§ AGGREGATION WITH INCOME OF PARENTS OF INVESTMENT ETC. INCOME OF UNMARRIED INFANTS NOT REGULARLY WORKING
§ 9.15 p.m.
§ Sir Hugh Lucas-Tooth (Hendon, South)
I beg to move Amendment No. 10, in page 10, line 35, after second ' income ', insert:'or any income paid bv one party to a marriage under a settlement as defined in section 411 of the Income Tax Act 1952 made after or in contemplation of the dissolution of the marriage or after or in contemplation of a separation or under an order of the Court if such settlement or order was made before the 19th day of March 1968'.
§ The Deputy Chairman (Mr. Sydney Irving)
With this Amendment we are to take the following:
Amendment No. 11, in page 10, line 35, after second ' income', insert:'or income derived from any sum paid under an order of the Court or under a settlement made in consequence of an order of the Court in circumstances where a parent of the infant has been killed or disabled'.Amendment No. 13, in page 11, line 17, at end insert:(4) Tax shall not be charged by virtue of this section in respect of—Amendment No. 43, in Schedule 8, page 61, line 42, at end insert:
- (a) any infant's income if such infant's income does not exceed five hundred pounds and in the case of income which exceeds that amount shall be charged only in respect of the excess; and
- (b) any infant's income so far as the same is income arising under a settlement in relation to which some person other than a relative of the infant's parent is or was a settlor (' settlement' and ' settlor' here having the same meaning as in Chapter III of Part XVIII of the Income Tax Act 1952, and relative including a husband or
1214 wife, parent or remoter forebear, child or remoter issue, brother or sister).4. Paragraph 1 above shall not apply to treat any income as the income of anv parent who shows that such income was not available to be spent by him or on his behalf.
§ Sir H. Lucas-Tooth
Broadly speaking, Clause 15 proposes to aggregate the so-called unearned income of children under 21 with the income of the parents from whatever source the children's income may come. I have had many complaints from my constituents about the effect of the Clause, particularly about the Clause as a whole. I was not a member of the Standing Committee and I was therefore unable to voice my constituents' complaints when I should have liked to have done so. These Amendments are necessarily of rather narrow scope and I ought to say that I would have voted against the Clause as a whole in Standing Committee. It is in that spirit that I move the Amendment.
In Standing Committee the Chief Secretary defended the Clause against all the Amendments proposed to it by asserting two principles. He said of the philosophy of the Clause:The philosophy is that of regarding the family unit as one.The other principle I can state fairly by quoting what he said a little later. Put shortly, he said that the present law was unfair. He said:It seems to me simple justice, and nothing more than that, that one should put an end to a system under which like families with like circumstances pay totally different burdens of tax just because in one case it has been possible to take advantage of this system which applies in one court but does not apply, except with the rarest of exceptions, in another court.One court was the High Court and the other was the magistrates' court.
I do not think that that principle means anything, but if it does, it is no more 1215 than a statement of a vague kind of egali-tarianism and nothing more. It suggests that people who can afford to use the High Court ought not to be able to take advantage of the decisions of that court. If so, that principle makes mere nonsense.
After hearing my hon. Friends, the Chief Secretary felt obliged to promise one concession. He said:One hon. Member referred to a thalidomide baby as being distinguished quite clearly from all others, in the sense that in this one case, and in this one case alone, compensation is paid for damages to the child itself. I recognise that there is a distinction to be drawn between that and the other cases of aggregation of income with the parents' or damages resulting from an accident to the parent. Where it is an accident to the child, damage to the child and deformity of the child, one recognises a vast distinction in principle which we should, if possible, like to meet."—[OFFICIAL REPORT, Standing Committee A, 15th May, 1968; c. 890–5.]He went on to promise to have the Bill amended so as to make that distinction. I do not congratulate the right hon. Gentleman on making that concession, because it would have been an outrage if he had failed to do so. In making that concession, he completely destroyed the validity of the two principles on which he defended the Bill against all the Amendments.
A thalidomide baby is a member of a family unit as much as anybody else. If the principle of treating the whole family as a unit is right, why should the thalidomide baby be excluded? If another member of the family receives damages or compensation in his or her own right, they are not excluded. If the mother of the family receives damages in her own right, the income derived from them is aggregated in the father's income for Income Tax purposes.
§ Mr. Barnett
Before this Clause, the investment income of the mother and father would have been aggregated anyway.
§ Sir H. Lucas-Tooth
That is as may be. But the right hon. Gentleman said that one should not aggregate the income of a particular child which has been paid to it in its own right because of some accident; that would be wrong. If that is a sound argument, why does it not apply equally to any other member of the unit if the principle of the family 1216 unit being the taxable unit is followed? Damages received by an injured child or compensation payable before damages are recovered are received because of payment ordered, in every case, by the High Court and not through the magistrates' court. This illustrates the absolute nonsense of the position concerning the two courts.
The Clause is illogical, unjust and inexpedient. All that I can do is to propose Amendments designed to remove its worse elements.
Amendment No. 10 proposes to exclude from aggregation the income of a child with that of its parents when the child's income is derived from a trust or court order made because of the parents' divorce and if, and only if, the divorce took place before the Budget date. It is, therefore, of extremely limited effect and refers only to existing cases. There is a special reason for the Amendment. Such trusts as are included in it, or such court orders as are referred to, were made on the basis of the law existing at the time that they were made. It is difficult, if not impossible, to vary these trusts—difficult in all cases, both trusts and orders, and impossible in the case of most trusts.
The effect of the Clause on such income of the child is, in every case, to make the child suffer. The parent who has made the provision—normally it will be the father—will escape unscathed as a result of the Clause. He will have nothing more to pay. In the great majority of cases this tax burden will fall upon the mother in whose custody the child or children may be. In many such cases the mother is not well off, and one knows of many instances where a mother has to work extremely hard to maintain the children with which she is left. As a result of this aggregation this tax will fall upon that mother's income and that seems wrong. Where do the Chief Secretary's principles apply in these cases? By definition the family unit has already been broken up and it is the poorer element left that is affected by the Clause. I hope that the Chief Secretary will accept this Amendment or the principle contained in it.
Amendment No. 11 proposes to exclude from aggregation a child's income derived from compensation paid to the child for loss of a parent, by death or disablement. 1217 Compensation for disablement would be extremely rare, and the ordinary case is of compensation paid to a child because of the death of the father. Why should this case not be treated as being on all fours with the case to which I have referred, and which the Chief Secretary has said he is prepared to accept?
I hope that when he replies to the debate he will say that he is prepared to include this in his Amendment. I cannot believe that he will say that the loss of a parent is not a loss to the child, even within the definition he has made. It is not a physical loss but the loss of care, security, educational and other opportunities is as great, possibly greater, in certain circumstances. The only reason that I can see why he can draw a distinction is that the kind of loss that the child will suffer in the circumstances of this Amendment will be as a member of a better-off family.
If that is the principle the Chief Secretary should say so clearly, because it ought to be seen and understood by everyone that he deliberately intends to prevent, by the taxation imposed in the Bill, the opportunity that a child may have because it happened to be born into a slightly better-off family.
Amendment No. 43, amending the Schedule, deals with the case where parents do not receive and cannot control, the income belonging to their child. For example, a relative or even a stranger might make a settlement to educate or otherwise provide for a child on a scale out of proportion to the rest of the family, or might arrange for the money to accumulate for the child at 21. I appreciate that this Amendment might create a loophole. A grandparent might make a settlement with what I will rudely call "stooge" trustees.
We do not pretend to be draftsmen in Opposition. We make our Amendments say what we intend in principle, and I am certain that if the Government accept the principle, they can cure any difficulties. What does the Chief Secretary contemplate will be done in this sort of case? A parent disapproves of a young man whom his daughter is marrying; he is a well-to-do parent and the daughter is marrying someone without great resources, to whom he objects for that reason. A child is born. A grandparent 1218 of the child makes a settlement on the child for the child's benefit, giving the money to trustees and directing them to spend it on the child for the child's benefit.
In that case, as the Bill is drafted, the effect of that will be that the son-in-law, to whom objection was taken, may have a substantial increase made in his relatively small income so that the child may be maintained in a way which is totally disproportionate to the income of himself, his wife and, possibly, other members of the family.
That is an intolerable situation. Provision must be made to deal with it. I do not say that the Amendment is perfect, but something must be done to deal with that kind of situation. I suggest a method in the Amendment. If it is not acceptable, let the Government say what they are prepared to do. I think that I have said enough to indicate that the Clause as a whole is objectionable, but it certainly has such features that it must be amended before it can be accepted by the House.
§ Dame Joan Vickers (Plymouth, Devonport)
I support Amendment No. 10 moved by my hon. Friend the Member for Hen-don, South (Sir H. Lucas-Tooth) in regard to another aspect, and that is maintenance orders. It is fantastic how the Government always try to hit the poorest sections of the population. If my hon. Friend's Amendment or one on similar lines is not accepted, many more women will be forced to resort to social security.
Many women receive only maintenance for their children and, therefore, they go go out to work to supplement their income. It is essential for them to do so because the money given by the father for the children does not support the entire family. This means that the mother either has to claim supplementary benefit or take a job. If she claims the former, she lives merely at subsistence level. Most women wish to go out to support their children, and it is admirable that they should, otherwise they must apply for social security assistance for clothes and holidays for the children. If they can work, it is very much better.
At present, only the actual money which the mother earns is taxed, and this makes working feasible or possible, but 1219 if the maintenance money for the children were to be taxed this would practically double the mother's taxation and, therefore, it would not be worth her while to go out to work. It would be a great pity to drive a number of women on to supplementary benefit. It is well known that when a woman has been deserted, it is beneficial for her to mix with the world, to take a job and earn her living. These woman have a great deal of pride and that is what they wish to do.
One-parent families are in constant danger of legislation of this nature. Not only would the difficulties which I have outlined be bad for the family, bad for the woman and also bad for the child, because of the mother's lower income, but the cost would be expensive for the State. I therefore suggest that the Chief Secretary should consider this point, because it is not only a social asset that these women should go out to work. It is beneficial for the economy and for the woman and the Government would be saved money in the long run.
§ Mr. Richard Wainwright (Colne Valley)
I wish to speak to the Liberal Amendment, Amendment 13, and only to that, since it appeared in Committee that the degree of opposition to the Clause from the Conservatives, on the one hand, and the Liberal Party on the other, was quite different. It may well be, although I hope not, that with their usual clumsiness the Government will drive the two Opposition parties into each other's reluctant arms. Whereas the right hon. Member for Enfield, West (Mr. Iain Macleod) was quite explicit in saying that if he were in power he would not merely seek to amend this Clause drastically but would repeal it entirely, the Liberal view which, in face of the Government's astonishingly stubborn record on the whole of the Bill, we cling to with very slender hope, is that the Government should so amend the Clause that it becomes a reasonable and useful weapon against deliberate tax avoidance of a prevalent kind, which is entirely legitimate and honourable, but not helpful to the revenue and not conducive to a state of equity.
The trouble with the Clause as it stands is that, contrary to the belief of many people, it will affect a large section of the tax-paying population. The 1220 idea is about that the Clause is aimed simply at wealthy families. Not a bit of it. In the course of one of his many, if I may say so, distinguished and independent contributions to the Committee debate, the hon. Member for Birmingham, All Saints (Mr. Walden) from the opposite side of the Committee, said that his guess was that the Clause will apply to hundreds of thousands of taxpayers. This was not contradicted by the Chief Secretary who, to my surprise, ignored the speech of the hon. Member for All Saints. It is a great pity that the Clause should have been so widely drawn as to catch a very large number of modest and perfectly legitimate cases of small investment income of young people up to the advanced age of 21.
The Liberal Amendment seeks to make two modifications to the operation of the Clause. Under the Amendment the only forms of investment income which will be caught are those which reach the child through a relative of one of its parents. One of the most common forms of tax avoidance is for the family to get together and, because previous legislation prevents the parents from settling anything on the child with a tax advantage, to settle something on the child. This is what we seek to outlaw, but we do not seek to outlaw investment income which reaches the child in an entirely independent way, perhaps on the child's own merits, without any apparent motive of deliberate tax avoidance, or if somebody quite outside the family, possibly the High Court itself, secures a settlement upon the child. It is monstrous that income which accrues to a child in that way should be aggregated with that of the parents.
Secondly, we seek to remove from the scope of the Clause investment income up to a figure of £500 a year. As a child grows up and reaches, say, school-leaving age, there is everything to be said for him learning to dispose of property and, if he is lucky enough, having resources at his own disposal, so long as they do not reach a figure at which there is every indication of substantial tax avoidance. We are a little optimistic in making this suggestion, because there is still almost a year before the Government commit themselves to the precise form of this legislation.
1221 Here I would make the point which I have often tried to make in previous debates, and that is to urge upon the Government the importance of engaging in much more detailed and thorough consultations with those professions which will bear the main burden of implementing this kind of legislation—
§ Mr. A. Woodburn (Clackmannan and East Stirlingshire)
Would the hon. Gentleman say to how many children in any one family he would extend this £500 extension, and how he would justify giving these exemptions, when any number of people working and earning £500 a year have to pay Income Tax on it?
§ Mr. Wainwright
I would not dream of suggesting that the £500 should be free of Income Tax. The £500 of investment income will pay substantially more tax than £500 earned by a young person. What we say is that it should not be aggregated with the parents' income. Dealing with the right hon. Gentleman's first point, the Liberal Party would have nothing to do with a proposal to limit the number of children in a family who might benefit from exemption of this kind. I say, the more, the merrier.
I was talking about the accountancy profession. I hope that all hon. Members attach importance to the need for more consultation with the experts—those who will have to carry the heat and burden of the day after any enactment—before complicated new concepts are introduced into our tax law.
The accountancy bodies now approach the Chancellor as a united group. The four major recognised bodies of the United Kingdom act together in these matters. The Government cannot excuse themselves by suggesting that they are faced with a bewildering multitude of counsel. The accountants have said to the Chancellor that they are concerned… at the number of possible anomalies which may arise under this Clause and, since it will not come into effect until 1969–70, submit that it should be the subject of further detailed study. They would welcome the opportunity of joint consultation with the Inland Revenue.In view of their dismal experience in the past with Governments of both parties, I take that to mean that they want meaningful and prolonged consultation in real depth.
1222 The old, hoary, dusty argument that consultation with people outside the Government exposes the Revenue to the risk of forestalling is too old-fashioned to be repeated from the Government Front Bench today. Any forestalling which might take place as the result of a leakage of the Government's intentions would be a deterrent which, if anything, would be of value to the Inland Revenue. In fact, I am surprised that the Treasury does not use the threat of future legislation to greater effect. If the taxpayer had foreknowledge that legislation was coming, he would abstain from making covenants, dispositions and tax avoidance arrangements of this kind, and it would only be for the good of the Revenue.
§ Mr. Patrick Jenkin
Surely the hon. Gentleman would have the expectation of being able to point to the fact that practically no one now will set up an accumulation trust, because legislation against such arrangements is expected by everyone.
§ Mr. Wainwright
Yes, and I give the Government full marks for announcing that deterrent in advance. I think that it will be of some good to the Revenue, but I wish that there was more consultation and that the Treasury realised that the risk of a leakage is likely to do more good than harm, except possibly in relation to commodities liable to Excise Duty.
§ Sir Harmar Nicholls
Perhaps one can-not object too much to that as a special selective point, but I cannot agree with the hon. Gentleman or my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) if it is urged upon the Government to rule by intimidation. We had too much of that, for example, from the Ministry of Public Building and Works about 18 months ago. Let us be ruled by Statute, properly enacted, not by intimidation.
§ 9.45 p.m.
§ Mr. Wainwright
I join with the hon. Member for Peterborough (Sir Harmar Nicholls) in hoping that the Government will not be there much longer to intimidate people. Granted we have the misfortune of having them there, I am all for them announcing their intentions, however dire and stupid, in good time so that the experts can at least whittle them into some kind of shape.
1223 So long as the Government insist on dressing up this aggregation Clause in the absurd garments, now completely tattered and threadbare after discussion in Standing Committee, of the so-called common spending unit, a concept at least 50 years too late, a concept which might have done some kind of justice in Edwardian times but which now is a most ironic concept to introduce just when the family has par excellence ceased to be a common spending unit owing to the habits of young people, is really too ridiculous. If they would take the Clause back and put it into the form of an effective tax avoidance Clause, which would do a great deal of good to the Revenue—something which Conservative Governments ought to have attended to a long time ago—we should then be happy to support the Clause.
§ Mr. Barnett
I am tempted to speak in the debate briefly, because I fear that anybody listening might have assumed that the Clause was brought about by some wicked idea of the Government.
One heard from the hon. Member for Hendon, South (Sir H. Lucas-Tooth) of the case of a grandfather leaving something to a grandchild, probably from very fine motives. However, it should be known—and the hon. Member for Colne Valley (Mr. Richard Wainwright) certainly knows this to be true—that in the majority of cases income is allocated by trust to grandchildren to avoid taxation on the donor.
I do not go along with the Inland Revenue in its campaign to plug every conceivable loophole against tax avoidance. I think it frequently goes so far as to make the lives of people in the accountancy profession intolerable. The loophole with which the Clause attempts to deal is clearly not a minor one, as anybody who knows anything about it will be aware. The purpose of the Clause is to stop a major loophole provided for large Surtax payers, enabling them to reduce their income for tax and surtax purposes by obtaining the personal allowances of an infant. If anyone doubts that I would be delighted to hear, but that is the general purpose.
When we hear of these heart-rending cases from hon. Gentlemen opposite, we should bear in mind that the major pur- 1224 pose of the Clause is to stop a glaring loophole in the tax system. That does not mean that there are not anomalies to be found when one brings in a Clause of this description. There certainly are —for example, the one concerning the thalidomide children. We should do something to deal with those anomalies. We have heard some hon. Members joke about the family being a common spending unit, and so on. These comments are all very humorous. In Standing Committee we grew to expect sneering and sarcastic comments from some hon. Members. But it is completely misleading to suggest that this Clause is doing other than dealing with a major piece of tax avoidance which was quite legitimately carried out previously. It is now being plugged. In the process some anomalies have been brought to light, and I hope that my right hon. Friend will make certain concessions in respect of some of them, but to suggest that the whole purpose of the Clause is wicked is to present an utterly false situation.
§ Sir H. Lucas-Tooth
I agree with the hon. Gentleman that it is right and proper to stop the practice of allowing parents to make settlements on their children, but does not he agree that it is desirable that grandparents should provide a good education for their grandchildren? Does he regard that as something objectionable?
§ Mr. Barnett
There is nothing objectionable about it. A grandparent is entitled to leave something to his grandchild.
§ Mr. Barnett
Very well, give something to his grandchild, but why should he do it at the expense of the Inland Revenue, and thereby other tax payers?
§ Mr. Philip Goodhart (Beckenham)
As the father of seven children I am naturally interested in, and equally naturally opposed to, any Clause which seeks to aggregate for tax purposes any income of any child with that of the parents. Apart from my personal interest in the Clause, it is of great interest and concern to many of my constituents.
1225 I should have liked to have taken part in the discussions upstairs about the main purpose of the Clause, but I approve of what my right hon. and hon. Friends said, that the Clause is based on envy, that it is an attack on savings, and particularly on the savings of the middle income group, and that it is indirectly an attack on the independent schools.
My hon. Friends, some hon. Gentlemen opposite, and this evening the hon. Member for Colne Valley (Mr. Richard Wainwright), have pointed out that the philosophy behind the Clause is directly contrary to all progressive sociological and educational thought in the trend of looking on young people as responsible and independent individuals. Indeed, the provisions of the Clause are diametrically opposed to the suggestions of the Latey Committee whose Report has just been accepted by the Government.
As the Chief Secretary revealed in Committee upstairs, the Clause has a peculiar parentage. It is based on the minority report of the 1954 Royal Commission, the author of which was none other than Professor Kaldor. Indeed, the Clause has the stamp—
§ The Chief Secretary to the Treasury (Mr. John Diamond)
The hon. Gentleman said that the author of the minority report was none other than one individual. There were several individuals who signed that report.
§ Mr. Goodhart
There were four signatories to it, but I do not think anybody would dissent from the view that Professor Kaldor was its principal author. When the Chief Secretary referred to the matter in Committee he could not remember the names of two of the signatories. I think that he will, therefore, accept that Professor Kaldor was the principal author. It bears the brand of Kaldor on it, because it will create muddle, confusion and hardship.
My hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) pointed out that the only parallel example that he could find in taxation systems in other parts of the world for the philosophy behind the Clause was in the ancient Indian taxation code that referred to the Hindu undivided family. There seems to be an element of poetic justice here, because we sent Professor Kaldor 1226 out to India to advise the Indians on their taxation system, with somewhat unfortunate results for that country. It would seem that, as Professor Kaldor no doubt noted, this idea of taxing the family as one unit this is India's revenge on us for having sent Professor Kaldor out there.
Amendment 10 deals directly with the problem of settlements already made on children of broken homes. In Committee the Chief Secretary talked of the family as a common spending unit. We are trying to help the family where the common spending unit has already been broken by desertion or divorce. As we know from our Parliamentary work, or from our personal acquaintance with the subject, the children normally remain with the mother, and only too often she is the person who suffers most, financially, from the break-up of the family. The Amendment therefore seeks to lift the additional financial burden from those parents who have already received settlement in the court.
The Chief Secretary cannot argue that national solvency is involved in imposing additional burdens on this comparatively small group of hard-pressed people. He cannot argue that the Government need to balance their books by extracting this small extra amount of money from this hard-pressed group. I do not think that he can even argue that this imposing of extra burdens on a small section of the community is part of Socialist theory. Not even the hon. Member for Heywood and Royton (Mr. Barnett), in looking at the broader sweep of the whole Clause, can argue that this is a real tax loophole. I therefore hope that the Chief Secretary will give close consideration to the Amendment.
The second Amendment in the name of my hon. Friend the Member for Hendon, South (Sir H. Lucas-Tooth) deals with incomes derived from money paid to a child as damages when a parent has been killed or injured. As in the previous Amendment, the collective spending unit concept of the family has been broken by the death or incapacitation of the parent. In Committee, the Chief Secretary expressed sympathy for the case of "thalidomide children", but if the courts can accept that the death or injury of a parent is just as much damage to a child 1227 as the loss of fingers or a limb, I do not see why the Treasury cannot accept it as well.
I know from long acquaintance with him that the Chief Secretary is an honourable and generous man, and he admitted in Committee that the Government had not thought about the impact of the Clause on the independent schools. They cannot have thought, either, of its likely impact on those children who have lost a parent through death or injury and received damages from the court. I earnestly ask him to look at this again.
The final Amendment deals with income which will not go to the parent but can be used only for the child. My hon. Friend cited theoretical examples of families being severely jeopardised, but I know an actual constituency case, of a man who has spent a long career and earned a reasonable income. He has a number of children on whom settlement has been made by his father-in-law, and he cannot touch that money. He now faces financial ruin if the Clause is not amended, because the children's income will be aggregated with his and he will have no extra money to meet this greatly increased tax bill. He talked to me in desperation in terms of trying to persuade his wife to divorce him, since otherwise the family would suffer disastrous financial hardship.
The whole Clause is undesirable, but the Amendments will at least mitigate the inevitable hardship.
§ Sir Harmar Nicholls
I want to draw the right hon. Gentleman's attention to something which he has probably already marked. The expert in his part on these matters, the hon. Member for Heywood and Royton (Mr. Barnett), scraped the bottom of the barrel to find some lucid argument to justify the Clause, but even he, trying hard to be loyal to the Government, concluded that, although the Clause might settle major things, it had many anomalies. His final appeal to the Chief Secretary—
§ Mr. Barnett
The hon. Member should not make appeals for me to my right hon. Friend. If I want to make them, I know how to do it and I will do it.
§ Sir Harmar Nicholls
The hon. Gentleman wrapped up his message in 1228 so much cotton wool that it may not have got through to his right hon. Friend. The only part of his speech that was relevant to the discussion was the part in which he said that the Clause was riddled with anomalies. That, coming from the expert on the benches opposite —indeed, from the only backbencher opposite to take part in this discussion —coupled with the appeal made by the Liberal spokesman and the speeches of my hon. Friends shows that these anomalies must be ironed out before the Bill proceeds.
§ Mr. Diamond
I sense from the length of the speeches that hon. Members are well aware of the principles behind the Clause and would not wish me to go over the ground which was covered fully in Committee upstairs. It is also clear from the references made to speeches in Committee that hon. Members have read the OFFICIAL REPORT of our earlier discussion and are aware of the background to and purpose of the Clause. We can, therefore, concentrate more narrowly on the Amendment.
I hope that I will not do what the hon. Member for Colne Valley (Mr. Richard Wainwright) asked me to avoid—driving him into the unreceptive arms of the Conservative Party. It would be a difficult act for me to do since the Conservative Party is opposed to the principle of the Clause whereas the hon. Gentleman accepts the principle, certainly from the point of view of anti-avoidance.
It was obvious from an official Opposition Amendment in Committee upstairs that Conservative hon. Members think that income from parents should not be aggregated, whereas the hon. Member for Colne Valley considers that it should be aggregated. [HON. MEMBERS: "No."] I think I am right in saying that the official Opposition Amendment moved in Committee upstairs referred to parents— [HON. MEMBERS: "No."]—or grandparents— [HON. MEMBERS: "No."]—or relatives— [HON. MEMBERS: " No."]—close relatives —[HON. MEMBERS: "NO."] Official Opposition Amendment No. 249, I think it was, referred to close relatives. [HON. MEMBERS: "No."] That is my recollection of the matter and I am sure that grandparents were included. In any event, the Conservative Party is completely opposed to the principle of the Clause and it is difficult to see on what grounds 1229 the Conservative and Liberal Parties could join in supporting the Amendment.
From the remarks of the hon. Member for Hendon, South (Sir H. Lucas-Tooth), it seems that I did not make the principle of the Clause clear. He said that there was no principle involved in the distinction between the two courts. I must, therefore, make the principle clear by using words which are broader than I would otherwise use if I were not invited to make the principle clear. I move on the principle, in rejecting the Amendment, that there should not be one law for the rich and one for the poor. That is expressing it in very simple terms indeed.
By one law for the rich I mean the possibility open to those whose income is such that their maintenance payments and matters arising under divorce proceedings are dealt with in the High Court. It is possible for them, on the advice of their advisers, so to arrange matters that the maintenance is made in favour of the child, that it becomes the child's income and that it therefore becomes eligible for an Income Tax repayment claim. The result in a typical case is that the mother would have both the income provided by the father and the repayment claim provided by the general body of taxpayers
The other law is for those of modest means who are dealt with in the magistrates' court. In the generality of cases this method of arranging the maintenance payment is not available, so those people do not have any opportunity of getting both the income from the maintenance payments and the benefit of a repayment claim.
We have been over this ground many times in Committee. I want to make it clear that whereas with the humbler settlement, the more modest amendments —and these are the vast majority of cases —there is no opportunity for such a tax arrangement to be made; where much larger sums are involved there is an opportunity, which is frequently taken, of a tax arrangement whereby the payment is made in favour of the child and ranks as the child's income.
That was difficult to achieve. It was sought after for many years, but failed. Finally, about 15 years ago, a method was discovered whereby the income became the income of the child and was subject to a tax repayment—
§ Sir H. Lucas-Tooth
The right hon. Gentleman's arugment can only be on the basis that he believes that the poor are divorced in the magistrates' court. That is the only possible sense of his argument.
§ Mr. Diamond
I do not believe that. I believe that the smaller cases go to the magistrates' court, and the larger cases— [Interruption.] The smaller cases of maintenance payments we are talking about, arising under divorce, go through the magistrates' court—[Interruption.]— I speak of the smaller cases, of which there are very many more than those involving larger sums. The cases referred to many times in Committee as the humbler cases—everyone knows this to be so—involve smaller payments, and it is not open to the mother of the child so to arrange her affairs that the income is the child's income and she gets the additional repayment benefit I have mentioned. On the other hand, under the High Court procedure it is possible for that argument to be made, and this has been done.
The Committee knows quite well the basis on which we are proceeding, and it has been described again this evening. These Amendments do not dispute the principle of the Clause: what is in dispute is whether there should be further deductions in the generality of the cases. What the hon. Baronet the Member for Hendon, South seeks is an allowance where the parent has been killed or disabled. I do not follow the point about the parent being disabled, but it is a minor point. In the case of disablement the parent is still alive and would be entitled to the income.
The essential point is where the parent has been killed. I promised in Standing Committee that I would give further consideration to this question, and undertook that on Report I would table an Amendment dealing with the case of children who have suffered injury by loss to themselves in the sense of losing an arm, or physical loss of that kind—a typical case being the thalidomide baby. One is very concerned to give the most sympathetic and careful consideration to this. One is concerned to find cases— because a tax machine has to be administered—which would represent a justifiable distinction between those who 1231 are exempt and those who are not exempt from aggregation.
I have heard precisely the same argument tonight as I did in Committee. The argument is that if one goes as far as to exempt the income of the thalidomide baby from aggregation one is logically compelled to go further. The argument tonight was in exactly the same direction.
A further argument with which I have considerable sympathy is that the logic behind exempting the income of the thalidomide baby is not great. That was the point made by the hon. Baronet the Member for Hendon, South. Of course it is not great. But I undertook to bring forward an Amendment at all events going that far but no further. Having considered the matter most carefully and sympathetically, I am unable to find, as I was unable to find then, any principle by which one could possibly distinguish any further categories. Once one goes beyond the individual case of a personal loss in the sense of the loss of an arm or some other physical loss to the child itself, one cannot draw a line anywhere. Indeed, it was very difficult to go this far logically. One is going this far partly on logic but more particularly on compassion. Let us recognise that that is not a good basis on which to legislate, but it is a basis on which one can just make a distinction. However, I regret to say that we cannot go any further.
Therefore, I must tell the hon. Baronet that in respect of his Amendment dealing with fatal accident cases and the loss to the parent, I am unable to recognise a distinguishing line, and, therefore, I am unable to recommend the Committee to accept the Amendment.
I think that the hon. Member for Plymouth, Devonport (Dame Joan Vickers) was under a misapprehension in the case that she put forward. She said that the Clause would hit the poorest section of the community, and that, as a result of the tax being paid as a result of aggregation, the mother would be forced to go out to work.
§ Dame Joan Vickers
It was the other way round—that she will not be able to afford it if she has to bear the tax and that it would be better for her to go to social security.
§ Mr. Diamond
I do not quite follow that argument. But the case that the hon. Lady was making that this is an attempt to hit the poorest section of the community is a complete misunderstanding of the application of the Clause. The present position, as I explained on an earlier Amendment, is that by far the majority of maintenance payments are in favour of the mother, and the payment is treated as the mother's income. It is only in an extremely small minority of cases that the payments are in favour of the child in such a way as to be affected by the new provision for aggregation. Therefore, I should have thought that the hon. Lady's vote would have been on our side if we went to a vote. It is because the present proposals do not hit the poorest sections of the community that we are bringing them forward.
The hon. Member for Colne Valley wanted to retain the Clause on tax avoidance grounds, and I welcome that. He made a most interesting comment about the deterrent effect of advance warning of legislation. I should be interested to hear him pursue the philosophy of that because it is a matter of great interest to those who are concerned with tax avoidance. I did not know how far he was carrying his principle.
The hon. Gentleman's Amendment seeks to do two things. First, to exclude infants' income where it is no more than £500 a year and, secondly, to exclude from aggregation income under settlements made by persons who are not relatives. As far as the £500 a year is concerned, I remind him that there were two reasons for bringing in these proposals. One of them was to produce income and the income we are likely to produce by these proposals is £25 million. His proposal would eliminate £20 million of that, so he recognises that his Amendment would wreck our proposals almost completely by the size of the exclusions. For that reason alone, we could not accept such an Amendment, which is really a wrecking one.
§ Mr. Richard Wainwright
The hon. Gentleman acknowledged a few minutes ago the very point I was at pains to make about the deterrent effect. Does not he consider that, although the Clause in the form that we would like would bring in only £5 million, it would still 1233 have a severe deterrent effect on the spread of this avoidance procedure by taxpayers?
§ Mr. Diamond
But it would have the the same effect as it stands. The Clause as drafted has the additional advantage that it will collect £25 million in the first full year, whereas the hon. Gentleman's proposal would reduce this to £5 million. Presumably, the arrangement he proposes of allowing up to £500 a year would go on permanently and therefore the avoidance that he seeks to deter is on the provision of incomes of more than £500 a year, which are pretty substantial.
§ Mr. Goodhart
But does not the fact that the Clause as drafted would raise £25 million a year underline the case that it is the smaller people and not the very rich who are going to be hit?
§ Mr. Diamond
Of course it is not the small people who are going to be hit by this. In their case, the average circumstance is that the child has either no income of its own or a negligible income of its own. I do not know what the hon. Gentleman means. These arrangements only arise either deliberately to avoid tax, as has been made clear, or as part of a process of provision by well-to-do people of gifts, legacies, etc., which produce income to the child. The second category clearly cannot be solely the case, nor, indeed, can the first. The hon. Gentleman's experience must be totally different from mine.
In the second part of the hon. Gentleman's Amendment he proposes that there should be excluded from aggregation in- 1234 come under settlements made by persons who are not relatives. I understand his logic, particularly as his proposal is based on his belief that the purpose of the Clause is merely to deter tax avoidance. But that is not so. If it were, there would be merit in his argument. The purpose is to deal with a principle which we think exists, namely the family spending unit. There is no reason why income deriving from one source should be treated differently from income derived from another source once one accepts that principle. It is only on the basis of that principle that a sensible arrangement could be made.
None of these Amendments—I note that none of them is sponsored by the Front Bench opposite—cover ground which we did not cover fully upstairs and which provide any opportunity for improving the Bill. The only matter on which, I repeat, one is anxious, if possible, to meet the views of the Opposition and many others, is perhaps to go a little further in the way of the fatal accident case and to recognise that there is something other than physical damage to the child for which a right is created when a parent is lost and the child has a right to damages from the loss. I am only sorry to say that I cannot distinguish between this case and a whole host of other categories which would follow on, and I am afraid that we have to leave the matter as it is and as the Bill is drawn, coupled with the undertaking that I have given about producing an Amendment on Report to deal with physical loss to the child itself.
§ Mr. Fletcher-Cooke
In spite of the opening words of the Chief Secretary, I thought that he would not be able to resist an appeal to the principle of the common, or family, spending unit before he sat down. Therefore, rather against my will, I shall be obliged once more to show it up for what it is so worth, because it was an appeal to that principle and that principle alone which made him resist the heart-rending appeal which is formulated by Amendment No. 11, that is to say, to insist that when the breadwinner is killed and compensation is paid by the persons responsible for the death to, or for the benefit of, the child, that should nevertheless be aggregated.
That can be justified only by an appeal to the extraordinary idol which the Chief Secretary has erected and which he has borrowed from Professor Kaldor in the Minority Report of the Royal Commission on the Taxation of Profits and Income, borrowing all the details and anomalies. It is a self-confessed hypocrisy by the fact that the common spending unit, for some inscrutable reason, takes no account of earned income although earned income is spent just as much in common as or just as little in common as unearned income, and nor does it take account of such matters as unemployment benefit, which, again, is spent just as much in common, or just as little in common, as unearned income, because the right hon. Gentleman knows that if he did that, there would be a riot. So much for the common spending unit.
The purposes of these Amendments are somewhat detailed. Owing to the procedure under which we are operating, they are obliged to be. As this is the last chance which we shall have—because Report stage of the Finance Bill is no chance—I want to begin by asking the Chief Secretary to give his attention to an anomaly in Schedule 8 which was pointed out to me only today. It occurs in paragraph 4(2). The Committee may know that if either the child is resident abroad, or the parent is resident abroad, aggregation does not take place. But, owing to the wording of paragraph 4(2), there may be a casus omissus, that is to say, if both are resident abroad, but nevertheless both have investment income coming from the United Kingdom, the two types of withholding tax, that upon 1236 the resident abroad infant and that upon the resident abroad parent, may be aggregated. That would be a complete anomaly and I ask the Chief Secretary whether his advisers can see whether that interpretation of the words is correct and, if so, whether he will put it right on Report, because it is obviously an oversight.
The first Amendment deals with a very narrow point, namely, provisions which have been made as a result of a broken marriage before the Budget. The Chief Secretary took the opportunity to make one of his "class war in the courts" speeches, which we have heard before, and which has no relevance to these provisions. If he will make speeches about how there is one law for the rich and one for the poor, and how divorced persons who are poor go to the magistrate's court, which is quite wrong, we must repeat for the third or fourth time, our criticism that there has been no Law Officer present during the debate.
This is probably the first time that this has happened during consideration of a Finance Bill in living memory. It may have been difficult for them to attend Committee, because there were so many Committees meeting, but since tonight we are dealing purely with the difficulties which we think the courts will have, then we ought to have had the advantage of the presence of a Law Officer. I do not wish to be insulting to the Chief Secretary but he will recognise that it is only from a Law Officer that the Committee can expect such authority.
The purpose of Amendment No. 10 is to prevent the courts being flooded by the re-applications, which there are liable to be. For many years now the High Court and to some extent the lower courts have been in the habit, and have had the duty in many cases, so to make their arrangements and awards that the various parties benefiting paid the least amount of tax. There is nothing wrong with that. The courts have been encouraged to do so, and have certainly done so, with the great advantage that the amount of maintenance or alimony or compensation, or whatever, is reduced.
We all know that in matrimonial cases the amount of money available from the 1237 former husband is strictly limited. This is one of the troubles. I see the hon. Member for Pontypool (Mr. Abse) listening. He knows, from his recent experiences upstairs, that this is the great trouble in broken marriages. For that reason, the courts have been very astute so to arrange affairs that the person who has to pay pays in such a way that he is not crippled, but that those who receive the money get enough to keep them afloat.
The proposed aggregation provisions will alter the amounts that have to be awarded—which will need to be increased —so much so that there will be many cases in which, if there is more than one child, it will be in the interests of the children, financially, that their custody should be split, so that there is less aggregation. I can imagine no worse reason for dealing with a family than that. That may happen in many cases. The Amendment has the confined purpose of ensuring that arrangements already made should not be upset.
My hon. Friend the Member for Hendon, South (Sir H. Lucas-Tooth) said that it is difficult to vary trust or court orders. With respect, it is easier to do so now than in the days when he was in practice, in the sense that we have the Variation of Trusts Act, and we also have the more firmly established principle that for parties to a former matrimonial dispute there is never an end to the matter, and they can always return to the court if circumstances change and ask for a new order. Circumstances will be changed very much by this aggregation provision and there will be floods of cases going back, asking for a variation to be made to the court order in matrimonial disputes. There will also be a very large wave of variation of trust applications in the Chancery courts.
It is for these reasons that we say that a line should be drawn on Budget day and that all the arrangements that were made in this field before Budget day should not need to be upset, because the only result is that an immense amount of money will be spent in applications to the courts and immense heartburning will be caused to those who at present receive the payments, because they 1238 know that there is not very much money left from the source from which it comes and that they will never be able to get back to the position which they are in now and that the best they can hope for is some modification.
We think, therefore, that it is only common sense, as well as common justice, that the aggregation provisions should not apply to court orders and the like made before Budget day. The Chief Secretary did not deal with that point. I make it again. All that I ask him, if he would care to give the reason why it is, for some reason, unobtainable or objectionable, is not once again simply to say that it will not do the poor any good and that we will not have the class war of the courts fought over again.
What the right hon. Gentleman said on Amendment No. 11 is a bitter disappointment to us. As my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) said upstairs, the loss of the breadwinner is in many cases more serious to a child than the loss of a limb. Since an admitted exception has been made by the Chief Secretary to the common spending unit rule in one case, we cannot see why it should not be made in the other case.
Although I do not think that it is worth spending the time, I could explain the reason for the word "disabled". Once again, the right hon. Gentleman may not know that since Gourlay's case the courts have done their best in awarding damages in the case of the disabled breadwinner to say that the child has a direct damage caused by the disablement of the breadwinner and have, therefore, awarded the damages to the child as well as to the disabled person and have split it in that way, with an eye to the non-aggregation of tax under the old dispensation.
Amendment No. 43, which the Chief Secretary did not mention, seeks to relieve aggregation in the case where the parent has no control whatever over the income of the child. The common case is where the child has left the home and has set up its own home. If it marries, it is free of aggregation, If, however, it has not married when it is 17, 18, 19 or 20 and has gone off, it can do so in such a way that the law as proposed is not merely unjust, but simply unworkable, 1239 because in many cases the parent simply cannot find out what the child is getting.
As we instanced upstairs, in many cases where the home is, perhaps, an undesirable one, where one of the parents is a bad influence on the child, either a grandparent or a stranger may make a settlement on the child on condition that he lives away from home. That is not at all an uncommon state of affairs. The parent is, nevertheless, to have his income aggregated with such income even though the child has left the common spending unit for two or three years.
This is quite unworkable apart from being unjust. Nevertheless, the Chief Secretary is so wedded to his unit—as one of my hon. Friends has been good enough to remind me, the unit is similar to the Hindu undivided family, which is the only comparable taxation unit known, I believe, in the modern world—that even in cases like that, where the parent has no means of knowing and no control over the income, there is to be this ludicrous aggregation. I am not surprised that the Chief Secretary did not mention it, because there is no defence.
Finally, I will try to deal with the suggestion that, somehow, this is merely an anti-rich device aimed at the rich. Upstairs in Committee, we moved an Amendment to exempt from aggregation the first £115 of any income that someone under the age of 21 might have. That is a fairly modest figure. I should have thought it fairly widespread, not throughout the whole population, but in a substantial part of the population, that someone of 19 or 20 may have £115 a year of his or her own. We asked what that would cost and the Chief Secretary said:This Amendment would reduce the revenue which would come from aggregation by about half."—[OFFICIAL REPORT, Standing Committee A, 20th May, 1968; c. 1046.]In other words, of the £25 million, £12,500,000 is coming from infants under 21 who have something like £115 a year. Today we have had another similar example.
The hon. Member for Colne Valley (Mr. Richard Wainwright) moved an Amendment to relieve a much larger sum, £500, and it was said that that would cost £20 million or £25 million. If one analyses these figures, and considers the idea that this is something which will hit 1240 the very rich, this is nonsense. It is going deeper into the population, much deeper than we realised and much deeper than the Government let on.
This has been a miserable Clause. Apart from the thalidomide baby case, the Government have not given an inch. We are bitterly disappointed, and I suggest to my hon. Friend the Member for Hendon, South that he should press this Amendment to a Division.
§ Sir H. Lucas-Tooth
In moving this Amendment I said that varying trusts and orders was difficult. I am obliged to my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) for reminding me that nowadays it is easier, but I think he will agree that it is still a very expensive business and these Amendments all relate almost entirely to relatively poor people affected by this provision. They affect poor families who are obliged to make payments under orders or arrangements made at a time of divorce. A great many such orders are made in many relatively humble families. The attitude of the Chief Secretary has been one of complete negation. He has somehow simultaneously adopted the parts of Scrooge, Bill Sikes, and Dracula—an almost impossible performance, but he has achieved it. In the circumstances we can only show our extreme protest by voting.
§ Mr. Iain Macleod (Enfield, West)
I think it right to ask the Chief Secretary to say a few sentences at least about Amendment No. 43 which he ignored entirely. He knows very well that we on this side, as we showed upstairs, regard Clause 15 and Schedule 8 as bitterly offensive. We have made clear that we will have no part in it. I do not argue that point now. We have put three Amendments before the Committee on this Recommittal stage and they have been excellently explained and supported by my hon. Friends. On Amendment No. 10 we believe that it is wrong to overturn the orders of the courts made before Budget day. We know that the Chief Secretary has had representations from the judges against the Clause, and we think that he is making a grave mistake, but at least he answered that point.
On Amendment No. 11 I am appalled that the Chief Secretary could not go any 1241 distance towards meeting the tragedy that falls upon a family when the breadwinner is killed. I repeat what I said upstairs. The loss of the breadwinner is a greater hardship to the family, and indeed to the child, than the loss of a limb to that child. It is almost inconceivable that, where the breadwinner is killed, and compensation, if there can be compensation for that tragedy, is awarded by the court, or under a settlement to the child, we should meanly scrape away some of the benefit towards the Treasury. It is appalling that he has not been able to go further, but at least he answered that.
He made no reference to Amendment No. 43, and I ask him, as a matter of courtesy to the Committee—he is always most courteous, and I have always acknowledged this—to give some sort of answer on Amendment No. 43.
Let me put the point very briefly. Amendment No. 43 to Schedule 8 says, in effect, that whatever may be the merits of this concept of the common spending unit, if the money be not available then it should not be aggregated. It seems to me to be a proposition absolutely incontestable both in logic and in law. It is not difficult to think of illustrations in which this can happen. The most obvious one is of a grandparent who for some reason is disappointed in his son or his daughter and who leaves all the money he has one generation down to a grandchild, in the hope that that boy or girl will prove worthy of his life savings. There must be any number of cases like this.
As my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) says, if that child leaves the family home at 19, not being married and not in a full-time occupation, in other words falling under the Clause, the Clause and the Schedule say that that money shall be aggregated with that of the parent. It is not in any conceivable way available to the parent to spend, and it cannot be treated as the income of the family or, if the Chief Secretary prefers it, of the spending unit. It may be a family by courtesy only, in the sense that I have given. It is in no sense a common spending unit.
I ask the Chief Secretary, if he would, very briefly to refer to Amendment No. 43. We will vote on this, but it is a 1242 matter to which we attach such importance that I must ask him to give us the benefit of his views why Amendment No. 43 should also be rejected.
§ Mr. Diamond
I am grateful to the right hon. Gentleman for giving me an opportunity to say another word on Amendment No. 43 which I acknowledge I omitted to deal in answer to the hon. Member for Beckenham (Mr. Goodhart). One does not know on what grounds an Amendment is moved until one hears what is said. The hon. Member for Beckenham adduced arguments which were not valid, and I regret to say that, instead of controverting the arguments, it slipped my mind.
The right hon. Gentleman referred to the difficulty where trust income is tied up in such a way that it is not immediately available to the parent, and yet it is income of the child for Income Tax purposes, and therefore would be aggregated with the parent's income, the parent being called upon to pay tax on the basis of aggregation, although the parent is not able to handle and to receive the trust income money. In those circumstances, the remedy is for the parent to recover the additional tax payable from the trustees.
It was because the case was moved on that basis that I thought that that was the point, and, as I have explained, it is not a valid basis—
§ Sir H. Lucas-Tooth
The right hon. Gentleman said that the father will be able to recover the additional tax payable. Does that mean the whole of the additional tax payable—in other words, the top slice—or only a proportion? I think that the position is that the father might have to pay a very substantial amount out of his own pocket, because it would put up his rate as well.
§ Mr. Diamond
If the hon. Gentleman refers to the Schedule, he will see the words used there and that, in effect, what I have said is accurate.
§ Mr. Diamond
It is no use the hon. Gentleman saying " Which is it? " as if one can define the answer in one word on all the possible cases coming before the Inland Revenue. I have referred the hon. Gentleman to the Schedule. The 1243 purpose of the Amendment, as it makes clear, is to provide that there shall not be aggregation where the income was not available to be spent by the parent or on the parent's behalf. I have explained that the remedy is that the additional tax payable can be claimed from the trustees. If the hon. Gentleman considers the matter carefully, I think that he will realise that there is no problem which need cause him anxiety.
The hon. Member for Beckenham and the right hon. Member for Enfield, West
§ have now drawn my attention to a different set of circumstances. It must be extremely rare that there is a cessation of the family unit because the family unit has, in effect, split up into two units. I say at once to the right hon. Gentleman that I had not considered that situation, and I will be glad to consider it immediately.
§ Question put, That the Amendment be made:—
§ The Committee divided: Ayes 122, Noes 169.1245
|Division No. 222.]||AYES||[10.53 p.m.|
|Allson, Michael (Barkston Ash)||Hiley, Joseph||Percival, Ian|
|Astor, John||Holland, Philip||Pink, R. Bonner|
|Baker, Kenneth (Acton)||Hornby, Richard||Pounder, Rafton|
|Baker, W. H. K. (Banff)||Hunt, John||Powell, Rt. Hn. J. Enoch|
|Beamish, Col. Sir Tufton||Hutchison, Michael Clark||Pym, Francis|
|Bell, Ronald||Iremonger, T. L.||Renton, Rt. Hn. Sir David|
|Bennett, Sir Frederic (Torquay)||Jenkin, Patrick (Woodford)||Rhys Williams, Sir Brandon|
|Berry, Hn. Anthony||Jones, Arthur (Northants, S.)||Rodgers, Sir John (Sevenoaks)|
|Biffen, John||Jopling, Michael||Rossi, Hugh (Hornsey)|
|Birch, Rt. Hn. Nigel||Joseph, Rt. Hn. Sir Keith||Royle, Anthony|
|Black, Sir Cyril||Kershaw, Anthony||Russell, Sir Ronald|
|Blaker, Peter||King, Evelyn (Dorset, S.)||Scott-Hopkins, James|
|Boardman, Tom (Leicester, S.W.)||Kirk, Peter||Sharples, Richard|
|Bossom, Sir Clive||Knight, Mrs, Jill||Shaw, Michael (Sc'b'gh & Whitby)|
|Boyle, Rt. Hn. Sir Edward||Lancaster, Col. C. C.||Sinclair, Sir George|
|Brinton, Sir Tatton||Lane, David||Smith, Dudley (W'wick & L'mington)|
|Bruce-Cardyne, J.||Lubbock, Eric||Smith, John (London & W'minster)|
|Buchanan-Smith,Alick(Angus,N&M)||MacArthur, Ian||Stainton, Keith|
|Burden F A.||Mackenzie,Alasdair (Ross&Cron'ty)||Stoddart-Scott, Col. Sir M. (Ripon)|
|Campbell, B. (Oldham, W.)||Maclean, Sir Fitzroy||Summers, Sir Spencer|
|Campbell, Gordon (Moray & Nairn)||Macleod, Rt. Hn. lain||Taylor, Frank (Moss Side)|
|Clegg, Walter||McMaster, Stanley||Temple, John M.|
|Crosthwaite-Eyre, Sir Oliver||Maddan, Martin||Thatcher, Mrs. Margaret|
|Crowder, F. P.||Maude, Angus||Tilney, John|
|Dalkith, Earl of||Maxwell-Hyslop, R. J.||Turton, Rt. Hn. R. H.|
|Dean, Paul (Somerset, N.)||Maydon, Lt.-Cmdr, S. L. C.||van Straubenzee, W. R.|
|Eden, Sir John||Mills Stratton (Belfast, N.)||Vickers, Dame Joan|
|Errington, Sir Eric||Miscampbell, Norman||Wainwright, Richard (Colne Valley)|
|Eyre, Reginald||Montgomery, Fergus||Walker, Peter (Worcester)|
|Farr, John||More, Jasper||Walters, Dennis|
|Fisher, Nigel||Morgan, Geraint (Denbigh)||Ward, Dame Irene|
|Fletcher-Cooke, Charles||Munro-Lucas-Tooth, Sir Hugh||Webster, David|
|Gilmour, Ian (Norfolk, C.)||Nabarro, Sir Gerald||Whitelaw, Rt. Hn. William|
|Gilmour, Sir John (Fife, E.)||Nicholls, Sir Harmar||Williams, Donald (Dudley)|
|Cower, Raymond||Noble, Rt. Hn. Michael||Wilson, Geoffrey (Truro)|
|Grant, Anthony||Nott, John||Winstanley, Dr. M. P.|
|Grimond, Rt. Hn. J.||Onslow, Cranley||Wylie, N. R.|
|Harrison, Col. Sir Harwood (Eye)||Osborn, John (Hallam)||Younger, Hn. George|
|Hawkins, Paul||Page, Graham (Crosby)|
|Heald, Rt. Hn. Sir Lionel||Page, John (Harrow, W.)||TELLERS FOR THE AYES:|
|Heseltine, Michael||Pardoe, John||Mr. Hector Monro and|
|Higgins, Terence L.||Peel, John||Mr. Humphrey Atkins.|
|Abse, Leo||Bishop, E. S.||Dalyell, Tarn|
|Albu, Austen||Blackburn, F.||Davies, G. Elfed (Rhondda, E.)|
|Allaun, Frank (Salford, E.)||Boardman, H. (Leigh)||Davies, Ifor (Gower)|
|Alldritt, Walter||Booth, Albert||Dell, Edmund|
|Anderson, Donald||Braddock, Mrs. E. M.||Dempsey, James|
|Archer, Peter||Brooks, Edwin||Dewar, Donald|
|Armstrong, Ernest||Brown, Bob(N'c'tle-upon-Tyne, W.)||Diamond, Rt. Hn. Jonn|
|Atkins, Ronald (Preston, N.)||Buchanan, Richard (G'gow, Sp'bum)||Dickens, James|
|Atkinson, Norman (Tottenham)||Cant, R. B.||Dobson, Ray|
|Bacon, Rt. Hn. Alice||Carter-Jones, Lewis||Doig, Peter|
|Barnett, Joel||Coe, Denis||Driberg, Tom|
|Beaney, Alan||Coleman, Donald||Dunn, James A.|
|Bence, Cyril||Concannon, J. D.||Dunnett, Jack|
|Benn, Rt. Hn. Anthony Wedgwood||Conlan, Bernard||Dunwoody, Mrs. Gwyneth (Exeter)|
|Bennett, James (G'gow, Bridgeton)||Cullen, Mrs. Alice||Eadie, Alex|
|Edwards, William (Merioneth)||Jones, J. Idwal (Wrexham)||Park, Trevor|
|Ellis, John||Judd, FranK||Parker, John (Dagenham)|
|English, Michael||Kerr, Dr. David (W'worth, Central)||Parkyn, Brian (Bedford)|
|Ensor, David||Kerr, Russell (Feitham)||Pavitt, Laurence|
|Evans, loan L. (Birm'h'm, Yardley)||Lawson, George||Peart, Rt. Hn. Fred|
|Faulds, Andrew||Leadbitter, Ted||Pentland, Norman|
|Fitch, Alan (Wigan)||Lector, Mist Joan||Perry, Ernest G. (Battersea, S.)|
|Fletcher, Ted (Darlington)||Lewis, Arthur (W. Ham, N.)||Price, William (Rugby)|
|Foley, Maurice||Lewis, Ron (Carlisle)||Probert, Arthur|
|Foot, Michael (Ebbw Vale)||Loughtin, Charles||Rankin, John|
|Ford, Ben||Lyon, Alexander W. (York)||Reet, Merlyn|
|Forrester, John||Lyons, Edward (Bradford, E.)||Roberts, Albert (Normanton)|
|Freeson, Reginald||McCann, John||Ross, Rt. Hn. William|
|Galpern, Sir Myer||MacDermot, Niall||Sheldon, Robert|
|Garrett, W. E.||Macdonald, A. H.||Silkin, Rt. Hn. John (Deptford)|
|Cordon Walker, Rt. Hn. P. C.||McGuire, Michael||SiIverman, Julius|
|Gourlay, Harry||Mackintosh, John P.||Small, WiIIiam|
|Gray, Dr. Hugh (Yarmouth)||Maclennan, Robert||Snow, Julian|
|Gregory, Arnold||McMillan, Tom (Glasgow, C.)||Spriggs, Leslie|
|Grey, Charles (Durham)||McNamara, J. Kevin||Taverne, Dick|
|Griffiths, Eddie||MacPherson, Malcolm||Tinn, James|
|Griffiths, Will (Exchange)||Mahon, Peter (Preston, S.)||Urwin, T. W.|
|Hamilton, James (Bothwell)||Manuel, Archie||Varley, Eric G.|
|Hamling, William||Maxwell, Robert||Wain Wright, Edwin (Dearne Valley)|
|Hannan, William||Mendelson, J. J.||Walker, Harold (Doncaster)|
|Harrison, Walter (Wakefield)||Milan, Bruce||Wallace, George|
|Haseldine, Norman||Milne, Edward (Blyth)||Watkins, Tudor (Brecon & Radnor)|
|Hazell, Bert||Mitchell, R. C. (S'th'pton, Test)||Wells, William (Walsall, N.)|
|Heffer, Eric S.||Morgan, Elystan (Cardiganshire)||Whitaker, Ben|
|Herbison, Rt. Hn. Margaret||Morris, Charles R. (Openshaw)||White, Mrs. Eirene|
|Homer, John||Moyle, Roland||Wilkins, W. A.|
|Houghton, Rt. Hn. Douglas||Neal, Harold||Williams, Alan Lee (Hornchurch)|
|Howarth, Robert (Bolton, E.)||Newens, Stan||Williams, W. T. (Warrington)|
|Howie, W.||Noel-Baker,Rt.Hn.Philip(Derby,S.)||Willis, Rt. Hn. George|
|Huckfield, Leslie||Oakes, Gordon||Wilson, William (Coventry, S.)|
|Hughes, Roy (Newport)||O'Malley, Brian||Woodburn, Rt. Hn. A.|
|Hunter, Adam||Orme, Stanley||Woof Robert|
|Hynd, John||Oswald. Thomas||Yates, Victor|
|Irvine, Sir Arthur (Edge Hill)||Owen, Dr. David (Plymouth, S'tn)|
|Jackson, Colin (B'h'se & Spenb'gh)||Owen, Will (Morpeth)||TELLERS FOR THE NOES:|
|Jackson, Peter M. (High Peak)||Page, Derek (King's Lynn)||Mr. Joseph Harper and|
|Jenkins, Rt. Hn. Roy (Stechford)||Palmer, Arthur||Mr. Neil McBride.|
|Johnson, James (K'ston-on-Hull W.)||Pannell, Rt. Hn. Charles|
§ Mr. J. Grimond (Orkney and Shetland)
On a point of order. I understand that it was agreed by the Chair that there could be a Division on Amendment No. 13. I take it that if the Motion is agreed to that Amendment will be voted on as the first business at the next Sitting?
§ The Chairman
The right hon. Member is correct. The appropriate time for a Division on Amendment No. 13 will be after we have disposed of Amendments Nos. 14, 15 and 16.
§ Question put and agreed to.
§ Committee report Progress; to sit again Tomorrow.