HC Deb 29 May 1962 vol 660 cc1179-207

(1) In section two hundred and ten of the Act of 1952 (Personal relief) for the reference to two hundred and forty pounds there shall be substituted a reference to two hundred and fifty pounds and for the references to one hundred and forty pounds there shall be substituted references to one hundred and fifty pounds.

(2) This section shall not be deemed to have required any change in the amounts deducted or repaid under section one hundred and fifty-seven (Pay as you earn) of the Act of 1952 before the twenty-second day of June, nineteen hundred and sixty-two.—[Mr. Callaghan.]

Brought up, and read the First time.

Mr. James Callaghan (Cardiff, South-East)

I beg to move, That the Clause be read a Second time.

The Chairman

It will be possible also to discuss with this Clause the new Clause—Increase of a personal relief —and the new Clause—Increase of relief in respect of children not over the age of eleven—and divide separately on the latter if that is necessary.

Mr. Callaghan

We hope that it will not be necessary to have a separate Division, Sir William, because we hope that the Government will accept the new Clause. It is with that gesture of faith, if I may repeat the words of my right hon. Friend the Member for South Shields (Mr. Ede), that I move the new Clause. Two of the Clauses have a simple purpose—to increase the personal allowance for the single man and the married man by £10, and the third seeks to increase the child allowance by the modest sum of £10.

These proposed increases do not mark any feeling that this is necessarily the appropriate figure, but the Clauses do mark our dissatisfaction with the trend of the Government's taxation policies, especially over the last seven years. This move to increase personal allowances is yet another step in a campaign to harry and hound the Chancellor until he acknowledges that his predecessors and he himself in this Budget have acted unfairly towards P.A.Y.E. taxpayers. I have followed this theme through many of my speeches on the Finance Bill and I will continue to do so, because so far we have had no acknowledgement from the Chancellor, or any other Government spokesman, that the Government recognise that the small taxpayer, the P.A.Y.E. man, is getting an unfair deal.

I do not think that any hon. Member who looks at the figures can possibly disagree with that. In 1938-39, the personal allowance for a single man stood at £100. Now, twenty-three years later, it has been increased to only £140. The allowance for a married man was £180 in the year of the war and has now been increased to only £240, an increase of just one-third. The increase in the case of the single man is 40 per cent. There were variations in those years. but, broadly speaking, the personal allowances for the married man and the single man have been increased by only an insignificant sum since 1938–39.

The child allowance has a rather better history. There were steady increases right up to 1956–57, but since 1958–59, at any rate, those allowances have been stationary.

It might be argued that we cannot afford these increases, and if that is so we would not be entitled to make them. I have no doubt that the Chancellor will say that they cannot be afforded now. But it is no use picking these items out in isolation and saying that we cannot afford them unless we have first considered them in the context of all the Budgets over a period of years. It is with that backcloth that I say that the Government have been treating the P.A.Y.E. man and the family man with a small income extremely unfairly.

The standard rate of Income Tax came down in 1959 and that cost the Chancellor £230 million. The famous or infamous Surtax is due to come down as from 1st January next, and that will cost about £83 million. I have no doubt that the Financial Secretary, who does not seem to be here at moment, will say "Ah, yes, but that was paid for by the increase in Profits Tax". In that way he will hope to wear a fig leaf to salve his conscience—but a fig leaf on the Financial Secretary is a rather indelicate subject and I will not pursue it further. But to regard the trend of Profits Tax over the last few years in that way is to get the whole trend of Government expenditure and budgeting out of context.

Profits Tax stood at 25 to 33 per cent. ranging between those two figures, right up to 1958. It was then reduced to 10 per cent. at a cost of scores of millions of pounds. It was then put up from 10 per cent, to 12½per cent and then to 15 per cent. I think that I am in order in referring to this, Sir William, because I am trying to show the Chancellor that if he had spent less and given fewer relies in that direction, he could have helped the married man and the single man, and the family man, the P.A.Y.E. taxpayer generally, much more than he has. What he has done is so to weight the scales of taxation that he has allowed the companies to have a high old time over the last few years. They have probably never had such a wonderful period of increased profits and lower taxation.

Although figures are a little tedious, I ought to put these figures on the record. In 1952–53, company profits were £2,450 million. In 1959–60, they were £3,470 million, so that company profits have increased by £1,000 million in less than ten years. But the annual taxation paid on those company profits has gone down by £48 million. One would normally expect that with a rise in income, profits would yield higher taxation revenue, but the reverse has been the case.

Because the Chancellor's financial policies have yielded less revenue to fortify his Budget at a time when companies have been even more prosperous than before, I say that company taxation has escaped extremely lightly over the last few years as a result of the Government's deliberate financial policy. In 1952–53, company taxation was £815 million, whereas in 1959–60 it was £767 million. The income of companies was up by £1,000 million and their tax was down by 6 per cent.

Making the same comparisons for the Schedule E taxpayer, it will be seen that his income as gone up by 55 per cent. whereas his tax has gone up by nearly 100 per cent. Taking the two groups, companies, on the one hand, and individual taxpayers, on the other, it cannot be disputed that company taxation has gone down substantially and individual taxation has gone up. Although there is obviously a case for giving sufficient incentive to companies actively to invest in new plant and machinery—I shall be coming to that later—I might be less scathing if there were some evidence of that, but we know that not nearly enough has been done in that direction.

Companies have had a phenomenal increase in income over the last ten years, an income which has probably never been exceeded since the Companies Act was instituted one hundred years ago. Most of the profit has been distributed in dividends. I do not wish to go into that now, but the total distributed in dividends has gone up by hundreds of millions of pounds.

I make the contrast—at a time when companies have been more profitable than ever, the Government have so organised their Budgets that companies pay less tax and the P.A.Y.E. man pays more. I propose to continue this campaign throughout the year, if we get no satisfaction in the course of this Finance Bill, to compel the Chancellor, through the sheer force and weight of public opinion, so to alter his taxation policy that the married man and the single man with a small income get higher personal allowances out of which to be able to do at least something to pay for the increased cost of living which is bearing so heavily on them now.

4.30 p.m.

The £10 increase in the allowance that we propose is a token payment. It will cost a certain amount. Oddly enough—this is a feature that I do not like—it will cost much more in the Surtax part of the range than at the lower end. The real difficulty from the Chancellor's point of view about putting up the personal allowance is that it will cost him a certain amount because he gives away not only Income Tax but also Surtax.

I should like him to investigate the possibility of having a cut-off for the personal allowances. I do not see why not. We have had no fuss in the past over the earned income relief. It was common form up to a few years ago always to have a cut-off at a certain level of income. [Interruption.] Earned income is by far the most important matter here. There are 20 million P.A.Y.E. taxpayers, and that is by far the most important aspect.

I wonder whether, to save a certain amount of revenue, and, in addition, to increase the amount of personal allowance relief where it really matters—at the point of the man earning £15 or £20 per week—the Chancellor would consider having a cut-off on the personal allowance. I wonder whether he has any figures to show how much he could save if he said, "I will increase the personal allowance up to £2,000 a year," or whatever figure he thinks appropriate. I do not see why we should not have this differential. I appreciate that the Inland Revenue will not like it, for it will mean additional work, and the Department is already very hard pressed. But that cannot always be the final consideration. The Chancellor must make arrangements to get the work done in whatever way Parliament thinks necessary.

I come back to the point that the Chancellor is not being fair to the P.A.Y.E. taxpayers. He is offsetting the relief of taxation on company profits, which has been extremely substantial, by increasing the total yield from the P.A.Y.E. taxpayers. It is high time this discrimination was corrected. I hope that the Chancellor will correct it today. If he does not, I can tell him that I shall pursue him and expose him on every possible occasion. I shall do my best to ensure that he is compelled by public opinion to help the P.A.Y.E. taxpayers in the next Budget.

Mr. Fletcher

I support what has been said by my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan). In the Finance Bill we have the one opportunity in the year to achieve some degree of financial justice between different classes of taxpayer. As my hon. Friend has said, as the law stands at present this is a montrous injustice to P.A.Y.E. taxpayers compared with other taxpayers.

My only comment on my hon. Friend's proposal is that I do not think that it goes far enough. It is very modest. It is merely that the personal allowance should be increased for a single man from £140 to £150 and for a married man from £240 to £250. I put it to the Chancellor that in view of all that has happened in recent years, in view of the reliefs given to Surtax payers, in view of the profits made by companies, I think that it is recognised generally that the single man and the married man with a family have been paying an undue burden of tax compared with other sections of the community. In view of the rise in the cost of living and the differentials which have been introduced in other spheres of taxation, it is quite absurd that the personal allowances should be left at the figures which have obtained during recent years.

The least that can be done to produce a degree of justice between the lower and the higher wage earners is to increase the personal allowances. I have not worked out what the proposal will cost the Treasury. I have no doubt that either the Chancellor or the Chief Secretary will be able to tell us. If the Chancellor says that the cost is more than he can afford in his overall Budget, then, as my hon. Friend has suggested, there are ways by which the gap can be reduced. There can be a cut-off. There can be differentials in respect of Surtax.

However, the fact that stands out preeminently in our fiscal legislation at present is that as the result of the Government's operations during their ten or eleven years in office the tax burdens of the lower income groups compared with the better-off sections of the community have increased disproportionately. An unfair proportion of taxation now falls upon those with low incomes as the result of the Government's policy. An obvious way to remedy that injustice is to increase the personal allowances. This measure is long overdue. It is merited by every social consideration and every consideration of justice. I hope that we shall hear from the Chancellor that he is prepared to accept my hon. Friend's proposal.

Mr. Frank Tomney (Hammersmith, North)

Whoever the genius was in years gone by who thought of the P.A.Y.E. system, he deserves the congratulations and thanks of the nation, because what he did at one single stroke was to provide the Inland Revenue with a basis upon which the tax assessments covering a multitude of taxpayers—20 million—can be assessed from year to year almost in advance. There was a time under our tax law when the Inland Revenue used to ask people for their tax. Now it is taken from them.

The people to whom my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) referred are those who constitute the productive backbone of the nation's industry. This a modest request—I am surprised that it is couched in such modest terms—for an increase of £10 only. An increase is long overdue.

There are many factors bearing upon the people in this tax group. Many of them cannot be assessed in the ordinary way for tax purposes. There is the effect on them, for instance, of maintaining their children at school, and there is also the ever-increasing effect upon them of the cost of travel to work, for Which no taxation allowance or compensation is made. There is an added necessity for some consideration for these people. They are the people who, by their social content, provide the balance to the fiscal side of the nation, which is lacking in the 5 per cent. at the bottom of the scale, the people who are always trying to get something for nothing from the State, and the people at the top of the scale, who are prepared to grab all they can get.

I support the point made by my hon. Friend with regard to Profits Tax, and so on. If one has a private sector economy it is necessary to tax profits according to a schedule which will benefit industry. But it is also necessary to ensure that the persons who provide those profits receive common justice. In this way, the Chancellor has year after year fallen down in respect of these assessments. I have the greatest pleasure in joining my hon. Friend in asking the Chancellor to accept his modest proposal.

Something must be done to counterbalance the ever-growing charges on a person's income against which he cannot Claim, but which, nevertheless, constitute a real burden to him and which, in the long run, represent an increasing demand upon him. Sometimes a man is unable to meet these demands in the strict sense. This burden should be shared a little more equally as between industry and the Treasury. The margin of profitability, particularly in marginal industries which are necessary in making exports, for capital turnover or providing employment should be shared equally and more fairly by tax concessions of this kind to the people who really need them.

Mr. Archie Manuel (Central Ayrshire)

I, too, have great pleasure in supporting the new Clause. I compliment my hon. Friends who put down this series of Clauses. We should thank my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) very much for the overwhelming case which he has made for greater personal relief for the lower income groups. My hon. Friend indicated clearly that there is unfairness in the allocation of relief under existing taxation procedures. I cannot imagine that the Chancellor of the Exchequer will find it easy to be firm and rocklike in resolving not to accept the principle enunciated by my hon. Friend.

We continually hear the plea that we will not get much further forward as a nation unless we do all we can to increase the output of our factories, to build more ships in our shipyards, and so on. The incentives so far provided by the Chancellor to achieve this expansion have been given at the wrong end of the income scale.

When the Surtax payers were afforded a further £83 million relief on 1st January, the only argument that we were given was that this would help exports and would make it worth while for people at those income levels to get a better return from industry through their directorships and salaries. We heard not a word about the importance of the man at the bench, the young fellow who wanted to provide a home so that he could get marriedamp—the single man of whom my hon. Friend the Member for Cardiff, South-East spoke when claiming this meagre relief for which we ask. I agree that this is merely a token gesture to get the principle established.

My hon. Friend proved overwhelmingly that his case cannot be brushed aside. If it is said that taxation reliefs are dealt with fairly, the figures provided by my hon. Friend—showing the vast increase which has occurred in company profits and the smaller amount of Income Tax now paid by these companies, as against the far greater sums now being deducted from P.A.Y.E. payers—amply demonstrate that we have reached a time when something must be done concerning taxation reliefs.

We are continually being told that the major economic difficulties of the nation will be solved only with the help of those at the top end of the salary scales and by the companies which make vast profits, by appealing to them to obtain greater stability and to increase exports. There is, however, another side to the coin. The Chancellor must recognise the supreme connection in expansion between directorships and the young man at the bench—the young fellow who, for example, has served his apprenticeship, is earning his journey-manship and is starting to save to provide a home of his own. The token £10 additional relief to the classes indicated by my hon. Friend the Member for Cardiff, South-East should be gladly conceded by the Chancellor as an indication that the Government sincerely desire better relations in industry in augmenting exports.

4.45 p.m.

Mr. F. J. Bellenger (Bassetlaw)

When the Chief Secretary replies, perhaps he will explain why the figures of £240 for married couples and £140 for single people ever appeared in a Finance Act. Do they represent the cost of married or single life? If they are token sums, I understand them.

I was a Member of the House before the Chief Secretary and I know the origin of P.A.Y.E. during the war. It was introduced, I believe, by Sir Kingsley Wood. I have nothing to say about P.A.Y.E. except that it imposes upon employers the burden of collecting taxes for the Inland Revenue. That was an acceptable arrangement during the war, but I am not so sure that it is equally acceptable today. The imposition of this duty upon big employers means the payment of large sums of money in the expense of collecting these taxes, for which the Inland Revenue has to allow under Schedule D. I am more concerned, however, with the reason for the figures of £240 and £140.

My hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) proposes what he calls a token increase of £10 in both cases. I do not consider that figure sufficient, but it all depends upon how one argues the case. If it is argued that the £240 and £140 are merely figures which a former or the present Chancellor regarded as giving, I was going to say a little bit of fat, but recognition that a man is married or single, I understand them. If, however, they are figures which represent the cost of married or single life, they are out of all proportion.

I have no doubt that acceptance of the new Clause would cost the Chancellor a lot of money. It is, however, a question of priorities. Therefore, when the Chief Secretary replies, he must indicate whether he considers that the whole line of allowances should be concentrated on the essence of life as we understand it, and particularly married life, in which I and, no doubt, the Chief Secretary are mainly concerned and in which we have to declare an interest.

We want from the Chief Secretary not the cost to the Inland Revenue of the £10 token increase, but an explanation of the Government's thinking in the granting of allowances to alleviate the burdens which come upon individuals who have to pay tax. Against that background we can judge the other new Clauses and assess whether the Government are doing their best, as in their propaganda they claim to have been doing, to alleviate the great burden of taxation upon individuals.

Mr. Percy Holman (Bethnal Green)

Last year, by a similar new Clause, some of us pleaded with the Chancellor of the Exchequer to raise the allowance from £240 to ampamp£250 for married couples on the ground that the cost of living had gone up approximately four points and that would leave them in exactly the same position as they were in twelve months' earlier. Since then the cost of living has gone up by a further five, nearly six, points. So the concession for which we are asking today is totally inadequate to represent the change in the value of money during the past two years. Today, £260 would barely be as much as £240 was two years ago.

In the fifteen years of my political life I have always believed that these personal allowances were meant to cover the basic elemental needs people have for food, a little for rent, a little for heating, but nothing much besides. On that basis, the allowances left as they are today affect very seriously the lower income groups. They do not affect Members of Parliament very much. What is an extra £10 or £50 allowance to those in the higher income groups? They materially affect the lower income groups, however, and certain groups of white-collar workers who find each year that the basic necessities are rising in price while their wages and salaries have not gone up proportionately with those of many other groups in industry, nor with the cost of living.

I know clerks who are seriously affected by the steady increase in prices while their increments are very much less than those increases. These little adjustments, as I call them, which, in our suggestion, would be totally inadequate today, ought to have amounted to at least £260 instead of £240. Nevertheless, this would be a gesture which would cost relatively little in a Budget which is almost self-supporting. The Chief Secretary should deal with this basic essential point which would materially help those in the greatest need.

Mr. Norman Dodds (Erith and Crayford)

I hope that the Government will show at long last that they are taking heed of the appeals made from this side of the Committee on behalf of the lower income groups. My hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) will be doing a public duty if he pursues relentlessly the path he has taken in these debates. For years the Government have been transferring wealth and the lower income groups have been having a very bad time.

I hope that the Chief Secretary will show some appreciation of the work which is being put in by my hon. Friend. The proposals which he put forward were for only token personal reliefs. No one knows better than the Financial Secretary that the Government are in a terrible mess. Slowly but surely people throughout the length and breadth of the land—it matters not whether they are in industry or in agriculture—are realising this fact. I hope that the Minister's P.P.S. will be having a word with him about the growls and grumbles which are being heard because the Government seem to have no time whatever for the lower income groups. Here is a face-saver which would last at least for a week or so if these proposals were accepted.

I ask the Minister to take heed of the warnings given in the last week or two about the rapidly increasing cost of living, which will bear very heavily indeed on lower income groups. A few days ago Oxford University gave figures showing that a family of five with very moderate needs found that the cost of food had gone up on average by 6s. 7d. a week. If they accepted these proposals, the Government would show the people that they have some concern for those in the lower income groups as well as for those who are Surtax payers.

I ask not only that this new Clause should be accepted, but that some expresssion of gratitude should be made to my hon. Friend, because, although this would be only a token, it would indicate that we appreciate how, in a difficult period, the finances of the country have to be carefully watched but the lower income groups should be considered. I hope that there will be an expression of sympathy for the millions who are having a very difficult time.

If the Minister had seen the editorial in the Evening News on Monday night—and that paper is certainly not a supporter of the Labour Party—he would have seen that "the storm signals can be plainly seen" about the increasing cost of living. A writer in the newspaper said:" It gives me no pleasure to see Tory seats with 8,000 or 10,000 majorities being captured by the Liberals. Before it is too late, will the Government wake up and help the ordinary people if they want their votes?"

The Chief Secretary to the Treasury and Paymaster-General (Mr. Henry Brooke)

Probably the most helpful thing would be far me to state in the first instance some of the difficulties involved in this matter.

I was asked by the right hon. Member for Bassetlaw (Mr. Ballenger) what was the justification for fixing these personal allowances at any particular paint. The justification for this was not, as he perhaps suggested, that the figures of £140 or £240 were thought of by Governments as sums upon which a single person or a married couple could live. They are part of a complex system which is designed so to shade the amount of Income Tax at different income levels as to be fair throughout. The right hon. Member will appreciate that there are not only these personal allowances of which we are speaking, but also reduced rates of tax which operate for bands of income above the personal allowance level.

The amounts involved here, if the Committee were to accept this new Clause, would be, under new Clause 2 £34 million a year in respect of raising the £240 limit for a married couple to £250, £30 million a year in respect of raising the £140 for a single person to £150, and, in respect of new Clause 4 —which we are discussing at the same time—there would be another £20 million in a full year. That amounts to £84 million altogether. It would be quite impossible for my right hon. and learned Friend to contemplate a reduction of revenue of that character in this year when he has made clear in his Budget statement and throughout our Budget debates that this is not a year in which he considers, in view of the state of the national economy, that it would be appropriate to reduce taxation by massive amounts of that character.

These questions of personal allowances are very important. It is most desirable that we should discuss them from time to time. The Conservative Government have over the years shown interest in them, by the substantial their interest in them, their practical increases they have already given. The hon. Member for Cardiff, South-East (Mr. Callaghan) criticised the fact that they had not been increased by more than they actually have since 1938–39. The fact remains that practically all the increase has been due to Conservative Chancellors of the Exchequer. If one compares the present situation with that Which existed under the last Budget of a Socialist Government and takes as the basis the amounts of these personal allowances in 1938–39, which was the basis the hon. Member for Cardiff, South-East took, we find the following. The increase for a married man over 1938–39, which was 5 per cent. when the Labour Government fell, is now 331 per cent. and in the case of a single person the increase over 1938–39, which was 10 per cent. when the Labour Government fell, is now 40 per cent. Indeed, there has been a remarkable improvement under both of these heads during the years, and if I may refer to new Clause 4 for a moment, on three separate occasions the Conservative Government have substantially increased the arrangements for child allowances.

5.0 p.m.

Mr. Callaghan

As the Chief Secretary is comparing and contrasting the records of Governments, which I did not do, would he not complete the picture by saying that when the Labour Government came into power the personal allowance was £80 for a single man and that they put it up in a period of extreme financial difficulty to £110, and that the married man's allowance was £140 which they put up to £190? Therefore, the difference is not very great. In fact, the Labour Government increased the single man's allowance by £30 in five years and the Tory Government have managed to put it up another £30 in 10 years. The Labour Government put up the married man's allowance by £40 in five years and the Tories have managed to put it up by £60 in 10 years. If the right hon. Gentleman wants to make that cheap sort of comparison—which I did not make, but contrasted the total level of tax on persons and companies, on the one hand, and, on the other, the level of allowances before and after the war—he might at least give the figures which the Labour Government found when they came to power.

Mr. Brooke

I do not think it was I who introduced party politics into this matter. I do not dispute the figures which the hon. Member has just given, but if he wants the picture completed it should be said that under the Labour Government Income Tax was reduced by a net amount of 6d. and under the Conservative Government it has been reduced by Is. 9d.;all these matters have to be taken into account.

The hon. Member for Bethnal Green (Mr. Holman) and other hon. Members have referred to the cost of living. In this Finance Bill, in Clause 8, we have made special tax reductions for some of those classes most hit by the rising cost of living, but the way to offset the hardship caused by the rising cost of living is for the Opposition to set its face against policies that would involve large increases of expenditure and to give full support to the Government's incomes policy, because it is principally through increases in wages and salaries outrunning the rate of production that the cost of living has been rising.

The hon. Gentleman referred to company taxes and quoted certain figures. I hope he will forgive me if I concentrate mainly on the new Clauses, because I was not sure whether he was sufficiently taking into account in his statement that there was a radical change in the whole system of Profits Tax four years ago. In fact, under the old system, in the last year when Profits Tax was charged, if I remember rightly, at 3 per cent. on undistributed profits and at 30 per cent. on distributed profits, the yield of the tax was £255 million, whereas this year, when there is a flat rate of Profit Tax of 15 per cent., the yield of the tax is estimated to be no less than £374 million.

It is all very well for hon. Members to insinuate that companies are lightly taxed, but the fact remains that the combined effect of Profits Tax and Income Tax on the profits of companies is a tax at the rate of 53¾per cent. I do not think that many people who have any concern with the running of a business, whether private or public, will be the more disposed to vote for Labour candidates after hearing the official Opposition saying that companies in this country are lightly taxed.

The situation which we have had for a long time in this country is a system of taxation which, so far as individuals are concerned, has borne very heavily on the wealthy and very lightly on those on small incomes. If I may quote an entirely independent source in support of that statement, I have in front of me the March, 1961, issue of the National Institute of Economic and Social Research's Economic Review, which is certainly not under the Government's control, in which a very interesting article compares the tax systems of ourselves and of a number of other countries on the Continent and across the Atlantic. I will read one sentence: Britain taxes the poor lightly and the middle and upper income groups heavily. That is the answer to these allegations that under our system of taxation those who are living on small incomes are unduly mulcted. The fact is that if we compare the line of our Income Tax on different incomes at different levels with a similar line based on the tax system of almost any other country of the world, it will be seen that our Income Tax falls lightly on small incomes and much more heavily on the large incomes.

Mr. Manuel

Would not the right hon. Gentleman agree that it all depends how one looks at these things? I look at what we have left after the tax is taken off, and my friends have very little left, while the right hon. Gentleman's friends have a great deal left.

Mr. Brooke

If the hon. Member looks at the matter upside down, then it will look like that, but I do assure him that he can examine the independent findings of all kinds of people who have no connection with the British Government and that they will confirm that direct taxation on people with small incomes in this country is relatively low.

Hon. Members

No.

Mr. Callaghan

That is not what was said. What was said was that this is fairer because it is much more progressive than in Continental countries. That is true, but my complaint is that the Government are destroying the fairness by their present policies.

Mr. Brooke

I certainly do not withdraw anything I have said. My point here is that, of course, we have to examine the personal allowances along with the standard rate, of Income Tax, the reduced rates and the size of the bands to which the reduced rates apply, and this Government has shown in the most practical terms in the last 10 years its interest in reducing taxation, an interest which is greater than that of any other party, to judge from the party policies of the other parties, and the additional expenditure which they would involve, because all that expenditure has to be met out of taxation. If hon. and right hon. Gentlemen opposite were responsible, they would find how difficult it was to meet greatly increased expenditure, while keeping the level of direct taxation unchanged.

To come back to the new Clause now before us, it would be quite inconsistent with my right hon. and learned Friend's judgment on what is suitable for the management of the economy at the moment if he were in this Budget to concede substantial reductions of taxation. Unfortunately, and I use that word deliberately, increases in the personal allowances cost a lot of money, and if what hon. Members opposite suggest were adopted, and we had a cut-off somewhere, they would have to have the cut-off very low down if it were to make any real difference to the cost. It all depends on what result one wishes to achieve, and, quite clearly, a large number of taxpayers, under P.A.Y.E. and otherwise, are concentrated in the lower part of the range. Therefore, whatever arrangements one makes, one cannot enact a £10 increase in one of the personal allowances without its involving a very considerable loss of tax revenue. I have given the figures. If these two Clauses were adopted, it would involve a loss of tax revenue of no less than £84 million a year, and that is far more than my right hon. and learned Friend could agree to. In these circumstances I have no choice but to advise the Committee to reject the Clause.

Mr. Callaghan

The Chief Secretary says that he has no choice, but he has a choice. He has chosen to exercise it. It will not have escaped the attention of the Committee that the total cost of these concessions at £84 million is within £1 million of the cost of the Surtax relief. The right hon. Gentleman has made his Choice.

Mr. A. R. Wise (Rugby)

We have had that five times.

Mr. Callaghan

The hon. Gentleman will have it another twenty-five times. He will hear it another 500 times during the next year, because he does not seem to have realized—indeed, I do not think that he has been in the Committee very long—what the debate is about. The debate is about a matter of fairness and a matter of equal distribution of taxation. I am saying that the Chief Secretary has a choice. It is wrong of him to say that he has not a choice. He has a choice to make today between the Surtax payers and the people of whom we are speaking. He has made his choice. He has chosen the Surtax payers.

Mr. Brooke

Is the hon. Gentleman proposing that the Surtax concessions should be repealed and that the increase in Profits Tax which pays for the Surtax concessions should be repealed at the same time?

Mr. Callaghan

If I proposed that I should be out of order. I will return to that point later. The right hon. Gentleman knows that I would be out of order. It is a remarkable coincidence that there is this close correlation between the Income Tax reliefs which could have been given to P.A.Y.E. taxpayers and the Surtax reliefs which the Government have chosen to give.

I have no hesitation in saying that a Labour Chancellor of the Exchequer, confronted with the same situation, would have given the reliefs to the P.A.Y.E. taxpayer. He is the man who is being hard hit. He is the man whom the cost of living is affecting. He is the man who finds the cost of food, clothing, shoes, rent and beer going up week by week. This is where the relief ought to come, and this is the whole difference between the two sides of the Committee.

The Chief Secretary has made his choice. He is entitled to do that, but he is not entitled to say, "I have no choice but to resist this". He has a choice. He has made it. I say that I differ from him in the choice he has made. It is for this reason that I shall pursue this campaign. During the next twelve months I am determined to make the people of this country understand the position. The Chancellor could have given the reliefs by now, but as he has not chosen to do so we shall compel him, in so far as public opinion can have any effect on the Government's thinking, before the next Budget is out to face a rising tide of public opinion, because what I am concerned about is relative fairness.

It is not true to say, as the Chief Secretary said, that the poor are lightly taxed in this country whereas on the Continent they are more heavily taxed. The whole point about our taxation system and one of which we were very proud and one which, in all fairness, Conservative Governments helped to do something about before the war, was that through this series of steps and the personal allowances there was a progressive system of taxation which operated as fairly as possible.

5.15 p.m.

What I am complaining about is this. I must repeat the complaint. During the last ten years the Government have departed from their own canons of fairness in order to relieve companies of a far greater proportion of tax than they should have done. How can anyone justify to me that, although the profits of companies have risen by £1,000 million in the last ten years, the total amount of Income Tax and Profits Tax paid by them is less? Is there any normal hon. Member sitting in the Committee today who, if he had had an increase of £1,000 in his income, would not have been paying more tax, unless he were a big Surtax payer? But the whole group of companies, earning £1,000 million more in profits, pay £48 million a year less in tax.

The Chief Secretary said that we had forgotten the recasting of the structure of Profits Tax. Indeed, I have not. It was 25 per cent. it rose to 30 per cent., it mounted to 33 per cent, under the present Government, it was then reduced to 10 per cent., and it has gone up by two successive steps to 12½per cent. and 15 per cent. The right hon. Gentleman tries to justify the reduction of Surtax on this basis, but the fact remains that less is being paid in Profits Tax today by these companies than was being paid ten years ago. Although their profits are £1,000 million higher than they were, they pay less in Income Tax and Profits Tax.

The Committee should probe this matter much more closely than we have done so far, because the Chancellor has pulled the wool over the eyes of many people by saying that he cannot afford these reliefs. If there were a fair distribution of taxation, he would be able to. I am not asking for a penal system of taxation. All I am asking for is that these groups should pay their fair share of taxation. I say that in times of rising Government expenditure they, too, should contribute, as the P.A.Y.E. taxpayer has had to contribute. That is all I am asking. It is not an unfair request.

The Chief Secretary said that the Opposition would find it very difficult to get rates and tax down with mounting Government expenditure. He should know. It is his task to try to do it. I remind him, as he has brought this fact to our notice, that in 1958–59 the Prime Minister told the country that if they voted for the Socialists they would find that expenditure would rise by £1,000 million in five years. "Do not vote for them", he said. The Chancellor has managed to put up expenditure by £1,000 million in three and a half years. Do not vote for the Tories next time! I must say that I get very impatient with this sort of party poppycock emanating, as it does, from people who, like the Prime Minister, should know better and should be able to put their case on a different basis.

Naturally I agree that it is going to be difficult, but there are big things which the country has to do. I am absolutely positive that if everybody in the country is to assent to make the effort that is needed there must be a conviction that there is fair play. There must be a conviction that as between one group and another and as between one sector of the economy and another no one is being asked to bear an unfair burden.

My complaint against the Government is this. The right hon. Gentleman asked us to support the incomes policy. It was a very rough and ragged affair to support. The simple truth is, as has been brought out more than once in Questions, that in the very year in which the Chancellor introduces an incomes policy the cost of living is allowed to mount at a record rate. In no single period of ten months since the new index was introduced did the cost of living go up faster than it has gone up in the past ten months. The Chancellor is asking people to accept, as he has said in speeches and in Answers, a real cut in their standard of living at a time when many sections of people, and certainly the companies with their taxation record over the last ten years, are not bearing any cuts in their standard of living but are doing very well indeed. It is the sense of unfairness that I intend to fight against.

I was very alarmed at what the Chief Secretary had to say about the Continental system of taxation. If we are not careful we shall have them shovelling indirect taxation more and more on to the shoulders of the people who are least able to afford it. I admit that there is a case for regrading the rates, but I shall fight against any attempt to put a heavier burden upon the shoulders of those least able to bear it. We are all proud of the fairness of the British taxation system. It has been a wonderfully fair system in the past. Hon. Members opposite have been assisting and conniving in the breaking up of the fairness of that system by their record since 1956, and I hope that my hon. Friends will not allow them to get away with this.

Mr. Fletcher

I have never heard a more miserable speech than that made by the Chief Secretary a few moments ago. I endorse everything that my hon. Friend has said. I hope that the Chancellor will pay heed to the burden of the criticisms being made against him, against the Chief Secretary and against the Government for their refusal to listen to the representations being made in support of the new Clause.

The Chief Secretary quoted from a document and appeared to draw the inference that in some Continental countries there was an even more unfair system of taxation as between the lower-paid and the higher-paid sections of the community than was the case in this country. He did not itemise the countries where the unfairness was greater, and I should like to know where they are.

Even if there are some, does the Chief Secretary really wish to take any credit for that? Is he proud of the fact that there are some countries in Europe in which there is a greater discrimination against the lower-paid sections of the community than there is against the higher-paid sections? Does not he realise that the success of any community, in Europe or elsewhere, must depend in the long run upon a fair and just basis of taxation? Does not he realise, if he examines the matter in his heart—and does not the Chancellor also realise this—that during the last ten or eleven years, under a Tory Government, the extremes of wealth and hardship in this country have increased? Whereas it was the record of the Labour Government to try to produce less inequality and more equality, and less extremism in respect of wealth, during the last ten or eleven years, as every disinterested person will agree, there has been a tendency towards increased discrimination between those who are well off and have a large spendable income, and are able to indulge in luxuries, and those living on a low margin of income.

Does not the Chief Secretary realise that the policy which ought to actuate any Government interested in securing a socially contented community—one which is able, because of its contentment, to strive and prosper and act in unison, in competition with its European cornpetitors—is to have a just and fair basis of taxation? Does not the Minister realise that the present discontent with the Government, not only in this House but in the country—as evidenced by by-elections and by all the people who lobby us—is due to the fact that it is now recognised that the Government seem bent upon increasing the disadvantages to the lower-paid sections of the community as compared with those who are better off?

This Government have given reliefs year by year to Surtax payers and others at the expense of those who have to pay tax under the P.A.Y.E. system. That is why discontent exists among nurses, teachers, probation officers and the rest. Here, in the Finance Bill, is an opportunity that recurs annually to try to redress the balance. Does not the Minister realise that he has made a grave mistake; that he and the Chancellor have not only done nothing to repair the inequality, but, on the contrary, have stressed and exaggerated it by their whole fiscal policy?

I do not believe that the Chief Secretary or the Chancellor is really proud of what he has done. It is not only economically stupid, it is politically dangerous and disastrous. The Government will suffer the penalty for it when the General Election comes, as they are now suffering in the by-elections. In their own interest, leaving aside the interests of the country and the community, cannot they reconsider their policies and pay some heed to what my hon. Friends have said? The discussion on the Finance Bill in Committee provides a unique occasion to examine the whole basis upon which taxation is distributed among the various sections of the community.

It is completely irrelevant for the Chancellor or the Chief Secretary to talk about an incomes policy, the pay pause, or increases in the volume of taxation; we are not concerned with that. That is a matter for separate debate. We are now concerned with the fact that, whatever may be the total level of taxation or the total volume of taxation that it is right that the State should exact from the taxpayers to pay for the national services of one kind or another, the total burden should be fairly and equitably distributed among the various sections of the community, and should be seen to be fairly distributed.

It is notorious that in recent years those on small salaries, who have to pay Income Tax under the P.A.Y.E. system, have been unfairly burdened as compared with other taxpayers and Surtax payers, including company taxpayers. I should have thought that it was pushing at an open door to argue this. It is completely irrelevant for the Chancellor to talk about the cost of these proposals, because, if it is right—and it must now be axiomatic—that this reform is essential in order to produce not complete equality and justice but a greater measure of it than now obtains, whatever the cost may be it should be redistributed among other taxpayers.

The policy of the Government has been to increase indirect taxation at the expense of direct taxation. Personal allowances that may have been relevant years ago have now ceased to be relevant, and to the extent that the burden of indirect taxation and the cost of living rises, the injustice of maintaining the old, out-of-date personal allowances becomes an increasing burden on the lowest class of taxpayer. That is what we are trying to urge upon the Chancellor, whether or not he is taking any notice of it.

I hope that he and the Chief Secretary will not sit there in their places with their stony-hearted, flinty glares, apparently completely irresponsive to the arguments that are being adduced. What is the object of our discussing these matters in Committee on the Finance Bill unless we have some kind of intelligent glimmer of response from the Chancellor and the Chief Secretary? This afternoon we have had a miserable reply, and I hope that this will not be the end of the matter. If that is the policy on which the Government are to stand in the by-elections they are even more doomed to destruction than the results of recent by-elections indicate.

This is the acid test of their policy. If they think that it is clever to go on making concession after concession to a very limited range of Surtax payers they can expect hordes of nurses, teachers, probation officers and the rest of the community to rise up in arms, not only against their incompetence, which is bad enough, but against their injustice and their miserable standards of honesty and fairness. I hope that before we finish with the Clause the whole Committee will rise in righteous indignation against this attitude.

5.30 p.m.

Sir Henry d'Avigdor-Goldsmid (Walsall, South)

We have had a great deal of talk this afternoon about fairness, and I wonder whether hon. Members realize—I know that the hon. Member for Cardiff, South-East (Mr. Callaghan) realizes—that every hon. Member in the Committee is likely to benefit far more personally if we accept these Clauses than a number of the taxpayers about whom we have been talking. If hon. Members are in the fortunate position of paying Surtax, and perhaps a high rate of Surtax, they will benefit even more. So I think that this is a blunt instrument which is being applied—

Mr. Callaghan

There should be a cut-off Clause.

Sir H. d'Avigdor-Goldsmid

I heard what the hon. Gentleman said, that there should be a cut-off Clause. That was the phrase he used. But I am discussing the proposed Clause.

We have had a lot of information about the time which was devoted to the Clause and the great attention which was paid to it before it was put down and somehow the figure happened to work out at £84 million. I feel that this Clause would have been valuable if brought in as a sort of manuscript Amendment. The suggestion is that we give £84 million back to the taxpayers. But it would go to those taxpayers paying the highest rate of tax. That is absolutely and utterly incontrovertible. More than that, it would affect not at all the large section of the population which pays no tax. First, there would be no relief for people who do not pay tax, and secondly the maximum relief would go to those who are most fortunate in their incomes. If that be the sort of fairness we are asked to support, I have no hesitation whatever in considering that my right hon. and learned Friend is absolutely right.

Mr. Callaghan

That is one of the most specious arguments which I have heard for a long time, and the hon. Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) knows it. If what he says is correct he should have voted against all the increases in personal reliefs about which the Chief Secretary to the Treasury was boasting. But I do not remember the hon. Gentleman doing that. I will make this offer to him. I acknowledge the technical difficulties regarding this Clause. If he will assist me in drafting a cut-off Clause and march with me through the Lobbies on Report stage, I will draft a cut-off Clause with his support and we can become Tellers together. Will the hon. Gentleman help me?

Mr. William Ross (Kilmarnock)

I hope the hon. Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) will take advantage of the fact that this is the Committee stage and reply to the offer made by my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan). The hon. Member for Walsall, South did make a specious speech. He does not like blunt instruments. He prefers sharp ones. When there was a proposal in the last Finance Bill to give this £84 million to Surtax payers, without a single penny for the people about whom he is concerned today, the hon. Gentleman did not offer a single word of criticism. He accepted it with both hands—with the Lobbies outside crowded with hard-up Surtax payers; with processions down Whitehall of Surtax-paying exporters who said they could not export because they had not sufficient relief. We do not need to have Surtax payers in the Lobbies outside. We have them here in the Chamber in places where they matter. If the hon. Gentleman were honest in what he said, he would have objected to what the Chancellor did last year and would have insisted that this year he put a stop to it in view of the present situation which demands a pay pause.

What do we suggest? We suggest that we do belated justice to the people at the bottom of the scale. No one can quibble with the figures presented by my hon. Friend. They are startling. In 1938 personal relief for a single man was £100. Today it is only £140. Perhaps the Chief Secretary can tell me what is the present-day value of a pre-war income of £100. Before the war, in 1938, the relief far a married couple was £180. Today it is £240. No one, on the face of those simple figures, can state that what we are demanding is anything other than simple justice. This is what happened, and it is happening again this year. We may be able to stop nurses from getting pay increases, but we are unable to stop other people covered by cost of living agreements. In factories in Kilmarnock, in the boot and shoe industry, there are people on this basis. As soon as the cost of living moves up a paint or two automatically they get an increase in their wages. People at the bottom of the scale may soon find that without having had more than a rise to meet the rise in the cost of living they will be paying Income Tax. Others already paying tax will have to pay more. That is the Income Tax cheat which has gone on, while the Government ignore the fact, or do not conceal from the public, that just by keeping up personal incomes whenever wages rise to meet the cost of living automatically more tax is drawn in, and from the poorest sections of the population.

If the Government are able in one year to give away £84 million, it makes it impossible, if they are faced with certain Budget-balancing exercises, to give justice to the people. People at one end of the scale are paying for people at the other, and there is no justice in that. The Chancellor has appealed to the nation in relation to the pay pause, but that appeal fails completely, because this is one of the most blatant things the Government have done. We are asked not to undermine that appeal by the Tory Government to the people. But how can we defend that policy when we are faced with the fact that the Government are prepared to give benefit to the extent of £84 million to people who are far better off than those who are being hit by rising costs?

The Government must face the dilemma in which they find themselves and which is caused by pressure from hon. Members on the back benches opposite in relation to those in receipt of company profits. The figures were quoted by my hon. Friend and they have not been refuted. Taking Income Tax and Profits Tax together, these people are paying less in direct taxation today than during the last ten years. That does not lead to a sense of justice or fairness. The Government are trying to appeal to the hard core of Tory financial support and at the same time they are trying to appeal to the country. But they cannot serve two masters.

I hope that my hon. Friends will pursue this debate, which I consider absolutely vital. It displays the true interests served by hon. Members opposite in matters of finance. This is where we make clear how they have been using

Budgets and Finance Bills over the years to suit their own ends. There is no doubt about it. This country is less socially healthy today than ten years ago. I refer to the nation, as between one section of the public and another. The hon. Gentleman is rather like the Prime Minister who at times looks across the wide horizons of the country and sees whatever he wants to see for the purpose of the peroration to any particular speech he may be making.

A year ago the Prime Minister was telling us that there was more than a spread of materialism in the country. When he was opening a garden fete in Scotland he said that he thought from what he saw in the country that we were on the eve of a great religious revival. Within a month he was talking of juvenile delinquents and the spread of materialism and things detrimental to the true interests of the nation. I wish hon. and right hon. Members opposite would forget their beer and gaming laws and all the rest and try to do something nationally by means of a fair system of taxation. Until they regret the errors of last year in the Surtax promise that they made, and until they fasten themselves to the reality of the unfairness which has been developing towards the lower-paid workers, the country will continue to distrust them.

Question put, That the Clause be read a Second time:—

The Committee divided: Ayes 176, Noes 250.

Jones, Jack (Rotherham) Owen, Will Steele, Thomas
Jones, J. Idwal (Wrexham) Padley, W. E. Stewart, Michael (Fulham)
Jones, T. W. (Merioneth) Pannell, Charles (Leeds, W.) Stonehouse, John.
Kelley, Richard Pargiter, G. A. Stones, William
Kenyon, Clifford Parker, John Strachey, Rt. Hon. John
Key, Rt. Hon. C. W. Parkin, B. T. Strauss, Rt. Hon. G. R. (Vauxhall)
Lee, Frederick (Newton) Paton, John Stross, Dr. Barnett (Stoke-on-Trent, C.)
Lee, Miss Jennie (Cannock) Pavitt, Laurence Swingler, Stephen
Lever, L. M. (Ardwick) Pearson, Arthur (Pontypridd) Taylor, Bernard (Mansfield)
Lewis, Arthur (West Ham, N.) Peart, Frederick Thomson, G. M. (Dundee, E.)
Lipton, Marcus Pentland, Norman Thornton, Ernest
Loughlin, Charles Plummer, Sir Leslie Timmons, John
Lubbock, Eric Price, J. T. (Westhoughton) Tomney, Frank
Mabon, D. J. Dickson Probert, Arthur Wade, Donald
Mclnnes, James Proctor, W. T. Wainwright, Edwin
McKay, John (Wallsend) Pursey, Cmdr. Harry Warbey, William
McLeavy, Frank Randall, Harry Watkins, Tudor
MacMillan, Malcolm (Western Isles) Rankin, John Weitzman, David
MacPherson, Malcolm (Stirling) Reynolds, G. W. Wells, Percy (Faversham)
Mallaieu, J P W (Huddersfield, E.) Roberts, Albert (Normanton) Wells, William (Walsall, N.)
Manuel, Archie Roberts, Goronwy (Caernarvon) Wigg, George
Mason, Roy Robertson, John (Paisley) Willey, Frederick
Mayhew, Christopher Robinson, Kenneth (St. Pancras, N.) Williams, D. J. (Neath)
Mellish, R. J Rodgers, W. T. (Stockton) Williams, LI. (Abertillery)
Mendelson, J. J. Rogers, G. H. R. (Kensington, N.) Williams, W. T. (Warrington)
Millan, Bruce Ross, William Willis, E. G. (Edinburgh, E.)
Mitchison, G. R. Royle, Charles (Salford, West) Wilson, Rt. Hon. Harold (Huyton)
Monslow, Walter Silverman, Julius (Aston) Woodburn, Rt. Hon. A.
Moody, A. S. Silverman, Sydney (Nelson) Woof, Robert
Moyle, Arthur Skeffington, Arthur Yates, Victor (Ladywood)
Mulley, Frederick Slater, Mrs. Harriet (Stoke, N.)
Oliver, G. H. Slater, Joseph (Sedgefield) TELLERS FOR THE AYES:
Oram, A. E. Sorensen, R. W. Mr. Lawson and Mr. Redhead.
Oswald, Thomas Spriggs, Leslie
NOES
Agnew, Sir Peter Corfield, F. V. Hinchingbrooke, Viscount
Aitken, W. T. Costain, A. P. Hirst, Geoffrey
Allan, Robert (Paddington, S.) Coulson, Michael Hobson, Sir John
Allason, James Courtney, Cdr. Anthony Hocking, Philip N.
Ashton, Sir Hubert Craddock, Sir Beresford Holland, Philip
Atkins, Humphrey Crosthwaite-Eyre, Col. Sir Oliver Hollingworth, John
Barber, Anthony Crowder, F. P. Hope, Rt. Hon. Lord John
Barlow, Sir John Cunningham, Knox Hopkins, Alan
Barter, John Dalkeith, Earl of Hornby, R. P.
Beamish, Col. Sir Tufton Dance, James Hornby Smith, Rt. Hon. Dame P.
Bell, Ronald d'Avigdor-Goldsmid, Sir Henry Howard, Hon. G. R. (St. Ives)
Bennett, F. M. (Torquay) de Ferranti, Basil Howard, John (Southampton, Test)
Bennett, Dr. Reginald (Gos & Fhm) Digby, Simon Wingfield Hughes Hallett, Vice-Admiral John
Berkeley, Humphry Donaldson, Cmdr. C. E. M. Hughes-Young, Michael
Bevins Rt. Hon. Reginald du Cann, Edward Hutchison, Michael Clark
Bldgood, John C. Duncan, Sir James Iremonger, T. L.
Biffen, John Duthie, Sir William Irvine, Bryant Godman (Rye)
Biggs-Davison, John Eden, John Jenkins, Robert (Dulwich)
Birch, Rt. Hon. Nigel Elliott, R.W.(Nwcastle-upon-Tyne, N.) Johnson, Dr. Donald (Carlisle)
Bishop, F. P Errington, Sir Eric Johnson, Eric (Blackley)
Black, Sir Cyril Farey-Jones, F. W. Johnson Smith, Geoffrey
Bourne-Arton, A. Farr, John Jones, Rt. Hn. Aubrey (Hall Green)
Box, Donald Finlay, Graeme Kaberry, Sir Donald
Boyd-Carpenter, Rt. Hon. John Fisher, Nigel Kerans, Cdr. J. S.
Boyle, Sir Edward Fraser, Hn. Hugh (Stafford &Stone) Kerby, Capt. Henry
Braine, Bernard Fraser, Ian (Plymouth, Sutton) Kimball, Marcus
Brewis, John Freeth, Denzil Lagden, Godfrey
Bromley-Davenport, Lt.-Col. SirWalter Galbraith, Hon. T. G. D. Lancaster, Col. C. G
Brooke, Rt. Hon. Henry Gammans Lady Langford Holt, sir John
Brooman-White, R. Gilmour sir John Langford Holt, Sir John
Brown, Alan (Tottenham) Glyn, Sir Richard (Dorset, N.) Leather, E H C.
Browne, Percy (Torrington) Goodhart, Philip Leavey, J. A.
Bullard, Denys Goodhew, Victor Leburn, Gilmour
Bullus, Wing Commander Eric Cower, Raymond Legge-Bourke, Sir Harry
Burden, F. A. Grant, Rt. Hon. William Lewis, Kenneth (Rutland)
Campbell, Gordon (Moray & Nairn) Grant-Ferris, Wg. Cdr, R. Litchfield, Capt. John
Carr, Robert (Mitcham) Green, Alan Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)
Channon, H. P. G. Hall, John (Wycombe) Lloyd, Rt. Hon. Selwyn (Wirral)
Chataway, Christopher Hamilton, Michael (Wellingborough) Longden, Gilbert
Clark, Henry (Antrim, N.) Harris, Frederic (Croydon, N.W.) Loveys, Walter H.
Clark, William (Nottingham, S.) Harrison, Brian (Maldon) Lucas, Sir Jocelyn
Clarke, Brig. Terence (Portamth, W.) Harrison, Col. Sir Harwood (Eye) Lucas-Tooth, Sir Hugh
Cleaver, Leonard Harvey, Sir Arthur Vere (Macclesf'd) McAdden, Stephen
Cole, Norman Harvie Anderson, Miss MacArthur, Ian
Cooke, Robert Hay, John McLaren, Martin
Cooper, A. E. Heald, Rt. Hon. Sir Lionel Maclay, Rt. Hon. John
Cooper-Key, Sir Neill Hill, Mrs. Eveline (Wythenshawe) Maclean, SirFitzroy (Bute&N.Ayrs)
Cordeaux, Lt.-Col. J. K. Hill, J. E. B. (S. Norfolk) McLean, Neli (Inverness)
Macleod, Rt. Hn. lain (Enfield, W.) Pike, Miss Mervyn Stoddart-Scott, Col. Sir Malcolm
MacLeod, John (Roes & Cromarty) Pilkington, Sir Richard Storey, Sir Samuel
Macmillan, Maurice (Halifax) Pitman, Sir James Studholme, Sir Henry
Macpherson, Niall (Dumfries) Powell, Rt. Hon. J. Enoch Summers, Sir Spencer
Maddan, Martin Price, David (Eastleigh) Tapsell, Peter
Maitland, Sir John Prior, J. M. L. Taylor, Sir Charles (Eastbourne)
Manningham-Builer, Rt. Hn. Sir R. Prior-Palmer, Brig. Sir Otto Taylor, Frank (M'ch'st'r. Moss Side)
Markham, Major Sir Frank Profumo, Rt. Hon. John Teeling, Sir William
Marshall, Douglas Proudfoot, Wilfred Temple, John M.
Marten, Neil Pym, Francis Thatcher, Mrs. Margaret
Mathew, Robert (Honiton) Quennell, Miss J. M. Thomas, Leslie (Canterbury)
Matthews, Gordon (Meriden) Redmayne, Rt. Hon. Martin Thompson, Kenneth (Walton)
Maxurell-Hyslop, R. J. Rees, Hugh Tiley, Arthur (Bradford, W.)
Maydon, Lt. -Cmdr. S. L. C. Rees-Davies, W, R. Touche, Rt. Hon. Sir Gordon
Mills, Stratton Renton, David Turner, Colin
Miscampbell, Norman Ridley, Hon. Nicholas Turton, Rt. Hon. R. H.
Montgomery, Fergus Ridsdale, Julian van Straubenzee, W. R
More, Jasper (Ludlow) Robertson, Sir D. (C'thn's & S'th'ld) Vane, W. M. F
Morgan, William Robinson, Rt. Hn. Sir R. (B'pool.S.) Vickers, Miss Joan
Morrison, John Robson Brown, Sir William Vosper, Rt. Hon. Dennis
Mott-Radclyffe, Sir Charles Rodgers, John (Sevenoaks) Wakefield, Sir Wavell
Nabarro, Gerald Roots, William Walker, Peter
Neave, Airey Russell, Ronald Ward, Dame Irene
Nicholls, Sir Harmar Scott-Hopkins, James Wells, John (Maidstone)
Nicholson, Sir Godfrey Seymour, Leslie Whitelaw, William
Noble, Michael Sharples, Richard Williams, Dudley (Exeter)
Nugent, Rt, Hon. Sir Richard Shaw, M. Williams, Paul (Sunderland, S.)
Oakshott, Sir Hendrie Skeet, T. H. H. Wills, Sir Gerald (Bridgwater)
Orr, Capt. L. P. S. Smith, Dudley (Br'ntf'd & Chiswick) Wilson, Geoffrey (Truro)
Osborn, John (Hallam) Smithers, Peter Wise, A. R.
Osborne, Sir Cyril (Louth) Smyth, Brig. Sir John (Norwood) Wolrige-Gordon, Patrick
Page, Graham (Crosby) Soames, Rt. Hon. Christopher Worsley, Marcus
Page, John (Harrow, West) Spearman, Sir Alexander Yates, William (The Wrekin)
Pannell, Norman (Kirkdale) Stanley, Hon. Richard
Pearson, Frank (Clitheroe) Stevens, Geoffrey TELLERS FOR THE NOES:
Peel, John Steward, Harold (Stockport, S.) Mr. W. Clark and Mr. Batsford
Pickthorn, Sir Kenneth Stodart, J. A.