Mrs. Shirley Williams (Hitchin)
May I first say that we have had some extremely good maiden speeches, and I would like particularly to congratulate the hon. Members who made them. I say to the hon. Member for Leek (Mr. Knox), the hon. and learned Member for Dover (Mr. Peter Rees) and particularly the hon. Lady for Gloucester (Mrs. Sally Oppenheim) that if they do as well as those whom they have succeeded, then we shall very much admire them. We admired their predecessors, and they can set themselves no higher standard.
To my hon. Friends the Members for Birmingham, Ladywood (Mrs. Doris Fisher) and Bradford, South (Mr. Torney) I would say that both of them contributed excellently to the debate. In particular my hon. Friend the Member for Birmingham, Ladywood revealed the extent to which a means-tested society is a society that confuses a very large number of its citizens. [column 1202]
I begin by saying a word about what I can only describe as an “Alice in Wonderland” statement. It was the hon. Member for Horsham (Mr. Hordern) who said that he regarded the Chancellor as being in the position of someone running up a down-going escalator. I prefer that verse from “Alice in Wonderland” which reads:
“How cheerfully he seems to grin,
How neatly spreads his claws,
And welcomes little fishes in
With gentle smiling jaws!”
I do not believe that anybody who looks closely at this budget—and I shall call it a budget because that is what it is—will be persuaded that it in any way meets the economic, social or any of the other problems of this country. It was the Chancellor himself who, in his statement, said that the main economic problems facing the country were those of inflation, unemployment and inadequate growth, and yet my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) and my hon. Friend the Member for Heywood and Royton (Mr. Barnet) have shown that the statement has nothing to do with any of those problems.
Perhaps I might give the House one example. With regard to regional employment, the statement both phases out R.E.P. after several years and also clearly reduces the incentives to people to invest in the regions. I have here—and it is worth quoting—a letter from a managing director of one of the larger firms in Scotland. He writes:
“I believe it is true to say that investment incentives in plant and equipment have completely disappeared … I am afraid that those of us who are engaged in trying to attract industries to development areas will have a much more difficult job now since there are no incentives left other than differential building grants.
It goes even deeper than that. The hon. Members for South Angus (Mr. Bruce-Gardyne) and Horsham attacked the Governor of the Bank of England. They did so, I think, perhaps in an effort to try to avoid attacking their colleague the Chancellor himself. But it is not only the Governor of the Bank of England who has been critical of economic policies as set out in the statement. It was the Daily Telegraph which, on 2nd [column 1203]November in its financial columns, indicated that the effect of the statement would be a marginal shift from investment to consumption, and it was The Times that said on 30th October:
“What is clear is that monetary policy alone cannot stand as a surrogate for proper policy in this respect. With no incomes policy and an expansionist fiscal policy, the Government has created a situation in which the natural consequence of wage inflation is a reduction in our already inadequate finance for investment. To put it bluntly, that policy does not make sense.”
I believe, too, that the policy being followed by the Conservative Government does very little in a situation in which they themselves admit that inflation is extremely disturbing because, as several of my right hon. and hon. Friends have said during the debate, the present position is one in which the Government are not merely allowing prices to go to the levels to which pressures take them, but are deliberately encouraging them to go beyond that.
But even more strange is the fact that this statement, which is not an economic statement, nor a social statement, but is, above all, a political statement, has three major consequences; first, to shift the burden of the financial expenditure of this country from the rich to those who are less well off; second, to shift it from single people and people without children to families; third, to shift it from unearned to earned income. To my mind the oddest feature of all, coming as it does from a party which constantly declares its belief in incentives, is that if one takes the traditional incentives of the stick and the carrot, it is the stick alone that is applied to the great majority of people, and the carrot which is reserved for those who are rich. This statement might be described not as a dustman's tanner but as a director's tanner.
I now turn to say something about the cuts which have been made, and I begin by taking up what was said by the hon. Member for Horsham. He said that it was hypocritical of hon. Members on my side of the House to attack the cuts which had been made. These cuts are not being made in a situation in which taxation is being increased across the board because of an economic crisis. They are being made in a situation in which the Chancellor himself admits that [column 1204]the balance of payments position is sound, and that there is money to return for the purposes of consumption.
I am sure that the hon. Lady would not wish to misquote me. I asked the Opposition to say how they would finance the building of further primary schools and hospitals and encouraging the provision of more mental health facilities. I asked what proposals they had for the money which my right hon. Friends are to spend.
I will come to that later. I do not think that is quite the whole of what the hon. Gentleman said. As I recall it, he said that it was hypocritical of the Opposition to attack the cuts which were being made in the Social Services. May I take the first of these cuts, the cuts concerned with primary welfare milk and school dinners. May I underline a question which was asked in the debate, a question of extreme importance; did the Government, when they reached this decision, consult either the B.M.A. or their own medical advisers? As recently as a year and a half ago when the British Medical Association, on a split decision, agreed by a narrow majority that secondary school milk was no longer necessary, they also agreed that primary school milk should continue. I wonder whether they have also changed their minds in the course of only 18 months. I wonder also why the Federal Republic of Germany is now considering introducing free milk into the schools, at a time when our Government have decided to withdraw it.
In respect of prescription charges, may I ask whether the Government have really worked out the effects of a proportional payment? May I give two examples. At the present time, treatment for the chronic condition of arthritis costs approximately £3 10s. a month. Treatment for Parkinson's disease costs £15 12s. a month. In other words, these diseases are exempted diseases for prescription charge purposes. The object and purpose of the Government's attempt to introduce proportional charges will be directly to say that the more ill a person is, the more that person should pay. This is in direct contradiction to the National Health Service——
The Secretary of State for Social Services (Sir Keith Joseph)
It may help if [column 1205]I remind the hon. Lady that there will be a ceiling and there will be even a better bargain season ticket than now.
I am delighted to hear that, but I must say that it is very typical of the Government that one always hears the details of what they are going to do after they have made a statement about it. There was nothing in the White Paper about the fact that there would be a better bargain season ticket. If the Government believe that this is any part of the answer, the whole argument for proportional charges necessarily and rapidly falls to the ground.
May I say a word about dental and spectacle charges. As the Government well know, what they have done is to introduce a charge which again is proportional and which has been described by the British Dental Association as taking dental treatment in this country back by 20 or 30 years. In addition, the Government have reduced the age of those who are no longer exempt from 21 to 18—the very age at which people are most liable to susceptibility to dental illness and disease. They must introduce a fixed maximum figure if they are going to do this at all. But they have given no indication of that. Unless they do something of that kind, it will wreck the dental service in this country. Once again they have been as unclear and obscure as they can possibly be.
May I next ask a question about the three-day waiting period. As the Government know, the proposal which was made before and which they have attacked was to shift the burden of this on to employers. In the case of this Government, they simply intended not to shift the burden anywhere but to allow those least able to bear this to meet the three day waiting period themselves.
Again the Government have said nothing about linkage, about what happens if somebody is ill for up to 12 days within a 13-week period. A great many people are liable to recurrent diseases like asthma, bronchitis and the rest, and they should not be penalised in this way. The Government also may not know—at least they have said nothing about it—that there are many trades like merchant seamen, fishermen and others who must be allowed linkage because their jobs are such that they get three days' unemploy[column 1206]ment in a 13-week period on a recurrent basis. The Government have said nothing at all about that. They have said that the family income scheme—and they repeat this over and over again—will meet the needs of those who are least well off in our society. Yet they themselves know that the family income supplement scheme will help less than two in 100 families in this country. They know that their means test will set a new level of poverty which will be below even the level of poverty set in the supplementary benefit scheme. Above all, they must realise that, unless they introduce measures the exact contrary of the kind they are now supporting to uphold minimum wage and low wage occupations, they will be introducing not a genuine income supplement but a Speenhamland system by another name.
I return to what must be, I take it, part of Conservative doctrine, the argument that people ought to have incentives if they are to work harder. The Government recognises—and I know that they recognise—that one of the great difficulties about the scheme which they have adopted, directly contrary to the one promised by the Prime Minister and the last Chancellor of the Exchequer, is that it will create a disincentive of no less than 54 per cent. for those low-paid workers who might earn another £1 or £2 out of overtime or from getting a better job. This is a massive disincentive, greater than anybody faces through the standard rate of income tax and for that matter, a greater disincentive than we have seen elsewhere.
In regard to the whole range of means-tested benefits proposed, I draw attention to what was said by my hon. Friend the Member for Ladywood. The right hon. Gentleman the Secretary of State for Social Services knows better than I do the level of uptake of means-tested benefits. It is shockingly low. He knows, in particular, in respect of such matters as rate rebate, rent rebate, welfare milk and so on, that in many cases not even half those entitled actually draw the means-tested benefit. The reason is the total confusion and utter difficulty of explaining or even understanding these things. In heaven's name, if Members of Parliament cannot understand the system, with a 60-hour week in which to grasp it, how can we expect the great bulk of people, troubled as they are by hardship, by poverty, by trying to make [column 1207]ends meet, to grasp these infinitely complicated schemes now put before them?
In my closing few minutes, I shall raise three points of great importance with the Government. First, I refer to the effect which prices are already having on those who draw supplementary benefit and on old-age pensioners. I shall not reiterate what has been said at length in the debate about the impact of the Chancellor's measures on the prices of food and fuel, on fares, and, for that matter on the social services. Suffice it to say that there is little reason to believe that price rises will slow down over the next few months. When the Chancellor says, as he did, that the effect of these measures will be less than 1 per cent. on the cost of living, I am bound to reply that already the cost of living has increased by more than that in the past three months.
What will be the effect on those who are dependent on supplementary benefits and on pensions? First, supplementary benefits. We know that the November up-rating is already just about matched, give or take a few pence, by the increase in the cost of living. What do the Government propose to do about that? If they plead administrative difficulties, I quote to them a statement made when they were in opposition. On 16th November, 1964, in a similar situation when the cost of living had risen rapidly over the previous few months, the right hon. Gentleman who is now Secretary of State for Social Services said:
“If, as I am sure is the case, the Minister wants to help the most needy as quickly as possible, she should consider laying regulations raising the assistance scales in a matter of weeks.” —[Official Report, 16th November, 1964; Vol. 702, c. 19.]
I ask the right hon. Gentleman to do exactly what he asked his predecessor in office in our Government to do, and what she, in fact, did, for, as most hon. Members remember, she brought in a special fuel benefit for all old people that Christmas.
What does the right hon. Gentleman intend to do about pensions? The hon. Gentleman the Member for Harwich (Mr. Ridsdale) made a moving appeal on behalf of pensioners. But he did more than that; he accused us when in Government of having been unhelpful and ungenerous towards old-age pensioners. But the hon. Gentleman does not realise [column 1208]how the record that was played when they were in opposition looks today. I quote from a letter sent by the Prime Minister's secretary to an old-age pensioner:
“As you know, the rates of retirement pensions were increased by 10s. a week for a single person and 16s. for a married couple only last November and, although price levels have certainly risen since then, the buying power of the pension is still higher than before the last increase.”
That is what the Prime Minister says about the policies of the Labour Government. We ask the Government what they will do between now and November, 1971, when the consequencies of their policies will be to undermine the position of the old-age pensioner.
Lastly, I wish to raise a question which follows from the obscurities, the confusions, and the strangenesses of the Chancellor's statement. During the discussion about the statement I asked the Chancellor whether he would indeed commit himself to the £28 million of increased school building which we are told is one of the two major increases that this statement is about. I asked whether this was additional to school building programmes. The right hon. Gentleman replied:
“These are additional starts which are over and above the proposals put forward by the previous Government. This is additional school building.” —[Official Report, 27th October, 1970; Vol. 805, c. 75.]
The 1971–72 Labour school building programme was worth £186 million. The 1972–73 Conservative school building programme is worth exactly the same amount. The difference is as follows. Certainly the Secretary of State for Education and Science is increasing expenditure on improvements by £21 million, but what has not been made clear to the House is that the right hon. Lady is reducing expenditure on basic needs by £30½ million. So much for additional expenditure.
The Secretary of State for Education and Science (Mrs. Margaret Thatcher)
I will give way to the right hon. Lady in a minute.
In fairness to the right hon. Lady, I must quote the other statement that she [column 1209]made about the following year's school building programme. She told the local authorities at the Association of Education Committees last week:
“It follows that the programme for 1973–74” ——
She had referred to the end of the raising of the school-leaving age programme—
“will be smaller than in 1972–73.”
So much for the additional expenditure of £28 million about which we have been told by the Government. If the right hon. Lady wishes, I will give way now.
The difference lies between what the shadow Minister of Education and Science left and what I have provided for the year 1972–73. If the hon. Lady cares to examine the figures, she will find a considerable increase. Also, I hope that she will not blame on me the fact that the birth rate was down for the relevant year.
Of course I do not blame the right hon. Lady. The decision she made may well have been right. I am saying that no one who listened to the Chancellor's statement would have come to any conclusion other than that there was £28 million extra for school building. This follows from an extraordinary constant reiteration of the deep concern of the Government for primary schools. I must remind them, because we cannot divorce the basic needs from the improvement programme, that in the five years 1959–64 they built 1,453 primary schools, whereas in the five years 1964–69 we built 2,818—very nearly twice as many.
We are aware that the problems facing this country that must be solved by whichever party is in office are, above all, the question of industrial peace, the control of inflation, and how we can achieve social justice.
Some of us believed that when the Prime Minister made the statement which my right hon. Friend has already quoted about one nation he was going to prove to be the leader of at least a moderately progressive Conservative Government. We now see that even the memory of the depression that to some extent moderated and qualified the approach of previous Conservative Governments has been overthrown by this Government. Indeed, the [column 1210]consequences of that statement will be not one nation but two nations in the classroom, two nations in the doctor's surgery and two nations on the shop floor. It is a tragedy that those divisions should be deepened in consequence.