Tag: Michael Meacher

Below is the text of the speech made by Michael Meacher, the then Under-Secretary of State for Trade, in the House of Commons on 26 July 1978.

My right hon. Friend the Member for Kettering (Sir G. de Freitas) has made a speech which befits his position as chairman of the all-party committee on tourism and which I think was witty, detailed and very well informed, as one would expect, and closely argued. He raised a large number of points, and I shall try to deal briefly with each of them.

My right hon Friend’s theme was that of spreading the blessings of tourism not only seasonally but also geographically. He will know that the Government’s policy on this matter has been quite clear since 1974, in particular in the guidelines on the application of section 4 expenditures to the development areas and special development areas, where we emphasised the need to make fuller use of the scenic and other touristic assets in those parts of the country which would benefit from the development of tourism.

We asked the tourist boards to emphasise this in the course of their work. The aim, as my right hon. Friend knows, was not to divert existing trade from established resorts to new areas but to tap the growth in visitors, including overseas visitors in particular, but not only them, and to encourage them to leave the beaten track and to try new areas in Britain.

For British people, the emphasis has been more on extending the season and on exploring the less familiar parts of Britain instead of taking a package tour abroad. I think it is fair to say that the tourist boards’ response to this initiative has been excellent. The attractions of the rest of Britain besides London and the traditional resorts, which my right hon. Friend praised so highly and so rightly, are now featured prominently in their literature. New heritage routes and trails have been developed to encourage people to visit particular localities. Joint marketing ventures have contributed to the retention and growth of Continental traffic through northern and western ports. Off-season and weekend promotions have brought valuable extra business to hostels in all parts of the country at their less busy times, and plans are afoot to encourage the increasing numbers of overseas motorists to undertake more adventurous and wide-ranging itineraries.

My right hon. Friend asked for the Government’s view of Amsterdam referring to itself as London’s third airport. I think it is not for me to comment on the way in which a foreign airport chooses to market its services, but I will say that Schiphol is not one of the options which the Government will consider for handling the longer-term demand for air transport in the London area.

My right hon. Friend made reference to the London visitor survey. He quoted the statistics about the 10 per cent. of complaints. The response to questions about the problems encountered by visitors to London certainly varies from year to year. Last year fewer visitors found overcrowding a problem. The strengthening of the pound inevitably made prices less attractive, in terms of foreign currency, in comparison with the previous year. I should also add that a broader survey of all overseas visitors indicated that last year over 50 per cent. found ​ prices less expensive than in their own countries. That, after all, is a very relevant comparison.

Mention was also made of bureaux de change charges. As a result of complaints, the Bank of England recently carried out a survey of one-third of the bureaux operating in the London area. In the Bank’s view, the charges displayed were not unreasonable. The higher commission rates may, of course, reflect the cost of providing a service outside normal banking hours and at the weekend. One would expect there to be a certain higher charge for that service. But, if my right hon. Friend has evidence of unreasonable rates of commission being charged, certainly we can ask the Price Commission to investigate.

My right hon. Friend also asked about what was happening in the tourism growth areas such as the North Pennines, Scarborough and Devon and Cornwall. After a lot of hard work by all concerned in the region, I approved the first of these schemes in outline a few weeks ago. I am pleased to have this opportunity to pay tribute to the local authorities, the Government agencies and other interests, including those from the private sector, in getting together to stimulate tourism in a wide area of the North Pennines while at the same time—this is very important, because it is an issue which has arisen in some of these areas—doing everything possible to safeguard the essential environmental character of the area.

My right hon. Friend also inquired specifically about progress at Scarborough. I am afraid that I cannot give him any special news about the Manor of Northstead or about the gardens of Scarborough, but I can tell him that I am still awaiting substantive proposals from the working party concerned. I know that the Scarborough scheme was delayed because the initial proposals for the alterations to the Spa Hall failed to secure listed building consent after a public inquiry. I understand, however, that revised proposals, taking account of the inspector’s report, are being energetically pursued, and I hope to receive a submission soon.

I was then asked whether we were doing enough in respect of the catering ​ industry. My right hon. Friend mentioned a number of mouth-watering English foods. I hope that that message is conveyed in the right quarters. The problems of the catering industry are being studied by the hotel and catering economic development council and is sub-groups. In particular, I should mention the now completed work of the catering industry study group, which produced “Trends in Catering”, a booklet incorporating a large amount of data on the catering industry which had previously not been made available. This was intended as a benchmark to assist the industry in its future development and in its investment decisions. On the recommendations of the EDC, the catering supplies steering group is at present investigating the feasibility of establishing a body to represent the interests of the catering industry as a whole. As my right hon. Friend will know, the industry is at present represented by numerous trade associations.

In the same context, my right hon. Friend asked about standards and whether they were being maintained by British waiters and cooks in the light of the drastic reduction in foreign staff in hotels over the last three years. With regard to foreign workers, although the annual quotas for work permits for the industry have been reduced drastically, a significant number of those issued with permits since January 1973 have remained here, as, indeed, one would have expected, with the approval of the Home Office. Many have remained in hotel and catering work. There is no reason to believe that the reduction in the annual quotas has affected standards generally.

It must be remembered also that training for the industry with the training opportunities scheme continues to expand throughout the country, and last year the number of people successfully completing courses was no less than 50 per cent. up on the previous year.

On the question of overseas conferences—my right hon. Friend mentioned one in particular which chose July-August, with all the inconvenience and congestion that that causes—the Government have very little control over the timing of such conferences. Very few take place in the main holiday season. In fixing the dates, ​ organisers have to take account of the programme of the international organisation involved or of the wishes of the delegate countries.

However, if my right hon. Friend is referring to Government hospitality which is provided in conferences not organised by the Government, that hospitality is in fact confined to a single evening reception whenever the conference is held. There is really no scope for variation in that.

My right hon. Friend mentioned complacency in terms of what he described as the decline in the number of visitors in the first quarter of this year. He said that this had been a jolt for the industry and he suggested that this might have been an antidote for the complacency which he previously feared.

On numbers, I think that my right hon. Friend may perhaps be going a little too far. What we have experienced is a slowing down in the rate of increase rather than an absolute decline. In fact, the BTA is now forecasting about 4 per cent. growth in overseas visitors this year. I hope and believe that my right hon. Friend is right about a lessened risk of complacency. There could be nothing more destructive of standards, above all in a service industry, than the belief—which is inevitably wrong in the long term—that the customers will keep on coming anyway.

I am grateful for what my right hon. Friend said about the BTA and the Government in their role towards the tourist industry. I agree also that the BTA has done a very good job. It would not be right to forget the ETB and the other national tourist boards, and the non-statutory regional boards, all of whom contribute to the success of the industry and the extension of its benefits throughout the country.

Let me conclude by briefly summing up the Government’s main strategy for the tourism industry. First, there are the newly-announced initial allowances for hotel construction. I am grateful for the reference by the hon. Member for Christchurch and Lymington (Mr. Adley) to the point about the Budget. I do not know whether it was the first time this had ever been mentioned in a Budget, but these allowances demonstrate convincingly the importance that the Government attach to tourism, which is now our second largest earner of foreign currency—a remarkable achievement.

This is a most convincing demonstration of the importance which the Government attach to tourism. The allowances will stimulate new investment through the country, at an estimated cost in a full year of £15 million. This is additional to the value of the existing allowances for plant and machinery.

Secondly, I have already mentioned the selective financial help available to stimulate tourism investment in many of the more beautiful and remote parts of Britain, including most of Wales and almost the whole of Scotland. Thirdly, the industry benefits from the grants-in-aid given to the statutory tourist boards, currently almost £19 million a year, most of which is used to promote visits to and within Britain and to spread the benefits of tourism more evenly throughout the country. We take my right hon. Friend’s message to heart tonight. No doubt this could be done more thoroughly and more fully.

The industry has served Britain well in the last few years. With these incentives and help, I have every confidence that it will go on doing so in the future.

Below is the text of the statement made by Michael Meacher, the then Under-Secretary of State for Trade, in the House of Commons on 11 April 1978.

I beg to move,

That this House takes note of Community Documents Nos. S/139/77, S/183/78, R/3375/77 and R/513/78 (and the Supplementary Memorandum submitted on 21st March 1978) on Community Textile Policy.

I am glad that we have an opportunity today to consider these documents which, together, establish the framework for trade in textile products over the next five years. They all arise from the multifibre negotiations which took place at the end of last year, and may be regarded as the practical outcome of those negotiations.

When hon. Members last debated textile policy during the debate on the Consolidated Fund Bill on 14th December, the EEC had not taken its final decision about renewal of the MFA. That decision was taken by the EEC Council of Ministers a few days later, on the 20th, when Ministers decided to accept the results of the negotiations and agreed that the Community should renew the MFA. In taking this decision, they agreed to some increase in the ceilings set in the negotiating mandate for cotton yarn and cloth in order to reach agreement with certain countries. To have done otherwise would have put at risk the whole package of negotiations. But before going along with that decision, we secured a useful reduction in the United Kingdom share of the cotton cloth increase, together with other important assurances from the Commission, which I shall come back to in a moment.

The decision to accept the new bilateral agreements was described by my right hon. Friend as a “historic turning point” in the fortunes of the United Kingdom textile and clothing industries. For the first time, we and our trading partners in textiles know where we stand for the next five years. And within this overall framework there are new rules to control the flow of imports which are an enormous improvement over anything that we have had in the past.

In the first place, there are many more bilateral agreements or other special arrangements with low-cost suppliers—28 to date, compared with only 14 previously. ​ The coverage of these new arrangements will be much more comprehensive than in the past. In 1977, about 75 per cent. of our low-cost imports were covered by quotas. The new arrangements cover, either by quotas or by special safeguard provisions, about 95 per cent. of our low-cost imports.

Mr. John Roper (Farnworth)

Can my hon. Friend say how much of the remaining 5 per cent. is with State trading companies and therefore also covered in some way?

Mr. Meacher

My hon. Friend must have read my speech, because that point is covered in the next sentence. If we include the separate quotas that operate outside the MFA or the State trading countries, the coverage rises to 98 per cent. The arrangements with State trading countries account for a further 3 per cent. of the remaining 5 per cent. Virtually all of the United Kingdom’s low-cost imports of textiles and clothing are subject to actual or potential control.

We have paid particular attention to the most sensitive products. These are a familiar list for hon. Members—cotton yarn, cotton cloth, synthetic cloth, knitted shirts, jumpers, trousers, woven blouses and woven shirts—and are all products where import penetration is high. All low-cost imports of these eight products are now restricted within global ceilings, both for the EEC as a whole and for each member State. The effect of these ceilings should be that import penetration will be virtually stabilised, because imports from new suppliers will have to be contained within the overall limits. This is a significant departure for the EEC and, because these eight products represent about 60 per cent. of our total low-cost imports, this should be of great benefit to our own industry.

In general, the quotas are based on actual trade in 1976. Trade in 1977 was, in some cases, lower than in 1976, and I know that some hon. Members are therefore concerned about the level of the 1978 quotas. I understand that concern, but I insist that there was no alternative to using the 1976 base line.

As negotiations took place during the latter half of last year, 1976 was the latest year for which complete EEC statistics were available. The 1977 statistics were not available until the beginning of ​ April this year. To have chosen a base year before 1976 would have been contrary to the spirit of the MFA and on practical grounds it would not have been possible to justify using different base periods for different products or suppliers.

Documents S/139/77 and S/183/78 set out the quota levels for the member States for 1978. In the case of Taiwan, the quota levels for 1978 to 1982 are shown. Both documents were approved by the Council of Ministers on 7th February and both have now been published in the Official Journal. Our own notice to importers will be published in Trade and Industry on 14th April. I should also say that in the case of the regulation covering Taiwan—this is a more technical matter—where no negotiations took place because Taiwan is not a GATT signatory, the Taiwanese authorities have made representations to the Commission about the low level of some of the quotas. If any changes are proposed as a result of these representations, the Select Committee on European Secondary Legislation will, of course, have an opportunity to consider them.

Mr. Dan Jones (Burnley)

I completely agree with my hon. Friend that the new regulations are a valuable safeguard However, what steps have been taken to ensure that the safeguards are ironed out securely for the textile industry in future?

Mr. Meacher

My hon. Friend raises a key point. It is all very well to have a set of regulations, but we must be concerned about efficiency in implementing them and the prevention of loopholes and possible abuse. I assure my hon. Friend that later I shall turn to the whole issue of surveillance, the blocking of loopholes and the prevention of potential abuse. When I reach that stage in my speech, he will understand that the arrangements are extremely comprehensive.

Mr. J. Enoch Powell (Down, South)

Is this one of the cases where approval was given to EEC documents by the Council of Ministers before instead of after the documents had been debated in the House?

Mr. Meacher

This is one of the cases where the decision is taken by the Council of Ministers because it is felt to be in the interests of each of the member ​ States that action should be taken as soon as possible. However, the Select Committee on European Secondary Legislation will have a full opportunity to examine the matter. As we are talking about the imposition of levels of quota that will benefit a particular industry, the urgency of the matter is sometimes overriding. This is not the first time that it has happened, but I do not believe that it has caused matters to be taken amiss by the Select Committee. It has an opportunity to make representations if it takes that view.

Mr. Roper

My recollection is that this is an instrument that the Scrutiny Committee did not recommend for debate in the House before the decision was taken. It merely recommended that it should be debated at some stage in the context of a debate on textiles.

Mr. Meacher

I am grateful to my hon. Friend for giving the House that information. This is quite regular practice, as I have indicated, in the circumstances that I have outlined. It is not that there is any attempt by the Government in any way by sleight of hand to put through a measure before there is a proper opportunity to discuss it. When it is beneficial to the home industry for action to be taken more quickly, that is the procedure that has been followed. That is well understood by the Select Committee.

With one or two exceptions, the quotas are now all subject to dual control—that is, that an import licence is granted here only on production of a valid export licence issued by the supplying country. The exceptions are Taiwan, where the quotas continue to be import-administered: Malaysia and the Philippines, where export-administration will begin on 1st May; and Peru and Mexico, where export administration will begin on 1st July.

Another very important advantage in the new agreement is the introduction of more precise safeguard procedures which cover all products from bilateral agreement countries which are not subject to immediate quotas. These procedures are most often described as a “trigger mechanism”, under which new quotas can be introduced following consultation if imports of unrestricted products reach certain specified levels compared with ​ imports into the EEC in the previous calendar year. That is one of the most important aspects of the new agreement.

I mentioned earlier the assurances that we secured from the Council on 20th December. One was that similar procedures would be applied to countries which have not concluded bilateral agreements. This is an assurance to which we attach great importance because the ability to introduce quotas when imports rise above a certain level, whether or not the country concerned has entered into a bilateral agreement, is clearly a crucial element in the new framework, and clearly in respect of new suppliers. I know that that is a matter of great concern to the industry and to Members on both sides of the House. Therefore, I shall spell it out briefly.

As a result of their preferential relationship with the EEC, none of the Mediterranean suppliers was prepared to enter into separate textile agreements, with the exception of Egypt. Instead, the Commission secured a series of informal understandings. That is a word that is used in the technical sense. It is, perhaps, a term of art within the trade. In the case of Morocco and Tunisia, the Governments of those countries have agreed to a voluntary restraint on their exports of certain sensitive products. Similar arrangements have been agreed with the textile and clothing industries in Greece and Turkey. Discussions are continuing with Spain and Portugal in the hope that similar arrangements can be agreed with them. In the meantime, both countries have been notified of levels which should not be exceeded and have been warned of possible safeguard action. All these arrangements apply in the first instance to 1978, but the Commission intends to make similar arrangements in subsequent years.

Mr. Mike Noble (Rossendale)

My hon. Friend said that the Commission intends to make similar arrangements in subsequent years. Will he confirm that the arrangements will mean no increase in quota levels for these countries in subsequent years, and will not merely imply the creation of further informal understandings, albeit at a different level?

Mr. Meacher

The proposal is that the basis on which existing informal understandings are made shall be continned, ​ although this is no doubt dependent on future negotiations. There will be the same basis for limitation as exists in 1978. The basis of restriction will remain the same. There is no suggestion that there will be an increase in future years, although, as I repeat, that is a matter for negotiation. The fact that it is not written into the specific framework of the MFA means that it is open to negotiation. The Commission has made it clear that it is not allowing non-signatory countries any easier conditions than those that apply to countries that sign the bilateral agreements.

Mr. Nicholas Winterton (Macclesfield)

What if the situation were changed and, for example, two of the four countries became signatories to the Treaty of Rome? What protection would the British textile industry have within that changed circumstance?

Mr. Meacher

If the hon. Gentleman is referring to Greece, Spain and Portugal, these are all countries where membership is being contemplated and arrangements are being made to that end. If they became members of the EEC they would have to abide by the same rules that govern existing member States, especially in terms of the abolition of quotas or tariffs and any special aids that they might now give to their industries. Such measures would have to be done away with as a result of the competition rules under the Treaty of Rome. That would certainly make a good deal of difference in terms of intra-Community trade in respect of those countries. We are talking about a situation well into the middle or late 1980s. If accession were to come about for those countries in the 1980s, there would be a transitional period, as there was for Britain, so we are talking of a period five, eight or 10 years on.

I was saying that because of the voluntary nature of these arrangements we have not published details in a notice to importers. However, I assure the House that a close watch is being kept on the level of imports from these Mediterranean suppliers, so that the Commission can be alerted in good time if the agreed levels are threatened. The Commission, for its part, gave an undertaking at the Council on 20th December that appropriate action would be taken promptly if it became necessary. That is an assurance to ​ which we attach great importance and certainly intend to utilise if need be.

This brings me to the question of surveillance and the intervention by my hon. Friend the Member for Burnley (Mr. Jones). This is obviously a key factor in ensuring that the safeguards are operated satisfactorily. We shall need to know in advance when trigger levels are likely to be reached so that the safeguard machinery can be set in motion in Brussels. To this end, our own surveillance licensing of non-restricted textiles is being brought into line with the new MFA product categories, and we plan to introduce an early warning system which will give us time to act. At the same time, a Community-wide surveillance system based on early information about actual imports is being set up which should help to draw the net still tighter.

This surveillance will be based on new product categories which are common to all the agreements and other arrangements. These new categories—no fewer than 123 in all—are much more precise than the 60 categories which applied in the past. This will greatly reduce the amount of flexibility between quotas—that is the transfer of unused portions in the one quota to increase trade in another which has been fully used up—and it should also reduce considerably the scope for evasion. I hope that my hon. Friend is satisfied with what I think is a comprehensive answer to his question in terms of the new arrangements.

Mr. Max Madden (Sowerby)

Is my hon. Friend satisfied with the disparity that seems to exist within the Common Market between the delays that occur in submitting import data? I understand that it is 16 days for the United Kingdom, which is the quickest country, and goes up to 10 weeks for Italy. Can my hon. Friend foresee any standardisation in these arrangements to ensure that import information is passed much more quickly than appears to be the case today?

Mr. Meacher

We certainly intend to be as efficient as possible in passing this information to the Commission. One of the problems in textiles has always been the great delays in the information pipeline. As I indicated, we did not get the full figures for 1977 import levels until ​ the beginning of April. There are considerable delays in getting information quickly. I think that the United Kingdom is rather better than other countries in this respect. Subject to our capacity to collect that information more quickly, we certainly intend to process it and to pass it to the Commission as quickly as we can. If my hon. Friend is aware of unreasonable delays in that respect, I hope that he will let us know.

Mr. Dan Jones

The Minister asked me whether I was satisfied with regard to the Mediterranean relationship. Frankly, I am not. I think that the agreement with the EEC is remarkable and must, if left to that device, be of immense good for the textile industry. But if the Mediterranean countries are allowed freedom, I believe that that could undermine that good effect. Are we prepared to take steps now to bring under control, in the same way as the EEC has done with other countries, the situation concerning the Mediterranean countries, or, put another way, is the EEC prepared to allow them to participate in the control of the Mediterranean countries?

Mr. Meacher

There are preferential agreements with the Mediterranean suppliers. That is the different relationship that they have with the EEC. I am not convinced that, because of that special relationship, the Mediterranean suppliers will be able to increase their exports beyond what is permitted to the normal bilateral signatories. In effect, we are concerned about the level of imports, particularly of cotton yarn and cloth, from a number of the Mediterranean suppliers. We have given this information to the Commission. I understand that it is at present carrying out consultations with the supplying countries. That is a term of art. It means that the Commission is making it very clear that it does not expect these levels to be exceeded. In certain Mediterranean supply agreements—for example, with Turkey—there are safeguard clauses which we can invoke if need be. We are examining ways in which we can close that gap in relation to other countries where there are not such safeguard clauses.

Another important element of the revised MFA—this is the last point that I want to make—is the introduction—

Mr. Nicholas Winterton

Is the hon. Gentleman leaving the question of surveillance?

Mr. Meacher

I am leaving surveillance. Does the hon. Gentleman wish to make a further point?

Mr. Winterton

Is the Minister aware that the figures quoted by his hon. Friend the Member for Sowerby (Mr. Madden) were based on a paper recently issued by Comitextil? If there is this tremendous disparity in the notification of this import data—for the United Kingdom 16 days, but for the Netherlands and Italy anything between six, eight and 10 weeks—how can Europe in the present situation efficiently implement a surveillance system and procedure? Will he look at this matter rather more seriously and perhaps take to a European table the fact that we in this House are dissatisfied with the length of time that it takes some of our European partners to supply the import data which is so vital to an efficient and effective implementation of a surveillance procedure?

Mr. Meacher

I agree about the importance of making sure that information is made available so that action can follow. If this is a paper by Comitextil, the remedy lies in its hands. These are the textile manufacturers of the EEC. If they stand to gain from processing this information quickly to the Commission, it is up to them to ensure that their Governments act quickly. I suggest that they put more pressure on their Governments. Certainly the United Kingdom Government cannot require or induce the Netherlands or Italian Governments to operate more quickly. We can indicate by our own example that it can be done by us in a shorter time than by them. I hope that the industries in those countries will put a lot of pressure on their Governments to act more quickly. It is mainly for them to do that.

Another important element of the revised MFA is the introduction of more precise rules of origin and of measures that will require documentary proof of origin to be produced at the lime of importation in respect of imports from all non-EEC countries. These provisions are the subject of the other documents on the Order Paper, R/3375/77 and ​ R/513/78. Essentially, and at some risk of over-simplification, the former document sets out the new provisions and the latter modifies those relating to proof of origin.

The amended proof of origin provisions have been published in the Official Journal as Council regulation 616/78 and will come into effect on 1st May. It may help the House if I explain that the rules of origin determine the country of origin of a product. The proof of origin is the documentary statement of that origin which is presented to Customs. The combined effect, with some differences in detail between restricted and non-restricted sources of supply, will be that documentary proof of origin will need to be supplied by the exporter and produced by the importer at the time of importation in respect of all commercial imports of textile products of categories covered by the bilateral MFA agreements.

This is a very important point. Without rules of origin it would be possible, for example, for a country with a product under quota to evade the quota ceiling by shipping goods through a country where the same product was not subject to any restriction. The present origin rules lack precision and are open to differing interpretations. This will be avoided by the introduction of precise rules based on the concept that the origin of all textile products will be determined—with certain minor exceptions—by the carrying out of one complete process. For some products, the present origin criteria will be changed. The new rules will also apply to trade within the Community to determine whether goods traded between member States are of EEC origin and thus free from restriction, or of third country origin and thus susceptible in certain circumstances to restriction under Article 115 of the Treaty of Rome.

This is a complex subject. I have not attempted to give more than the barest outline of the purpose of the new regulations and how they will work. But we are satisfied that the combined effect of the revised origin rules will be to close the loopholes, to resolve the ambiguities in the existing rules and to ensure that the intentions of the MFA cannot be evaded by manipulation of the country of origin. If we have succeeded, as I think we have, that is an important point.

The documents that are the subject of todays motion are the outcome of a years’ hard bargaining and negotiating both within the EEC and outside it. They are proof of the Government’s determination to remedy the defects of the old MFA agreements and to provide our textile industry with adequate protection. As I have already said, there are now agreements or other special arrangements with 28 low-cost suppliers. These agreements provide for over 400 separate quotas, covering 123 separate product categories. These quotas, together with the new safeguard provisions, mean that about 95 per cent. of our low-cost imports of textiles are now under control. If the separate arrangements for State-trading countries are added, this brings the coverage up to 98 per cent.

It is perhaps too early, after only three months’ experience of arrangements that will last for five years in most cases, to come to any final judgment. I would not wish to claim that the results are perfect; I am sure that they are not. This is clearly no time to become complacent or to relax our efforts. On the contrary, vigilance must and will continue.

I again pay tribute to the determination and dedication of members of the textile lobby on both sides of the House who provided the Government with the determination that was needed for these negotiations. But I urge the industry to take advantage of the new arrangements and the valuable breathing space that they provide.

We have done all that we could to secure our objectives of adequate protection against disruptive imports and security and protection for those who work in our textile industry. I think that they, and we, must look now towards the textile employers to do their bit and start expanding and investing for the future, so that if demand picks up—as I hope it will—it will be British manufacturers who have the capacity to fill the gap. Much will obviously depend on the general economic climate about which my right hon. Friend has spoken so encouragingly this afternoon. But the Government have recognised the special difficulties facing the textile industry and have taken unprecedented steps to provide help. I have not mentioned the many other areas in which help is provided, such as Industry ​ Act assistance, TES and other aspects, as these are mainly matters for my hon. Friend who will wind up this debate.

We have done our best to meet the objectives that we set ourselves in February last year. The documents before the House show our concern for the textile industry and those who work in it. We now look to the industry for a positive and determined response.

Below is the text of the speech made by Michael Meacher, the then Labour MP for Oldham West, in the House of Commons on 15 January 1986.

First let me make it clear that the uprating principle underlying the order is not in contention, but I wish briefly to use the debate to highlight two main issues where the Opposition remain distinctly critical. One is the experience of statutory sick pay as it has developed, especially in the light of its extension to 28 weeks from 6 April next, and the other is the proposed privatisation of other benefits where the example of statutory sick pay is being used as a model.

Our main objection is that the extension of statutory sick pay represents not only the abolition of state sickness benefit but the prolongation over a much longer period of all the disadvantages clearly manifest in this act of privatisation.

First, unlike sickness benefit—and we take a view of it different from the over-generous picture for employees given by the Minister—statutory sick pay is taxable and subject to deductions for national insurance contributions. Therefore, for many employees, especially those on low earnings, SSP means less money when they are unable to work because of sickness or disability. Indeed, for those on very low incomes, about £50 a week, the loss can be as hefty as £14 or £15 a week.

Nor is it any defence to say, as Ministers do—although the Minister did not do so tonight—that the low level of SSP is compensated for by supplementary benefit. Recent figures show that one third of sick or disabled people do not claim the supplementary benefit to which they are entitled. Perhaps that is the best indication of the inadequacy of SSP. Means-tested supplementary benefit should never be regarded as a satisfactory substitute for an adequate benefit as of right when people cannot work.

Ministers also like to evade the unsatisfactory nature of SSP by referring—as the Minister did tonight—to the number of occupational sick pay schemes. Of course, a few do exist, but many employees are not covered by them because they are generally run on a discretionary basis. In particular, part-time workers and others in low-paid jobs are frequently excluded.

A sign of the amount of loss of benefit from the extension of SSP is provided by the Government’s estimate of the so-called savings that will accrue in the next financial year—of the order of £200 million. Those savings are being made purely at the expense of the sick and disabled who are already having to cope with the extra costs of disability. It is surely wrong and unfair that employees will be paying out more in tax and national insurance contributions because of the extension of SSP, while employers will not be expected to pay any national insurance contribution for SSP payments.

Another matter for concern is that—

The Minister for Social Security (Mr. Tony Newton)

The hon. Gentleman plainly has not understood the financial basis of SSP. The saving of £200 million is a saving to public expenditure, but it is almost precisely counterbalanced by the revenue forgone from the national insurance fund in compensation for the payments by employers to employees. The notion that either the original introduction of SSP or its extension entail losses to beneficiaries of the sort suggested by the hon. Gentleman is, quite simply, wrong.

Mr. Meacher

The figures are not so very different from what I have suggested. The Minister is right to say that there is an offset, and I wholly accept that. But there are substantial disadvantages to employees. The figure that I am quoting is the public expenditure figure that appears in the Government’s public expenditure papers.

Does the Minister deny that, if employees are to pay substantially more in tax and national insurance contributions, there will be a significant disadvantage for them? Does he deny that as a result of the scheme, many on the lowest levels of income—about £40, £50 or £60 a week—are suffering substantial losses that can be as much as £14 or £15 a week?

Another matter for concern is that the rate of unemployment is already higher among the disabled than among the work force as a whole. An extension of SSP, with the additional administrative burden on employers, is all too likely to lead to discrimination against workers with poor health records.
Indeed, there are other disadvantages to SSP. It has involved a much harsher linking than that applying to sickness benefit, although that is now to be changed.

Moreover, because it is administered by employers—that is not to be changed—and not by the DHSS, there are no powers, short of taking the employer to court, to ​ enforce payment of statutory sick pay by employers. If an adjudication officer, social security appeal tribunal or a social security commissioner issues a formal decision that a person is entitled to statutory sick pay, the DHSS cannot force a recalcitrant employer to pay the correct amount to the employee. Employees in unorganised workplaces, particularly part-time workers or those in low-paid jobs, are vulnerable to harassment by employers in relation to absence through sickness, given the leeway that the DHSS has now given to employers.

There is no protection for employees who are dismissed by their employers so that the latter can avoid paying them statutory sick pay. Extending statutory sick pay in April will increase the employee’s exposure to unscrupulous manoeuvres by some employers.

For those reasons, we contend that statutory sick pay, which was introduced almost without warning and with perfunctory consultation, has worked to the detriment of employees in a variety of ways.

There are good grounds for the fear that the introduction of statutory sick pay will be used as a wedge in the door of further moves to hive off state responsibility for social security benefits. Evidence of further intended privatisation by the Government emerged on 19 December when the DHSS issued a consultation paper on statutory maternity allowance. That proposed that responsibility for paying maternity allowance—

Mr. Deputy Speaker (Mr. Harold Walker)

Order. The hon. Gentleman is straying wide of the order. I have given him a lot of rope, but he must not discuss maternity pay.

Mr. Meacher

I am not seeking to introduce a debate on maternity allowance, but I am making the valid point that the introduction of statutory sick pay is being used as a model for further extending the privatisation of social security benefits. I wish to make one or two other brief comments related to that, but I do not seek to discuss that argument in depth because it is to be discussed in another place.

Mr. Deputy Speaker

That can be left to another place because the order is about uprating statutory sick pay, not the principle, which the House has already decided.

Mr. Meacher

I accept that, but it is important that this is being used as a model for further privatisation. It suggests that statutory maternity allowance should be paid at the lowest rate of statutory sick pay—£31·60 a week in April 1986 terms—regardless of earnings. Statutory maternity allowance and statutory sick pay should not in general link to the same period of interruption in work. A further act of privatisation is now to be carried out on the model of statutory sick pay, despite all its drawbacks, but in this case it will be on even meaner terms with only one level of benefit instead of three, and that will be the lowest statutory sick pay level.

We do not dispute the uprating basis in the order, but we want to place firmly on record our strong condemnation, not only of the principle of the privatisation of social security benefits, but of the manifest disadvantages for the employee that this has been shown to involve. We oppose the extension of the principle, with its disadvantages to other benefits such as statutory maternity allowance.

If the Government do not take note of our objections, I give notice that when we come to power we shall deal with them rapidly.

Below is the text of the speech made by Michael Meacher, the then Labour MP for Oldham West, in the House of Commons on 27 June 1985.

I beg to move,

That this House strongly condemns the Government’s breach of their own repeated promises to increase Child Benefit in line with inflation which will result in mothers and children being deprived of £175 million in the current year as the first of the Green Paper cuts; notes that Child Benefit is uniquely effective in countering family poverty, reducing the poverty trap and ensuring that mothers are the recipients of monies needed for child care; and therefore calls upon the Government to restore the real value of Child Benefit both now and for the future.

Our case in this debate is very simple and very clear. It is that child benefit is uniquely effective in countering family poverty, in reducing the poverty trap and in ensuring that the person who receives the money necessary for caring for the children is the mother. It was a Labour Government who brought in child benefit and, for the reasons that I have just given, we believe strongly that it is a key benefit, central to our social security system, which should be built up and not cut back. It is a benefit which has attracted widespread endorsement.

I offer at the outset one or two quotations. My first is this:

“We would all, I suspect, like to see an increase in child benefit; I think that it is one of the most effective ways in which you can deal with the problem of poverty and the problem of bringing help to children.”

I am sure that we would all say “Heat, hear” to that. Those were the words not of a Labour Minister, but of the present Secretary of State for Social Services when speaking to the Treasury and Civil Service Sub-Committee on 28 July 1982. That was when he still believed in child benefit, just as, when he set up the pensions inquiry, he.still believed in the state earnings-related pension scheme.

If child benefit was, in the Secretary of State’s own words,

“one of the most effective ways”

of dealing with the problem of poverty, does the downgrading now of child benefit mean that the Government are repudiating that objective? The Secretary of State does not appear to want to reply now. No doubt he will do so later.

On 28 June 1983 the Prime Minister said that the Government’s real increase in child benefit then was

“evidence of our commitment to the family.”—[Official Report, 28 June 1983; Vol. 44, c. 49.]

Quite so, but does this latest princely increase of 15p—which is less than one third of the rate of inflation—now indicate that the Government’s commitment to the family is somewhat wilting? That is another question to which we would like an answer today.

I offer a third quotation:

“It plays a major part in easing the unemployment trap, and so in our strategy of improving incentives for everyone. It is important for families, and particularly for the low paid. Indeed, ​ it is the benefit which provides the greatest help to many of the poorest families in the country. I refer, of course, to child benefit.”—[Official Report, 15 March 1983; Vol. 39, c. 143.]

Again that is not some Child Poverty Action Group enthusiast, as one might think, but the right hon. and learned Member for Surrey, East (Sir G. Howe), the then Chancellor of the Exchequer, in 1983.

If child benefit is so effective in all these roles, according to Ministers, why is it being sidelined now? If all those unsolicited panegyrics applied in 1982 and 1983, why do they not apply now?

The Secretary of State’s justification for his backtracking on child benefit was stated by him in his answer to me a week ago, when he said:

“The first priority must be to give help to families in greatest need.”—[Official Report, 18 June 1985; Vol. 81, c. 177.]

It would indeed be a seductive argument if it were true, but it is not. It simply does not reflect what the Secretary of State has done, for three good reasons.
First, only a fraction—about 16 per cent.—of the £175 million saved from the child benefit cut is being used to improve benefits for low-income families.

The improvement in family income supplement will cost just £17 million, and the housing benefit child’s needs allowance £12 million — which had in any case originally been promised for April this year. So the Government are not transferring resources at all; they are cutting benefit to mothers by £150 million.

Secondly, cutting child benefit and spending more on FIS, which is the Government’s strategy, does not concentrate resources on the poorest families. It has the opposite effect. It cannot be stated too often that take-up of child benefit is virtually 100 per cent., while FIS, because it is means-tested, reaches only about half of all the low-paid families which are eligible. Housing benefit is little better—the take-up there is about two thirds. So the losers from the right hon. Gentleman’s package are clear. They are those entitled to FIS but not claiming it, and that is about 200,000 of the poorest families, those with incomes just above the FIS eligibility levels, and mothers and children in families with reasonable incomes, but where the income is not shared fairly. Far from being helped by what the Government have done, those families will be the hardest hit.

There is a third important reason, if one follows through the logic of the right hon. Gentleman’s package, why the outcome contradicts his own claims. It is that even those families which get the family income supplement will find that the so-called extra help that the Government are providing by increasing the FIS prescribed amount by more than 7 per cent. will be swallowed up by the loss of child benefit and the consequential changes in housing benefit.

I shall give an example which effectively demolishes the Government’s case. In March of this year the average FIS payment for a two-child family was £12, which implied an average wage of around £76 a week. Assuming that their earnings increase in line with inflation, this family’s FIS award will increase by £1 in real terms as a result of the higher FIS levels announced by the Government a week ago. However, at the same time, no less than 70p of this £1 increase will be snatched back by the cut in child benefit.

Indeed, the result will be even worse because of the infernal logic of the interconnection between means tested benefits. Because increases in FIS are taken into account ​ for calculating housing benefit, many parents will find that the gain in housing benefit due to the increased child’s needs allowance will be outweighed by the downward adjustment to housing benefit resulting from the higher FIS levels. The Secretary of State looks puzzled, but I hope he realises the logic of his own proposals. That is exactly what will happen even to those who get the fullest benefit of his increases.

The result of all that was the boast by the Secretary of State a week ago:

“The first aim is to direct help to the poorest … That is precisely what we are doing”.—[Official Report, 18 June 1985; Vol. 81, c. 177.]

That is not borne out by the facts. Indeed, the truth is the reverse. Downgrading child benefit and upgrading the odds and ends of means tested benefits at the margin does not bring the greatest help to the poorest families, but traps them even more deeply in their own poverty.

We know the Government’s real motive behind this child benefit cut. It has next to nothing to do with targeting the needy, which is Fowlerspeak for more means-testing. It has everything to do with cutting expenditure on benefits to safeguard future tax cuts, which, as usual, will go mainly to the better off and the rich.

Mr. Jerry Hayes (Harlow) rose—

Mr. Meacher

If the hon. Gentleman was in his place at the start and heard my argument, he knows how compelling it is. If it has a fault, I should like to know what it is. It contains the compelling fact that even those who will benefit most by the increase in FIS levels will probably lose in net terms, leaving aside those who, because they do not claim FIS, do not get the benefit.

Far from concentrating resources on poorer families, which will not happen as a result of this package the proposal paves the way for concentrating resources on the richer sections of society — a redistribution which has become the characteristic hallmark of Thatcherite Toryism. That connection was made absolutely explicit yesterday by the Chancellor of the Exchequer when he made a ringing call to bankers and business men at the Carlton Club in favour of further tax cuts at the expense of further public expenditure cuts, and child benefit is the first victim of that renewed Treasury drive.

Mr. Hayes

How can the hon. Gentleman say, hand on heart, looking at the figures, that the Government’s proposals are not designed to help families most in need, when he has not mentioned that one-parent benefit has increased by 7 per cent., that the child’s needs allowance has gone up to £15.40 a week, and that there is a new higher prescribed amount for families with older children?

Mr. Meacher

I am not surprised that the hon. Gentleman ran away after a single day when he was setting up a new organisation in the Tory party, if those were the sorts of arguments that he had in mind. He obviously has not listened to my remarks. I mentioned the increases in housing benefit, in the child’s needs allowance and in the FIS prescribed amounts. I agree that for one-parent families the FIS increase is an improvement, but would the hon. Gentleman care to give the details of the increases and the number of families who will receive them? They are minuscule compared with the 12 million children who are losing 35p every week this year as a result of the cut in child benefit.

​This switch from public expenditure to taxation cuts has precious little justification. The Financial Times—scarcely a Left-wing publication—commented on 20 June, just after the Secretary of State announced his package:

“By looking for economies in the benefits but not in the tax allowances which form part of the welfare system, the Government is open to the charge of unfairness. The real value of child benefit, in reality a substitute for child tax allowances, is to be cut by nearly 5 per cent., yet the Chancellor recently raised the married man’s tax allowance, enjoyed by couples without children, by twice the rate of inflation.”

In truth, the married man’s tax allowance has been increased by about 17 per cent. — that is, if it was increased by the statutory price-linked formula which the Government use—whereas child benefit is 3 per cent. lower in real terms — that is, if it was pitched in accordance with that formula. That demonstrates how, long-term, the fiscal trend under Tory policies has worked against families.

Mr. John Butterfill (Bournemouth, West)

When does the hon. Gentleman intend to depart from the brief prepared by the Child Poverty Action Group? Is he aware that most of us have read it?

Mr. Meacher

I am pleased to hear that. I hope that many Conservative Members, including the Secretary of State, will read it, because it represents a devastating indictment of the Government’s social policies. If the Secretary of State read more documents such as that at bedtime, rather than the briefs from his Department, we might get better policies from him.

I quote again from the document, this time from the Conservative Women’s National Committee, the publications of which I do not normally read. In a passionate plea on behalf of child benefit, that organisation said:

“We recommend that as economic circumstances permit, child benefit is increased in line with increases in tax allowances, or at least protected against rising prices.”

Poor old Emma Nicholson. She really did her best among the upper echelons of Conservative women. Just her luck that the present Government are led by a women who happens to be more like a man. [HON. MEMBERS: “Sexist.”] I am sure that the Prime Minister will be delighted by that reaction from the Government Benches.

There is a further important reason why this attack on child benefit cannot be justified on the grounds of public expenditure costs, which is what I suspect the argument is really all about. Even if child benefit had been indexed fully in line with inflation—as we believe it should have been—expenditure on it would still be falling in real terms. That is because the number of children qualifying for it has been, and still is, falling. It fell by 1 million in the six years up to 1984, and that reduction saved about £300 million at present benefit rates. Moreover, the number will continue to decline in the immediate future because of the relatively low birth rates of the late 1960s.

All of that is in addition to the fact that the Conservatives have cut spending on child support since 1979 by allowing child benefit to fall below its 1979 level during the period up to the November 1983 uprating, and by the steady and continuing reduction in the real value of child support for national insurance beneficiaries. For those reasons, there is absolutely no excuse today, in expenditure terms, for chopping back child benefit even further.​

Mrs. Edwina Currie (Derbyshire, South)

The hon. Gentleman referred to the position in 1979 and then carefully spoke of the November 1983 uprating. Is he aware that in that uprating, and in the November 1984 uprating, the resulting real value of child benefit was higher than in any year under any Labour Government back to 1951?

Mr. Meacher

Quite, and we are approaching November 1985. It is true that at November 1984 prices the value of child benefit rose to £6·85, the level from which it is now being increased. That is marginally, by 15p, above the level in April 1979. However, at November 1984 prices, in the same real terms, it is now to be lowered to £6·57. That is precisely our objection. Child benefit is not being increased steadily in line with rising prosperity and increasing growth, as we are always being told, but is being lowered.

There is even less excuse for any cut in child benefit. The Government are mortgaged to the hilt in terms of promises about child benefit. The previous Secretary of State for Social Services, the right hon, Member for Wanstead and Woodford (Mr. Jenkin) said in 1980:

“We are committed to the child benefit system and it is our intention, subject to economic and other circumstances, to uprate child benefit each year to maintain its value.” — [Official Report, 28 July 1980. Vol. 989, c. 1063.]

Perhaps we should now ask: are the Government saying that the economy is in a worse shape than in 1980, so that the promise of the then Secretary of State no longer holds good? Otherwise, we should like to know how their actions are justified.

Equally important, I quote from the letter from the 38 organisations, including the National Federation of Women of Great Britain, to the Prime Minister in March this year. The letter reminded the Prime Minister of her pre-election assurance:

“there are no plans to make any changes to the basis on which child benefit is paid or calculated.”

Nothing could be more unequivocal than that. Moreover, the letter went on to say:

“In our view, the retention of child benefit, paid at a reduced level in real terms, alongside a restructured system of means-tested child support would mean a ‘change in the basis of that benefit’. The Government would be seen, we believe, to be paying lipservice only to the principle of a benefit for all children, and would be widely suspected of intending to allow the reduced universal benefit to decline in value until it withered away and was replaced entirely by means-tested provision.”

In a nutshell, that is exactly what is happening, despite all the Government’s solemn pledges which are churned out like confetti before an election and then disappear like snowflakes on a boiler after it.

What is most worrying is that this attack on child benefit is not a “blip”—to use a word which I believe is beloved of the Chancellor of the Exchequer—but part of a calculated long-term strategy on the part of the Government to run down child benefit. I quote from paragraph 4.49 of the Green Paper, which is a very important statement by the Government:

“The Government believe that it will be right to give greater priority to assistance for families in the income range covered by family credit than to the assistance given to families as a whole through child benefit. We will therefore have regard to the need to concentrate resources in this area … in determining the overall level of child benefit.”

That says it all. Today we are debating the beginning of the end of child benefit. All that I would add is that to embark on this strategy—​

The Secretary of State for Social Services (Mr. Norman Fowler)

As the hon. Gentleman is about to conclude, are we to understand that we shall have this debate without him informing us of his own policy in this area? Does the hon. Gentleman still stand by the pledge that he made only two months ago to abolish the married man’s tax allowance?

Mr. Meacher

I shall certainly outline not only our future policies but what we have done in the past. In April 1974 the Labour Government inherited child benefit at £5·14, at November 1984 prices. We increased that to £6·70. We shall not cut child benefit. We shall seek to increase it, not in line with prices as we did previously, but to do better than that. We stand on our record. If only the right hon. Gentleman could do the same. He inherited the level of £6·70, and it will fall this November to about £6·57.

Mr. Fowler

The hon. Gentleman said in a statement only two months ago that he would double child benefit and abolish the married man’s tax allowance. Are we to understand from what he has just said that that part of his policy has been abandoned?

Mr. Meacher

I think that the right hon. Gentleman is used to the terminology of Green Papers. I hope he believes that Green Papers are the subject of consultation. I made it clear that the document I released was not party policy, but a consultative paper. There should be serious consultation about whether we spend £4·5 billion on the married man’s tax allowance, which is in no way concentrated on those who need the money, instead of increasing child benefit, which is far and away the most cost-effective and direct way of assisting those in need. That is a serious question, and if the right hon. Gentleman seeks to make a mockery of it I think that his view will be taken into account by the people of this country.

It is a travesty of consultation that the Secretary of State, having issued a Green Paper, which we presume is for consultation, embarks on carrying out the policy with his first statement no less than two weeks after he issued the Green Paper. Is that his idea of a Green Paper and consultation? That is also a pointer to the shape of things to come from the Green Paper. So far we have been given no figures from the right hon. Gentleman’s policy document, after the most important review of the welfare state for 40 years, except for two. One is a £500 million cut in housing benefit, and now we have a £175 million cut in child benefit. It does not exactly fill us with a great deal of confidence as we await the rest.

It is our contention in this debate that the Government’s family policy—if I can dignify it with that title is fundamentally flawed and misconceived. In seeking to justify the cut, the Prime Minister argued on 20 June that the alternative to raising tax thresholds is

“of particular benefit to families”. [Official Report, 20 June 1985; Vol. 81, c. 433.]

It cannot be said too often and too strongly that that is absolutely wrong. An increase in tax thresholds gives most money to the highest paid and least to the low-paid lifted out of tax, while the half a million working families with children below the tax threshold gain absolutely nothing. An increase in child benefit, on the other hand, is pound for pound a far more discriminating way of assisting families and concentrating help on low-paid families in need.
​

Even the Government’s Green Paper accepts, at paragraph 4.44, that

“Child benefit is simple, well understood and popular.”

Yet, perversely, the Government now want to give higher priority to family income supplement, which is complicated, poorly understood and unpopular, and moreover, worsens the poverty trap. Not only that, but the problems associated with FIS will be compounded by the shift to the proposed family credit scheme. In particular, not only will payment through the pay packet be used. I suspect, to subsidise low-pay employers, but the benefit is less likely to be spent on the children, and the take-up could be reduced still further.

Last November the Government clawed back £1 a week from pensioners on supplementary benefit who were getting heating allowances. This June they are clawing back £1 a week from families with three children. That cut further threatens the diet and health of children, especially since the Government have already withdrawn school milk and run down school meals, when one third of all children in our society are in families living either at or only just above the Government’s own poverty line. It is not a policy for families; it is a policy for cutbacks at the expense of families. Because 7 million mothers and 12 million children will lose, I earnestly and unhesitatingly request every Member of the House who cares about families to vote for our motion.

Below is the text of the speech made by Michael Meacher, then then Shadow Secretary of State for Social Services, in the House of Commons on 3 June 1985.

Is the Secretary of State aware that, behind all the rhetoric about restructuring, this statement represents the erosion of the fundamental principle of a welfare state for all citizens? [Interruption.]

Mr. Speaker

Order. The Secretary of State was given a fair hearing.

Mr. Meacher

Is the Secretary of State further aware that the statement represents the reintroduction, for the first time this century, of Victorian values in an invidious distinction between deserving and undeserving poor? Is he also aware that this package as a whole will bring about a net loss in the next few years to pensioners and the unemployed of at least £1,000 million a year even before the huge losses from the abolition of SERPS begin, and that the main beneficiaries, whom he did not mention, will be the rich, who will receive even bigger tax handouts in future Tory Budgets?

We welcome the Government’s limited reprieve on SERPS, in response to our demand.[Interruption.]

Mr. Speaker

Order. We have a full day ahead of us.

Mr. Meacher

It is patently clear that the Government lost their nerve after their original intention had been made clear in repeated leaks. Is the Secretary of State aware that the Government’s longer-term abolition of SERPS, which is the central arch of the welfare state, is still a betrayal of an unequivocal pledge by the Prime Minister three weeks before the last general election, when she said:

“nor are there any plans to change the earnings-related component of the State pension.”

Is the Secretary of State aware that if SERPS were to continue it would roughly double the pension in the next 13 years, and that if it is abolished millions who would have enjoyed dignity and security without a means test in retirement will be forced into poverty? How does the Secretary of State justify the fact that women, low-paid workers, and the longer-term sick and disabled and the millions of carers who look after them will be shifted compulsorily into private schemes to which they will be forced to make higher contributions for less benefit?

Is the Secretary of State aware that there can be no justification for claiming that SERPS cannot be afforded in the next century, when the Government’s own Social Security Advisory Committee said explicitly less than two years ago:

“At this distance of time we do not think there can be solid grounds for altering the scheme now for fear of all the worst outcomes occurring steadily for 40 years.”

Is the Secretary of State aware that any allegations that SERPS cannot be afforded reflect not adverse demographic trends but an admission that the Government’s policies will lead to longer-term economic stagnation?
Secondly, is the Secretary of State aware that the huge cuts in the housing benefit package will bring a loss to tenants of about £750 million a year, forcing up rents for ​ tens of thousands by £7 to £12 a week? Is he aware that the poverty trap will be enormously intensified by his decision to increase the loss of housing benefit as wages rise from 38p in the pound to 70p in the pound? Is it not harshly unjust that the 7 million people receiving housing benefit, of whom 4 million are pensioners, will for the first time have to pay 20 per cent. of their rates and all of their water rates? Is he aware that nearly 2 million households now receiving housing benefit, of which the great majority are owner-occupier pensioners, especially widows with small occupational pensions, will lose it altogether?

Thirdly, this statement virtually makes the unemployed into the outcasts of society—the new undeserving poor in the Prime Minister’s vision of this new Victorian poor law. Not content with clawing back £650 million a year from the unemployed by taxing unemployment benefit for the first time over the past three years, and not content with ending, three years ago, the earnings-related supplement to unemployment benefit, worth £16 a week to an average paid worker, the Government are now proposing to force the unemployed on to the lowest rate of the new income support scheme. Is the Secretary of State aware that that will take about £5 a week from those who are 25 or younger, will deprive them of all help with heating bills and of single payments for clothing and furniture, will force them, for the first time, to pay 20 per cent. of then-rates and all of their water rates, and will replace the present basic benefit safety net by a discretionary and recoverable loan? The Government have trebled unemployment. With these cuts, they are now gratuitously twisting the knife in their victims.

Fourthly, families across the nation will be hit. Will the Secretary of State confirm that child benefit will be frozen or uprated by less than inflation, so that the benefit for 7 million mothers and 12 million children will begin to decline in real value? Will he confirm, too, that the new, vaunted family credit will begin to be phased out when earnings exceed £40 a week, which is lower than for the family income supplement, and that the rate of withdrawal will be 60p in the pound, which is higher than the 50p in the pound under FIS, so that the poverty trap will be worsened? Will he also confirm that benefit will be transferred from the woman to the man, which is not publicly supported, and that entitlement to free school meals and school milk will be ended? The Prime Minister has not only become the pensions snatcher — she remains the milk snatcher that she always was. Changes such as this will not strengthen family life, but will undermine it.

Fifthly, will the Secretary of State confirm that the death grant will be abolished and that the discretionary help will be available to the deceased’s relatives only on the basis of a means test? Is he aware that this means bringing back for hundreds of thousands of our poor elderly the shame and indignity of a pauper’s funeral, which no civilised society should inflict on its citizens?

This is a black day for the people of Britain — a monument to six harsh years of Thatcherite rule. The themes of this statement are more means testing, bigger cuts, penalising pensioners, the unemployed and low-paid in order to enrich still further the already rich, and the privatisation of the welfare state on the American model, which the people of this country want no more than they want the Prime Minister’s fancy for the Americanising of our hospital management. There is no shred of political mandate for the proposals, since they derive from partisan ​ committees hand-picked by a partisan Government for pre-determined ends. Today’s statement opens up the central issue which will dominate the next general election and, because the Government have profoundly misunderstood the commitment of the British people to the welfare state, it will pave the way for the election of the next Labour Government.