HC Deb 18 June 1968 vol 766 cc997-1025


Sir G. Nabarro

Mr. Yates, how nice to see you in the Chair, when we are debating a Purchase Tax Amendment. No hon. Member of the House has a longer experience of Purchase Tax troubles than you have.

I beg to move Amendment No. 25, in page 55, line 32, leave out from beginning to 'for' in line 35.

The Temporary Chairman (Mr. Victor Yates)

It would be for the convenience of the House to consider also Amendment No. 28, in page 55, line 36, leave out '33⅓ per cent.' and insert '25 per cent.'.

Sir G. Nabarro

This Amendment was a paving Amendment to a number of succeeding Amendments in my name and the name of many of my hon. Friends dealing with the whole gamut of Purchase Tax and its reform. As Amendments Nos. 25 and 28 alone have been selected for debate, I am rather restricted in what I may say, for the purport of these two Amendments, when read together, is to deal only with the existing 33⅓ per cent. rate of Purchase Tax and to seek to bring it back to 25 per cent. I am sure I may have your indulgence, Mr. Yates, in saying that any references I may make in the course of my speech to other Purchase Tax will be of a passing and desultory character only and will not be dwelt upon by myself.

I have a long association with Purchase Tax matters, and during the period between 1958 and 1962 I was asking Parliamentary questions at the rate of 100 per annum, always confined to the two or three months before the Chancellor's Budget statement. The purpose of that exercise, spread over four years and not without a measure of success, was reformative in character and sought to make progress towards a single flat rate of tax. I was prepared that the tax should be levelled at wholesale and, therefore, continue to be called a Purchase Tax. I do not mind that at all, although other people called it a sales tax simply because it was on a single flat or uniform rate. That is merely a matter of verbiage.

The important consideration, which is the gravaman of my Amendments, is that in peacetime in Britain my philosophy for indirect taxation dictates that there is no such thing as a luxury. No manufactured article is more or less essential than any other manufactured article. My fiscal philosophy is that the manufacturers of all goods do two things. First, they contribute towards a policy of full employment, which my party strongly supports, and, second, they contribute to the export of British goods all over the world. Resting on those two tenets I say that there should be no discrimination in levels of Purchase Tax. There should be only one rate of Purchase Tax.

I cannot, in a Finance Bill, because of the rules of the House, move to put Purchase Tax rates up. Thus, I cannot by any manoeuvre or contortion seek to raise the 12½ per cent. rate to 25 per cent., or the 20 per cent. rate to 25 per cent. I can only seek to bring rates down, and, to enable me to make this speech, my group of Amendments on Purchase Tax was designed to bring the 50 per cent. rate to 25 per cent. and the 33⅓ per cent. rate to 25 per cent. I deal, therefore, this evening only with the second of those considerations, 33⅓ per cent. to 25 per cent., while advancing a general principle throughout. I am not alone in my concept—

7.45 p.m.

Mr. Michael Alison (Barkston Ash)

Would my hon. Friend allow me to intervene? Would he concede, in limiting himself to the category which he proposes to reduce from 33⅓ per cent. to 25 per cent., that it would naturally follow that any article which is now to be charged at 50 per cent. but which was formerly charged at 33⅓ per cent. he would likewise like to see moved back to 25 per cent. and not remain stationary at 33⅓ per cent.?

Sir G. Nabarro

That is so. I shall not dwell on it, as I should be tempted out of order if I did so.

I seek, in the passage of time, a flat rate of tax, whatever we call it, whether we call it a Purchase Tax levelled at wholesale, a sales tax levelled at retail, or whether it is analogous to the West German and French method, an added value tax, a broadly based indirect tax which does not discriminate between manufactured article and manufactured article, most largely because of the frightful complexities, anomalies and fiscal incongruities that are created by the processes of discrimination. I intend to dwell on those in the 33⅓ per cent. bracket in a few moments.

I said that I was not alone in this matter. I was not a member of the Finance Bill committee upstairs, but I was delighted to see that my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod), used these words: If one believes, as I do, that it is right to reduce direct personal taxation, wherever possible, as we did before, and as we will do again, the logic of events drives one towards such taxes as the payroll tax and the value-added tax."—[OFFICIAL REPORT, Standing Committee A, 8th May, 1968, c. 531.] I am quite unashamed of what I said about this matter. An added value tax suits Britain, and we ought to have it in this country. It would lead to a much broader base for indirect taxation. It would rid us of the appalling discrepancies and disparities that exist today as between, for example, the taxation of whisky, of cigarettes and of petrol, and in all the different rates of Purchase Tax on a whole range of manufactured articles. It would cause all manufacturers and services to conform to a single taxation system on a very broad base, yielding much greater revenue than the present revenue from indirect taxation, and enabling us to devote the surplus from indirect taxation, to the reduction of direct taxation. That will form the subject of a later Amendment which, I am glad to see, is selected.

Though the Chancellor of the Exchequer has many qualities, he does not share my views about fiscal propriety and simplicity. In his Budget statement on 19th March, he demonstrated that he is philosophically directly opposed to me in taxation matters. I will read the passage from his Budget speech because it demonstrates all this and has caused my Amendment. He said: Here, I propose a relatively small increase of approximately one-seventh to bring them to a 121 per cent. rate of tax. The middle range includes confectionery, ice cream and soft drinks. Here I propose an increase of approximately a fifth, bringing them to a 20 per cent. rate of tax. The third rate, now 274 per cent., applies to motor cars and most durable consumer goods as well as to a wider range of luxury or substantially less essential goods. Here, I propose to split the rate. For motor cars, motor cycles, refrigerators, washing machines, etc., there will be a similar increase of approximately one-fifth to 33⅓ per cent. But I think that in our present circumstances it is desirable that there should be a new, much higher, rate for luxury and less essential goods. For these, therefore, there will be an increase of rather over four-fifths —to 50 per cent. This rate will apply to furs, jewellery and imitation jewellery, gold and silver watches and clocks, gramophone records, smokers' requisites, cameras and other photographic goods, pictorial reproductions, diaries, calendars and greeting cards, fancy and ornamental articles, perfumery, and various toilet preparations and requisites. Full details will be given in the White Paper."—[OFFICIAL REPORT, 19th March, 1968; Vol. 760, c. 280.] That pronouncement was utterly retrogressive, and I castigate him for it. He moved in exactly the opposite direction from his predecessors, the Tory Chancellors who toiled mightily under the scourge of my whip year after year, causing those Tory Chancellors to contract the rates of Purchase Tax and reduce them in number.

You, Mr. Yates, sat though it all. I knew that I was doing well when you laughed at me, as you did so frequently, because you were afflicted in Birmingham as I was then afflicted in Kidderminster. When I started my campaign in 1958, there were seven Purchase Tax rates. The top end. was a rate of 90 per cent., on cosmetics, of course. Lipsticks were judged the most luxurious of all manufactured goods, as if women could do without them, anyway—

Mr. Dempsey

Of course they could.

Sir G. Nabarro

That may be the hon. Gentleman's view, but he is an eccentric, and we all know him. However, we on the Tory benches are normal lusty males, and we like our womenfolk wearing cosmetics, including appropriate shades of lipstick.

There were seven rates, ranging from 90 per cent. at the top on cosmetics down to 5 per cent. at the bottom. Over those four years, we contracted the rates and we brought the seven rates down to three. At the top, we had not 90 per cent. but 25 per cent. At the bottom, we had not 5 per cent. but 10 per cent., without prejudice to the total yield. The revenue from Purchase' Tax went up year by year. As the economy expanded steadily, prosperity rose, and that was all reflected in the yield from Purchase Tax.

It was progress towards a single taxing system and, had the Tories got back in 1964, as they nearly did, by now we would have had a single rate of tax.

I am not alone in observing these trends. I have a healthy regard for Mr. Samuel Brittan, the Economics Editor of the Financial Times, who wrote on " The emerging tax philosophy of Mr. Jenkins", a leading feature article on Tuesday, 9th April, these words: The desire to shift from direct to indirect tax is part of conventional economic enlightenment, although none the worse for that. But an unconventional feature, which has so far escaped attention, is the way in which Mr. Jenkins has increased the number of Purchase Tax bands, and widened the range between the highest and the lowest. When Mr. Jenkins got up there were three rates—11, 16½ and 27½ per cent. When he sat down there were four—12½ Per cent., 20 per cent., 33⅓ per cent. and 50 per cent. This is in sharp contrast to the whole direction of changes under previous Chancellors, which was to reduce the number of bands, narrow the differences between them and bring more commodities into the net. The aim was to transform the Purchase Tax gradually into something more like a general sales tax. Thus the Chancellor is moving against the general stream of conventional thought in this important matter.

I want to say something about the yield, and then, I hope, a little about the anomalies which have been created. This year, the Chancellor has soaked the consumer very hard. On the Purchase Tax, the provisional outturn for 1967/68 was £747 million. Before the Budget changes for 1968–69, the revenue would have been £760 million. After the Budget changes, it had become £887 million. Thus the Chancellor has increased the amount of the Purchase Tax yield between last year and the present year by £140 million, or 16 per cent., which is a very large and swingeing impost on the consumer.

Last, I want to say a word about the extraordinary difficulties that have been created in the interpretation of the Purchase Tax Schedules. I do not propose to embark upon another 100 Parliamentary Questions on the Purchase Tax. I believe that I may be able to do it in a better way and may see tax reforms at an early date with the return of a Tory Government, who I believe will move in this matter in the first Budget after their return to power.

The present state of the Purchase Tax Schedules as a result of what the Chancellor has done is very unsatisfactory. For example, Table 1 of the Financial Statement, 1968–69, gives the proposed changes in taxation and lists all those items which are to go up: The other goods previously chargeable at 27½ per cent., which it is proposed shall become chargeable at 33⅓ per cent., are as follows", and then there is a long list.

Group 31 is: Toilet requisites shown on page 7 as exceptions from the 50 per cent. charge under this Group. Group 32 (b) is: Toilet preparations shown on page 7 as exceptions from the 50 per cent. charge under Group 32 (a) and (b). When one looks at the 50 per cent. charge, one finds language of this kind: … brushes, combs, scissors, nippers, knives, razors, … mirrors, sponges, dental sticks and tooth-picks … perfumery and toilet preparations (other than soap made up for sale as toilet soap, soap substitutes made up for sale as substitutes for toilet soap, baby dusting powders, shaving creams, shampoos, dentifrices, eye lotions, mouthwashes and antiseptics, calamine lotions and similar alleviating preparations, unperfumed. 8.0 p.m.

I would find it extremely difficult—if not impossible—after years of study of Purchase Tax Schedules to determine what is the tax chargeable on any particular item of toilet preparation I picked up in a chemist's shop. Take, for example, that passage in Group 18: wireless and television sets; valves and loudspeakers. They are put up from 27½ per cent. to 33⅓ per cent. but photographic cameras and enlargers; parts and accessories; unexposed sensitised photographic paper etc., are up by 50 per cent. By what determination is it arrived at that the second group are 50 per cent. more luxurious than a television set or a radio? Who said so? Are they? I doubt it. Who has decided, other than a boffin sitting in a back room in the Treasury, for example, that the 50 per cent. rate shall apply to all articles designed for use in the waving, curling, setting, dyeing, tinging, bleaching, dressing or treating the hair, but not to drying machines and articles for heating the hair in the process of waving, curling or setting the hair? Hair waving and hair drying machines are in the 33⅓ per cent. rate. The machines are in the 33⅓ per cent. rate and the accessories for use with them are in the 50 per cent. rate.

It is no good the professor getting agitated; this is inconsequential fiscal nonsense and everyone knows it to be inconsequential fiscal nonsense. I could easily make up another 400 Purchase Tax Questions demonstrating the nonsense which runs right through all the Schedules today. They cannot be blamed on Tory Chancellors, for they were on the threshold of putting the whole position right gradually over the years. Now the present Chancellor has gone into reverse and made the whole position immeasurably worse than it was a year before by the increase from 27½ per cent. rate partly to 33⅓ per cent. rate and partly to 50 per cent. without rhyme or reason. Traders everywhere are very indignant that this has been done.

I hope that my hon. and right hon. Friends will join me in the Lobby if we obtain no satisfaction on this important Amendment. It is the only substantial Purchase Tax Amendment that we are debating on Recommittal. I emphasise that I want two factors. I want a broad-based indirect system of taxation and I want absolute equality between manufactured goods. It is drivelling rot to say that a camera should be taxed at 50 per cent. but the Savile Row suit I am wearing should be taxed at 9 per cent.; that an ordinary Brownie camera is nearly six times as luxurious as this suit of clothes.

Mr. Nott

Does my hon. Friend realise that if he were wearing a mini-skirt he would have to pay no Purchase Tax at all?

Sir G. Nabarro

I am grateful to my hon. Friend. We could go on with this nonsense absolutely ad infinitum.

I am glad to see that the 50 per cent. rate of tax, as a result of removal of dressed fur skin, now includes the Australasian red opossum if undyed and in strips measuring not more than 9 inches in length and I inch in width will be exempt. Why has Australasian red opossum been singled out for this highly favourable and discriminatory treatment?

I leave these fiscal meditations with the hon. and learned Member the Minister of State. I hope that he will not attempt to defend them, but will draw to the attention of the Chancellor—who I wish were in his place—his fiscal aberrations in this context. I express the hope that if by some mischance he is in office next year he will set about remedying this dreadful state of affairs.

Mr. Nott

I congratulate my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) on his fascinating speech about the Purchase Tax anomalies. Long before I came to this House I heard of his reputation in this field and it has been a matter of the deepest regret to me that, until now, I have not had an opportunity of hearing him perform on this subject.

I want to concentrate my argument on a particular anomaly to which I made brief reference in my recent interruption. Before coming to the anomaly of the mini-skirt, however, I want to make some remarks; about my hon. Friend's speech. He is, I think, quite right when he says that in the attitude of the Chancellor and of my hon. Friends towards the Purchase Tax Schedule there is contained a basic difference in philosophy. I do not think my hon. Friends believe that it is the function of a Chancellor or a Government to try to instruct the British public or to try to interpret the public's choice in the market as between a luxury or an essential or a less essential article.

I read with amazement the Minister of State's speech on greetings cards in the OFFICIAL REPORT of the debate in Committee. I thought of the discussions in Committee upstairs trying to categorise whether greetings cards are a luxury or an essential item or a less essential item. It is not the function of politicians to try to lay down whether a particular commodity is a luxury or not. That is for the consumer to choose. What is a luxury to one is an essential to another.

Mr. Booth

Would the hon. Gentleman agree that the logic of his argument is that the Government should levy Purchase Tax on everything that is produced? That is the only way to escape from some discrimination.

Mr. Nott

Yes, I was about to say how much I agree that the only logical Tory attitude to the whole wide question of Purchase Tax is to have one overall sales tax. I certainly favour the French as opposed to the German system. We should get rid of these differentials between one product and another and go for one single rate, for a sales tax preferably in the form of an added value tax. There is, however, a substantial difficulty which will face the Conservative Party if it goes for this reform. If we have a single range of sales tax over all items there will be problems, and this is something which hon. Members opposite will recognise, for the poorer sections of the community. Therefore, if our party moves towards a general sales tax with a uniform rate as I hope it will, we have first to contemplate some form of negative Income Tax or some other means whereby we can ensure that the income of the poorer members of the community does not fall below a certain minimum level.

Mr. Orme

We have had this argument put in great detail, but there is not the difference between his side and our Front Bench on this matter that the hon. Gentleman tries to make out. They are both moving towards a broader based form of taxation. Some of us on this side are opposed to that sort of broad-based taxation and voted accordingly in the Committee.

The Temporary Chairman

It is not a question of a broad-based tax or a single tax. We are discussing an Amendment and I should be glad if the hon. Member would address his remarks to the Amendment.

Mr. Nott

I was merely making a few comments on my hon. Friend's speech on the anomalies of Purchase Tax. I want now to deal with one particular anomaly which relates to Group I referred to in the section we are now debating under this Amendment. I intervened and suggested to my hon. Friend that if he were to change his clothes at any stage from a Savile Row suit to a mini-skirt this latter garment would bear no Purchase Tax at all.

This is extraordinary because one has heard consistently from the Chancellor and the Minister of State how in this Budget is was necessary to raise the maximum amount of revenue. If revenue is to be raised, and if he is talking about distinguishing between luxury and less essential items, it might be reasonable to assume that a mini-skirt would bear some Purchase Tax, but in fact it bears none at all.

Last weekend in my constituency I met a most proper lady who was approaching middle age—I may perhaps be being slightly kind to her. Anyway, she was of the age when one would anticipate that normally she would not wear a garment of this particular length. I asked why it was that she wore her hem so high above the knee, to which she replied that she was living on a fixed income and had become very poor since the Labour Government came to power. Because of Purchase Tax she found it less expensive to purchase miniskirts than skirts of normal length.

I inquired into this anomaly with the greatest interest and found in fact that mini-skirts bear no Purchase Tax at all because there is an exemption for garments and footwear of a kind suitable for children's wear. Therefore, they do not bear the rate of Purchase Tax of 11½ per cent., now to be raised to 12 per cent.; they bear none at all. I inquired why nothing had been done about this anomaly. I was told that it proved awkward to hold the balance between children and adults in defining what was of a kind suitable for children's wear. The only criteria could be length. I naturally asked whether the waist measurement could not be a criteria, to which the Department of Customs and Excise replied that this could not be so as some teenagers wore skirts known as hipsters and it was therefore not possible to distinguish by the waist; it was necessary to do so by the length.

8.15 p.m.

So the argument went round and round and we find the anomalous situation whereby the most fashionable garment— I do not know whether it is regarded as a luxury by the wearer but it is certainly regarded as a luxury in the eye of the beholders—is not taxed. Perhaps I should add that I would not personally like to see however, any increase in taxation which would act as a disincentive to the wearing of this admirable garment.

Mr, Alison

Surely an increase in taxation, or the application of taxation on a rational basis, would lead to a diminution in the length of the skirt.

Mr. Nott

Perhaps the Department of Customs and Excise would categorise such wear as being even less adult-like than it is at the present time. I merely quote this anomaly to support my hon. Friend and I would say that the present system is quite absurd. It leads to hundreds of anomalies and we have to pursue some means of overcoming the increasing number of categories, the increasing differentiation which the Government are making between luxury, essential and less essential items. I support the Amendment in an attempt to narrow the number of separate rates of Purchase Tax and support my hon. Friend in his wish that the Conservative Party will move for the abolition of Purchase Tax and the adoption of one single sales tax, perhaps an added value tax.

We should then have to give careful thought to how to protect the poorer sections of the community against a substantial shift to a tax on necessities, food and other items which would be much more badly hit than now if an added value tax were to be imposed.

Mr. Stanley Henig (Lancaster)

So far, Mr. Yates, you have been liberal in your interpretation of what is allowed on this rather limited Amendment and I hope you will continue to be liberal with me so that I can reply from this side of the Committee to some of the points made by the hon. Member for Worcestershire, South (Sir G. Nabarro), and to the hon. Member for St. Ives (Mr. John Nott).

It would seem so far that hon. Gentlemen on the other side prefer their ladies to wear lipstick and other false equipment whereas we on this side prefer the mini-skirt. It would appear to me that the skirts might be that little more essential than lipstick—but I defer to the hon. Gentleman's great experience in these matters.

The hon. Gentleman has justified his Amendment seeking to reduce the new 33⅓ per cent. to 25 per cent. on the ground that this will simplify the position for the day when we have a flat-rate sales tax. The substitution of this Amendment in the Finance Bill would not achieve that, we are talking about something rather broader than that. Hon. Gentlemen are putting forward the idea of a sales tax. Many on this side of the Committee would not be prepared to accept anything like this at a time when there are so many inequalities in income which means that people's expenditure must be very unequal. Many hon. Members on this side would prefer, rather than a sales tax, something like an expenditure tax which was proposed some years ago. A person who was spending £500 a year on consumption would pay no tax; a person spending £2,000 a year on consumption might be taxed 50 per cent. This is more the kind of thing we would like to see.

Mr. Higgins

Who suggested an expenditure tax?

Mr. Henig

I regret I do not know. I understand the purpose of the hon. Gentleman's interjection is to cast aspersions on a very distinguished economist. I regret that he should have made such an intervention.

Mr. Higgins

I was in no way casting discredit on anyone. If the hon. Gentleman will read the Standing Committee reports, he will see that I pay compliments to the gentleman he has in mind.

Mr. Henig

I am glad to hear that.

To return to the point made by the hon. Member for Worcestershire, South, he very engagingly said that all manufactured articles were treated the same. When he said that I wondered whether he had ever had the good fortune to read or see the play, " The Apple Cart", by that distinguished Socialist, George Bernard Shaw, in which, towards the end, it transpires that in that mythical age England's entire prosperity had come to be based on the export of a most important manufactured article, namely, Christmas crackers.

Doubt: was expressed in some quarters whether the rest of the world could not conceivably do without Christmas crackers. Indeed, many on this side would say that, for example, there is a great deal of difference between pots and pans and Jaguar and Rolls-Royce motor cars. That is because virtually everybody can afford pots and pans, but only a small and privileged section of the community can afford Jaguars and Rolls-Royces. In this sense, moves towards a flat-rate sales tax are socially regressive because the people harmed most are those who spend the least because they have the least.

Although it was not specifically mentioned, one example of the kind of consideration that we on this side had in supporting the chancellor's Budget referred to gramophone records, which were not increased to 33⅓ per cent but to 50 per cent. People do not have to buy the most expensive types of gramophone records. They can buy the cheaper varieties. Those who have a small amount of money to spend on gramophone records would do this.

The hon. Member for Worcestershire, South and his one supporter so far, the hon. Member for St. Ives, suggested that there is no such thing as a luxury. The hon. Member for Worcestershire, South asked how the Treasury define and categorise a luxury. In looking at what is a luxury, one must consider the aspirations of ordinary people. These change over time. A television set, 10 or 15 years ago, was generally considered to be a luxury. This is not the case now. I do not see why we should say it is a luxury if people do not think that it is. Nowadays people consider, rightly or wrongly, that it is a necessity.

A magnetic tape recorder, on the other hand, is regarded as a luxury for the simple reason that most people feel they cannot aspire to one. Some people can afford a magnetic tape recorder and a television, but the vast majority can not. They, therefore, choose that which is the more necessary article and, rightly or wrongly, the majority of people have settled on television.

Given that there are many items which people feel that they need and many items which are felt generally to be luxuries and can only be afforded by a few, in a state of affairs where the Government have to raise money in a variety of ways it is right to consider the possibility of taking relatively more from those who can afford relatively more and demonstrate this by the goods that they buy. For this reason, it seems wrong to say, " Let us put 10 per cent. on pots and pans, so that a pot or pan costing 30s. would mean 3s. tax, and just 10 per cent. on a £2,000 motor car." That would be wrong, because the person who buys the £2,000 motor car can obviously afford to pay tax at a much higher rate. This is the attempt which has been made in this Budget.

Sir G. Nabarro

The hon. Gentleman is miles off beam in this argument. There is no difference in the rate of tax on a £10,000 Rolls-Royce or a £500 Mini. The rate of tax is exactly the same. There are about 11 million motor car owners in this country. A motor car is not a luxury; it is a necessity. Yet it is taxed at 33⅓ per cent.—much higher than many other articles which, in many respects, axe much more luxurious.

Mr. Henig

In view of that, I am wondering whether the hon. Gentleman would join with me in putting down an Amendment on Report to the effect that the tax on motor cars costing more than £1,000 should be dealt with. If the hon. Gentleman will support me, I will willingly put down an Amendment.

Sir G. Nabarro

The hon. Gentleman shows a crass ignorance of Parliamentary procedure. It would be absolutely out of order, even unacceptable at the Table, to move an increase in Purchase Tax. If the hon. Gentleman knew his fiscal history, if he rested less on academics and more on assiduity in Parliament, he would know that the late Sir Stafford Cripps unilaterally reduced the Purchase Tax on Rolls-Royces and similarly expensive motor cars, because of the export trade and to encourage the home market for them. He reduced the Purchase Tax on the most luxurious of all articles in Socialist eyes to increase export potentialities. The hon. Gentleman should go home and do his homework.

Mr. Henig

The hon. Member for Worcestershire, South is aware of what the late Sir Stafford Cripps did in this case, but he will be the first to admit, under other circumstances, that the right hon. Gentleman was by no means always right. However, on that occasion I suspect that he thought he was right.

An argument often used is that high taxation on luxuries prevents exports. Frankly, in an age when manufacturers are often content to rely on the home market, and not bother about exports, this argument becomes increasingly anomalous and not in accord with the facts.

In conclusion, I come down to the spirit in which these changes in the system of Purchase Tax, to which the hon. Member for Worcestershire, South objects, have been made. The argument is not that the new system is without anomalies. It is impossible for any system of taxation to be without anomalies. Every time a change is made there must be anomalies, and it is the job of those making the changes to try to iron them out. But the spirit behind the changes has been that, at a time when there is a manifest economic crisis— and we can argue ad infinitum the responsibility for it—and the need to raise a great deal of revenue, one has to look at the means by which it should be done.

One possible means might be an increase in direct taxation. That, at least, was ruled out this year. But the hon. Member for Worcestershire, South said that he would like the increase in indirect taxation to be spread equally across all forms of expenditure. If that were done, it would not fall equally on everybody; it would fall most heavily on those who could least afford to pay. In erecting, on the other hand, the system brought before us at this stage, the Chancellor had in mind a different criteria: that those who could afford the most, and demonstrated it by expenditure considered by their fellow citizens to be on luxuries, should pay the highest rate of taxation and, therefore, make the major contribution to the national revenue.

Bearing in mind social justice, this seems to be an unexceptional formula and one reason why I shall be only too delighted to vote against the Amendment.

8.30 p.m.

Mr. Alison

I warmly support my hon. Friend the Member for Worcestershire, South (Sir. G. Nabarro) in his powerful and cogent argument, because it seems to me that one of the most ludicrous and unsatisfactory aspects in the changes in Purchase Tax is the inequitable separation of the sheep from the goats. Some goods which hitherto have been taxed at 27½ per cent. go up to 33⅓ per cent. Some which hitherto have had to pay the tax at 27½ per cent. go up to 50 per cent. There is no rhyme or reason behind the Government's proposal.

In deploying my plea to the Minister around a particular item which lies within that group which has moved up to 50 per cent. I want to argue that any reduction which my hon. Friend may be successful in getting in the group which has gone up to 33⅓ per cent. must, in logic, since it comes from the same basic starting point, be extended up the parallel scale.

Perhaps I might draw the Minister's attention to an anomaly which stands in the strongest contrast to the anomaly to which my hon. Friend referred. Miniskirts, at one might call the ridiculous extreme, are exempted. This proposal is outdone in its injury and unsatisfac-toriness only by the fact that at the sublime end of the scale a commodity which is of semi-educational, if no higher, value, namely, the so-called framed scripture text which is distributed for Sunday school purposes, to schools, and to other places of education, goes up from the 27½ per cent. category, not into the group we are discussing, but into the outer space of the full 50 per cent. maximum penal rate. Is it logical that framed scripture texts should be charged at the full penal luxury rate while mini skirts are exempted, and bookmakers are charged at the rate of 5 per cent.?

Perhaps I can tell the Minister what one framed scripture text might say and here I give a sound four-line fiscal injunction: Render therefore to all their dues: tribute to whom tribute is due; custom to whom custom; fear to whom fear, honour to whom honour. I do not think that there is much fear or honour to be rendered to the Government, but at least the injunction makes certain that custom is paid under the heading of Customs and Excise to those who levy it, and that tribute, in the form of taxation, it is enjoined, should be paid to the tax gatherer. The Government single out injunctions such as that for the maximum tax. I am certain that these texts have a most educational value, and it seems incredible that, to fit in with the fiscal policy of the Government, they should be penally affected.

In the light of this wide-ranging debate which my hon. Friend has so skilfully and cogently initiated and deployed, there should be not only this reduction from the rate proposed by the Government to that which my hon. Friend proposes, but it should logically be extended to all the other regions of increase which take their starting point from the present level of 27½ per cent. The Government should make a clean sweep of the present disabilities and anomalies of the system and get back to something which is fair and equitable. They should do this particularly in respect of framed scripture texts in order to bring about a right frame of mind in our society, and to encourage a truly educational purpose.

The Minister of State, Treasury (Mr. Dick Taverne)

The hon. Member for Worcestershire, South (Sir G. Nabarro) brought out his whips and scorpions to chastise the Chancellor of the Exchequer for widening and increasing the bands and differences between the bands of Purchase Tax. He and some of his hon. Friends have had a certain amount of fun with some of the anomalies. It is vital, in considering the Amendment, to look at the reasons why these bands were increased, and the number and the differences between them widened. The Chancellor faced the need to raise a large amount of tax. He decided that he would not place the burden of this on Income Tax, and if followed logically that he had to increase by a substantial amount the burden which was borne by Purchase Tax.

As I think the hon. Member for St. Ives (Mr. Nott) recognised, one of the disadvantages of increasing the amount of Purchase Tax is its regressive effect unless the tax is somehow or other made selective. Despite some of the things said by the hon. Member for Worcestershire, South, it is possible to distinguish between some items which ordinary people of all income groups have to use and to buy, and other items about which there is an element of choice.

Indeed, the hon. Member for St. Ives said that if there was to be a general sales tax, because of its regressive effects one would need to have ameliorating social measures such as a negative Income Tax to make up for the obvious injustice which a straight increase in sales tax or a straight increase in ordinary Purchase Tax would cause. So that to avoid the regressive effect of the kind of movement which the hon. Member for Worcestershire, South wants to see in the evolution of Purchase Tax, and to avoid the regressive effect of simply putting up Purchase Tax as it now exists, the Chancellor of the Exchequer chose to use Purchase Tax more selectively.

A powerful case has also been made out, and was made out by hon. Members opposite, against doing so; because just as there are disadvantages, on the one hand, in simply putting up Purchase Tax rates, so there are obviously certain disadvantages also in making the tax more selective. The disadvantages are those which have been pointed out and which to some extent are inevitable, because it is not possible to select neat, logical categories in which no element of dispute can arise, nor any incongruity or anomaly. This was already true of Purchase Tax as it was before.

I was worried when the hon. Member for Worcestershire, South referred to the Australasian red opossum. I was relieved to find that this related to an anomaly already present in the Purchase Tax system and was not in any way created by the Budget; nor was the special case of the mini-skirt. These anomalies were already there but I concede that if one creates four categories instead of three and if the differences between the categories are increased, then to some extent more anomalies arise and those anomalies become somewhat greater.

The Opposition made the most of this but essentially the whole point which has been debated and very well debated, in the course of this Amendment, comes down to a very simple choice which was brought out by hon. Members opposite and by my hon. Friend the Member for Lancaster (Mr. Henig). The Chancellor of the Exchequer faced a choice, if he was to avoid increasing Income lax, between relying more heavily on a regressive tax with more being paid on things which are undoubtedly essential—and if be had gone in the direction of the hon. Member for Worcestershire, South the burden would have been even more widely spread, with possibly a tax on food and on a number of items at present exempt about which there is no element of choice whatsoever; and, on the other hand, of being more selective making the tax less regressive but choosing in a subjective way.

Essentially, the issue at stake here is one of fairness; on the one hand going against logic, on the other following logic not in the strict sense but in avoiding certain anomalies which cannot be strictly defended in logic. But if one looks at the overall list there is very little doubt that when it comes to fairness the balance undoubtedly is in favour of the measures in the Finance Bill. Undoubtedly, it is true that those categories which now bear the highest rate of tax are those about which there is the largest element of choice; and undoubtedly it is true, also, that by and large the choice which the Chancellor of the Exchequer has made and which is enshrined in the Finance Bill is one which will make the use of the Purchase Tax less regressive and, therefore, will remove some of the objections which otherwise could have been brought in and which, by and large, would have put a greater burden on Income Tax.

Mr. Higgins

I rise to support my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro), who proposed this Amendment in his usual cogent and on this occasion I might almost say flamboyant manner; because there is no doubt that the case he made was a very powerful one. My hon. Friend the Member for St. Ives—I have not heard him speak before on this particular subject; I would have remembered if I had—brought out with great force the extraordinary anomalies which exist in the Purchase Tax structure. He was right to stress that the Government's policy of widening the bands and creating four instead of three is bound to accentuate the number of anomalies and their impact on those affected. The Minister of State fairly admitted this.

This must be a serious criticism of the Government's policy. We believe that the right tendency in the Purchase Tax structure is that which we pursued in office, of reducing both the number of classes and the differentials. The logic of events might then lead one to a value added tax, a discussion of which would be out of order, but we discussed in Committee the extraordinary way in which the Government raise Purchase Tax whenever the increased competition brought about by the abolition of resale price maintenance brings down the price of something.

It is clear that, in a number of categories—for example, motor cars and consumer durables—prices have been driven down by that competition and the Government are now raising them again. This has been a general effect of the Government's increases. I will resist the temptation to digress further on the question of mini-skirts, except to say that I saw a notice in the cleaners the other day saying, " Mini-skirts cleaned, Is. an inch". This might have some peculiar effects.

The crucial point is that the Government are distorting the overall pattern of consumption and making some value judgements. The Minister of State said that this was necessary to raise this vast amount of taxation. We recognise that, in the situation which they have created, the Government have to raise the largest amount ever in a Finance Bill. That is why my hon. Friends did not vote against the Clause, which is concerned with Purchase Tax, although we shall vote against the Schedule, which embodies the anomalies.

It is bizarre that the Minister of State should advance this argument with no reference to the fact that, in the debates on last year's Finance Bill, the then Chancellor said that the situation could be " Steady as she goes," that there was no need for increased taxation, and, later, that everyone could look forward to an increased standard of living. Now, the hon. and learned Gentleman says that we have to accept all these anomalies and changes because of the economic situation. He said that they were making the tax less regressive—not that some things are luxuries and some are not, or that some classes can bear the tax better and will yield belter revenue, but that the tax must be made less regressive.

8.45 p.m.

This must imply that the Government have made a clear-cut basis on which they say that because certain goods are bought more by people with high incomes and that certain goods are bought more by people with low incomes, they can somehow grade the tax between the two. This also means that for someone whose preference for a certain item is greater or less than the normal, the tax system is having an effect on his pattern of consumption, which is a tax principle that should not be lightly introduced, certainly for the arbitrary list of items concerned.

This series of Amendments is designed to reduce the rate of tax from what used to be the old top rate of 33⅓ per cent. to 25 per cent. Among the goods covered in this category are items which now come into the tax system for the first time, including tape recorders and music reproduction instruments. Among these is a class of musical reproduction instruments used for producing background music in industry and for other purposes. I understand that these machines are largely designed for use either in industry, with the object of increasing productivity, or in hotels and similar places where they are likely to increase trade.

I will not digress on the province of the Secretary of State for Employment and Productivity or on the question of the hotel industry. We recognise the urgent need to increase productivity and the valuable contribution which the hotel industry makes to our national economy, and particularly to the balance of payments. I hope, therefore, that between now and Report the Minister will look at this side of the matter—sound reproducing equipment used in industry and elsewhere, which can be readily identified—and consider allowing equipment in this category to bear the lower rate of tax.

I must add a word about motor vehicles, since the whole effect of the Government's policy this year has been to impose bigger restrictions and taxes, whether by way of petrol tax, vehicle licence duty or Purchase Tax, on those who drive. We should have a clear statement about whether the Government feel that the motor industry, particularly from the point of view of its tendency to export, is helped by having a healthy home market, which will not be helped by the increase in tax imposed by the Clause. It would have been helped and its overhead costs might have been more widely spread if the proposals of my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) were accepted.

Mr. Henig

Would the hon. Gentleman agree that in the last few months, and certainly since the announcement of many of the increases in taxation on the home sales of the motor industry, the export returns of the industry have been running at the highest level ever and that the industry is doing everything expected and hoped of it at the time of devaluation?

Mr. Higgins

At the time of devaluation and in the period immediately after it my hon. Friends and I argued that there was a strong case for using the Purchase Tax regulator. I appreciate that the hon. Gentleman takes a great interest in the export of motor cars. He will be aware that for a number of months following devaluation the export of motor cars fell substantially while the import of foreign motor cars rose substantially because the Government did not use that regulator. It has been a continual contention of my hon. Friends that had the Government used the Purchase Tax regulator earlier, the economy might have been in a stronger position, so that the need to increase taxation now would have been less. It may be that the generally depressed state of the home market will lead to a position-we earnestly hope that it will not-when the industry will not be working at full capacity.

I am sure that it would be common ground between both sides that we would hope that everything which could possibly be done to encourage motor car exports would be done. All I am saying is that we have yet to hear a clear statement from the Government whether they think a healthy home market is or is not likely to bring about that state of affairs.

Division No. 219.] AYES [8.51 p.m.
Alison, Michael (Barkston Ash) Goodhew, Victor Osborn, John (Hallam)
Astor, John Cower, Raymond Page, Graham (Crosby)
Atkins, Humphrey (M't'n & M'd'n) Grant-Ferris, R. Pearson, Sir Frank (Clitheroe)
Awdry, Daniel Griffiths, Eldon (Bury St. Edmunds) Peel, John
Baker, Kenneth (Acton) Hall-Davis, A. G. F. Pink, R. Bonner
Bennett, Dr. Reginald (Gos. & Fhm) Hamilton, Marquess of (Fermanagh) Pounder, Rafton
Berry, Hn. Anthony Hamilton, Michael (Salisbury) Powell, Rt. Hn. J. Enoch
Biffen, John Harrison, Brian (Maldon) Price, David (Eastleigh)
Birch, Rt. Hn. Nigel Harvie Anderson, Miss Prior, J. M. L.
Black, Sir Cyril Hawkins, Paul Pym, Francis
Boardman, Tom (Leicester, S.W.) HeaW, Rt. Hn. Sir Lionel Quennell, Miss J. M.
Body, Richard Heath, Rt. Hn. Edward Rees-Davies, W. R.
Bossom, Sir clive Higgins, Terence L. Renton, Rt. Hn. Sir David
Boyle, Rt. Hn. Sir Edward Hiley, Joseph Rhys Williams, Sir Brandon
Braine, Bernard Hill, J. E. B. Ridley, Hn. Nicholas
Brinton, Sir Tatton Hirst, Geoffrey Ridsdale, Julian
Brown, Sir Edward (Bath) Hogg, Rt. Hn. Quintin Rodgers, Sir John (Sevenoaks)
Bruce-Cardyne, J. Holland, Philip Rossi, Hugh (Hornsey)
Bryan, Paul Homby, Richard Royle, Anthony
Buck, Anthony (Colchester) Hunt, John St. John-Stevas, Norman
Bullus, Sir Eric Iremonger, T. L. Scott, Nicholas
Campbell, Gordon (Moray & Nairn) Jenkin, Patrick (Woodford) Sharpies, Richard
Campbell, B. (Oldham, W.) Jopting, Michael Shaw, Michael (Sc'b'gh & Whitby)
Carr, Rt. Hn. Robert Kaberry, Sir Donald Silvester, Frederick
Chichester-Clark, R. Kimball, Marcus Sinclair, Sir George
Clark, Henry King, Evelyn (Dorset, S.) Smith, Dudley (W'wick & L'mington)
Clegg, Walter Kirk, Peter Smith, John (London & W'minster)
Cooke, Robert Lane, David Speed, Keith
Cooper-Key, Sir Neill Langford-Hott, Sir John Stainton, Keith
Corfield, F. V. Lewis, Kenneth (Rutland) Stoddart-Scott, Col. Sir M. (Ripon)
Costain, A. P. Loveys, W. H. Summers, Sir Spencer
Craddock, Sir Beresford (Spelthorne) Lubbock, Eric Tapsell, Peter
Crowder, F. P. MacArthur, Ian Taylor, Sir Charles (Eastbourne)
d'Avigdor-Goldsmid, Sir Henry Mackenzie,Alasdair(Ross&Crom'ty) Taylor, Frank (Moss Side)
Dean, Paul (Somerset, N.) Maclean, Sir Fitzroy Temple, John M.
Deedes, Rt. Hn. W. F. (Ashford) Macleod, Rt. Hn. lain Thatcher, Mrs. Margaret
Digby, Simon Wingfield McMaster, Stanley Tilney, John
Doughty, Charles Maddan, Martin Turton, Rt. Hn. R. H.
Drayson, G. B. Maginnis, John E. van Straubenzee, W. R.
Eden, Sir John Marten, Neil Wainwright, Richard (Colne Valley)
Elliot, Capt. Walter (Carshalton) Maude, Angus Walters, Dennis
Elliott,R.W.(N'c'tle-upon-Tyne,N.) Mawby, Ray Ward, Dame Irene
Errington, Sir Eric Maxwell-Hyslop, R. J. Whitelaw, Rt. Hn. William
Eyre, Reginald Maydon, Lt.-Cmdr. S. L. C. Williams, Donald (Dudley)
Farr, John Mills, Peter (Torrington) Wills, Sir Gerald (Bridgwater)
Fletcher-Cooke, Charles Mills, Stratton (Belfast, N.) Wilson, Geoffrey (Truro)
Fortescue, Tim More, Jasper Winstanley, Dr. M. P.
Galbraith, Hn. T. G. Morgan, Geraint (Denbigh) Wolrige-Gordon, Patrick
Gibson-Watt, David Morrison, Charles (Devizes) Woodnutt, Mark
Gilmour, Ian (Norfolk, C.) Munro-Lucas-Tooth, Sir Hugh Wylie, N. R.
Gilmour, Sir John (Fife, E.) Murton, Oscar Younger, Hn. George
Glyn, Sir Richard Nabarro, Sir Gerald
Godber, Rt. Hn. J. B. Noble, Rt. Hn. Michael TELLERS FOR THE AYES:
Goodhart, Philip Nott, John Mr. Anthony Grant and
Mr. Hector Monro.

I do not want to detain the Committee any longer. We have had a good debate on this subject. I am convinced that the arguments put forward by my hon. Friend the Member for Worcestershire, South carry the very greatest weight. We do not believe that the widening of the rates and the increased anomalies are in the public interest, and I very much hope that my right hon. and hon. Friends will join me in the Division Lobby in support of my hon. Friend's Amendment.

Question put, That the Amendment be made: -

The Committee divided: Ayes 159, Noes 227.

Albu, Austen Gordon Walker, Ht. Hn. P. C. Morris, John (Aberavon)
Allaun, Frank (Salford, E.) Gray, Dr. Hugh (Yarmouth) Mulley, Rt. Hn. Frederick
Alldritt, Walter Greenwood, Rt. Hn. Anthony Murray, Albert
Anderson, Donald Gregory, Arnold Neal, Harold
Archer, Peter Griffiths, David (Rother Valley) Newens, Stan
Atkins, Ronald (Preston, N.) Griffiths, E. (Brlghtside) Norwood, Christopher
Atkinson, Norman (Tottenham) Griffiths, Rt. Hn. dames (Lianlly) Oakes, Gordon
Barnett, Joel Hamilton, James (Bothwell) Ogden, Eric
Baxter, William Hamilton, William (Fife, W.) O'Malley, Brian
Beaney, Alan Handing, William Orme, Stanley
Benn, Rt. Hn. Anthony Wedgwood Hannan, William Oswald, Thomas
Bennett, James (G'gow, Bridgeton) Harper, Joseph Owen, Will (Morpeth)
Bidwell, Sydney Harrison, Walter (Wakefield) Page, Derek (King's Lynn)
Bishop, E. S. Haseldine, Norman Palmer, Arthur
Blackburn, F. Hattersley, Roy Pannell, Rt. Hn. Charles
Blenkinsop, Arthur Hazell, Bert Park, Trevor
Boardman, H. (Leigh) Heffer, Eric S. Parker, John (Dagenham)
Booth, Albert Henig, Stanley Parkyn, Brian (Bedford)
Boston, Terence Hilton, W. S. Pearson, Arthur (Pontypridd)
Bottomley, Rt. Hn. Arthur Horner, John Pentiand, Norman
Boyden, James Houghton, Rt. Hn. Douglas Perry, Ernest G. (Battersea, S.)
Braddock, Mrs. E. M. Howarth, Harry (Wellingborough) Price, Thomas (Westhoughton)
Bradley, Tom Hoy, James Probert, Arthur
Brooks, Edwin Huckfield, Leslie Rees, Merlyn
Brown, Hugh D. (G'gow, Provan) Hughes, Emrys (Ayrshire, S.) Reynolds, Rt. Hn. G. W.
Brown,Bob (N'c'tle-upon-Tyne, W.) Hughes, Roy (Newport) Richard, Ivor
Buchan, Norman Hunter, Adam Roberts, Albert (Normanton)
Buchanan, Richard (G'gow, Sp'burn) Hynd, John Robertson, John (Paisley)
Butler, Herbert (Hackney, C.) Irvine, Sir Arthur (Edge Hill) Robinson, Rt. Hn. Kenneth (St.P'c'as)
Callaghan, Rt. Hn. James Jackson, Colin (B'h'se & Spenb'gh) Robinson, W. O. J. (Walth'stow, E.)
Cant, R. B. Jackson, Peter M. (High Peak) Rodgers, William (Stockton)
Carmichael, Neil Jeger, Mrs. Lena (H'b'n&St.P'cras,S.) Rogers, George (Kensington, N.)
Carter-Jones, Lewis Johnson, Carol (Lewisham, S.) Shaw, Arnold (llford, S.)
Coe, Denis Johnson, James (K'ston-on-Hull W.) Sheldon, Robert
Coleman, Donald Jones, J. Idwal (Wrexham) Shore, Rt. Hn. Peter (Stepney)
Concannon, J. D. Kelley, Richard Silkin, Rt. Hn. John (Deptford)
Conlan, Bernard Kenyon, Cllfford Silverman, Julius (Aston)
Crawshaw, Richard Kerr, Mrs. Anne (R'ter & Chatham) Slater, Joseph
Cronin, John Kerr, Russell (Feltham) Small, William
Crosland, Rt. Hn. Anthony Lawson, George Snow, Julian
Crossman, Rt. Hn. Richard Leadbitter, Ted Spriggs, Leslie
Cullen, Mrs. Alice Ledger, Ron Summerskill, Hn. Dr. Shirley
Dalyell, Tarn Lee, Rt. Hn. Frederick (Newton) Swain, Thomas
Darling, Rt. Hn. George Lee, John (Reading) Swingler, Stephen
Davidson, Arthur (Accrlngton) LEStor, Miss Joan Symonds, J. B.
Davles, G. Elfed (Rhondda, E.) Lever, Harold (Cheetham) Taverne, Dick
Davies, Dr. Eynest (Stratford) Lewis, Arthur (W. Ham, N.) Thomas, Rt. Hn. George
Davies, Ifor (Cower) Lewis, Ron (Carlisle) Thornton, Ernest
Dempsey, James Lomas, Kenneth Tinn, James
Dewar, Donald Loughlin, Charles Tomney, Frank
Diamond, Rt. Hn. John Luard, Evan Tuck, Raphael
Dickens, James Lyon, Alexander W. (York) Urwin, T. W.
Dobson, Ray McBride, Nell Varley, Eric G.
Doig, Peter McCann, John Wainwright, Edwin (Dearne Valley)
Dunn, James A. MacColl, James Walker, Harold (Doneaster)
Dunnett, Jack Macdonald, A. H. Wallace, George
Dunwoody, Mrs. Gwyneth (Exeter) McGuire, Michael Watkins, David (Consett)
Dun woody, Dr. John (F'th & C'b'e) McKay, Mrs. Margaret Watkins, Tudor (Brecon & Radnor)
Eadie, Alex Mackenzie, Cregor (Rutherglen) Weitzman, David
Edeiman, Maurice Mackintosh, John P. Wellbeloved, James
Edwards, William (Merioneth) Maclennan, Robert Wells, William (Walsall, N.)
Ellis, John McMillan, Tom (Gasgow, C.) Whitaker, Ben
Ennais, David McNamara, J. Kevin White, Mrs. Eirene
Ensor, David MacPherson, Malcolm Wilkins W. A.
Evans, Albert (Islington, S.W.) Mahon, Peter (Preston, S.) Willey, Rt.Hn. Frederick
Evans, loan L. (Birm'h'm, Yardley) Mallalieu,J.P.W.(Huddersfleld,E.) Williams Alan (Swansea W)
Faulds, Andrew Manuel, Archie Williams, Alan Lee (Hornchurch)
Fitch, Alan (Wigan) Marquand, David Williams, Clifford (Abertillery)
Fletcher, Ted (Darlington) Mason, Rt. Hn. Roy Williams, Mrs. Shirley (Hitchin)
Foot, Michael (Ebbw Vale) Maxwell, Robert Willis Hn. George
Ford, Ben Mikardo, lan Winnick, David
Forrester, John Millan, Bruce Woodburn, Rt. Hn. A.
Fraser, John (Norwood) Milne, Edward (Blyth)
Freeson, Reginald Mitchell, R. C. (S'th'pton, Test) TELLERS FOR THE NOES:
Galpern, Sir Myer Morgan, Elystan (Cardiganshire) Mr. Charles Grey and
Gardner, Tony Morris, Alfred (Wythenshawe) Mr. Ernest Armstrong.
Garrett, W. E. Morris, Charles R. (Openshaw)

Question, That this Schedule be the Sixth Schedule to the Bill, put forthwith pursuant to Order [11th June]:—

Division No. 220.] AYES [9.0 p.m.
Albu, Austen Galpern, Sir Myer Morris, John (Aberavon)
Allaun, Frank (Salford, E.) Gardner, Tony Mulley, Rt. Hn. Frederick
Alldritt, Walter Gordon Walker, Rt. Hn. P. C. Murray, Albert
Anderson, Donald Gray, Dr. Hugh (Yarmouth) Neal, Harold
Archer, Peter Greenwood, Rt. Hn. Anthony Newens, Stan
Atkins, Ronald (Preston, N.) Gregory, Arnold Norwood, Christopher
Atkinson, Norman (Tottenham) Griffiths, David (Rother Valley) Oakee, Gordon
Bagier, Gordon A. T. Griffiths, Rt. Hn. James (Llanelly) O'Maltey, Brian
Barnett, Joel Griffiths, E. (Brightside) Orme, Stanley
Baxter, William Hamilton, James (Bothwell) Oswald, Thomas
Beaney, Alan Hamling, William Owen, Will (Morpeth)
Benn, Rt. Hn. Anthony Wedgwood Hannan, William Page, Derek (King's Lynn)
Bennett, James (G'gow, Bridgeton) Harper, Joseph Palmer, Arthur
Bidwell, Sydney Harrison, Walter (Wakefield) Pannell, Rt. Hn. Charles
Bishop, E. S. Haseldine, Norman Park, Trevor
Blackburn, F. Hazell, Bert Parker, John (Dagenham)
Blenkinsop, Arthur Heffer, Eric S. Parkyn, Brian (Bedford)
Boardman, H. (Leigh) Henig, Stanley Pearson, Arthur (Pontypridd)
Booth, Albert Hilton, W. S. Pentland, Norman
Boston, Terence Homer, John Perry, Ernest G. (Battersea, S.)
Bottomley, Rt. Hn. Arthur Houghton, Rt. Hn. Douglas Price, Christopher (Perry Barr)
Boyden, James Howarth, Harry (Wellingborough) Price, Thomas (Westhoughton)
Braddock, Mrs. E. M. Howarth, Robert (Bolton, E.) Probert, Arthur
Bradley, Tom Hoy, James Rees, Merlyn
Brooks, Edwin Huckfield, Leslie Reynolds, Rt. Hn. G. W.
Brown, Hugh D. (G'gow, Provan) Hughes, Roy (Newport) Richard, Ivor
Brown,Bob (N'c'tle-upon-Tyne,W.) Hunter, Adam Roberts, Albert (Normanton)
Buchan, Norman Hynd, John Robertson, John (Paisley)
Buchanan, Richard (G'gow, Sp'burn) Irvine, Sir Arthur (Edge Hill) Robinson, Rt. Hn. Kenneth (St. P'c'as)
Butler, Herbert (Hackney, C.) Jackson, Colin (B'h'se & Spenb'gh) Robinson, W. O. J. (Walth'stow, E.)
Callaghan, Rt. Hn. James Jackson, Peter M. (High Peak) Rodgers, William (Stockton)
Cant, R. B. Jeger, Mrs. Lena (H'b'n&St.P'cras,S.) Rogers, George (Kensington, N.)
Carmichael, Neil Johnson, Carol (Lewisham, S.) Shaw, Arnold (llford. S.)
Carter-Jones, Lewis Johnson, James (K'ston-on-Hull W.) Sheldon, Robert
Coe, Denis Jones, J. Idwal (Wrexham) Shore, Rt. Hn. Peter (Stepney)
Coleman, Donald Kenyon, Clifford Silkin, Rt. Hn. John (Deptford)
Concannon, J. D. Kerr, Mrs. Anne (R'ter & Chathars) Silverman, Julius
Conlan, Bernard Kerr, Russell (Feltham) Slater, Joseph
Crawshaw, Richard Lawson, George Small, William
Cronin, John Leadbitter, Ted Snow, Julian
Crosland, Rt. Hn. Anthony Ledger, Ron Spriggs, Julian
Crossman, Rt. Hn. Richard Lee, Rt. Hn. Frederick (Newton) Summerskill, Hn. Dr. Shirley
Cullen, Mrs. Alice Lee, John (Reading) Swain, Thomas
Dalyell, Tam Lestor, Miss Joan Swingler, Stephen
Darling, Rt. Hn.George Lever, Harold (Cheetham) Symonds, J. B.
Davidson, Arthur (Accrington) Lewis, Arthur (W. Ham, N.) Taverne, Dick
Davies, G. Elfed (Rhondda, E.) Lewis, Ron (Carlisle) Thomas, Rt. Hn. George
Davoes, Dr. Ernest (Stretford) Lomas, Kenneth Thornton, Ernest
Davies, Ifor (Gower) Loughlin, Charles Tinn, James
Dempsey, James Luard, Evan Tomney, Frank
Lyon, Alexander W. (York) Tuck, Raphael
Dewar, Donald McBride, Nell Urwin, T. W.
Diamond, Rt. Hn. John McCann, John Varley, Eric G.
Dickens, James MacColl, James Wainwright, Edwin (Dearne Valley)
Dobson, Ray Macdonald, A. H. Walker, Harold (Doncaster)
Doig, Peter McGuire, Michael Wallace, George
Dunn, James A. McKay, Mrs. Margaret Watkins, David (Consett)
Dunnett, Jack Mackenzie, Gregor (Rutherglen) Watkins, Tudor (Brecon & Radnor)
Dunwoody, Mrs. Gwyneth (Exeter) Mackintosh, John P. Weitzman, David
Dunwoody, Dr. John (F'th & C'b'e) Maclennan, Robert Wellbeloved, James
Eadie, Alex McMillan, Tom (Glasgow, C.) Wells, William (Walsall, N.)
Edelman, Maurice McNamara, J. Kevin Whitaker, Ben
Edwards, William (Merioneth) MacPherson, Malcolm White, Mrs. Eirene
Ellis, John Mahon, Peter (Preston, S.) Wilkins, W. A.
Ennals, David Mallalieu, J.P.W.(Hudderfield,E.) Willey, Rt. Hn. Frederick
Ensor, David Manuel, Archie Williams, Alan (Swansea, W.)
Evans, Albert (Islington, S.W.) Marquand, David Williams, Alan Lee (Hornchurch)
Evans, loan L. (Birm'h'm, Yardley) Mason, Rt. Hn. Roy Williams, Clifford (Abertillery)
Faulds, Andrew Maxweil, Robert Williams, Mrs. Shirley (Hitchin)
Fitch, Alan (Wigan) Mikardo, Ian Willis, Rt. Hn. George
Fletcher, Ted (Darlington) Millan, Bruce Winnick, David
Foot, Michael (Ebbw Vale) Milne, Edward (Blyth) Woodburn, Rt. Hn. A.
Ford, Ben Mitchell, R. C. (S'th'pton, Test)
Forrester, John Morgan, Elystan (Cardiganshire) TELLERS FOR THE AYES:
Fraser, John (Norwood) Morris, Alfred (Wythenshawe) Mr. Charles Grey and
Freeson, Reginald Morris, Charles R. (Openshaw) Mr. Ernest Armstrong.

The Committee divided: Ayes 224, Noes 159.

Alison, Michael (Barkaton Ash) Cower, Raymond Page, Graham (Crosby)
Astor, John Grant-Ferris, R. Pearson, Sir Frank (Clitheroe)
Atkins, Humphrey (M't'n & M'd'n) Griffiths, Eldon (Bury St. Edmunds Peel, John
Awdry, Daniel Hall-Davis, A. G. F. Pink, R. Bonnor
Baker, Kenneth (Acton) Hamilton, Lord (Fermanagh) Pounder, Rafton
Bennett, Dr. Reginald (Gos. & Fhm) Hamilton, Michael (Salisbury) Powell, Rt. Hn. J. Enoch
Berry, Hn. Anthony Harrison, Brian (Maldon) Price, David (Eastleigh)
Biffen, John Harvle Anderson, Miss Prior, J. M. L.
Birch, Rt. Hn. Nigel Hawkins, Paul Pym, Francis
Black, Sir Cyril Heald, Rt. Hn. Sir Lionel Quennell, Miss J. M.
Boardman, Tom (Leicester, S.W.) Heath, Rt. Hn. Edward Rees-Davies, W. R.
Body, Richard Higgins, Terence L. Renton, Rt. Hn. Sir David
Bossom, Sit Clive Hiley, Joseph Rhys Williams, Sir Brandon
Boyle, Rt. Hn. Sir Edward Hill, J. E. B. Ridley, Hn. Nicholas
Braine, Bernard Hirst, Geoffrey Ridsdale, Julian
Brinton, Sir Tatton Hogg, Rt. Hn. Quintin Rodgers, Sir John (Sevenoaks)
Brown, Sir Edward (Bath) Holland, Philip Rossi, Hugh (Hornsey)
Bruce-Gardyne, J. Hornby, Richard Royle, Anthony
Bryan Paul Howell, David (Guildford) St. John-Stevas, Norman
Buck, Antony (Colchester) Hunt, John Scott, Nicholas
Bullus Sir Eric Iremonger, T. L. Sharpies, Richard
Campbell, Gordon (Moray A Nairn) Jenkin, Patrick (Woodford) Shaw, Michael (Sc'b'gh & Whitby)
Carr Rt. Hn. Robert Jopling, Michale Silvester, Frederick
Chichester-Clark, R. Kaberry, Sir Donald Sinclair, Sir George
Clark Henry Kimball, Marcus Smith, Dudley (W'wick & L'mington)
Clegg, Walter King, Evelyn (Dorset, S.) Smith, John (London & W'minster)
Cooke Robert Kirk, Peter Speed, Keith
Corrfield F. V. Lane, David Stainton, Keith
costain A. P. Langford-Holt, Sir John Stoddart-Scott, Col. Sir M. (Ripon)
Craddock, Sir Beresford (Spelthorne) Lewis. Kenneth (Ruthland) Summers, Sir Spencer
Crowder F. P. Loveys, W. H. Tapsell, Peter
d'Avigdor-Coldsmid, Sir Henry lubbock, Eric Taylor, Sir Charles (Eastbourne)
Dean, Paul (Somerset, N.) MacArthur, Ian Taylor, Frank (Moss Side)
Deedes, Rt. Hn. W. F. (asford) Mackenzei, Alasdair (ross & Crom' ty) Temple, John M.
Digby, Simon Wingfield Maclean, Sir Fitzroy Thatcher, Ars. Margaret
Doughty, Charles Macleod, Rt. Hn. Iain Tilney, john
Drayson, G. B. McMaster, Stanley Turton, Rt. Hn. R. H.
Eden, Sir john Madden, Martin van Straubenzee, W. R.
Elliot, capt. Walter (Carshalton) Maginnis, John E. Wainwright, Richard (Colne Valley)
Elliott,R.w.(N'Ctle-upon.Tyne,N.) Marten, Neil Walter, Dennis
Emery, Peter Maude, Angus Ward, Dame Irene
Errington, Sir Eric Mawby, Ray Whitelaw, Rt. Hn. William
Eyre, Reginald maxwell-Hyslop, R. J. Williams, Donald (Dudley)
Farr, John Maydon, Lt.-Cmdr, S. L.C. Wills, Sir Gerald (Bridgewater)
Fletcher-Cooke, Charles Mills, Peter (torrington) Wilson, Geofferey (Truro)
Fortescue, Tim Mills, Stratton (Belfast, N.) Winstantley, Dr. M. P.
Galbraith, Hn. T. G. More, Jasper Wolrige-Gordon, Patrick
Calbraith, Hn. T. G. Morgan, Geraint (Denbigh) woodnutt Mark
Gibson-Watt, David Morrison, Charles (Devizes) Wyile, N. R.
Gilmour, Ian (Norfolk, C.) Munro-Lueas-Tooth, Sir Hugh Younger, Hn. George
Gilmour, Sir John (Fife, E.) Murton, Oscar Younger, Hn. George
Glyn, Sir Richard Nabarro, Sir Gerald TELLERS FOR THF NOES:
Godber, Rt. Hn. J. B. Noble, Rt. Hn. Michael Mr. Anthony Grant and
Goodhart, Philip Nott, John Mr. Hector Momro.
Goodhew, Victor Osorn, John (Hallam)
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