Does my right hon. Friend agree that, in view of the package, the line drawn between short-term benefits and long-term benefits will be of great importance, especially for those who have been out of work and sick for a long period?
I accept what my hon. Friend says. I am grateful to him for his remarks about the whole package. Many right hon. and hon. Members will know that many invalidity beneficiaries choose not to move to the pension because the pension is taxed and long-term invalidity benefit is not. That makes a [column 1669]nonsense of the failure to tax benefits, including the invalidity benefit. As the figures that I announced indicated, it is a much higher rate. Equally, it is right that it should be treated as part of taxable income.
Does the right hon. Gentleman recognise that, apart from the decisions that he and his right hon. and learned Friend the Chancellor of the Exchequer have taken on prescription charges, his decision to cut back in real terms on unemployment benefit, invalidity benefit and child benefit means that he is no longer able to fulfil the proper responsibilities of the Secretary of State for Social Services, which are to protect those who are least able to protect themselves? In view of all that he said before the election, especially on child benefit, does he believe that he should continue to hold his present post?
The Prime Minister (Mrs. Margaret Thatcher)
My right hon. Friend kindly said “Yes” . That is the answer to the right hon. Gentleman's question. I am grateful to my right hon. Friend. The package that I have announced goes the whole way to protect those in the greatest need. As the right hon. Gentleman was equally committed with his right hon. Friends to tax short-term benefits, he has no right to quarrel with the 5 per cent. abatement.
Sir William Clark
Is my right hon. Friend aware that the proposal on strike pay and the deemed £12 a week is widely welcomed in the country because it has been considered extremely unfair that those who are on strike should benefit from the taxpayer? Does he agree that the deemed £12 a week will mean that the taxpayer is picking up some of the cost of this social payment? Does he accept that it is high time that the Opposition realised that union funds and the contributions that ordinary trade unionists make to those funds should be used when members are called out on strike by their leaders?
I am happy to agree with my hon. Friend. I have no doubt whatever that this change will be widely welcomed in the country, not least by many [column 1670]trade union members who believe that it will make their unions act more responsibly.
Does not the Minister realise that to deem that people have had money when they have not received it is unprecedented and must in some cases be outrageously unfair? Would it not be better for the Government to take powers so that they can work out the total sum involved and then send the bill to the trade union involved—or is the Minister afraid of the trade unions?
I suggest that the hon. Gentleman waits for the Bill tomorrow Neither my right hon. and learned Friend the Chancellor nor I said anything about deeming. We are simply saying that the amount of supplementary benefit to which a striker should be entitled for his family will be reduced by £12. It will not be deemed. It will be reduced by £12. It will apply to all strikers. It is reasonable to assume that they will have made, either through their unions or individually, provision to cover themselves in the event of a strike.
I welcome the generous fuel assistance package announced by my right hon. Friend. First, will be confirm that it is intended that this should be paid not only to those on supplementary benefit but to those in work who are low paid and who therefore receive FIS? Secondly, will be confirm that, unlike past fuel assistance schemes, it does not depend on a particular fuel being used, but will be payable whether gas, electricity or solid fuel is used?
One of the great advantages of the more limited scheme this winter and the greatly expanded scheme of next winter is that they cover all fuels. It is a help to those in the greatest need with their fuel costs, whatever fuel they use My hon. Friend is absolutely right. The help going to those in work—that is families with children who are entitled to family income supplement—as with all FIS payments that continue, once awarded, for a year, operates as a considerable incentive for those who return to, or remain at, work.
Is the Minister aware that most people, certainly working people, will regard these policies as sheer class policies and think that the Government are acting in a mean and callous fashion? [column 1671]The people will get the Government out of office at the earliest possible moment. I hope that the trade movement takes the strongest possible action to do that.
I am not sure whether the hon. Gentleman is advocating that the union should engage in political strikes against a democratically elected Government. If so, I should have thought that he as a good Member of the House of Commons, would be unwise to pursue that course. The constituents of the hon. Gentleman, as much as those of any other Member of Parliament, are thoroughly fed up with the sight of people being better off out of work. The Budget and the changes I announced make a start on dealing with that.
Referring to the contribution that may be expected from the unions towards the strike pay, is not ours the only country in Europe in which hitherto the whole of the support for those to strike has been extracted from the tax-payer? Does not this change enable us to look to the unions for a reasonable contribution and, as a result, a much greater measure of responsibility?
My hon. and learned Friend is right when he says that ours is the only country to do this. This is one of the measures which the Government are taking in fulfilment of their pledge to even up the balance between employers and unions.
Mr. Andrew F. Bennett
Does the Secretary of State recall last week's debate on the Social Security Bill, and especially that on child benefit? Was not he pressed strongly by his own Back Benchers? Did not he seem to agree that child benefit was the best way to reduce the poverty trap? Did he make any attempt in the Cabinet to get more than 75p this time?
The hon. Gentleman would not expect me to answer that question. Perhaps I could say that the 75p is the equivalent of an increase in child tax allowance of £130. I suspect that if my right hon. and learned Friend had announced an increase in the child [column 1672]tax allowance of £130, he would have been applauded by hon. Members on both sides of the House. When we come to convert this into weekly payment, it is made to look much smaller.
The advantage of the child benefit is that it goes to people who are below the tax threshold and who would not be able to obtain the advantage of a child tax allowance. Therefore, it is a great improvement on that. If we increased the child benefit by the figure of £1.20, the subject of the amendment on the Report stage of the Social Security Bill, it would have cost £90 million more in the current year and £250 million more in a full year. Anybody who advocates that course must be prepared to say where that money should come from.
Several Hon. Members
I thought that you were about to call another member of the Opposition, Mr. Speaker.
Order. I called four hon. Members from either side, as I said I would. I always conclude with a Front Bench Member.
When the Secretary of State refers to the reduction in unemployment benefit in real terms, that has nothing to do with the principle of taxation, which would be on a fair basis and which would enable the threshold to be raised. What are the Government doing? As I stated, the Secretary of State is making a reduction in real terms. Is it not the first reduction of that kind since 1928?
As the right hon. Gentleman would know if he studied the public expenditure White Paper and table 5.13, at the back, the yield from taxing these short-term national insurance benefits would have been £430 million. The yield from the 5 per cent. abatement that we suggest is about £133 million, which is about one-third as much. As he was committed in principle to taxation, he cannot complain about a 5 per cent. abatement yielding one-third of the revenue.