§ Any sum payable by way of retirement pension under the National Insurance Acts as amended shall not be included in the amount assessed for income tax liability unless the total assessable income from all sources of the taxpayer (excluding such retirement pension) exceeds in the case of a married man four hundred pounds a year or in the case of a single man or woman, or widow or widower, without other dependants exceeds two hundred and fifty pounds a year.—[Mr. Iain Macleod.]
§ Brought up, and read the First time.
§ 3.58 p.m.
§ Mr. Iain Macleod
(Enfield, West): I beg to move, That the Clause be read a Second time.
The Clause stands in my name and that of three hon. Members from the Government benches. I was somewhat suspicious at the close of play on Thursday to see that neither the hon. Member for Oldham, West (Mr. Hale) nor the hon. Lady the Member for Wood Green (Mrs. Joyce Butler) were in their places, and I rapidly added my name to theirs because I think that this is an admirable Clause which certainly should be considered by the Committee. Since then we have had the unexpected support of the hon. Member for Fife, West (Mr. William Hamilton). I draw to the Financial Secretary's attention the fact that although the Clause has only four sponsors it is most formidably supported. It is supported by the Opposition, and it is supported by the hon. Member for Fife, West—whom one might describe as the general of the remaining loyalists, a rapidly dwindling band on the Government benches. It is supported by a Co-operative Member and the hon. Mem- 48 ber for Oldham, West, who is extremely convincing on each and every cause which he brings forward.
§ 4.0 p.m.
Now I will start by saying a word about the cost, as I understand it. The Financial Secretary will be able to correct me, but the nearest estimate I have been able to find comes from a Written Answer he gave on 2nd November, 1965, to a Question from the hon. Member for Heywood and Royton (Mr. Barnett), who asked for
an estimate of the cost of exempting retirement pensions from Income Tax where the pensioners' total income, including the pension. does not exceed £10 per week.
The Financial Secretary's Answer, which no doubt he will have in his file, was
About £7 million in a full year …
He went on to say:
This cost would be nearly double if marginal relief were also given …"—[OFFICIAL REPORT, 2nd November, 1965; Vol. 718, c. 138.]
§ Of course, the two situations are not wholly comparable. One excludes and the other includes the retirement pension in the calculation for assessment. The Written Question by the hon. Member had put a total limit, including pension, of £10 a week or £520 a year, while this new Clause is more modest and suggests £400 a year, excluding such retirement pension, in the case of a married man, and £250 a year in the case of a single man or woman, or widow or widower.
§ Mr. Joel Barnett
(Heywood and Royton): It is not strictly more modest, because it would give allowances to unearned income as well as to earned income.
§ Mr. Macleod
Yes, but I would have thought—we shall get the right figures from the Financial Secretary—that there is not very much between the two whichever way one does the sum, and I think there is a strong case on those grounds for acceding to this particular request.
There is, secondly, the argument in the second part of the Financial Secretary's Answer to which I have referred, about repercussions. This is an argument or an excuse which is always put forward on financial and other matters—the suggestion that one is opening a door which might have to be pushed a good deal wider before one can find a satisfactory 49 answer. I would say, if that is worth doing, one could either ignore the repercussions and simply not meet them, or one should accept them; and that must bear very much on the Chancellor's assessment of his Budget judgment.
It is very relevant here, and will be in this the last day of the Committee stage, that, as my hon. Friend the Member for Finchley (Mrs. Thatcher) said in her speech on the Budget, this is a Budget which has been put forward without any social service proposal at all, and, as far as we know, this is the first Budget of which this can be said in, at least, the post-war years. The Financial Secretary tried to ride that one off by saying that there was, of course, the option mortgage scheme. Perhaps there is, but we have not seen it, and I do not know when, if ever, we are going to see it, and I do not think it can weigh in these particular scales.
This proposal, then, is a strictly limited one. I am not—I do not know about my co-sponsors: I have not had any discussions with them, I am afraid, on this Motion—but I am not particularly wedded to the amounts of £400 or £250 and would be quite prepared to consider an adjustment of these within the limits of what the Financial Secretary can afford for this particular proposal.
There is just one other point I wish to make for the new Clause. I think that in last year's Budget the allowance against tax in the case of National Insurance contribution was withdrawn in relation to the contribution towards the retirement pension, but before this it was the practice—I do not say there was no exception to it, because one always finds there is an exception to everything, but certainly it was the general rule—that either the contribution or the benefit was taxable but not as in this case both. Therefore, there seems to me, on the grounds both of merit and of logic, a very considerable case to be made out for this particular proposal.
I am somewhat surprised, if I may say so, that none of those who have put a new Clause like this on the Paper and have known that it was selected from the list which is provided for us—that none of those three hon. Members on the Government back benches—should have thought it worth while coming this after 50 noon to move the new Clause, but we are glad to remedy that even at short notice—indeed, by an impromptu speech—from this side of the Committee, and if they will not support this new Clause, well then, we will, and we will adopt this new Clause as our own, and I hope that in due course we shall have a response from the Financial Secretary.
§ Mr. Barnett
As my hon. Friends are not here to support their new Clause I would venture to do so. I have a great deal of sympathy for the Clause—or, at least, the principles in the Clause. As the right hon. Gentleman rightly said, the cost is not very great whichever way one looks at it. However, there are in the Clause certain point I should like briefly to mention which I do not like.
I think that in considering the question whether National Insurance pension should be taxable or not one could perhaps look at it very much like an annuity or pension policy purchased with annual instalments. An annuity is purchased, voluntarily of course, and National Insurance benefit is purchased, as it were, compulsorily, but that annuity, or a quite substantial part, is treated as a capital payment and a capital receipt and is, therefore, not taxable in the hands of the recipient, and I think that, in equity, it could well be argued that the National Insurance pension should equally be treated as non-taxable in the hands of the recipient. Therefore, I believe there is an arguable case on equity grounds, but the Clause as it stands really does create a great many anomalies, and I do not think it could really be left precisely as it is at the moment.
For example, all those without National Insurance pension at all would get no benefit from this relief which we would be giving to all National Insurance retirement pensioners, but there are still many old people without National Insurance retirement pensions and consequently this would be unfair to one section of taxpayers, by giving it solely to that other particular section of taxpayer. Not that one is not friendly disposed to that particular section, but, as I say, I believe it does create just one more anomaly.
Equally, I am not at all sure I would want to see the same amount of tax 51 relief given to those over 65 for unearned income as we might consider giving to those over 65 in respect of earned income. I think the question of the amount of relief we give in this sphere has to be considered on a much wider basis. It cannot be taken in the simple context that this Clause would have us do.
The really major point of principle behind this Clause is whether or not we should be giving assistance to retirement pensioners to carry on working; in other words, whether as a nation we should encourage retirement pensioners to work, either in part-time or full-time employment. It could be argued that in many ways it is a tragedy that a person at the age of 65, having worked hard all his life, should feel it necessary to go on working, either full-time or part-time, because he has insufficient income to have a reasonably happy retirement in the last 10 or 20 years of his life.
But there are many people over 65 who want to go on working because they feel able and fitted to do so. It gives them a great deal of happiness, and they do not wish to retire. There are others who literally have to go on working because they cannot survive on the National Insurance retirement pension. I do not suppose that many of us here would like to try.
Then there is the question of national economy. Whether we like it or not, there are not many of us who would deny that, in our present economic situation and that likely in the foreseeable future, we need to give every possible encouragement to people over the age of 65 who wish to go on working. There is therefore a strong case for allowing the National Insurance pension to be tax-free to a certain degree, if only to the extent that it gives encouragement to people aged 65 and over to work an extra few hours or to work at all. In that sense, the cost to the Treasury of the Clause or something like it would be very small in comparison to the increased production from the use of the extra manpower which we so desperately need.
It is in that sort of spirit that I welcome the idea behind the Clause, and I hope 52 that the Treasury will be able to accept something like it.
§ Mr. Raymond Gower
(Barry): The Committee will agree that it was commendable of the hon. Member for Heywood and Royton (Mr. Barnett) to step in at the last moment and declare his limited support for the principle of this valuable new Clause. On the other hand, my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) declared his support with a good deal more forcefulness and less equivocation. My right hon. Friend commented that it was remarkable that the Clause should have been tabled in the way that it was. It is surprising that, even if the hon. Gentlemen opposite who sponsored it were unable to be present, they did not find some hon. Member on their side to add his name to it and appear here today to argue the principle. I cannot understand why no hon. Member found it possible to do that.
The hon. Member for Heywood and Royton said that one of his objections to the Clause as it stands was that it would not help some of the people who are not in receipt of National Insurance pensions. He will be aware that we on this side have pressed the claims of most of those people for a long time, and that, only a few days ago, an Amendment in respect of most of those people was solidly resisted by the Government. So that is not a very formidable objection to the principle contained in the words of the Clause.
As my right hon. Friend pointed out, it would be of valuable help to a substantial number of people who, after all, are not in receipt of anything like a large income. By definition, those are the very people who, in retirement, cannot understand why they are paying Income Tax. I am sure that hon. Members on both sides have had people in that category coming to see them at their interviews, asking why they should be paying tax. I put it to the Financial Secretary that quite often the amount of tax involved is minimal, and to that extent the concession for large numbers of these people would be a very small one.
As my right hon. Friend pointed out, the Budget has no social service content at all. I would go further and say that 53 a concession of this sort would be some thing for a group of people from whom promised benefits have long been with held. We were led to believe by propaganda that an income guarantee was likely to be one of the earliest steps taken in the last Parliament, but there has been no sign of it. Surely these people deserve some slight concession of this kind.
As has been indicated from both sides of the Committee, the cost would not be excessive. My right hon. Friend made it clear that we are not attached to the wording of the new Clause, and I hope that than removes the chief objection of the hon. Member for Heywood and Royton to it as it stands. We support the principle. I hope that the Financial Secretary can accept the principle, even if he cannot go so far as to accept the exact words of the new Clause.
§ 4.15 p.m.
§ Mr. Robert Sheldon
(Ashton-under-Lyne): We know that at present there are various forms of relief under which people in the category that we are discussing can claim. They get the retirement pension under the National Insurance scheme, which on its own is not assessed for Income Tax. They get the age relief whereby investment income is treated as earned income up to a certain limit. Also available to them is the small income relief whereby investment income is treated as earned income. Finally, there is the complete exemption for small incomes of under £12 a week in respect of married couples over the age of 65.
The right hon. Member for Enfield, West (Mr. Iain Macleod) said that in considering the Clause, we should ignore the repercussions or accept them. I am sure that he really did not mean that we should ignore them. I assume that he meant that we should accept them. One of the repercussions is that the Clause would blur the distinction between earned and unearned income. My hon. Friend the Member for Heywood and Royton (Mr. Barnett) mentioned the case of people over 65 whose decision whether to work or not would be governed by the extent of the relief which they got for unearned income.
One of the great problems of our time is that people over 65 are much more 54 able and willing to work than in the past. Many progressive firms are going to considerable lengths to provide the sort of work which can be done by those who do not wish to retire after having acquired skills which are in great demand but for which their declining energies do not fit them in the same degree as in the past. Such firms are to be encouraged, and people should be encouraged to continue working and be able to earn and pay tax at some slight differential rate from those who decide to retire.
I am not saying that we should not assist them in the way that my hon. Friend mentioned, but any blurring of the distinction must be looked at with great care. If there is to be a distinction between earned and unearned income, this distinction will necessarily apply to a larger proportion of the population who desire to work after approaching the age of 65. It is because of that that the Clause should be looked at with some caution.
§ Mr. Charles Fletcher-Cooke
(Darwen): I am rather impressed by what the hon. Member for Ashton-under-Lyne (Mr. Sheldon) has just said. I take it to be his point that if this Clause were adopted and included in the Bill fewer people would work after 65 than would otherwise be the case because they would pay Income Tax on their wages, whereas if they drew their pension at 65 they would not. I hope that I have got the point which the hon. Gentleman was making. If I have not, perhaps he will correct me.
§ Mr. Sheldon
My point was that the distinction between earned and unearned income becomes blurred. This distinction is of some importance, and it is becoming of increasing importance as the number of people over 65 who are working increases relative to those who do not work. It is because the blurring of this distinction between earned and unearned income may occur when people are making this choice that this is rather dangerous.
§ Mr. Fletcher-Cooke
I was hoping to support the hon. Gentleman in wondering whether, although the emotion and the feeling behind the Clause are admirable. it was, nevertheless, a rather blunt instrument as drafted, because it might mean that somebody faced with this choice at 65 might decide to accept the pension. 55 Goodness knows there are a number of people of that age, and it is important to persuade them to choose to work. I am not sure that the inducements are sufficient under our present system of pension and taxation. I am afraid that this might mean that they will jump at the idea of accepting a pension at 65, because it is to be tax-free, or virtually tax-free, whereas if they go on working they will have to pay tax on their earnings.
§ Mr. Barnett
I think that the hon. and learned Gentleman is under a misapprehension. He thinks that the pension is taxable, but if a married couple have no income other than a pension, naturally they do not pay tax on it. Therefore, I think the argument that because we make it tax free people will not go to work does not apply.
§ Mr. Fletcher-Cooke
Because it is tax free anyhow? I follow that, and to that extent this Clause is irrelevant. If it is already tax free under the present rules, it is no good making it even more tax free by putting in a new Clause.
§ Mr. Harold Lever
(Manchester, Cheetham): I have only just looked at the Clause, but it seems clear what my hon. Friend the Member for Heywood and Royton (Mr. Barnett) is aiming at, and it seems clear, too, what my hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) who criticised it is aiming at.
The effect of the Clause will be that where there is income in addition to the retirement pension the retirement pension will be left out of account for taxation purposes, it being agreed that for practical purposes, where there is not an income the retirement pension is tax-free, not by law but by the practical consequence of the existing limits. The Clause will mean that what is tax-free because it does not come up to the taxable limits will remain tax-free when, either by reason of earnings or unearned income, that limit is exceeded.
§ Mr. Fletcher-Cooke
I am obliged to the hon. Gentleman for putting it so succinctly. It would apply in the case of a man over 70, because under the present rules he would have his pension and be allowed to work. It would therefore be of immense assistance to him because he would get free of tax that part of his 56 total income which was pensionable. It would be a great encouragement to those over 70 to go on working, but I am still of the mind that when those at 65—which is a far more serious matter because, this is where it bites—have to decide whether to forgo their pension, and therefore under this Clause forgo possible tax-free income, they might well say, "No. I have my interest on my savings. I have the possibility of working. I have my pension at present. I have to pay tax on my pension, because I have another source of unearned income. If the Clause goes through I shall not have to pay tax on my pension, but if I forgo my pension for five years and earn money instead of drawing my pension I will not get the same sort of relief as the Clause would provide me with if I drew my pension". Is that wrong?
§ Mr. Barnett
A man of 65 can earn £5, draw his pension, and still get the benefit of this type of Clause.
§ Mr. Fletcher-Cooke
There is that exception, but if a man of 65 earns more than £5, if he wants to take full-time employment, which is what we desire, then I think that this Clause as drafted might be a deterrent to him doing so in certain circumstances.
I thought that I ought to say that because it seems to me that the Financial Secretary's task is not to pick holes in this Clause—I think that that is fairly easy to do—but to explain why, in principle, and not in detail, it is now considered right that the Government should tax money not only when it comes back to the people who have contributed, but also when it is contributed in the sense that since the last Budget it is no longer an exception for tax purposes.
Hitherto since the last Budget the defence for taxing pensions has been that people got the relief when they paid their contributions over their working life. It was always said that the reason why the pension was taxable was that for 40 years people have been enabled—and sometimes it was a considerable advantage—to regard their contributions as expenses for tax purposes. Now they have to be paid out of spending money, and this means that the Treasury is getting it at both ends. This is a characteristic Treasury attitude. It is not Morton's fork, it is MacDermot's 57 fork, and it is monstrous, since at the instance of the Treasury last year an immense amount of money was gathered by altering the rule. It was all done rather surreptitiously and nobody noticed it.
§ Mr. Fletcher-Cooke
It is being noticed by the population now, although it was not noticed then, because people had even more dramatic new taxes to consider. As my hon. Friend the Member for Barry (Mr. Gower) pointed out, more and more in our interviews we are finding that people consider it intolerable to have to pay tax twice, as they put it, because this is really what it amounts to.
It is therefore incumbent on the Financial Secretary when he rejects this Clause, as I fear he looks as though he is going to, to give us some hope that he will produce a better Clause on the same lines, taking into account the little dangers that I have pointed out in the first instance, and perhaps giving the marginal relief. This is necessary because one cannot have all or nothing as the Clause as drafted gives when one gets up against the £400, or the other sum, as the case may be.
I think that the Financial Secretary ought to design his new Clause—I am paying him the compliment of thinking that he will put down a new one on Report—so that it gives encouragement to the continuation of working, and if necessary working full-time by those who would want to do so if it was made worth their while. I regard this as an important feature, apart from the mere justice of it. This could have most important economic consequences, and I think that the Financial Secretary should do something imaginative with this suggestion. If he merely puts up a bald refusal, he will disappoint us very much indeed.
§ 4.30 p.m.
Mr. J. T. Price
(Westhoughton): I fully understand the readiness and even enthusiasm with which the right hon. Member for Enfield, West (Mr. Iain Macleod) supports the new Clause. What I do not understand, since a question of principle is involved, is why hon. Members oppo- 58 site were not so enthusiastic for this reform when they were holding the reins of Government.
§ Mr. Iain Macleod
Part of the case is that the situation has altered since last year. That is precisely what we are trying to put right. We cannot be held responsible for last year's Budget.
I am much obliged to the right hon. Gentleman for his intervention, because it strengthens my case. This question has previously been argued in the House and in Committee on previous Finance Bills, and it has always been resisted for good and sufficient Treasury reasons, as presented by Ministers who are now on the benches opposite. That is a matter of history. No amount of recrimination will help us in this debate. Since the Clause has now been moved we should be given some adequate answers why consideration cannot be given to the principle behind it, because there are many precedents which help in this direction.
I am familiar with the objections, but I am constantly pressed by my constituents to raise this matter, and I am now raising my voice in an impromptu manner in respect of the principle enshrined in the Clause. I am not sure that my hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) was right in something he said, but I do not want to be argumentative.
When a retirement pensioner, for his own reasons or because he is under pressure owing to economic circumstances, returns to work after having reached the age of 65, he becomes a special case, which has a great bearing on the Clause. The hon. and learned Member for Darwen (Mr. Fletcher-Cooke) referred to the £5 wages limit. It is true that the House, in its wisdom, has made regulations to provide that a pensioner may earn up to £5 a week without remission, or without its interfering with his retirement pension, which he is receiving as of right under the National Insurance scheme.
But people are constantly perplexed when they find that, having gone out to work and having earned £7 or £8 a week, although they have been given the £5 remission without interference with their pensions, when the matter comes to the attention of the tax officer their pensions are aggregated with their 59 earnings and they have to suffer a reduction of pension in relation to the amount earned in part-time or full-time employment.
I know that my right hon. Friend the Minister without Portfolio does not agree with this, but I should like to give an example to show what I mean. A widower receiving only £4 a week in National Insurance may go to work because he cannot live on that sum alone, and can then earn £5 a week without having his pension interfered with. But if he earns more the tax officer quite rightly aggregates both earnings and pension, which was previously free of tax, and he pays on the overall amount. This question should be looked at more critically.
We have always acknowledged that war service pensions should be free of tax. That has been part of our fiscal legislation for many years. We should take cognisance of the fact that a National Insurance contributor is drawing his pension as of right in respect of contributions he has paid, and is not receiving his pension as a gift from the State. But since the relevant legislation has been altered, so as to remove the allowance on the contributions he has paid, while he is working he does not receive that allowance, and some concession ought to be made in respect of that.
My right hon. Friends know that under Finance Acts going back to 1921 all contributory pensions under industrial pension schemes or bipartisan pension schemes—which are becoming the common rule in industry—have carried full remission of tax in relation to contributions made both by employer and employee. Since we are no longer making an allowance of tax National Insurance contributions this is the appropriate time for the House to examine the question in principle, and to bear in mind that although only a relatively small sum is involved—I believe that it is about £7 million a year—this would be a valuable concession, which might have the effect of giving greater encouragement to fit people over 65 years of age to fill some of the vacant places that now exist in industry. It would give them greater encouragement if they felt that the basic pension, which was 60 theirs of right under the State insurance scheme, was free of tax. I know that certain difficulties arise, but I should like to hear what the Minister has to say about it.
§ Mr. Paul Dean
(Somerset, North): The hon. Member for Westhoughton (Mr. J. T. Price) has drawn attention to some of the anomalies which exist in our present tax law, but he was a little unfair to my hon. and right hon. Friends when he asked why we did not do something to put this right when we were in power. As my right hon. Friend the Member for Enfield, Wes'. (Mr. Iain Macleod) pointed out, this entirely new situation in respect of the retirement pension has arisen as a result of last year's Finance Bill. This is the main point of principle involved in the new Clause. I am not entirely wedded to its precise proposals, but it provides an opportunity for the Financial Secretary to tell us upon what principle we now tax retirement pensions.
Until last year's Finance Bill the principle was clear enough; a person had a tax limit in respect of contributions he made towards his retirement pension, and therefore the pension itself was taxed. So long as that situation existed, in the vast majority of cases that situation suited the people better, because the chances are that they were paying a higher rate of tax while they were earning and contributing towards their pensions than they did when they were retired and were drawing their pensions.
But last year, when the tax allowance for retirement pensions was abolished, the old standard argument in favour of taxing the pension was largely removed. I know that the abolition of this tax relief has been compensated for by the increase in the allowances. That was done, in a rough and ready way, last year. But if that argument is to be effective we must be sure that the new situation is taken account of in the personal allowances system, so that every time National Insurance contributions increase in future the allowances will automatically increase to compensate. That was broadly the position under the old arrangements, when we had a direct relief in respect of pension contributions. If the contribution went up, the relief went up at the same time.
61 Unless we can be assured that this position will obtain in future, the case for continuing to tax these pensions has gone. After all, the retirement pension is the only National Insurance benefit now subject to tax. The reason for that and why it has been so ever since the National Insurance scheme was introduced is that, for example, there is no tax relief on contributions for sickness, unemployment or industrial injuries benefit. There was no tax transaction in those cases. That was an entirely logical position.
The anomaly to which the new Clause draws attention is that the retirement pension is now the only benefit in the whole of our arrangements subject to tax. Whatever one may feel about the precise details of the Clause, there is an important point of principle here, with which I hope the Financial Secretary will be able to deal.
§ Mr. MacDermot
It might be helpful if I intervene partly in order to recall the Committee to the scope of the new Clause. The debate is developing into something very much wider: arguments are being addressed to the proposition that all retirement pensions should be free of tax. That is not what is proposed in the new Clause. What is proposed is a provision to help certain retirement pensioners, namely those with small incomes, to the effect that a pension should not be liable to tax unless the total income, excluding the pension, exceeds £400 for a married couple and £250 for a single person. That is its broad intention.
The starting point is, of course, that the whole Committee have great sympathy, if not with the principle of the Clause, certainly with the categories of people whom it is designed to benefit. I cannot advise the Committee to support the Clause for what I suggest is a very sound reason of principle. That is that it would undermine one of the first principles in tax law, that we base liability to tax upon capacity to pay and not upon the source of any income or part of the income, and that it is the level of the total income, from whatever source, which attracts the liability to tax.
62 If we began with accepting the principle that certain types of income should be exempted, we should be opening up a very wide field.
§ Mr. MacDermot
Perhaps I could continue a little further for the moment.
Many retirement pensioners do not pay tax already because their total income is not sufficient to bring them within the scope of liability. For example, a pension not exceeding £283 a year is covered by the two-ninths earned income relief and the single personal allowance of £220. For elderly people over 65, the effect of the special age exemption is to exempt from tax single persons of 65 or over whose total income does not exceed £390 and married couples, at least one of whom is 65 or over, whose total income does not exceed £625.
§ 4.45 p.m.
§ The effect of the new Clause, if accepted, would be to introduce considerably higher Income Tax starting points for people receiving such pensions. A single pensioner could have a total income of £458 and if he deferred his retirement or decided upon a graduated pension, it would be higher than that. A married couple both receiving pensions could receive £738 and, if they both were entitled to a £4 a week pension, £816 per annum, and, in each case, more if there was a graduated element or extra pension for deferred retirement, without having to pay Income Tax at all.
§ This would produce a very sharp contrast between two sets of retired elderly people both of whom had exactly the same total income and were in exactly the same position, but one of whom would be entitled to much greater tax relief than the other. This is the basic objection in principle to what is proposed. I must congratulate the right hon. Member for Enfield, West (Mr. Iain Macleod) on having kept this new Clause alive by putting his name to it. I do not know whether my hon. Friends who originally had their names to it have thought better of it or wheher it was the discouraging effect of the right hon. Gentleman's name being added to their number which led them to stay away.
§ Be that as it may, we have had an interesting debate, raising important 63 points. I will try to answer some of the arguments which have been adduced in support of the new Clause. First there was the argument—if accepted, as I pointed out, this is one which would mean exempting all National Insurance Pensions from tax—that, as the specific allowances for National Insurance contributions were withdrawn last year, therefore the pension ought to be made tax-free.
§ We debated this matter last year, when we discussed that withdrawal, but I would remind the Committee that the reason for the withdrawal of those specific allowances was that we took the view—it was certainly the view of my hon. Friends—that that would have resulted in an undue reduction in the net cost of the contributions to those with higher incomes. The effect of it would have been that the relief, the benefit of that allowance, was least to those who were most in need.
§ What my right hon. Friend did instead was to give a £20 increase in the single and married allowances as a broad compensation for the withdrawal of the special alllowance for National Insurance contributions. There is now, instead of the allowance in respect of the actual amount paid, what might be called an arbitrary figure substituted, but that does not alter the principle that an allowance is made. It was because of that liability that this additional allowance of £20 was made in the single and married allowances—
§ Mr. MacDermot
I will give way when I have completed this point.
My hon. Friend the Member for Heywood and Royton (Mr. Barnett) likened this situation to the position of a capital element in an annuity, but surely there is a clear distinction there. When a person buys an annuity for a capital sum, part of the repayment is regarded, rightly, as a return of his capital. Naturally, there is no liability for Income Tax on that and that part has to be deducted in arriving at what is the right amount of tax—
§ Mr. MacDermot
—but that, surely, is in an entirely different category from 64 a pension which results from individual contributions.
§ Mr. Barnett
Perhaps I did not make myself clear. There is a different distinction between the purchasing of an annuity as such and the element of annual pension payments which are wholly a deduction for tax. When one receives an annuity in due course the greater part of it is tax-free, but, nevertheless, the annual payments are allowed as a deduction for tax in many cases.
Mr. J. T. Price
This is the first time that I have understood that the £20 increase in the personal allowance last year was wholly in respect of the loss of the pension contribution allowance. My understanding was that it was a general increase in the allowance because of inflation, and the fact that everybody—[Interruption.] If I am wrong, I stand corrected. If I have it wrong, I should like greater authority on this than has been quoted already. I listened to the debates last year and it is quite new to me to be told this this afternoon.
§ Mr. MacDermot
I assure my hon. Friend the Member for Westhoughton (Mr. J. T. Price) that this is quite correct. I think that my right hon. Friend the Chancellor said it in his Budget speech, and the point was certainly made in the debates. I shall try to find the references and let my hon. Friend know.
That being the case, I would not accept the proposition implicit in the point which my hon. Friend the Member for Heywood and Royton (Mr. Barnett) made, that this is to be likened to a case where no tax allowance is given in respect of the payment. Also the return which is obtained by way of a National Insurance retirement pension for the amount of the contributions is very considerably more than one would get under a private pension scheme, and that is another relevant factor to take into account, but it is, of course—
§ Mr. Dean
Before the hon. and learned Gentleman leaves that point, would he say whether the £20 increased allowance last year was one which will be increased in future years, as National Insurance contributions are increased? If I follow his argument correctly, he is making the point that that was not a once-for-all 65 allowance to deal with the last increase in the National Insurance contributions, but will be a continuing one which will be increased as contributions are increased in the future.
§ Mr. MacDermot
If the hon. Member for Somerset, North (Mr. Dean) succeeds in getting an answer to that question out of a Treasury Minister, he will have acquired greater Parliamentary skill, or the Treasury Minister will have lost a greater amount of skill, than one assumes.
§ Mr. John Hall
(Wycombe): The point raised by my hon. Friend the Member for Somerset, North (Mr. Dean) is very important. Surely, the whole basis of the Financial Secretary's argument is that he is saying that the Government are giving tax relief to contributions but in another form, through an increase in the personal allowance? Unless the personal allowance has some relation to the insurance premiums that one is paying year by year, or to increases in them during the year, this point has no validity.
§ Mr. MacDermot
We shall have to agree to differ. I made the point, and my right hon. Friend the Chancellor made it last year, that the specific intention was to substitute for an allowance on the actual amount paid a round sum which it was considered—and certainly the majority of the Committee accepted this last year—met the broad justice of the case.
I was asked about the cost. I do not, and I have not, put my argument on cost. I am advised that the cost of this new Clause would be of the order of £1 million to £2 million a year, which is not great. The right hon. Member for Enfield, West (Mr. kin Macleod), in moving, correctly predicted that I would, of necessity, make the point that it would repercuss, and that if the principle were accepted it would have to have wider application than is proposed in the new Clause. An obvious example is that widows would clearly want to know why there was special tax exemption for retirement pensions and not for their pensions.
The objection is the much broader one which I have stated already, and if assistance is to be given through tax relief to elderly people I suggest that this is not the right way to do it.
§ Dame Irene Ward
I am thrilled that my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) put his name to this new Clause. I do not quite know on which side I shall be this afternoon. I cannot wait to see this proposal embodied in the new Conservative Manifesto. I have been arguing for very many years that National Insurance retirement pensions should be tax-free. It has been a particular bee in my bonnet, and I could hardly believe my eyes when I opened the Order Paper and saw that at last my party is committed to this very important matter.
In case the Government think that they have won this battle, I must immediately say—and I think that I should be fair to say—that the Financial Secretary could not accept this Clause as it stands without great consideration. I do not think that the Treasury team have given any consideration to anything in relation to the Finance Bill.
I am stunned that the Financial Secretary has not said that this is a matter which is being considered in the social services review. He must have forgotten. After all, here is a matter of paramount importance to those who are drawing retirement pensions. As I thought that we were waiting and waiting for all the intricate matters which were being examined by those who are carrying out the review, I was astonished to find that this aspect of the situation was not under consideration—or has the hon. and learned Gentleman forgotten that it is in his brief, because he had to bring it out so quickly? Perhaps he has.
I am in some little difficulty, because my hon. Friend the Member for Somerset, North (Mr. Dean) made a point, which the Financial Secretary underlined and which I had believed for many years under my own Government—that it was not right to give a taxation relief in respect of contributions when, thanks to the Conservative Government, so many people had been withdrawn from the groups who paid tax at all. We exempted many people, particularly married couples with children. One had to have a reasonable income before coming into the tax grades, and all of us were very grateful to the Conservative Government for that.
Nevertheless, I thought that it was fair to argue that people who were relieved 67 from paying taxation, and who therefore did not have tax relief for contributions, were paying more for their retirement pensions in the long run than those who were getting taxation relief. I was never entirely satisfied with the argument that when one finally had one's retirement pension, one would be in a better position. I waited with great interest for relief of taxation on pensions in the last Finance Bill when the taxation relief on insurance contributions was withdrawn and the £20 personal allowance was substituted. I naturally thought, after all the promises from the Government during the General Election campaign, that this would be followed by relieving from taxation at any rate some section of the retirement pension when it was drawn.
Nothing happened in this Bill; there was not a single thing for any of the poorest section or the small fixed income group. This is one of the matters which I have argued with my own Government, and I got more out of them than anybody will ever get out of the present Government. I am astonished that all the quotations by the Financial Secretary about reliefs of one kind or another—age relief and low income relief—related to reliefs introduced into a Finance Bill by Mr. Peter Thorneycroft, arising out of representations by Conservative back-bench Members. He quoted all these as though they were contributions made by a Socialist Government. What a lot of tommy-twaddle.
I am delighted that the Conservative Party now believe that it would be possible to examine the question of relieving certain groups of people from paying tax on their National Insurance pensions. I look forward with the greatest possible pleasure and excitement to the day when we are back in power and can get on with this very important proposal. I hope that my right hon. Friend will call a Division on this Clause, because it is important to have on record the conversion of the Conservative Party to and the rejection by the Government of all the things which were said about this matter in the Election campaign. I am delighted about this and delighted that I shall have the opportunity to go into the Lobby in support of the new Clause.
§ 5.0 p.m.
§ Mr. Harold Lever
At the risk of mitigating, in however small a degree, the delight of the hon. Lady the Member for Tynemouth (Dame Irene Ward) at the conversion of her hon. Friends to this fiscal generosity, I must point out that the Clause was tabled by Labour Members and that it was only the other day that the right hon. Member for Enfield, West (Mr. Iain Macleod), for perfectly good reasons which I do not in the least criticise, added his name to the Clause, presumably to ensure that it was debated. Had my hon. Friends not put down the Clause I do not believe that there would have been any such discussion.
May I dispose of two arguments which have been advanced and which seem to me to be demonstrably bad. The first is: as the premiums are no longer exempt from tax, and as they no longer result in a reduction in the taxpayer's assessment, therefore the retirement pension should automatically be tax-free. This argument is not valid, for two reasons. The central excuse offered by the right hon. Member for Enfield, West for taking up one position two years ago, when the country was flourishing under the innumerable benefits of a Conservative Government and yet we could not afford this concession, and for taking at a different position today is this reason of taxation.
It is a bad argument. Even if we conceded the principle that the retirement pension was taxed because the payments made by the worker were relieved of tax or were an offset to his tax liability—which is by no means necessarily so—it would not justify the Chancellor in now exempting these pensions from tax assessment. The most elementary actuarial calculation shows that about 99 per cent. of the content of the pensions being paid in the year which we are discussing consists of premiums which have been allowed against the tax liability of those who paid them. We are dealing only with this year, and there is nothing to prevent the right hon. Gentleman from tabling a similar Amendment in later years. But his present argument falls completely to the ground if it represents that we are no longer giving tax relief to the payments and therefore must not tax the pension.
69 That argument may be valid in twenty years' time but it is not valid in the current year when the money out of which the payments are made comes from premiums which were paid when the relief was available to those who paid them. And that is the only argument which could possibly justify the right hon. Gentleman in going into the Lobby in support of the Clause.
Another bad argument was that advanced by the hon. Member for Somerset, North (Mr. Dean), who said that this is the only social security benefit which is taxed. That is not so. We tax family allowances. There is no reason why we should not tax retirement pensions if the justice of the case merits it.
§ Mr. Lever
I may be wrong about this. But when I produced a single and very considerable exemption that was enough to destroy the hon. Member's argument which had been based on the uniqueness of taxing this pension.
I think that my hon. Friend the Member for Heywood and Royton (Mr. Barnett) also makes a bad point when he attempts to equate the return of capital which goes to a person who buys an annuity with this retirement pension. The return of capital is tax-free precisely because it is capital being returned.
§ Mr. Barnett
Does not my hon. Friend agree that the pension in the hands of the worker is largely the result of the capital of his work during his lifetime?
§ Mr. Lever
That sort of involved argument relates more to the theological than to the financial. My hon. Friend is attempting to equate two totally different things. I hope that he will not go on with that argument or it may discourage 70 the revenue from the somewhat belated concession which is made about annuities. Where a man buys an annuity and uses his capital to do so, the Revenue recognises that many of the payments are in large part his own capital coming back to him and should not be taxed. What this has to do with taxing the earnings of a workman or anybody else entirely escapes me, although that may be due to my own obtuseness. I cannot see that it has any relation to the Clause.
What we have to bear in mind within the rules of order is that we cannot look at one concession away from the general theme of the Finance Bill as a whole.
§ Mr. Lever
The hon. Lady is free to do so, but I am suggesting that it is unwise to do so. We must bear in mind that if the Finance Bill has a beauty it lies in the whole and not in any individual part. I am not saying that it has any beauty; it is possible to hold more than one view on that point. But if the Finance Bill is justified, then it is justified as a whole and we cannot look at each of the individual potential concessions and accuse the Treasury of great hardness of heart if it refuses something. The Finance Bill has been part of modern economic theory over the last twenty years or so, whichever party has been in power.
If I may trespass on the quotation which is now almost the private property of the right hon. Member for Enfield, West, the face may be the face of Jacob but the hands are the hands of Esau. The face is the face of Jacob—that is to say, the Treasury experts, largely with first-class honours degrees, who write the extremely stimulating literature which from time to time encourages us in our efforts. But the hand is the hand of Esau—the rough, hoary hand of the Inland Revenue which remains in more or less the same attitude whichever Government is in power.
That explains why this sort of concession was never made by the Conservative Party. The right hon. Gentleman was asked why it had not been done before. I am bound to repeat what I said in the small hours the other night—that with the Conservative Party it is not power that corrupts but the absence of power that corrupts. When 71 they are the Government they have a certain responsibility, but when they are in Opposition they tend to be frolicsome and excessively generous without regard to principle or coherence. In these debates, however interesting they are, and however ready we all are to reflect sentiment and good intentions, I do not think that the Treasury can be asked to regard any of these concessions away from the general economic climate. It is as if we must take into account every gesture of fiscal manipulation which the Chancellor makes in any Budget and have regard to every facet of it in Committee.
§ Mr. Gower
The hon. Gentleman has referred to the general economic climate and said that everything must be considered against that. Would he not consider that a concession of this kind should be viewed against the general background of the sort of Finance Bill that is under discussion? Is he aware that for many years Conservative Finance Acts followed the principle of reducing taxation and giving considerable concessions to large numbers of people, while we are dealing with this Bill against the background of very heavy increases in taxation?
§ Mr. Lever
Whatever can be said of Conservative economic policy, the hon. Gentleman must accept that its general consequences have been to put the country's economy into such a position that a Finance Bill such as this has been found necessary.
Without opposing this concession, one must bear in mind that the arguments advanced in favour of it—that a new situation has arisen, and so on—are without foundation. I have never been one to suppose that arguing from the point of view of humanitarian considerations is something exclusively for the Labour Party. I recognise that hon. Gentlemen opposite would like, in present circumstances to make this concession to old people. However, one must bear in mind the same general financial principles which caused the last Conservative Government to reject such a proposal and which, I accept, has made my right hon. Friend the Chancellor give a dusty answer on it now.
§ Mr. Iain Macleod
We have had an excellent, though somewhat surprising, 72 debate. The hon. Member for Fife, West (Mr. William Hamilton) sent me a note, after I had spoken, saying that he could not be here. I understand that, although it is rather remarkable that those sponsoring the new Clause—and, to put it mildly, not all new Clauses have the privilege of being selected—should have regarded that privilege so lightly as to not have appeared before the Committee.
The hon. Member for Heywood and Royton (Mr. Barnett) asked if we should encourage retired pensioners to work and I agree with the answer he gave; yes, if they want to. That is something which, in this short debate, we would do well to bear in mind, as I am sure the right hon. Lady the Minister of Pensions and National Insurance would. When I said—and the hon. Member for Ashton-under-Lyne (Mr. Sheldon) took me up on this—that one could either accept or ignore the repercussions, I meant it like that. I suggest that the best thing is to accept them if one can and that one should not be hypnotised by the argument of repercussions. When the hon. Member for Heywood and Royton becomes a Minister he will find that the question of repercussions is always being put to him by the civil servants. I assure him that that question is never as formidable as it seems at first sight. I must mention, in passing, that back bench speeches such as those regularly made by the hon. Member for Manchester, Cheetham (Mr. Harold Lever) have never usually, either in this or previous Administrations, ranked as being good for one's prospects for promotion.
We have been told, somewhat to my surprise, about the repercussions in this case. I thought that the figure would be less than £7 million. I did not think that it would be as low as £1 million or £2 million, although the Financial Secretary said that if one accepted the repercussions, a widening of the argument, the amount would be more than I had thought. The true point was missed by the hon. Member for Westhoughton (Mr. J. T. Price) and even the hon. Member for Cheetham was somewhat incoherent about it, and it is not often that one can say that about the hon. Gentleman. The point is not what happened in 1964 but that the rules were changed in 1965. That is something for which the Conservative Party cannot be 73 held responsible, because we opposed it last year. It is important to remember that the rules were changed for everybody. We are now asking that some of that change should be returned for a very few people, notably the poor.
§ 5.15 p.m.
§ It is not easy to oppose this principle, although the Financial Secretary courteously did his best. He said that my hon. Friends and I had never concerned ourselves with the source of income from the tax point of view, although he knows that there are exceptions, such as the £15 from the Post Office Savings Bank. Thus, the principle about which he spoke is not one that has never been breached.
§ When the hon. and learned Gentleman says that compensation was given last year through allowances, he must also he prepared to answer the question asked by my hon. Friend the Member for Somerset, North (Mr. Dean); can we be sure that we will get comparable relief in future when there are increases in National Insurance contributions? The Financial Secretary dodged that one, as I would have done in his position, but we know that the answer is "No". That was a piece of once-for-all sugar given last year and it does not stand up as an argument for opposing the new Clause.
The Government should recall what was stated in the Millard Tucker Report of 1954, Cmd. 9063, paragraph 263 of which stated:
The taxation treatment of retirement pensions and certain other periodic payments under the National Insurance Acts, and of the relative contributions, follows the principle of exempting the build-up and taxing the benefit".
Paragraph 264 stated:
In these days of high taxation, however, when the amount of free income left to the taxpayer is so reduced as to make saving very difficult, we would not willingly recommend a reversal of the principle of exempting the build-up".
The answer to that is, "Nor would we". Of course it is true that there are flaws in the drafting of the new Clause. Indeed, there are gaping holes in it, as is often the case. Obviously its sponsors on the benches opposite did not have the advantage of the expert drafting which is available to us.
§ Mr. Harold Lever
Is it not the case that the consequences of accepting the 74 proposal would be that the beneficiaries under it would not be the victims of the withdrawal of the relief given in 1965?
§ Mr. Macleod
The hon. Gentleman is much too experienced in Committee debates on financial matters not to know that when a proposed new Clause is incompetently drafted one can argue the principle of it at the appropriate stage, which is in Committee, and put the drafting right before Report. That is what I propose to my hon. Friends. This debate has had a good deal of sympathy from hon. Members on both sides, although I do not rely on that. Nor do I rely on the unbounded enthusiasm although I welcome it, on the part of my hon. Friend the Member for Tynemouth (Dame Irene Ward).
The simple point is that while the new Clause is, in its present form, entirely unsatisfactory, we will do our best to put that right in a new attempt at a new Clause on Report. That is normal Committee procedure. Indeed, it is one of the things which a Committee is designed to do, and I give notice of our intention. We believe that the principle, however faulty the drafting of the new Clause, is a just one, that the cost is cheap and that we must support that principle by dividing the Committee.
§ Mr. John Peyton
(Yeovil): I entirely agree with the remarks of my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod), and I do not know why the Treasury has not been more forthcoming and has not itself promised a new version of the new Clause on Report. I would not be rising to speak had my right hon. Friend looked in his driving mirror before speaking, when he would have seen me on my feet. I rise merely to comment on some remarks made by the hon. Member for Manchester, Cheetham (Mr. Harold Lever), who, as my right hon. Friend pointed out, is courageous in speaking the way he does from the Government back benches, remembering that that is not something which is uniformly encouraged.
The hon. Member for Cheetham produced the extraordinary statement that a Finance Bill was capable 75 of an integral beauty of its own. This is a view I wish to challenge. Finance Bills are ugly things. If I found myself in the position of the curate eating that horrible egg, I think that the most polite thing one could possibly say would be that it was good in parts—and that applies only to some Finance Bills and not to this one.
It is wholly improper for the hon. Member for Cheetham to suggest that this side has become irresponsible when dealing with a new Clause like this. The hon. Gentleman stings one into recollection of the silly ranks of his own party in opposition who allowed irresponsibility and enthusiasm to gallop away with them hand in hand for hour after hour as they pressed the then Conservative Government to accept the most impossible and optimistic Amendments. When the hon. Gentleman now makes that sort of accusation from the Government side my imagination just boggles at the thought of what would have been the reaction of his party on this side of the Committee had such a speech been made at that time. But, of course, compared with him we are mild and simple people, who do not react with quite the same vigour as
|Division No. 88.]||AYES||[5.22 p.m.|
|Alison, Michael (Barkston Ash)||Fletcher-Cooke, Charles||Lancaster, Col. C. G.|
|Allason, James (Hemel Hempstead)||Foster, Sir John||Langford-Holt, Sir John|
|Awdry, Daniel||Gilmour, Sir John (Fife, E.)||Lewis, Kenneth (Rutland)|
|Balniel, Lord||Glover, Sir Douglas||Lloyd, Ian (P'tsm'th, Langstone)|
|Batsford, Brian||Goodhart, Philip||Lloyd, Rt. Hn. Selwyn (Wirral)|
|Beamish, Col. Sir Tufton||Goodhew, Victor||Loveys, W. H.|
|Bell, Ronald||Gower, Raymond||McAdden, Sir Stephen|
|Bennett, Dr. Reginald (Gos. & Fhm)||Grant, Anthony||Macleod, Rt. Hn. Iain|
|Bessell, Peter||Griffiths, Eldon (Bury St. Edmunds)||Maddan, Martin|
|Biffen, John||Grimond, Rt. Hn. J.||Mawby, Ray|
|Biggs-Davison, John||Gurden, Harold||Maxwell-Hyslop, R. J.|
|Birch, Rt. Hn. Nigel||Hall, John (Wycombe)||Mills, Peter (Torrington)|
|Black, Sir Cyril||Hall-Davis, A. G. F.||Mills, Stratton (Belfast, N.)|
|Body, Richard||Harris, Frederic (Croydon, N.W.)||Miscamphell, Norman|
|Boyle, Rt. Hn. Sir Edward||Harris, Reader (Heston)||Mitchell, David (Basingstoke)|
|Braine, Bernard||Harrison, Brian (Maldon)||Morrison, Charles (Devizes)|
|Brown, Sir Edward (Bath)||Harvey, Sir Arthur Vere||Murton, Oscar|
|Bruce-Gardyne, J.||Harvie Anderson, Miss||Nabarro, Sir Gerald|
|Buck, Antony (Colchester)||Hawkins, Paul||Neave, Airey|
|Bullus, Sir Eric||Heald, Rt. Hn. Sir Lionel||Nott, John|
|Chichester-Clark, R.||Heath, Rt. Hn. Edward||Page, Graham (Crosby)|
|Clegg, Walter||Heseltine, Michael||Page, John (Harrow, W.)|
|Cooke, Robert||Higgins, Terence L.||Pardoe, John|
|Cooper-Key, Sir Neill||Hiley, Joseph||Percival, Ian|
|Costain, A. P.||Hirst, Geoffrey||Peyton, John|
|Crawley, Aidan||Hobson, Rt. Hn. Sir John||Pike, Miss Mervyn|
|Crowder, F. P.||Hogg, Fit. Hn. Quintin||Powell, Rt. Hn. J. Enoch|
|Dalkeith, Earl of||Holland, Philip||Pym, Francis|
|Dance, James||Hooson, Emlyn||Renton, Rt. Hn. Sir David|
|Davidson, James (Aberdeenshire, W.)||Hordern, Peter||Ridley, Hn. Nicholas|
|Dean, Paul (Somerset, N.)||Hornby, Richard||Roots, William|
|Digby, Simon Wingfield||Hunt, John||Rossi, Hugh (Hornsey)|
|Dodds-Parker, Douglas||Hutchison, Michael Clark||Sharples, Richard|
|Drayson, G. B.||Johnston, Russell (Inverness)||Smith, John|
|Eden, Sir John||Kimball, Marcus||Steel, David (Roxburgh)|
|Elliot, Capt. Walter (Carshalton)||Kirk, Peter||Taylor, Sir Charles (Eastbourne)|
|Elliott, R. W. (N'c'tle-upon-Tyne, N.)||Kitson, Timothy||Taylor, Edward M. (G'gow, Cathcart)|
|Errington, Sir Eric||Knight, Mrs. Jill||Taylor, Frank (Moss Side)|
§ no doubt he and his colleagues would have done had that kind of speech been made by us in days gone by—
§ Mr. Harold Lever
I was careful at the same time to affirm my belief in the sincerity of the feelings that actuate hon. and right hon. Members opposite in their support for this new Clause.
§ Mr. Peyton
I have never been one to underrate the hon. Gentleman's skill. He always gives himself some very satisfactory safeguards against the more damaging of counterattacks. That point I concede at once.
I hope that the Financial Secretary will make some effort to produce a version of his own, because it seems to me that the Treasury Ministers are again guilty of taking an incredibly niggardly attitude. One cannot believe that this attitude would have been the same had they been faced this time, as they were last year, with the prospect of an early General Election.
§ Question put, That the Clause be read a Second time:—
§ The Committee divided: Ayes 132, Noes 208.77
|Temple, John M.||Walker-Smith, Rt. Hn. Sir Derek||Winstanley, Dr. M. P.|
|Thatcher, Mrs. Margaret||Wall, Patrick||Worsley, Marcus|
|Thorpe, Jeremy||Ward, Dame Irene||Wylie, N. R.|
|Turton, Rt. Hn. R. H.||Weatherill, Bernard||Younger, Hn. George|
|Vickers, Dame Joan||Whitelaw, William|
|Wainwright, Richard (Colne Valley)||Wills, Sir Gerald (Bridgwater)||TELLERS FOR THE AYES:|
|Walker, Peter (Worcester)||Wilson, Geoffrey (Truro)||Mr. Peter Blaker and|
|Mr. Reginald Eyre.|
|Allaun, Frank (Salford, E.)||Ginsburg, David||Ogden, Eric|
|Archer, Peter||Gourlay, Harry||O'Malley, Brian|
|Armstrong, Ernest||Gray, Dr. Hugh (Yarmouth)||Orbach, Maurice|
|Atkins, Ronald (Preston, N.)||Gregory, Arnold||Orme, Stanley|
|Atkinson, Norman (Tottenham)||Grey, Charles (Durham)||Oswald, Thomas|
|Bacon, Rt. Hn. Alice||Griffiths, Will (Exchange)||Owen, Will (Morpeth)|
|Baxter, William||Hamilton, James (Bothwell)||Page, Derek (King's Lynn)|
|Bence, Cyril||Hamilton, William (Fife, W.)||Paget, R. T.|
|Bennett, James (G'gow, Bridgeton)||Hamling, William||Palmer, Arthur|
|Bidwell, Sydney||Hannan, William||Pannell, Rt. Hn. Charles|
|Bishop, E. S.||Harper, Joseph||Park, Trevor|
|Blackburn, F.||Harrison, Walter (Wakefield)||Parker, John (Dagenham)|
|Blenkinsop, Arthur||Hazell, Bert||Parkyn, Brian (Bedford)|
|Boardman, H.||Helder, Eric S.||Pearson, Arthur (Pontypridd)|
|Booth, Albert||Herbison, Rt. Hn. Margaret||Pentland, Norman|
|Boston, Terence||Hooley, Frank||Perry, Ernest G. (Battersea, S.)|
|Bowden, Rt. Hn. Herbert||Houghton, Rt. Hn. Douglas||Perry, George H. (Nottingham, S.)|
|Bradley, Tom||Howle, W.||Price, Christopher (Perry Barr)|
|Brooks, Edwin||Hoy, James||Price, William (Rugby)|
|Broughton, Dr. A. D. D.||Hughes, Hector (Aberdeen, N.)||Pursey, Cmdr. Harry|
|Brown, Rt. Hn. George (Belper)||Hunter, Adam||Rankin, John|
|Brown, Hugh D. (G'gow, Provan)||Hynd, John||Rhodes, Geoffrey|
|Brown, Bob (N'c'tle-upon-Tyne, W)||Irvine, A. J. (Edge Hill)||Robertson, John (Paisley)|
|Brown, R. W. (Shoreditch & F'bury)||Jackson, Colin (B'h'se & Spenb'gh)||Robinson, W. O. J. (Walth'stow, E.)|
|Buchan, Norman||Jay, Rt. Hn. Douglas||Rodger, William (Stockton)|
|Butler, Herbert (Hackney, C.)||Jeger, Mrs. Lena (H'b'n & St. P'cras, S.)||Roebuck, Roy|
|Butler, Mrs. Joyce (Wood Green)||Jenkins, Hugh (Putney)||Rose, Paul|
|Callaghan, Rt. Hn. James||Jenkins, Rt. Hn. Roy (Stechford)||Ross, Rt. Hn. William|
|Carmichael, Neil||Johnson, James (K'ston-on-Hull, W.)||Rowland, Christopher (Meriden)|
|Castle, Rt. Hn. Barbara||Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)||Ryan, John|
|Chapman, Donald||Kerr, Mrs. Anne (R'ter & Chatham)||Shaw, Arnold (Ilford, S.)|
|Coe, Denis||Kerr, Dr. David (W'worth, Central)||Shinwell, Rt. Hn. E.|
|Coleman, Donald||Kerr, Russell (Feltham)||Short, Rt. Hn. Edward (N'c'tle-u-Tyne)|
|Conlan, Bernard||Leadbitter, Ted||Short, Mrs. Renée (W'hampton, N.E.)|
|Corbet, Mrs. Freda||Lee, Rt. Hn. Jennie (Cannock)||Silkin, John (Deptford)|
|Craddock, George (Bradford, S.)||Lee, John (Reading)||Silverman, Julius (Aston)|
|Cullen, Mrs. Alice||Lestor, Miss Joan||Silverman, Sydney (Nelson)|
|Dalyell, Tam||Lever, Harold (Cheetham)||Slater, Joseph|
|Davies, Dr. Ernest (Stretford)||Lewis, Arthur (W. Ham, N.)||Small, William|
|Davies, Harold (Leek)||Lipton, Marcus||Spriggs, Leslie|
|Davies, Robert (Cambridge)||Lomas, Kenneth||Steele, Thomas (Dunbartonshire, W.)|
|Delargy, Hugh||Luard, Evan||Swain, Thomas|
|Dempsey, James||Lyon, Alexander W. (York)||Swingler, Stephen|
|Dewar, Donald||Lyons, Edward (Bradford, E.)||Symonds, J. B.|
|Diamond, Rt. Hn. John||McBride, Neil||Taverns, Dick|
|Dickens, James||McCann, John||Tinn, James|
|Doig, Peter||MacDermot, Niall||Tuck, Raphael|
|Driberg, Tom||McKay, Mrs. Margaret||Urwin, T. W.|
|Dunn, James A.||Mackenzie, Gregor (Rutherglen)||Wainwright, Edwin (Dearne Valley)|
|Dunnett, Jack||Mackie, John||Walden, Brian (All Saints)|
|Dunwoody, Mrs. Gwyneth (Exeter)||Mackintosh, John P.||Walker, Harold (Doncaster)|
|Dunwoody, Dr. John (F'th & C'b's)||Maclennan, Robert||Wallace, George|
|Edwards, William (Merioneth)||McNamara, J. Kevin||Watkins, David (Consett)|
|Ellis, John||MacPherson, Malcolm||Weitzman, David|
|English, Michael||Manuel, Archie||Wellbeloved, James|
|Ennals, David||Marquand, David||Wells, William (Walsall, N.)|
|Evans, Ioan L. (Birm'h'm, Yardley)||Marsh, Rt. Hn. Richard||Whitaker, Ben|
|Fernyhough, E.||Mason, Roy||Williams, Alan Lee (Hornchurch)|
|Fitch, Alan (Wigan)||Mayhew, Christopher||Williams, Clifford (Abertillery)|
|Fletcher, Raymond (Ilkeston)||Mellish, Robert||Williams, Mrs. Shirley (Hitchin)|
|Fletcher, Ted (Darlington)||Mendelson, J. J.||Williams, W. T. (Warrington)|
|Floud, Bernard||Mikardo, Ian||Wilson, Rt. Hn. Harold (Huyton)|
|Foley, Maurice||Milian, Bruce||Winnick, David|
|Forrester, John||Mitchell, R. C. (S'th'ampton, Test)||Winterbottom, R. E.|
|Fowler, Gerry||Morgan, Elystan (Cardiganshire)||Woodburn, Rt. Hn. A.|
|Fraser, John (Norwood)||Morris, Alfred (Wythenshawe)||Yates, Victor|
|Fraser, Rt. Hn. Tom (Hamilton)||Moyle, Roland|
|Freeson, Reginald||Willey, Rt. Hn. Frederick||TELLERS FOR THE NOES:|
|Gardner, A. J.||Murray, Albert||Mr. Charles R. Morris and|
|Garrett, W. E.||Norwood, Christopher||Mr. William Whitlock.|
|Garrow, Alex||Oakes, Gordon|