TAX RELIEF FOR EMPLOYED PERSONS

HC Deb 05 July 1971 vol 820 cc1015-45

The expenditure of any person taxable under Schedule E in respect of purchase of overalls, tools of trade, books, professional journals and courses of study, up to a total value of £50 in any year wholly and exclusively incurred for the purposes of his trade, occupation or profession shall be allowed as a deduction from the wages or salary in computing the amount of assessment.—[Mr. Barnett.]

Brought up, and read the First time.

7.45 p.m.

Mr. Barnett

I beg to move, That the Clause be read a Second time.

I suppose it could be said that this is a reasonably generous Clause and that it is, in effect, a device to give £50 of relief to those paying tax under P.A.Y.E. I do not apologise for the fact that the Clause proposes relief of £50 for those paying tax under P.A.Y.E., because those people do not fare so well under the Bill as those paying tax under Schedule D and those at the higher end of the scale.

One of the effects of the Clause would be to remove a reasonable number of taxpayers from paying tax at the threshold. When the Government increased the child allowance by £40 they exempted 200,000 taxpayers from paying tax. Despite this, in 1971–72, 750,000 more people are paying tax than paid tax in 1970–71. This was revealed in an Answer given by the Chief Secretary on 15th June.

One reason why we have tabled the Clause is to seek to put a little balance into a badly balanced Bill, because the Bill gives considerable relief to people paying tax on investment income and to those at the higher end of the scale. I will give examples of relief which the Bill gives to comparatively small numbers of taxpayers. In 1971–72 £38 million is given by means of the 15 per cent. earned income relief to those with incomes of more than £4,005, removing a comparatively small number of taxpayers from surtax and giving a comparatively small number of taxpayers additional earned income relief. There is £12 million relief on the separation of wife's earnings, again to a very small number of taxpayers. There is £9 million of relief for the self-employed paying tax under Schedule D on the annuity relief for the self-employed. There is £15 million on the disaggregation of parent-child income.

There is £3 million of relief to a small number of close companies in relief from shortfall and £1 million of other reliefs to close companies and, as emerged in our debates in Standing Committee, £½ million of that to just 30 close companies—that is, to 30 families; that is, £½ million in retrospective relief. There is £1½ million relief to a small number of people for short-term capital gains. There is the increased car allowance from £2,000 to £4,000, a provision which was not mentioned either in the Budget or on Second Reading.

On top of all this there is the unified tax system which is clearly intended to give further substantial relief to those paying tax on investment income.

The Financial Secretary will no doubt tell us that the cost of implementing the Clause would be high. I said at the outset that this would be a generous Clause to those paying tax under P.A.Y.E. The fact that it would be a generous provision is no excuse for the Government's refusing to agree to the Clause, because it is open to the Government, if they wish to give relief of this kind, to make the necessary alterations in the Bill to allow it to be done.

Apart from that, everybody other than the Government now recognises that there is a considerable need for more reflation; indeed, kites have been flown over the weekend to the effect that the Government propose to introduce another £1 million into the regions. That is a little belated. It is not very much, anyway, but if the Government want to reflate, to increase demand, and to reduce unemployment, one way would be to give £50 by way of relief for tax purposes precisely to those who would be given it by the new Clause.

The present position is governed by Section 189 of the Taxes Act. That goes back to the famous or infamous Section relating to what should or should not be allowed by way of expenses for Schedule E purposes. It includes the word "necessarily". In order to qualify for allowance for Schedule E purposes an expense must be "wholly, exclusively and necessarily" incurred, unlike expenses for Schedule D purposes, which need to be only "wholly and exclusively" incurred.

At present there is an agreement between the Inland Revenue and certain trade unions under which an allowance is made of £15–I am told that in other trade unions the sum is £10–for tools and overalls. All that happens is that the taxpayer puts a cross in a certain part of his tax return and receives that allowance. He receives it even though he may not have spent the money. It is given to him as a concession. In some cases he may spend the money but the expenditure may not be "necessarily" incurred, as the word has been defined over the years. The Amendment would take the position very much wider. We have deliberately excluded the word "necessarily". The expenditure of up to £50 would need only to be "wholly and exclusively" incurred.

The last debate on this matter took place in 1957 and was concerned with the question of tools and overalls. It was replied by the then Financial Secretary—now the right hon. Member for Wolverhampton, South-West (Mr. Powell). At that time the debate centred around a word that had been included in a new Clause that was being discussed—the word "reasonably". It was argued that that word would be equally difficult to define. That is true. On this occasion the word "necessarily" has been removed, and the word "reasonably" has not been included. The expenditure would simply have to be wholly or exclusively incurred—in other words, it would be the same definition as is used for Schedule D purposes.

The new Clause would cover other items—books, journals and courses of study. Generally one does not define a specific form of expense; the matter is left to the Revenue and the taxpayer. In the case of Schedule E generally the trade union often agrees a specific type of expenditure which should or should not be allowable. On this occasion we have added additional items because the expense provision is grossly unfair in its working in all sorts of ways.

No tax system can ever be wholly fair and correct; with such a complicated tax system and so many tax laws as ours there are bound to be some occasions when it is never precisely fair as between one taxpayer and another. As it stands at the moment it is very unfair in the professions—for example, in respect of the purchase of books by teachers to enable them to do their jobs better.

The purchase of those books would not be an allowable expense, as the law stands. Equally, technical and professional magazines would not be allowable for tax relief. That applies in accountancy. If I were assessed for Schedule D and I bought journals, magazines and books, they would be wholly allowable for tax relief, but if an accountant who is not in public practice were assessed under Schedule E and bought precisely the same books and journals, that expenditure would not be allowed. He would have to pay for them out of his taxed income.

In the 1957 debate a Conservative Member pointed out that if a solicitor were assessed under Schedule D the books and journals that he bought would be allowable for tax, whereas if he were engaged as a town clerk and bought the same sort of books the expense would not be allowable. The position is grossly unfair between one taxpayer and another—between two taxpayers who are doing a similar sort of work. Moreover, in many cases the income of the man assessed under Schedule E is lower than that of the man assessed under Schedule D.

The question of courses of study never used to be very important. Until a few years ago articled clerks not only did not earn enough to pay tax; they earned nothing at all. Frequently they had to pay premiums to their principals. That situation does not exist today, and articled clerks earn enough to pay tax. But people in my profession pay for their courses of study in a variety of ways. These courses are still largely correspondence courses, and their cost is quite substantial. The cost is not allowable for tax purposes, presumably on the ground that the expense is not incurred in order to earn the money. That is the general principle under which expenses are refused.

In my opinion that is defining the matter a little too narrowly. I should have thought that that aspect of the expense incurred—courses of study for articled clerks and apprentices, who are young men and women out to improve their status, and paying out what to them are considerable sums of money—ought to be reconsidered, and that the least we could do is to allow that sort of expenditure as a deduction for tax purposes. I therefore submit that the Clause would not only go some way to give a better balance to the Bill; in its own right it is worthy of support by hon. Members on both sides of the House.

In the debate in 1957 the then Financial Secretary quoted an argument presented by the Royal Commission. He sought to answer a series of questions that the Royal Commission posed. He said: Those answers ought to be given correctly with the aid of the formula … The questions were these:— 'are personal tools to be allowed for, if used in preference to those provided by the employer? 'Books additional to those provided? 'Overalls where their use is optional? 'A private car where alternative travelling facilities are provided free? 'Wife's or secretary's wages where the terms of employment do not require their assistance?' "—[OFFICIAL REPORT, 3rd July, 1957; Vol. 572, c. 1045.] That brings me to the whole question of the use of the word "necessarily" for Schedule E purposes. Whether an expense is allowable or not will turn upon whether an employer says to his employee, "I do not think it is necessary for you to have that overall or those tools"—or, "It is not necessary for you to purchase that journal" —"You can do the job I want you to do without those things". If the employer does not regard them as necessary, the Revenue takes the view that the expense is not allowable.

8.0 p.m.

I accept that there is a problem here administratively in the same sense that there is a problem in regard to all expenses for Schedule D purposes, though on a smaller scale under Schedule D inasmuch as there are fewer taxpayers under Schedule D than under Schedule E. In the circumstances of Schedule D, inspectors of taxes generally have professional people to negotiate with as regards what is or is not an allowable expense, and in any case the definition is broader, without the word "necessarily". None the less, I suspect that it may be argued that, if every taxpayer under Schedule E could claim relief of up to £50, even if the employer did not think it necessary, there might be an administrative problem in negotiating the question between each Schedule E taxpayer and the Revenue. I shall deal with that argument now.

What happens in practice is that trade unions, on behalf of their members, even without the new Clause and with the word "necessarily", are able to negotiate a concession from the Revenue and secure relief of £10 or £15 for tools and overalls. It is not impossible that trade unions, again on behalf of their members, would be able to negotiate under the terms of the new Clause—and much more easily because the word "necessarily" would not be there—an allowance of up to £50.

Perhaps, because of the more substantial figure involved here, the Revenue would be likely to insist on the amount having to be spent, or it might say that it would allow up to, say, £25 and that anything in excess would have to be proved. We know that the Revenue is generally quite flexible in all sorts of ways. It is flexible in the case of Schedule D expenses, for example, in negotiating the level of car expenses and the proportion of private benefit; where the precise amount of private benefit cannot be settled, it agrees a broad percentage with the taxpayer.

I see no reason why that could not be done here, and it would be particularly beneficial at this time when, as I say, taxpayers under Schedule E have not had a fair share of what is being distributed under this Finance Bill. For those reasons, I commend the Clause to the House, confident that it will have not only the support of my right hon. and hon. Friends but the support of many hon. Members on the Government side, too.

Mr. William Clark

I am amazed at the hon. Member for Hey wood and Royton (Mr. Barnett). I should have expected him, with his expert knowledge, to make a better case for a greater expenses allowance without any talk about reflating the economy or producing a better balance in the Budget. If one wants to reflate the economy, one need not play about with the expenses rule under Schedule D or Schedule E. That part of it was just a red herring.

As the hon. Gentleman said, overalls and tools are covered at the moment. There may well be some justification for raising the allowance of £10 or £15 to £20 or £25. However, when he comes to the question of books and journals, the hon. Gentleman is in danger of exaggerating. I leave teachers out of it for the moment. Many employees who have to have professional and technical journals have them provided by the employer. This is allowed under Schedule D, and it does not cost the employee anything.

When he talks about articled clerks and courses of study, the hon. Gentleman treads on dangerous ground. It is one thing to talk about articled clerks—if a professional man improves himself by passing examinations while he is earning, that is splendid—but what about the doctor who is not earning while he does his training but who—both himself and his family—has to bear the substantial cost of training? That argument does not hold water.

There is some justification in the hon. Gentleman's case in one respect. I feel that the expense claim differential between Schedule E taxpayers and Schedule D taxpayers should be looked at. Also—I hope that my hon. Friend will be sympathetic to this—the complications of our tax laws now, particularly since 1964–I say this in no party sense—are such that the ordinary taxpayer is unable to understand his liability. The Schedule D taxpayer is probably all right, but the Schedule E taxpayer, if he has a mixed income, with earned income and a bit of investment income, must take professional advice to settle his liability.

The time is fast approaching when the Inland Revenue should allow some sort of expense claim against Schedule E emoluments when sums are genuinely paid out for professional advice, whether to an accountant, a bank manager, a solicitor, or whoever may advise the taxpayer on his tax liability.

I utterly refute the hon. Gentleman's argument about putting a bit of balance into the Budget and giving a little more to the small man rather than to the so-called rich. I remind him that the reduction in S.E.T. goes right through the tax range. [Laughter.] It is no good hon. Members joking. It goes right through the tax range. The family man has done very well in this Budget. About £200 has been given to the family man in tax remissions of one form or another, and it is quite wrong to say that only one section of the community has been looked after in this Budget.

I hope that my hon. Friend will resist the new Clause, but I hope that he will say something encouraging about the possibility of investigating the expenses which may be allowed against the Schedule E assessment. I ask him to bear particularly in mind the need which the layman feels to have his tax problems and liabilities explained by professional advisers. I do not say that because I happen to be an accountant and hope to increase my fees. There is no doubt that the ordinary layman is bemused and bewildered by our tax laws. He must take professional advice, and it would be only equitable and just if, at some time in the future, an allowance were made in respect of the sums which he pays his professional advisers.

Mr. Charles Loughlin (Gloucestershire, West)

I am always fascinated by the reaction of hon. Members opposite to questions of this kind. Perhaps I have a working-class background which produces a sort of mental blockage in my mind when I listen to such people as the hon. Member for Surrey, East (Mr. William Clark). The Clause is primarily concerned with giving up to £50 in allowance to workers in industry. By a weird twist of intellect the hon. Gentleman manages to suggest that the Minister should look at the cost to the individual taxpayer of obtaining professional advice. I know mainly the ordinary industrial workers to whom the Clause was supposed to relate. I suppose that I know as many of them as any right hon. Member or hon. Member does. Very few of them employ professional tax advisers. It is unreal to introduce the argument that whilst rejecting the Clause the Minister might take into consideration the amount of money paid to an accountant for advice.

Then the hon. Gentleman talked about S.E.T. I am sorry to take up the subject, but we have heard a lot about its effect on the ordinary taxpayer in the past two or three days. The Prime Minister and the Chancellor of the Exchequer have talked about the benefits likely to result from the reductions in S.E.T. I understand that they amount to £1.20 for the male adult assistant in shops and 60p for the female assistant. The minimum sales per male operative are about £120 a week in the distribution industry. A more realistic figure would be about £150. We do not need to be mathematicians to work out that the unit of distribution can concede to the consumer at best one new penny per £ of sales. [Interruption.] The Financial Secretary may wish to intervene.

Mr. Patrick Jenkin

My hon. Friend the Chief Secretary asked me which Amendment we were on, and I replied that it was about Schedule E expenses.

Mr. Loughlin

Exactly, and I apologised at the beginning for speaking about S.E.T., but if the hon. Member for Surrey, East mentions S.E.T. and the Chair does not object I am entitled to answer him. It is a con game.

8.15 p.m.

Just as I have practical knowledge of the effect of S.E.T. in distribution, I have practical knowledge of the effect the Clause would have on industrial workers. My hon. Friend the Member for Hey-wood and Royton (Mr. Barnett) spoke of an allowance of £15 and I corrected him, because in my experience the tax people will allow £10 for overalls. The Clause does refer to overalls. Shop assistants use overalls, and they not only buy them but have to pay to launder them. If he is to be reasonable in his approach to the customer, the average shop assistant will need four sets a year, and his weekly laundering bill will be at least 20p. for each overall. Many assistants also have to buy books. Even in distribution, today it is not a question of somebody obtaining a job as a shop assistant and eventually emerging, after about 27 years, as manager of a shop taking about £500 a week and having a wage of £18 a week. The whole system of distribution has changed. The assistant may well be a trainee manager, and if so his expenses will be far in excess of the cost of the overalls.

I give the following information about what I did before becoming a trade union official not because I want to boast about it but because I think it is germane. Many people in industry are in precisely the same position as I was in then. I was in the fishing industry before I became a trade union official. I wore a white coat and white leggings, and on top of them I wore oilskin leggings and an oilskin apron. I had my white coat and leggings laundered every week. My oilskins were pretty expensive.

I do not know what the hon. Member for Flint, West (Sir A. Meyer) is smiling about. These are the facts of life; I am describing what happens in the fishing industry throughout the country. If the hon. Gentleman thinks it is funny, I should like to know why. These are important facts to be borne in mind in the consideration of a Finance Bill. We are considering a Clause which seeks to obtain relief for people in the reality of the situation. I know that as a professional person today I can obtain all sorts of reliefs and that my accountant will look after me. I have only to give him the requisite information, and he will ensure that I get every relief possisble. But it is important that we should consider the men in industry—in fishing, distribution or in factories—who do not have accountants just as much as we consider the professional people who have access to professional advice. I believe that the hon. Member for Flint, West, who smiled in a scathing way, is Parliamentary Private Secretary to the Financial Secretary. I remind him that the people in the fishing industry have to meet costs incurred by the purchase of oilskins and the constant laundering of overalls and leggings.

New Clause 5 refers to a value of up to £50. I do not want to talk now about the increased cost of living with hon. Members opposite, although it is the biggest joke of the century. But bearing in mind that the proposal is for a total of up to £50, I think that this is an eminently reasonable proposal. I hope that the Financial Secretary will not skate over the issue but deal with the practical points which arise in the fishing trade or in distribution—indeed, in the whole of industry—because I believe that the proposal for a total of up to £50 is more realistic than the £10 or £15 to which my hon. Friend referred.

Mr. Dalyell

I would like to put forward two cases as sympathetically as I can in the hope that the Government, if not this year then next year, will look sympathetically at the new Clause. The first is the case of the young teacher. Here, I would not follow my hon. Friend the Member for Heywood and Royton (Mr. Barnett) in the general economic merits of the new Clause, although I happen to agree with him. But I would express the value judgment that there is good in itself in young teachers purchasing books and that the possession of books and the ability to build up some kind of a personal library helps them and helps the country indirectly in their profession. New Clause 5 would be an incentive to them to do so.

Without such a provision, it is true that a large number of young teachers would probably start a library of their own, anyway, but I think that this would have an incentive effect at a critical time, that it would encourage the book-owning habit, which is in itself a value. This is not just my opinion but that of the Educational Institute of Scotland and, doubtless, of a number of other professional organisations. Therefore I hope that the Treasury will talk to Curzon Street and St. Andrew's House about this matter because some of us think that there is real value in the ownership of books and that there should be some tax advantages early on, knowing that people want to take advantage of them and not abuse them or neglect them. There is certain value in the proposal.

The second case is that of the young professional man. As is known to some hon. Members, I work for the New Scientist, and there is no doubt that there is a feeling that many people now going into engineering, for example, are relatively less well paid today than they used to be—incidentally, engineers are finding it much more difficult to get jobs—and that they, too, would benefit greatly from some kind of financial incentive to buy what are not only books but increasingly expensive books.

Ten years ago, as any publisher knows—and here I am not looking straight at the Chief Secretary, although I expect a little sympathy from him on this—books were relatively, even granted the rising cost of living, a great deal cheaper than they are now. But the price of books has soared. I do not blame the publishers; nor do I blame the printers. This is just one of the facts of life. In these circumstances, there is an added reason for the new Clause so that we can help young scientists, young engineers, young technologists and young technicians to own their own books. That would be good for the country and good for British industry.

Mr. Patrick Jonkin

I was surprised to hear the hon. Member for Heywood and Royton (Mr. Barnett) saying, as a result of his researches, that this subject had not been debated since 1957. He himself took part in a debate in 1966 on a very similar proposal.

Mr. Barnett indicated dissent.

Mr. Jenkin

I have the debate here. It is no use the hon. Gentleman shaking his head. He must have been asleep at the time. But he did, in fact, speak. I have done him the credit of reading his speech. It was on 30th June, 1966, and his speech began in column 2269 of HANSARD. I mention this only because proposals along the lines of new Clause 5 have been put by successive Oppositions to successive Governments and have never been able to find favour, for reasons which I hope to explain.

The Amendment in 1966 was moved by the hon. Member for Ashton-under-Lyne (Mr. Sheldon) and the exemption proposed was for overalls, tools and books. The amount suggested was £25. New Clause 5 adds professional journals and courses of study, and is for an amount up to £50. I take the point put by the hon. Member for Gloucestershire, West (Mr. Loughlin)—that the proposal is for a total up to £50.

What new Clause 5 seeks to do is to apply the Schedule D rule wholly and exclusively for the purposes of the employment to certain expenses incurred by Schedule E taxpayers. It omits the word "necessarily", to which the hon. Member for Heywood and Royton referred and which appears in the Schedule E rule. It also omits the other very important leg to the Schedule E rule—that the expenses are only allowable if they are incurred in the performance of the duties of the office. It is probably fair to say that more horses fall at that hurdle of being unable to establish that expenses are incurred in the performance of the duties of the office than fall at the earlier hurdle of having to prove that they are necessary, although the rider must succeed in overcoming both hurdles.

8.30 p.m.

My hon. Friend the Member for Surrey, East (Mr. William Clark), while advising me to reject the new Clause, and I was grateful for his support, for I fear that I must advise the House to reject it, asked me to look at the differences in the treatment of Schedule D and Schedule E taxpayers. One must recognise that Schedule E and Schedule D incomes are taxed under different rules because, as the Royal Commission put it in 1955, of the inherent difference between the two types of income. The taxable income is arrived at in different ways and is computed on different principles and is therefore inevitably taxed under different rules.

Schedule D income is the balance of the profits of a trade or profession, being the difference between the receipts of the trade and the expenses necessary to earn those receipts. The expenses rule uses the words "wholly and exclusively" because the test is not necessity, but commercial expediency.

Unlike the Schedule E taxpayer, the Schedule D taxpayer has no duties within a defined area. He directs his own income-earning activities and he alone is judge as to whether expenditure is for the advantage of the business or profession in which he is engaged. No one else can know, and no one else can decide. All the Inland Revenue can do is, when it has been spent, decide whether the expenditure was wholly and exclusively for the purposes of the trade. This phrase allows the apportionment of an expense which is partly for the purpose of the trade and partly for other purposes.

Mr. J. T. Price (Westhoughton)

The hon. Gentleman is trying to explain the philosophy which lies behind this system of levying tax differently on Schedule D and Schedule E taxpayers. Would he care to be more explicit and to bring his argument out of the realm of the abstract and to give a positive example? For instance, how would he distinguish in principle between the accountant, or solicitor, or barrister, who needs certain professional books to assist him in carrying out his professional duties and who is taxed on Schedule D and the teacher, or politician, or some other person who is pursuing another profession, or who may be a humble shop assistant, who needs certain technical information? How does he distinguish in principle at the two levels between the two different types of taxpayer? We know what the mechanics are, but we want to get at the principle.

Mr. Jenkin

I am trying to deal with the principle. The hon. Gentleman started by asking, and I willingly accede to his request, that I should explain this in relation to specific cases. May I continue to distinguish in principle between the two categories and then give examples to illustrate my argument?

I have dealt with the Schedule D taxpayer, who, on the whole, directs his own income-earning activities and decides whether certain expenditure is necessary in order to enable him to earn his profits, and about whom all the Inland Revenue has to decide is whether those expenses were wholly and exclusively incurred for the purpose of earning the profits.

The Schedule E taxpayer, on the other hand, is in a totally different position. Generally he has an employer who deter mines the scope of the employee's duties and who often tells the employee exactly how he is to perform them. In the over whelming majority of cases, the employer it is who provides all the facilities and all the equipment necessary to enable the employee to perform his duties. If the employee incurs expenses in the per formance of his duties, overwhelmingly that expenditure will be paid for by the employer, whether they are travelling expenses—

Mr. Loughlin

Those expenses are not paid for by the employer, and the hon. Gentleman knows it as well as I do.

Mr. Jenkin

I am taking the overwhelming majority of cases. The hon. Gentleman should not argue too specifically from the position of a Member of Parliament. I do not think that we want to go into this too deeply at the present juncture, but as office holders we may be in a somewhat unique capacity in this regard. However, for the most part if the employer sends the employee away, for instance, to a building site, or to join a ship at a different port, or as a travelling salesman to go round the country, travel expenses are paid by the employer. I think that this is generally accepted by the House. But when the employee is required to provide certain facilities or equipment or to meet certain expenses, then under the law he is entitled to a deduction.

The hon. Member for Westhoughton (Mr. J. T. Price) asked me to illustrate this point by giving the difference between, for instance, the accountant in private practice and the teacher employed by an education authority. In general, the accountant must buy his Simon on Income Tax; the lawyer needs to equip himself with the law reports. They pay for them out of their own pocket. They decide whether they should acquire them or rely for them on public or professional libraries. These are inevitably part of the expenses in earning profits.

On the other hand, the teacher in school—and I take the generality of teachers—will be provided with the text books, blackboard, chalk and increasingly nowadays, language laboratory equipment. For domestic science courses, teachers are provided with washing machines and cookers and for secretarial courses they are provided with typewriters. In general, they do not have lo buy these things; they are provided by the employer, the education authority. I shall come later to the point raised by the hon. Member for West Lothian (Mr. Dalyell) because it must be answered. This in general is the difference between the two. The professional man must decide himself whether to incur expenditure to earn profits. In the other instance, the decision is generally made by the employer who provides or pays for the facilities and equipment necessary to enable the employee to carry out his duties.

I come to the question whether we should extend the Schedule E expenses rule in the manner suggested by the new Clause. I make three broad points. First, the existing rule works pretty satisfactorily for the overwhelming number of Schedule E taxpayers, for a number of reasons. First, the flat-rate deductions to which the hon. Member for Gloucestershire, West referred meet many of the expenses which employees are obliged to bear—for example, overalls and tools. The hon. Member for Gloucestershire, West referred to his experience in the fishing industry. The figure which has been agreed with the relevant unions and professional associations for skippers, mates and deck hands on trawlers is £45, which the hon. Member may feel is not unreasonable, and £22 for engineers on trawlers. I could quote all the way down the scale to vehicle spray painters where the negotiated figure is £9.

Mr. Loughlin

I do not want the hon. Gentleman to mislead the House. When one talks about the fishing industry, one does not necessarily talk about deep sea trawling. There is also freshing, curing, salt codding, and so on. I was not talking about skippers. I was unfortunate in that I was a deep sea fisherman apart from working on the inland side of the fishing industry. I was talking about people working on the docks, in the inland wholesale markets and in the inland retail markets. That has nothing to do with skippers, mates and engineers.

Mr. Jenkin

I was merely giving examples which came from the industry to which the hon. Gentleman referred. A very large number of agreements have been made between the relevant unions and professional associations and the Inland Revenue. The hon. Member for Heywood and Royton has put down a number of questions asking Treasury Ministers to publish the full list in HANSARD. It would be impracticable be cause there are many hundreds of these agreements. I am prepared to answer individual questions about the amounts in any particular case by correspondence.

Perhaps the point is that this is a matter for negotiation between the appropriate trade union or professional association and the Inland Revenue. If in any particular case it is felt that the sum no longer reflects the expenses incurred by the generality of workers in the area, and this is sometimes narrowed down considerably because of conditions of work, it is always open to the union to approach the Revenue to seek to negotiate a higher figure. The Revenue will require to be satisfied that the figure it is being asked to approve represents the necessary expenditure of the individual concerned on the upkeep of tools, provision of overalls and matters of that sort.

There is no desire to try to restrict the figure unreasonably, provided that the Inland Revenue is satisfied that the amounts are being spent and are necessary. In such cases the figure will be agreed without a great deal of difficulty. It must be remembered that these are minimum figures. It is always open to an individual worker, be he a worker in a fish dock or a factory, to prove that in the performance of his duties he has necessarily incurred expenses above the figure which the union has negotiated. He is not bound by the union figure. He can approach the Inland Revenue and negotiate a larger sum—

Mr. Loughlin

No.

Mr. Jenkin

It is all very well for the hon. Gentleman to say "No" but I am stating the rules as they are. If he thinks that I am stating them wrongly I shall be happy to give way.

Mr. Loughlin

What happens in the generality of cases is that there is an agreed figure, say £10. If I want, as an individual in any industry, to spend more than the £10, then the hon. Gentleman can bet his bottom dollar that the local insurance officer will not agree to my spending that amount.

Mr. Jenkin

If the hon. Gentleman could show that he was required to spend this to perform the duties of his office, then the tax inspector would allow the higher sum. If it is merely a matter of personal choice by the individual, then I fully concede that that does not alter the tax rule. It is a question of whether the expenditure is wholly, exclusively and necessarily incurred in the performance of the duties of office. To revert to the white leggings and oilskins to which the hon. Gentleman referred when talking of his previous incarnation in the fishing industry, if he could show that because of the particular work in which he was engaged he needed to have more than the figure that had been negotiated by his union, then it would be open to him to persuade his inspector to accept that and, if it was not accepted, to appeal to the Commissioners. The flat deduction system, bearing in mind that it is a minimum figure and that people can apply for a higher sum, is the first reason why I say the rule is working satisfactorily.

Secondly, we must take into account what is now Section 192 of the Taxes Act, formerly Section 16 of the Finance Act, 1958. Under that Section, following the recommendations of the Royal Commission—not exactly, but in spirit—Parliament decided that annual subscriptions and fees to professional bodies and learned societies should be allowed if they are connected with the taxpayer's employment. It has been generally recognised that the Section went a long way to meeting the point raised by the Royal Commission, particularly about professional people in employment.

It often covers the professional journal which will be included within the annual subscriptions, and in other cases additonal subscriptions are admissible for periodicals which are devoted wholly or mainly to the society's principal purpose. Here again the Revenue has approved lists of professional societies and learned bodies for which the subscriptions are admissible provided that the employee is engaged in that particular area of activity.

It is for these reasons that I say that the existing rule works satisfactorily. I have made the point that the employer normally provides the facilities to enable the employee to do his job and reimburses any expenses. I have given an example of the teacher in class who is usually provided with all the necessary books for teaching the class. In practice such teachers as, for instance, university lecturers and sixth form teachers are allowed to deduct the expenses of books which they buy for use in class.

8.45 p.m.

The hon. Member for West Lothian suggested that we should go further. He suggested there should be a tax allowance to encourage, as he put it, the book-owning habit, to help teachers to acquire background libraries to improve their knowledge of and skill in those subjects in which they are particularly interested, to enable them to keep up to date with their subjects. Naturally, it is desirable that a teacher or other professional person should acquire a library—I do not think I need any prompting by my hon. Friend the Chief Secretary to say that—but the question is whether this expenditure is, in fact, incurred in the performance of the duties of the office and the problem is where we draw the line. For instance, how do we distinguish between expenditure incurred to keep up to date in filling the existing office, and expenditure perhaps to enable a teacher to achieve promotion to a different office, or to take a different job? Perhaps there would be a relatively small amount for buying books, but what about a classics teacher who feels it is part of his duty to explore Greek and Roman antiquities? It seems to me that one is opening the gates extremely wide.

The truth is that it is necessary to limit the Schedule E expenses rule to the expenditure incurred in the performance of the duties and to exclude expenditure of a personal nature whose only possible basis for a claim is that it is in some way related to the man's job. I recognise that the Clause will limit the expenditure to the five categories the hon. Member mentioned and to a figure of up to £50, but—

Mr. Sheldon

I thought the hon. Gentleman would need to deal, as it is essential that he should, with the question of increases in relief needed because of the incidence of inflation. He seems to be coming to the end of his speech without having referred to it. What really is important is that the figure needs to change. The hon. Gentleman gave a number of figures as applied to different occupations. They show how relief needs to be increased as inflation goes on. Surely this is a most important matter But he has not yet mentioned it.

Mr. Jenkin

I think it was before the hon. Gentleman came in that I was engaged with the hon. Gentleman the Member for Gloucestershire, West—I will not say in an altercation, for I would not wish to have one with the hon. Gentleman—in a discussion as to the relevance of the particular figures in particular occupations. I made it clear that it is always open to a union or professional association to approach the Inland Revenue to satisfy the Revenue that a figure which may have existed for a number of years is no longer representative of the expenditure which the members of the union or professional association have to incur in earning the emoluments of their offices. I also made the point that there are a very large number of these figures which have been agreed and I had the assistance of the hon. Member, whose speech in the 1966 debate I referred to briefly. The hon. Member will forgive me if I do not tread that ground again. The difficulty is that if we were to concede the principle embodied in this new Clause it would be increasingly difficult to resist its application to further items of expenditure. It would lead to the erosion of the tax base, and it would seem to me that, in these circumstances, it would be a very slippery path indeed.

My third reason—I do not place as much weight on this as on the other two reasons, which are issues of principle—is a practical consideration to which the hon. Member for Haywood and Royton referred. It is not possible to estimate the cost of the new Clause except to say that it would undoubtedly be considerable. My predecessor, Mr. MacDermot, in reply to the debate in 1966, indicated that, and that, even on the basis of £25, the cost would be as much as £100 million, although he indicated that that included quite a lot of expenditure which was already allowed. As regards the cost, one is talking certainly in terms of tens of millions. More important, however, particularly in present circumstances, would be the manpower requirements in the Inland Revenue if we were to concede the case.

I appreciate that the hon. Member sought to overcome that by arguing that trade unions could negotiate lump sum figures for individuals on the new, more relaxed basis. Even so, this would be bound to have considerable staff implications, and the fact that it was negotiated on a lump sum basis would be bound to increase the cost more than if it were done on an individual basis.

Mr. Dalyell

We have seen many other slippery paths in this year's Budget and Finance Bill than granting these allowances. Could the hon. Gentleman disentangle the cost of a book allowance for teachers from the overall figure of tens of millions which he has given?

Mr. Jonkin

Not without notice. I would not, however, encourage the hon. Member to believe that it could possibly be right to make a specific exception in respect of teachers' books and to refuse, for instance, in respect of examination fees for accountant's articled clerks. It would seem to me that one would be drawing demarcation lines that would be totally impossible to defend. I would not be tempted to go down that slippery slope. As I emphasise again, however, it goes without saying that everybody wishes to encourage people to acquire libraries and to undertake courses of study, but it does not necessarily follow that there should be a tax relief for engaging in those desirable activities.

I therefore sum up by saying that I believe the existing law and practice meets the reasonable requirements of the overwhelming majority of Schedule E taxpayers. If further expense is incurred, it is, in general, a matter of personal choice. The taxpayer is not obliged to incur the expenditure, and he certainly does not do so in the course of performing the duties of the employment. It is not necessary to earn the income. In those circumstances, it seems to me that a case for further relief has not been made.

Mr. J. T. Price

The Financial Secretary to the Treasury has made a valiant attempt to defend his wicket on the new Clause. It is the classical function of a Financial Secretary on the Treasury Bench to defend his wicket, and I do not criticise him for doing so in such an agreeable way. The hon. Gentleman has tried to give us a rational, reasonable, pleasant justification for something which is not quite as simple as he would have us believe.

As the hon. Gentleman knows full well from many previous debates in the House, it is quite useless for him or any other Treasury Minister to point out to me that this kind of proposal has been resisted by both Labour and Conservative Governments for many years. That does not shake me at all, because I admit at once that some of my hon. Friends who have occupied office in the Treasury in former Administrations have been equally obtuse with their colleagues when they occupied the corridors of power.

Without wishing to be tendentious, which is the last thing I would try to be in the House of Commons, let me leave the books alone for the moment, although I will say a word about them presently. I am very interested in them because long before I reached the age of 21 I had acquired 1,000 books of my own out of my very meagre pocket money. They have always been one of my greatest treasures.

Let us take the question of protective clothing and the provision of tools. It is fashionable for Treasury Ministers in the House of Commons, when faced with this kind of request from back-benchers and others who are interested, to say that the question of protective clothing is dealt with fairly and in a liberal manner by many employers—and that is true. There was a time when it was almost unknown for companies or employers of any size to provide overalls, leggings or protective clothing of any kind. Going back a bit further, within my own lifetime, it was quite unknown for employers to produce the tools of the trade.

Mr. James Dempsey (Coatbridge and Airdrie)

They still do not.

Mr. Price

They still do not. The first thing an engineer does when he comes out of his time at 21 is to buy himself a box of tools if he has not inherited one from his father. He has had no allowance for this from the Treasury but, being a good craftsman and not blaming the tools for bad workmanship, he has bought the tools out of his own resources. A man used to have to pay for the sharpening of his picks, for his miner's lamp and the little bit of oil that went into the lamp—the lamp money of 6d. a week. This was the common historic procedure of British industry.

In more recent years, there has been a liberalisation and greater co-operation from employers with more enlightened ideas, chiefly under pressure from trade unions and stupid Socialists like me and some of my lion. Friends—

Mr. Sheldon

My hon. Friend is making excellent points, but is he not understating his case? Although employers nowadays are more enlightened about the provision of tools, nothing can replace the possession by an individual of tools he knows well and can depend on. If he gets tools from the store they may be of doubtful quality because they have been used by everybody else, or they may need to be calibrated, which is the case with engineers' tools. No engineer calls himself a skilled craftsman unless he posseses his own tools. He takes a pride in them and cherishes them all his life. I still have mine.

Mr. Price

I am grateful for that intervention, which has given me a rest just for a moment. It tempts me to go into another aspect which I had thought to spare the House the torment of. I thought we all wanted to go home sometime. This is a fascinating theme and I come back to a perfectly serious point. I do not want to treat this matter flippantly, although I tend to be light-hearted about these things.

The practice of Treasury Ministers is all too aften to quote the big, progressive employer and to forget the large number of bad employers who do not even provide protective clothing, and who do none of the things that are common practice in the great corporations which are so often cited as examples of liberal practice. I will tell the House the difference in practice between good companies and bad companies.

A good company will provide overalls and protective clothing where dirty work is to be done, and will provide for the laundering of them at no cost to the workmen. When Schedule D has to be computed through the company's accountants—I am looking at one or two accountants on my own Front Bench who have done this job for many years—an ample allowance is given for what is spent. No arbitrary ceiling is fixed by agreement for such employees as are on the company's payroll to lessen the liability for tax in respect of those payments. This is well understood.

Another employee doing the same job for another employer may not have the advantage of an agreement for the provision of free protective clothing, and he is faced with an arbitrary limit of perhaps £8 or £7, or a minimal amount that makes no reference to inflated values. The onus is on the workman to establish his case without any professional assistance.

9.0 p.m.

Mr. Patrick Jenkin

I thought for a moment that the hon. Member was leaving out of account the fact that this is not, as he put it, a ceiling but, in a sense, a floor. It has always been open to the man to establish that he has spent, more in doing those things covered by the agreement, and professional advice does not seems to be needed there at all. Receipts would be all that were necessary, or even a supported statement of some sort. The matter is not as difficult as the hon. Gentleman seeks to make out.

Mr. Price

I am being sorely tempted. The last thing I want is to be involved in an altercation with the Financial Secretary, but he is being a little narrow on this question. The man in the small firm who has no professional assistance is in a different category in regard to tax relief for his purchases of protective clothing from that of his opposite number working for a large employer, who is not at such a disadvantage. I do not wish to press the point further except to say that if the Clause merely gets the matter debated until one day some Government have the sense to see that the practice in this case is not as equitable as we are sometimes told it is, it will be all for the good.

I was naturally attracted by what was said earlier about books. The idea of putting a tax on books or putting any penalty on their circulation is completely obnoxious to me. It is just as senseless as was the old window tax. As a boy in Lancashire I saw large blocks of factories and offices and other premises with the windows bricked up because some stupid Tory Government about a century earlier—or it may have been a Liberal Government—put a tax on windows. Whatever the political persuasion, it was a very silly Government. Bricked-up windows were quite common in those days. It had been considered bad to have too much light shed on the work going on in a building, so a tax was put on windows. The occupants responded by getting bricklayers to brick up the windows. In Lancashire, there are still thousands of windows bricked up in very old buildings which stand as a memorial to the industrial age on which our greatness was founded.

A tax on books is equally stupid. Any Government, Labour or Tory, who tax the circulation of literature are stupid. So long as we have this stupid idea that we can put a tax on the circulation of knowledge, we are not as enlightened as we once were. And if we are to replace purchase tax by a value-added tax on the massive scale expected by some Common Marketeers I will have more to say here than I would otherwise have said.

Mr. Barnett

With the leave of the House. I thought it odd that we should have had a debate without mention of the Common Market. My hon. Friend the Member for Westhoughton (Mr. J. T. Price) has relieved our minds on that score.

When talking of some of the reliefs which should be available, I was reminded by my right hon. Friend the Member for Birkenhead (Mr. Dell), who has some knowledge of history, that in the Elizabethan army soldiers had to pay for their own ammunition and did not get any tax allowance.

The Financial Secretary put forward a most inadequate and somewhat complacent reply on the way that the system now works. He referred, in an intervention in the excellent speech of my hon. Friend the Member for Westhoughton, to the fact that the present system is not imposing a ceiling, but a flood. He is right about that. Most ordinary taxpayers under P.A.Y.E. have a floor. They have either nil or something above it, so they start from nil. In that sense we have a floor.

We have had an interesting debate. The hon. Member for Surrey, East (Mr. William Clark), in reply to the point I made earlier about this not being a balanced Finance Bill, said that it was balanced because the S.E.T. reduction went right through. My hon. Friend the Member for Gloucestershire, West (Mr. Loughlin) had something to say about that. I am sure that others of my hon. Friends would have had something to say, too, if they had been told that S.E.T. goes right through. I am not too sure who gets hold of it as it is passing through, but certainly not the people we are trying to assist with the new Clause.

The points raised by my hon. Friend the Member for West Lothian (Mr. Dalyell) about an allowance for young teachers and the incentive effect of allowing such a Clause to the encouragement of the book-owning habit were in no way adequately dealt with by the Financial Secretary. The hon. Gentleman made one fundamental point which, as I hope to show, he answered himself. His main point was that for the Schedule D taxpayer, where the rule is that the expense has to be wholly and exclusively incurred, the expense does not have to be necessarily incurred. He said that only the Schedule D taxpayer can be the arbiter whether the expense is appropriate and that all that the inspector of taxes can do is to decide whether that expense is wholly and exclusively incurred.

The hon. Gentleman went on to draw a comparison with the Schedule E taxpayer. He argued that in that case it was for the employer to decide whether the expense should be allowable. In effect, he said that if the employer does not consider that the employee should have additional overalls, tools, books, and so on, it should not be an allowable expense to tax. That was the main burden of his argument. I am paraphrasing it. If I have got it wrong, perhaps he will put me right.

Mr. Patrick Jenkin

It is not a question of "should not be an allowable expense". What I intended to argue was that prima facie, in the great generality of cases, the employer will provide the employee with the necessary facilities to undertake the duties of his employment, but that, if he does not, the rule—I submit that it is a reasonable rule—requires that it is only if the employee is required to incur the extra expense for the purpose of performing his duties that he should be entitled to tax allowance.

Mr. Barnett

That is not so different from what I was saying. The hon. Gentleman was arguing that if the employer does not provide the tools or overalls and the employee supplies them for himself, that would be a test whether that expense should be allowable. I gather the hon. Gentleman does not dispute that that is what I was saying.

As has been said by many of my hon. Friends, there are many good employers who provide more than an adequate supply of overalls, tools, and so on; but, there is a large number who certainly do not supply an adequate amount of tools, overalls, and so on. For example, many women workers have to launder their own overalls every week. The good employers would meet that expense, but many others would not.

The main burden of the hon. Gentleman's argument was that if the employer is not prepared to meet this expense, in itself this is an adequate test as to whether the expense should be allowable. He then virtually answered the main burden of his case, because he referred to a series of questions that I put to him a little while ago, when I asked how many agreements there were where there was an allowance for tools, overalls and the like. After giving a few examples of agreements between trade unions, employers and the Inland Revenue, again he said that there are so many hundreds of agreements between trade unions and the Inland Revenue that it is almost impossible to list them all.

In other words, the Revenue is at present allowing, on a very large scale, expenses incurred by employees where the employers do not meet them. Therefore, the whole burden of the hon. Gentleman's point is broken. In all those cases, the expenses allowed by the Inland Revenue—it may well be that the Revenue do so virtually in contravention of Section 189 of the Income and Corporation Taxes Act—are very flexible; flexible in such a way that it completely invalidates the hon. Gentleman's argument.

The hon. Gentleman said that he has no desire to restrict these expenses. If he genuinely has no desire to restrict them, one can only assume that by impli cation. Indeed, when he intervened during the speech of one of my hon. Friends, he seemed to imply that the Revenue should be prepared to review upwards the many agreements which exist.

As my hon. Friend the Member for Gloucestershire, West pointed out, in one industry, with an allowance of £10 per employee, the Revenue would be prepared to consider revising that upwards. My hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) pointed out that inflation has meant that there should be an increase in the amount of the allowances. In Committee the Financial Secretary pretty well conceded that there is a case for an increase in some allowances because of inflation. We debated the increase in the car allowance from £2,000 to £4,000. The Financial Secretary said that the Government had included a little bit for inflation. That little bit turned out to be about 43 per cent. I suppose that that was a little licence, bearing in mind what the Government are likely to do in the next year or so. In many cases the last time that these agreements were negotiated was some time ago. Therefore, in view of what the hon. Gentleman has said, I assume that trade unions should now seek to discuss this matter with the Inland Revenue with a view to revising substantially upwards the figure they have agreed, some years ago in many cases, for tools and overalls.

Apart from that, the general case for giving an additional £50 allowance, especially to those paying tax under P.A.Y.E., was not answered by the Financial Secretary. There is a case for increasing the threshold, by giving an additional £50 allowance, which would remove a number of lower paid taxpayers on Schedule E.

As I pointed out, in the Budget the Chancellor relieved 200,000 taxpayers from paying tax by the child relief, but another 750,000 were brought into the net this year because of inflation. For that reason alone there is a substantial case for giving another £50 allowance under P.A.Y.E. I am not saying that it should be for every person but only where there is an expense of up to £50 for tools, books, overalls, journals, and so on.

In view of the wholly inadequate reply which we have had and the complacency of the Financial Secretary, I hope that my right hon. and hon. Friends will join me in the Lobby in voting for the new Clause.

Question put, That the Clause be read a Second time:—

The House divided: Ayes 163, Noes 192.

Division No. 408.]	AYES	[9.15 p.m.
Allaun, Frank (Salford, E.)	Hannan, William (G'gow, Maryhill)	Orme, Stanley
Allen, Scholefield	Hardy, Peter	Oswald, Thomas
Archer, Peter (Rowley Regis)	Hart, Rt. Hn. Judith	Paget, R. T.
Ashton, Joe	Hattersley, Roy	Palmer, Arthur
Barnett, Joel	Heffer, Eric S.	Pannell, Rt. Hn. Charles
Bishop, E. S.	Hooson, Emlyn	Pardoe, John
Blenkinsop, Arthur	Horam, John	Parker, John (Dagenham)
Booth, Albert	Houghton, Rt. Hn. Douglas	Parry, Robert (Liverpool, Exchange)
Boyden, James (Bishop Auckland)	Howell, Denis (Small Heath)	Pavitt, Laurie
Bradley, Tom	Huckfield, Leslie	Pendry, Tom
Brown, Hugh D. (G'gow, Provan)	Hughes, Mark (Durham)	Pentland, Norman
Buchan, Norman	Hughes, Robert (Aberdeen, N.)	Price, J. T. (Westhoughton)
Callaghan, Rt. Hn. James	Janner, Greville	Reed, D. (Sedgefield)
Campbell, I. (Dunbartonshire, W.)	Jay, Rt. Hn. Douglas	Roberts, Rt. Hn. Goronwy (Caemarvon)
Carmichael, Neil	Jenkins, Hugh (Putney)	Robertson, John (Paisley)
Clark, David (Colne Valley)	John, Brynmor	Roderick, Caerwyn E.(Br'c'n&R'dnor)
Cocks, Michael (Bristol, S.)	Johnson, Walter (Derby, S.)	Rodgers, William (Stockton-on-Tees)
Coleman, Donald	Jones, Barry (Flint, E.)	Roper, John
Concannon, J. D.	Jones, Dan (Burnley)	Ross, Rt. Hn. William (Kilmarnock)
Cox, Thomas (Wandsworth, C.)	Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)	Sandelson, Neville
Cunningham, G. (Islington, S. W.)	Jones, Gwynoro (Carmarthen)	Sheldon, Robert (Ashton-under-Lyne)
Cunningham, Dr. J. A. (Whitehaven)	Judd, Frank	Sillars, James
Dalyell, Tam	Kaufman, Gerald	Silverman, Julius
Davidson, Arthur	Kerr, Russell	Skinner, Dennis
Davies, Denzil (Llanelly)	Lambie, David	Small, William
Davis, Terry (Bromsgrove)	Latham, Arthur	Smith, John (Lanarkshire, N.)
Deakins, Eric	Lawson, George	Spearing, Nigel
Delargy, H. J.	Lee, Rt. Hn. Frederick	Spriggs, Leslie
Dell, Rt. Hn. Edmund	Leonard, Dick	Stoddart, David (Swindon)
Dempsey, James	Lewis, Arthur (W. Ham, N.)	Strang, Gavin
Doig, Peter	Loughlin, Charles	Summerskill, Hn. Dr. Shirley
Dormand, J. D.	Lyon, Alexander W. (York)	Swain, Thomas
Douglas, Dick (Stirlingshire, E.)	Lyons, Edward (Bradford, E.)	Taverne, Dick
Douglas-Mann, Bruce	Mabon, Dr. J. Dickson	Thomas, Jeffrey (Abertillery)
Driberg, Tom	McBride, Neil	Thomson, Rt. Hn. G. (Dundee, E.)
Eadie, Alex	Mackenzie, Gregor	Thorpe, Rt. Hn. Jeremy
Edwards, Robert (Bilston)	Mackie, John	Tinn, James
Ellis, Tom	Mallalieu, J. P. W. (Huddersfield, E.)	Torney, Tom
Evans, Fred	Marks, Kenneth	Tuck, Raphael
Femyhough, Rt. Hn. E.	Marquand, David	Walden, Brian (B'm'ham, All Saints)
Fisher, Mrs. Doris (B'ham, Lady wood)	Marshall, Dr. Edmund	Wallace, George
Fletcher, Ted (Darlington)	Mayhew, Christopher	Watkins, David
Foley, Maurice	Meacher, Michael	Weitzman, David
Ford, Ben	Mellish, Rt. Hn. Robert	Wellbeloved, James
Freeson, Reginald	Mcndelson, John	Wells, William (Walsall, N.)
Galpern, Sir Myer	Mikardo, Ian	White, James (Glasgow, Pollok)
Garrett, W. E.	Millan, Bruce	Whitehad, Phillip
Gilbert, Dr. John	Miller, Dr. M. S.	Whitlock, William
Ginsburg, David	Morgan, Elystan (Cardiganshire)	Williams, Alan (Swansea, W.)
Golding, John	Morris, Alfred (Wythenshawe)	Wilson, Rt. Hn. Harold (Huyton)
Gourlay, Harry	Morris, Charles R. (Openshaw)	Woof, Robert
Grant, George (Morpeth)	Morris, Rt. Hn. John (Aberavon)
Grant, John D. (Islington, E.)	Murray, Ronald King	TELLERS FOR THE AYES:
Hamilton, James (Bothwell)	Ogden, Eric	Mr. Ernest Armstrong and
Hamilton, William (Fife, W.)	O'Halloran, Michael	Mr. James A. Dunn.
Hamling, William	O'Malley, Brian
NOES
Adley, Robert	Boardman, Tom (Leicester, S. W.)	Chapman, Sydney
Alison, Michael (Barkston Ash)	Boscawen, Robert	Chataway, Rt. Hn. Christopher
Allason, James (Hemel Hempstead)	Bossom, Sir Clive	Chichester-Clark, R.
Atkins, Humphrey	Bowden, Andrew	Churchill, W. S.
Baker, Kenneth (St. Marylebone)	Boyd-Carpenter, Rt. Hn. John	Clark, William (Surrey, E.)
Baker, W. H. K. (Banff)	Bray, Ronald	Clarke, Kenneth (Rusholiffe)
Barber, Rt. Hn. Anthony	Brinton, Sir Tatton	Clegg, Walter
Batsford, Brian	Brocklebank-Fowler, Christopher	Cooke, Robert
Bell, Ronald	Brown, Sir Edward (Bath)	Cooper, A. E.
Benyon, W.	Bryan, Paul	Corfield, Rt. Hn. Frederick
Berry, Hn. Anthony	Buchanan-Smith, Alick (Angus, N&M)	Cormack, Patrick
Biffen, John	Buck, Anthony	Critchley, Julian
Biggs-Davison, John	Butler, Adam (Bosworth)	Crouch, David
Blaker, Peter	Carlisle, Mark	Crowder, F. P.
Curran, Charles	King, Evelyn (Dorset, S.)	Rees-Davies, W. R.
d'Avigdor-Goldsmid, Sir Henry	King, Tom (Bridgwater)	Renton, Rt. Hn. Sir David
d'Avigdor-Goldsmid, Maj-Gen. James	Kinsey, J. R.	Rippon, Rt. Hn. Geoffrey
Dean, Paul	Kitson, Timothy	Rost, Peter
Deedes, Rt. Hn. W. F.	Knight, Mrs. Jill	Russell, Sir Ronald
Dixon, Piers	Knox, David	Scott, Nicholas
Dodds-Parker, Douglas	Langford-Holt, Sir John	Scott-Hopkins, James
Drayson, G. B.	Le Marchant, Spencer	Sharples, Richard
Dykes, Hugh	Lewis, Kenneth (Rutland)	Shaw, Michael (Sc'b'gh & Whitby)
Edwards, Nicholas (Pembroke)	Longden, Gilbert	Shelton, William (Clapham)
Farr, John	Loveridge, John	Simeons, Charles
Fell, Anthony	Luce, R. N.	Sinclair, Sir George
Fenner, Mrs. Peggy	McAdden, Sir Stephen	Smith, Dudley (W'vvick & L'mington)
Fletcher-Cooke, Charles	McCrindle, R. A.	Soref, Harold
Fookes, Miss Janet	McLaren, Martin	Speed, Keith
Fortescue, Tim	Macmillan, Maurice (Famham)	Spence, John
Foster, Sir John	McNair-Wifson, Michael	Sproat, Iain
Fowler, Norman	Maddan, Martin	Stainton, Keith
Gardner, Edward	Madel, David	Stanbrook, Ivor
Gibson-Watt, David	Marten, Neil	Stewart-Smith, D. G. (Belper)
Goodhart, Philip	Mather, Carol	Stokes, John
Goodhew, Victor	Maude, Angus	Stuttaford, Dr. Tom
Gorst, John	Meyer, Sir Anthony	Tapsell, Peter
Gower, Raymond	Mills, Peter (Torrington)	Taylor, Sir Charles (Eastbourne)
Grant, Anthony (Harrow, C.)	Mitchell, Lt.-Col. C.(Aberdeenshire, W)	Taylor, Edward M.(G'gow, Cathcart)
Gray, Hamish	Moate, Roger	Taylor, Frank (Moss Side)
Green, Alan	Monro, Hector	Tebbit, Norman
Gummer, Selwyn	Montgomery, Fergus	Temple, John M.
Hall, Miss Joan (Keigbley)	More, Jasper	Thatcher, Rt. Hn. Mrs. Margaret
Hall, John (Wycombe)	Morgan-Giles, Rear-Adm.	Thomas, John Stradling (Monmouth)
Hall-Davis, A. G. F.	Morrison, Charles (Devizes)	Trafford, Dr. Anthony
Harrison, Col. Sir Harwood (Eye)	Mudd, David	Trew, Peter
Hay, John	Murton, Oscar	Tugendhat Christopher
Hayhoe, Barney	Neave, Airey	Turton Rt Hn. Sir Robin
Heath, Rt. Hn. Edward	Noble, Rt. Hn. Michael
Hicks, Robert	Normanton, Tom	Waddington, David
Higgins, Terence L.	Onslow, Cranley	Walder, David (Clitheroe)
Hiley, Joseph	Oppenheim, Mrs. Sally	Walker-Smith, Rt. Hn. Sir Derek
Hill, James (Southampton, Test)	Owen, Idris (Stockport, N.)	Walters, Dennis
Holt, Miss Mary	Page, Graham (Crosby)	Ward, Dame Irene
Hordern, Peter	Parkinson, Cecil (Enfield, W.)	Warren, Kenneth
Hornby, Richard	Peel, John	Weatherill, Bernard
Hornsby-Smith. Rt. Hn. Dame Patricia	Percival, Ian	Wiggin, Jerry
Howell, David (Guildford)	Pink, R. Bonner	Wilkinson, John
Howell, Ralph (Norfolk, N.)	Powell, Rt. Hn. J. Enoch	Wolrige-Gordon, Patrick
Hunt, John	Pym, Rt. Hn. Francis	Wood, Rt. Hn. Richard
Hutchison, Michael Clark	Raison, Timothy	Woodhouse, Hn. Christopher
Irvine, Bryant Godman (Rye)	Rawlinson, Rt. Hn. Sir Peter	Wylie, Rt. Hn. N. R.
Jenkin, Patrick (Woodford)	Redmond, Robert
Jessel, Toby	Reed, Laurance (Bolton, E.)	TELLERS FOR THE NOES:
Kellett-Bowman, Mrs. Elaine	Rees, Peter (Dover)	Mr. Hugh Rossi and
Kilfedder, James		Mr. Paul Hawkins.