Clause 3.—(PAYMENTS TO CERTAIN PUBLIC BODIES.)

HC Deb 21 July 1966 vol 732 cc951-1003

Mr. R. Chichester-Clark (Londonderry)

I beg to move Amendment No. 68, in page 4, line 26, at the end to insert: Provided that no such payment shall be made to any employer to whom this section applies in respect of any person normally employed wholly or substantially in building operations or works of engineering construction.

The Chairman

I think that it would be for the convenience of the Committee if, with that Amendment, we discussed also the following: No. 354, in line 26, at end insert: Provided that the payment which may be made by the designated Minister may not exceed the payment which would have been made if the employer had qualified for a payment within section 1 or section 2 of this Act. No. 258, in line 38, at end add: (5) Notwithstanding any of the provisions of this section the repayment payable in respect of employees of nationalised industries shall not exceed that payable for employees engaged on competitive work in private industry. No. 74, in Clause 4, page 5, line 32, at end add: Provided that no such payment shall be made to any employer to whom this section applies in respect of any person employed wholly or substantially in activities falling under the minimum list heading in the Standard Industrial Classification, namely, Order XVII heading 500 (which relates to Construction). No. 179, in line 32, at end add: Provided that no such payment shall be made to any employer to whom this section applies in respect of any person employed wholly or substantially in activities concerned with the maintenance or repair of land or buildings. No. 289, in line 32, at end insert: Provided that no such payment shall be made to any employer to whom this section applies in respect of any person employed wholly or substantially in activities concerned with the provision of meals, refreshments and hotel accommodation.

Mr. Chichester-Clark

Most of the Amendments in this group deal with direct labour contract departments of public and local authorities, and I intend to confine my remarks, in the main, to this, although I understand that my hon. Friend the Member for Gloucestershire, South (Mr. Corfield) may seek to say something about some of the others.

I begin by emphasising what I said on 19th May, that we on this side of the Committee are not opposed to direct labour in certain sectors. What we are opposed to is any unfair advantages for direct labour, whether on its maintenance or new construction side. We hold this view because of the lower output statistics for employees of direct labour departments against those for employees of private contractors which we discussed on 19th May, and on many occasions since then.

I imagine that to dilate on that at this stage would incur your displeasure, Sir Eric, and would be out of order, but I hope for an early opportunity to come back to this subject, especially in view of the question-begging speech of the Joint Parliamentary Secretary to the Ministry of Housing and Local Government on the Adjournment debate in the early hours of last Tuesday morning, initiated by my hon. Friend the Member for Sutton and Cheam (Mr. Sharples). On that occasion I was denied the opportunity of intervening.

We believe that direct labour departments should be exposed to the check of competition in the proper way, as when the one in three rule operates. We believe, too, that they should be on the same basis of taxation as private contractors in all their spheres of activity. This is a fair position, and within that compass we believe that direct labour departments can do useful work without causing harm or ruining the ratepayers.

As drafted, the Bill empowers the Minister to refund the Selective Employment Tax to the authorities mentioned in Clause 3 in respect of the operatives employed in their works departments, and to refund, or even give a premium, in respect of Clause 4 authorities. I think that I have the position correct there.

However, since the Second Reading of the Bill the Minister of Housing and Local Government has made a statement in which his intentions become a little clearer, and any clarification would be an improvement on Clause 4(2) which seems to give the Minister power to hand out money almost like Father Christmas.

On 24th June the Minister of Housing and Local Government told the Urban District Councils Association: Construction workers employed by local authorities who are engaged on maintenance will be treated in the same way as other local authority employees. But an exception will be made for direct labour staffs employed on new construction whether of houses, schools, or any other new construction. They will be treated in the same way as employees of private contractors and will not rank for reimbursement. That could be said to be a fairly major change of policy, and perhaps we might be forgiven for wondering why on a Bill which had its Second Reading in this House, it was not announced from that Dispatch Box rather than in a public speech in the north of England. On 30th June I asked the Minister where and when he had made this announcement. I was told, but I received no hint of apology for the fact that he did not make the announcement in the House, where it ought to have been made.

The Minister's change of policy came in page 3 of a hand-out which dealt with an entirely different subject. It did not even get the heading of the hand-out and it was barely noted. To put the matter right, the Minister of Housing seems to have called in the Lobby correspondents, because news of the repayment appeared in the Sunday newspapers on 26th June as though it was a new story—a fresh Ministerial leak. Ever since then I have been trying to decide whether something went terribly wrong or whether something went terribly right with that psychological warfare. I find it difficult to know which it was.

7.30 p.m.

Despite the Minister's lapse in this matter, we are a little wiser about Government policy in respect of local authority employees, but the position still remains dark about Clause 3 authorities. Judging by what the Minister of Labour said—or did not say—in the Second Reading debate, it looks as if the tax will be refunded in full to the works departments of such bodies as the Central Electricity Generating Board and one or two others. But the right hon. Member made no reference to these Clause 3 authorities in his speech of 24th June, so we do not know. If he had come to the House of Commons, as would have been proper, and had given us a statement, we could have asked these questions and would not now have to waste time in doing so.

Let us, first, deal with the direct labour departments of public bodies. Here I am bound to refer to some figures which are relevant to the question. It appears that of about 375,000 operatives in Great Britain described in Part II of the National Plan as "operatives employed by public authorities" about 215,000 are employed by local authorities and the remainder—about 160,000—by public authorities proper.

Of those public authorities, the main direct labour employers are the Central Electricity Generating Board, the gas undertakings and the British Railways Board. Statistics concerning direct labour as a whole and direct labour work for public authorities in particular, are hard to come by, but it seems that at least 75 per cent. of such operatives are employed in maintenance work, and that the balance are engaged upon new work, such as the construction of electric pylons.

In 1965, about 14.3 per cent. of the total construction output, at current prices, was carried out by public authorities, including local authorities, to the value of £549 million. On the basis of a 50–50 split between public proper and local authority direct building, I calculate that the output of public authority direct labour works departments in 1965 was about £250 million. Even if the tax were charged in full on new construction only, and refunded on maintenance, there would still be an output of about £190 million, and about 120,000 men engaged on work in respect of which the tax would be refunded, while private contractors were having to meet it in full. My hon. Friends and I regard that as a grossly unfair form of competition—if competition is the right word—and that is certainly the way in which the industry regards it.

A much more serious question arises in connection with the refund in respect of local authority direct labour department operatives. The direct labour work of local authorities alone is running just under £200 million per annum, at 1958 prices. If we look carefully at Bulletins of Construction Statistics and related publications we find that it is possible to estimate that repairs and maintenance represent about 75 per cent.; housing new work, about 13 per cent., and non-housing new work, about 12 per cent. I am advised that there are sharp regional variations in the division between maintenance and new construction. I also estimate that the division of the labour force in this sphere is about 81.9 per cent. on repairs and maintenance, 7.9 per cent. on new housing work, and 8.4 per cent. on non-housing new work.

In short, of the 215,000 or so local authority operatives, 72 per cent.—or about 176,000—will not bear this tax. So we are talking of an annual refund of millions of pounds—perhaps about £10 million in a year—in respect of maintenance operatives, while contractors will have to pay the tax in full.

Some say that that is a small price, and some have even argued that the figures are so small that it is difficult to see what contractors are worrying about. My hon. Friends and I totally reject that view. We also totally reject the attitude which one builder told me, "appears to be an article of faith in the Ministry of Housing ", that local authority maintenance work is not in competition with private contractors.

The Minister of Housing went on television recently—his television appearances appear to become more and more frequent as time goes on, and housing figures slump—and said that he had ruled that where labour departments were in direct competition with private enterprise they were to be put on a par in the Selective Employment Tax. Where there is no direct competition, they should not '. The obvious inference was that competition did not take place in the maintenance sector. We must obviously reject that argument, just as the construction industry has already rejected it. One builder after another has told me that he regards the right hon. Gentleman's so-called concession as of so little value as to be barely worth discussing.

I wish that I could say that we are grateful for small mercies, if that is the way in which to describe the position, but it would be difficult for anyone to believe that if he had heard the speech of Mr. Pearson, the President of the N.F.B.T.E. when he opened the recent N.F.B.T.E. conference on 28th June. He completely dismissed the right hon. Gentleman's argument about no competition, and said: We believe that Mr. Crossman has taken as illogical decision in exempting direct labour personnel engaged on maintenance work. This decision has implications which constitute a savage blow to the thousands of small building firms who normally rely on local authority maintenance work for a large part of their turnover. They will now be placed at a financial disadvantage in tendering and, clearly, there will now not be that competition on equal terms with private enterprise which the Minister hmself regards as right in principle'. Could there be a clearer statement on behalf of the industry than that, with its reference to "a savage blow", "thousands of small builders", and "a large part of their turnover"? In all seriousness, the Minister, through his hon. Friend, should take this opportunity to think again, and he should think again pretty quickly. For one thing he will be meeting the builders in the very near future. The date previously fixed was deferred, incidentally, showing fairly clearly that on the right hon. Gentleman's original date he had no knowledge whatsoever what the Prime Minister was going to say yesterday. So much for carefully prepared packages. He should think again before that meeting.

The other argument that the right hon. Gentleman has put forward at different times is that he could not apply the tax to direct labour maintenance only, for administrative reasons. Mr. Pearson says that when he told the Minister about the industry's attitude to the refund of S.E.T. Mr. Crossman said that there were administrative difficulties in the way of applying the tax to direct labour maintenance and I told him they must be overcome because the exemption of maintenance was most unfair to private firms and would be another factor contributing to the lack of confidence among smaller building firms that he says he is anxious to remove. He has said that, and we hope that we shall see him set out on that course before long. No administrative problems of this kind ought to stand in the way of the proper treatment of small builders who, beyond anyone else, need an injection of confidence at this moment.

I would have thought that the complications would come in trying to exempt maintenance from the repayment provisions rather than vice versa. Local Government experts will tell us that calculating which operatives were engaged upon maintenance and which upon new construction would be difficult. Anyone who studies reports of Question time in the Greater London Council will see that this is borne out by the questions, and the answers given to them. That task would be extremely difficult to undertake, and could be done only on a rough and ready basis. The experts had hoped that local authorities would be permitted to work out their numbers of operatives at least on a monthly basis before advising the Ministry of their tax liability. But they now fear that they will be asked for calculations on a weekly basis and that they will have to certify their numbers based on the number of operatives on the roll on any Monday morning.

It seems to be obvious that a man may be engaged—this figure also emerged from the Greater London Council question and answer period—on maintenance one day and on new construction the next. I suspect that, in the end, the Government will simply have to ask local authorities to produce what one might call "vaguely accurate" figures and rely on checks by district auditors. It would be much simpler if all direct work operatives paid the tax in full. That would be much fairer.

I have already set out my attitude to direct labour. Of course, the whole situation was changed by the issue of Circular 50/65 on 16th November last year. My right hon. and learned Friend the Member for Hexham (Mr. Rippon) and I and many of my hon. Friends expressed ourselves in the House and outside to the effect that this circular was a gross example of unfair competition. That is the way in which I still regard it. It has contributed considerably to the serious loss of confidence among builders Surely by now the right hon. Gentleman has discovered that. Now, on top of that, comes this tax.

I believe that the Minister must relent a great deal further. He knows that his housing programme—even he must acknowledge that certain parts are in a mess—is in a considerable predicament because of the loss of confidence. The payment of this tax in full by direct labour departments would go a little way towards restoring that confidence. It might not be much, but it would be something and it would also held the Chancellor to withhold some more revenue from the S.E.T.; not many of us would complain about that.

After yesterday's statement by the Prime Minister, I should have thought that the Government could ill-afford to hand out revenue in one of the few areas where such a concession will do harm rather than good. The Government's timetable has prevented us from moving certain other Amendments which we wished to move, so as to draw attention to the general discontent through which the building and construction industry is moving, but this one goes nearly to the heart of confidence in that industry.

The Minister is to have this August meeting with the builders. If he does not want to go to that meeting naked or without a shred of credit and, much more important, if he wants to retrieve his housing programme, which is now faced with total collapse, he had better cover his tracks and accept the Amendment either in fact or in principle. If he does, he will take a real step towards restoring confidence.

Mr. H. P. G. Channon (Southend, West)

My hon. Friend the Member for Londonderry (Mr. Chichester-Clark) made an unanswerable case for Amendment No. 68. We are discussing a number of other Amendments with it and it is that I should like to talk about.

One of our major criticisms of the Selective Employment Tax is its inequity. It is not only a bad tax, but an unfair tax. Clauses 3 and 4 and the Amendments to them are directly relevant to this point. They are the Clauses which authorise the repayment of the tax to certain public bodies and local authorities. This power should be exercised with great care so as not to prejudice private people who may have been caught up in what may turn out to be the unfair workings of the tax.

Something worth attention is the point raised by the Roller Owners Association. The right hon. Gentleman will be aware that the association is extremely perturbed since its members are mostly engaged in the hiring out of road rollers and other plant, they have substantial repair and maintenance sections, and they undertake the bulk of their work for local authorities, which also own and operate rollers. In a letter to his right hon. Friend, the association said: It would seem to us illogical for the authorities to obtain a refund of the tax for the drivers they employ whilst our members must bear the full tax on their drivers. This is just one example of how the tax may affect an industry unfairly. I hope that the right hon. Gentleman will deal with this point.

I hope that he will also deal with the important point about the competition which many people will face from the nationalised industries. I refer him, in particular, to the electrical installation contractors, who are regarded, for the purposes of the tax, as part of the construction industry. Hon. Members will have had a vast amount of correspondence from people who are badly hit by the tax because of the wording in Clause 3. I understand that it is the Government's intention that nationalised industries should not receive refund of the tax for establishments comparable to private industries which are not entitled to a refund.

7.45 p.m.

I understand that that is the general principle which governs the Government's intentions, although their execution of it has not matched up. Therefore, in dealing with the problem of the private electrical contractors, we must go back to the Electricity Act, 1947. I would remind the Committee of the agreement reached at that time, and of the summary of principles governing the conduct of electrical contracting and retailing which was accepted by the area boards and the Electrical Contractors' Association. One was: In general, trading activities will be conducted on fair and unsubsidised commercial lines. That has been the basis of the competition in those years between the electricity boards and the private electrical contractors.

I hope that when we consider what is to happen in the operation of this Act, these will still be the principles which govern it. It would be most unfair for them to be abrogated for no reason purely because the Government have introduced a new tax without thinking out the con- sequences. I am certain that when they introduced the tax they had no intention of deliberately setting out to penalise private electrical contractors—[An HON. MEMBER: "I am sure they did."] My hon. Friend may be right, although I hope that he is not.

If they did not, it is a question of bad judgment rather than of bad faith. If it is, I hope that the right hon. Gentleman will be able to clear up the anomalies. He will be aware that, under the Electricity Act, 1947, private electrical contractors are entitled to undertake this form of electrical contracting. They are entitled to sell fittings and appliances by retail. The electricity boards are also entitled to sell fittings and appliances by retail. They are thus in direct commercial competition with private enterprise.

Nevertheless, it is clear, from Clause 3, that the nationalised electricity industry will obtain a refund and private contractors will not. In this case, private contractors may be driven out of business by the Selective Employment Tax. They will have no way to recoup their funds. The profit margins are already extremely small in this industry. They are faced with very tight competition from the nationalised industries. I do not complain about that, but I do complain about the fact that this competition will now become unfair. I hope that the Government will seriously consider that.

It would be a breach of the original agreement and contrary to the intentions of the Government if, as a result of S.E.T., there occurred, instead of economy of labour in the public electricity supply industry, an encouragement to employ more labour in an industry in which, I believe, the Chancellor wants to save labour. I therefore hope that the Chief Secretary will say what the position will be for the private electrical contractor and how he will be able to compete with the extra handicap which this tax will place on him.

My hon. Friend the Member for Londonderry pointed out that one of the Amendments we are discussing deals with the effect of Clause 4 on public, as against local, authorities, particularly from the point of view of direct labour. My hon. Friend gave some figures indicating the number of operatives employed, not by local authorities but by other public bodies such as British Rail, gas undertakings and the Central Electricity Generating Board. I hope that the principles which have governed, or which I have understood have governed, the introduction of S.E.T.—that competition should not be unfair—will be repeated for public bodies as well as for local authorities.

Although we have had a partial concession for direct labour employed by local authorities, nothing has been given to public boards. I am delighted with the small concession given so far by the Minister of Housing and Local Government, although I regret that we have not had an opportunity to question him in Parliament. There will be no refund in respect of those employed in direct labour on new construction, but I submit that if they are engaged on maintenance work they will be severely affected. The Government have given the clear impression that the only reason why they will not extend this concession to direct labour engaged on maintenance work is for administrative reasons.

When the Minister of Labour introduced the Bill he admitted that it would be unfair in its operation, that we would have to see how it worked, and that we would have to iron out some of its roughness. He went on to say that he hoped that by this time next year it would be less unfair. I submit that it is already known that there will be unfair competition and that only for administrative reasons has this injustice not been sorted out. Before introducing S.E.T. the Government should have considered the administration of the tax more fully. They should certainly now explain why they are not prepared to make this further concession.

Mr. A. P. Costain (Folkestone and Hythe)

My hon. Friend will have noted that although the Minister said that there will be this concession, the Bill does not say so.

Mr. Channon

I hope that my hon. Friend will develop that point if he has a chance to speak.

Perhaps the Chief Secretary will explain how the concession will be implemented in the operation of the Bill. A host of difficulties have presented themselves in our consideration of the implementation of S.E.T., and particularly its application to the building and construction industries. We have had little chance to debate these anomalies. Indeed, we have had only 10 minutes in which to discuss the whole building industry. I am sure that the Chief Secretary regrets this and that before imposing a tax of this magnitude he would have liked to have justified it to the Committee.

Time does not allow me to go into the many other anomalies that exist. There are a series of problems connected with fixed-price contracts. Is there really to be some concession for private contractors who have fixed-price contracts with nationalised industries? I do not know whether the Government have made a statement to that effect. What sort of rates of concession will apply to contractors who have fixed-price contracts with Government Departments and local authorities? The Chancellor gave us to understand that the money will not be totally recouped. What will be the principles guiding recoupment? These questions are directly relevant to the Clause and we are entitled to some straight answers.

Innumerable examples have been given to show that the Bill is unfair. It is the duty of the Government, these anomalies having been shown up, to remedy these shortcomings and to ensure that the tax is not only fair but is seen as one charge on the building industry and as part of a package of extra matters about which we heard yesterday from the Prime Minister. Blow after blow has been struck on the building and construction industries, although we have been told in the past by the Government that the one thing they would never do would be to make the construction industries a regulator when the economy was in difficulty. So incompetent—

The Minister of Public Building and Works (Mr. Reginald Prentice)

Before the hon. Gentleman continues, I suggest that any one who makes a fair analysis of yesterday's statement will say that it was a severe statement which involves sacrifices being made across the board, including sacrifices in the building and construction industries. However, it would not be fair to say, if one judges the package as a whole, that those industries are having to bear a disproportionate share of that. To say that is leaving out of account all the other things in the package.

Mr. Channon

That is a matter of opinion. The right hon. Gentleman is entitled to express his view. We cannot debate the matter now without being out of order. What happened yesterday, even though it may be necessary in the national interest, represented a direct refutation of everything the right hon. Gentleman and his predecessor said to the building and construction industries, as well as being a refutation of what the President of the Board of Trade said when introducing the Bill to control office building.

Mr. Chichester-Clark

My hon. Friend will also no doubt recall the statements made by hon. and right hon. Gentlemen opposite to the effect that the building industry would never be used as an economic regulator.

Mr. Channon

Yes, although if I develop this theme I shall find myself out of order.

Mr. Prentice

Statements have been made to the effect that the construction industries would not be singled out as economic regulators. I claim that the statement made yesterday by my right hon. Friend the Prime Minister confirmed those statements. It has never been said that the building or any other industry could be contracted out of the economic situation of the nation.

Mr. Channon

We will have two days in which to discuss these important economic measures next week.

In view of the extremely far-reaching nature of the measures announced by the Prime Minister yesterday, and the widespread effect of them on the building and construction industries, it is all the more important that S.E.T. is realised for what it is—a tax which represents yet another burden on the building industry. It should be seen to be fair and the anomalies and injusticies which have been proven to exist should be ironed out before it is imposed. That is why the Government have a duty not to allow S.E.T. to be imposed until these anomalies have been cured. If they do not accept that duty great harm will be done, and that is why I support the Amendment.

Mr. Costain

In accordance with the custom of the Committee, I will at the outset declare my interest and say that I am connected with the building industry.

My hon. Friend the Member for Londonderry (Mr. Chichester-Clark) and my hon. Friend the Member for Southend, West (Mr. Channon) have so adequately dealt with the problems of the building industry from the point of view of S.E.T. that there is no need for me unduly to develop their arguments further.

Since the General Election the Labour Government have introduced a number of Measures which have been nasty doses of medicine. Each one has contained a provision giving the Government special dictatorial powers to completely take over should the occasion arise. And when the right hon. Gentleman the Minister of Public Building and Works said, a few moments ago, that only part of the building industry would be sacrificed, he must realise why we are expressing fears on this subject. It is because of these fears that I tabled an Amendment, which, I understand, I may discuss. I fear that, once the economy gets worse, there will be a tendency to throw something more to satisfy the Government's Left-wing wolves—and private enterprise is a very tasty morsel when it comes to appeasing those who have not yet been satisfied.

8.0 p.m.

My Amendment is straightforward and I submit that the Government's attitude towards it will show quite clearly whether their intentions are honourably designed to follow what the Minister of Labour said on Second Reading, or whether this is another catch-clause of a party that got into power on a manifesto that said one thing and does another. If the latter is the case, we must expect the same thing to happen in legislation unless we on this side watch very carefully.

In the Second Reading debate on 23rd June, the Minister of Labour said: Those parts of the nationalised industries which are engaged in manufacturing activities directly comparable to those undertaken in the private sector are listed in Part III of the First Schedule. These will attract premiums. Those parts which are engaged in service activities directly comparable to the private sector are listed in Part II of the First Schedule. These will not attract any refund."—[OFFICIAL REPORT, 23rd June, 1966; Vol. 730, c. 938.] That statement was taken by the House to mean that private enterprise and the nationalised industries would be equally treated, but when we study this in Committee we find quite another situation. In Clause 3, we get this extraordinary statement: …that Minister with the consent of the Treasury may determine, a payment of an amount appearing to that Minister to correspond …. to certain things following. There is no catch in my Amendment. All I seek to add is: Provided that the payment which may be made by the designated Minister may not exceed the payment which would have been made ir the employer had qualified for a payment within section 1 or section 2 of this Act. That is what the Bill does not say.

If anyone has any doubts about this, let me go further. In any legislation related to the nationalised industries the Minister is ultimately the referee. What we have to do is to see that the rules are properly drawn, and that they cannot be altered by the Minister, in innocence or otherwise.

Part I of Schedule 1 makes interesting reading. It sets out those industries to which this Clause applies. Among them we find the National Coal Board—that is thet normal sort of industry, and the Electricity Council. My hon. Friend the Member for Southend, West (Mr. Channon) has made the point that that is a hybrid organisation, but I seek to amend Clause 3 because it gives such organisations greater power than they would have if they were private industries. I will not weary the Committee with anything further from Part I—it is all the same all the way down, and anyone can see the point quite clearly.

Par III deals with organisations that get a premium, which we are asked to empower the Minister to give them. It is headed: Parts of undertakings qualifying for premium ". The first is The Brickworks Executive of the National Coal Bcard. I took the trouble to visit the Library to find out just what the terms of reference of the Brickworks Executive are. They are: To develop and improve the Board's manufacture, supplies and sales of bricks "— That is manufacture—clay work—and I have no complaint there. It has also …to make best use of materials and facilities possessed by Board and services of other Departments of the Board, and to foster technical and other research in this field. Sales are also included, but the fact is that a manufacturer with a sales office in another area could not get a premium.

This is a wonderful list. The next organisation mentioned is The Coal Products Division of the National Coal Board. Then we have: The London Transport Railway Overhaul Workshops at Acton. No private enterprise can get a premium on an overhaul workshop. We go from bad to worse. The Minister is taking more power over the Workshops of the British Waterways Board which are wholly or mainly engaged in manufacturing or repairing waterway equipment. The Engineering and Maintenance Division of the British Overseas Airways Corporation. If those were private enterprise they would not get a premium, but we are here asked to give the Minister a right to give these little morsels out as he thinks fit.

All my Amendment seeks is to try to persuade the Minister to tell the Committee what is meant. If the Minister argues that my Amendment is wrong because of a slight technical error—and a Government always have the last word on that matter—I would willingly say, let them put down an Amendment on Report. We should have a right to ask for fair play between private enterprise and the nationalised industries and direct labour. They should compete as equals.

One of the factors of our present economic troubles is lack of confidence. How can private enterprise develop new industries in new areas if there is always the threat that the nationalised industries and local authority direct labour will get a special bonus premium because, as long as the present Government are in power, those bodies happen to be the "favourite kids", and get that little bit extra in a competitive world that helps them to compete unfairly? This Amendment seeks fair play, and I suggest that if the Minister does not accept it he does not intend to allow fair play in the future.

Mr. R. W. Elliott (Newcastle-upon-Tyne, North)

Bearing in mind the rigours of the Guillotine, I will not expand at any great length on many of the points I wished to make, as these have been excellently covered by my hon. Friend the Member for Southend, West (Mr. Channon), but I should like, in emphasising a few of the points he made, to refer to Amendment No. 258, which refers to the privileged position in which the nationalised industries are being put as a result of what is called in many of the letters that a number of us have received "this iniquitous Measure".

In particular, I would refer again to the position of electrical contractors. As he always is, my hon. Friend the Member for Southend, West was very generous—he has a generous spirit in suggesting that the Government had, in innocence, through the terms of this Bill, put the nationalised electricity industry in a privileged position over individual electrical contractors. I am unable to share my hon. Friend's generous out-look—

Mr. Channon

In this debate, my hon. Friend and I will find out who is right. If the Government give way, I shall be right; if not, he will be right.

Mr. Elliott

One comfort that those of us living in these troubled economic times have is the knowledge that members of the Government are also Members of Parliament. In their constituencies, there are high streets, and in those high streets there are premises occupied by electrical contractors. If members of the Government, particularly those responsible for the promotion of this Bill and its passage through the House, have not been receiving letters from the electrical contractors in the high streets, their experience has been different from those of us on this side of the Committee. We have received many letters from individual businessmen and from the ranks of private enterprise objecting to the fantastic preference that has been given to the nationalised industries. If this Clause is not designed to drive small businessmen out of existence—which seems to be the aim of the Government—I do not know what it does.

No one objects to the boards being in competition with private enterprise. As my hon. Friend said, no one objects to local authority direct labour being in fair competition, but it is out of all proportion that employees of nationalised industries should receive the payment for installing plants while small businessmen are not to receive the repayment The small businessman is to have hi's tied hands tied behind his back by this Measure. We can whole-heartedly condemn it. We suspect the Government very strongly indeed of desiring to give preference to nationalised concerns and wishing to drive the small businessman out of business.

Mr. R. B. Cant (Stoke-on-Trent, Central)

With some reluctance I follow the precedent of yesterday and oppose this Clause in detail while supporting it in principle. I do so for different reasons. Like hon. Members opposite, I have had more correspondence on Selective Employment Tax than on anything else. A large proportion of it has come from electrical contractors and the Co-operative movement.

The Government, by departing from the White Paper on the Selective Employment Tax, have introduced an element of injustice. They have introduced an element of discrimination in favour of nationalised industries. I am thinking particularly of electricity showrooms. I am opposed to this, not because I believe it will drive out the small businessman—although, obviously, it will have an effect on him—but because I think it extremely undesirable, speaking as a Socialist, from the point of view of the electricity undertakings themselves.

The electricity undertakings are extremely progressive and efficient. The gas and electricity industries have done a very great deal to promote the technical advance of their industries and they have been responsible for many administrative developments. I do not like to think that they are in a sense to be subjected to the indignity of this sort of treatment which offers them this sort of subsidy. As a Socialist, I should like to think that these industries can stand on their own commercial feet without fear of favour.

In Schedule 1(2) the retailing activities of the National Coal Board are excepted when the depots are outside the curtilage of any colliery and wholly or mainly engaged in the retail domestic trade. Speaking rather parochially, I think that in some areas, certainly in North Staffordshire, we have a situation in which the depots are almost exclusively out of the curtilage of the National Coal Board.

I confess that I am not quite clear about die situation in which the N.C.B. handles wholesale sales to other distributors a very high proportion of which are for domestic use and whether this creates a situation in which the National Coal Board depots are, in the meaning of the Schedule, wholly or mainly engaged in supplying coal …to domestic consumers both directly and indirectly. Quite obviously, in an area such as North Staffordshire the Coal Board would be exempt and the Co-operative movement and private retailers will be at a disadvantage. I make those two points and hope that I shall have a reply to them.

8.15 p.m.

Sir Harmar Nicholls (Peterborough)

I expected that when we reached this group of Amendments we would have some keen and informative argument from my hon. Friends, and we certainly have had it. What has disturbed me was the intervention of the Minister of Public Building and Works during the speech by my hon. Friend the Member for Southend, West (Mr. Channon).

I had the honour to serve in that Ministry for some time and I looked upon the right hon. Gentleman who is now Minister as the right type. He has vigour and an independent outlook. I felt that, if we had to have a Socialist Government, in that Department he would be as good a Minister as one could find, but he disturbed me tonight. What we expect from a Minister of Public Building and Works is that he should look after the interests of the building industry. We expect him to look at the great problems of the industry and to be prepared to argue within Treasury committees on behalf of the industry.

I could have understood the sort of intervention he made if it had come from a Treasury Minister. I could have understood it coming from the right hon. Gentleman who will reply to this debate. I could have understood his wanting to slide over the obviously well-based criticisms of my hon. Friends, but I could not understand it coming from the Minister of Public Building and Works, and I was disturbed that he should have done it. This is an occasion on which his silence would have been eloquent and helpful to the building industry, but his intervention showed that he is complacent and does not feel that the industry has much at which to grumble.

The right hon. Gentleman had to admit that the industry is having its fair share of restrictions, but he suggested that it had no more than its fair share. I should have expected him to know, more than anyone, that in the whole package squeeze the building industry and industries which go with it have more than their fair share. They have had a rough road. If we look at the loose wording of the Bill we find that not only are they to have a rough road, but they are in a hazy position and cannot see their way through. I should not have minded his silence if that meant he was battling for the industry, but now he seems to have put himself into the position of suggesting that the industry is all right. I hope that I have misjudged his intervention—

Mr. Prentice

Misinterpreted it.

Sir Harmar Nicholls

I am glad to know from that intervention that the Minister is battling within the Government to try to get better treatment for the industry. I give up the Minister of Housing and Local Government. He gets so excited and arrogant that I do not think he is a good representative of this great industry, but I am disturbed about the Minister of Public Building and Works.

I do not think that there is any doubt that these Amendments—certainly two of them—should be accepted by the Government, if only to clear up the present hazy situation. I support particularly Amendment No. 354, in the name of my hon. Friend the Member for Folkestone and Hythe (Mr. Costain). If the Government meant what was said in their name on Second Reading they must accept these words, because the words are merely confirming in an unequivocal way what was then said. There cannot be much doubt that that Amendment should be accepted.

The hon. Member for Stoke-on-Trent, Central (Mr. Cant) was eloquent in support of the point of view of electrical contractors. It was not easy for the hon. Gentleman to say what he said, because he had to be critical of the Government he supports. He is not an old Member of the House, although I can see that he will be a useful one. It is not easy for one to criticise one's own Government, particularly when they are in such trouble. In face of all these troubles, an hon. Member does not want to be labelled as a "Brown man".

However, the hon. Gentleman took the risk, because he knew from his own postbag and from his observations in North Staffordshire—the heart of England—that the Government's course of action is wrong. He knew that private enterprise electrical contractors will be in an unfair position when competing with nationalised industries.

The hon. Gentleman said that he would like to feel that Socialist-run industries did not need this sort of help. I assure him that they do need it they would not go far without it. That is why the Treasury Bench is giving it to them. In this instance, fair play should supersede doctrinaire views. I hope that the Treasury Bench will, when considering the Amendment, make it clear that it is not their intention to provide that private enterprise electrical contractors should be in this invidious position and that they will not allow such a provision to remain in the Bill.

The brick industry is another industry which will suffer as a consequence of this haziness and disturbance. My first job when I was at the Ministry of Works was to go round almost all the brick works, including some in North Staffordshire, urging them to invest a lot of money in the industry so that kilns could be built and there could be an upsurge in the output of bricks. I told them that this was essential if they were to meet the needs being made on them by the Government at that time. The records of the Ministry will show that on every occasion those concerned gave impressive figures to show that the capital investment which would be needed to build up the supplies of bricks which we said that the nation needed would put them at great risk, unless we could guarantee outlets for their products.

Those concerned in the brick industry said that they had been faced with stop- go so often. I believe that it was the brick industry which first made use of the phrase "stop-go". The industry had been encouraged to build up. Then it was faced with a slump and so it was left with all its capital invested. Because of Government action—it was not always a Labour Government—from 1947 onwards, clamps were imposed which affected the production of bricks and the industry was not able to get a return on the money which had been invested in new kilns, money on which, if obtained on bank overdraft, heavy interest payments had to be made.

The industry responded to the appeal that the then Government made and invested a lot of money, perhaps more money than the judgment of those concerned would have led them to make. They did this to ensure us the supply of bricks which got us through that period when so many houses, hospitals and schools were built.

Now the industry is back in its old unfortunate position. The large amount of money which has been expended is now reflected in the bricks piling up in the yards. The industry has to contemplate getting rid of some of its work-people. The kilns are standing idle. This is the result of the clamp which has again been imposed on the industry. Because of the economic problems now facing us, part of the restriction may be necessary. I do not agree or disagree with the statement made yesterday that we are in a mess and that we must all work hard to get out of it. However, it is not necessary for the position to be left hazy and unsettled for the building industry.

I plead with the Government to look favourably on this group of Amendments which, if they do nothing else, state in clear terms what the Government have already said they want to do and in every instance bring into being the outlook expressed by the Minister of Public Building and Works. I hope that these final words of mine will reach his heart. I should like to feel, as I did feel before I heard the right hon. Gentleman intervene earlier tonight, that the building industry had, in the new Minister of Public Building and Works, a man who will fight hard on its behalf and who will ensure that the miserable Treasury does not once again get away with imposing these restrictions on it.

I am on the side of the Minister of Public Building and Works, especially if he lives up to the picture I have of him. My picture of the Treasury is nothing to do with the picture I have of the right hon. Gentleman, but he seems to enjoy doing the dirty work which the Treasury so often foists on him.

Mrs. Jill Knight (Birmingham, Edgbaston)

I rise to speak on behalf of the people of whom we have heard quite a lot today, namely, private enterprise electrical contractors. I do so on a slightly different ground, speaking as a consumer. All of us know full well that one reason why area electricity boards have competitive prices is that they have had to face the competition of small private enterprise electrical contractors. From the consumer's point of view, this is an excellent thing, because it enables us to obtain a service much more cheaply than it would otherwise be. Therefore, anything which would operate to end this state of affairs would be against the consumer's interest and would be bad.

I want to speak on behalf of these people, partly because I have tabled an Amendment on this subject and partly because I conceive it to be my duty to represent here the grievances and upsets of those who sent me here. One letter I have received bears quotation, because it sums up the grievance that these people feel they have: With reference to the …. Selective Employment Payments Bill, says this employer, who is in a very small way of business— we would urge you to demand that the Bill should be for Selective Employment and not for selected employers. In our case, we would have to pay the tax for men sent to a factory to carry out installation and maintenance work. The Electricity Board will be entitled to a refund for the same work. Men on the payroll of a factory doing the same job would not only get a refund but also a rebate. Our main concern, naturally, is the unfair advantage given to the electricity boards" by the Bill. These people feel—it is natural that they should feel this way—that they are being forced to pay a tax to help their competitors against themselves. It is no wonder that they feel a very deep grievance.

I hope that the Government will not use a false argument in replying to the Amendment. One argument likely to be used against the proposal that area electricity boards should not receive a refund in respect of their contracting and retailing staff is that it is not possible for boards easily to discriminate against employees engaged on retailing and contracting and on other work.

I hope that we shall hear no nonsense of this sort. Each electricity board produces annual accounts which are published by the Stationery Office and which, inter cilia, give specific figures in respect of their contracting and retailing activities.

There is no argument about this. If it is possible for an electricity board to produce accounts showing the profitability of its contracting and retailing activities, the contracting and retailing staff are already separated and recorded as such. Surely no difficulty could arise in ensuring that such staff did not attract a refund of the tax. Surely arguments that are reasonable must be accepted and it must be recognised that private enterprise firms of electrical contractors have a real grievance, as do the consumers. In putting this viewpoint to the Government, I beg them to consider it very carefully.

8.30 p.m.

Mr. F. V. Corfield (Gloucestershire, South)

In intervening I have no intention of bringing the debate to an end but I want briefly to add to the arguments so ably deployed by my hon. Friends the Members for Southend, West (Mr. Channon), Newcastle-upon-Tyne, North (Mr. R. W. Elliott), and Birmingham, Edgbaston (Mrs. Knight) and the hon. Member for Stoke-on-Trent, Central (Mr. Cant) about the position of the electrical contracting industry vis-à-vis the nationalised electricity boards. Interested as I was in the speech of my hon. Friend the Member for Edgbaston, I do not share her belief that reasonable arguments will be accepted by the Government. This has come over me in the last few nights and I am no longer optimistic.

Time does not allow us to deploy the whole argument. The tax has been calculated to add between 9 per cent. and 10 per cent. to the labour element in the contracting industry. If the Chief Secretary doubts these figures I am willing to give him the calculations on which they are based. We must presume that even this Government recognise that this gives an enormous advantage to the nationalised electricity boards and we hope that they recognise it as a grossly unfair advantage—unless, of course, they contend, on the eve of the Iron and Steel Bill, that the nationalised industries are inherently so inefficient that private enterprise can catch up on a 9 per cent. lead.

I understand that the private electrical contracting industry employs about 36,000 electricians and about 20,000 apprentices and installs plant, appliances, etc., to the value of about £150 million per annum. It is obvious that this work offers very little scope for automation or mechanisation. Similar conditions apply to the selling side of the board's activities to showrooms and so on.

As my hon. Friend the Member for Southend, West pointed out, the irony lies in the fact that the Socialist Minister at the time of the nationalisation of the electricity supply industry lent his name to the agreement drawn up between the Electrical Contractors' Association and Lord Citrine, the first Chairman of the Central Electricity Authority, as to the clear trading terms. It is clear that this agreement, like so many other Socialist promises, is to be torn up and thrown out of the window for some doctrinaire administrative convenience.

It is also clear, as my hon. Friend the Member for Edgbaston said, that there is no difficulty on the part of the electricity boards in identifying the people employed on this side of their activities. As she rightly said, their accounts contain separate accounts of the selling and contracting activities so that there is no difficulty in identifying this branch of their operations. But the agreement is to be torn up, I understand, not—and this is to their credit —because the nationalised boards particularly want it done or because they are unable to identify the labour concerned but solely because they are in competition with the nationalised gas in- dustry which does not keep these separate accounts.

Thus we have the absurd position of a Government dedicated to nationalisation of the heights of the economy unable apparently to sort out the systems followed by the gas and electricity industries, preferring to leave this grossly unjust anomaly vis-à-vis the private enterprise contracting industry.

The result is that we have this gross discrimination, discrimination which is unfair from a Government which is always prattling about social justice until that has become an absolutely meaningless phrase. It is discrimination which condones a thoroughly inefficient form of accounting and an inability by the Gas Council and the gas boards to differentiate their labour. It is a discrimination which yet further, if that is possible, discredits the integrity of the Socialist Ministers of the past.

I challenge the Chief Secretary to dissociate himself from this form of discrimination and to say that he will put this matter right on Report.

Mr. Diamond

I have many questions to answer and while I do not want to delay hon. Members opposite, for I know that a Guillotine is operating and they will want me to speak as rapidly as possible, I have been asked so many questions, from road rollers onwards, that if I am to reply, I shall have to take a little time. One hon. Member opposite became so excited that I was rather worried and almost felt that I must ask him to sit down and relax.

I must, firstly, say that the Government's attitude to private enterprise and public enterprise is what has been many times stated from the Dispatch Box—we have, and we are likely to have as long as any hon. Member present is alive, a mixed economy; we want it to work and we think that we know what makes the public sector work and we think that we know what makes the private sector work, and certainly hon. Members opposite would claim that; we want to give every inducement to the private sector to be enterprising and energetic and to use all the emotion and drive which hon. Members have been putting into supporting the Amendments. On that first score hon. Members opposite can relax.

Secondly—[Interruption.] The hon. Member for Gloucestershire, South (Mr. Corfield) is more capable of debating than of persuading; it is not necessary for him to offer insults every time he rises to speak, or even when he is sitting down. I hope to deal with the debate and to do so fairly and I shall certainly not be put off by any words which I regard as less than praiseworthy. I want to deal with the arguments on their merits.

The second point is the distinction between private enterprise and nationalised industries in the application of the tax. We are anxious, for the very good reasons given by my hon. Friend the Member for Stoke-on-Trent, Central (Mr. Cant)—and I am glad that he gave them—that, so far as is consistent with sensible administration and organisation, there shall be fair competition. We do not take the view that the nationalised industries have to be coddled—quite the opposite. We give them their profit targets and we believe that they are capable of carrying out their industrial and commercial activities with the same efficiency as, or even more efficiency than, private enterprise and that they should be judged in that respect by that criterion.

I have carefully referred to commercial and industrial activities, because, of course, the nationalised industries often have their social responsibilities in addition which should be separately accounted and measured. We approach all these Amendments on the basis that we want fair play between private enterprise and nationalised industries and we are doing everything we can to encourage both the public and private aspects of the economy.

I will now deal with what the Bill provides for the nationalised industries. Perhaps I should start with the local authorities, because that is much simpler. Local authorities are to get a refund of the tax which they pay, with one major exception—directly employed local authority employees on new construction —not maintenance, but new construction.

Mr. Chichester-Clark

The right hon. Gentleman talks of a major concession, but does he not realise that he is talking about less than 10 per cent.?

Mr. Diamond

I was trying to make it simple for the Committee. I am sure that the hon. Gentleman is fully aware of the details, but I am not quite sure if everyone else appreciated them. Local authorities are to get a refund of the tax paid, with the exception of those employed in new construction. Broadly, nationalised industries are to be dealt with on the basis of being neutral, neither getting a premium nor being net payers of the tax.

As is said in the first Schedule of the Bill there will be a premium paid in respect of those employees of nationalised industries who are employed on some ancillary activity directly competing with private industry. This is set out in Part III of the Schedule. There will be no repayment in respect of those set out in Part II of the Schedule where there is again direct competition in respect of ancillary activities with private industry, when private industry receives no rebate or premium. They are being put on exactly the same basis as private industry, wherever one can seek it out in respect of their ancillary activities, either receiving a premium or nothing as the case may be.

That is the background, and I will now apply the general principles to the detailed questions put to me. On the question of construction there is the distinction between new work and maintenance work. I gather that there is no complaint about unfair competition between local authorities and private contractors on new work. If there is the Committee should bear in mind the words of my right hon. Friend the Minister of Housing. I think that I have made it clear that there will be no refund in respect of local authority employees engaged on new construction.

Mr. Chichester-Clark

The important question is what proportion is the new work of the whole?

Mr. Diamond

It does not matter what proportion it is. We are talking about whether competition is fair or unfair. Building work falls into two accepted categories, new work and maintenance.

Mr. Chichester-Clark

And what proportion is new work of the whole?

Mr. Diamond

I do not know what proportion new work is of the whole and I do not think I ought to know. It is totally irrelevant and I would not dream of asking the Box for it. It does not matter whether it is 1 per cent. or 91 per cent. On all new work there will be fair competition in the way that I have indicated.

Dealing with maintenance, there will not be an attempt to go into the various categories so as to divide them up between those categories of maintenance carried out by a local authority which are possibly competitive with private industry—this is a very small part of local authority maintenance—and the rest of local authority maintenance, concerned with sewerage and a host of things like that, where there is no element of competition with private enterprise. In short there is a very small area in which it might be held that the local authority maintenance work was being carried out in competition with private enterprise.

It is administratively impossible to sort out as between the men engaged on one kind of maintenance work one day and another kind of maintenance work another day. Very largely, it is not put out to tender. In that respect it is not administratively possible, and it is not relevant in terms of magnitude, that we should ask local authorities to accept the impossible task of trying to ascertain which members of their maintenance staff have been engaged for parts of a day or week in doing work which conceivably might have been held to be competitive with private enterprise. To that extent, therefore, it is a rough edge.

Mr. Costain

I want to point out how very weak the right hon. Gentleman's argument is. We have pointed out that 90 per cent. of the building work done by direct labour is maintenance work. We are talking about the livelihood of about 70,000 small builders who rely on maintenance work. The Minister is saying, "We want a special advantage over these people at 7s. 6d. a man a week when they are repairing a sewerage system". What the right hon. Gentleman said does not hold water.

8.45 p.m.

Mr. Diamond

The hon. Gentleman is wrong, and he should not get excited—[Interruption.] The hon. Gentleman was not listening. He was talking with his hon. Friend on the Front Bench. I did not want to interrupt him.

Mr. Chichester-Clark

It would not have profited me if it had been on a par with what we have had so far. The time was rapidly coming, if it were not for the Guillotine, when we should have had to ask the Minister of Public Building and Works to bail the Chief Secretary out, because he does not know what he is talking about.

Mr. Diamond

That may be. I am trying to answer the questions put to me. I am trying to demonstrate to the hon. Member for Folkestone and Hythe (Mr. Costain) that this rough edge—and I admit that it is a rough edge—is of tiny proportions. I go further: I shall be always at the hon. Gentleman's service to receive from him representations about local builders who have evidence that they are meeting unfair competition and losing their livelihood as a result.

Mr. John Brewis (Galloway)

Would not the right hon Gentleman agree that this is leaving the door wide open for local authorities to increase the number of men they have on maintenance work?

Mr. Diamond

Hon. Members opposite are expressing unnecessary anxiety. According to them, the whole world will turn round once this tax is put into force and small builders will be turned out of work and will go bankrupt. I assure the hon. Member for Galloway (Mr. Brewis) that there is no reason to fear anything of that kind. Small builders will be likely to be doing the same share of the work that they have done in the past. To meet their reasonable point of view we have deliberately taken steps to ensure that there is fair competition on all new construction, which is the relevant part.

I was asked about the Government's attitude to fixed-price contracts. You, Mr. Irving, were good enough to allow the matter to be raised, so perhaps you will permit me to reply to what was said as I dare say there is considerable interest in this matter.

The instructions to Government Departments which will very shortly be issued provide that in the case of Government contracts for construction works—I am not talking about term or service contracts—Departments may agree to pay up to 90 per cent. of the ascertained extra cost to the contractor resulting from his his Selective Employment Tax payments in respect of personnel employed on the construction site only. So far as term or service contracts are concerned—that is, contracts which can be terminated at relatively short notice by either side and which are usually for building maintenance work—Departments will be authorised to pay up to 100 per cent. of the extra costs to the contractor resulting from that part of his Selective Employment fax payments which can be attributed to work on Government contracts. What I have been talking about is Government contracts, and I expect—I can go no further than that—that public enterprise and local authorities will bear in mind what the Government are doing and may well fashion their attitude on that. The question of contracts as between contractors and private customers is not a matter For the Government at all.

Mr. Channon

Will the Chief Secretary consider, if necessary, giving the nationalised industries a general direction to ensure that they do so?

Mr. Diamond

I shall of course consider, but what I shall consider is whether my right hon. Friend has any such powers. and perhaps the hon. Gentleman will consider whether he wants nationalised industries to be run on a string so that they are given orders by Ministers from day to day on what they shall do. I have explained what the Government are doing and that I assume that the nationalised industries and local authorities would take due note of what the Government thought was appropriate action in regard to the present circumstances.

I do not know whether the hon. Gentleman wants me to go into questions of steam-rollers at this hour, in view of the fact that the debate is guillotined. Perhaps it would be simpler if I wrote to the hon. Gentleman.

The situation concerning electrical contractors is not quite as the hon. Lady the Member for Birmingham, Edgbaston (Mrs. Knight) describes it. Here again there is a very small rough edge. [Interruption.] I am not here to deny what exists. I am here to explain how one cannot improve on the present provision. I have stated the principles to which we shall try to adhere. If anyone can suggest methods by which we can improve the application of those principles of fair play as between private and public enterprise, we shall be only too glad to listen. We are taking powers in the Bill to vary the arrangements so as to permit that.

The majority of the work carried out by electricity undertakings is not competitive. Because it is not competitive, they do not get the same beneficial treatment that the electrical manufacturing contractors would get. For example, being a utility company, they would not get the premium in cases where they would otherwise get it. The gas and electricity manufacturing plants, which must run into hundreds of millions of £s, do not attract the premium that they would attract if they were under private enterprise because it would be manufacturing. Similarly, it is being treated broadly as a nationalised industry and is neither bearing the tax nor receiving the premium. That is the main philosophy.

Mrs. Knight

rose—

Mr. Diamond

If the hon. Lady could relax, as I have suggested that the hon. Gentleman should, we should all be so much happier.

Mr. Hector Monro (Dumfries)

rose—

Mr. Diamond

The hon. Gentleman can come in if he wants to afterwards. This is the Committee stage and I shall listen to him with interest.

The intention is neither to give nationalised industries the premium nor to charge them with the tax, and therefore one cannot start to make a direct comparison. If a direct comparison were sought, the hon. Lady would be inviting me to say that the nationalised industries that carry out major manufacturing activities should get a premium in respect of them. They would then be getting more substantial sums, which would be unfair in terms of competition, and therefore we do not propose that.

All that we propose, in terms of fair competition, is that this should be treated quite separately, as I have explained. This would give an advantage to the private electrical contractor in the sense that there is a small element, a quite tiny element, in which the private electrical contractor is competing with a nationalised industry. The electrical contractor starts off here with a considerable advantage, if he has manufacturing plant—some have and some have not—but we disregard that, inasmuch as one cannot separate not contracting from retailing but contracting of one kind from contracting of another kind.

What the electricity undertaking is concerned with mainly in contracting is the laying of mains and that kind of thing, and this is in no sense competitive. That is the major activity. On the other very minor proportion, the work might conceivably be competitive.

Mr. Corfield

How much in a year?

Mr. Diamond

I shall give way in a minute. I do not know why everyone is so impatient. I have been asked for information and I want to give the answer. The answer is that there is a very small area in which there is competition, and, although there would be advantage to the electrical contractor because he gets the premium in certain cases and the supply company does not, it is not possible to make an exact comparison and to give that same premium to the nationalised industry, for the reasons I have explained, or to separate out the hours a particular man might spend in one day doing contracting of one kind or contracting of another kind.

For these reasons, I cannot recommend the Committee to accept the Amendments.

Mrs. Knight

We must tell the right hon. Gentleman quite frankly that that is the most blatant example of double-talk we have ever heard. We have listened most carefully to his reply, given almost with tears rolling down his face, assuring us that he wants to be absolutely fair to private enterprise as opposed to the nationalised industries.

The point seems so simple. A nationalised industry sends a team along to wire up a house. A private electrical contractor sends along a team to wire up a house. They are in direct competition, and one of them is getting an unfair advantage over the other. If the right hon. Gentleman wants it like that, we recognise that he has a majority to have it like that, but what we cannot accept is that he is sincere in what he says at the beginning if that is how he finishes at the end.

Mr. Monro

The right hon. Gentleman has talked about a fair balance between the nationalised industries and free enterprise. It is surprising that in Schedule 1 there is no mention of the State management districts, the public ownership of hotels, restaurants and public houses, and the State brewery in Carlisle, Gretna and Ross and Cromarty. In view of the great importance of this matter to free enterprise in those districts, I should like the Chief Secretary to explain briefly why they have been omitted whereas, for example, British Transport has been included in the other part of Schedule 1.

I warmly support what my hon. Friends have said about the electrical contractor. Nothing that the right hon. Gentleman has said has alleviated our fears. I stress this particularly from the point of view of electrical contractors in Scotland, who have written to me and, I am sure, to all hon. Members who have such interests in their constituencies, expressing grave concern at the most unreasonable state of affairs now created by the Bill. I emphasise the point all the more from the Scottish point of view because we have had no time whatever to deal with our Amendments in Committee.

I hope now that after further questioning from my hon. Friend the Member for Birmingham, Edgbaston (Mrs. Knight) and myself, the Chief Secretary will at last tell us that he sees our points of view and will agree to our Amendment.

9.0 p.m.

Mr. David Mitchell (Basingstoke)

I am very glad that among the Amendments which we have been allowed to discuss in the limited time available it has been possible to include No. 258. Having heard the Chief Secretary's reply to the general discussion, I wonder why it is that he cannot accept the Amendment. The right hon. Gentleman said that he wanted to be fair and equal as between the nationalised industries, local authorities and private enterprise. In Amendment No. 258, we ask precisely that. To quote the Amendment, we ask that the repayment payable in respect of employees of nationalised industries shall not exceed that payable for employees engaged on competitive work in private industries. That is exactly what the right hon. Gentleman said was his intention. If it is his intention, I ask him to accept the Amendment. If he refuses to accept it, we can only assume, perfectly reasonably, that this is another example of the double talk of the present Government, where one thing is said and another thing is done.

I listened attentively to the right hon. Gentleman's summing up, and I want to make two specific points. The first one concerns local authorities. As he said, the competition between local authorities and private builders is, in part, involved in new construction, and there is no complaint about that. However, the other part is concerned with decoration and maintenance, and here there is constant direct competition between local authorities and private industry. The point which I want to stress is that it is not big private industry, but the small private firm which is affected.

When dealing with maintenance and decoration, one does not find the giants of the business involved, with respect to Costain's and other great firms. One finds the small village or town builder involved in it. If my researches are right, there are about 70,000 firms of this nature. and they are the people who will be put in the position of direct unfair competition when they have to quote against a local authority which does not have the weight which they have tied round their necks of having to pay Selective Employment Tax.

That is a point which the Chief Secretary has not answered, and it is one on which I feel that the Committee ought to hear an explanation, if there is one—I suspect there is not—of how he is to give effect to the meaning of his words, "equal and fair".

My second point is to join with my hon. Friends in their argument about the nationalised industries in relation to electrical contracting and other types of industry. A good example is railway track maintenance, where there is direct competition between the railways' costings in the use of its own labour for maintenance and the bringing in of contractors to do the wok. The contractor will have to pay; the railways will not. That is a direct case of firms being put at an unfair disadvantage where the Minister said that he intended it to be fair and equal.

The Chief Secretary talked as if, in electrical contracting, it was a non-existent problem. It so happens that I have just moved house, and I find that the electrical installation in my present house needs a good deal of rewiring. The obvious thing to do is to get a local electrical contractor and the L.E.B. or South-Eastern Electricity Board to quote for the job and give it to whichever is the cheaper. In future, the one will pay S.E.T. and the other will not; the one will have a competitive advantage and the other will not.

To return to the private builder doing decorating and repair work, another point which should be stressed is that it is the small firm which is involved. It is not the giants of the business who are involved. It is all very well for the Minister to talk about electrical manufacturers who have contracting departments who will receive 7s. 6d., but they are not the small firms, they are the giants of the business.

It is the small man who will be driven to the wall by the unfair competition provided by the Bill, which the Minister pretends, unless he accepts Amendment No. 258, it is his intention not to have. It must he unfair. It is blatantly and plainly unfair, and unless he is prepared to accept the Amendment, I can only assume that he knows it, and is not prepared to be fair.

The constant dripping attack on the small private firm seems to be a continuation of a highly unsatisfactory trend by which we are seeing the transference of a growing amount of power and of trade from private firms, and particularly small firms, to the State. This concentration of power and wealth in the hands of the State, which is the fundamental mark of a Socialist Government, is in direct contrast to what we believe in, which is the spreading of power and wealth as widely as possible throughout the community. Small traders, small builders, small decorators, and small electrical contractors are the people on whom competitive industry is built up, and the Bill is driving a knife into the opportunities available for the small firm to prosper.

Has the right hon. Gentleman any excuse to offer to these people? I ask him to accept Amendment No. 258, which embodies the phraseology which he used to describe his objective in an earlier speech.

Mr. Ian Percival (Southport)

I endorse all that has been said by my hon. Friends since the Minister sat down. The Minister said that the figures for contracting work could not be separated; and that in any event they represent only a small proportion of the total contracting work done by the electricity board. The second part of that is quite irrelevant and I believe that the first part is incorrect, because I have here the annual report and accounts of the Electricity Council for 1964–65, in which these figures are specified.

I wonder whether the Chief Secretary could pause to decide which way he should nod his head, instead of automatically nodding it that way? I can see that it may be possible for there to be some work of a different category in these contracting figures, but it cannot be anything like as big as the right hon. Gentleman says. In any event, the other figure given is the figure for sales of fittings, which is a comparable figure of sales carried out in direct competition with private enterprise, and the total of these two figures is no less than £80 million.

To suggest that this is a small matter is utter nonsense. It is £80 million, compared with a turnover of £150 million by private enterprise in the same field. Thus, if my arithmetic is correct, it is one-third of the total expenditure in these two fields, and I suggest to the Chief Secretary that it is an insult to the Committee to present an argument like he did.

The second point has been dealt with very fully by my hon. Friends that there is one other aspect which I want to mention. This argument that the people about whom we are concerned will get a premium under the Bill is the biggest nonsense that any of us has ever heard. If the right hon. Gentleman believes it, let

him come to Southport as my guest and meet my electrical contractors. If he can find one who will be given anything by way of premium to balance what he will lose by reason of this competition, I will give him as long a holiday as he likes in Southport. The right hon. Gentleman will realise that I make that offer not particularly because I want to see a Socialist Minister in my constituency—they are doing enough damage there already—but because I have considerable confidence in the wager.

The Minister says, from his comfortable position, that he knows that what he says is true. I do not put it as definitely as that, but I do say that if he really thinks that he must have been misled by someone; and if he does believe it I invite him to come down to earth and speak to some of the people whose views we are putting forward, and to hear what they say about it.

Mr. Costain

If the Chief Secretary thinks that, will he name a single firm that will benefit?

Mr. Percival

That is another challenge that he might like to take up at some time.

My hon. Friends and I are thinking of small businesses who have a difficult enough job as it is to compete with nationalised industries without having this extra burden placed upon them. It is quite untrue to say that this category will obtain any benefit under the Bill. They will not. It is all one way. That is why we feel so strongly about the Amendment, and about what I suggest to the Chief Secretary are the bogus arguments he has advanced—bogus in the sense that they are based on false premises, whether or not he knows it.

Question put, That those words be there inserted:—

The Committee divided: Ayes 229, Noes 295.

Division No. 141.]	AYES	[9.10 p.m.
Alison, Michael (Barkston Ash)	Bennett, Sir Frederic (Torquay)	Brewis, John
Allason, James (Hemel Hempstead)	Berry, Hn. Anthony	Brinton, Sir Tatton
Astor, John	Bessell, Peter	Bromley-Davenport,Lt.Col.Sir Walter
Atkins, Humphrey (M't'n — M'dn)	Biffen, John	Brown, Sir Edward (Bath)
Awdry, Daniel	Black, Sir Cyril	Bruce-Gardyne, J.
Baker, W. H. K.	Blaker, Peter	Bryan, Paul
Balniel, Lord	Bossom, Sir Clive	Buchanan-Smith,Alick(Angus,N—M)
Batsford, Brian	Boyd-Carpenter, Rt. Hn. John	Buck, Antony (Colchester)
Beamish, Col. Sir Tufton	Boyle, Rt. Hn. Sir Edward	Bullus, Sir Eric
Bell, Ronald	Brains, Bernard	Campbell, Gordon
Carlisle, Mark	Hiley, Joseph	Page, Graham (Crosby)
Carr, Rt. Hn. Robert	Hill, J. E. B.	Page, John (Harrow, W.)
Cary, Sir Robert	Hirst, Geoffrey	Pardoc, John
Channon, H. P. G.	Hobson, Rt. Hn. Sir John	Pearson, Sir Frank (Clitheroe)
Chichester-Clark, R.	Holland, Philip	Peel, John
Clark, Henry	Hobson, Emlyn	Percival, Ian
Clegg, Walter	Hordern, Peter	Peyton, John
Cooke, Robert	Hornby, Richard	Pink, R. Bonner
Cooper-Key, Sir Neill	Howell, David (Guildford)	Pounder, Rafton
Cordle, John	Hunt, John	Powell, Rt. Hn. J. Enoch
Corfield, F. V.	Hutchison, Michael Clark	Price, David (Eastleigh)
Costain, A. P.	Iremonger, T. L.	Prior, J. M. L.
Craddock, Sir Beresford (Spelthorne)	Irvine, Bryant Cadman (Rye)	Quennell, Miss J. M.
Crawley, Aidan	Jenkin, Patrick (Woodford)	Rawlinson, Rt. Hn. Sir Peter
Crouch, David	Johnson Smith, G. (E. Grinstead)	Rees-Davies, W. R.
Currie, G. B. H.	Johnston, Russell (Inverness)	Renton, Rt. Hn. Sir David
Dalkeith, Earl of Dance, James	Jones, Arthur (Northants, S.)	Ridley, Hn. Nicholas
Davidson ,James(Aberdeenshire,W.)	Jopling, Michael	Ridsdale, Julian
d'Avigdor-Geldsmid, Sir Henry	Joseph, Rt. Hn. Sir Keith	Rippon, Rt. Hn. Geoffrey
Dean, Paul (Somerset, N.)	Kaberry, Sir Donald	Robson Brown, Sir William
Deedes, Rt. Hn. W. F. (Ashford)	Kerby, Capt. Henry	Roots, William
Digby, Simon Wingfield	Kershaw, Anthony	Rossi, Hugh (Hornsey)
Dodds-Parker, Douglas	Kimball, Marcus	Russell, Sir Ronald
Doughty, Charles	King, Evelyn (Dorset, S.)	St. John-Stevas, Norman
Douglas-Home, Rt. Hn. Sir Alec	Kitson, Timothy	Scott, Nicholas
Drayson, G. B.	Knight, Mrs. Jill	Sharpies, Richard
du Cann, Rt. Hn. Edward	Lancaster, Col. C. G.	Shaw, Michael (Sc'b'gh — Whitby)
Eden, Sir John	Legge-Bourke, Sir Harry	Sinclair, Sir George
Elliot, Capt. Walter (Carshalton)	Lewis, Kenneth (Rutland)	Stainton, Keith
Elliott,R.W.(N'c'tle-upon-Tyne,N.)	Longden, Gilbert	Steel, David (Roxburgh)
Errington, Sir Eric	Loveys, W. H.	Stodart, Anthony
Eyre, Reginald	Lubbock, Eric	Stoddart-Scott, Col. Sir M. (Ripon)
Farr, John	MacArthur, Ian	Summers, Sir Spencer
Fisher, Nigel	Mackenzie,Alasdair(Ross—Cromity)	Tapsell, Peter
Fletcher-Cooke, Charles	Maclean, Sir Fitzroy	Taylor, Sir Charles (Eastbourne)
Fortescue, Tim	Macleod, Rt. Hn. Iain	Taylor,Edward M.(G'gow,Cathcart)
Foster, Sir John	McMaster, Stanley	Taylor, Frank (Moss Side)
Galbraith, Hn. T. G.	Macmillan, Maurice (Farnham)	Teeling, Sir William
Gibson-Watt, David	Maddan, Martin	Temple, John M.
Giles, Rear-Adm. Morgan	Maginnis, John E.	Thatcher, Mrs. Margaret
Gilmour, Ian (Norfolk, C.)	Marten, Neil	Thorpe, Jeremy
Gilmour, Sir John (Fife, E.)	Mathew, Robert	Tilney, John
Glover, Sir Douglas	Maude, Angus	Turton, Rt. Hn. R. H.
Glyn, Sir Richard	Maudling, Rt. Hn. Reginald	van Straubenzee, W. R.
Godber, Rt. Hn. J. B.	Mawby, Ray	Vickers, Dame Joan
Goodhart, Philip	Maxwell-Hyslop, R. J.	Wainwright, Richard (Colne Valley)
Goodhew, Victor	Maydon, Lt.-Cmdr. S. L. C.	Walker, Peter (Worcester)
Gower, Raymond	Mills, Peter (Torrington)	Walker-Smith, Rt. Hn. Sir Derek
Grant-Ferris, R.	Mills, Stratton (Belfast, N.)	Walters, Dennis
Gresham Cooke, R.	Miscampbell, Norman	Ward, Dame Irene
Griffiths, Eldon (Bury St. Edmunds)	Mitchell, David (Basingstoke)	Weatherill, Bernard
Gurden, Harold	Monro, Hector	Webster, David
Hall, John (Wycombe)	More, Jasper	Wells, John (Maidstone)
Hall-Davis, A. G. F.	Morgan, W. G. (Denbigh)	Whitelaw, William
Hamilton, Michael (Salisbury)	Morrison, Charles (Devizes)	Wills, Sir Gerald (Bridgwater)
Harris, Frederic (Croydon, N.W.)	Mott-Radclyffe, Sir Charles	Wilson, Geoffrey (Truro)
Harris, Reader (Heston)	Munro-Lucas-Tooth, Sir Hugh	Winstanley, Dr. M. P.
Harrison, Brian (Malden)	Murton, Oscar	Wolrige-Gordon, Patrick
Harrison, Cot. Sir Harwood (Eye)	Nabarro, Sir Gerald	Wood, Rt. Hn. Richard
Harvey, Sir Arthur Vere	Heave, Airey	Woodnutt, Mark
Harvie Anderson, Miss	Nicholls, Sir Harmar	Worsley, Marcus
Hawkins, Paul	Noble, Rt. Hn. Michael	Wylie, N. R.
Hay, John	Nott, John	Younger, Hn. George
Heald, Rt. Hn. Sir Lionel	Onslow, Cranley	TELLERS FOR THE AYES:
Heath, Rt. Hn. Edward	Orr, Capt. L. P. S.	Mr. Pym and Mr. Grant.
Heseltine, Michael	Orr-Ewing, Sir Ian
Higgins, Terence L.	Osborn, John (Hallam)
	Osborne, Sir Cyril (Louth)
NOES
Abse, Lee	Barnes, Michael	Booth, Albert
Albu, Austen	Barnett, Joel	Boston, Terence
Allaun, Frank (Salford, E.)	Beaney, Alan	Bottomley, Rt. Hn. Arthur
Alldritt, Walter	Bellenger, Rt. Hn. F. J.	Bowden, Rt. Hn. Herbert
Allen, Scholefield	Bence, Cyril	Braddock, Mrs. E. M.
Anderson, Donald	Benn, Rt. Hn. Anthony Wedgwood	Bradley, Tom
Archer, Peter	Bennett, James (G'gow, Bridgeton)	Bray, Dr. Jeremy
Armstrong. Ernest	Bidwell, Sydney	Brooks, Edwin
Ashley, Jack	Binns, John	Broughton, Dr. A. D. D.
Atkins, Ronald (Preston, N.)	Bishop, E. S.	Brown,Bob (N'c' tle-upon-Tyne, W.)
Atkinson, Norman (Tottenham)	Blackburn, F.	Brown, Rt. Hn. George (Belper)
Bacon, Rt. Hn. Alice	Blenkinsop, Arthur	Brown, Hugh D. (G'gow, Provan)
Bagier, Gordon A. T.	Boardman, H.	Brown, R. W. (Shoreditch — F'bury)

Buchan, Norman	Horner, John	Page, Derek (King's Lynn)
Buchanan, Richard (G'gow, Sp'burn)	Houghton, Rt. Hn. Douglas	Palmer, Arthur
Butler, Herbert (Hackney C.)	Howarth, Harry (Wellingborough)	Pannell, Rt. Hn. Charles
Butler, Mrs. Joyce (Wood Green)	Howarth, Robert (Bolton, E.)	Parkyn, Brian (Bedford)
Cant, R. B.	Howie, W.	Pearson, Arthur (Pontypridd)
Carmichael, Neil	Hughes, Emrys (Ayrshire, S.)	Peart, Rt. Hn. Fred
Carter-Jones, Lewis	Hughes, Hector (Aberdeen, N.)	Pentland, Norman
Castle, Rt. Hn. Barbara	Hunter, Adam	Perry, Ernest G. (Battersea, S.)
Chapman, Donald	Hynd, John	Perry, George H. (Nottingham, S.)
Coe, Denis	Irvine, A. J. (Edge Hill)	Prentice, Rt. Hn. R. E.
Coleman, Donald	Jackson, Colin (B'h'se — Spenb'gh)	Price, Christopher (Perry Barr)
Concannon, J. D.	Jackson, Peter M. (High Peak)	Price, Thomas (Westhoughton)
Conlan, Bernard	Jay, Rt. Hn. Douglas	Price, William (Rugby)
Corbel, Mrs. Freda	Jeger, George (Goole)	Probert, Arthur
Craddock, George (Bradford, S.)	Jeger,Mrs.Lena(H'b'n—St.P'cras,S.)	Pursey, Cmdr. Harry
Crawshaw Richard	Jenkins, Hugh (Putney)	Rankin, John
Cronin, John	Johnson, Carol (Lewisham, S.)	Redhead, Edward
Crosland, Rt. Hn. Anthony	Johnson, James (K'ston-on-Hull, W.)	Rees, Merlyn
Dalyell, Tans	Jones, Dan (Burnley)	Reynolds, G. W.
Darling, Rt. Hn. George	Jones, J. Idwal (Wrexham)	Rhodes, Geoffrey
Davidson, Arthur (Accrington)	Judd, Frank	Richard, Ivor
Davies, Dr. Ernest (Stretford)	Kenyon, Clifford	Roberts, Albert (Normanton)
Davies, G. Elfed (Rhondda, E.)	Kerr, Mrs. Anne (R'ter — Chatham)	Roberts, Goronwy (Caernarvon)
Davies, Ednyfed Hudson (Conway)	Lawson, George	Roberts, Gwilym (Bedfordshire, S.)
Davies, Harold (Leek)	Leadbitter, Ted	Robertson, John (Paisley)
Davies, Robert (Cambridge)	Ledger, Ron	Robinson,Rt.Hn.Kenneth(St.P'c'as)
de Freitas, Sir Geoffrey	Lee, Rt. Hn. Frederick (Newton)	Robinson, W. 0. J. (Walth'stow, E.)
Delargy, Hugh	Lee, Rt. Hn. Jennie (Cannock)	Rodgers, William (Stockton)
Dell, Edmund	Lee, John (Reading)	Rose, Paul
Dempsey, James	Lestor, Miss Joan	Ross, Rt. Hn. William
Dewar, Donald	Lever, L. M. (Ardwick)	Rowland, Christopher (Meriden)
Diamond, Rt. Hn. John	Lewis, Arthur (W. Ham, N.)	Rowlands, E. (Cardiff, N.)
Dickens, James	Lewis, Ron (Carlisle)	Ryan, John
Dobson, Ray	Lomas, Kenneth	Shaw, Arnold (Ilford, S.)
Doig, Peter	Loughlin, Charles	Sheldon, Robert
Donnelly, Desmond	Luard, Evan	Shinwell, Rt. Hn. E.
Driberg, Tom	Lyon, Alexander W. (York)	Shore, Peter (Stepney)
Dunn, James A.	Lyons, Edward (Bradford, E.)	Short, Rt.Hn.Edward(N'c'tle-u-Tyne)
Dunwoody, Mrs. Gwyneth (Exeter)	McBride, Neil	Short, Mrs. Renée (W'hampton,N.E.)
Dunwoody, Dr. John (F'th — C'b'e)	McCann, John	Silkin, John (Deptford)
Eadie, Alex	MacColl, James	Silkin, S. C. (Dulwich)
Edelman, Maurice	MacDermot, Niall	Silverman, Julius (Aston)
Edwards, Robert (Bilston)	Macdonald, A. H.	Silverman, Sydney (Nelson)
Edwards, William (Merioneth)	McGuire, Michael	Skeffington, Arthur
Ellis, John	Mackenzie, Gregor (Rutherglen)	Slater, Joseph
English, Michael	Mackie, John	Small, William
Ennals, David	Mackintosh, John P.	Snow, Julian
Ensor, David	Maclennan, Robert	Spriggs, Leslie
Evans, Albert (Islington, S.W.)	McMillan, Tom (Glasgow, C.)	Steele, Thomas (Dunbartonshire, W.)
Evans, loan L. (Birm'h'm, Yardley)	McNamara, J. Kevin	Stewart, Rt. Hn. Michael
Fernyhough, E.	MacPherson, Malcolm	Stonehouse, John
Finch, Harold	Mahon, Peter (Preston, S.)	Strauss, Rt. Hn. G. R.
Fitch, Alan (Wigan)	Mallalieu,J.P. W.(Huddersfield,E.)	Summerskill, Hn. Dr. Shirley
Fletcher, Raymond (Ilkeston)	Manuel, Archie	Swain, Thomas
Fletcher, Ted (Darlington)	Mapp, Charles	Swingler, Stephen
Floud, Bernard	Marquand, David	Symonds, J. B.
Foley, Maurice	Mason, Roy	Taverne, Dick
Foot, Michael (Ebbw Vale)	Mayhew, Christopher	Thomas, George (Cardiff, W.)
Ford, Ben	Mellish, Robert	Thomas, Iorwerth (Rhondda, W.)
Forrester, John	Mendelson, J. J.	Thornton, Ernest
Fowler, Gerry	Milian, Bruce	Tinn, James
Fraser, Rt. Hn. Tom (Hamilton)	Miller, Dr. M. S.	Tomney, Frank
Gardner, A. J.	Mitchell, R. C. (S'th'pton, Test)	Urwin, T. W.
Garrow, Alex	Molloy, William	Varley, Eric G.
Ginsburg, David	Morgan, Elystan (Cardiganshire)	Wainwright, Edwin (Dearne Valley)
Gordon Walker, Rt. Hn. P. C.	Morris, Alfred (Wythenshawe)	Walden, Brian (All Saints)
Gourley, Harry	Morris, Charles R. (Openshaw)	Walker, Harold (Doncaster)
Gray, Dr. Hugh (Yarmouth)	Morris, John (Aberavon)	Wallace, George
Greenwood, Rt. Hn. Anthony	Moyle, Roland	Watkins, David (Consett)
Gregory, Arnold	Mulley, Rt. Hn. Frederick	Weitzman, David
Griffiths, David (Rother Valley)	Murray, Albert	Wells, William (Walsall, N.)
Griffiths, Rt. Hn. James (Llanelly)	Neal, Harold	Whitaker, Ben
Griffiths, Will (Exchange)	Newens, Stan	White, Mrs. Eirene
Hamilton, James (Bothwell)	Noel-Baker, Francis (Swindon)	Whitlock, William
Hamilton, William (Fife, W.)	Norwood, Christopher	wigg, Rt. Hn. George
Hamling, William	Oakes, Gordon	Williams, Alan (Swansea, W.)
Hannan, William	Ogden, Eric	Williams, Alan Lee (Hornchurch)
Harper, Joseph	O'Malley, Brian	Williams, Clifford (Abertillery)
Hart, Mrs. Judith	Orbach, Maurice	Williams, Mrs. Shirley (Hitchin)
Hazell, Bert	Orme, Stanley	Williams, W. T. (Warrington)
Heffer, Eric S.	Oswald, Thomas	Willis, George (Edinburgh, E.)
Henig, Stanley	Owen, Dr. David (Plymouth, S'ton)	Wilson, William (Coventry, 8.)
Hilton, W. S.	Owen, Will (Morpeth)	Winnick, David
Hooley, Frank	Padley, Walter

Winterbottom, R. E.	Yates, Victor	TELLERS FOR THE NOES:
Woof, Robert	Zilliacus, K.	Mr. Walter Harrison and
Wyatt, woodrow		Mr. Grey

Question proposed, That the Clause stand part of the Bill.

Sir Keith Joseph (Leeds, North-East)

This Clause is a thoroughly distasteful one to my hon. Friends for several reasons, some of which have been spelled out in a series of trenchant speeches by my hon. Friends which, I understand, have been thoroughly inadequately replied to by the Government.

I will draw attention to two major defects in the Clause. The first is that, once again, it provides us with an example of taxation by discretion. In line 15 the word "may" appears—the Minister is given power, discretion, to refund the tax to the payers. This is a thoroughly unsatisfactory method of taxation, even if in this case the bodies paying the tax are public enterprises. We deplore taxation by discretion wherever it may appear and it is another example of the Government's hasty imprecision in introducing the Bill, so that they did not have time to work out exactly how the tax would fall.

Our second major objection to the Clause is that its effect on the nationalised industries is so damaging to the public. If we consider Schedule 1, with which Clause 3 must be considered, we find that a number of the nationalised industries to which it refers are akin to services. If these were private enterprises, the employers would bear the tax without any refund, and without, of course, any premium, but because they are nationalised, and because a number of them are already bearing heavy losses —which are transferred straight to the taxpayer—the Government cannot trust them 10 bear the tax, as it would fall straight back on the Government and on the taxpayer.

The nationalised industries are not subject to any competition. They have no incentive to minimise the burden of the tax, to absorb it where possible. Since the taxpayer is the ultimate supporter of the nationalised industries in those many cases where they are making losses, the Government have had to refund the tax, or give power to the Minister to refund the tax, to those nationalised industries providing the service, when the private service industries are the very ones that bear the tax.

These are the main objections we have to the Clause, and if there were time, which the Guillotine denies us, we would ask the Government to spell out in some detail exactly how the discretion in subsection (2) will be used. I hope that, if there is time, the Minister will be able to answer that question, but because I know that a number of my hon. Friends want to make their views known I now simply register the fact that we find the Clause most distasteful, and will want to move the Committee against its standing part of the Bill.

Sir Arthur Vere Harvey (Macclesfield)

I support my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph), because I have received a number of letters from constituents, both in Macclesfield and in Congleton, who are electrical installation engineers. They are mostly very small firms—the Chief Secretary laughs, but what is the joke'?

Mr. Diamond

There is no joke at all. I am listening very carefully to what the hon. Gentleman is saying. I was smiling only because this is a matter that we have just debated at some considerable length.

Sir A. V. Harvey

I hope that the right hon. Gentleman is convinced by the arguments. He would be if he were running a small firm in Macclesfield or Congleton, with one or two men, with only very limited capital on which to draw, seeing his costs go up right, left and centre in every sphere of the business, and then having this tax imposed while having to compete with nationalised industries which have almost unlimited capital. The nationalised industries never have to worry about capital—it is there for the asking, as we have seen since the war. I object very strongly to this Clause, because these men are getting a very raw deal.

The Government went to the country in March and made all sorts of promises about looking after small men and small businesses, but all we see is that those men and those businesses are being penalised to the hilt. But the Government's sins will find them out, and the country will awaken to how they have been misled by the Labour Government.

What is being done is shameful and disgraceful.

Sir Douglas Glover (Ormskirk)

I support what has been said by my hon. Friend the Member for Macclesfield (Sir A. V. Harvey) about discrimination against the small trader in favour of the nationalised industries, but a far greater constitutional issue involved here is that the Government are again taking permissive powers to do something without the control of the House of Commons.

Hon. Members opposite seem to have very quickly lost in their minds the reason why they were returned here. They were returned to consider legislation, to debate it, and to pass on to their constituents what is the law of the land. How can any Member of the House of Commons pass on to the electorate what the law is when we allow permissive legislation to go through? The right hon. Gentleman has never explained, and I do not suppose that he will explain now, what will happen under this permissive legislation.

What steps will be taken? How favourable will be the position of the nationalised industries vis-à-vis the private traders? We are giving permissive legislation to the Government just when, in fact, the House of Commons ought to be trying to get a grip on the Executive. We have heard speeches from the other side. Learned dons come here and teach us how to run our affairs, saying that it is a waste of time for Members of Parliament to try to control the Executive. It would not be a waste of time if the back benchers were determined to control the Executive.

9.30 p.m.

If hon. Members opposite had enough spunk in their bones to try to control the Executive this sort of legislation would never be brought to the Statute Book. They are returned with the idea that so much of our procedure is archaic and out of date and that it is a waste of time to have a debate. They know that, whatever happens, they will vote for the Government, however they disapprove of the Government's actions. When we were debating the Resale Prices Bill in the last Conservative Government, back benchers on the Conservative side showed a totally different approach to the problem than that shown by hon. Members opposite now. That was a very good thing for Parliament. It was back benchers doing their job. On one occasion when we had as big a majority as hon. Members opposite have, the Government won by one vote. There was no pulling of punches then. People who felt deeply about the issue were prepared to go into the Lobby to support their view.

We have not had a speech from either side of the Committee this evening supporting even lukewarmly the Government's proposals. Hon. Members opposite know that again they are allowing the Executive to pass legislation giving the Executive an increase in power to decide, after this Bill has left the House, what the Executive are to do.

Sir A. V. Harvey

Does my hon. Friend recall that during the long debates on resale price maintenance the Prime Minister never spoke once and hardly appeared in the Chamber?

Sir D. Glover

I am grateful to my hon. Friend, but I thought it was obvious, not only to this side of the Committee but to the other side, that the Prime Minister has treated the House of Commons with complete contempt. He is quite convinced that with his majority and with his elan he can get away with murder. Perhaps it is a good thing that we abolished capital punishment—[An HON. MEMBER: "You voted against it."]—Of course I voted against the abolition.

Sir Harmar Nicholls

My hon. Friend wanted to hang the Prime Minister?

Sir D. Glover

In social justice I cannot think of anything better for the nation than to do what my hon. Friend has suggested, but I do not want to be carried away, Mr. Irving. You must admit that I have been under some provocation. I was not certain whether it was the Prime Minister or I who was being guillotined. Parliament has the opportunity, if it desires to use it, to control the Executive. It only needs back benchers to have the courage for what they believe in. This has been done many times while I have been in Parliament, but it appears that on this occasion hon. Members opposite are completely gagged by their Whips. They are pusillanimous, have no backbone and are not prepared to stand for what they believe. The result is that they are allowing the Executive to get more and more power.

We had an example this afternoon of an hon. Member saying that he would like to do something, but the precedent in this House was contrary to what he would like. Once Parliament allows permissive legislation—[An HON. MEMBER:" What has this to do with the Clause? "]— It has a lot to do with the Clause. Once Parliament allows permissive legislation in this way in the next Parliament, which may be with a Conservative Government—

Mr. Robert Cooke (Bristol, West)

May be? Withdraw.

Sir D. Glover

I willingly withdraw—it will be. Hon. Members opposite will be worried because the Executive will then be using the precedent established by this Bill for more permissive legislation. That is exactly what we were sent here to stop.

Mr. John Hall (Wycombe)

My hon. Friend the Member for Ormskirk (Sir D. Glover) has, as usual, put his finger on the point that matters. He has drawn attention, as did my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph), to the unacceptable and abhorrent aspect of the Bill, which enables the Government to indulge in permissive legislation. When I am showing constituents round the Palace of Westminster, as many hon. Members on both sides do, I draw their attention to the pictures to be seen in the Lords Corridor, which show some of the incidents of the Civil War. I point out that this was a time when there was a struggle between Crown and Parliament, a struggle which Parliament won.

Today there is, as I point out to them, a struggle between Parliament and the Executive, and it would seem that, if we have many more Bills like this, it will be the Executive which will win. This is something which the House of Commons should oppose with all the force at its command. We should not allow this to pass without the strongest contest.

I pass from that to what is, by comparison. a small point. Like many hon. Members on both sides, I have received letters from small traders and others who are worried about the possible effects of the Bill. I have picked out one of the many hundreds of letters that I have received. It is from a firm of electrical contractors. I quote two short paragraphs. My constituents say: It has been suggested that the retailing departments of the area electricity boards should receive a refund of the tax on their sales and contracting work. Healthy competition is good for any business, but if a refund is made to the electricity board and not to the contracting businesses, this could bring about the closure of many small firms. Is it the Government's intention to give a refund to electricity boards? If the Chief Secretary cannot give an answer, if it turns out to be the fact that nationalised industries will be at an advantage in competition with the smaller contractors throughout the country, this will undoubtedly cause considerable dismay to many people who are engaged in private enterprise and who have, over many years, in face of great difficulty, built up businesses of considerable value to the country as a whole. This is a most unfortunate and reprehensible Clause. I am delighted that my right hon. Friend the Member for Leeds, North-East has advised the Committee to divide against it.

Mr. Robert Cooke

I would willingly give way to the Chief Secretary if I thought that he had anything new to say in reply to the argument which has been adduced. However, I feel that he has not. Therefore, in the short time that remains, I will speak up on behalf of many of my constituents who find themselves in a hopeless position because of the provisions of the Clause.

One of the things that the Government have always said that nationalised industries should have is effective competition from private enterprise, that nationalised industries should not be in a privileged position. If, as a result of the Clause, private enterprise is completely destroyed, there will be no competition and no efficiency. The Government should address their minds to this problem.

Under the Clause, taxation can be imposed by discretion. We have had nothing like an adequate reply from the Government on this vital matter. We are told that the Minister may, if he feels so inclined, or if he thinks it is justified, remit the tax or make payments back. This is thoroughly unsatisfactory to our point of view and to the Committee as a whole. It is just like the building controls which are being imposed without any statutory force whatsoever. This is government by decree. Permissive powers are being given to the Government to use as they like long into the future.

Then there is this messy little Schedule containing a long list of people who are

to receive favoured treatment. I am prepared to wager the Government

It being twenty minutes to Ten o'clock [the House having resolved itself into the Committee at ten minutes past Four o'clock], The CHAIRMAN proceeded, pursuant to Order [18th July], to put forthwith the Question already proposed from the Chair.

Question put, That the Clause stand part of the Bill:

The Committee divided: Ayes 303, Noes 230.

Division No. 142.]	AYES	[9.40 p.m.
Abse, Leo	Davies, Ednyfed Hudson (Conway)	Honig, Stanley
Albu, Austen	Davies, Harold (Leek)	Hilton, W. S.
Allaun, Frank (Salford, E.)	Davies, Robert (Cambridge)	Hooley, Frank
Alldritt, Walter	de Freitas, Sir Geoffrey	Horner, John
Allen, Scholefield	Delargy, Hugh	Houghton, Rt. Hn. Douglas
Anderson, Donald	Dell, Edmund	Howarth, Harry (Wellingborough)
Archer, Peter	Dempsey, James	Howarth, Robert (Belton, E.)
Armstrong, Ernest	Dewar, Donald	Howie, W.
Ashley, Jack	Diamond, Rt. Hn. John	Hoy, James
Atkins, Ronald (Preston, N.)	Dickens, James	Hughes, Emrys (Ayrshire, S.)
Atkinson, Norman (Tottenham)	Dobson, Ray	Hughes, Hector (Aberdeen, N.)
Bacon, Rt. Hn. Alice	Doig, Peter	Hunter, Adam
Bagier, Gordon A. T.	Donnelly, Desmond	Hynd, John
Barnes, Michael	Driberg, Tom	Irvine, A. J. (Edge Hill)
Barnett, Joel	Dunn, James A.	Jackson, Colin (B'h'se — Spenb'gh)
Beaney, Alan	Dunwoody, Mrs. Gwyneth (Exeter)	Jackson, Peter M. (High Peak)
Bellenger, Rt. Hn. F. J.	Dunwoody, Dr. John (F'th — C'b'e)	Jay, Rt. Hn. Douglas
Bence, Cyril	Eadie, Alex	Jager, George (Goole)
Benn, Rt. Hn. Anthony Wedgwood	Edelman, Maurice	Jeger,Mrs.Lena (H'b'n—St.P'cras.S.)
Bennett, James (G'gow, Bridgeton)	Edwards, Robert (Bilston)	Jenkins, Hugh (Putney)
Bidwell, Sydney	Edwards, William (Merioneth)	Johnson, Carol (Lewisham, S.)
Burns, John	Ellis, John	Johnson, James (K'ston-on-Hull, W.)
Bishop, E. S.	English, Michael	Jones, Dan (Burnley)
Blackburn, F.	Ennals, David	Jones, J. Idwal (W rex ham)
Blenkinsop, Arthur	Ensor, David	Judd, Frank
Boardman, H.	Evans, Albert (Islington, S.W.)	Kelley, Richard
Booth, Albert	Evans, loan L. (Birm'h'm, Yardley)	Kenyon, Clifford
Boston, Terence	Fernyhough, E.	Kerr, Mrs. Anne (R'ter — Chatham)
Bottomley, Rt. Hn. Arthur	Finch, Harold	Kerr, Russell (Feltham)
Bowden, Rt. Hn. Herbert	Fitch, Alan (Wigan)	Lawson, George
Braddock, Mrs. E. M.	Fletcher, Raymond (Ilkeston)	Leadbitter, Ted
Bradley, Tom	Fletcher, Ted (Darlington)	Ledger, Ron
Bray, Dr. Jeremy	Floud, Bernard	Lee, Rt. Hn. Frederick (Newton)
Brooks, Edwin	Foley, Maurice	Lee, Rt. Hn. Jennie (Cannock)
Broughton, Dr. A. D. D.	Foot, Sir Dingle (Ipswich)	Lee, John (Reading)
Brown, Bob(N'c'tle-upon-Tyne,W.)	Foot, Michael (Ebbw Vale)	Lestor, Miss Joan
Brown, Rt. Hn. George (Beiper)	Ford, Ben	Lever, L. M. (Ardwick)
Brown, Hugh D. (G'gow, Provan)	Forrester, John	Lewis, Arthur (W. Ham, N.)
Brown, R. W. (Shoreditch — F'bury)	Fowler, Gerry	Lewis, Ron (Carlisle)
Buchan, Norman	Fraser, Rt. Hn. Tom (Hamilton)	Lomas, Kenneth
Buchanan, Richard (G'gow, Sp'burn)	Freeson, Reginald	Loughlin, Charles
Butler, Herbert (Hackney, C.)	Gardner, A. J.	Luard, Evan
Butter, Mrs. Joyce (Wood Green)	Darrow, Alex	Lyon, Alexander W. (York)
Cant, R. B.	Ginsburg, David	Lyons, Edward (Bradford, E.)
Carmichael, Neil	Gordon Walker, Rt. Hn. P. C.	McBride, Neil
Carter-Jones, Lewis	Gourlay, Harry	McCann, John
Chapman, Donald	Gray, Dr. Hugh (Yarmouth)	MacColl, James
Coe, Denis	Greenwood, Rt. Hn. Anthony	MacDermot, Niall
Coleman, Donald	Gregory, Arnold	Macdonald, A. H.
Concannon, J. D.	Grey, Charles (Durham)	McGuire, Michael
Conlan, Bernard	Griffiths, David (Pother Valley)	Mackenzie, Gregor (Rutherglen)
Corbet, Mrs. Freda	Griffiths, Rt. Hn. James (Llanelly)	Mackie, John
Craddock, George (Bradford, S.)	Griffiths, Will (Exchange)	Mackintosh, John P.
Crawshaw, Richard	Hamilton, James (Bothwell)	Maclennan, Robert
Cronin, John	Hamilton, William (Fife, W.)	McMillan, Tom (Glasgow, C.)
Crosland, Rt. Hn.	Hamling, William	McNamara, J. Kevin
Anthony Crossman, Rt. Hn. Richard	Hannan, William	MacPherson, Malcolm
Dalyell, Tam	Harper, Joseph	Mahon, Peter (Preston, S.)
Darling, Rt. Hn. George	Hart, Mrs. Judith	Mallalieu J.P.W.(Huddersfieid,E.)
Davidson, Arthur (Accrington)	Hazell, Bert	Manuel, Archie
Davies, Dr. Ernest (Stretford)	Heffer, Eric S.	Mapp, Charles
Davies, C. Elfed (Rhondda, E.)
Marquand, David	Price, William (Rugby)	Summerskill, Hn. Dr. Shirley
Mason, Roy	Probert, Arthur	Swain, Thomas
Maxwell, Robert	Pursey, Cmdr. Harry	Swingler, Stephen
Mayhew, Christopher	Rankin, John	Symonds, J. B.
Mellish, Robert	Redhead, Edward	Taverne, Dick
Mendelson, J. J.	Rees, Merlyn	Thomas, George (Cardiff, W.)
Millan, Bruce	Reynolds, G. W.	Thomas, Iorwerth (Rhondda, W.)
Miller, Dr. M. S.	Rhodes, Geoffrey	Thornton, Ernest
Mitchell, R.C. (S'th'pton, Test)	Richard, Ivor	Tinn, James
Molloy, William	Roberts, Albert (Normanton)	Tomney, Frank
Morgan, Elystan (Cardiganshire)	Roberts, Goronwy (Caernarvon)	Urwin, T. W.
Morris, Alfred (Wythenshawe)	Roberts, Gwilym (Bedfordshire, s.)	Varley, Eric C.
Morris, John (Aberavon)	Robertson, John (Paisley)	Wainwright, Edwin (Dearne Valley)
Moyle, Roland	Robinson,Rt.Hn.Kenneth(St.P'c'as)	Walden, Brian (All Saints)
Mulley, Rt. Hn. Frederick	Robinson W. 0. J. (Walth'stow E.)	Walker, Harold (Doncaster)
Murray, Albert	Rodgers, William (Stockton)	Wallace, George
Neal, Harold	Rogers, George	Watkins, David (Consett)
Newens, Stan	Rose, Paul	Weitzman, David
Noel-Baker, Francis (Swindon)	Ross, Rt. Hn. William	Wells, William (Walsall, N.)
Norwood, Christopher	Rowland, Christopher (Meriden)	Whitaker, Ben
Oakes, Gordon	Rowlands, E. (Cardiff, N.)	White, Mrs. Eirene
Ogden, Eric.	Ryan, John	Whitlock, William
O'Malley, Brian	Shaw, Arnold (Ilford, S.)	Wigg, Rt. Hn. George
Orbach, Maurice	Sheldon, Robert	Willey, Rt. Hn. Frederick
Orme, Stanley Oswald, Thomas	Shinwell, Rt. Hn. E.	Williams, Alan (Swansea, W.)
Owen, Dr. David (Plymouth, S'tn)	Shore, Peter (Stepney)	Williams, Alan Lee (Hornchurch)
Owen, Will (Morpeth)	Short,Rt.Hn.Edward(N'c'tle-u-Tyne)	Williams, Clifford (Abertillery)
Padley, Walter	Short, Mrs. Renée (W'hampton,N.E.)	Williams, Mrs. Shirley (Hitchin)
Page, Derwt (King's Lynn)	Silkin, John (Deptford)	Williams, W. T. (Warrington)
Palmer, Arthur	Silkin, S. C. (Dulwich)	Willis, George (Edinburgh, E.)
Pannell, Rt. Hn. Charles	Silverman, Julius (Aston)	Wilson, William (Coventry, S.)
Parkyn, Brian (Bedford)	Silverman, Sydney (Nelson)	Winnick, David
Pearson, Arthur (Pontypridd)	Skeffington, Arthur	Winterbottom, R. E.
Pearl, Rt. Hn. Fred	Slater, Joseph	Woof, Robert
Pentland, Norman	Small, William	Wyatt, Woodrow
Perry, Erntst G. (Battersea, S.)	Snow, Julian	Yates, Victor
Perry, George H. (Nottingham,s.)	Spriggs, Leslie	Zilliacus, K.
Prentice, Rt. Hn. R. E.	Steele, Thomas (Durbartonshire, W.)	TELLERS FOR THE AYES:
Price, Christopher (Perry Barr)	Stewart, Rt. Hn. Michael	Mr. Charles R. Morris and
Price, Thomas (Westhoughton)	Stonehouse, John	Mr. Walter Harrison.
	Strauss, Rt. Hn. C. R.
NOES
Alison, Michael (Barkston Ash)	Cordle, John	Grant, Anthony
Allason, James (Hemel Hempstead)	Corfield, F. V.	Grant-Ferris, R.
Astor, John	Contain, A. P.	Gresham Cooke, R.
Atkins, Humphrey (M't'n — M'd'n)	Craddock, Sir Beresford (Spelthorne)	Griffiths, Eldon (Bury St. Edmunds)
Awdry, Daniel	Crawley, Aldan	Gurden, Harold
Baker, W. H. K.	Crouch, David	Hall, John (Wycombe)
Balniel, Lord	Currie, G. B. H.	Hall-Davis, A. G. F.
Batsford, Brian	Dalkeith, Earl of	Hamilton, Michael (Salisbury)
Beamish, Col. Sir Tufton	Dance, James	Harris, Frederic (Croydon, N.W.)
Bell, Ronald	Davidson,James(Aberdeenshire,W.)	Harris, Reader (Heston)
Bennett, Sir Frederic (Torquay)	d'Avigdor-Goldsmid, Sir Henry	Harrison, Brian (Maldon)
Berry, Hn. Anthony	Dean, Paul (Somerset, N.)	Harrison, Col. Sir Harwood (Eye)
Bessell, Peter	Deedes, Rt. Hn. W. F. (Ashford)	Harvey, Sir Arthur Vere
Biffen, John	Digby, Simon Wingfield	Harvie Anderson, Miss
Birch, Rt. Hn. Nigel	Dodds-Parker, Douglas	Hawkins, Paul
Black, Sir Cyril	Doughty, Charles	Hay, John
Blaker, Peter	Douglas-Home, Rt. Hn. Sir Alec	Heald, Rt. Hn. Sir Lionel
Bossom, Sir Clive	Drayson, G. B.	Heath, Rt. Hn. Edward
Boyd-Carpenter, Rt. Hn. John	du Cann, Rt. Hn. Edward	Heseltine, Michael
Boyle, Rt. Hn. Sir Edward	Eden, Sir John	Higgins, Terence L.
Brains, Bernard	Elliot, Capt. Walter (Carshalton)	Haley, Joseph
Brewis, John	Elliott, R.W.(N'ctle-upon-Tyne,N.)	Hill, J. E. B.
Brinton, Sir Talton	Errington, Sir Eric	Hirst, Geoffrey
Bromley-Davenport, Lt.Col. Sir Walter	Eyre, Reginald	Hobson, Rt. Hn. Sir John
Brown, Sir Edward (Bath)	Farr, John	Hogg, Rt. Hn. Quintin
Bruce-Gardyne, J.	Fisher, Nigel	Holland, Philip
Bryan, Paul	Fletcher-Cooke, Charles	Hooson, Emlyn
Buchanan-Smith,Alick(Angus,N—M)	Fortescue, Tim	Hordern, Peter
Buck, Antony (Colchester)	Foster, Sir John	Hornby, Richard
Bullus, Sir Eric	Galbraith, Hn. T. G.	Hunt, John
Campbell, Gordon	Gibson-Watt, David	Hutchison, Michael Clark
Carlisle, Mark	Giles, Rear-Adml. Morgan	Iremonger, T. L.
Carr, Rt. Hn. Robert	Gilmour, Ian (Norfolk, C.)	Irvine, Bryant Coffman (Rye)
Cary, Sir Robert	Gilmour, Sir John (Fife, E.)	Jenkin, Patrick (Woodford)
Channon, H. P. G.	Glover, Sir Douglas	Johnson Smith, G. (E. Grinstead)
Chichester-Clark, R.	Glyn, Sir Richard	Johnston, Russell (Inverness)
Clark, Henry	Godber, Rt. Hn. J. B.	Jones, Arthur (Northants, S.)
Clegg, Walter	Godhart, Philip	Jopling, Michael
Cooke, Robert	Godhew, Victor	Joseph, Rt. Hn. Sir Keith
Cooper-Key, Sir Neill	Gower, Raymond	Kaberry, Sir Donald

Kerby, Capt. Henry	Murton, Oscar	Stainton, Keith
Kershaw., Anthony	Nabarro, Sir Gerald	Steel, David (Roxburgh)
Kimball, Marcus	Neave, Airey	Stodart, Anthony
King, Evelyn (Dorset, S.)	Nicholls, Sir Harmar	Stoddart-Scott, Col. Sir M. (Ripon)
Kitson, Timothy	Noble, Rt. Hn.	Summers, Sir Spencer
Knight, Mrs. Jill	Michael Nott, John	Tapsell, Peter
Lancaster, Col. C. G.	Onslow, Cranley	Taylor, Sir Charles (Eastbourne)
Legge-Bourke, Sir Harry	Orr, Capt. L. P. S.	Taylor,Edward M.(G'gow,Cathcart)
Lewis, Kenneth (Rutland)	Orr-Ewing, Sir Ian	Taylor, Frank (Moss Side)
Lloyd,Rt.Hn.Geoffrey(SutinC'dfield)	Osborn, John (Hallam)	Teeling, Sir William
Lloyd, Rt. Hn. Selwyn (Wirral)	Osborne, Sir Cyril (Louth)	Temple, John M.
Longden, Gilbert	Page, Graham (Crosby)	Thatcher, Mrs. Margaret
Loveys, W. H.	Page, John (Harrow, W.)	Thorpe, Jeremy
Lubbock, Eric	Particle, John	Tilney, John
MacArthur, Ian	Pearson, Sir Frank (Clitheroe)	Turton, Rt. Hn. R. H.
Mackenzie, Alasdair(Ross—Crom'ty)	Peel, John	van Straubenzee, W. R.
Maclean, Sir Fitzroy	Percival, Ian	Vickers, Dame Joan
Macleod, Rt. Hn. lain	Peyton, John	Wainwright, Richard (Coins Valley)
McMaster, Stanley	Pink, R. Bonner	Walker, Peter (Worcester)
Macmillan, Maurice (Farnham)	Pounder, Rafton	Walker-Smith, Rt. Hn. Sir Derek
Maddan, Martin	Powell, Rt. Hn. J. Enoch	Walters, Dennis
Maginnis, John E.	Price, David (Eastleigh)	Ward, Dame Irene
Marten, Neil	Prior, J. M. L.	Weatherill, Bernard
Mathew, Robert	Pym, Francis	Webster, David
Maude, Angus	Quennell, Miss J. M.	Wells, John (Maidstone)
Maudling, Rt. Hn. Reginald	Rawlinson, Rt. Hn. Sir Peter	Whitelaw, William
Mawby, Ray	Rees-Davies, W. R.	Wills, Sir Gerald (Bridgwater)
Maxwell-Hyslop, R. J.	Renton, Rt. Hn. Sir David	Wilson, Geoffrey (Truro)
Maydon, Lt.-Cmdr. S. L. C.	Ridley, Hn. Nicholas	Winstanley, Dr. M. P.
Mills, Peter (Torrington)	Ridsdale, Julian	Wolrige-Gordon, Patrick
Mills, Stratton (Belfast, N.)	Rippon, Rt. Hn. Geoffrey	Wood, Rt. Hn. Richard
Miscampbell, Norman	Rossi, Hugh (Hornsey)	Woodnutt, Mark
Mitchell, David (Basingstoke)	Russell, Sir Ronald	Worsley, Marcus
Monro, Hector	St. John-Stevas, Norman	Wylie, N. R.
Morgan, W. G. (Denbigh)	Scott, Nicholas	TELLERS FOR THE NOES:
Morrison, Charles (Devizes)	Sharpies, Richard	Mr. More and Mr. Younger.
Mott-Radclyffe, Sir Charles	Shaw, Michael (Sc'b'gh — Whitby)
Munro-Lucas-Tooth, Sir Hugh	Sinclair, Sir George

The CHAIRMAN then proceeded to put forthwith the Questions necessary for the disposal of the Business to be concluded at twenty minutes to Ten o'clock, including the Questions on Amendments, moved by a member of the Government, of which notice had been given, to Clause 4.