshore into other countries and, secondly, to encourage the wealth creators of this country to work less hard, and thereby pay less tax?

My hon. Friend is right. Those would be the inexorable consequences of such a foolish and short-sighted policy—a policy which Labour Governments have pursued ever since they have had the opportunity to pursue them. We have the spectacular consequence that the tax havens of this world, which are nice, respectable and rich and all enjoy the protection of the British Crown and the rule of British law—I think of places from Hong Kong to the Channel islands—have thrived and prospered on minimal top tax rates. I can tell the hon. Member for Islington, North, who did not seem to be aware of the wealth of learning that has now been made clear, that some people in America and Japan are concerned at the rise of the Pacific rim countries, where, for example, in Hong Kong, Singapore and South Korea, top tax rates are much more favourable for enterprise than in Japan and certainly in Germany.

The gaping gap in the debate on the Opposition Benches is in any understanding of where wealth comes from. It apparently grows on the trees of the garden of Eden. They say that there should be more jobs, but doing what and for what purpose? Of course everyone wants to be rich or to have a well-paid job, but how does one get such a job? Who provides one? It is not the British state. It is not somehow the Workers International. It is not the trades union movement. It is individual businesses, which stay in business only so long as they provide goods and services which someone in the world is prepared to buy at a price.

If one puts up the price of something, be it a consumer durable or the price of labour, there is less money to be spent and people buy less. The British work force has rightly had a noble tradition of valuing itself extremely expensively. That is part of the engine of driving up average earnings, but it has a social cost. It prices a section of the community out of labour. The hon. Member for Islington, North seemed to think that everyone should be paid exactly the same. That was the only socialist logic that I could discern from his description of the uncertainties of being a cemetery keeper or the managing director of a large company. If they are not to be paid the same, who is to decide what each should be paid unless it is the free market and the choice of the community? It is a community decision, whether people buy more of this or pay for less of that. That is what freedom is all about.

It is ironic that the hon. Member for Rotherham (Mr. MacShane) should have raised this particular argument. I have a copy, which I much enjoyed in childhood, of Newnes "Children's Encyclopedia of the World". It contained a graphic illustration of the eclipse of the sun of 1921 or 1922—I forget which. It depicted the eclipse as a glorious ray of sunshine across a section of northern England which it could properly describe as the richest place on the face of the earth. It was once the richest place on the face of the earth. The brilliance and success of the textile industry at that time, which was a result of enterprise, initiative and technical advance, have now been wasted. Some businesses prosper, others do not.

The motion is based on a political fallacy—the idea that the British state should control its subjects in such a way that equality would be the end. It will not work.

Where is that in the motion?

The motion reads:

"To call attention to inequalities in the United Kingdom".

The hon. Lady should be drawing attention to poverty, welfare and all the important aspects of this debate that my hon. Friend the Minister and, in fairness, the Opposition spokesman, the hon. Member for Garscadden, dealt with.

Through the wording of her motion, the hon. Member for Gateshead, East interjected into a serious discussion of welfare matters some left-wing political nonsense about inequalities of income and wealth. She criticised the 40 per cent. top tax rate and that is why I am criticising the motion and why I say that it would not work.

Happily, we do not live in a world where one can impose socialism in one country. We live in a freer world, where trade moves around and where people can buy their goods from Singapore or South Korea and buy refrigerators from Italy. That is why such goods are cheaper than they were in the 1950s by substantial amounts in real terms.

The hon. Gentleman seems to claim that I am not in favour of free trade. I defy him to find anything in my motion that is against free trade.

Of course there is nothing in the motion that is against free trade, but it is the logical consequence of the hon. Lady's argument that this place should be concerned about income equalities at the top. If she is right, presumably we have to do something about it. She is presumably suggesting that the British legislature should increase tax rates for those on higher incomes. I am simply pointing out that in a free world, where there is free trade, and as part of a European Union, which increasingly has a single market, the British Government have happily lost the power to impose socialism in one country.

Although the motion has drawn attention to some serious matters, which the hon. Member for Garscadden certainly discussed, a fundamental political error of a very dangerous variety is at its heart

1.57 pm

I am grateful for the opportunity to take part in this debate, Mr. Deputy Speaker, and welcome the initiative taken by my hon. Friend the Member for Gateshead, East (Ms Quin) in causing it to happen.

I apologise for being unable to be here at the start of the debate, but I wish to introduce some information from my constituency, the London borough of Newham, where I had the privilege to be leader of the local authority for four years, until a couple of months ago.

In Newham, we suffer from poverty and the effects of inequality to a severe degree. The Department of the Environment's local conditions index, which was published earlier this year, placed Newham as the local authority area suffering from the highest urban deprivation. The local authority commissioned a report entitled, "Poverty on your doorstep" which was a poverty profile for the London borough of Newham and was published in March this year. I shall draw attention to some of its findings.

The research showed, not surprisingly, that the problems of poverty are closely linked with high unemployment. Between May 1990 and November 1993, there was a 72 per cent. increase in the number of unemployed people claiming income support in the borough of Newham. In November 1993, the official unemployment rate was more than 20 per cent.—a total of nearly 20,000 people registered as unemployed—which is 55 per cent. higher than the rate for Greater London and more than twice the rate for the south-east and the whole of the United Kingdom.

According to the 1991 census, 31 per cent. of the 16 to 24-year-olds were unemployed, so unemployment was particularly focused on that age group. Since 1991, the official unemployment rate has increased considerably. Members of the Asian, African, Afro-Caribbean and other ethnic groups in Newham suffer higher unemployment than the average for the community, which is a particular problem in east London.

Household incomes in Newham are considerably lower than for the capital as a whole. Fifty-five per cent. of gross annual household incomes were below £10,000, compared with only 40 per cent. for the rest of London. In November 1993, 47,800 people were claiming income support, and 37 per cent. of Newham children were entitled to free school meals in January 1993. The borough had 9,000 overcrowded households—twice the London average.

What do the Government think about inequalities and poverty on that scale? I believe that the view is held that they are a good thing because they drive people to work harder and drive the economy. Is that the view of Conservative Members? Are we being told that inequalities and poverty are a statistical error and do not really exist, because the people on lowest incomes are really chartered accountants? Are we to believe that the figures in the Newham, IFS and other reports are statistical flukes? Or are inequalities and poverty something which the Government want to change?

Is it Government policy that the gap between the richest and poorest in society should stop widening? Having listened to several speeches from Conservative Members, I have not heard those questions answered.

The Minister suggested that there is not a problem with poverty because the people who show up in surveys as being poor own video recorders and microwaves. The clearest refutation of that argument are investigations into the health of the poorest. The Newham poverty profile showed that 47 per cent. of children with long-term illnesses live in households where no one is in employment. That which we describe as poverty translates into poor health among not just the unemployed head of the household but his or her children. That is the clearest indication of real suffering and measurable poor health among members of the community who endure poverty and are the victims of inequalities.

The first step is to make it an explicit Government objective to narrow the gap between the richest and poorest and not allow it to widen. Are the Government prepared to acknowledge that policy objective? If so, we can move forward, to discuss how that objective may be achieved. I welcome the change of heart among Government Members in respect of full employment, which now appears to be an explicit and realistic policy objective. For many years, we were told that it was not. I hope that reducing inequalities will also be a Government objective—not their sole objective but part of the Government's intentions.

I enjoyed the Minister's speech. He drew attention to the Government's achievements in education and suggested that the introduction of the grant-maintained system would contribute to a reduction in inequality. I strongly disagree with that view and point the hon. Gentleman towards the example of Stratford school in the constituency of my hon. Friend the Member for Newham, North-West (Mr. Banks). There is no doubt that the granting of grant-maintained status has led to a radical fall in standards, to the extent that that school's level of GCSE achievement last summer was the lowest of any school in London. When the school was maintained by the local authority, it had a much higher level of achievement.

I accept that that example might be extreme, but it clearly shows why the school should not have been given grant-maintained status. Indeed, it should have been closed, as the local authority wished, to meet the Government's objective of removing surplus places. Instead, there will be significant reduction in life chances for a large number of the pupils at that school who otherwise would have been pupils at other Newham schools with much higher levels of achievement.

I endorse what my hon. Friend the Member for Islington, North (Mr. Corbyn) said about his experience of large numbers of bright young people with enormous potential, optimistic and looking forward to the future, reaching their middle teens and seeing no opportunities ahead, losing their optimism and no longer looking forward to the future. That is a terrible indictment of Government policy over the past 15 years.

It should be a specific policy objective that the gap between the richest and the poorest should be narrowed, or at least should not be allowed to widen, as it has done inexorably over the past 15 years. Full employment should also be a policy objective. Until job opportunities are provided, people will not be able to find a way out of poverty. There should be a minimum wage so that those in work can live at a decent standard.

Taking a parochial view, I must stress that east London needs investment. The local authority in Newham has developed partnerships with the Government and the private sector to work for the regeneration of our area. That has proved successful. I hope that soon the Government, consistent with their commitment to securing regeneration in east London, will give the green light to an international passenger station at Stratford on the high-speed rail link, towards which the local authority, private sector development companies and construction firms have been working for a couple of years. It will not cost the Government anything, but it will be the catalyst for the substantial new development, new jobs and new opportunities that east London so desperately needs.

There have been a number of references to the Labour party leadership election. I welcome the fact that throughout the country there is enormous interest in the issues that have been raised by that election. One effect of that is a growing revulsion towards the effects of narrow marketisation within our society. My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) said that there are signs that the Government have a worsening conscience about what has been happening to our society. I hope that that is so and that we shall increasingly agree on the need to reduce inequality in the United Kingdom.

2.9 pm

I have listened to the debate with tremendous interest, but, depending on whether one was sitting on the Opposition or Government Benches, one would have gained a completely different impression of Britain and of its role in the world.

I am fed up with Opposition Members bashing Britain and talking it down. The time has come for us to stand back and take a cool, calm look at where we are today and how society, across the board, has improved in terms of prosperity, standards of living and expectations.

The Opposition's talk about this country becoming "worse and worse" and their scaremongering bears no relation to reality. The striking point made in the debate that highlights the differing approaches of the Conservative party and the Opposition to social problems is that the Opposition seem to trade on the politics of envy and on resentment for one man's success. That is the most destructive element of their policies and is why I trust, hope and believe that the Labour party will never become a party of Government until it recognises that people are entitled to strive, achieve and gain reward for hard work.

In a thoughtful speech, the hon. Member for Gateshead, East (Ms Quin) made some telling points. She mentioned full employment and asked why we could not have a new environmental task force. Another spending pledge—that typified the Labour party. How much will such a scheme cost? Who will pay for it? It will be an artificial form of providing labour, which will not build the prosperity that we need. It simply would not work.

Will the hon. Lady give way?

I am sorry but time is short and I shall end my remarks shortly.

In a caring society, parents can know that their children will receive a proper education up to university level. I applaud the Government for ensuring that one child in three goes on to higher education. That is a big advance on 10 years ago, when one child in eight did so. I applaud the fact that children are now better fed than ever. People might criticise junk food, but improved diets have made children healthier and fitter.

The health service is treating more people more rapidly using the latest technology and is making more investment. People are now expected to live longer; hence the problems that we shall face in coping with old age pensions in the future.

We have not dealt with moral poverty. We all face the problem of the breakdown of family life. Why do couples no longer believe that they can marry and make a commitment to each other that will last throughout their children's lifetime? A spin off from that was the establishment of the Child Support Agency to chase feckless fathers, the absent dads—the people who believe in the "I want to have it" society and the "I can then dispense with it" society. We must deal with that moral poverty with a great deal of energy and diligence.

We should be clear in our minds and condemn lesbians seeking special facilities from the health service for fertility treatment. That is moral poverty; it has nothing to do with building family values.

I found it depressing that the Archbishop of Canterbury this week launched a model religious education syllabus but downgraded the Christian input. Our children cannot grow up in a moral-free and value-free society. If there is one thing that we must do, it is to ensure that Christian beliefs, culture and philosophy are included in our children's education and that they are thus enriched.

2.14 pm

This has been a very useful debate in that it served to highlight many of the issues which we all think important although we approach them from different viewpoints. In order to allow progress to be made with today's business, I beg to ask leave to withdraw the motion.

Motion, by leave, withdrawn

Victims Of Crime (Compensation)

2.15 pm

I beg to move,

That this House considers that:—

1.—(1) A court seeking to enforce a compensation order against a convicted criminal should have power to make a written request, signed by a Magistrate, for the following information in relation to the criminal:
(a) his place of residence;
(b) his place of work and the name of his employer;
(c) his income and capital; and
(d) his real or personal property.

(2) Any such written request should be addressed to any person or body whom the court making the request has reasonable grounds for thinking may be in possession of the information requested.

2. The Secretary of State should have power by regulation to establish an Agency to enforce compensation orders made in favour of the victims of crime by courts of criminal jurisdiction.

3. The Powers of Criminal Courts Act 1973 should be amended:—
(1) to require criminal courts to assess compensation without regard to the ability of the criminal to pay, as is already the case in the civil courts;
(2) to overrule case law which puts a time limit on the period over which money may be recovered under a compensation order, and which exempts a criminal's house from seizure for the purpose of satisfying a compensation order.

I am grateful to the hon. Member for Gateshead, East (Ms Quin) for withdrawing her motion. I am glad to have the opportunity to speak in Parliament on behalf of the victims of crime, but I am disappointed that not one Liberal Democrat has bothered to turn up for this important debate.

I am as committed as anyone to the prevention of crime and I support everything the Government are doing in this respect, not only directly through the Home Office but in their housing, education, social security and other policies. Nevertheless, however successful the Government's policies, I fear that we shall never see the day when there is no crime and there are no victims of crime. Many of today's victims of crime are, and probably always will be, from the poorest sections of our community. We must keep faith with them and make it clear that, although we appreciate the problem, poverty cannot be accepted as an excuse for crime.

For many years, the courts have had the power to order a convicted criminal to pay compensation to his victim, but, all too frequently, payment is not made under the order, either because the criminal disappears and cannot be traced or because he has been economical with the truth when asked about his income and assets. Information about his whereabouts and assets is very often on the files of the Department of Social Security, the Inland Revenue, banks and buildings societies, but, when they are asked to disclose it, they say that they are sorry they cannot do so, because it is confidential.

I am delighted that we have a Home Secretary who is determined to roll back 30 years of libertarian attitudes towards crime and to put the victim first. The Criminal Justice and Public Order Bill is a step in the right direction, but there is much more to be done. In Britain, we can be proud of the fact that anyone who suffers a serious criminal injury will be compensated out of public funds, but anyone who suffers a personal injury valued at less than £1,000 or who is the victim of a crime involving his property or money will not be compensated out of public funds. At present, there is about £100,000 worth of unpaid compensation orders made in favour of victims in every magistrates court in the land.

I thank my hon. Friend for making an important point about outstanding sums. May I point out that Sutton magistrates court found that there is £143,000 outstanding in compensation payments?

I am grateful to my hon. Friend for that figure, which confirms what I believe to be the situation throughout the country.

I tabled three new clauses to the Criminal Justice and Public Order Bill when it was in Committee in February and the substance of this motion is much the same as that of the new clauses. I was not a member of the Committee, so two of them were moved by my hon. Friend the Member for Sutton and Cheam (Lady Olga Maitland) on my behalf. The Government responded sympathetically, but did not commit themselves to doing anything about it.

Before I deal with those new clauses, I pay tribute to The Mail on Sunday for its excellent work in researching this topic and for drawing the attention of Members of Parliament and the public to the serious problem of non-payment of compensation orders. I refer to two cases that the newspaper has discovered. The first is a man in Bristol who went on a rampage of violence and caused £4,000 worth of damage to his victim's home. He was ordered to pay £3,855 in compensation, but he paid nothing. He went on holiday to Australia and failed to turn up in court where he was ordered to pay compensation. He claimed to be unemployed. His victim said:

"I think it is disgusting the way that victims of crime are treated. There should be a radical review of the compensation system. Victims should not be coming out at a loss. They don't ask for their homes to be damaged or to be attacked."

The second case was in Windsor in Berkshire. A criminal stole and wrecked a nurse's £1,100 moped. He was ordered to pay compensation, but he refused to pay. He was jailed for 28 days and the debt was written off. He said:

"I had the money, but decided to go to jail instead. It was my first offence and I don't think it was fair what they gave me."

The victim's view was:

"I work long unsociable hours to support my daughter and I see this criminal walking around doing nothing all day. He is a strong man who could work if he wanted to and he should be made to pay something."

The Government have not been idle on the matter and I give credit for their work in the Criminal Justice Act 1991, the Criminal Justice Act 1988 and the victims charter, which, for the first time, focused the attention of all involved in the criminal justice system on the needs of the victim. Hitherto, attention had always been on the needs of the criminal. However, there are still 28 agencies supporting criminals and only one supporting victims—the victim support scheme, to whose work I pay tribute.

The first paragraph of my motion incorporates new clause 30 which I tabled in Committee. It would require information to be given about the whereabouts and financial resources of criminals who have failed to pay compensation orders. Departments of state, banks and building societies will not disclose such information and say that it is confidential. They sometimes pray in aid the Data Protection Act 1984. I point out that the Act is the "Data Protection Act", not the "Protection of Criminals Act". The Act should be changed so that the information can be made available to courts seeking to enforce compensation orders.

The civil rights lobby will say that it is an infringement of civil liberties to provide confidential information to magistrates courts. Of course, it is an infringement of civil liberties, but criminals are not the only people who have civil liberties. Victims have civil liberties, too, and they have every right, under law, to receive compensation from the criminal for the damage caused. If a criminal does not wish his civil liberties to be infringed, the remedy is in his own hands—do not commit crime.

It was said in Committee that it would be rather draconian to employ such a measure against motorists who had been ordered to pay compensation and who had not paid. I do not see why. In any event, enforcement is in the hands of the courts, which can decide how they wish to enforce payment. I do not see why a motorist who has not paid compensation to his victim should be treated differently from any other criminal who has not paid compensation.

In Committee, the Government suggested that legislation would not be necessary and that the objective could be achieved by non-legislative means. If that is the case, what are the non-legislative means? What precisely are the Government doing to use those means to ensure that the victims of crime are properly compensated?

I congratulate the hon. Member for Shoreham (Mr. Stephen) on obtaining this short debate; I realise that the seconds are ticking away. A number of Opposition Members wholly endorse the principle that people who are trying to dodge their moral obligation to pay compensation should be pursued with vigour. We look forward with interest to seeing what the Government will do to ensure that compensation is paid to the victims of crime. The failure to pay compensation is an outstanding blot on our criminal justice system.

I am grateful to the hon. Member for Thurrock (Mr. Mackinlay) for his support. I am sure that his constituents are as concerned as mine are about the matter.

The second paragraph of the motion incorporates new clause 25 which I tabled in Committee. I believe that the courts are not well suited to the enforcement of orders. I often receive letters from people who say that they believe that the courts have gone to sleep after they have made compensation orders and that no real attempt is made to enforce them. People tell me—and it accords with my experience—that means inquiries in magistrates courts are rather like shelling peas, they are done so quickly. The whole thing is a farce. Magistrates do not have the time or the means to inquire rigorously into the income and the assets of criminals. That job requires an agency with specialised personnel and proper information technology to be able to chase the criminals. I know of the value of information technology in that area because I happen to be the parliamentary adviser to EDS-Scicon—a company working in that sphere.

The courts need to be reminded of the requirements of the victims charter. One of those requirements is that the courts must keep the victim informed of the progress of his case. Often, it turns into a dispute between the Crown and the criminal, and the victim is forgotten. In particular, the victim should be given an opportunity to give evidence of the means of the criminal once a compensation order has been made. An elderly lady running a newsagents shop in my constituency knew perfectly well that the criminal who was ordered to pay her compensation had assets much greater than those to which he was willing to admit, but she was never given an opportunity to go to court and say so.

Sometimes, notwithstanding the 1988 Act, no compensation order is made because no application is made. I believe that the courts should normally award compensation, unless they are specifically asked not to. The prosecuting solicitors and barristers must also be reminded that, although they are formally representing the Crown in the proceedings, they have also have a duty to represent the interests of the victim and to ensure that they have the necessary information from the victim to be able to argue effectively for a proper level of compensation.

In the criminal courts, there should be the same measure of damages as there is in the civil courts. A Home Office study in 1992 suggested that awards, especially for personal injuries made in the criminal courts, are much lower than those in the civil courts. The measure of damages in either the civil court or the criminal court should not be related in any way to the ability of the criminal to pay. That is certainly not the case in the civil courts and should not be so in the criminal courts. Often, defendants in civil proceedings are people of moderate means, but that does not affect the measure of damages. Means are relevant to enforcement, not to the amount of compensation. The criminal's ability to pay will vary over time. On the day of the hearing, he may not be able to pay, but he may get a job the next week or next month, or he may be left some money, or he may even win the pools. If he subsequently has the ability to pay, he should be made to pay, and section 35(4) of the Powers of Criminal Courts Act 1973 requires further amendment.

As for the argument that if we enforce compensation orders against criminals they will go out and commit further offences, I do not think that a civilised society could ever give in to such blackmail and any criminal who thinks that he can get away with that, has got another think coming. If a criminal does not have a job, if he cannot or will not work, work must be found for him so that he may pay the compensation that he owes. It is an affront to the public and the victim for the criminal to be sitting at home, drawing benefit and doing nothing to earn any money to pay his victim. If a criminal is fortunate enough, as some are, to sell their story to the press, the money should be confiscated and used to compensate the victim and any balance should be forfeited to Her Majesty—that is the effect of my new clause 56.

Also, courts should be reminded of their statutory duty to give priority to compensation orders over fines and they should never reduce compensation orders on the ground of the criminal's ability to pay if they are, at the same time, imposing a fine. Often, when the criminal is sent to prison, no compensation order is made. That is wrong because the criminal pays his debt to society, not to his victim, by going to prison. The courts should not send criminals who are in default of payment to prison quite so often. That is an easy option for an old lag. Compensation orders should remain in force, and if it takes 20 years to recover the money, so be it. There should be no time limit on the recovery of compensation orders. We should also repeal the absurd provision that makes it legally impossible to sell a criminal's house, if he has one, to compensate his victim.

I congratulate the Government on the efforts that they are making in the area of criminal justice. There is wide public concern. Much of it has been addressed by the Government, but much still remains to be done. We must consider the victims—

It being half-past Two o'clock, the debate stood adjourned.

Orders Of The Day

Private Members' Bills

Fine Defaulters (Restriction Of Power To Imprison) Bill

Order for Second Reading read.

Object.

Second Reading deferred till Friday 15 July.

Sale Of Goods (Amendment) Bill Lords

Order for Second Reading read.

Object.

Second Reading deferred till Friday 15 July.

Treasure Bill Lords

Order for Second Reading read.

Object.

Second Reading deferred till Friday 15 July.

Racial Hatred And Violence Bill

Order for Second Reading read.

Not moved.

Fair Treatment For Widowers Bill

Order for Second Reading read.

Not moved.

Pardon For Soldiers Of The Great War Bill

Order for Second Reading read.

Object.

Second Reading deferred till Friday 15 July.

Water (Domestic Disconnections) Bill

Order for Second Reading read.

Object.

Second Reading deferred till Friday 15 July.

Public Conveniences (No 2) Bill

Order for Second Reading read.

Object.

Second Reading deferred till Friday 15 July.

Land Drainage Bill Lords

Read a Second time.

Bill committed to a Committee of the whole House.—[ Mr. Clifton-Brown.]

Bill immediately considered in Committee; reported, without amendment; read the Third time and passed, without amendment.

Civil Rights (Disabled Persons) Bill

Order for Second Reading read.

Object.

Second Reading deferred till Friday 15 July.

Business Of The House

Ordered,

That at the sitting on Monday 11th July, the Speaker shall put the Questions necessary to dispose of proceedings on the Motion in the name of Mr. Tony Newton relating to Scottish Business not later than two hours after it has been entered upon; and such Questions shall include the Questions on any Amendments to the said Motion, which she may have selected, which may then be moved; and those proceedings may be entered upon or continued after the expiration of time for opposed business.—[Mr. Andrew Mitchell.]

Rural Policing

Motion made, and Question proposed, That this House do now adjourn— [Mr. Andrew Mitchell.]

2.33 pm

I make no apology for raising the problems of rural policing and rural crime. I do not disparage what has been happening in our towns and cities and I recognise the real problems of urban crime. Perhaps rural crime and rural policing have been less in the spotlight. I wish to focus briefly on some of the problems and opportunities.

I welcome the presence of my hon. Friend the Minister of State, Home Office. He and I march together across the Sussex and Kent borders. I am sure that in his constituency he has many of the problems that are to be found in mine.

The problems of policing generally and rural crime will be overcome only by good intelligence being available to the various law enforcement agencies. We should be targeting and seeking the criminal and not the crime itself. There are now police teams in rural areas in Kent to which one person is attached who is responsible for a specific rural area. That person must know the area. That is fine because, without the intelligence, we do not stand a good chance of catching the criminal and obtaining a conviction.

The village bobby is a particular problem in rural areas. In the old days, every village had its policeman who lived in a police house. Today, for economic and social reasons, that is not possible. Quite naturally, policemen wish to buy their own houses. Therefore, police authorities have sold village police houses as there has been no demand for them.

With the best will in the world, one cannot expect a village policeman to work 24 hours a day, seven days a week. Therefore, police teams and mobile forces are increasingly covering rural areas to prevent crime and to catch criminals.

Experiments are being carried out with parish constables in different parts of the country, including in Tunbridge Wells in Kent. Parish constables are an answer to the village bobby problem. A parish constable must be a special constable. He or she must have the training and powers of a special constable so that that person can arrest people and enforce law and order. Parish constables are part of the community and can work extremely well with neighbourhood watch schemes, parish councils and others.

I have a suggestion which may or may not be controversial. I accept that we should not pay special constables a full salary. However, we need more special constables, even in Kent where there are vacancies. We need to encourage people. Perhaps we should pay special constables a modest bounty at the end of each year's service in the same way that we pay members of the Territorial Army and the Royal Naval Reserve. That would not be expensive. In fact, it would be cost efficient as it would tell people that we are prepared to reward them for the unsocial hours they work, for their dedication and for the voluntary duties that they perform, with a small tax repayment at the end of each year. I hope that my hon. Friend the Minister will consider that suggestion.

Neighbourhood watches have been well established for many years. They are particularly useful in rural areas if they can work with the concept of parish constables, the local men and women who can look after a patch. Technology is also helping us. The Kent police authority has introduced a radio system which enables headquarters to contact a policeman wherever he may be. Even if he is right out in the wilds or the sticks, there can be two-way contact. That is vital.

Geography is a particular problem for rural areas. It is easy to get around in towns. If there is an incident in a town, people can get to that incident very quickly because they can use an A to Z guide. They will know precisely where they are going. It is not so easy in villages and rural areas. That is not just a problem for the police; it also affects the ambulance and fire services.

For example, to be told that there is a problem at Bramble cottage in High Halden means very little. One could spend 30 minutes or an hour travelling around High Halden trying to find Bramble cottage. That problem arises for several reasons. In many rural areas, local authorities—no doubt for good reasons—do not erect street signs. There is also the problem that, in many villages, streets have more than one name.

I am sure that my hon. Friend the Minister is familiar with High Halden, which is on the A28 in my constituency. There is a street in High Halden called Man of Kent road. It is also known as American road, America road and Crompton House lane. Those are names for the same street. If there is an incident in that area, it is the luck of the draw how it is described by the person affected by that incident. It would be extremely difficult for the police car, the ambulance or the fire brigade to find that incident.

In addition, many houses in rural areas do not have names or numbers or, if the names or numbers are shown, they are right by the front door and perhaps hidden from the main road. This is essentially a problem for local authorities. I do not know whether they could adapt postcodes. However, the Kent police have mentioned that problem to me. Perhaps the Department of the Environment and the Home Office could have a long hard look at it.

Another matter might be helpful in dealing with the problem of rural crime. We have had a number of horrendous events in my constituency. My hon. Friend the Minister will recall that, a few months ago, there were 12 cases of arson in Kent, mostly in my constituency, and even in Sussex. Barns were burnt down. In fact, there were 12 cases of arson in one night. I regret to say that, so far, the culprit has not been found.

Arising out of that and other matters, the leader of Ashford borough council and I decided to institute a series of meetings to take place perhaps every three to five months, involving the leader and deputy leader of Ashford borough council and two or three of its key officers, myself as the Member of Parliament, the local representative of the Kent Association of Parish Councils, representatives of the National Farmers Union, the local police superintendent and our chief inspector of police.

Those meetings are structured in so far as we have an agenda, but they are very informal—no great papers are presented. We discuss informally the latest crime statistics, the problem of vandalism on farms, and perhaps teaching young people how to respect the land, footpaths and so on connected with the countryside. We can address the problems of towns or of the countryside and bring to bear our expertise and knowledge.

I hope that my hon. Friend the Minister will respond to my points. Crime generally and rural crime in particular are not just for the police. Whether it is the prevention of crime or the enforcement of the law, we are all involved— farmers, school teachers, ordinary citizens and the police. That is true all over the country, but in villages and small towns there is a real sense of community. I hope that everyone realises that it is no good passing on the other side of the road and that if we enhance the role of the parish constable, neighbourhood watch schemes and communities working together, perhaps in the informal way as in Ashford in Kent, we may bring about a rather more peaceful and pleasant countryside in which people can go about their business without the fear of being mugged, without vandalism and without car theft. It is an important problem and I hope that my hon. Friend will respond constructively.

2.42 pm

I congratulate my hon. Friend the Member for Ashford (Sir K. Speed) on obtaining this Adjournment debate and on raising such important issues. As he said, our constituencies lie side by side along the Kent ditch. Were he or I to travel from Northiam to Newenden or vice versa, we would be able to meet each other on the border. The situations that my hon. Friend described apply just as much in Sussex as in the part of Kent which he represents, and indeed in much of rural England. My hon. Friend made a number of interesting suggestions. I shall talk in a moment about the parish constable initiative, and I am delighted to hear my hon. Friend's support of it.

My hon. Friend gave a wonderful description of how partnership should work—people getting together with the police, local community leaders, Members of Parliament, farmers and others, working together in partnership to ensure that we can tackle crime as vigorously as possible on every front. My hon. Friend was right to talk about the importance of local intelligence. I know what he means about that intelligence helping to pinpoint houses. I understand entirely what he means about the difficulties of trying to find Bramble cottage down America road, America lane, or whatever else it might be called by local people. It is a problem to which we shall all pay attention.

My hon. Friend also suggested a bounty for special constables. That idea has been raised before. A pilot scheme was tested by the Dorset constabulary last year and we are currently considering the outcome of that test. We shall, no doubt, have more to say about it in due course.

The Government recognise that there is much concern among people living in rural areas about policing and the effect that crime can have on their communities. All too often, the attention has been on inner cities, which is where the media tend to focus. Crime has spread into rural areas, where it bites just as much and with just as devastating an effect. I shall say more later about Government action and how the Government encourage the public to take action. At the outset, I want to place my remarks in a suitable context by talking about our commitment to the police.

The first statutory responsibility of the police is to prevent crime; that has been so ever since the formation of the police in 1829. The police have always needed the consent of the public and a partnership with the public to help them in the fight against crime. Since 1979, we have greatly increased the resources available to the police. After allowing for inflation, expenditure on policing has risen on average by 87 per cent. since 1979 to more than £6,000 million. There are 16,000 more uniformed police officers in post and a similar number of additional civilians working for the police. When we consider the number of jobs that have been civilianised, thus enabling more uniformed officers to get out from behind their desks to undertake operational duties, we realise that progress has been considerable.

Every police force has shared those increases, with an average county force tending to do better in terms of the percentage increase in expenditure than an average metropolitan force. For the current year, the total of police standard spending assessments has risen by 4.3 per cent. for the metropolitan forces, and by rather more than that—4.6 per cent.—for the county forces. On average, police establishments have risen by 8 per cent. since 1979, but some of the more rural forces have done significantly better. Kent has had an increase of 12 per cent. and Suffolk has had an increase of 13 per cent.

The vast majority of forces are a mixture of urban and rural, and it is for chief constables to decide on the allocation of resources within the areas for which they are responsible. But we are continuing to do everything possible to help them to maximise the number of officers available for operational policing. Current initiatives aimed at cutting bureaucracy, reorganising management structures and employing more civilians will help to get yet more police officers into the front line against crime. From next year, detailed central controls on force strength will be removed as a result of the measures now going through Parliament. Chief constables will be able to decide for themselves how many officers they need within the resources available to them.

I know that the Kent constabulary is well aware of the problems of rural crime that my hon. Friend described and is undertaking a number of initiatives to tackle them. The Thanet police are currently developing an intelligence-based proactive model that will be evaluated by the force and considered for use throughout Kent. It should bring advantages to my hon. Friend's constituency. The structure of area intelligence will take into account the unusual and sometimes unique nature of rural communities.

My hon. Friend mentioned the new radio system to be introduced by the Kent constabulary. It represents an investment of £7 million and will offer enhanced communications to police officers in rural areas. The police are aware of the importance of working with the community to tackle crime. To that end, police officers working in rural parts of Kent will work as members of teams under dedicated leaders. Those teams will identify with specific parts of the rural area to allow the development of a particular local knowledge. That ties in with the reforms and the Police and Magistrates' Courts Bill in terms of locally focused policing plans. The initiative in Kent will assist members of the community, in that they will be more directly aware of the officers responsible for tackling crime, but, ultimately, it must be the chief constable who decides how to deploy his resources.

There is a danger when talking about crime, and the way in which the police and the public can work together, of concentrating on urban burglary and the like. As I said a few moments ago, that is what the media seem to concentrate on. Frequently, rural crime happens and does not make the headlines. But I know, and so do the police, that a single criminal incident in a quiet rural area can have a simply devastating and disruptive effect on the way of life of the entire community.

We are all aware of the nuisance caused to rural communities by the activities of new age travellers and other trespassers, and we are taking measures to deal with them. But other types of crime, which are also more relevant to the countryside, present their own particular problems: the rustling of animals, arson attacks, as my hon. Friend described, and the theft of agricultural machinery, which can create heavy losses. The attacks on, and mutilation of, horses in the southern counties have given a disturbing and horrific twist to our notion of rural crime.

Another worrying development is the export from urban areas of some particularly nasty crimes that have rarely been experienced by rural communities such as the armed robbery of village post offices and rural petrol stations and the violent burglary of isolated homes. These seem to become increasingly common as criminals are squeezed out of some of their more difficult urban haunts arid go further afield. Of course, the professional villain can be in his car and half way across the country on the motorway network after hitting a pre-chosen target.

Again, rural communities are often better placed to report anything out of the ordinary more quickly than can many urban or suburban communities. The police rely on seemingly innocuous pieces of information that might be essential in linking known criminals to these climes. Dealing with crime in rural areas is already a high priority for the police and for the Government. There is considerable activity across many Departments.

My hon. Friend spoke enthusiastically about the parish constables initiative in the context of rural policing. He will know that our aim is to increase the number of special constables from 20,000 to 30,000. As I shall show in a moment, we hope that an increasing number of those special constables will become parish constables. My right hon. and learned Friend the Home Secretary's parish constable initiative, which began less than a year ago, has quickly established itself as a valuable extra dimension to rural policing. I am very pleased indeed with the enthusiasm with which both police and public have greeted the initiative. There are now more than 80 schemes in operation around the country. I know that my right hon. and learned Friend hopes personally to launch the 100th such scheme later this summer.

The success of the parish constable scheme clearly demonstrates the great interest that members of the public have in helping to police their own communities. That is what matters so much. They have that vested interest. The schemes are an excellent example of what can be achieved when police and public work together in that fashion.

In practice, most of the small towns and villages taking part in the initiative have preferred the parish special constable model to the alternative parish warden model. In this kind of scheme, the chief constable agrees with the parish council or councils that a serving special constable should spend all his or her duty hours working within their area.

The special constabulary in general is an excellent example of how ordinary men and women can volunteer to help the police. Ordinary men and women from other walks of life lend their help to the police. Special constables have full powers of arrest; they are trained and supervised by the regular police, but, none the less, they give their own time as volunteers.

Until the introduction of the parish constable initiative, specials were generally used on a range of duties. Now, whether they are existing specials or volunteers recruited specifically for the purpose, they can develop a sense of identity with their local area, patrol it regularly and get to know all the local people and all the local concerns. They provide a uniformed police presence in areas of the country which the full-time police sometimes find less easy to reach regularly.

The Home Office is keeping track of the schemes. Four are being studied in detail so that we can identify good practice and spread that knowledge more widely. But for parish constable schemes to work as well as they are doing, everyone involved has to recognise that it is a locally driven initiative.

In my hon. Friend's county of Kent, eight very successful schemes are already up and running, using a mixture of experienced specials with some years of service and new recruits supervised by local beat officers. The police in Kent have begun to recruit members of the public to work as parish special constables in the county.

Those recruits will have to be trained and supervised to start with, but the chief constable of Kent has extended that imaginative approach, by ensuring that they will be trained in the parishes where they will be working, once they have completed training.

As I have said, a formal progress report on selected schemes will be published later in the year, but informally we already know that there is high satisfaction with what has been achieved. The benefits of the scheme are obvious to many. They include support for the regular police, in terms of the intelligence information that is fed through to them by people who really know their area and can detect quickly signs of trouble brewing, strangers snooping around, and any build-up of tension.

The benefits include a reassurance for local residents who may recently have felt somewhat out of touch. So often, reducing the fear of crime is just as important as preventing crime—both matter. In some areas, volunteers under the parish constable scheme have been active in keeping local police stations open and manned for some hours during the day when that might otherwise not have been possible.

Parish special constables and the alternative—parish wardens—are positive, productive examples of the type of partnership between public and police on which policing, whether it is in rural areas or inner city estates, crucially depends to achieve all its aims. I am encouraged by the success of the initiative. I look forward to its increasing success throughout the country and hope that it will give us lessons that we could build on, even in the wider context.

On other Government initiatives, I have been exploring the issue of rural crime with my colleagues on the ministerial group on crime prevention, which promotes co-ordinated action by Government Departments in the prevention of crime. The National Board for Crime Prevention is also giving the matter attention. Recently, I spoke at a conference in Gloucestershire on rural crime, with Crime Concern and other participants.

In February this year, my hon Friend the Minister for the Environment and Countryside announced the rural challenge initiative. That is a competition run by the Government's agency, the Rural Development Commission, with which my hon. Friend the Member for Ashford will be familiar. It is designed to stimulate innovative approaches to social and economic development in less prosperous rural areas. One of the prize categories is action to combat rural crime.

We are also determined to take measures to deal with those who trespass en masse with complete disregard for law-abiding citizens. I do not need to remind the House of the disgraceful events at Castlemorton common in the summer of 1992, which were subsequently repeated, albeit on a lesser scale, in other parts of the country. The disruption suffered by local communities, the fear caused to local residents by such mass gatherings and unruly behaviour, and the filth left behind by the trespassers are intolerable.

The Criminal Justice and Public Order Bill, which is before Parliament, will strengthen existing police powers to deal with trespass on land and introduce new powers to tackle specific nuisances, such as unlicensed night-time rave parties on open land, which can cause untold misery to local residents, and trespassers who wilfully disrupt or intimidate others engaged in lawful activities on land.

The proposed new powers will allow the police to take pre-emptive action to nip disorder in the bud, rather than leave them to deal with a serious problem once it has arisen.

That comprehensive package of measures is necessary to protect the quality of life in rural areas and will be welcomed by law-abiding citizens throughout the country.

Rural areas present a special kind of challenge to the police. The types of crimes that I have mentioned are less easy to prevent and detect because of the relatively isolated nature of the areas where they are committed. The response of the police to those incidents cannot always be as speedy as they, or the public, would like. That is why there is a particular onus on rural communities to be the eyes and ears of the police and to work in partnership with them.

The rural community is more stable than most other communities, however, and that is a strength on which we should be able to develop our initiatives. Tightly knit communities can easily spot outsiders. Those who live in close communities can find it easier to work together to fight crime.

The police place considerable emphasis on dealing with crime in rural areas, both through prevention and detection. Cheshire constabulary, for example, appointed a dedicated wildlife and environment officer two and a half years ago. He has since developed a very effective county-wide strategy for dealing with rural crime.

A great deal can be achieved when the police work alongside the public and other agencies. The partnership approach is the cornerstone of the Government's crime prevention strategy, and it is being developed on a broad front. Neighbourhood watch schemes are well known, and there are 130,000 such schemes in England and Wales.

There has been a welcome proliferation of other watch schemes, many of which are relevant to rural areas—country watch, farm watch and horse watch. At the last count, there were 35 different watch schemes up and running throughout the country. They show that members of the public want to work with the police in the fight against crime and to help the police to develop a strengthened partnership at local level. That, in turn, will help the police to be more effective and responsive to the public's needs. I hope that my hon Friend agrees that, in that way, we will be able to deliver the kind of society in which we all want to live.

Question put and agreed to.

Adjourned accordingly at one minute to Three o'clock.

Volume 246: debated on Friday 8 July 1994

House Of Commons

Prayers

United Kingdom (Inequalities)

Sports Council

United Kingdom (Inequalities)

Victims Of Crime (Compensation)

Orders Of The Day

Private Members' Bills

Fine Defaulters (Restriction Of Power To Imprison) Bill

Sale Of Goods (Amendment) Bill Lords

Treasure Bill Lords

Racial Hatred And Violence Bill

Fair Treatment For Widowers Bill

Pardon For Soldiers Of The Great War Bill

Water (Domestic Disconnections) Bill

Public Conveniences (No 2) Bill

Land Drainage Bill Lords

Civil Rights (Disabled Persons) Bill

Business Of The House

Rural Policing