§ 4.0 p.m.
§ Mr. Anthony Barber (Altrincham and Sale)
I beg to move Amendment No. 232, Clause 42, in page 101, line 4, to leave out "1964 and 1965"and to insert "1965 and 1966".
This Amendment is at once the simplest and, I think, the most important Amendment on the Notice Paper today. Its purpose is to defer the operation of Corporation Tax for one year. Although the Corporation Tax does not technically come into operation until after the end of the current financial year, the importance of this Amendment can be gauged from the fact that nearly all company profits earned this year will be liable to Corporation Tax.
I shall, in a moment, give the House four specific reasons for my belief that it would be in the general interest to defer the operation of this tax for a year hut, broadly speaking, all those reasons are directed to giving the Government an opportunity for second thoughts on the particular type of Corporation Tax embodied in the Bill.
I mention this because the Amendment does not provide an occasion for debating whether or not we should have a Corporation Tax at all. When we voted against the Second Reading of the Bill, we did so because we had reached the conclusion that the particular scheme of Corporation Tax devised by the Chancellor of the Exchequer for a Socialist Britain, unlike the schemes of corporation tax in many other countries, would do irreparable damage to industry and commerce, would retard modernisation and technological advance, and would penalise success.
That Second Reading debate took place two months ago. Since then, day after day in Committee we have listened to the laboured explanations of Treasury Ministers, and I must say that those explanations have served only to confirm 41 our view that, whatever the Chancellor's theoretical objective, unless much more thought is given to his proposals the practical consequence of the Corporation Tax in its present form will be to make this country less efficient, and so less competitive. What is wanted is far more consideration to be given, not only to the details of the tax, which we have considered at length in Committee, but also to the basic objectives of the change proposed by the Chancellor of the Exchequer.
I say that because the whole philosophy underlying this particular scheme of taxation is based on the Chancellor's mistrust of the business community. It is of no use the right hon. Gentleman complaining, as he has done on a number of occasions, because one commentator after another has dubbed him "anti-business". The fact is that again and again his decisions on the Corporation Tax have shown him to be just that.
In his Budget speech, the right hon. Gentleman claimed all the glories of a great tax reformer. He told us that with the Corporation Tax he was establishing, as he put it,… a new landmark in our fiscal history, such as we have rarely been able to create in this country save under the stringent needs of war."—[OFFICIAL REPORT. 6th April, 1965; Vol. 710, c. 254.]But there are many who believe that the Corporation Tax will go down in history as a classic example of fiscal bungling and retrospective incompetence. The Times was not far from the mark when it said of the Bill:It is the sheer administrative incompetence of the Government that worries most.The simple reason for the Chancellor getting himself into this mess has been his dogged determination to rush through the preparation of the Corporation Tax section of the Bill without allowing sufficient time to get it right. Nobody would deny the magnitude of the proposed change to Corporation Tax, but it is the very size of the operation that should have made the right hon. Gentleman, with the advice which I am certain he had, at least to 1iesitate to bring it in this year—a year when the Inland Revenue and the parliamentary draftsmen have had the added burden of establishing the Capital Gains Tax.
As I have said, the sole purpose of this Amendment is to defer for one year 42 the operation of the tax and so to give time for further consideration—and, as I think equally important, further consultation with, if I may be permitted the phrase, "the interests" most concerned. I believe that if the Chancellor of the Exchequer were to accept this Amendment he would be applauded not only by his parliamentary colleagues on both sides of the House, but by an overwhelming majority of his countrymen. It would, I believe, be a victory, not for the Opposition, but for common sense.
Lest the right hon. Gentleman thinks that our criticisms on this score are cooked up for political reasons, let me quote two short comments in leading articles made after the conclusion of the Committee stage—in other words, since we last had an opportunity of considering the Corporation Tax proposals. The Financial Times wrote on 26th June:So the fundamental doubts about the Bill remain; and with them the objection that such complex changes should never have been made before the Chancellor had had time to study their likely effects. The corporation tax may encourage companies to retain more profits; it has yet to be shown that this is a good way to promote effective investment. It will separate individual from company taxation; but is this administrative advantage enough to justify the tangle of tax law that will surround it?Next, I want to quote from the leading article in The Times last Monday:The proper preparation of a major Finance Bill, even if attention can be devoted to it without other monetary distraction, is a lengthy business. It was not a happy choice, therefore, for the Labour Government to decide to produce for their very first Budget a Finance Bill involving major changes in the fiscal system. All the attention of their economic Ministers and civil servants should have been devoted to dealing with the sterling crisis. Even without this, there simply was not time to do the job properly.There are four basic reasons why I would urge on the House the acceptance of the Amendment. The first is that if the Chancellor of the Exchequer were to accept it it would at least go some way to restoring the confidence of the business community which he has lost. After all, we are concerned here not merely with the technicalities of company taxation. The fact is, whether or not it is justified, that a considerable proportion of those engaged in industry and commerce—not to mention those abroad to whom we are indebted—no longer have confidence in the Chancellor of the Exchequer. Even 43 Sir Jock Campbell, one of the Labour Party's most prominent supporters in the City, has told the world that he is… dismayed by the probable effects of Corporation Tax on British productive investment in developing countries.I am sure that the right hon. Gentleman would not deny that when the Labour Government came to office last autumn, after we had held responsibility for 13 years, there was great good will in industry towards himself and his colleagues. I noted the wise words of the First Progress Report of the Department for Economic Affairs. After describing the tasks ahead, it went on:The establishment of good communications and mutual understanding between the Government and industry is necessary if all these policies are to be successful.But all the good intentions of the Government will count for nothing if the Chancellor of the Exchequer determines to push ahead with the Corporation Tax in its present form.
The fact is that since that First Progress Report of the Department of Economic Affairs there has arisen a growing hostility between the Chancellor of the Exchequer on the one hand and industrial and financial people on the other. Indeed, not long ago the right hon. Gentleman's hon. Friend the Member for Manchester, Cheetham (Mr. Harold Lever) said:I believe that if we wish to avoid a very serious financial and economic crisis in the coming months the growing hostility between the Government and the financial community must be reversed.Those are not my words, but the words of the Chancellor's own hon. Friend, the Member for Cheetham. If only the Chancellor would admit, what he knows to be the case, that Corporation Tax in its present form is not right and that it should be considered further during the coming year, his stock would rise immediately.
The second reason for deferment is that it would give more time for a really thorough appreciation to be made of the operation of various forms of Corporation Tax in other countries. I say this because—quite apart from the merits, which we cannot argue all over again today—it is a fact that the type of Corporation Tax set out in the Bill is the very type which is now being abandoned by 44 some of our major competitors. I genuinely believe that the Chancellor still does not appreciate the significance of the differences between the various systems.
Only last week the Chancellor reported to the House on his visit to the United States of America and, as he was at liberty to do, in his statement he worked in a passage to the effect that the Americans thought his system of Corporation Tax was a good one. I am sure he knows that in the United States the corporate rate is considerably higher than he is contemplating whereas personal rates are very much lower in the United States than they are in the United Kingdom. The Chancellor's adherence to the single rate of Corporation Tax is at the root of many of the evils which flow from his system, particularly the loss of effective double taxation relief and devaluation of investment allowances.
On an Amendment of this kind we cannot obviously go into the merits of these matters all over again, but they are all aspects of crucial importance, and of importance not just in terms of profit or incomes but in relation to the whole course of industrial development and overseas investment. With an additional 12 months to go into all these matters with the thoroughness which they certainly merit, I am sure the right hon. Gentleman and his colleagues would feel bound to modify their proposals.
The third reason for deferment is that the Chancellor of the Exchequer has now agreed to take part during the year in a full survey of and investigation into the question of overseas investment. What utter folly to go ahead with all the transitional reliefs being meticulously worked out by one company after another before the inquiry is complete! It may well turn out that within a year the whole taxation approach to overseas investment is shown to be a nonsense. The Leader of the Liberal Party, in Committee when we were considering Clause 79, said:I believe that the Bill is too big and that the right hon. Gentleman should have postponed this part of it for a year, had his inquiry before introducing these proposals and then, if necessary, brought the matter to the Committee."—[OFFICIAL REPORT, 22nd June, 1965; Vol. 714, c. 1487–8.]I should have thought that that was the sensible approach to this whole question of overseas investment.
45 That is only one aspect. It seems monstrous that within a few days the House of Commons should be asked to pass legislation which may well be based on an assumption by the Chancellor which is utterly without foundation. What possible harm could a year's delay have done to find out these facts which are now being sought by the Federation of British Industries and the Chancellor? These are matters of the greatest concern to the developing countries and to thousands of investors at home, many of them men and women of very moderate means.
The fourth reason for deferring the operation of Corporation Tax is that the inevitable complexity of the Chancellor's proposals have made it quite impossible in the time available to work out all the ramifications and side effects of the provisions in the Bill. Throughout the business world endless time and energy is being occupied in trying to cope with the effects of the Bill, energy which should be directed to planning greater efficiency and a higher level of exports. It is no exaggeration to say that tax-wise the business world has never been in a state of greater confusion and uncertainty.
For all the good intentions of the Chancellor and his colleagues, that confusion was made worse confounded by no fewer than 140 Government Amendments on Corporation Tax alone which we considered in Committee and the prospect of a further 100 Government Amendments on Report. Even if one accepts the basic structure of the Corporation Tax no one in his right senses now seriously pretends that the details are anywhere near right and that gross inequities will not appear in the months ahead.
Without going into the merits, I give two examples to show what I mean. Twice we have debated an Opposition proposal to limit the ambit of the close company provisions and to exclude from those provisions companies in which the public were substantially interested. Twice we have been rebuffed by the Chief Secretary. The second time was only a few days ago. Yet, just before the weekend, there appeared on the Notice Paper a starred Amendment in the name of the Chancellor which goes a considerable way to meet us. Only two days before, the Chief Secretary had not made up his mind. Does anyone 46 doubt that if our proposal had not been selected for debate again on Report the Chancellor would have done anything about it? Of course he would not. So we have the ridiculous situation that a concession which is of the utmost importance which we were able to wring from the Chancellor came about only by chance.
I give another example. Last week a newspaper gossip column pointed out that royalties to authors are penalised by the Finance Bill. The very next day the Government put down an Amendment to deal with that. This hit or miss technique, which is still going on more than two months after the publication of the Bill, makes a mockery of the legislative process, but it is inevitable unless we are to have more time to consider the details of the Chancellor's proposals. My goodness, the Chancellor of the Exchequer set out to make his mark—he certainly has done so! The sheer complexity of the scheme which, together with Capital Gains Tax is to be integrated into the existing Income Tax system, is bound to give rise to all kinds of difficulties of interpretation and administration.
Here is an Amendment the terms of which do not in any way challenge the principle of Corporation Tax. It is directed solely to ensuring that the Chancellor, the Inland Revenue and every taxpayer concerned shall have one more year in which together they can get this tax right. I beg the right hon. Gentleman not to confuse stubbornness with determination or obduracy with resolution. The aim of the Chancellor and his colleagues on the Government Front Bench should be to evolve a tax which is both equitable and efficient. In its present form it is neither. If the Chancellor does not accept this Amendment, the country will know that, like all political fanatics, the right hon. Gentleman is redoubling his efforts when he has lost his aim.
§ Sir Kenneth Pickthorn (Carlton)
I, also, have no intention of going into the ultimate merits of this tax. I have still less intention of going into the ultimate merits of the decision of the Chair on an earlier occasion. I think it necessary, however, to remind the House of what happened on that occasion. I must begin by apologising to the House, because I 47 have a quite unavoidable engagement in the service of the House at five o'clock.
The Executive asks the Commons for authority to tax when, in its judgment, it needs money. On 2nd June, was it, upon such a demand, the Executive failed to find a majority in the House of Commons. Never before in such circumstances has the tax in question been imposed. There is a good deal I could say both about the merits of the tax and far more about the procedural and constitutional implications. Surely, in all decency, Her Majesty's Government should think twice before insisting on this occasion on that imposition, which failed to get a majority on a Division, being acted upon and made continuous by the act of the House today. It seems to me that must be improper. We have been engaged in various ballets and other celebrations because of Sir Simon de Montfort, 750 years ago, because of Magna Carta—[Interruption.] Simon de Montfort, rather longer [Interruption.] [HON. MEMBERS: "700."] Never mind.
The point of the argument is readily perceptible. That being so, I am sure all those who have been engaged either in the management of the House, or in the management of the country's finances through all that period, would be very much surprised, not to say shocked and horrified, if they knew that at this date the Executive were to impose taxation which had failed to receive a majority on a Division.
§ Mr. Geoffrey Lloyd (Sutton Coldfield)
Unless the Government accept the Amendment, it will be clear that they are not engaged upon a large measure of tax reform, but are, in fact, engaged upon a Socialist attack on the private enterprise system.
It is necessary, perhaps, to consider quite shortly the first crude effect of the Corporation Tax, which is that taxpayers of all classes have their net incomes reduced, on a Corporation Tax of 35 per cent., by almost 12.7 per cent., assuming that an unchanged slice of gross profits passes through to dividend. But the value after tax of retained profits is enhanced by 37 per cent., which puts the point that the Chief Secretary has been advancing many times during our debates, 48 that it is the Government's purpose to encourage retention.
My right hon. and hon. Friends and myself, in earlier debates, have shown the Chancellor that many companies in the country require not only retention but free access to the capital market, which, we have argued, is injured by the particular form of Corporation Tax the Government are introducing.
I would like briefly to point out that there has been some research on the effect of retentions, and that this is not at all encouraging to the Government's case. It was published by the Bulletin of the Oxford University Institute of Statistics and was the work of I. M. D. Little, entitled, "Higgledy Piggledy Growth", in which he analysed the relationship between retained earnings and growth in profits and arrived at the alarming, though tentative, verdict that the rate of return on invested retentions is usually low and occasionally negative.
The investigation was regarded in the world of economics and investment analysis as very important indeed, and the author of it summed up by saying:One seems left with the conclusion that those companies which retain a relatively high proportion of profits select relatively unprofitable investments.The bulletin is the only research done by any important statistical body of economists of which I am aware. The Government, as usual, seem to have taken no cognisance of anything that has been brought out since the minority Report of the Royal Commission was published, which, I think, was in 1955. This is a point that should be borne in mind, and it is yet another reason for our suggesting that if they were engaged in genuine tax reform they should have had a much greater measure of inquiry before they introduced their proposals.
While it is true, as the Chief Secretary says from time to time, that other countries have a Corporation Tax, it is also true that very few countries have a Corporation Tax of the kind that is being introduced by the Government. Canada allows shareholders a tax credit of 20 per cent. of dividends received. South Africa exempts part of dividends on a sliding scale according to the size of income, and the most remarkable example is the German system, where 49 there is a very much higher rate of Corporation Tax on retentions and a much lower rate on amounts paid out.
It is remarkable that the Germans have adopted a system which, in effect, is very similar to the one which we had in this country before the Chancellor brought in his present Budget. This similarity was noted and approved in the Neumark Report, which analysed the economic disadvantages of artificially encouraging retentions, suggested that E.E.C. countries should eventually harmonise their tax systems by moving closer to the German model, and pointed out that the United Kingdom system at that time was, in effect, very similar to that which Germany had already.
France was not then on the German system. However, France has now modernised her system, leaving the United Kingdom and Luxemburg isolated in Europe.
§ Mr. J. Grimond (Orkney and Shetland)
Would the right hon. Gentleman expand further on the way the German system is similar to our system? I thought that the German system was to have a very high rate of Corporation Tax, but a low rate of withholding tax.
§ Mr. Lloyd
The German system has a rate of 50 per cent. Corporation Tax on retentions, and only 15 per cent. on profits distributed through dividends. That is why the net receipt by the shareholder comes out at about the same as the net receipt by the shareholder under the British system before the present Corporation Tax was introduced.
That leaves the only shred of respectability which the Chief Secretary can gather in the fact that the United States is the only country where there is still almost complete double taxation of dividends paid to individuals. But, as my right hon. Friend has pointed out, the validity of this example is really taken away by the completely different level of tax in the two countries. For example, a married couple in Britain, with a dividend income of £2,100 per annum, pay 51¼ per cent. Income Tax and Surtax on any additional dividends, and the rate rises steeply to a swingeing 91¼ per cent. over £15,000. In the United States a married couple could have dividends of 44,000 dollars—that is £15,700—before 50 reaching the 50 per cent. rate. At this figure, they would be left with 29,940 dollars, or nearly £11,000 of net income. This makes a very great difference.
I am not the only person who says that this is, in fact, a Socialist attack on the private enterprise system, because in the intellectual organ of the party opposite—I refer to the New Statesman—there was an important article on 25th June called "Socialism by Taxation", of which I shall read only the last sentence, because it shows the point quite clearly:… undistributed profits—now additionally encouraged—should pass from the nominal ownership of the shareholders into the hands of the consumers, the workers, and the State. For if the shareholders no longer have the right to all profits, this right should be transferred to other hands, not left in the control of 'managers'.So we can see that this is part of a twofold design. First, as the Chief Secretary endlessly says, the shareholder and the company are to be completely separated. When they are separated, the control of industry by the directors appointed by the shareholders will be challenged. Finally, this Socialist economy says we are to proceed to the stage of actually dispossessing the shareholders of what, at any rate under the law at present, is their property.
§ 4.30 p.m.
§ Mr. Patrick Jenkin (Wanstead and Woodford)
I support the Amendment. The introduction of this tax is premature, principally because quite inadequate consideration has been given to its economic effects. My right hon. Friend the Member for Sutton Coldfield (Mr. Geoffrey Lloyd) has just mentioned the study by Mr. Little, of Oxford, entitled "Higgledy Piggledy Growth". The Chief Secretary will remember that when I raised this matter in Committee and described the study, I fear at rather greater length, he said this:The hon. Gentleman is quite right in saying nobody should pontificate and it is possible to draw a variety of conclusions from a variety of studies—and I had read the study a long time before the hon. Gentleman retailed it to the Committee. He arrived at a tentative and negative conclusion, that nobody is able to say, 'The way to get companies growing, and the best way to ensure dividend policy, is as follows.'"—[OFFICIAL REPORT, 2nd June, 1965: Vol. 713, c. 1898–9.]Surely to goodness the Government's claim that the only piece of evidence— 51 nobody else has attempted to put any other evidence before the House—is a tentative and negative conclusion in the opposite direction is a poor foundation on which to base a major tax reform of this sort.
The article "Higgledy Piggledy Growth", which, as I said in Committee, is worked out at considerable length and which employs advanced statistical techniques, arrives at the disturbing conclusion that retained profits are not necessarily a good thing and that there is no evidence that companies which retain profits grow any faster than companies which have a higher rate of distribution. This is not a matter of opinion. It is a matter of fact. The facts have not been determined by the Government. To rely on what some people—the Chancellor, or some of his advisers—believe to be the facts is a shaky foundation for a major tax reform of this sort.
A second point which I raised in Committee and to which we have had no answer was this. If a tax system is changed so as either to encourage or discourage retained profits, does it have any effect on the amount of new capital which is raised from the market?
§ Mr. Deputy-Speaker (Dr. Horace King)
Order. It seems to me that the hon. Gentleman is addressing himself to the merits of Corporation Tax. I hope that he will come to the Amendment.
§ Mr. Jenkin
I am using these as illustrations of major points of economic importance which were put before the House on Second Reading, which were made on Committee, and which will no doubt be made again on Report, as reasons why the tax should be introduced. I am pointing out that these are questions of fact which have simply not been determined and that therefore—
§ Mr. Deputy-Speaker
Order. We are not debating whether the tax should or should not be introduced. We are debating on this Amendment the date of introduction.
§ Mr. Jenkin
I am grateful to you, Mr. Deputy-Speaker.
More time is necessary before the tax is introduced in its present form to determine the validity or otherwise of the 52 arguments on which the Chancellor and his right hon. and hon. Friends rely in supporting the tax. I am pointing out that there has as yet been no answer to the convincing figures produced by Mr. Harold Wincott, in the Financial Times. showing that after the change in the pattern of the Profits Tax in 1958 a very substantially higher proportion of new capital had been raised from the market compared with the period before that change.
In Committee, the Chief Secretary said that people are entitled to draw different conclusions. He has never yet given the House or anybody else the source of the figures he quoted. He merely quoted the figures. If I am wrong about that, perhaps I shall be corrected. I have not seen any statement of the source of the figures.
The final point is the effect on capital allowances There was a very interesting, if somewhat abstruse, debate on this subject in Committee, in which a number of hon. Members made some valid points and, with respect, also some invalid points. I have spoken to the hon. Member for Middlesbrough, West (Dr. Bray), who seemed at one point to have gone somewhat astray. He has been kind enough to agree that he did not choose his words wisely. He has readily conceded his point that the Amendment moved by the Opposition asked for five times too much was a misinterpretation and that all that it did was to increase the investment allowances in one case to 40 per cent. or 42 per cent. However, I will not pursue that point.
It is far from the case, as the Government have contended, that the rate of tax compensates for the reduction in the investment allowances. This is only so up to a certain return on capital. Above that figure—there are many businesses with a high rate of obsolescence which must obtain a higher return than that—the balance swings the other way. There are many cases where the change, if introduced, will give rise to substantial penalties on companies compared with the present situation.
These facts are not known. They are not widely appreciated. They do not appear to be appreciated in the Treasury and in the Inland Revenue. This is why I say that it is premature to introduce so 53 major a tax reform at this time, which appears to have almost as a sidewind these important economic consequences of which the effect is at present quite unknown. I therefore contend that the Government are being far too hasty in introducing this enormously important and radical change in our system of taxing companies without giving it very much more thought, particularly thought related to its very important economic consequences.
§ Mr. Barber
Before my hon. Friend sits down, I ought to say, Mr. Deputy-Speaker, that the Chief Secretary has sent me details of the sources of the various figures which were used in an earlier debate and to which my hon. Friend has just referred. I am sure that the Chief Secretary would wish me to hand them over to my hon. Friend so that he may study them.
§ Mr. Grimond
I want to be brief, partly because I, like the hon. Member for Carlton (Sir K. Pickthorn), have to apologise to the House because we have a meeting of the Committee of Privileges later and, secondly, because most of the arguments on this point have already been rehearsed and, indeed, enacted before the House.
I would only mention that I still believe that there is an important constitutional point at issue. We are coming to see that we cannot deal with the country's finances by an annual Budget. We are now projecting ourselves two or three years ahead, but this is contrary to supposed constitutional procedure at the moment. In the course of time, in our look at other things, we should look at the whole handling of our taxation by the House for a period of years.
In Committee, the Chief Secretary argued from the German case that the fact that the Germans now taxed distributed profits more lightly had not led to any striking increase in the amount of new capital raised in their capital market. Now we are told that a high level of retention does not mean that the investment resulting from that level of retention is necessarily worth while. This is a large field in which there is disagreement, and it is clearly an area for further research. I should have thought that this was an argument for putting off the initiation of this tax until we have more information about what its effects may be.
54 This and many other points have already been deployed, and I do not wish to go into them at length. What has emerged during the discussion of the Bill is that not only are there disagreements about the methods of taxation and about the effect of the Bill, but there is also the question of the absolute height of taxation. I interrupted the right hon. Member for Sutton Coldfield (Mr. Geoffrey Lloyd) and asked him about the German system. It appears to me that so far as the method is concerned, the German system is the opposite to our present system. Our present system may be described as one by which we have a very low rate of Corporation Tax and a high rate of withholding tax or Income Tax.
Under the German system there is a high rate of Corporation Tax and a low rate of withholding tax on dividends. Surely, therefore, when we consider what is the ultimate level of taxation which a shareholder can be expected to bear, this raises the larger subject, which it would be out of order to discuss at length on this Amendment, of the rate of taxation in the country as a whole.
We know that the Government are going to make certain further investigations. Further, the House should remember that the rate of Corporation Tax is not fixed, and we are all arguing about the effects of a rate of tax which is not fixed and which we do not know. The Chief Secretary said that if it was fixed at 35 per cent. or under, in many companies the result would not be very different from what it is under the present system, bearing in mind that most companies tend to distribute around 50 per cent. of their dividends. We should remember that. While we are considering the appropriate rate and, before we fix the rate, we should examine not only this new method of taxation but the absolute level of taxation, we should look again at its possible effect.
It has been argued that the idea that a high rate of taxation is a disincentive to work had been disproved. In my experience, that is probably true. Very few people work less hard when taxation goes up, always granted that they remain in the same job. But the rate of tax may have some effect on the brain drain, on whether people stay in this country or 55 go to other countries, and on the jobs they choose and on savings and investment. When all these matters are being considered I believe that the point about the absolute rate of taxation, quite apart from how we raise it and divide it, might be looked at again. We have had very little information about this, and there has been no inquiry into it for some years.
§ Sir Alexander Spearman (Scarborough and Whitby)
I also support this Amendment, and I shall be as brief as, or even briefer than, previous speakers.
I do not want to argue the merits or demerits of this tax. I can very well see that a case can be made for a tax of this sort very differently presented, but it seems clear that we have to look no further than the formidable attacks upon it by the hon. Member for Manchester, Cheetham (Mr. Harold Lever) to see that time has not been taken to prepare this very important tax. There is no doubt that the tax will cause a major upheaval. That does not necessarily condemn it. There are things which cause major upheavals but which are worth while.
Take the question of the adoption of a decimal system. That may well cause a major upheaval, but there will also be considerable advantages. However, there do not seem any possible advantages to the country's economy as a result of the upheaval caused by this tax. The only result would appear to be to make a sensational change for political purposes without any regard to the economic consequences.
§ 4.45 p.m.
§ Sir Douglas Glover (Ormskirk)
I believe that this is one of the most important Amendments that we have discussed during the whole of the Report stage of the Bill. I ask the Government once again to consider accepting the Amendment. In Committee, we dealt with about 140 Government Amendments on Corporation Tax. On this, probably the last day of the Report stage, we are still dealing with over 50 Government Amendments. This shows that even the Government themselves do not know their own mind about the repercussions and the effect of the Corporation Tax on the economy. I do not criticise the party opposite for bringing in what might be described as a Socialist Measure. But 56 even if they are doing that, one would have thought that they would want it to work. Yet all the indications are that they are by no means certain that what is to become an Act of Parliament is in a condition in which it will work effectively for the benefit of the nation.
My right hon. Friend the Member for Bexley (Mr. Heath) and his Front Bench colleagues have carried out a magnificent job all through the consideration of the Bill. Even the Chancellor of the Exchequer must accept that it is a much better Bill as a result of their efforts. On the subject of the Corporation Tax, although many of the Chancellor's Amendments have resulted from arguments from this side of the House, this is not the only place where the right hon. Gentleman has had a change of view. As was said a few moments ago, the Government have put down an Amendment on Report as a result of a comment in a gossip column. Surely, the party opposite does not want to go down in history as the party which governed by gossip column.
The Government's reputation has rapidly waned as a result of their inefficiency since they have been in power. Here is an opportunity for them to show that they have had second thoughts. I am not asking them to abandon Corporation Tax if they believe that it is the right thing for the country, but it is quite obvious from the way in which the Bill has been so torn about and altered from its original form that the Chancellor's original intentions cannot have been very well thought out.
Even now, on the 21st day of consideration of this Bill, the Chancellor is bringing forward Amendments at the last moment, and this shows that we are being asked to put into force a Measure on the effects and benefits of which the Government have a very cloudy idea. Indeed, there is doubt about whether they will turn out to be benefits or disadvantages. Would it not, therefore, be common sense and the attitude of wise men to accept this Amendment? I do not say that on this question of Corporation Tax I have understood all the arguments which have been adduced from this side or the other side of the House. There is nothing derogatory in saying that, because I am certain that the same applies to the Chancellor and to his colleagues. We are dealing with something that is new. We are 57 trying to balance the systems of one country with the systems of another. We are trying to work this into our own economy, and these are very few in the House who could claim that they have completely understood every Clause relating to Corporation Tax. This would include the Chancellor, the Chief Secretary and their hon. Friends.
This is a complicated matter and that is why we have had all these Amendments. Is not it, therefore, sensible and logical to say that because it is such a complicated measure it would be wise to put off this provision for a further year? I would point out to the Chief Secretary that although he and his right hon. Friend thought that ample time was being given to people to consider these matters it is now the middle of July, 1965, and, therefore, the time gets shorter and shorter during which further consideration can be given to it by companies and accountants.
The hon. Member for Heywood and Royton (Mr. Barnett) appears to be smiling. He knows that he has some headaches in front of him before 1966 and I think that he would say that a great deal of commonsense has been said in the debate and that the Amendment should be accepted.
§ Sir D. Glover
The hon. Member could not say that in public, of course, and he knows that at this stage of the Bill it would not be worth while getting into that amount of trouble.
We are trying to stop the Government making a mistake. This is the very last opportunity to stop them going down hill and into the sea like the Gadarene swine. This is an important part of the Bill and we have done our best to try to bring reason and sense into the discussion. Will not the Government think again and give the economy of the country, and particularly the financial aspect of it, a further twelve months to sort out these problems? If they do, their popularity will go up considerably in the Gallup poll and far more important, it will go up rapidly among those who have the best interests of the nation at heart.
§ Mr. Ian Gilmour (Norfolk, Central)
I do not think that even acceptance of this 58 Amendment would stop hon. Members opposite running down to the sea. Nevertheless, I hope that the Government will accept it because, for the first time, it would gear the economy to the situation as it is today and not to what the Chancellor thought it to be when he and his right hon. Friends decided to bring in this tax. A year's delay would give the Government a chance to study foreign experience.
There have been arguments about Germany, but it is undeniable that the trend in Germany, holland, Belgium and France has been towards lightening the tax on distributed profits. The Chancellor thinks that he is an enlightened reformer, but he is doing the opposite. There is nobody more out-of-date than yesterday's radical, and the Corporation Tax as it now stands is very much the produce of the radicalism of yesterday or of 10 years ago. It is a mere rehash of the old-fashioned two-tier profits tax in order to raise tax on distributed profits.
As for the investment allowances, it is undeniable that the Corporation Tax will hit those companies which have a high rate of investment eligible for relief. This means that the Chancellor is increasing the burden on manufacturing industry and shifting it away from service trades. Is that really what the Treasury wants to do? Is that the way to increase exports and diminish imports? On the face of it, it seems likely to do the precise opposite.
There has been argument as to whether retention encourages growth—the evidence seems to be that it does not. But it is plain that if we encourage retention as such there will be less dependence upon the rate of return on investments: there may be more investment but it may be the wrong investment. The Chancellor claims that he is making overseas investments more selective but this tax makes investment at home less selective, which seems hardly the way to strengthen and modernise the economy. Since the tax was thought out for entirely different conditions I hope that the Government will think again and put it off for another year.
§ The Chief Secretary to the Treasury (Mr. John Diamond)
If the Amendment were accepted, Clause 42 would read:For the financial years 1965 and 1966 there shall be charged on profits of companies a tax, to be called corporation tax…59 I would not have thought from listening to any single one of the speeches in this debate that that was in the mind of anyone. Every speech has been directed to destroying the theory of Corporation Tax. [HON. MEMBERS: "No."] Not one speech in merit has produced a single argument in favour of postponement, with the possible exception of one or two points made by the right hon. Member for Altrincham and Sale (Mr. Barber), whose speech I shall be glad to answer now.
The right hon. Member for Sutton Coldfield (Mr. Geoffrey Lloyd), for instance, says that this is a Socialist attack upon the private enterprise system. He wants us to mount our Socialist attack upon the private enterprise system 12 months from now instead of now. Is that what he really wants, or is his argument totally irrelevant to the Amendment?
The same remarks go for every comment made in the debate. Every speaker has produced an argument against Corporation Tax and no one has produced a valid argument, with the sole exception of the right hon. Member for Altrincham and Sale, who said that the Amendment would give time for further thought to be given to certain of the points and that the present situation is unsatisfactory—
§ Mr. Grimond
I listened to all the speeches and I thought that the whole tenor of most of them was that the tax should be postponed so that more research should be done. That seems to me to be relevant to the Amendment.
§ Mr. Diamond
No, the right hon. Gentleman is quite wrong. These words were used, but if the right hon. Gentleman would be good enough to read the speeches carefully in HANSARD he will find that the one meaning behind every argument was that this is a bad tax and should not be introduced. The words used were all sorts of colourful arguments towards postponement, because the Amendment talks about postponement, and even on one occasion you, Mr. Deputy-Speaker, had to call one hon.
60 Member to order by reminding him of the situation. If the right hon. Member for Sutton Coldfield thinks that the argument that this is a Socialist attack upon the private enterprise system is a solid argument, which does him credit, for postponing the tax for one year, I can only assume that he will think anything.
§ Mr. Geoffrey Lloyd
I took this from a respectable intellectual organ of the Government, the New Statesman, put forward by one of their leading economists. In so far as I argued about the Corporation Tax I argued that there were several types of this tax in Europe and that it would be very much better, before introducing this type here, to study the European types and their effect and that a great deal of research had been done before those taxes had been introduced.
§ Mr. Diamond
We do not want to argue whether the New Statesman is a Government organ. That was as wrong as the right hon. Gentleman's other argument.
§ 5.0 p.m.
§ Mr. Diamond
It is not a Socialist Party organ—the right hon. Gentleman is wrong twice—and neither did the "Socialist organ" say it. It was the right hon. Gentleman who said it, and I am quoting what he said.
Of course, it is not acceptable to right hon. and hon. Members opposite, who have, in their view, made a case against the Corporation Tax, to have their attention drawn to the fact that we are discussing an entirely different issue. But it so happens that we are. We had seven hours' discussion on this same Amendment at an earlier stage. The arguments for the Corporation Tax are not in order for discussion now, but they have been given fully in the Budget debate, on Second Reading, and, to a certain extent, in reply to a similar debate at an earlier stage. I hope, therefore, that the House will not, after we have had a further hour's discussion, wish me to rehearse the matter again at length. As the right hon. Gentleman the Leader of the Liberal Party pointed out, we have had all the arguments before.
61 The hon. Member for Scarborough and Whitby (Sir A. Spearman) spoke of this as being a major upheaval. This is what the argument is about, of course. It is about change and about unwillingness to accept change. That is all it is. [HON. MEMBERS "No."] I am maintaining that it is, and every argument put forward on this Amendment shows that what the party opposite opposes is change. Right hon. and hon. Members opposite are opposed to changing the system, and they are opposed to it because of particular interests which might be involved.
Although the figures are well known, although it is well known that for every company which may in present circumstances pay more one will pay less, because we are talking about method and not about rate of tax, not one right hon. or hon. Member opposite throughout our proceedings has referred to the advantages which certain companies will get.
§ Mr. Deputy-Speaker
The right hon. Gentleman is now guilty of the offence he attributed to others. He is drifting into the merits of the tax.
§ Mr. Diamond
I apologise, Mr. Deputy-Speaker. It is very difficult to reply to the debate without doing so, but you are, of course, quite right to remind me that it is a debate about postponement.
The only argument I can put forward in reply is this, following what the right hon. Member for Altrincham and Sale said in opening the debate, that never was the country or the city—I am not sure which it was—in a position of worse uncertainty, but all the Amendment would do would be to prolong the uncertainty for a further year.
It is ridiculous to suggest that that should be done. There has been ample time for full consideration. [HON. MEMBERS: "No."] My right hon. Friend, as long ago as last December, gave an indication of the general principles of the tax. Ever since the Bill was published—one could not have confidential discussions until it had been published—we have had the fullest possible discussion with every kind of interest involved, and we have listened very carefully to the representations made in Committee and in the House.
If I may say so, many hon. and right hon. Members opposite were very well 62 informed about the various interests which were advanced. All those interests have been fully consulted, and we have made whatever adjustments we thought right, irrespective of whether we should be dubbed weak, obdurate, or whatever the adjective might be, in order to get the tax, as far as possible, working smoothly and well from the beginning.
This is not an easy task. Everyone knows that it is not an easy task. We have a tax system which has been going for many years, yet every year, and sometimes twice a year, we have to alter that tax system. In spite of all the precedents and the great knowledge there is, it is necessary to keep it up to date, and I have no doubt that it will be found necessary to keep the Corporation Tax up to date from time to time. This is not an argument for postponement. Every argument is in favour of removing the uncertainty to which the right hon. Gentleman referred, to give business men an opportunity to get down to it, to get used to it, to know what will be involved, and to read all the books which are on the point of publication, about which many of us are already being told and which will explain how the Corporation Tax will work, how it will effect the individual, and so on.
For those reasons, and particularly as every single argument produced this afternoon was produced in our earlier debates and has been fully answered, I cannot recommend acceptance of the Amendment.
§ Mr. Barber
With the leave of the House, I shall comment on what the Chief Secretary has just said. His reply could be divided into three parts. The first was sheer provocation not only to my right hon. and hon. Friends, but also to the Leader of the Liberal Party, who has now left the Chamber. The second was a passage in which he told the House that he did not think that there was any point in replying to a single argument which had been put forward from this side. The third was to tell the House that—to quote his words—the fullest possible discussion had taken place with every interest involved.
What utter nonsense. The very last day we met on the Bill we were considering the case of the statutory water companies and we were told that neither the Chancellor nor the Chief Secretary, or any 63 Treasury Minister, had had time to discuss the matter with them although all they wanted to do was to point out that the Chancellor was barking up the wrong tree.
The right hon. Gentleman said that no argument in support of the Amendment had been put forward in this debate. What about the argument advanced by some of my hon. Friends about the complexity of the tax, the fact that it is not yet understood, the fact that there are new Amendments down on the Notice Paper which we are to consider even today?
§ Mr. Barber
The answer is quite simple. Because it is a complex tax, because many people, including many chartered accountants, do not fully understand how it is to work, it is most desirable that time should be given for further consideration to get the tax right. It is incredible that, at this stage, with a new tax proposal, we still have to consider a variety of Amendments in the course of today and, perhaps, the early part of the night, even after the discussion which we had in Committee.
What about the point made by the Leader of the Liberal Party and several of my hon. Friends concerning research into overseas investment? Why should the Chancellor take a firm decision on this tax when it is now known that he is not satisfied with the factual background which led him to introduce the tax in the first place and when he is to undertake further investigations in the course of the year?
§ Mr. Diamond
I did not interrupt the right hon. Gentleman earlier, but that is an inaccurate statement. I am grateful to him for giving way. It is not, as he
§ said, a joint exercise by the Federation of British Industries and the Chancellor. It is an exercise by the Federation of British Industries with which the Chancellor is glad to co-operate and afford any assistance which may be required.
§ Mr. Barber
I never used the word "joint". The right hon. Gentleman is too touchy. I said that the Chancellor of the Exchequer would, in the course of the coming year, as I understand, take part in this inquiry. Presumably, he is ready to do that only because he thinks that it is worth while. This is obvious to all of us.
What about necessary further research into other systems of Corporation Tax? The right hon. Gentleman gave no answer to the point I made about the Chancellor's obvious misunderstanding last week of the Corporation Tax system in the United States? What about the constitutional point, which was in order, raised by my right hon. Friend the Member for Carlton (Sir K. Pickthorn)? Many hon. Members who divorce themselves from the politics and principles of the Corporation Tax will agree that there was a great deal in the cogent argument advanced by my right hon. Friend. But, of course, as with most of the sensible suggestions from this side of the House, it is rejected by the Chief Secretary.
This has been a wholly unsatisfactory debate. Serious points were put forward. Only once, Mr. Deputy-Speaker, apart for the time when you called the Chief Secretary to order, did either you or Mr. Speaker have to intervene to call an hon. Member to order. We devoted our arguments directly to the Amendment before us, and we were entitled to a reasonable reply. This we have not had.
§ Question put, That "1965 and 1966" stand part of the Bill:—
§ The House divided: Ayes 279, Noes 255.69
|Division No. 248.]||AYES||[5.10 p.m.|
|Abse, Leo||Benn, Rt. Hn. Anthony Wedgwood||Brown, Hugh D. (Glasgow, Provan)|
|Albu, Austen||Bennett, J. (Glasgow, Bridgeton)||Brown, R. W. (Shoreditch & Fbury)|
|Allaun, Frank (Salford, E.)||Binns, John||Buchan, Norman (Renfrewshire, W.)|
|Alldritt, Walter||Bishop, E. S.||Buchanan, Richard|
|Allen, Scholefield (Crewe)||Blackburn, F.||Butler, Herbert (Hackney, C.)|
|Atkinson, Norman||Blenkinsop, Arthur||Butler, Mrs. Joyce (Wood Green)|
|Bacon, Miss Alice||Boston, Terence||Callaghan, Rt. Hn. James|
|Bagier, Gordon A. T.||Bottomley, Rt. Hn. Arthur||Carmichael, Neil|
|Barnett, Joel||Bowden, Rt. Hn. H. W. (Leics S. W.)||Castle, Rt. Hn. Barbara|
|Baxter, William||Boyden, James||Chapman, Donald|
|Beaney, Alan||Braddock, Mrs. E. M.||Coleman, Donald|
|Bellenger, Rt. Hn. F. J.||Bradley, Tom||Conlan, Bernard|
|Bence, Cyril||Bray, Dr. Jeremy||Corbet, Mrs. Freda|
|Cousins, Rt. Hn. Frank||Irving, Sydney (Dartford)||Perry, Ernest G.|
|Craddock, George (Bradford, S.)||Jackson, Colin||Prentice, R. E.|
|Crawshaw, Richard||Janner, Sir Barnett||Price, J. T. (Westhoughton)|
|Crosland, Rt. Hn. Anthony||Jay, Rt. Hn. Douglas||Probert, Arthur|
|Crossman, Rt. Hn. R. H. S.||Jeger, George (Goole)||Pursey, Cmdr. Harry|
|Cullen, Mrs. Alice||Jenkins, Hugh (Putney)||Rankin, John|
|Dalyell, Tam||Jenkins, Rt. Hn. Roy (Stetchford)||Redhead, Edward|
|Darling, George||Johnson, Carol (Lewisham, S.)||Rees, Merlyn|
|Davies, G. Elfed (Rhondda, E.)||Johnson, James (K'ston-on-Hull, W.)||Reynolds, G. W.|
|Davies, Ifor (Gower)||Jones, Dan (Burnley)||Rhodes, Geoffrey|
|Davies, S. O. (Merthyr)||Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)||Roberts, Goronwy (Caernarvon)|
|de Freitas, Sir Geoffrey||Jones, J. Idwal (Wrexham)||Robertson, John (Paisley)|
|Delargy, Hugh||Jones, T. W. (Merioneth)||Robinson, Rt. Hn. K. (St. Pancras, N.)|
|Dell, Edmund||Kelley, Richard||Rodgers, William (Stockton)|
|Dempsey, James||Kenyon, Clifford||Rogers, George (Kensington, N.)|
|Diamond, Rt. Hn. John||Kerr, Mrs. Anne (R'ter & Chatham)||Rose, Paul B.|
|Dodds, Norman||Kerr, Dr. David (W'worth, Central)||Ross, Rt. Hn. William|
|Doig, Peter||Leadbitter, Ted||Rowland, Christopher|
|Donnelly, Desmond||Ledger, Ron||Sheldon, Robert|
|Driberg, Tom||Lee, Rt. Hn. Frederick (Newton)||Shinwell, Rt. Hn. E.|
|Duffy, Dr. A. E. P.||Lever, Harold (Cheetham)||Shore, Peter (Stepney)|
|Dunn, James A.||Lever, L. M. (Ardwick)||Short, Rt. Hn. E. (N'c'tle-on-Tyne, C.)|
|Dunnett, Jack||Lewis, Arthur (West Ham, N.)||Short, Mrs. Renée (W'hampton, N. E.)|
|Edelman, Maurice||Lipton, Marcus||Silkin, John (Deptford)|
|Edwards, Rt. Hn. Ness (Caerphilly)||Loughlin, Charles||Silverman, Julius (Aston)|
|Edwards, Robert (Bilston)||Mabon, Dr. J. Dickson||Silverman, Sydney (Nelson)|
|English, Michael||McBride, Neil||Skeffington, Arthur|
|Ennals, David||MacColl, James||Slater, Mrs. Harriet (Stoke, N.)|
|Ensor, David||MacDermot, Niall||Slater, Joseph (Sedgefield)|
|Evans, Albert (Islington, S.W.)||McGuire, Michael||Small, William|
|Evans, Ioan (Birmingham, Yardley)||McInnes, James||Solomons, Henry|
|Fernyhough, E.||McKay, Mrs. Margaret||Soskice, Rt. Hn. Sir Frank|
|Fitch, Alan (Wigan)||Mackenzie, Gregor (Rutherglen)||Spriggs, Leslie|
|Fletcher, Sir Eric (Islington, E.)||Mackie, John (Enfield, E.)||Steele, Thomas (Dunbartonshire, W.)|
|Fletcher, Ted (Darlington)||MacMillan, Malcolm||Stewart, Rt. Hn. Michael|
|Fletcher, Raymond (Ilkeston)||Mahon, Peter (Preston, S.)||Stonehouse, John|
|Floud, Bernard||Mahon, Simon (Bootle)||Stones, William|
|Foley, Maurice||Mallalieu, E. L. (Brigg)||Strauss, Rt. Hn G. R. (Vauxhall)|
|Foot, Sir Dingle (Ipswich)||Mallalieu, J.P.W. (Huddersfield, E.)||Stross, Sir Barnett (Stoke-on-Trent, C.)|
|Foot, Michael (Ebbw Vale)||Manuel, Archie||Swain, Thomas|
|Ford, Ben||Mapp, Charles||Swingler, Stephen|
|Fraser, Rt. Hn. Tom (Hamilton)||Marsh, Richard||Symonds, J. B.|
|Galpern, Sir Myer||Mason, Roy||Taverne, Dick|
|Carrett, W. E.||Mathew, Robert||Taylor, Bernard (Mansfield)|
|Ginsburg, David||Maxwell, Robert||Thomas, George (Cardiff, W.)|
|Gourlay, Harry||Mayhew, Christopher||Thomas, Iorwerth (Rhondda, W.)|
|Greenwood, Rt. Hn. Anthony||Mellish, Robert||Thomson, George (Dundee, E.)|
|Gregory, Arnold||Mendelson, J. J.||Thornton, Ernest|
|Grey, Charles||Mikardo, Ian||Tinn, James|
|Griffiths, David (Rother Valley)||Millan, Bruce||Tomney, Frank|
|Griffiths, Rt. Hn. James (Llanelly)||Miller, Dr. M. S.||Tuck, Raphael|
|Griffiths, Will (M'chester, Exchange)||Milne, Edward (Blyth)||Urwin, T. W.|
|Gunter, Rt. Hn. R. J.||Molloy, William||Varley, Eric G.|
|Hale, Leslie||Monslow, Walter||Wainwright, Edwin|
|Hamilton, James (Bothwell)||Morris, Alfred (Wythenshawe)||Walden, Brian (All Saints)|
|Hamilton, William (West File)||Morris, John (Aberavon)||Walker, Harold (Doncaster)|
|Hamling, William (Woolwich, W.)||Mulley, Rt. Hn. Frederick (Sheffield Pk)||Wallace, George|
|Hannan, William||Murray, Albert||Watkins, Tudor|
|Harper, Joseph||Neal, Harold||Weitzman, David|
|Harrison, Walter (Wakefield)||Newens, Stan||Wells, William (Walsall, N.)|
|Hart, Mrs. Judith||Norwood, Christopher||White, Mrs. Eirene|
|Hattersley, Roy||Oakes, Gordon||Whitlock, William|
|Hayman, F. H.||Ogden, Eric||Wigg, Rt. Hn. George|
|Hazell, Bert||O'Malley, Brian||Wilkins, W. A.|
|Healey, Rt. Hn. Denis||Oram, Albert E. (E. Ham, S.)||Willey, Rt. Hn. Frederick|
|Heffer, Eric S.||Orbach, Maurice||Williams, Alan (Swansea, W.)|
|Henderson, Rt. Hn. Arthur||Orme, Stanley||Williams, Clifford (Abertillery)|
|Hobden, Denis (Brighton, K'town)||Oswald, Thomas||Williams, Mrs. Shirley (Hitchin)|
|Holman, Percy||Owen, Will||Williams, W. T. (Warrington)|
|Houghton, Rt Hn. Douglas||Padley, Walter||Willis, George (Edinburgh, E.)|
|Howarth, Harry (Wellingborough)||Page, Derek (King's Lynn)||Wilson, Rt. Hn. Harold (Huyton)|
|Howarth, Robert L. (Bolton, E.)||Paget, R. T.||Wilson, William (Coventry, S.)|
|Howell, Denis (Small Heath)||Palmer, Arthur||Winterbottom, R. E.|
|Howie, W.||Pannell, Rt. Hn. Charles||Woodburn, Rt. Hn. A.|
|Hoy, James||Pargiter, G. A.||Woof, Robert|
|Hughes, Cledwyn (Anglesey)||Park, Trevor (Derbyshire, S. E.)||Wyatt, Woodrow|
|Hughes, Emrys (S. Ayrshire)||Parker, John||Zilliacus, K.|
|Hughes, Hector (Aberdeen, N.)||Parkin, B. T.|
|Hunter, Adam (Dunfermline)||Pavitt, Laurence||TELLERS FOR THE AYES:|
|Hunter, A. E. (Feltham)||Pearson, Arthur (Pontypridd)||Mr. George Lawson and|
|Hynd, H. (Accrington)||Peart, Rt. Hn. Fred||Mr. John McCann.|
|Hynd, John (Attercliffe)||Pentland, Norman|
|Agnew, Commander Sir Peter||Giles, Rear-Admiral Morgan||Maydon, Lt.-Cmdr. S. L. C.|
|Alison, Michael (Barkston Ash)||Gilmour, Ian (Norfolk, Central)||Meyer, Sir Anthony|
|Allan, Robert (Paddington, S.)||Gilmour, Sir John (East Fife)||Mills, Peter (Torrington)|
|Allason, James (Hemel Hempstead)||Glover, Sir Douglas||Miscampbell, Norman|
|Amery, Rt. Hn. Julian||Glyn, Sir Richard||Mitchell, David|
|Anstruther-Gray, Rt. Hn. Sir W.||Godber, Rt. Hn. J. B.||Monro, Hector|
|Astor, John||Goodhart, Philip||More, Jasper|
|Atkins, Humphrey||Goodhew, Victor||Morrison, Charles (Devizes)|
|Awdry, Daniel||Gower, Raymond||Mott-Radclyffe, Sir Charles|
|Baker, W. H. K.||Grant, Anthony||Munro-Lucas-Tooth, Sir Hugh|
|Barber, Rt. Hn. Anthony||Grant-Ferris, R.||Murton, Oscar|
|Barlow, Sir John||Gresham Cooke, R.||Neave, Airey|
|Batsford, Brian||Griffiths, Eldon (Bury St. Edmunds)||Nicholson, Sir Godfrey|
|Bell, Ronald||Griffiths, Peter (Smethwick)||Noble, Rt. Hn. Michael|
|Bennett, Sir Frederic (Torquay)||Grimond, Rt. Hn. J.||Nugent, Rt. Hn. Sir Richard|
|Berry, Hn. Anthony||Gurden, Harold||Onslow, Cranley|
|Bessell, Peter||Hall, John (Wycombe)||Orr-Ewing, Sir Ian|
|Biffen, John||Hall-Davis, A. G. F.||Osborn, John (Hallam)|
|Biggs-Davison, John||Hamilton, M. (Salisbury)||Osborne, Sir Cyril (Louth)|
|Birch, Rt. Hn. Nigel||Harris, Frederic (Croydon, N. W.)||Page, John (Harrow, W.)|
|Black, Sir Cyril||Harris, Reader (Heston)||Page, R. Graham (Crosby)|
|Blaker, Peter||Harvey, Sir Arthur Vere (Macclesf'd)||Pearson, Sir Frank (Clitheroe)|
|Bowen, Roderic (Cardigan)||Harvey, John (Walthamstow, E.)||Peel, John|
|Box, Donald||Harvie Anderson, Miss||Percival, Ian|
|Boyd-Carpenter, Rt. Hn. J.||Hastings, Stephen||Peyton, John|
|Boyle, Rt. Hn. Sir Edward||Hawkins, Paul||Pickthorn, Rt. Hn. Sir Kenneth|
|Braine, Bernard||Hay, John||Pike, Miss Mervyn|
|Brewis, John||Heald, Rt. Hn. Sir Lionel||Pitt, Dame Edith|
|Brinton, Sir Tatton||Heath, Rt. Hn. Edward||Price, David (Eastleigh)|
|Bromley-Davenport, Lt.-Col. Sir Walter||Hendry, Forbes||Pym, Francis|
|Brooke, Rt. Hn. Henry||Higgins, Terence L.||Quennell, Miss J. M.|
|Brown, Sir Edward (Bath)||Hiley, Joseph||Ramsden, Rt. Hn. James|
|Bruce-Gardyne, J.||Hill, J. E. B. (S. Norfolk)||Rawlinson, Rt. Hn. Sir Peter|
|Bryan, Paul||Hirst, Geoffrey||Redmayne, Rt. Hn. Sir Martin|
|Buchanan-Smith, Alick||Hobson, Rt. Hn. Sir John||Rees-Davies, W. R.|
|Bullus, Sir Eric||Hopkins, Alan||Renton, Rt. Hn. Sir David|
|Burden, F. A.||Hordern, Peter||Ridley, Hn. Nicholas|
|Butcher, Sir Herbert||Hornby, Richard||Ridsdale, Julian|
|Campbell, Gordon||Hornsby-Smith, Rt. Hn. Dame P.||Roberts, Sir Peter (Heeley)|
|Carlisle, Mark||Howard, Hn. G. R. (St. Ives)||Rodgers, Sir John (Sevenoaks)|
|Carr, Rt. Hn. Robert||Howe, Geoffrey (Bebington)||Roots, William|
|Cary, Sir Robert||Hunt, John (Bromley)||Royle, Anthony|
|Channon, H. P. G.||Hutchison, Michael Clark||St. John-Stevas, Norman|
|Chataway, Christopher||Iremonger, T. L.||Scott-Hopkins, James|
|Clark, William (Nottingham, S.)||Irvine, Bryant Godman (Rye)||Sharples, Richard|
|Clarke, Brig. Terence (Portsmth, W.)||Jenkin, Patrick (Woodford)||Shepherd, William|
|Cole, Norman||Johnson Smith, G. (East Grinstead)||Sinclair, Sir George|
|Cooke, Robert||Johnston, Russell (Inverness)||Smith, Dudley (Br'ntf'd & Chiswick)|
|Cooper, A. E.||Jones, Arthur (Northants, S.)||Smyth, Rt. Hn. Brig. Sir John|
|Cooper-Key, Sir Neill||Jopling, Michael||Soames, Rt. Hn. Christopher|
|Corfield, F. V.||Joseph, Rt. Hn. Sir Keith||Spearman, Sir Alexander|
|Costain, A. P.||Kaberry, Sir Donald||Stainton, Keith|
|Courtney, Cdr. Anthony||Kerr, Sir Hamilton (Cambridge)||Stanley, Hn. Richard|
|Craddock, Sir Beresford (Spelthorne)||Kershaw, Anthony||Steel, David (Roxburgh)|
|Crawley, Aidan||Kimball, Marcus||Stodart, Anthony|
|Crosthwaite-Eyre, Col. Sir Oliver||King, Evelyn (Dorset, S.)||Stoddart-Scott, Col. Sir Malcolm|
|Curran, Charles||Kitson, Timothy||Studholme, Sir Henry|
|Dalkeith, Earl of||Lagden, Godfrey||Taylor, Sir Charles (Eastbourne)|
|Dance, James||Lambton, Viscount||Taylor, Edward M. (G'gow, Cathcart)|
|Davies, Dr. Wyndham (Perry Barr)||Legge-Bourke, Sir Harry||Teeling, Sir William|
|d'Avigdor-Goldsmid, Sir Henry||Lewis, Kenneth (Rutland)||Temple, John M.|
|Dean, Paul||Litchfield, Capt. John||Thatcher, Mrs. Margaret|
|Deedes, Rt. Hn. W. F||Lloyd, Rt. Hn. Geoffrey (Sut'n C'dfield)||Thomas, Sir Leslie (Canterbury)|
|Digby, Simon Wingfield||Lloyd, Ian (P'tsm'th, Langstone)||Thomas, Rt. Hn. Peter (Conway)|
|Dodds-Parker, Douglas||Lloyd, Rt. Hn. Selwyn (Wirral)||Thompson, Sir Richard (Croydon, S.)|
|Doughty, Charles||Longden, Gilbert||Tiley, Arthur (Bradford, W.)|
|Douglas-Home, Rt. Hn. Sir Alec||Loveys, Walter H.||Tilney, John (Wavertree)|
|Drayson, G. B.||Lubbock, Eric||Turton, Rt. Hn. R. H.|
|du Cann, Rt. Hn. Edward||Lucas, Sir Jocelyn||Tweedsmuir, Lady|
|Eden, Sir John||McAdden, Sir Stephen||van Straubenzee, W. R.|
|Elliot, Capt. Walter (Carshalton)||MacArthur, Ian||Vaughan-Morgan, Rt. Hn. Sir John|
|Elliott, R. W. (N'c'tle-upon-Tyne, N.)||Mackenzie, Alasdair (Ross & Crom'ty)||Vickers, Dame Joan|
|Emery, Peter||Maclean, Sir Fitzroy||Walder, David (High Peak)|
|Farr, John||Macleod, Rt. Hn. Iain||Walker, Peter (Worcester)|
|Fell, Anthony||McNair-Wilson, Patrick||Walker-Smith, Rt. Hn. Sir Derek|
|Fisher, Nigel||Maitland, Sir John||Wall, Patrick|
|Fletcher-Cooke, Charles (Darwen)||Marples, Rt. Hn. Ernest||Ward, Dame Irene|
|Fletcher-Cooke, Sir John (S'pton)||Marten, Neil||Weatherill, Bernard|
|Foster, Sir John||Mathew, Robert||Wells, John (Maidstone)|
|Fraser, Rt. Hn. Hugh (St'fford & Stone)||Maude, Angus||Whitelaw, William|
|Galbraith, Hn. T. G. D.||Maudling, Rt. Hn. Reginald||Williams, Sir Rolf Dudley (Exeter)|
|Gammans, Lady||Mawby, Ray||Wills, Sir Gerald (Bridgwater)|
|Gibson-Watt, David||Maxwell-Hyslop, R. J.||Wise, A. R.|
|Wolrige-Gordon, Patrick||Wylie, N. R.||TELLERS FOR THE NOES:|
|Woodhouse, Hn. Christopher||Yates, William (The Wrekin)||Mr. Marten McLaren and|
|Woodnutt, Mark||Younger, Hn. George||Mr. Ian Fraser.|