§ These Amendments merely correct verbal errors in new Clause 29 which the Government accepted last night. The Vehicle Excise Acts were consolidated earlier this year and the reference in the Clause is to the pre-consolidation legislation. The correct title of the "Minister of Health and Social Security" is "Secretary of State for Social Services".
§ Mr. Taverne
The Chief Secretary gives me the opportunity to put a correction on the record. In the course of his generous concession yesterday, the Chancellor of the Exchequer said that my hon. Friend the Member for Manchester, Wythenshawe (Mr. Alfred Morris) had previously voted against the proposal which he was now supporting. He realised later that that was not so and he personally apologised, very generously, to my hon. Friend. I should like to make it clear that the reference in column 1166 of the OFFICIAL REPORT for yesterday's debate to the hon. Member for Wythenshawe voting against the new Clause in a previous year is incorrect, because my hon. Friend did not vote against it.
§ Mr. Macmillan
I should like to thank the hon. and learned Gentleman. As he knows, there was an error. There was no reflection on the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris) and I am happy to say that the record is now clear.
§ Amendment agreed to.
§ Further Amendments made: Clause (Disabled Passengers), line 9, leave out from 'by' to 'the' in line 10.
§ Order for Third Reading read.
§ 8.58 p.m.
§ Mr. Maurice Macmillan
I beg to move, That the Bill be now read the Third time.
What with Second Reading, Committee of the whole House, Standing Committee "H" and now three days on Report, the 1450 measures in the Bill have been fairly extensively debated. Some have been debated more than others. We have had some extremely interesting contributions from both sides of the House and both sides of the Committee, sometimes directly referring to the Bill and sometimes dealing with the underlying economics or philosophy which hon. Members in different parts of the House detected behind my right hon. Friend's Budget measures either with approval or disapproval.
Sometimes we have had extremely interesting contributions from hon. Members with original and individual ideas of reform and new measures which they wished the Government to take up. Sometimes we have had repetitions of new ideas which have come before successive Committees on Finance Bills and which have been urged on successive Governments of both parties.
§ Mr. Macmillan
And resisted by successive Treasury Ministers, as the hon. Member correctly observed.
We have had fascinating dissertations from my hon. Friend the Member for Kensington, South (Sir B. Rhys Williams), in a highly characteristic contribution to our debates, which have been taken up with almost equal expertise by hon. Members opposite. Some hon. Members, less well versed in the detail of this type of argument, have found themselves from time to time a little confused.
We have covered all the relevant passages and points, and some were more relevant than others, if I may put it like that, and, without undue lateness, we have been fairly thorough. I am bound to admit that when debates were protracted, the blame for such protraction, if that is the right word in this context, could be fairly evenly divided between both sides. [HON. MEMBERS: "NO."] That may be a matter of judgment and opinion, sometimes subjective, depending on the length of time for which hon. Members have been sitting on the bench.
1 would like to thank hon. Gentlemen opposite and the usual channels for the amicable arrangement on the whole which we have somehow sustained in planning our programme in Committee upstairs and in the House and on Report. I have not counted either the number of Amendments discussed or the column inches in 1451 HANSARD, but my impression is that my hon. and right hon. Friends have been more assiduous than usual in this Finance Bill. I am not sure that they have not been more assiduous in moving the Amendments and speaking to them than hon. and right hon. Gentlemen opposite.
This Bill, as usual, does two things. It implements the Chancellor's Budget judgment and makes changes in the tax system. It is unique in one way, in that the changes which are made in the tax system and structure, the reforms which this Bill is bringing in, are projected further into the future than is usual in Finance Bills. We have the value-added tax in the autumn and a change in corporation tax, which is being discussed by a Select Committee. That is not unique but it is something which has not been used for some time. There are also changes in the personal tax system, starting with this Bill and working through to unification in 1973–74.
The Chancellor has initiated and carried through a massive programme of tax reform and I am glad to say that in the process of putting this to the House and to the country we have been able to use some slight innovations and improvements in communication through the use of the Green Papers on value-added tax and corporation tax and the use of the Select Committee to discuss the details of the latter.
I do not now want to go further into the question of the Chancellor's Budget judgment and the economic situation which we debated at some considerable length recently—a debate which went on in a slightly spasmodic fashion yesterday at Question Time. I would remind the House that this Bill introduces tax reductions totalling in a full year some £1,000 million and that in itself is a considerable change for the better compared with the pattern of the last six years.
There is a time lag for these measures to have their full effect on the economy but in both the long and the short term they will lead to a more vigorous and efficient economy, as my right hon. Friend pointed out on 28th June when he gave some of the signs of the improvement he had detected. It has been said, and no doubt will be said again later this evening, that this is a rich man's Budget. It is not. The tax system as it is after 1452 this Budget, and as it will be when the reforms are complete, will still be progressive. That is one of the reasons which enable hon. and right hon. Gentlemen opposite to say that it benefits those who are better off more than those who are less well off. Any reduction in direct taxation in a system as progressive as ours is bound to benefit those who pay the most tax but it still leaves them paying a very large proportion of tax with a relatively high tax burden.
Part of the package in this Budget was the new and considerable help given to the poorer families, the upgrading of social security benefits and the upgrading of pensions in the autumn. Part of it was the improved child allowances, helping a very large number of families, and the cut in selective employment tax which was demanded by my hon. Friends, by the country and by industry and commerce, who all sought to have it abolished. This year my right hon. Friend has been able to reduce it by half. Other elements in the Budget package were the proposals to help companies with their liquidity and profitability through corporation tax which even right hon. and hon. Members opposite felt were necessary.
In the Budget debate, my hon. Friend the Financial Secretary pointed out that the 15 per cent. earned income relief above £4,005 a year earned income cost the Exchequer in taxation only £16 million—less than 3 per cent. of the total tax reliefs.
Finally, in the package we have had the reforms of indirect taxation and the replacement of two taxes—purchase tax and selective employment tax—by one tax. On the other side, the reform of direct taxation—the one point on which the Committee and the House were in total agreement was that the unification of taxation makes it harder for people to assume that their tax burden is more oppressive than it really is. We have today discussed this aspect at some length and I need not go into it any further. Despite criticisms about not informing the House sufficiently of future intentions, I point out that my right hon. Friend has exposed more of his future tax intentions than any Chancellor of the Exchequer has done before.
The tone of our discussion, particularly in Committee and on Report, has shown that the objections of right hon. and hon. 1453 Members opposite are sometimes more theoretical than practical and they have not been expressed with quite the vigour of the past. A lot of their criticism, even today, has reminded me of the title of a song which I remember from my younger days—" It ain't what you do, it's the way that you do it "—that's what really counts. The Opposition have criticised my right hon. Friend the Chancellor and the Government for doing the right thing in the wrong way. I reply by quoting another song title—"It ain't necessarily so". I sometimes thought that right hon. and hon. Members opposite were straining a little disagreement to go a very long way. I should be delighted to express my words in song were it not for the fact that even in church I am inclined to put the choir off by singing out of tune.
We have had disagreements between the Government and their supporters and right hon. and hon. Members opposite and a certain amount of divergence of view between the Treasury Bench and my right hon. and hon. Friends. But I can, with more than conventional sincerity, thank hon., right hon. and right hon. and learned Gentlemen opposite for the cooperative nature of their opposition and criticism and, perhaps, thank my hon. Friends for the critical nature of their cooperation. As a result, we are now embarking on the Third Reading of a much improved Bill. It is the first of a series. It is bringing in a coherent and sensible pattern of tax changes and reform, a pattern of reform which was put before the country at the last election and approved by the electorate.
§ 9.10 p.m.
§ Mr. Taverne
I do not propose to follow the Chief Secretary in his historical survey of the progress of the Bill through its various stages, except to say that it was on the whole an agreeable occasion, although some of the sittings were much too late. Nor do I intend to follow him in his game of song-titles.
The reasons why we have asked for a Third Reading are twofold; first, because a Third Reading provides a chance to look back on the Budget, to see it whole and to see it in perspective; secondly, because it gives us on this side of the House a chance to register our opposition to the whole of the Bill as one which is 1454 economically irrelevant and socially unjust.
The Budget had one good result. When it was introduced it was a personal success for the Chancellor of the Exchequer, and it certainly is no good for the country if the Chancellor does not command respect. The Budget raised the respect in which he was held, although it has perhaps again become a little worn since. The immediate effect of the Budget on the House was undoubtedly one of euphoria for the Government back benchers; the promises which they cared most about seemed to have been realised. Conservative remedies were being applied and, just as the Government are the most Conservative of post-war Governments, this Budget was the most Conservative of the post-war Budgets.
The immediate reaction in the City and in industry was to welcome the Budget, to a large extent for much the same reasons, because there is a natural sympathy between the captains of industry and commerce and hon. Gentlemen opposite. At first the popular reaction to the Budget was favourable because the people were dazzled by the size of the tax cuts. There was a momentary recovery in the Government's standing immediately after the Budget which, shortly afterwards, resumed its plunge to deeper and deeper depths.
I invite hon. Members opposite to look back at the original Budget debates. My right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) quoted "Macleod's Law" with some foresight. He quoted Macleod's statement that a Budget that looks good in April is rarely a Budget that looks good in July. This law has proved true with a vengeance, because the euphoria of the benches opposite has evaporated. Only yesterday we heard from the Government's own back benchers widening and deepening rumbles of discontent, and that I think we shall hear more and more. The effect of the Budget was being criticised from the back benches opposite and the whole of the Budget judgment was being questioned.
The mood of industry is now very different; it is a gloomy mood. If one looks at the popular reaction, the state of the opinion polls is not necessarily of enormous significance looked at over a long time span because the opinion polls go 1455 up and down. However, unpopularity has been achieved more quickly and to a greater extent than was achieved by any of the Government's predecessors.
When one looks at the results of the local elections, who would have thought that one-and-a-half months after the Budget, which was the crowning piece of a programme which has given back £1,000 million in taxes, as the Chief Secretary has boasted, there would be such a disastrous landslide as the loss by the Tory Party of over 2,000 local government seats? Some of us predicted this. Indeed, if I may refer to my own speech in the Budget debate, I said:So when all the smokescreen has been blown away these are the stark facts which emerge—higher unemployment, higher prices, worsening balance of payments, falling manufacturing investment."—[OFFICIAL REPORT, 5th April, 1971; Vol. 815, c. 156.]What lessons are to be learned from the Budget? One cannot yet give a final judgment, but certain fundamental flaws in the Government's thinking have become evident.
The first of these flaws is the fallacy that tax benefits for the wealthy are a short-cut to economic health. When we were in Government the Opposition always told us that the key to economic prosperity and progress was confidence. We were told that confidence could arise only if there were a Conservative Government, and many lectures were delivered to us by the Conservative Opposition. As one moment I almost thought there was something in it. I thought that if business men believed that the measures were the right ones because they approved of them and they thought on similar lines to those who were taking the measures, this might influence their attitude to investment and might mean that the measures were made effective by the psychological reaction to them.
For a moment it looked as if the Budget might do the trick. At the end of the Budget debate the Chancellor of the Exchequer pointed with glee to the monthly survey of business opinion which appeared in the Financial Times and which seemed to suggest that this was what was happening. When I challenged the right hon. Gentleman about the forecast of investment intention, he said:That figure represents a cautious view, but I would certainly hope … that in the out- 1456 come we shall have a better figure for investment than that."—[OFFICIAL REPORT, 5th April, 1971; Vol. 815, c. 164.]Since he spoke the figure has gone down and down, and every successive survey from every angle has shown a more pessimistic picture.
It is clear that this whole argument is based on a total fallacy. In the end business men are far more objective in their assessment of what is good for their investment intentions than right hon. and hon. Gentlemen opposite suppose. Business men look at what will be the demand for their products and an ideological boost is no substitute for proper economic management. That is the first of the Tory fallacies exposed.
The second lesson from the Budget, and what has happened to the economy since, is that tax reform as such is no substitute for demand management. It is true that to a large extent tax reform has been a neglected subject and, as many hon. Members will know, I have an interest in this matter in more ways than one. Some of the tax reforms proposed in the Budget, and contained in the Finance Bill, were reforms of which we approved. Furthermore, we welcomed the publication of Green Papers following the tradition launched by my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan).
Clearly, tax reform has been the subject that has absorbed the energies of the new régime at the Treasury more than any other. It is an important subject. It is not totally irrelevant to growth, but it is only one of the several factors and not necessarily the most important factor. It certainly will not help if economic management is bad.
I repeat a warning to the Government which I gave in the early hours of one morning in the Committee stage. The tax pattern for the future is a pretty unpleasant one. If one plots a full employment path for the next few years and if one looks at the pattern of public expenditure and how it is likely to develop on the basis of present plans, this will require an increase in the proportion of the gross national product that will go in taxation by the mid-1970s. I am sure that this is what the medium-term assessments will show the Treasury.
But at present we have a position of unemployment. We are therefore at a stage where the tax burden has been 1457 reduced below the average trend which would be required if we were in a position of full employment. A number of back bench Members opposite have said from time to time that the Budget is splendid and gives a whole series of tax reforms exactly in line with good Conservative thinking, but that, unfortunately, there is one slight stain on the total picture and that is the amount of unemployment. They have said this as if somehow this were no accidental condition, as if there were an unfortunate link between the two conditions. But there is a direct link. It is precisely because the economy is slack and we face a recession that the Chancellor has had to give some boost—in the circumstances, an insufficient boost—and to lower taxation. If one looks at the requirement over the years if we return to a position of full employment, and if one looks at the added promises of further relaxations in the taxation of interest and on property income, the total burden of taxation which will have to be borne will be an increasing and a depressing one, unless the other way out is taken, that of intolerable restrictions on public expenditure.
The third lesson from the Budget is that the Budget judgment has now been shown to be totally wrong. This subject has been extensively debated and I do not wish to refer to it at any length. It is clear that the base was wrong and that the amount, in any event, was insufficient; and we now face rising unemployment. What is especially disturbing is that it appears to have been based on a persistent bias towards over-optimism in the Treasury estimates. It is true to say that until the beginning of 1969, Treasury estimates were, perhaps, persistently under-estimating the amount of consumption. It is also true that since the beginning of 1969 there has been a constant bias towards over-estimating the amount of growth and the amount of consumption which we are likely to have.
What is partciularly serious is that in the Buget the Chancellor took the wrong action on prices. We said so at the time, and there is now widespread support, again from certain hon. Members opposite, for this proposition. The Chancellor acted in a manner which provided the effects too late and in sufficiently. They were measures of the wrong kind. The Chancellor and the Treasury 1458 Ministers were obsessed by their own propaganda on S.E.T. They whipped up a popular myth that S.E.T. had a big effect on prices. Now it is seen that the effect on prices was vastly over-stated and that a cut in S.E.T. has only a minimal effect on the cost of living. What is more, this a crucial mistake, because the total failure of the Government's policy on prices taints everything, inclding some of the most important things that the Government are trying to do.
The last lesson is that social inequality is econmically harmful. I fear that the effects of the drive towards greater inequality contained in the Budget are still to come. There are still some chickens to come home to roost.
I have not made much reference on Report to the inequality contained in the Finance Bill, since it was a constant theme of our debates in Committee. The other points that we have made from the beginning have made a considerable impact on some more discerning hon. Members opposite. For example, the whole question of the Budget judgment has gone home. On this line, we have made no impact so far. But it is clear that the Chancellor of the Exchequer cannot avoid a complete change of strategy in dealing with inflation, and that a voluntary incomes policy must be an important part of that change of strategy. It is also clear that the right hon. Gentleman cannot get within miles of that if he continues to pursue a policy which is so heavily biased towards the wealthy. That is why I say that the final lesson is that social justice is a central part of economic strategy.
This, therefore, is a Budget which is irrelevant, except in so far as it is harmful. It is totally unjust, and I shall ask my right hon. and hon. Friends to vote against the Motion.
§ 9.27 p.m.
§ Mr. John Farr (Harborough)
I hope that I shall be forgiven if I do not pursue many of the arguments of the hon. and learned Member for Lincoln (Mr. Taverne). He seemed to revel in a cloud of gloom and despondency. He spoke almost with relish about the prospects of unemployment and seemed to sense that, whichever Government were in office, there would be a need for increased taxation in 1974. He went on to say that there was a bias, anyhow, 1459 to over-optimism in the Treasury's estimates. Listening to the hon. and learned Gentleman the House may well conclude that, if ever the unfortunate day comes when he has a hand in the Treasury's esimates, one of his first actions will be to see to it that any misplaced bias to over-optimism is eradicated. The hon. and learned Gentleman will do that effectively, I am sure.
We on this side of the House take a different view. We believe that it is a first-class Budget. It is fair to say that when my right hon. Friend introduced his Budget a few months ago, he did so as a man standing in the shadow of a great statesman. Today, as a result of this Finance Bill, my right hon. Friend stands in no one's shadow. Throughout the country there is a feeling of warm affection for all that he has done for all sections of the community in this Finance Bill.
I want to specify three points which I find worthy of note. First, I congratulate my right hon. Friend on assessing husbands and wives separately for income tax. I know from personal experience that many wives would have gone back to their previous employments before the Budget if only they had found it worth while financially. I know, for example, of highly skilled physiotherapists, of whom the nation is in desperate need, who, being married with two or three children, would not return to their old jobs. They felt that it was unrewarding financially to go back to work since they would have to employ others to do their housework and look after their children. I congratulate my right hon. Friend warmly on what he has done in that direction.
Another relief provided in this Finance Bill which has been welcomed by my constituents is the halving of selective employment tax. We hope to see the other half go next year. I know from personal experience what a tremendous amount of wasted time and damping down on initiative this tax has occasioned. For instance, those engaged in farming have had to go through the ludicrous procedure every month of paying S.E.T., which is then held by the tax collector for three or four months before it comes back in the form of a refund. It is difficult to conceive a more ludicrous time- 1460 wasting performance for making a forced loan to the tax collector for three or four months before it comes back again. Only a Socialist Chancellor of the Exchequer in his heyday could have conceived such a nonsensical arrangement. I am glad that at least half of the S.E.T. has now gone.
Thirdly, I should particularly like to congratulate my right hon. Friend on what he did last night. He proved that he and his colleagues on the Treasury Bench were humane enough to accept the critical and valuable new Clause, supported by hon. Members on both sides of the House, relating to disabled persons who, due to their disabilities, are unable to drive motor cars. The Chancellor showed compassion in accepting that valuable proposal which was tabled yesterday by hon. Members on both sides. I know from practical experience that this concession which we have now put into the Bill will make a substantial difference to disabled persons who, being unable to drive, have to rely, for instance, upon their wives, relatives or friends to drive for them.
If I have any concern about the Bill, it is that the Chancellor has not been energetic enough in tackling the injustice of the application of the capital gains system. My fears about the justice and fairness of the system exist for the following reasons. The Bill contains marginal reliefs, but it does not attempt to tackle the basic injustice and unfairness of the capital gains tax system. It is basically unfair because, at the present rate of inflation, a person's liability for capital gains tax can be doubled within ten years without the slightest increase in the real value of his assets. Hon. Gentlemen opposite do not appear to be particularly concerned. I am thinking of how it affects many people who have relatively small assets and who, due to the rise in the cost of living and the decrease in the value of money, are year by year drawn into the capital gains assessment network. It means that, with stable values, capital gains tax liability is increasing by 10 per cent. per annum.
Many thousands of holders of small assets have become liable to capital gains tax each year solely as a result of inflation without any increase in the real value of their assets. That is an unfair situation. I hope that the Government 1461 will bring inflation under control. If not, then steps must be taken to correct this anomaly in the next Finance Bill.
Inflation is having a serious effect on small family businesses. It can only hasten their departure from the scene. It may be that, in the interests of national efficiency, we should get rid of some family businesses, but I should hate to see them have to leave the scene in this way.
On the whole, this is a fine Budget. After the dead hand of Socialist financial control for five or six years, with continually rising taxation, and with the usual Socialist devaluation, it is like a breath of fresh air to have a Bill containing a good measure of Conservative common sense.
§ 9.35 p.m.
§ Mr. A. E. P. Duffy (Sheffield, Attercliffe)
The hon. Member for Harborough (Mr. Farr) claims that this is a fine Budget, but he must be blind if he cannot see the evidence on all sides that the Budget judgment is already being reconsidered by his right hon. Friend, and that a fresh stimulus to spending is on the way. The hon. Gentleman will feel foolish on the day when that is introduced.
Whatever views may be entertained about the adequacy of the stimulus, there must be growing doubts among hon. Gentlemen opposite about the timing of it. It is surely now clear that the individual measures were badly chosen by the Chancellor, simply because their impact has been slow-acting, and has been too long delayed. Only now, in this week, are we beginning to enjoy the effects of fiscal boosts.
As a result, total spending in the first half year is considered to be less than originally estimated by the Chancellor—according to the National Institute as much as £600 million less on consumer expenditure—and the disappointing behaviour of exports is playing just as large a rôle as the shortfall in consumption, and this is what I find especially disturbing. The duty of the Government, therefore, is to ensure, first, that a large part of any stimulus that may be forthcoming is directed towards the expansion of exports and, secondly, in that way to ensure that any stimulus will not stoke up inflation.
1462 The behaviour of prices is crucial, and anything that the Chancellor can do, through the use of the regulator, to damp down prices will be widely welcomed because, as my hon. and learned Friend the Member for Lincoln (Mr. Taverne) said, the investment intentions that have been revealed since the first short-lived euphoria are now shocking. Investment follows, and not leads, and therefore there are further grounds for the use of the consumer tax regulator.
There is also a case for making exporting profitable if a safe and continuing assault is to be made on unemployment. This is my major point this evening, and in the two or three minutes that remain to me I want to mention my own City of Sheffield. I am sorry that the Chancellor could not remain, because I was going to invoke our common Yorkshire background. I was going to remind him that though we may be broadly accustomed though by no means reconciled to higher levels of unemployment in some parts of Yorkshire, especially in the heart of the coalfield, than in other parts of the country, I am sure he would agree with me that never at any time, in our worst moods, until recently, would we have imagined that a city like Sheffield could have been the scene of such rising unemployment.
The position now is that unemployment there is at its highest since 1939. It has doubled during the last year. Last week there emerged the prospect of 4,500 redundancies in the local steel industry. This week the Darnall firm of Cravens Homalloy, in my constituency, announced plans to make large-scale redundancies in the next few weeks, and 20 per cent. of the city's school leavers are expected to be on the dole before the summer is out.
As a result, a spectre is haunting Sheffield tonight, a spectre of fear, the fear of unemployment. It will also be haunting the chambers of the City Council in its proceedings tonight, because the Council is debating the position, and I imagine that it will, as a result, ask me to join it in making representations to the Government for the granting to it of intermediate area status.
The Chancellor has it within his power to relieve Sheffield of this fear. If only he will take the course of action that I have prescribed and provide some stimulus to our economy. Yet I recognise his 1463 difficulties. I hope that he will do what we all want in Sheffield and give an impetus to exports. He could then safely use the regulator without worrying that he would also be stoking up inflation.
§ 9.41 p.m.
§ Mr. Percy Grieve (Solihull)
I am happy and proud to welcome this Finance Bill in the very words used of it by the hon. Member for Lincoln (Mr. Taverne)—the most Conservative Finance Bill since the war. Perhaps I do not use the word in the same sense. It is Conservative in taking taxes off the backs of the people. It is Conservative in reducing taxes by £1,000 million a year. It is Conservative in initiating a great radical reform of the whole tax system such as no Government have undertaken since the war and such as we did not see in the six Socialist Budgets that I have seen since I became a Member.
Indeed, this Finance Bill is Conservative in the sense that it is undoing many of the more vicious Socialist Measures which we had to suffer through six years of Socialist Government. I will not repeat the welcome which my hon. Friend the Member for Harborough (Mr. Farr) has already given to parts of the Bill, but there are some to which I wish to refer.
The first is the abolition of capital gains tax on assets realised upon death. This was a vicious double swipe at the lifetime savings of men, who normally died before their wives, and whose wives are therefore left even poorer.
I particularly welcome Clause 13, which does away with one of the most vicious Measures of the last Government—the aggregation of children's incomes with those of their parents. At the time that this was done, we were treated by the then Chief Secretary—now Diamond cutting diamond in another place—to a wonderful new principle, that family income should be treated as one, although of course this was not applied to earned income but only to unearned income.
It seemed to revert to some form of tribalism which exists nowhere else in the world. We all knew that the true reason for that measure, which hit at children deriving incomes from legacies, was not in aid of some new principle of the unity of the family but in order to make it even more difficult for families 1464 to pay the school bills of their children when they were educated independently.
I particularly welcome the disaggregation of the incomes of working husbands and wives. It has always seemed to me one of the most grossly unfair parts of our fiscal system that marriage should in many cases increase the tax burden of the couple. I was interested to note the other day the proposal of the Law Commission that we should now have a double form of marriage—a civil service and a religious service. I wondered whether that might not be a way of getting around this vice in our tax system, because it might be possible to be married in the eyes of God but not in the eyes of the State.
But I also thought that, whenever such a measure is introduced, if a Conservative Government have not succeeded in abolishing altogether the aggregation of the income of husbands and wives, there might be some clause providing that one could not be married in the eyes of God without going through the State ceremony first—
§ Mr. Loughlin
Has the hon. and learned Gentleman ever reflected that perhaps marriage is a contract between two people who do not trust each other?
§ Mr. Grieve
I cannot speak for the hon. Gentleman's experience of marriage. It is not my own, and I would not so describe it.
I am sorry that the Chancellor, in introducing a great and sensible measure of reform, did not feel able to go further and enable husbands and wives to opt for their incomes to be taxed separately, whether they are from earnings or investments. In leaving the investments of husbands and wives aggregated, as they are at present, there is a further element of discrimination in our tax system against investment income.
Although I appreciate that to have disaggregated such incomes altogether would have been costly, I hope that in due course, in justice and fairness—indeed, in fairness to the institution of marriage—the time will come when the Chancellor will feel able to dis-aggregate both the investment income and earned income of husbands and wives.
I will not reiterate what has been said by way of welcome to many of the other reforms in the Finance Bill, including 1465 the halfway house to the abolition of S.E.T., a tax which penalised the service industries, industries which alone saved the revenues of this country and our foreign exchange in the last years of Socialist misgovernment.
This is a first and substantial Measure of reform. When it has been carried into law it will go a long way to putting the country on its feet economically and restoring some of the damage that six years of Socialist misgovernment have done to our economy.
§ 9.48 p.m.
§ Mr. Dalyell
For about two hours in Committee upstairs and for a short while on the Floor of the House yesterday we discussed the question of L.P.G. This is an important issue, partly because it typifies the Government's attitude towards the anti-pollution campaign and partly because it brings into question the whole business of Treasury advice.
The information we have today is that devices for fitting to petrol engines are not suitable for leaded petrol which is necessary for the majority of cars. The lead, which improves the octane rating, poisons the catalyst in the device, making it ineffective. Alternative means of raising octane ratings include aromatics already suspected of contributing to carcinogenic compounds in exhaust gases. This may seem detail, but it is important that somebody puts it on the record and it is realised that the Treasury can be wrong.
The reference of the Minister of State to diesel engines meant choosing one pollutant—a blatant selection of facts by Ministers and their advisers—in the selection of carbon monoxide, where diesel performance is outstanding. Other pollutants—hydrocarbons, oxides of nitrogen and unburnt carbon; in other words, soot—are ignored. However, industry has not ignored them so readily and, given the choice of diesel or L.P.G.-powered forklift trucks for use in a confined space, the exclusive choice is L.P.G.
Further, the Minister of State referred to measures to prevent the emission of fumes from the crankcases of new cars. These fumes are unburnt hydrocarbons. Hydrocarbon emission from diesel exhaust may be 100 times greater than from the L.P.G. engine. Oxides of nitrogen may be 10 times greater. The carbon or soot which is familiar from 1466 diesel exhaust is not measurable in the case of L.P.G. and, for example, buses in Vienna use 30 per cent. L.P.G. which is added to clean up exhaust gases.
As a back bencher, even as an Opposition back bencher, one stands not a chance against the Treasury machine unless one is prepared to be specific and detailed. We have been both specific and detailed, and the hope is not that anything will be done in 1971, but that the function of a Committee stage and the hours we have spent in the Committee will be fulfilled by a facing up to the problem next year, and a shift of policy. That is why I have ventured once again to intrude in these debates.
§ 9.52 p.m.
§ Mr. David Mitchell (Basingstoke)
I listened with fascination to the hon. and learned Member for Lincoln (Mr. Taverne) leading the Opposition's case against the Third Reading of the Bill. I thought he was a little uncharitable and did less than justice to the Budget. Perhaps that is to be expected from Opposition benches in any case, and I do not quibble about it.
The hon. and learned Gentleman first talked about "Macleod's Law", and told us that a Budget that looks good in April does not look good in July. The quotation is perfectly fair, but I am not concerned about what it looks like now but about its effect, and the whole Budget is designed around a delaying effect which will not come into operation until later this year. If after 12 months the hon. and learned Gentleman can still maintain that his present Budget judgment is right I will be happy to concede the point, but I doubt whether his Budget judgment will prove any better than it was when he and his colleagues were on the Treasury Bench.
Second, the hon. and learned Gentleman referred to the confidence factor. He said, quite rightly, that business men are hard headed; that they look at the demand for their product and at their profits, and are not concerned with the ideological boost. This is true, but the effect of the Budget has not so far been seen in the business world. Business looks at its post-tax profit, and when the cuts in corporation tax come into effect and busines men see themselves getting a lower tax bill at the end of the year, we shall begin to see the Budget's effect.
1467 I believe that it is quite right to work on the theme of making profits hard to get but well worthwhile once they have been made. As I see it, this is part of the strategy which my right hon Friend the Chancellor of the Exchequer has followed here. How easy it would have been, and how popular, to latch on to the Opposition's demand to give a general boost to the economy; to feed out money which would merely find its way into satisfying wage inflation. That may be the desire of hon. Members opposite, especially those who are chuckling at that suggestion, but the reality is that the effect on costs would be devastating.
Thirdly, the hon. and learned Member said that unemployment at its present levels is not accidental. I am glad that he recognises that it is not accidental. It is a direct result of inflationary wage settlements, many of which are being strongly supported by his colleagues on that side. From the contacts I have in industry, and the discussions I have had there, I see quite clearly two things happening at present. Because of inflationary wage settlements, industry is forced to look for economies. Some cost increases, though not all, are being passed on as price increases, but every time an increase has to be made there is first a search for economies. One of the principal economies sought for is in labour. If a firm can do without someone, that is one economy. Many industries are pricing themselves out of the market because of the high level of wage settlements they have been forced to accept. This applies particularly to assembly industries, such as shipbuilding.
So I take this part of the criticism of hon. Members opposite and throw it back in their teeth and ask them whether they will go round the trade union conferences in the autumn and tell their friends there that the quickest way to increase unemployment is to press for inflationary wage settlements. Will they nave the courage in the national interest and not just in the party interest to urge on the union conferences a degree of moderation and restraint in order to ensure that one of the major costs, which lies in their hands, is not increased in a way which will reflect itself in escalating prices in the months ahead?
1468 The hon. and learned Gentleman referred to a bias in the Budget judgment in favour of the wealthy. I say simply that one cannot help the poor by pulling down the rich; that one cannot help the wage-earner by pulling down the wage-payer; that one cannot create full employment by kicking the employer in the teeth. [An HON. MEMBER: "Why not?"] That sort of facile remark is an indication of the lack of reality which so often pervades hon. Members opposite. One cannot encourage investment without making it worth while for the investor. When looking at the Budget judgment, these are the things which the House should have in mind. For these reasons, I thoroughly welcome the Budget and look forward to more budgets reducing taxation further in the coming years of this Government.
§ 9.57 p.m.
§ Mr. Barnett rose—
§ Mr. Loughlin rose—
§ Mr. Loughlin
On a point of order, Mr. Speaker. I would like clarification. I understand that this debate is unrestricted in time and that even after my hon. Friend the Member for Heywood and Royton (Mr. Barnett) speaks no other hon. Member is prohibited from speaking afterwards. Can I have that Ruling?
§ Mr. Speaker
Subject to the rules about the Closure and so on, this is unrestricted business, but it is a convention of the House that when a Front Bench speaker gets up the Chair calls him.
§ Mr. Loughlin
I am sorry, but I must pursue this. I accept that once a Front Bencher stands up he is, in effect, attempting to exclude back benchers, not in the sense of time but by virtue of the very point you make when you say that it is subject to the moving of the Closure. I would like some guidance on this, because, apart from my own case now, it is important to back benchers that Front Benchers should not take to themselves the right of closure of debates. In view of the fact that I stood up after telling my hon. Friend that I was going to stand up, can I have your assurance that if the Closure is moved immediately he sits down you will refuse to accept it?
§ Mr. Speaker
I have considerable sympathy with the hon. Gentleman's point of view. I think these are matters which must be ironed out on his side of the House. But he will not expect the Chair to give any undertaking as to when it will or will not accept the Closure. I will certainly bear in mind the general situation of the debate and whether I think it is right to allow the Closure. But this is really one of those House of Commons situations which usually are ironed out either on one side or the other.
§ Mr. Barnett
I have considerable sympathy with my hon. Friend the Member for Gloucestershire, West (Mr. Loughlin). I certainly have no wish to shut him out if he wishes to speak afterwards. He is perfectly free to exercise that right and I would not seek to prevent him.
The hon. Member for Basingstoke (Mr. David Mitchell) was a little audacious to suggest to us on this side that we should recommend trade unionists to co-operate with the Government in a prices and incomes policy in view of what the Government are doing in the Bill. When the Chief Secretary opened this debate, he gave us some song titles. He said that he would not sing them to us because he was generally out of tune. It is equally true, I suppose, that this year's Finance Bill is out of tune with realities, except the realities of the few hon. Members opposite who have spoken in the debate and have appeared to come from another world with some other kind of realities.
The Chancellor's words on Second Reading have turned sour by the time we reach Third Reading. If anyone doubts that, one has only to look at the Chancellor's words on Second Reading, when he told us that he was creatinga nation which combines … fairness and success.It was interesting that the Chief Secretary certainly did not repeat those words tonight, because nobody in his right mind could imagine that the Bill creates either fairness or success.
The Chancellor went on to tell us that he was givinga modest stimulus to demand, and to … stimulate investment and assist the fight against inflation.1470 If anybody could believe that today, it would be very surprising. Once again, the Chief Secretary did not feel able to say anything about this.
The Chancellor told us thatBusiness confidence should be helped".As my hon. and learned Friend the Member for Lincoln (Mr. Taverne) pointed out, if business confidence has been helped, it is not noticeable, because the last business survey indicated clearly that business men's confidence has certainly not been stimulated, to judge by their view of what is likely to happen to industrial investment.
The Chancellor went on to tell us thatthe reaction throughout the country has been one of approval".—[OFFICIAL REPORT, 28th April, 1971; Vol. 816. c. 439, 440, 441, 451.]If anyone could believe that after the Bromsgrove by-election and the local government elections, I would be very surprised. Certainly, we never heard the Chief Secretary say anything about it when he spoke on Third Reading.
Thus, three months after the Budget, both the economic and the tax effects are disastrous, both in the short term and in the long term. Economically, it is now clear that the Chancellor's judgment was wrong in March. This in itself is no terrible thing. It would not have been terrible had the Chancellor conceded that at the time he made his Budget judgment he thought that that was the situation, but that within a few months, when the figures came out, it turned out that he was wrong, as everybody else now recognises. What is terrible is the failure of the Chancellor to admit that he was wrong when the figures are put before him, because that is what is happening today.
We see inflation raging on, with no chance of the sort of co-operation with trade unions about which the hon. Member for Basingstoke spoke. Even with the belated measures that the Government propose to introduce, unemployment will still, at best, stick around the 800,000 or 900,000 level and output is unlikely to reach even our productive potential. Above all, however, industrial investment is in decline with appalling consequences for our long-term prospects. So much for the economy under the Tories 12 months after they won the Election.
1471 And so one comes to the Finance Bill and the new taxation philosophy of the Chancellor. On a previous occasion, I spoke about the bogus nature of the reform, the value-added tax and the corporation tax. The value-added tax is something new but it is certainly no simplification. As used by the present Government, it seems likely to be far from a progressive reform.
It is now clear that our suspicions were well founded about the one genuine reform in the Bill—the unification of income tax and surtax. It is clear that the Chancellor's intention is to use this reform as a cloak for reactionary tax changes. There is no doubt, as we found in our debates both on the Floor of the House and in Standing Committee, that the whole of this unification proposal is intended to disguise the fact that it will be utilised in a way which will fall most harshly on the lower end of the income scale, because, without a substantial increase in economic growth and with rising public expenditure, paid for unfairly under the Government's proposals, any proposed reduction in tax on investment income at the higher income scales, as the Government propose under the unification system, can be only at the expense, not just of the lower end of the tax scale, but of the majority of tax payers.
The only excuse there could have been for this Finance Bill would have been that it was worth temporarily widening the gap between the lowest and the highest ends of the income scale for some kind of longer-term incentive from this method. But it has all been done without any kind of evidence that it will have that kind of incentive effect. It is therefore not surprising that we see no sign yet of any incentive effect causing a massive upsurge in effort.
Indeed, the only upsurge in effort resulting from the Bill has been that made available to all those who have the opportunity to use the Bill to obtain bigger and bigger tax reliefs from the additional tax avoidance opportunities left for them. If the philosophy in the Bill is that of a Conservative Government and if it foreshadows more of the same in a future Finance Bill, when the Prime Minister vacates No. 10 it will be a much less united country he leaves behind. We 1472 condemn this divisive philosophy, and I ask my hon. Friends to vote against it in the Lobby.
§ 10.8 p.m.
§ Mr. Higgins
This is a reforming Finance Bill and it begins and foreshadows a transformation of the tax system which has grown complicated and oppressive. It thus redeems the Government's election pledge to reduce taxation and to simplify the tax system. The Government believes that by easing the pressures of taxation especially on families, they are making a contribution towards checking inflation; and that by simplifying the system and by getting rid of the indefensibly high marginal rates on the higher incomes, and by encouraging savings, they will encourage personal initiative, which is an essential ingredient of economic growth.
It is worth recalling that the revenue cost involved is the biggest in any Budget since the war. When the hon. and learned Member for Lincoln (Mr. Taverne) says that it is irrelevant, except in as much as it is harmful, that is a quantitative assertion worth bearing in mind, because the Budget will mean a substantial increase in the size of the market available to our producers. This is bound to encourage investment, for it will be widely agreed that the prospect of a growing market is a most important condition for a healthy level of investment.
But the question of timing is important and the major parts of the Budget with regard to the child allowances and the cuts in S.E.T. are only just beginning to take effect. Related to other measures, such as the cut in corporation tax and the cut in personal income tax announced earlier, these measures will do much to improve the economic climate.
My hon. Friend the Member for Harborough (Mr. Farr) pointed out that the cut in S.E.T. would halve the forced loan of manufacturing industry and thereby increase company liquidity at a time when that was very important. Similarly, the Bill will make a contribution to the fight against inflation because the increase in the child allowances will raise the standard of living of families and the tax liability of a married man with two children will be reduced, if he is on average industrial earnings, by 60p a week. This is in addition to the tax cut on the standard rate which has already 1473 been made. Combined with the policy of de-escalation of inflationary wage claims which the Government are pursuing we shall have taken an important step towards curing what is undoubtedly the most pressing of our economic problems.
We have, of course, had a number of fascinating debates, whether on the disabled or on the question of pollution. To answer the specific point raised by the hon. Member for West Lothian (Mr. Dalyell), in reaching a decision on the question of the use of gas for vehicles we were looking at all the various pollutants from vehicles and it was the question of total pollution, as I stressed at the time, which we regarded as important.
The process of simplication, particularly with regard to close companies, will be important not only in reducing the burden on the revenue but also in reducing the burden of work which has to be done in a number of small firms. This will mean that they will be able to concentrate their efforts on running their businesses rather than seeking to solve complicated tax problems.
Similarly we are now engaged on a major programme of tax reform of which the unification of income and surtax is the first step. The hon. and learned Member for Lincoln says that tax reform is no substitute for demand management and that we can accept. The change to unification will mean that people can more readily understand what is their tax burden. We shall be introducing provisions for charging the first slice of investment income at the earned income rate. That will be important in encouraging savings. We have introduced further Green Papers on the value-added tax and corporation tax and are engaged in a major programme stretching over a number of years.
As to the accusation that the Bill is socially unjust I can only say that that is complete nonsense. Hon. Gentlemen opposite just will not recognise the very large range of measures which we have introduced over the last year to help those most in need. In our first year of office we have reduced the tax burden by some £1,000 million, which is in marked contrast
§ to the Finance Bills we had under the previous Administration. This approach is embodied in this Bill and I ask my hon. and right hon. Friends to support it.
§ Mr. Loughlin
Before the hon. Gentleman sits down—[HON. MEMBERS: "TOO late."]—I am not too late. There is no time limit. The hon. Gentleman talked about a reduction in income tax and this is something which we ought to examine in more detail. Using the figures given by the hon. Gentleman in the last two or three minutes it looks good. He said something about reducing the total burden of income tax by £1,000 million. He is talking about direct taxation. The Government are changing the system from direct to indirect taxation. It is easy for the Government to give tax reductions of £1,000 million to certain strata of society if at the same time they change the system of income tax levies so that more tax is paid indirectly than directly. That is what the Government are doing.
If the 10 Orders which we discussed last week—and I protested that we had only one-and-a-half hours to discuss them—as a consequence of which the housewife has to pay a greater amount of tax over the counter—[Interruption.] I know that the Chief Secretary is not interested in indirect taxation. He is not interested in the housewife or in the average person. He is solely interested in people who have made contributions to the Conservative Party and who are now getting the payoff.
The point is that this Bill tells only half the story. [An HON. MEMBER: "Tell the other half."] If the hon. Gentleman wants to intervene, I do not mind; we have all the time in the world. There is no point—[HON. MEMBERS: "Hear, hear."]—in claiming credit for a Bill which reduces the taxation burden on people who can afford to pay taxes if the Government's policy increases the taxation burden on those who cannot afford to pay taxes.
§ Question put:—
§ The House divided: Ayes 206. Noes 177.1477
|Division No. 414.]||AYES||10.18 p.m.|
|Adley, Robert||Archer, Jeffery (Louth)||Awdry, Daniel|
|Alison, Michael (Barkston Ash)||Astor, John||Baker, Kenneth (St. Marylebone)|
|Allason, James (Hemel Hempstead)||Atkins, Humphrey||Balniel, Lord|
|Barber, Rt. Hn. Anthony||Grieve, Percy||Owen, Idris (Stockport, N.)|
|Batsford, Brian||Gummer, Selwyn||Page, Graham (Crosby)|
|Bennett, Sir Frederic (Torquay)||Hall, Miss Joan (Keighley)||Page, John (Harrow, W.)|
|Berry, Hn. Anthony||Hall, John (Wycombe)||Parkinson, Cecil (Enfield, W.)|
|Biffen, John||Hamilton, Michael (Salisbury)||Percival, Ian|
|Biggs-Davison, John||Hannam, John (Exeter)||Pike, Miss Mervyn|
|Blaker, Peter||Harrison, Col, Sir Harwood (Eye)||Pounder, Rafton|
|Boardman, Tom (Leicester, S. W.)||Haselhurst, Alan||Powell, Rt. Hn. J. Enoch|
|Body, Richard||Hastings, Stephen||Pym, Rt. Hn. Francis|
|Boscawen, Robert||Hayhoe, Barney||Rawlinson, Rt. Hn. Sir Peter|
|Bossom, Sir Clive||Hicks, Robert||Redmond, Robert|
|Bowden, Andrew||Higgins, Terence L.||Reed, Laurance (Bolton, E.)|
|Boyd-Carpenter, Rt. Hn. John||Holt, Miss Mary||Rees, Peter (Dover)|
|Braine, Bernard||Hordern, Peter||Renton, Rt. Hn. Sir David|
|Brinton, Sir Tatton||Hornsby-Smith, Rt. Hn. Dame Patricia||Ridley, Hn. Nicholas|
|Brocklebank-Fowler, Christopher||Howe, Hn. Sir Geoffrey (Reigate)||Ridsdale, Julian|
|Brown, Sir Edward (Bath)||Howell, Ralph (Norfolk, N.)||Rossi, Hugh (Hornsey)|
|Buchanan-Smith, Alick (Angus, N amp; M)||Hunt, John||Russell, Sir Ronald|
|Buck, Antony||Hutchison, Michael Clark||Sandys, Rt. Hn. D.|
|Bullus, Sir Eric||Irvine, Bryant Godman (Rye)||Scott-Hopkins, James|
|Burden, F. A.||Jenkin, Patrick (Woodford)||Sharples, Richard|
|Butler, Adam (Bosworth)||Jessel, Toby||Shaw, Michael (Sc'b'gh amp; Whitby)|
|Cary, Sir Robert||Joseph, Rt. Hn. Sir Keith||Shelton, William (Ctapham)|
|Channon, Paul||Kellett-Bowman, Mrs. Elaine||Sinclair, Sir George|
|Chapman, Sydney||Kershaw, Anthony||Skeet, T. H. H.|
|Chichester-Clark, R.||Kilfedder, James||Smith, Dudley (W'wick amp; L'mington)|
|Clarke, Kenneth (Rushcliffe)||Kimball, Marcus||Soref, Harold|
|Clegg, Walter||King, Evelyn (Dorset, S.)||Speed, Keith|
|Cockeram, Eric||King, Tom (Bridgwater)||Spence, John|
|Cooke, Robert||Kinsey, J. R.||Sproat, lain|
|Coombs, Derek||Knight, Mrs. Jill||Stainton, Keith|
|Cooper, A. E.||Knox, David||Stanbrook, Ivor|
|Cordle, John||Legge-Bourke, Sir Harry||Stewart-Smith, D. G. (Belper)|
|Corfield, Rt. Hn. Frederick||Longden, Gilbert||Stodart, Anthony (Edinburgh, W.)|
|Cormack, Patrick||Loveridge, John||Stokes, John|
|Costain, A. P.||Luce, R. N.||Stuttaford, Dr. Tom|
|Critchley, Julian||MacArthur, Ian||Sutcliffe, John|
|Crouch, David||McCrindle, R. A.||Taylor, Edward M. (G'gow, Cathcart)|
|Curran, Charles||Maclean, Sir Fitzroy||Taylor, Frank (Moss Side)|
|Davies, Rt. Hn. John (Knutsford)||McMaster, Stanley||Taylor, Robert (Croydon, N. W.)|
|d'Avigdor-Goldsmid, Sir Henry||Macmillan, Maurice (Farnham)||Tebbit, Norman|
|d'Avigdor-Goldsmid, Maj.-Gen. James||McNair-Wilson, Patrick (NewForest)||Temple, John M.|
|Deedes, Rt. Hn. W. F.||Madden, Martin||Thompson, Sir Richard (Croydon, S.)|
|Dodds-Parker, Douglas||Madel, David||Trafford, Dr. Anthony|
|Douglas-Home, Rt. Hn. Sir Alec||Maginnis, John E.||Turton, Rt. Hn. Sir Robin|
|Eden, Sir John||Mather, Carol||van Straubenzee. W R.|
|Elliot, Capt. Walter (Carshalton)||Maude, Angus||Vaughan, Dr. Gerard|
|Elliott, R. W. (N'c'tle-upon-Tyne, N.)||Mawby, Ray||Vickers, Dame Joan|
|Eyre, Reginald||Meyer, Sir Anthony||Waddington, David|
|Farr, John||Mills, Stratton (Belfast, N.)||Walder, David (Clitheroe)|
|Fell, Anthony||Mitchell, Lt.-Col. C. (Aberdeenshire, W.)||Walker, Rt. Hn. Peter (Worcester)|
|Fenner, Mrs. Peggy||Mitchell, David (Basingstoke)||Walker-Smith, Rt. Hn. Sir Derek|
|Finsberg, Geoffrey (Hampstead)||Moate, Roger||Wall, Patrick|
|Fisher, Nigel (Surbiton)||Molyneaux, James||Walters, Dennis|
|Fletcher-Cooke, Charles||Monks, Mrs. Connie||Ward, Dame Irene|
|Fookes, Miss Janet||Monro, Hector||Warren, Kenneth|
|Fortescue, Tim||Montgomery, Fergus||Wells, John (Maidstone)|
|Gilmour, Ian (Norfolk, C.)||More, Jasper||Wiggin, Jerry|
|Gilmour, Sir John (Fife, E.)||Morgan, Geraint (Denbigh)||Wilkinson, John|
|Glyn, Dr. Alan||Morgan-Giles, Rear-Adm.||Wolrige-Gordon, Patrick|
|Goodhart, Philip||Morrison, Charles (Devizes)||Wood, Rt. Hn. Richard|
|Goodhew, Victor||Mudd, David||Woodhouse, Hn. Christopher|
|Gorst, John||Murton, Oscar||Wylie, Rt. Hn. N. R.|
|Gower, Raymond||Nabarro, Sir Gerald|
|Grant, Anthony (Harrow, C.)||Normanton, Tom||TELLERS FOR THE AYES:|
|Gray, Hamish||Nott, John||Mr. Paul Hawkins and|
|Green, Alan||Oppenheim, Mrs. Sally||Mr. Bernard Weatherill|
|Abse, Leo||Buchan, Norman||Cox, Thomas (Wandsworth, C.)|
|Albu, Austen||Buchanan, Richard (G'gow Sp'burn)||Crawshaw, Richard|
|Allaun, Frank (Salford, E.)||Callaghan, Rt. Hn. James||Dalyell, Tam|
|Allen, Scholefield||Campbell, I. (Dunbartonshire, W.)||Davidson, Arthur|
|Ashton, Joe||Cant, R. B.||Davies, Denzil (Llanelly)|
|Atkinson, Norman||Carmichael, Neil||Davies, S. O. (Merthyr Tydvil)|
|Bagier, Gordon A. T.||Carter-Jones, Lewis (Eccles)||Davis, Clinton (Hackney, C.)|
|Barnett, Joel||Castle, Rt. Hn. Barbara||Davis, Terry (Bromsgrove)|
|Beaney, Alan||Clark, David (Colne Valley)||de Freitas, Rt. Hn. Sir Geoffrey|
|Bennett, James (Glasgow, Bridgeton)||Cocks, Michael (Bristol, S.)||Dempsey, James|
|Blenkinsop, Arthur||Cohen, Stanley||Doig, Peter|
|Boardman, H. (Leigh)||Coleman, Donald||Douglas-Mann, Bruce|
|Booth, Albert||Concannon, J. D.||Driberg, Tom|
|Duffy, A. E. P.||Kinnock, Neil||Pendry, Tom|
|Dunnett, Jack||Latham, Arthur||Pentland, Norman|
|Eadie, Alex||Lawson, George||Price, J. T. (Westhoughton)|
|Edwards, Robert (Bilston)||Leadbitter, Ted||Price, William (Rugby)|
|Evans, Fred||Lee, Rt. Hn. Frederick||Probert, Arthur|
|Fernyhough, Rt. Hn. E.||Lestor, Miss Joan||Rees, Merlyn (Leeds, S.)|
|Fisher, Mrs. Doris (B'ham, Ladywood)||Lomas, Kenneth||Richard, Ivor|
|Fletcher, Ted (Darlington)||Loughlin, Charles||Roberts, Albert (Normanton)|
|Foley, Maurice||Lyons, Edward (Bradford, E.)||Roberts, Rt. Hn. Goronwy (Caernarvon)|
|Ford, Ben||Mabon, Dr. J. Dickson||Rodgers, William (Stockton-on-Tees)|
|Forrester, John||McBrdie, Neil||Roper, John|
|Fraser, John (Norwood)||McCann, John||Rose, Paul B.|
|Freeson, Reginald||McCartney, Hugh||Ross, Rt. Hn. William (Kilmarnock)|
|Galpern, Sir Myer||McGuire, Michael||Sandelson, Neville|
|Gilbert, Dr. John||Mackenzie, Gregor||Sheldon, Robert (Ashton-under-Lyne)|
|Ginsburg, David||Mackie, John||Silkin, Rt. Hn. John (Deptford)|
|Golding, John||Maclennan, Robert||Silkin, Hn. S. C. (Dulwich)|
|Gordon Walker, Rt. Hn. P. C.||McMillan, Tom (Glasgow, C.)||Skinner, Dennis|
|Gourlay, Harry||McNamara, J. Kevin||Small, William|
|Grant, George (Morpeth)||Mahon, Simon (Bootle)||Smith, John (Lanarkshire, N.)|
|Griffiths, Eddie (Brightside)||Mallalieu, J. P. W. (Huddersfield, E.)||Stallard, A. W.|
|Hamilton, James (Bothwell)||Marks, Kenneth||Steel, David|
|Hamilton, William (Fife, W.)||Marquand, David||Stewart, Donald (Western Isles)|
|Harman, William (G'gow, Maryhill)||Marsden, F.||Stewart, Rt. Hn. Michael (Fulham)|
|Hardy, Peter||Marshall, Dr. Edmund||Stoddart, David (Swindon)|
|Harrison, Walter (Wakefield)||Meacher, Michael||Strang, Gavin|
|Heffer, Eric S.||Mellish, Rt. Hn. Robert||Summerskill, Hn. Dr. Shirley|
|Hooson, Emlyn||Mendelson, John||Taverne, Dick|
|Horam, John||Millan, Bruce||Thomas, Rt. Hn. George (Cardiff, W.)|
|Huckfield, Leslie||Miller, Dr. M. S.||Tinn, James|
|Hughes, Rt. Hn. Cledwyn (Anglesey)||Milne, Edward (Blyth)||Torney, Tom|
|Hughes, Robert (Aberdeen, N.)||Mitchell, R. C. (S'hampton, lichen)||Urwin, T. W.|
|Hughes, Roy (Newport)||Morgan, Elystan (Cardiganshire)||Varley, Eric G.|
|Hunter, Adam||Morris, Alfred (Wythenshawe)||Walker, Harold (Doncaster)|
|Irvine, Rt. Hn. Sir Arthur (EdgeHill)||Morris, Charles R. (Openshaw)||Watkins, David|
|Janner, Greville||Morris, Rt. Hn. John (Aberavon)||Weitzman, David|
|Jay, Rt. Hn. Douglas||Moyle, Roland||White, James (Glasgow, Pollok)|
|Jeger, Mrs. Lena (H'b'n amp; St. P'cras, S.)||Murray, Ronald King||Whitehead, Phillip|
|Jenkins, Rt. Hn. Roy (Stechford)||O'Halloran, Michael||Willey, Rt. Hn. Frederick|
|John, Brynmor||O'Malley, Brian||Williams, Mrs. Shirley (Hitchin)|
|Johnson, James (K'ton-on-Hull, W.)||Oram, Bert||Wilson, Rt. Ht. Harold (Huyton)|
|Johnson, Walter (Derby, S.)||Oswald, Thomas||Wilson, William (Coventry, S.)|
|Jones, Barry (Flint, E.)||Owen, Dr. David (Plymouth, Sutton)||Woof, Robert|
|Jones, Dan (Burnley)||Paget, n. T,|
|Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)||Parker, John (Dagenham)||TELLERS FOR THE NOES:|
|Jones Gwynoro (Carmarthen)||Parry, Robert (Liverpool, Exchange)||Mr. James Dunn and|
|Jones, T. Alec (Rhondda, W.)||Pavitt, Laurie||Mr. Ernest Perry|
§ Bill accordingly read the Third time, and passed.