HC Deb 18 November 1970 vol 806 cc1245-87
The Chairman

Before I call the hon. Member for Rowley Regis and Tipton (Mr. Archer) to move the next Amendment, I would remind the Committee that we shall be discussing with it Amendments Nos. 21, in page 2, line 4, leave out: 'but shall not in any case exceed £3', and No. 22, in line 4, at end insert: 'or such higher sum as in the circumstances of the case may be approved by the Supplementary Benefits Commission'

Mr. Peter Archer (Rowley Regis and Tipton)

I beg to move Amendment No. 20, in page 2, line 2, leave out 'one half 'and insert 'two thirds'.

As I understand it, all the Amendments in this group raise essentially the same issue. It is a question where the balance should be drawn between two converse dangers. If the sum paid to the recipient is too high he has no incentive to work harder, no incentive to get a better job and no incentive to press for a fairer wage; if the sum paid to him is too low, those who are intended to benefit continue to exist below the subsistence level.

My mind is not made up beyond the possibility of reconsideration as to the correct proportion or the correct formula. I am hoping that this discussion will help to clarify my mind. But I hope that the Minister will not be too disappointed if we do not exactly exude sympathy from these benches, because his dilemma is of his own making. If a Government choose to tackle the problem in this way instead of in the way in which we understood was the original election promise they build into the whole framework of the Bill a dilemma precisely like this.

Leaving aside the objections, one would have thought that the natural formula would be to say that incomes would be made up to what in the Bill is called the prescribed amount and what many of my constituents would think of as the breadline. The arguments against it may be stated in two ways. The first is the way adopted by the hon. Member for Kensington, South (Sir B. Rhys Williams) who, for unavoidable reasons, is not present today. The way in which he put it was that this was a poverty surtax. He said that if a loss of 8s. 6d. in the pound on an average or higher income is a disincentive to earning more, at the lower end a subsidy of 10s. in the pound on money that is not earned must, ipso facto, be a greater disincentive.

I appreciate that the hon. Member for Kensington, South, whose compassion is not in dispute, was using this as an argument against this method of tackling the problem, but there is a danger that it could be real ammunition in the armoury of the uncompassionate. It could emerge as a repetition of the old argument that the rich will not work unless we make them richer and the poor will not work unless we make them poorer. I should be more impressed by that way of stating the argument if we had more information about the effects of disincentives. There is a complete dearth of research in this matter, and one contribution which the hon. Member's Department might make to this question would be to initiate some research into the effect of the alleged incentives and disincentives on how hard people work.

I know many people who do not like paying income tax, and I do not argue vigorously with them about it. I do not know many people—if I can think of one—who actually work less hard because of the tax they pay; indeed, I could point to some who work harder because they want to make up for what they consider to be the difference between what they earn and what is left to them. In my submission there is little evidence of a disincentive effect of this kind. I do not believe that many people in the lower income brackets enjoy working for a lower wage simply in order that that wage shall be made up.

A more impressive way of stating the objection is that wages are likely to become more depressed if public funds are used to shoulder a burden that should properly fall on the employer. I find that argument more worrying. Public funds are a sanctified commodity when it is suggested that they should be used to benefit the public generally, or a specific section of the public in the lower income brackets. Public funds cease to be sanctioned only when they are being used as a substitute for a burden that should fall on industrial management.

That is the real objection that is summed up in the Speenhamland argument. I was startled to discover that I was probably one of the earliest to give this argument the label "Speenhamland". I discovered with a shock that I had mentioned it in the House on 24th May, 1966. If anybody wants to initiate research, he will find what I said at column 393 in HANSARD. Basically this is a way of restating a substantially wider argument—whether it is justifiable deliberately to depress conditions to create a public outcry for something better.

My hon. Friend the Member for Brentford and Chiswick (Mr. Barnes) said yesterday that in his view the Bill was not in the long-term interests of the poor. I agree, but I cannot find it in my heart to say that we should oppose the Bill in the absence—from our point of view—of anything better. We are condemned, in the interests of those whom the Bill seeks to benefit, at least to try to improve it as best we can. We must start with the Bill that we have.

I cannot bring myself to advocate that one generation of individuals should be deliberately condemned to suffer in order that future generations may benefit. It is too easy to say that that would be a price worth paying when we in this House do not have to pay it. If working conditions and wages for the future are to be improved the responsibility lies upon all of us, and it would be too easy, and grossly unfair, to push it off on to the shoulders of those who have burdens enough already.

If those two arguments are not held to have sufficient weight we are left with what appears to be an unanswerable argument for giving higher benefits to people who are obviously in need of relief. If the arguments are not held to be overwhelming—and at the moment I should require convincing about that—in my submission we should bring these families, if not into affluence, at least closer to the subsistence level.

Mr. John Boyd-Carpenter (Kingston-upon-Thames)

I will not, if he will permit me, follow the hon. Member for Rowley Regis and Tipton (Mr. Peter Archer) into the intriguing arguments about the disincentive effects of high taxation. If I did, I should take up a good deal of the time of the Committee. I want to address myself solely to the point raised in Amendment No. 21—the £3 limit. My hon. Friend the Under-Secretary will, I am sure, recall that on Second Reading I raised this matter and asked him certain questions about it. In particular, I then put the point, which still seems to me to be material, that the overall limit of £3 runs counter to what I understand to be the general principle of the Bill.

That principle appears to be that one takes the prescribed amounts, varying, very properly, with the size of the family, and then makes up half the difference between the family income and the prescribed amount. That is a comprehensible formula. I know that the hon. Member for Rowley Regis and Tipton, in respect of his own Amendment, thought that half was the wrong proportion, but it is at least a rational and understandable principle.

But when one superimposes on that principle an arbitrary limit of a particular figure—and not a very high figure—of £3, one seems both to cast some doubts on the main principle of the Bill and, I believe—I shall be interested to hear what my hon. Friend says, of course—to inflict a considerable measure of particular hardship on certain categories.

I would imagine—here again, I am willing to hear what my hon. Friend has to say—that the £3 limit would bite hardest in the case of the larger families, because the prescribed amount rises by £2 per child, so that the likelihood of a gap of one-half the difference between the prescribed amount and the family income obviously becomes greater as one moves into the larger families. But these are precisely the families where the greatest hardship is likely to be found.

On Second Reading I asked my hon. Friend what it would cost to abolish the £3 limit and simply apply the formula of the Bill without the limit. I do not complain of the fact that when winding up, because he had to encounter certain difficulties, he was not able to answer that question. In the more peaceful atmosphere of this afternoon, I hope that he may be able to make up for that omission.

The Committee would accept, I think, that no one who has served at the Treasury is likely to advocate any proposal, however sound, without knowing the cost; so I should like to know the cost. I venture, with some caution, to suggest that it might not be very large, but I am more than likely to be wrong, and I would like to have the figure. I gather that steps are now being taken to obtain it.

This is what is important, a departure from the principle of the Bill. My hon. Friend, with his habitual courtesy, referred to this matter in the winding-up speech, although, while his courtesy was up to his habitual standard, his lucidity was somewhat below it. I sympathise with him. The Committee may remember that he was subjected, in terms of decibels at any rate, to a formidable onslaught from the front bench below the Gangway opposite, and even an experienced Parliamentarian like my hon. Friend possibly finds these things disconcerting.

4.15 p.m.

This is what my hon. Friend said: I turn now to the questions put to me by my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), especially that concerning the £3 maximum proposed. The main reason is the incentive that it provides. I do not follow that. I suppose that the point on incentive is the difference between the family income of earnings supplemented by F.I.S. compared with the family income on supplementary benefit. But, of course, family income if one is on supplementary benefit rises with the number of one's children because of the allowance per child. Therefore, I do not follow why this limitation has such importance from the point of view of incentive, at any rate from that angle.

My hon. Friend went on: Equally, we are anxious to make the full-time work test as simple as possible and to treat one-parent families as generously as we can. With all respect, interposing this arbitrary limit does not make the test simpler. Marginally, I suppose it makes it more complicated, because there is one more process which has to be completed—does half the difference between family income and prescribed amount come to more than £3?

So I do not see my hon. Friend's argument about simplicity and treating one-parent families as generously as we can. If the one-parent family is, as is sometimes the case, the large family, this treats it less generously than if the limitation were not there.

My hon. Friend went on: Equally, it is necessary to have some maximum, otherwise anyone who can show that he or she is working full time will be able to claim."—[OFFICIAL REPORT, 10th November, 1970; Vol. 806, c. 334.] With respect, I do not follow that. As I understand the Bill, no one will be able to claim unless his family income is less, and less by at least 10s., than the prescribed standard. So here again, although all the ideas that my hon. Friend put forward—incentive, simplicity, need to exclude everyone in full-time work from claiming—are admirable ideas, I am unable to follow from that how those ideas are helped and supported by this limitation.

The limit seems to me to bite most hard on the larger family. That is precisely the type of family which would have gained most had my right hon. Friend decided to proceed on the basis of using the family allowance instrument: the bigger the family, obviously the larger the family allowance.

My right hon. Friend gave what he regarded as good reasons—whether one accepts them or not, they are, as one would expect from him, logical and arguable reasons—why on this occasion he would not proceed by way of family allowances. But I should have thought that that decision to some extent imposed on him a duty to ensure that those who would stand to gain most from use of the family allowance instrument should not be unduly handicapped or kept back by the limitation on the use of this instrument.

Therefore, I must say to my hon. Friend—I shall be very happy to listen to his argument—that at the moment I am very unhappy about the £3 limit. He talked about this being a test of good faith, and I agree with him. But surely one should not therefore impose, without better reasons than we have so far heard, a limitation which diminishes the good which this measure will undoubtedly do in the case of some of the hardest hit families.

Mr. John Pardoe (Cornwall, North)

I want to direct my attention primarily also to Amendment No. 21, in my name and the names of the hon. Lady the Member for Hitchin (Mrs. Shirley Williams) and her hon. Friends. The fact that my name was top of the list really means that I put mine in first and they put theirs in after, and that great minds thought alike. It is one of the advantages of being an outsider in this House that I do not have the weight of numbers to carry and I do not have to get agreement to any Amendment I put down—except, of course, the agreement of the Government, which I covet on this occasion.

My Amendment deals with the £3 limit. As everyone has calculated, this will clearly affect the larger family, because, after all, taking the family with one child, the prescribed amount is £15. It is difficult to imagine the situation in which the difference, when halved, could result in a figure of more than £3 and in which case they would lose by it. One doubles the £3 to get the £6, and then one has to subtract that from the prescribed amount to find the point at which the family's income would actually lose money as a result of the £3 limit. For a family with one child, the prescribed amount is £15. If one takes £6 off that, one gets down to £9, and that is the point at which they would then lose something by the £3 limit. But there can be very few families with one child whose resources are as low as that—thank goodness.

Going up the scale a little to a family with two children, the prescribed amount is £15 plus £2, a total of £17. The resources would have to be £11 before they would lose out as a result of the £3 limit. I think my calculations are right. The Parliamentary Secretary will amend them if they are wrong. I got a little muddled as to which side of the resources one adds family allowance, but no doubt he will sort out the mathematics. For the family with six children, by my calculations we have a figure of £15 plus five times £2, making a total of £25. Then the resources would have to be £25 less £6. It is easy to imagine a family with six children having total resources of £19 or less. If its resources were less than £19, it would lose out by the £3 limit. This is what the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) meant when he said that it is the larger family who will lose.

What about, say, the family of six children with resources of £16? They are below the prescribed amount by £9. Applying the figure of 50 per cent., they ought to get £4 10s. In fact, they will only get £3. This seems an injustice.

I agree with the right hon. Gentleman, that having read through the points that the Minister made in his reply to the Second Reading debate, I cannot say that he is on very strong ground, unless he was to argue that it was a question of cost, and I cannot think that the cost would be sufficient to make it very strong ground. But if the Government were of a particularly cheeseparing mind, as no doubt they are, then I imagine they want to stick to the £8 million. It may cost a few hundred thousands or even a million pounds to accept the Amendment.

The Minister said that the main reason for the limit was the incentive reason. I do not accept that argument. I do not want to go into details on the question of financial incentives. It is an open debate, which runs the way one's political prejudices run. Nobody can prove the argument, but it will be canvassed every time we debate taxation or social security. We may wish to have some incentive for people who are, say, out of work—which does not include these people—so that we can overcome the problem of political unacceptability by the public.

Some people, by no means Fascist in their inclinations, are worried when they see people out of work getting more, or nearly as much, as they who are working. This is a big problem in all social security benefits. It does not apply to this. But if a family with six children were getting a supplement of £5 or £6 a week, and therefore a substantial income compared with other people in the road, and the other people knew and were in a better-paid job but getting in total a lower income political unacceptability would follow. This is probably the reason for the relationship between the supplement and supplementary benefit. There are other ways to overcome the resulting tensions and problems, however. The argument about financial incentive or disincentive has not been sufficiently settled to be used as an argument for keeping the £3 limit.

Oother reasons could be adduced for the £3 limit. The Under-Secretary has not adduced them yet, though he may do so. It may be part of the Government's new population policy. I am probably in a minority of one but I believe that the time is coming when we must seriously discuss population policy. One cannot stress too often that there is absolutely no connection between the level of financial incentive for having children and the actual number of children in a family. If there were, middle-class parents ought to be breeding ad lib, because their tax incentive for having more children is astronomically greater than the family allowance, supplementary benefit, or any of the other benefits, particularly this.

I do not see why the Government are so intent on applying the limit. It would be a guide to their sense of good faith if they were to accept the Amendment. In view of the powerful arguments from his right hon. Friend, I hope that the Under-Secretary will accept the Amendment.

Mr. Timothy Raison (Aylesbury)

I dare to cross swords with my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). It is a daring thing to do on an issue concerned with social security. I shall not go too far in committing myself to saying that he is wrong. I shall at least put to the Under-Secretary a question which I suspect is at the heart of this problem of the £3 maximum limit.

It is possible that by the time people have received family incomes supplement, when they have large families—it was large families my right hon. Friend was particularly concerned about—and by the time they have also received certain rebates or benefits, whatever one likes to call them, which would not be available to people with larger incomes, such as free school meals, free prescriptions, free dental treatment, spectacles, and so on, one is getting close to the situation where some on ostensibly a rather low income are having a higher net income than people on about £24 per week.

If the accumulation of these benefits is such that somebody with £14 a week income is as well off as somebody with £24 a week—assuming that he has a large family, for it would not apply otherwise—that is essentially a nonsensical situation which cannot be defended. It is right therefore to have this £3 maximum.

I do not want to deal with disregards now, but I have observed a reply to a Question in which the Secretary of State said that for the moment he would disregard disregards.

Mr. Tavern

Why does the hon. Member think that extending the limit beyond £3 will make any difference? Within the £3 range, there are now people who will lose not only 10s. of F.I.S. for every pound they earn, but other benefits clustered round it. The total effect of the scheme will be thoroughly disincentive as it stands.

Mr. Raison

Am I right in assuming that when my right hon. Friend said that he would disregard disregards for the time being, that did not apply to the sort of things I have mentioned, for instance, rebates on spectacle charges, dental charges and so on, which are of a slightly different category from things like family allowances and other more direct cash benefits? I do not see that the hon. and learned Gentleman's argument destroys the essential of mine. It seems to me that the limit is necessary to prevent the spread of what may already be a problem and that without the limit we shall get into a slightly ridiculous situation.

4.30 p.m.

Mr. O'Malley

I rise to speak on this group of Amendments with optimism in my heart. An Amendment on behalf of the Official Opposition has been supported by the hon. Member for Cornwall, North (Mr. Pardoe) from the Liberal benches, and we have had the formidable support of the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). But it is not only for those reasons that I am optimistic. I thought that the Under-Secretary was somewhat sensitive in a previous debate when discussing the sum of £30 million. In parentheses, perhaps I should say, with great friendship, that one cannot be that sensitive if one is a Member of the Conservative Government.

However, it is not what the Under-Secretary says, but what the Prime Minister says, and it is the Prime Minister of whom we must take account for these purposes. The Prime Minister wrote to Mr. Frank Field of the Child Poverty Action Group on 1st June, 1970: As Mr. Macleod said on 15th April, an increase of 10s. in family allowances would cost £30 milion a year using the claw-back procedure. In a letter to the Prime Minister dated 2nd November, Mr. Field pointed out: You will remember that in this year's budget debate lain Macleod stated that as the Government had £220 million to return to the taxpayer, about £30 million ought to have gone to low income families in the form of increased family allowances. As we are now discussing a matter seriously and not trying to make party points, I think that we may take it that the Government, anxious as they are to deal with family poverty, would willingly go beyond the total of £8.6 million envisaged by the Bill; so we have some room for manoeuvre and if we can improve the Bill, financial cost will not disbar Amendments.

Mrs. Jill Knight (Birmingham, Edgabaston)

Would the hon. Gentleman accept that this is an argument as to how best to help, as to whether F.I.S. helps best, or family allowances help best? It is an argument as to which way is more effective.

Mr. O'Malley

I would not accept that. I find it hard to conceive of a situation, and I suppose that the public would also find it hard, where to be given £30 million is not somewhat better than to be given £8.6 million. What I am saying is that if we are to distribute money as a result of the family income supplement principle, if we can distribute rather more money, there will be rather more money going to help the family poverty with which we are concerned.

I should like to consider some of the undesirable results which come from having a cut-off at £3. I can understand the reason for a provision limiting the payment to half the difference between income and prescribed means. I recognise the disincentive argument, although it is fair to say that my hon. Friend the Member for Hitchin (Mrs. Shirley Williams) and I dealt with this point on Second Reading. Is it possible to make a case, although I should like to say to my hon. Friend the Member for Rowley Regis and Tipton (Mr. Peter Archer) that it is largely an unproven case, more an assessment based on no solid research, for believing that there would be a disincentive effect if the figure of one half were replaced by the whole amount.

However, as the right hon. Member for Kingston-upon-Thames pointed out, that does not apply to the £3 cut-off. I say that advisedly, in spite of what the hon. Member for Aylesbury (Mr. Raison) said. As the right hon. Gentleman said, the £3 cut-off runs counter to the general principles of the Bill and it has some undesirable side effects.

Let us take the example of a man with about national average earnings—using the out-of-date figures which we are employing in these debates—and with six children. Family poverty is clearly concentrated largely among the large families and it is worse among these families. A man with £12 a week and six children will be entitled to £4 18s. family allowances. The prescribed sum as laid down under the formula of Clause 2 is £25 and half of the difference is £4 1s. But instead of getting £4 ls., he will have the cut-off at £3. The net result will be that his net wage plus the family allowances plus FIS will be £18 18s. 4d., while the supplementary benefit would be £23 10s.

I do not want now to repeat the arguments that the Bill is creating a new poverty line below the supplementary benefit level but, with all the inadequacies of the Bill, when we are discussing it in detail in Committee, we should do everything we can to bring such a man's income as near as possible to the supplementary benefit level. If anyone starts to argue the necessity of the wage stop, the simple answer is that such a man is not unemployed, is not not working. Therefore, one should not use in this instance any of the theoretical arguments which have been used in favour of the wage stop principle.

If there is this difficulty for the man at £12 a week with six children, the argument is even stronger for the low paid widow. Let us take the example of a widow with two children and earning £9 a week, and there are plenty of such examples. She would have 18s. family allowance. Under the 50 per cent. formula of Clause 3(1), she would be entitled to £3 11s., but, as a result of the cut-off, she will lose 11s. I take it further and consider the position of the widow with six children who ought to be getting £5 11 s. but who would be losing £2 11s. under the cut-off formula.

As the right hon. Gentleman said, the cut-off bites, and bites hard, on the large family with low earnings.

A further criticism of the cut-off principle is that the same help is given in similar circumstances to people with very real differences in size of family. For example, it gives the same help to a widow—the point applies also to couples at the bottom of the scale, but I think that the majority in this connection would be widows—with a weekly wage of £9 and one child as to a widow with the same earnings but six children. Again, anyone with a weekly income of £11 would receive the same whether there were three or six children in the family, or at £12 a week whether there were four or six children in the family.

Since we are not this afternoon working strictly within the bounds of the £8.6 million, I must ask the Under-Secretary of State to consider this question most carefully. We on this side, as he knows, do not like the whole principle on which the Bill is based, but we genuinely wish nevertheless to try to improve it. We regard Amendment No. 21 as of value in that direction. It would give further alleviation to the problem of family poverty and it would remove some of the crudities introduced into the Bill by the £3 cut-off.

Mr. Albert Booth (Barrow-in-Furness)

I shall discuss Amendment No. 22, Sir Robert, and I trust that you will in due course afford me an opportunity formally to propose it.

The Chairman

Perhaps I should make clear to the hon. Gentleman now that I do not propose to call that Amendment for a Division.

Mr. Booth

Very well, Sir Robert; I understand.

There has been some difficulty apparent in our debate on these three Amendments because of the changing wages situation. When the Clause was drafted, no doubt, reference was made to the then existing wage rates and the incomes of lower-paid workers.

In an effort to meet that point and argue the case for better provision for people hit by the £3 limit, I have done some research on recent increases in wage rates of lower-paid workers. The increase of 25s. a week which was paid in the bacon-curing industry from 1st July this year raised the rate for grade 1 male workers to £14 18s. 4d. and for grade 3 workers to £13 15s. a week. The increase of 3 per cent. in railway shop-men's pay on 3rd August this year increased the weekly wage of a category 1 railway shopman to £15 4s. in areas outside Greater London. The increase of £1 a week for men in the wire and wire rope industries paid from 7th September this year increased the rate for winders to £12 1s. 2d. a week.

In considering the validity of these Amendments in the light of the latest wage movements, we must have figures of that sort in mind. One could take area rates also to bear the point out. For example, male jute workers in Dundee, who have a wage rate of their own following an increase in their general minimum time rates of 31s. a week in September, now have a weekly rate of £12 15s.

Families with earnings at that sort of level are the people who should benefit from the Bill if the aims claimed for it by the Government are achieved, yet people on those rates are the ones most severely hit by the £3 limit cutting off the amount of family income supplement which would otherwise be paid to them.

I take, for example, men on £13 a week, almost the same as the £12 15s. for the Dundee jute workers. If any of them have five children, they will have family allowances totalling £3 18s., making their wage plus family allowances £16 18s. Their prescribed amount under Clause 2 would be £23. The difference between their wage plus family allowances and the prescribed amount is £6 2s., and the £3 limit would apply, giving them £3 family income supplement, with £3 18s. family allowances and £13 weekly wage, totalling £19 18s.

4.45 p.m.

Let us suppose that a similar family next door has had the misfortune of having the principal wage earner out of work for some time, or even for a relatively short time, and their income is made up by supplementary benefit. That family will have an income of £21 a week, taking £3 rent and other allowances into account. Thus, in these cases, where there is undoubtedly poverty, the person who is working full time in industry has a total family income considerably smaller than that of someone on supplementary benefit.

I hope that the Committee will not think that I have been carefully selective in my choice of rates. One can find similar circumstances in other areas and sections of industry. For instance, there has recently been an increase in the flax-hemp preparing, spinning and weaving industry which has brought male tenters of 21 years and over up to £13 15s. 3d. a week. A pay increase to male workers in the paper box making industry from 9th September this year gave rates of between £14 16s. and £13 a week to men over 21, according to the categories of work which they do. In Bury the district rate for workers employed in the manufacture of cloth for mechanical purposes was increased in August to £13 8s. 4d. for male workers and £9 2s. for female workers. There are whole areas in this country where wage levels are primarily determined by low wage industries and in which many people with large families will be severely affected by the limitation on benefits.

Even within London, where there is a great demand for labour there are wage rates still applying at levels which, if earned by the father of a large family, would bring the £3 limitation into effect. The London Transport Executive—to its shame—on 3rd August brought the weekly payment to track cleaners to £15 3s. I say "to its shame" because the rate should have been raised further. How anyone with five children can live in London on £15 3s. a week I do not know.

I have already shown that the effect of the Bill as drafted is to put a family with five children on £13 a week wage in a considerably worse position than a similar family who rely on supplementary benefit. But even in the £15 range, there is still a limitation, even without the £3 applying, which makes a man in work worse off than another on supplementary benefit. A man on £15 a week with five children would have £3 18s. family allowances, making a combined family income of £18 18s. Under Clause 2, the prescribed amount for the family is £23, so the difference between wage plus family allowances and the prescribed amount is £4 2s. He would be entitled to £2 1s. family income supplement, giving him the sum of £20 19s., which is still below the supplementary benefit level. Although the £15 a week man receives less than the man on supplementary benefit, he does not receive a total amount as far below the supplementary level as the £13 man. Surely it is obvious that the £13 man, with five children, is more likely to be in desperate need of help. Therefore, this part of the Bill will work against the very purpose which the Government claim it is designed for, namely, to be selective in directing aid to where it is most severely needed. By any objective examination of current wage rates, there is a built-in contradiction in the Bill.

Therefore, the Committee must consider disincentive effects of a different kind to those considered up to now, namely, the disincentive to a man who, through no fault of his own, has been in receipt of supplementary benefit for a considerable time and is offered a job at a low wage. He cannot, as a responsible family man, take that job if it offers considerably less than he could get from supplementary benefit.

I have the greatest sympathy with any person who is put in that position, and I should be very loath to advise him that he should take a cut in income and go to work for low wages. I think that any hon. Member would be loath to give such advice. Faced with such a query from a constituent, and realising that what he needed was more income, one would be tempted to say to him, "Get one morning's work a week at £2 which will increase your income but will not cut down your supplementary benefit allowance." For a Bill to place hon. Members in such a position that they will seriously have to consider giving advice of that sort is very serious, and the Government should at least think again before we pass the Clause.

There is obviously a case for revising the Bill in respect of payments to families affected by the £3 family income supplement limit. Whatever objections I have to the Bill as a whole. I appeal to the Government to consider this part of it in particular because even by their own criteria it fails to meet its aim. There is neither natural justice nor logic in using public funds in a way which disadvantages the poorest workers while claiming to meet their special needs.

Mr. Hugh D. Brown (Glasgow, Provan)

The Committee has enjoyed listening to the sort of constructive speech which we expect to hear from my hon. Friend the Member for Barrow-in-Furness (Mr. Booth). Supported, oddly enough, by the right hon. Member for Kingston - upon - Thames (Mr. Boyd-Carpenter), my hon. Friend has flattered the Government. The argument revolves around the weakness of the £3 cut-off. We have not had any information from the Government on this matter, and so I had better not jump to conclusions, but I agree with the right hon. Member for Kingston-upon-Thames that the question of cut-off is the crucial weakness in the Bill.

It is generally accepted that the average amount of supplement likely to be paid is £1 per family. It is true that the limitation placed on people with larger families will be quite significant. It is impossible for us properly to consider the Clause and the Amendments without knowing a bit more about the resources which must be taken into account. This means thinking in terms of what will be counted as income and about whether provision will be made for disregards. Otherwise, the discussion must be confined to the very narrow point raised by the right hon. Member for Kingston-upon-Thames. I hope that we shall have some more information on this subject before we come to a conclusion on the Amendments.

Why should family allowance be included as part of income? No doubt there is a simple explanation, but it has escaped me. What resources will he taken into account? Clause 4(2)(c) refers to any income not consisting of money. What does that mean? I do not suppose that people in the jute, weaving, flax or bacon curing industries to whom my hon. Friend the Member for Barrow-in-Furness referred have any "perks". The agricultural labourer receives a wage of only £15. Will any of his "perks" be taken into account?

When dealing with national superannuation Measures, we have had long and weary discussions about what should be included as income for superannuation purposes. Will the arguments used then be used to exclude people on the ground that "perks" are part of income, although not wages in the direct sense?

I hope that we shall have a fairly wide-ranging debate on a matter about which we require much more information. I should like to know what thinking, if any, has been done about it and the reasons behind some of the provisions in Clauses 1 and 2 which cause us concern.

[Mr. E. L. MALLALIEU in the Chair]

Mr. Dean

We have had a very interesting debate on this important question of the prescribed limits and about whether there should be a cut-off point. All hon. Members who have spoken have admitted that very little is known about the possible effects of incentives, which are clearly relevant to the Amendments. The hon. Member for Rowley Regis and Tipton (Mr. Peter Archer), in his usual very fair way, admitted that his mind was open about the incentive or disincentive effect of what he was proposing, and he said that he would listen to the debate. The hon. Member for Cornwall, North (Mr. Pardoe) also mentioned that very little is known about the way in which his proposal would operate in practice with regard to the motivation for people who are, or might be, in full-time work. My hon. Friend the Member for Aylesbury (Mr. Raison) made the same sort of point, in this case in favour of a £3 limit.

5.0 p.m.

I freely admit that very little is known. What we know is that the families whom we are dealing with in the Bill are in full-time work. In spite of the fact that their earnings from full-time work are below the supplementary benefit level, they are in full-time work. In other words, they have a high motivation. It might well be said that were they to calculate, as we can calculate, the incentive or disincentive effect, they would not be in full-time work. It may well be, therefore, that there is a motivation operating here about which at present we know very little. One of the by-products of the scheme is that we hope to learn a great deal more about it than we know at present. The Government and I share the lack of knowledge which has been expressed in the debate. It suggests however, that, at least to begin with, we should proceed with caution.

The effect of Amendment No. 20, moved by the hon. Member for Rowley Regis and Tipton, would be to alter the taper from one-half to two-thirds. The immediate difficulty which might arise is that in so far as there is at present a taper of 50 per cent.—and, therefore, one could say that there is that amount of disincentive—the effect of the Amendment would be to increase it from 50 per cent. to 66⅔ per cent. On the point made by the hon. Member himself about disincentives, that may well be an argument against proceding that far, at least until we learn more from experience about the way in which the scheme is likely to work. That is one of the big problems of both the hon. Member's Amendment and also of Amendment No. 21 in the name of the hon. Member for Cornwall, North.

I hope, therefore, that the hon. Member will feel that it is better to keep the question under review, as my right hon. Friend has said that we firmly intend to do, to accept what, we admit, is something of a compromise figure—namely, 50 per cent.—to start with that and see how it works in practice; and if, in practice, we find that there are the hardship effects which have been mentioned in the debate and the disincentive effects—which may operate, but we do not know whether they will—are not operating, the figure can be altered in regulations under the Bill.

I turn to Amendment No. 21 concerning the removal of the maximum limit. The hon. Member for Cornwall, North made the point, and it was made also by my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), that one of the effects of having a limit is that it bears most hardly upon large families. I accept that this may be the effect. On the other hand, however, that does not follow, because the figure which matters most is the actual earnings of the family concerned. This is much more important in this connection than the number of children.

To give an example concerning the six-child family, the make-up level would be £25 of which family allowances would be £4 18s. and other income at most £20 2s. The shortfall to produce the maximum £3 family income supplement is £6. Thus the only families with six children who would benefit from a higher maximum would be those whose gross earnings were under £14 2s. I admit that the hon. Member for Rotherham (Mr. O'Malley) cited a family with under £14 2s.. I freely admit that families of that kind—they are not many in number, but I agree that they exist—would benefit from a higher maximum than is proposed in the Bill.

The other point that I should like to make is the reason why the limit has been specified. The main reason for it is that we feel it necessary to have a limit, otherwise there is a danger of abuse. I do not put it higher than that. My right hon. Friend the Member for Kingston-upon-Thames mentioned my somewhat telescoped argument on Second Reading and I apologise to him for not being able to answer all his points on that occasion. He will, I think, realise that time was short and some of my time on that occasion was taken up.

Mr. O'Malley

The hon. Gentleman says that there is a danger of abuse. Can he explain one thing about which I am not clear? What danger of abuse is there in not having a £3 limit which would not exist with a £3 limit for the income that a person gets under £3? I do not see that any new factor arises.

Mr. Dean

I am developing the point. I was suggesting that there is a danger of abuse if there is no limit. I do not put it higher than that. One of the things that could happen, for example, is collusion between a man and his employer. There could also be possible difficulties with some kinds of self-employment. It is largely to guard against this and the additional checking and controls which would be required that we felt it prudent to have a limit in the scheme. It may well be that as we gain experience in practice of the working of the scheme, either the limit can be raised or it may not be required.

I assure the Committee, however, and particularly my right hon. Friend the Member for Kingston-upon-Thames, who mentioned the point, that it is not for reasons of cost that the limit is included. The figures on which we are working are very limited and they are not entirely up to date. It is, therefore, virtually impossible to give a meaningful calculation about the cost that would be involved, but that is not the factor which is uppermost in our minds on this point.

Mr. McNamara

The hon. Gentleman has made the point that the reason is not cost but the dangers of collusion. If the object of the Bill is to help families in real poverty—and we give the Government all the benefit of the doubt that that is their aim—surely the Government should give them the money, not have a limit and, when it is found that there is collusion with an employer and people are abusing the system, then jump in. This could have been done easily under regulations. The hon. Gentleman surely does not think that he has given a sufficient reason for the limit.

Mr. Dean

I do not want to put too much weight on this particular argument, but we do feel about all the proposals in this Bill and regulations under it that, if we are to maintain simplicity of approach in getting this scheme off the ground as soon as we possibly can, then there are some restrictions of this kind which will be desirable in the interests of avoiding abuse. The last position we want to get into—and this really answers the hon. Gentleman's point—is the position where abuse creeps into the scheme, where the practice of it comes under criticism, and where we have to tighten up the regulations. That is the last thing we want. We much prefer to get the scheme off the ground as quickly as we can, and to err, if necessary, on the side of caution, to begin with, and then increase the limits, and not to have regulations which are not actually required.

That, therefore, is the main reason. The Committee may say that we are erring a little on the side of caution here, but I think it is desirable, in the circumstances, to do so, but I want to emphasise to the Committee that a comparatively small number of people would in fact benefit from the removal of the limit. It would be a comparatively small number of people. For example, very few two-parent families will be affected by the limit. For example, it would be altogether exceptional for a man genuinely in full-time work to have gross earnings of less than £9 a week which is a limit which affects the one-child family, and, of course, fatherless families have an alternative, the supplementary benefit. So I hope that the Committee will feel in these circumstances that it is wise, at any rate for the moment, to have this limit, always bearing in mind that there is power by regulations to alter it, to change it, in the light of experience.

Now let me turn to the other point which was made by my right hon. Friend the Member for Kingston-upon-Thames and that concerned the larger families. I think I have already explained, through the figures I have given, that what really matters here is not so much the number of children but the income coming into the household. That is the figure which really affects the position, and it is only in the case of a family whose earnings are under £14 2s. that the maximum figure we are proposing would in fact operate.

Turning now to the point made by the hon. Member for Barrow-in-Furness (Mr. Booth) and repeated in a slightly different form by the hon. Member for Glasgow, Provan (Mr. Hugh D. Brown), who mentioned the difficulties of income disregards, perhaps he feels and the Committee feels that it would be more convenient if we discussed the question of disregards in a later debate when the whole of this question would come up.

Mr. Boyd-Carpenter

Hear, hear.

Mr. Dean

With the actual definition of earnings and the examples which the hon. Gentleman gave, we are in some difficulty, in that the statistics on which we rely are not as full and complete as is desirable. There are whole areas here about which very little is known, much less than we would hope. This, again, is one of the advantages of this scheme, that it will bring us into direct touch with those low-earning families, and we shall learn as a result a great deal more not only of their needs here but also of their needs in other fields.

Mr. Booth

Precisely on this point I extracted all the figures from publications of the Ministry of Employment whose new review gave wages changes right up to September. Therefore, the figures I gave were available to the Government.

Mr. Dean

Yes. The point I am going to make, though, is that many of the instances which the hon. Gentleman was giving were in terms of wage rates rather than actual earnings and family expenditure figures. I think that he would accept that what matters here is actual earnings and also the family expenditure figures, and it is in that regard, as I said, that we have not anything like as complete information as we would desire.

5.15 p.m.

I hope that the Committee will feel, having had a fairly long debate on these two interesting Amendments, that the Government's mind is certainly not closed. There have been some very valuable if rather tentative contributions made from both sides of the Committee. We intend to watch these figures extremely carefully, to learn by the light of experience and also the light of the interesting contributions which have been made in the debate.

Mr. Hugh D. Brown

Would the hon. Gentleman add just one comment to what he has said? He has clarified the point made by my hon. Friend the Member for Barrow-in-Furness (Mr. Booth) about wage rates. How does he propose to put before the House information which he gets? There is no mention here of an annual report. How shall we get this information on earnings or where cases of low earnings exist?

Mr. Dean

My right hon. Friend gave an undertaking earlier—I think it was in the Second Reading debate—that he is extremely anxious that the House and the country should have, and that it is his intention that they should have as much information about the working of the scheme, and the take up, and the number of people who are involved, and the type of people who are involved, as we can possibly get.

Mr. Boyd-Carpenter

No one on either side of the Committee would complain of the tone of my hon. Friend's reply, but I hope he will not mind my saying that the argument which he adduced about £3 limit, which has been the central issue of the debate, was a new one. It is not one of the three given to the House on Second Reading, nor even the lifeline cast to him, very chivalrously, by my hon. Friend the Member for Aylesbury (Mr. Raison), but a new one, and I think the Committee wants to weigh it.

My hon. Friend said this is necessary to prevent abuse. I think he will accept that that is the substance of what he said. I am not sure that that is an argument of self-evident truth. I suppose there is force in the suggestion that as the amount involved increases so the temptation, to a limited number of people, to abuse the scheme increases. I suppose there is a sort of scale at which people choose to do wrong—the larger the amount of the reward for wrongdoing may be. This may have force.

The Secretary of State for Social Services (Sir Keith Joseph)

I would remind my right hon. Friend that it was the right hon. Gentleman my predecessor, in his speech on Second Reading, who said honesty was a question of the amount of the temptation.

Mr. Boyd-Carpenter

I am very sorry that my right hon. Friend adopts the moral standards of that right hon. Gentleman.

Sir K. Joseph

I only quoted them.

Mr. Boyd-Carpenter

If there is anything which would alarm me about this Bill it is my right hon. Friend's present intervention!

However, it obviously has force, although I am not sure how much weight it really has. We are dealing with people at the bottom of the poverty scale. I wonder how one can calculate and say that people will not indulge in wrong practices if £2 19s. is involved but will fall into temptation when the £3 limit is passed. It really does seem a very arbitrary rule.

I can understand that my right hon. Friend does not want this scheme abused, and it is a scheme which, obviously, Members on both sides of the Committee interested in social security and with administrative experience will agree is one which could be abused. At any rate this is a new argument.

To turn to what my hon. Friend the Member for Aylesbury said. I think, with respect, that this is a better case than his, because his argument was that the various items in kind when added to the payments under the Bill could rise to the sort of level at which people could be expected to get very good earnings figures. If that is true where the half difference between the supplement and family income is more than £3, it is equally going to be true when it is less. That, I do not think, justifies the £3 limit.

My hon. Friend the Under-Secretary adopted a conciliatory attitude on this. He said it was an experiment. He drew my attention to this—I would be grateful if he would confirm it, if only by a nod of the head—that the £3 limit could be taken out altogether by regulations made under subsection (4) of the Clause. Is that right? If my hon. Friend could so indicate when he has had a chance to look at the Bill it might help us.

Mr. Dean

It could both be increased and taken out altogether.

Mr. Boyd-Carpenter

There are some who believe that this may cause hardship, but none of us would wish to lay down the law about that against the experience of the right hon. Gentleman's Department. Can we make sure that the House of Commons is informed about how this works, so that not only the attention of my right hon. Friend but that of the House of Commons can be focused on this.

Will my right hon. Friend, in such form as is convenient to him, either by way of Written Answer or by laying a Paper, after the scheme has been operating for six months or a year, inform the House of Commons of the number of cases in which the £3 limit has operated to prevent the payment which would otherwise have been made, and the amounts involved. If this is a precautionary limit which will not affect many people, it will not be much of a burden. If it is a burden because there are so many cases, the matter becomes infinitely more serious. If my hon. Friend will say to the Committee that his right hon. Friend will give this information, many of us will be greatly helped, and will know, if our fears turn out to be justified, we shall be able to press my right hon. Friend for remedial action and the exercise of his powers under subsection (4).

Mr. Pardoe

The reasons which we have heard for the £3 limit are in no way convincing. The Under-Secretary said that a family with six children would have to have an income of £14 2s. for the £3 to apply, and he seemed to imply that there were so few of these families that they were not worth bothering about. Admittedly, to take the combination of six children and £14 2s. may be stretching the point, but throughout the country there is a large number of families earning less than £14 2s. I will simply direct him to "Incomes Data Panorama, July 1967 to June 1970", from which he will see that there are many people whose rates of pay are below this level. If he goes a little further west than his own constituency—where the prosperity of Portishead may be having its effect—into South-West Devon and Cornwall, he will find a large number of people with incomes below this level.

Mr. Dean

I think perhaps the hon. Gentleman has misunderstood me. The example and the figures I quoted were for a low earning family with six children. It is the combination of the two, low earnings and a large family.

Mr. Pardoe

Yes, but it just does not happen that low earning income groups have small families. If the man were economic in every sense of the word that would happen, but unfortunately it often goes the other way.

If the limit affects so few people, why not discard it? These people, few though they may be, are worth arguing for this afternoon. I understand, Mr. Mallalieu, that you will allow us to vote separately on Amendment 21. These people are not only worth arguing for but are worth voting for, and I hope a large number of hon. Members will support me.

Mr. Dean

I will deal quickly with one or two specific questions which my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) asked me. I will first slightly correct a point which I made in an intervention to him. I said that the £3 limit could be removed altogether. In fact, it can be raised right through the roof, and that amounts to much the same thing. It cannot be removed altogether, but it can be raised to a limit which would, in effect, erase it altogether.

My right hon. Friend asked whether it would be possible to provide information generally on the working of the scheme and in particular about the number of people on whom the £3 limit would bite. The answer is "Yes". My right hon. Friend is anxious to provide this information and, indeed, as much information as possible. It will probably take longer than six months before we have meaningful information, but it is the intention to provide such information.

Mr. O'Malley

I feel sorry for the Under-Secretary. He has been driven into strange arguments in his attempt to defend the Bill. He said that little is known about what constitutes incentives and disincentives. I thought that this was one of the main planks of Tory taxation policy. I can imagine one of my hon. Friends on the back benches putting down a Question to the Prime Minister asking whether or not the speech of the Under-Secretary of State for Health and Social Security in Committee on 18th November represents Government policy.

Secondly, the Under-Secretary said that there was a danger of abuse. When I asked him how the danger of abuse was magnified by the removal of the £3 limit he gave me a non-answer. Thirdly, he suggested that it was simpler to leave it as it is. In fact, it is not it is more complicated. Fourthly, he admitted that the people who would benefit would be those earning under £14 2s. a week. Taking that in conjunction with his reply to his right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) that the provision can be changed by regulations, I should have thought that the equitable thing to do would be to accept the Amendment rather than to argue against it as he did.

I think the hon. Gentleman will not deny that the real reason for his rejection of the Amendment has virtually nothing to do with the arguments he has adduced. His Department has been given its strict instructions by the Treasury not to go beyond the £8.6 million limit. Since the hon. Gentleman will not accept the Amendment, we intend to press it to a Division.

Mr. Peter Archer

Striving as I still am to suggest improvements to a bad Bill, I invite the Under-Secretary to think about what he has just said in relation to regulations under Clause 3(4). If the only way in which he can later deal with the situation imposed by the limitation is by increasing the amount to an absurd figure such as £1 million, would not it be better for him to avoid getting himself into that difficulty?

This has been an enlightening debate. I said at the beginning that I approached the principal matter with an open mind and that I did not seek to be dogmatic. I am now much more dogmatic, and my mind is virtually closed. It may be that my assessment of incentives represents

nothing more than prejudice, but I have heard nothing to displace it. However, I appreciate that there are considerations relating to cut-off which do not necessarily apply to the proportion. If a test of the feeling of the Committee is to be taken, it had better be on the question of the cut-off rather than the proportion.

Accordingly, I ask leave of the Committee to withdraw Amendment No. 20.

Amendment, by leave, withdrawn.

Mr. Pardoe

I beg to move Amendment No. 21, in page 2, line 4, leave out 'but shall not in any case exceed £3'.

Question put, That the Amendment be made:—

The Committee divided: Ayes 166, Noes 201.

Division No. 26.] AYES [5.30 p.m.
Abse, Leo Foot, Michael McCartney, Hugh
Albu, Austen Ford, Ben McElhone, Frank
Allaun, Frank (Salford, E.) Forrester, John Mackenzie, Gregor
Archer, Peter (Rowley Regis) Freeson, Reginald Mackie, John
Armstrong, Ernest Garrett, W. E. Mackintosh, John P.
Ashton, Joe Ginsburg, David McMillan, Tom (Glasgow, C.)
Atkinson, Norman Gourlay, Harry McNamara, J. Kevin
Bagier, Gordon A. T. Grant, George (Morpeth) MacPherson, Malcolm
Barnes, Michael Grant, John D. (Islington, E.) Marks, Kenneth
Bannett, Joel Griffiths, Eddie (Brightside) Mason, Rt. Hn. Roy
Beaney, Alan Griffiths, Will (Exchange) Meacher, Michael
Bennett, James (Glasgow, Bridgeton) Hamilton, James (Bothwell) Mellish, Rt. Hn. Robert
Bidwell, Sydney Hamilton William (Fife, W.) Milne, Edward (Blyth)
Bishop, E. S. Hamling, William Morris, Alfred (Wythenshawe)
Blenkinsop, Arthur Hannan, William (G'gow Maryhill) Murray, Ronald King
Boardman, H. (Leigh) Hardy, Peter O'Malley, Brian
Booth, Albert Harrison, Walter (Wakefield) Oram, Bert
Bradley, Tom Healey, Rt. Hn. Denis Orbach, Maurice
Broughton, Sir Alfred Heffer Eric s. Orme, Stanley
Brown, Hugh D. (G'gow, Provan) Horam, John Oswald, Thomas
Buchan, Norman Houghton, Rt. Hn. Douglas Pardoe, John
Buchanan, Richard (G'gow, Sp'burn) Howell, Denis (Small Heath) Peart, Rt. Hn. Fred
Carter-Jones, Lewis (Eccles) Hughes, Rt. Hn. Cledwyn (Anglesey) Pentland, Norman
Castle, Rt. Hn. Barbara Hughes, Dr. Mark (Durham) Perry, Ernest G.
Clark, David (Colne Valley) Hughes, Robert (Aberdeen, North) Prentice, Rt. Hn. Reg.
Cocks, Michael (Bristol, S.) Hughes, Roy (Newport) Prescott, John
Cohen, Stanley Jenkins, Hugh (Putney) Probert, Arthur
Concannon, J. D. Jenkins, Rt. Hn. Roy (Stechford) Rankin, John
Conlan, Bernard John, Brynmor Reed, D. (Sedgefield)
Cox, Thomas (Wandsworth, Central) Johnson, Walter (Derby, South) Rhodes, Geoffrey
Crawshaw, Richard Johnston, Russell (Inverness) Roberts, Albert (Normanton)
Cunningham, G. (Islington, S. W.) Jones, Dan (Burnley) Robertson, John (Paisley)
Cunningham, Dr. J. A. (Whitehaven) Jones, Barry (Flint, East) Roderick, Caerwyn E. (Br'c'n & R'dnor)
Davies, S. O. (Merthyr Tydvil) Kaufman, Gerald Roper, John
Davis, Clinton (Hackney, C.) Kelley, Richard Rose, Paul B.
Deakins, Eric Kerr, Russell Ross, Rt. Hn. William (Kilmarnock)
de Freitas, Rt. Hn. Sir Geoffrey Lambie, David Shore, Rt. Hn. Peter (Stepney)
Delargy, H. J. Lamond, James Silkin, Rt. Hn. John (Deptford)
Dell, Rt. Hn. Edmund Latham, Arthur Sillars, James
Dempsey, James Lawson, George Skinner, Dennis
Doig, Peter Leadbitter, Ted Small, William
Douglas, Dick (Stirlingshire, E.) Leonard, Dick Smith, John (Lanarkshire, North)
Duffy, A. E. P. Lestor, Miss Joan Spearing, Nigel
Dunnett, Jack Lever, Rt. Hn. Harold Spriggs, Leslie
Edwards, William (Merioneth) Lewis, Arthur (W. Ham, N.) Stallard, A. W.
English, Michael Lipton, Marcus Stewart, Donald (Western Isles)
Faulds, Andrew Lomas, Kenneth Stoddart, David (Swindon)
Fisher, Mrs. Doris (B'ham, Ladywood) Lyon, Alexander W. (York) Summerskill, Hn. Dr. Shirley
Fitch, Alan (Wigan) McBride, Neil Tavern, Dick
Fletcher, Ted (Darlington) McCann, John Thomson, Rt. Hn. G. (Dundee, E.)
Thorpe, Rt. Hn. Jeremy Walker, Harold (Doncaster) Wilson, William (Coventry, S.)
Tomney, Frank Wallace, George Woof, Robert
Torney, Tom Wellbeloved, James
Tuck, Raphael White, James (Glasgow, Pollok) TELLERS FOR THE AYES:
Urwin, T. W. Whitehead, Phillip Mr. Joseph Harper and
Wainwright, Edwin Williams, Mrs. Shirley (Hitchin) Mr. John Golding.
Walden, Brian (B'm'ham, All Saints) Wilson, Alexander (Hamilton)
Adley, Robert Gurden, Harold Morrison, Charles (Devizes)
Allason, James (Hemel Hempstead) Hall, John (Wycombe) Mudd, David
Astor, John Hall-Davis, A. G. F. Nicholls, Sir Harmer
Atkins, Humphrey Hannam, John (Exeter) Noble, Rt. Hn. Michael
Awdry, Daniel Harrison, Col. Sir Harwood (Eye) Normanton, Tom
Baker, W. H. K. (Banff) Haselhurst Alan Onslow, Cranley
Batsford, Brian Hastings, Stephen Oppenheim, Mrs. Sally
Bennett, Dr. Reginald (Gosport) Havers, Michael Orr, Capt. L. P. S.
Benyon, W. Hawkins, Paul Owen, Idris (Stockport, N.)
Biffen, John Hayhoe, Barney Page, Graham (Crosby)
Biggs-Davison, John Hicks, Robert Percival, Ian
Boardman, Tom (Leicester, S. W.) Hill, James (Southampton, Test) Pike, Miss Mervyn
Boscawen, R. T. Holland, Philip Powell, Rt. Hn. J. Enoch
Boyd-Carpenter, Rt. Hn. John Holt, Miss Mary Prior, Rt. Hn. J. M. L.
Braine, Bernard Hordern, Peter Pym, Rt. Hn. Francis
Brewis, John Hornby, Richard Raison, Timothy
Brown, Sir Edward (Bath) Hornsby-Smith. Rt. Hn. Dame Patricia Ramsden, Rt. Hn. James
Bruce-Gardyne, J. Howell, David (Guildford) Redmond, Robert
Buchanan-Smith, Alick (Angus, N & M) Howell, Ralph (Norfolk, North) Reed, Laurance (Bolton, E.)
Bullus, Sir Eric Hutchison, Michael Clark Renton, Rt. Hn. Sir David
Burden, F. A. Iremonger, T. L. Ridley, Hn. Nicholas
Campbell, Rt. Hn. G. (Moray & Nairn) James, David Ridsdale, Julian
Carlisle, Mark Jenkin, Patrick (Woodford) Roberts, Michael (Cardiff, N.)
Channon, Paul Jennings, J. C. (Burton) Rossi, Hugh (Hornsey)
Chichester-Clark, R. Jessel, Toby Rost, Peter
Churchill, W. S. Jopling, Michael Russell, Sir Ronald
Clark, William (Surrey, East) Joseph, Rt. Hn. Sir Keith Scott, Nicholas
Clarke, Kenneth (Rushcliffe) Kaberry, Sir Donald Shaw, Michael (Sc'b'gh & Whitby)
Cockeram, Eric Kellett, Mrs. Elaine Shelton, William (Clapham)
Cooke, Robert Kerby, Capt. Henry Sinclair, Sir George
Coombs, Derek Kershaw, Anthony Soref, Harold
Cooper, A. E. Kilfedder, James Spence, John
Cordle, John King, Tom (Bridgwater) Sproat, Iain
Cormack, Patrick Kinsey, J. R. Stanbrook, Ivor
Costain, A. P. Knight, Mrs. Jill Stewart-Smith, D. G. (Belper)
Critchley, Julian Knox, David Stodart, Anthony (Edinburgh, W.)
Crouch, David Lambton, Antony Stoddart-Scott, Col. Sir M.
Dalkeith, Earl of Lane, David Stokes, John
d'Avigdor-Goldsmid, Sir Henry Langford-Holt, Sir John Stuttaford, Dr. Tom
d'Avigdor-Goldsmid, Maj-Gen. Jack Legge-Bourke, Sir Harry Sutcliffe, John
Dean, Paul Le Marchant, Spencer Tapsell, Peter
Dixon, Piers Lewis, Kenneth (Rutland) Taylor, Sir Charles (Eastbourne)
Edwards, Nicholas (Pembroke) Lloyd, Rt. Hn. Geoffrey (Sut'n C'dfield) Taylor, Frank (Moss Side)
Elliot, Capt. Walter (Carshalton) Loveridge, John Taylor, Robert (Croydon, N. W.)
Eyre, Reginald McAdden, Sir Stephen Tebbit, Norman
Farr, John MacArthur, Ian Thompson, Sir Richard (Croydon, S.)
Fell, Anthony McCrindle, R. A. Tilney, John
Fenner, Mrs. Peggy McLaren, Martin Tugendhat, Christopher
Fidler, Michael Maclean, Sir Fitzroy Turton, Rt. Hn. R. H.
Finsberg, Geoffrey (Hampstead) McMaster, Stanley Waddington, David
Fisher, Nigel (Surbiton) Macmillan, Maurice (Farnham) Walder, David (Clitheroe)
Fookes, Miss Janet McNair-Wilson, Michael Ward, Dame Irene
Fortescue, Tim Madel, David Warren, Kenneth
Fowler, Norman Marten, Neil Weatherill, Bernard
Fraser, Rt. Hn. Hugh (St'fford & Stone) Mawby, Ray White, Roger (Gravesend)
Fry, Peter Maxwell-Hyslop, R. J. Whitelaw, Rt. Hn. William
Galbraith, Hn. T. G. Meyer, Sir Anthony Wilkinson, John
Gardner, Edward Mills, Peter (Torrington) Wolrige-Gordon, Patrick
Gibson-Watt, David Mills, Stratton (Belfast, N.) Wood, Rt. Hn. Richard
Gilmour, Sir John (Fife, E.) Mitchell, David (Basingstoke) Woodhouse, Hn. Christopher
Glyn, Dr. Alan Moate, Roger Woodnutt, Mark
Goodhew, Victor Molyneaux, James Worsley, Marcus
Gorst, John Money, Ernie Wylie, Rt. Hn. N. R.
Gower, Raymond Monks, Mrs. Connie Younger, Hn. George
Grant, Anthony (Harrow, C.) Monro, Hector
Gray, Hamish Montgomery, Fergus TELLERS FOR THE NOES:
Green, Alan More, Jasper Mr. Walker Clegg and
Griffiths, Eldon (Bury St. Edmunds) Morgan-Giles, Rear-Adm. Mr. Keith Speed.
Gummer, Selwyn

Amendment No. 66 made: In line 9, leave out from 'vary' to end of subsection and insert: 'the proportion and increase the amounts for the time being specified in this section'.—[Mr. Dean.]

Mr. Michael Meacher (Oldham, West)

I beg to move Amendment No. 70, in page 2, line 10, at end to add: (5) Where the weekly rate falls to be reduced on a subsequent claim as a result of an increase in the family's resources, the reduction shall not be such that, taken together with the effect of that increase on the amount of any other benefits, rebates or exemptions, it reduces the value of the increase by more than 0–75 in every £1. I am grateful that on reconsideration this Amendment has been called since it raises the whole question of the overall impact of the total accumulation of disincentives, and I believe that the Amendment is of the greatest importance for the operation of the Bill. I therefore hope the Government will regard this matter sympathetically.

It augurs wells for the Amendment that the Under-Secretary, in summing up the previous group of Amendments, rejected one Amendment on the ground that it would involve a marginal tax levy of 66⅔ per cent., which he regarded as too high. The aim of this Amendment is to prohibit a marginal tax levy in excess of the 75 per cent. I therefore assume that the Government, if they wish to be consistent, will agree to my Amendment.

Let me illustrate the significance of the Amendment by drawing attention to the effect of the interaction between family income supplement and one single other means-tested benefit, namely rate rebate. For any size of family with two parents, the income limit for a rate rebate is 15s. per week below the F.I.S. prescribed amount, and for a one-parent family is as much as £3 below. If the prescribed amounts are raised before the F.I.S. scheme comes into operation in 1971, as the Secretary of State has hinted, the gap will grow even wider. This means that families just above the income limit for a full rate rebate will both have their rate rebate reduced by 5s. for every extra £1 of income above the limit, and lose 10s. of F.I.S. for each additional pound in the same income range. Thus, in terms of benefit forgone, these two means tests alone will represent a tax rate of 15s. in the pound for a large number of families.

5.45 p.m.

This is serious enough, but it is infinitely worse if we include, as we must, the whole plethora of other national and local means-tested benefits. Admittedly, most of the other national means tests, such as those for school meals and exemptions from Health Service charges, are pitched at a slightly more generous level and involve somewhat higher cutoff points. But there will often be local means-tested benefits which will be reduced or cut off at the same level of income as rate rebates. I am thinking of rent rebate, school uniform grants and educational maintenance allowances. In such cases the combined marginal tax rate will be very much in excess of 75 per cent.

In addition, each extra £1 of income will be subject to a further proportional levy because of national insurance contribution. Even beyond this, there will be cases where income tax will be payable by claimants of F.I.S. A family whose income is above the prescribed amount in the first six months of the tax year and then falls below it will still qualify for F.I.S. but at the same time will be liable to tax at the standard rate on each additional £1 of income.

To make this situation clearer, let me illustrate the cumulative effect of these contingencies in a single typical case. Let us take the case of a married man with three children who by dint of harder work, more overtime, or more generous piece-work earnings improves his pay from £15 to £18 a week. At this new level—and I admit that the exact position depends on the locality—he stands to lose about 15s. in school meals, 13s. 4d. in rent rebates, 15s. in rate rebates, and at the same time he will have to pay an extra 2s. 10d. in graduated national insurance contributions, representing a combined levy of 46s. 2d. out of £3, which means a marginal tax levy of 15s. 4d. in the pound.

If F.I.S. is added to this, the total levy rises to 68s. 2d. out of £3, or 22s. 9d. in the pound. If one of the children is aged between 15 and 18 and if that child is still in full-time education and the family is claiming educational maintenance allowance, the total levy actually rises to around 80s. out of £3, or 27s. in the pound. This is a preposterous situation. But it may be argued that a small proportion of families eligible for educational maintenance allowance actually claim it. It may also be said that the man in my example lives in one of the many areas of the country where a rent rebate of any generous nature is not available, although the scheme recently propounded by the Secretary of State for the Environment will soon alter this situation. But, for the purposes of debate, I accent these limitations on my argument, although I would insist that it is the framework of benefits that are open to the public to claim, rather than what is actually claimed, to which we should address our minds. Even accepting these restrictions, the levy in my example, excluding rent rebate and educational maintenance allowance, will still be 54s. 10d. out of £3, or 18s. 3d. in the pound. To this sum F.I.S. has contributed 7s. 4d. in the pound.

It will be clearly seen from this example that the poor are far worse off than the rich in the matter of incentives and that, in spite of the considerable emotional heat that has been generated on the other side of the House, about incentives, far more attention has been given to incentives to highly-paid executives rather than to what under these proposals will be a disincentive to a far greater number of low-paid workers on the shop floor. Even at the highest point of the income tax scale, the new marginal rate on earned income, bearing in mind the two-ninths earned income tax relief, never exceeds 17s. 9d. in the pound, while a maximum marginal levy of 15s. in the pound, which is the object of this Amendment, is not reached on the earned income tax scale until the very high salary level of around £11,000 a year. It is too much to say that there should be a direct comparison between high marginal rates for both rich and poor because the rich also get considerable fruits of a large gross income in terms of extensive accrued pension entitlements, lucrative widows' entitlements and also high status. None of these offsets is available to the poor and, therefore, the effects upon them of an extremely high marginal levy are all the worse.

There is an inescapable argument for a marked reduction in what constitutes an utterly inadmissible burden of disincentives at the bottom of the income scale, such as we are considering under the Bill. The Government may argue that this position may arise only if a series of means-tested benefits are claimed and that this is unlikely. If means-tested bene- fits were considered to be an unsatisfactory method of delivering services to poor families, I am glad that the Government are blocking up this escape route in two ways. The first is by the admirable intention on the part of the Secretary of State to make eligibility for F.I.S. an automatic passport for eligibility to exemption from the other increased charges, such as higher prescription charges and ophthalmic and dental charges.

Sir K. Joseph

From the charges themselves, if we can—not just the higher element in them.

Mr. Meacher

I entirely accept that. The other way is by an increased advertising budget, designed to increase the take-up of at least the rate rebates, and I think the same for F.I.S. as well, although I am not clear about that—

Sir K. Joseph

indicated assent.

Mr. Meacher

I am glad that the Secretary of State is nodding. While commending the purpose of both these Measures, I am sure that the Government must also agree that they will grossly aggravate the whole problem of disincentives discussed under the Amendment, because the higher the uptake, the more people who will have more to lose.

For all these reasons, I trust that the case for easing the disincentives for the low-paid workers will be seen to be both plausible and convincing. What the Amendment seeks is far from an ideal settlement, but at least it would prevent an intolerable situation getting completely out of hand. In this vein, I hope that the Government will give it the sympathetic consideration that I believe it deserves.

Mr. John Roper (Farnworth)

I should like briefly to support the Amendment. One of the many disadvantages of the Bill, which the Amendment seeks to remove, is the addition to the disincentives that it imposes on the low paid. Earlier today, the Under-Secretary admitted the ignorance of his Department about the disincentive effects of different parts of this Measure on the low paid. He referred to it as an experiment to discover the strength of motivation of people in full-time work with low incomes.

Mr. Dean

This is true of everyone—not just the Department.

Mr. Roper

But it is odd that there is so much certainty about incentive or disincentive effects at high levels of income, but so much ignorance about the incentive or disincentive effect of these low incomes.

There has been a certain amount of work on this already. My hon. and learned Friend the Member for Lincoln (Mr. Taverne) referred in an earlier debate to the paper by Professor Prest, the Hobart Paper published by the Institute of Economic Affairs, which analysed the effect of this multiplicity of means tests, which will be added to by the family income supplement. Similarly, Professor Kaim-Caudle has done a certain amount of work on this subject.

My hon. Friend the Member for Oldham, West (Mr. Meacher) referred to the marginal tax levy, and I think that he was referring to the high marginal loss of social benefits for people in this situation as a result of the multiplicity of means tests. I hope that the Government will consider the Amendment seriously and will not think it necessary to carry their scientific research into the motivation of those on low incomes to a greater extent than a marginal loss of social benefits of 15s. in the £. Therefore, I hope that they will accept the Amendment.

Mr. Dean

The hon. Member for Oldham, West (Mr. Meacher) admitted that the solution which he suggested was not ideal, and I entirely agree with that. In fact, it was very much an underestimate. What he was doing in drawing attention to a problem which certainly exists, as is clear from our earlier debates, is to take a very extreme case. There would be very few cases in which all these tests would operate together and have the sort of impact which he suggested on any particular family.

In particular, most of the tests would operate at higher income levels than the family income supplement level. In typical cases, a family entitled to F.I.S. whose income is increased by £3 a week would still be eligible for full remissions in respect of school meals, prescription charges, welfare foods and optical and dental charges. So there would be very few cases in which the full impact of the cost that the hon. Gentleman mentioned would operate.

Mr. Meacher

Would the hon. Gentleman not accept that it is precisely the fact that F.I.S. will act as a passport for remission of other charges which will itself increase the disincentive to move above the F.I.S. level in order to rely on ordinary earnings?

Mr. Dean

There is a disincentive operating here—and this is admitted—but we do not know to what extent. This is an area where little is known about incentives and disincentives. But my point is that the sort of example which the hon. Member has quoted amounts to an overstating of his case. It is so extreme that he spoils what starts off as a reasonable argument on a problem which we admit exists.

But there are also practical difficulties in the hon. Gentleman's proposal. It would mean that on all claims but the first, we would have to ask for full details of the various benefits and rebates a family has to be able to make a complete calculation, comparing the position at the time of the earlier claim with that at the time of the later claim. This would add greatly not only to the administrative burdens involved but also to those of the families concerned.

So it is both for the first reason I gave and also for the practical reason that this Amendment is not acceptable. Where one has many forms of help, this type of problem is likely to arise. But this wide question which the hon. Member has raised is one of which the Government are very conscious, and which we are considering, of course, in the measures that we are taking to deal with this problem and the problem of family poverty as a whole.

Mr. O'Malley

The Under-Secretary says that the Amendment is not acceptable. I would advise my hon. Friends that I do not find his arguments acceptable or convincing. Therefore, if my hon. Friend the Member for Oldham, West (Mr. Meacher) wishes to press the Amendment to a Division, I would advise my hon. Friends to support him in the Lobby.

Mr. Meacher

I should like to reply to the points made, if they were really intended as substantial objections to the Amendment. It is suggested that it is very unlikely that several of these means tests would be taken together. I have already said that for most local and national means tests it remains the case that the cut-off point is at about the same level as for F.I.S.; so persons on F.I.S. will have an added disincentive to move their earnings to a higher level, not only because they will lose F.I.S., which is a substantial disincentive by itself, but because of the accumulation of all these other benefits.

It is untrue to say that they will not occur at the same level. I should like to hear the Under-Secretary's view on the impact of the expensive advertising campaign which the Secretary of State for the Environment proposes to launch—£600,000 to be spent to improve the take-up on rate rebates. I would estimate that we might have an advertising budget for F.I.S. of around £250,000 or some similar figure. Perhaps it is lower than that. If we take the advertising budget of the two together, it will not be far short of £1 million.

It is bound to improve the take-up and it will aggravate the whole problem of disincentives. In trying to do the right thing in increasing the take-up, the Government are getting themselves into increasing logical toils. I suggest that the Under-Secretary either does not see the problem or is making no attempt to find a proper way out of it.

Second, the hon. Gentleman says that there is uncertainty, that we do not know enough about what constitutes a disincentive.

Sir K. Joseph

At this level of income.

Mr. Meacher

Can the right hon. Gentleman suggest, even at this level of income, that a 75 per cent. loss of earnings is not a very potent disincentive? Is there any level, however low, where that is not the case? Does the hon. Gentleman seriously suggest that we must have a controlled piece of research? It is often said of sociology that the aim is to prove the obvious. Must we have a piece of sociological research to indicate that a 75 per cent. loss of earning is not a massive disincentive?

6.0 p.m.

Mr. S. C. Silkin (Dulwich)

Would my hon. Friend agree with what seems, to me at any rate, to be common sense: that the lower the income level the greater the disincentive of a very small sum?

Mr. Meacher

I am grateful to my hon. and learned Friend for that point. I entirely accept it.

For both these reasons, and in the absence of any substantial arguments against the Amendment, I should indeed like to press the matter to a Division.

Question put, That the Amendment be made:—

The Committee divided: Ayes 152, Noes 191.

Division No. 27.] AYES [6.1 p.m.
Albu, Austen Cunningham, G. (Islington, S. W.) Hamilton, William (Fife, W.)
Allaun, Frank (Salford, E.) Cunningham, Dr. J. A. (Whitehaven) Hamling, William
Archer, Peter (Rowley Regis) Davies, S. O. (Merthyr Tydvil) Hannan, William (G'gow, Maryhill)
Armstrong, Ernest Davis, Clinton (Hackney, Central) Hardy, Peter
Ashton, Joe Deakins, Eric Harper, Joseph
Atkinson, Norman Dell, Rt. Hn. Edmund Harrison, Walter (Wakefield)
Bagier, Gordon A. T. Dempsey, James Healey, Rt. Hn. Denis
Barnett, Joel Doig, Peter Heffer, Eric S.
Beaney, Alan Douglas, Dick (Stirlingshire, E.) Horam, John
Bennett, James (Glasgow, Bridgeton) Duffy, A. E. P. Houghton, Rt. Hn. Douglas
Bidwell, Sydney Dinnett, Jack Howell, Denis (Small Heath)
Bishop, E. S. Eadie, Alex Hughes, Rt. Hn. Cledwyn (Anglesey)
Boardman, H. (Leigh) Edwards, William (Merioneth) Hughes, Dr. Mark (Durham)
Booth, Albert English, Michael Hughes, Roy (Newport)
Bradley, Tom Faulds, Andrew Jenkins, Hugh (Putney)
Broughton, Sir Alfred Fisher, Mrs. Doris (B'ham, Ladywood) Jenkins, Rt. Hn. Roy (Stechford)
Brown, Hugh D. (G'gow, Provan) Fletcher, Ted (Darlington) Jones, Dan (Burnley)
Buchan, Norman Foley, Maurice Jones, Barry (Flint, East)
Buchanan, Richard (G'gow, Sp'burn) Foot, Michael Kaufman, Gerald
Carmichael, Neil Forrester, John Kerr, Russell
Carter-Jones, Lewis (Eccles) Freeson, Reginald Lambie, David
Castle, Rt. Hn. Barbara Galpern, Sir Myer Lamond, James
Clark, David (Colne Valley) Garrett, W. E. Latham, Arthur
Cocks, Michael (Bristol, S.) Ginsburg, David Lawson, George
Cohen, Stanley Gourlay, Harry Leadbitter, Ted
Concannon, J. D. Grant, George (Morpeth) Leonard, Dick
Conlan, Bernard Griffiths, Eddie (Brightside) Lestor, Miss Joan
Cox, Thomas (Wandsworth, C.) Griffiths, Will (Exchange) Lever, Rt. Hn. Harold
Crawshaw, Richard Hamilton, James (Bothwell) Lewis, Arthur (W. Ham, N.)
Lipton, Marcus Peart, Rt. Hn. Fred Spriggs, Leslie
Lomas, Kenneth Pentland, Norman Stoddart, David (Swindon)
McBride, Neil Perry, Ernest G. Summerskill, Hn. Dr. Shirley
McCann, John Prentice, Rt. Hn. Reg. Taverne, Dick
McCartney, Hugh Prescott, John Thomson, Rt. Hn. G. (Dundee, E.)
McElhone, Frank Probert, Arthur Tomney, Frank
Mackenzie, Gregor Rankin, John Torney, Tom
Mackie, John Reed, D. (Sedgefield) Tuck, Raphael
Mackintosh, John P. Rhodes, Geoffrey Wainwright, Edwin
McMillan, Tom (Glasgow, C.) Roberts, Albert (Normanton) Walden, Brian (B'm'ham, All Saints]
McNamara, J. Kevin Robertson, John (Paisley) Walker, Harold (Doncaster)
MacPherson, Malcolm Roderick, Caerwyn E. (Br'c'n & R'nor) Wallace, George
Marks, Kenneth Roper, John Wellbeloved, James
Mason, Rt. Hn. Roy Rose, Paul B. White, James (Glasgow, Pollok)
Meacher, Michael Ross, Rt. Hn. William (Kilmarnock) Whitehead, Philip
Mellish, Rt. Hn. Robert Shore, Rt. Hn. Peter (Stepney) Williams, Mrs. Shirley (Hitchin)
Morris, Alfred (Wythenshawe) Silkin, Rt. Hn. John (Deptford) Wilson, Alexander (Hamilton)
Murray, Ronald King Silkin, Hn. S. C. (Dulwich) Wilson, William (Coventry, S.)
O'Malley, Brian Sillars, James Woof, Robert
Oram, Bert Skinner, Dennis
Orbach, Maurice Small, William TELLERS FOR THE AYES:
Orme, Stanley Smith, John (Lanarkshire, N.) Mr. Alan Fitch and Mr. John Golding.
Oswald, Thomas Spearing, Nigel
Adley, Robert Gibson-Watt, David Macmillan, Maurice (Farnham)
Allason, James (Hemel Hempstead) Gilmour, Sir John (Fife, E.) McNair-Wilson, Michael
Astor, John Glyn, Dr. Alan Madel, David
Atkins, Humphrey Goodhew, Victor Marten, Neil
Awdry, Daniel Gorst, John Mawby, Ray
Baker, W. H. K. (Banff) Cower, Raymond Maxwell-Hyslop, R. J.
Batsford, Brian Grant, Anthony (Harrow, C.) Meyer, Sir Anthony
Bennett, Dr. Reginald (Gosport) Gray, Hamish Mills, Peter (Torrington)
Benyon, W. Green, Alan Mills, Stratton (Belfast, N.)
Biffen, John Griffiths, Eldon (Bury St. Edmunds) Mitchell, David (Basingstoke)
Biggs-Davison, John Gummer, Selwyn Moate, Roger
Boardman, Tom (Leicester, S. W.) Gurden, Harold Molyneaux, James
Boscawen, R. T. Hall, John (Wycombe) Money, Ernie
Boyd-Carpenter, Rt. Hn. John Hall-Davis, A. G. F. Monks, Mrs. Connie
Braine, Bernard Hannam, John (Exeter) Monro, Hector
Brewis, John Haselhurst, Alan Montgomery, Fergus
Brown, Sir Edward (Bath) Hastings, Stephen More, Jasper
Bruce-Gardyne, J. Havers, Michael Morgan-Giles, Rear-Adm.
Buchanan-Smith, Alick (Angus, N & M) Hawkins, Paul Morrison, Charles (Devizes)
Bullus, Sir Eric Hayhoe, Barney Mudd, David
Burden, F. A. Hicks, Robert Neave, Airey
Campbell, Rt. Hn. G. (Moray & Nairn) Hill, James (Southampton, Test) Nicholls, Sir Harmar
Channon, Paul Holland, Philip Noble, Rt. Hn. Michael
Chichester-Clark, R. Holt, Miss Mary Normanton, Tom
Churchill, W. S. Hordern, Peter Onslow, Cranley
Clarke, Kenneth (Rushcliffe) Hornby, Richard Oppenheim, Mrs. Sally
Clegg, Walter Hornsby-Smith. Rt. Hn. Dame Patricia Orr, Capt. L. P. S.
Cockeram, Eric Howell, Ralph (Norfolk, North) Owen, Idris (Stockport, N.)
Cooke, Robert Hutchison, Michael Clark Page, Graham (Crosby)
Coombs, Derek Iremonger, T. L. Percival, Ian
Cooper, A. E. Jenkin, Patrick (Woodford) Pike, Miss Mervyn
Cordle, John Jennings, J. C. (Burton) Powell, Rt. Hn. J. Enoch
Cormack, Patrick Jessel, Toby Pym, Rt. Hn. Francis
Costain, A. P. Jopling, Michael Raison, Timothy
Critchley, Julian Joseph, Rt. Hn. Sir Keith Ramsden, Rt. Hn. James
Crouch, David Kaberry, Sir Donald Redmond, Robert
Crowder, F. P. Kerby, Capt. Henry Reed, Laurance (Bolton, E.)
Dalkeith, Earl of Kershaw, Anthony Renton, Rt. Hn. Sir David
d'Avigdor-Goldsmid, Sir Henry Kllfedder, James Ridsdale, Julian
d'Avigdor-Goldsmid, Maj-Gen. Jack King, Evelyn (Dorset, South) Roberts, Michael (Cardiff, N.)
Dean, Paul King, Tom (Bridgwater) Rossi, Hugh (Hornsey)
Deedes, Rt. Hn. W. F. Kinsey, J. R. Rost, Peter
Dixon, Piers Knight, Mrs. Jill Russell, Sir Ronald
Edwards, Nicholas (Pembroke) Knox, David Scott, Nicholas
Elliot, Capt. Walter (Carshalton) Lambton, Antony Shaw, Michael (Sc'b'gh & Whitby)
Fair, John Lane, David Shelton, William (Clapham)
Fell, Anthony Langford-Holt, Sir John Sinclair, Sir George
Fenner, Mrs. Peggy Legge-Bourke, Sir Harry Soref, Harold
Fidler, Michael Le Marchant, Spencer Spence, John
Finsberg, Geoffrey (Hampstead) Lewis, Kenneth (Rutland) Sproat, Iain
Fisher, Nigel (Surbiton) Lloyd, Rt. Hn. Geoffrey (Sut'n C'dfield) Sranbrook, Ivor
Fookes, Miss Janet Loveridge, John Stodart, Anthony (Edinburgh, W.)
Fortescue, Tim MacArthur, Ian Stoddart-Scott, Col. Sir M.
Fowler, Norman McCrindle, R. A. Stuttaford, Dr. Tom
Fry, Peter McLaren, Martin Sutcliffe, John
Galbraith, Hn. T. G. Maclean, Sir Fitzroy Tapsell, Peter
Gardner, Edward McMaster, Stanley Taylor, Sir Charles (Eastbourne)
Taylor, Frank (Moss Side) Ward, Dame Irene Woodhouse, Hn. Christopher
Taylor, Robert (Croydon, N. W.) Warren, Kenneth Woodnutt, Mark
Tebbit, Norman Weatherill, Bernard Wylie, Rt. Hn. N. R.
Thompson, Sir Richard (Croydon, S.) White, Roger (Gravesend) Younger, Hn. George
Tugendhat, Christopher Whitelaw, Rt. Hn. William
Turton, Rt. Hn. R. H. Wilkinson, John TELLERS FOR THE NOES:
Waddington, David Wolrige-Gordon, Patrick Mr. Reginald Eyre and
Walder, David (Clitheroe) Wood, Rt. Hn. Richard Mr. Keith Speed.

Clause 3, as amended, ordered to stand part of the Bill.

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