HC Deb 10 July 1972 vol 840 cc1271-95

Employees shall be entitled to a luncheon voucher free from any liability to income tax provided that no voucher shall exceed 30 pence in value and no more than one per working day shall be allowed.—[Mr. Sheldon.]

Brought up, and read the First time.

Mr. Sheldon

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

This Clause seeks to obtain for employees the use of luncheon vouchers which will be free from liability to income tax, and the intention is to increase the value of the voucher which is free from liability to income tax from 15p. to 30p.

Briefly, to give some of the background to the Clause, the whole of this field of operations started during the last war when there was a major expansion of industry and as a result, with the very long hours of overtime being worked, industrial canteens grew in size and inscope to allow people to have their meals at their place of work so that the production that was necessary in wartime was obtained. Those who had no such canteen found themselves in a rather unenviable position by comparison with those who did. So in lieu of subsidised canteen facilities other firms started giving an allowance in lieu.

As might be expected under those conditions, the practice grew in a rather higgled-piggledy manner. Certain inspectors of taxes allowed certain sums of money as an allowable expense, while others allowed a much more limited sum of money as an allowable expense for a luncheon voucher. So the situation went on until it was resolved, I understand, in 1948 when the level was fixed at 15p.

The CBI this year suggested that it might be increased from 15p to 30p because of the level of inflation. The present position is that the value of the luncheon voucher in real terms has declined steadily over the years until at the present time it looks as if it will not be long before the amount that it will buy, far from being a solid lunch which it was at one time meant to purchase, will be little more than tea and a bun. We feel that it is now time that it should be brought up to date.

There is one element which is of importance. This is a concession that was introduced by the Inland Revenue, and it needs to be in statute form. It is suitable and right that the House of Commons should debate what is the right amount of money for a luncheon voucher which people should be allowed to claimas relief from tax.

I will now come to the scope of the luncheon voucher scheme. It might lead to some sort of understanding of the extent of the problem and the way in which it might best be met. There are 19 million luncheon vouchers issued in a year. As I said before, the limit allowed against tax is 15p. The total number of luncheon vouchers is increasing at a steady rate of 8 per cent. or 9 per cent. a year, and at present it is far from saturation point.

Some people realised the value of a more solid mid-day meal than that which is provided by sandwiches, and tribute should be paid to Sainsbury's stores, which in the early 1930s had luncheon rooms, a method of operation which was much updated by Marks & Spencer luncheons for the same type of people, which led to a notable improvement in the facilities that were available. The luncheon voucher scheme, it should be remembered, is run by a number of shareholders of catering firms. Basically these are Associated British Foods, Grand Metropolitan Hotels, Trust Houses Forte and J. Lyons. So the luncheon voucher is a recognised system of operations, though there are others. There are, I understand, 300 other firms with their own schemes, but Luncheon Vouchers, covering so many of the large caterers, is the main national organisation.

What concerns me personally is its extension in recent years into the provinces. The Luncheon Vouchers people say that there is room both for luncheon vouchers and canteens. They say that in their opinion canteens are the best solution to this kind of problem. People going from early morning till late evening require some sustenance during the day, and they are best able to get that by means of an industrial or factory or office canteen. The Luncheon Vouchers people say that their limited objective is the provision of some sort of facility for firms which cannot, for one reason or another, undertake the provision of those facilities.

Luncheon Vouchers makes a 1¼ per cent. charge to its customers—a very modest charge for the administration concerned—and it makes no charge at all to the caterers. Therefore, this is a scheme which must commend itself to all parts of the House. It does not interfere with the natural and growing desire by firms and employees to get the benefits of industrial canteens and things of a similar nature.

Mr. Keith Stainton (Sudbury and Woodbridge)

It would be helpful and informative to know what the aggregation is per annum of the 1¼ per cent.

Mr. Sheldon

I regret that I do not have that information—I had that figure from the Luncheon Vouchers organisation—but it could easily be worked out. The 1¼ per cent. is the charge made by Luncheon Vouchers, so all one needs to find is the cost of the vouchers and takel¼ per cent. of it. I could do the sum in a few minutes, but on one's feet at the Box one is not necessarily quick at these things and the hon. Gentleman, who has a few moments, could probably do it better for himself.

The main point of resistance in the past has been that fundamentally the Treasury does not like the luncheon voucher. The argument is that if people have a canteen which a company subsidises, the subsidy comes out of profits and, since it comes out of profits, there is no tax involved. The luncheon voucher, on the other hand, the Treasury regards as an anomaly which crept in during the war and which it found itself unable to dispense with in subsequent years.

That has been the Treasury argument repeatedly used under Governments of both political parties. I find it grossly inadequate. The Government must face the question: are luncheon vouchers justified? If they are, the case for a substantial immediate increase is overwhelming. If they are not, they should be scrapped altogether and the present state of affairs ended. Soon, what will be subsidised will not be a meal any more; it will be just a mid-morning snack, and I do not see how anyone could justify the subsidising of a snack of that kind. Either it is the sort of nourishment which people need between early morning breakfast and evening meal, or it is not. With the level of inflation which we have achieved under the present Government—and, to be fair, under previous Governments—the Treasury must now decide what it intends to do about luncheon vouchers.

Subjects of this kind come up only rarely on new Clauses; they receive an airing and then they are not heard of for a number of years. We all know the reason. Either the proposers of such new Clauses feel that it is not worth while, that the mood has not changed, or, for good reasons, very often new Clauses are not selected because it is felt that the subject has had an airing.

The need for this subject to have an airing now is all the greater because, if we are not to hear about luncheon vouchers for another three or four years, the present level of inflation will mean that their value will be derisory. It is not good enough to say that those who have the facility of a works canteen may enjoy the benefit of the meal they need in the middle of the day but others may not because their employers, often small firms of considerable importance, are unable to provide such facilities. We expect a substantial and satisfactory reply from the Minister.

Captain Walter Elliot (Carshalton)

I hope that my hon. Friend the Minister of State will give this case sympathetic consideration and accept the Clause. I have been in many works canteens in various parts of the country, and it is my experience that one can get a good meal there at a reasonable price. I have had a good many meals in the dining rooms run by some of the big office organisations, too, and I know that a good meal can be had at a reasonable price there. Where there are not such facilities—I think particularly of office workers, many of my own constituents among them—people have what is often a poor or inadequate lunch. Certainly, one could not buy an adequate lunch for 15p. Many people do not like a big lunch, but, certainly, something to more than the value of 15p is needed.

8.15 p.m.

All hon. Members who have done any commuter travelling know that the life of the commuter is often by no means a joke. Those who work in London would, I am sure, take accommodation nearer the centre if they could find it, or if they could afford it; but we all know that they cannot, and in their daily commuting they often suffer a good deal of hardship. At a fairly short distance from the centre, say, 15 or 20 miles, the journey will commonly take one and a half hours from door to door. This means three hours of travel each day. It is very tiring. Often, it entails a cold wait on a railway station—the train may be late, they may have missed it because of the crowd, there is the occasional strike—and, for one reason or another, commuter travel can be an arduous business. Reasonable facility for a hot lunch at a reasonable price is a good thing. It keeps people healthy and satisfied.

The hon. Member for Ashton-under-Lyne (Mr. Sheldon) said that the Treasury does not like the luncheon voucher. But, as he pointed out, the Treasury has got it, and I do not suppose that it intends to do away with it. Now that prices are rising as they are, my hon. Friend must recognise that 15p is a quite inadequate sum. Perhaps 30p is barely adequate, but it is at least much better, and I sincerely hope that he will accept the Clause.

Mr. J. T. Price (Westhoughton)

I had not intended to intervene, but, having heard the very reasonable case advanced by my hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), I must say a few words in support of the Clause. The case for it needs no labouring. Indeed, it is so reasonable as to permit little margin for polemical argument from the Treasury Bench.

My only doubt about the matter is more on principle than on the question of luncheon vouchersper se. In my view, earnings ought to represent the true relationship of employee and employer and be in the coin of the realm, not in kind. The Truck Acts were passed many generations ago to prevent the payment of remuneration in kind instead of in cash. Be that as it may, the payment of certain small allowances for lunches, particularly to office workers employed in smaller organisations which do not have the facility of a staff canteen, has become part of our established practice.

I am well aware that there is a commercial organisation, Luncheon Vouchers Limited, which takes a commission on the business with all the industrial catering firms which are interested. The merits of the scheme are so self-apparent as not to need laboured argument from me or anyone else. Half an hour before I came into the Chamber I went into our self-service canteen and paid 25p for a sandwich and a coffee. That is considerably more than 15p, and we are all familiar with the prices that are charged in commercial restaurants. I know that the Minister of State is overborne by more weighty questions than this, but I hope he will accept what I have to say in support of the new Clause. If the Treasury digs in its heels and says it does not like luncheon vouchers and that 15p is sufficient, it should compare the payment of that small allowance to millions of office workers and others who have no industrial canteens with the allowances on taxation, given to executives of companies who have to meet certain expenses.

Other people like myself no doubt commute from distant parts of the country and have to live in London and have to pay substantial bills for meals and accommodation even in reasonably priced hotels. Every company executive is given adequate allowances out of his taxation to pay for meals while travelling on the business of his company. Amounts of £10 a day are commonplace. Higher allowances than that are given for taxation purposes under Schedule D under the present regulations. There has been a gross abuse of expense allowances, and it is well known that very often the expense allowance is more attractive to an executive of a big company than the salary itself. Fringe benefits are very significant takenin toto.

Therefore, the Treasury advisers and those who conduct these affairs at a high level should make a comparison between what they allow on expense account allowances and this piddling allowance of 15p a day for luncheon vouchers. I said that I would not labour the point, and I hope that I am not doing so. When a decision is made it should be on grounds of equity and not on grounds of emotion or sym- pathy. By any test the allowance of 15p has been eroded very seriously by inflation, and the Minister of State, with his colleagues in the Treasury, should at least double the amount to 30p.

I have spoken to executives of important companies on other occasions and they have told me that the subsidies paid to staff canteens are considerable. I hesitate to quote figures because I do not want to make references to individual firms. But the taxation allowed under Schedule D in respect of the subsidies by large companies which are operating successful canteen services for their employees is far in excess of 15p per head on meals supplied.

The Treasury should now unbend and unwind and cease to be so starchy and official on these matters. It does not like luncheon vouchers and the fringe benefits which are a bit of a nuisance in terms of purist economic theory. But millions of people are benefiting to a small extent from the vouchers, and the time has come for a reasonable increase in the amount. I hope the Minister of State can give an adequate reply. I shall need a great deal of convincing that all the academic ballyhoo about this is anything more than academic ballyhoo. The Treasury can condone the expense account for the business executive, yet it is niggling and petty about the 15p for the office typist, and that is wrong.

Mr. James Dempsey (Coatbridge and Airdrie)

For some time I have been asking the Chancellor of the Exchequer to what extent the purchasing power of the £ has been reduced over a period of years. Reply after reply has indicated that the reduction has been very substantial. It is obvious therefore that the purchasing power of the 15p on luncheon vouchers has been substantially reduced. At the very least the Minister of State should consider restoring the purchasing power of luncheon vouchers to enable workers to get the full advantage of the amount originally fixed in 1948 for the purchase of lunches. I do not see how he can resist the Clause on grounds of logic or morality.

Another aspect of the problem to which my hon. Friends have drawn attention is the subsidy which employers pay towards canteens. This has been adduced as an argument by the Chancellor of the Exchequer for avoiding tax on profits. Certain canteens in industrial estates have been closed because the development corporation has refused to subsidise them. The employers do not have sufficiently large economic organisations to subsidise canteens and therefore they must go. The employers receive no benefit from tax because they are not subsidising a canteen and the workers, who receive luncheon vouchers, find that a substantial proportion of those vouchers is being taxed.

The Treasury should say that the employee can have a taxation allowance on luncheon vouchers up to 15p but that above that figure he will have to pay tax at 7s. 9d. in the £, approximately two-fifths, on the excess. That means that a worker who got 60p or 65p would pay about 20p in tax and spend less on food. He would be spending less on sustenance or nourishment and the money would be going back to the Chancellor of the Exchequer, despite the fact that its fundamental purpose is to renew the tissues of the body so that the worker can give production or service according to the industry or employment in which he is engaged. This is a denial of the right of any person to enjoy the fullest advantage from the allowance he gets for luncheons.

8.30 p.m.

I draw this serious anomaly to the attention of the Minister. I ask him to pause and think for a moment about Ministry employees throughout the country. I have in mind the employees of the Department of Health and Social Security, because as sure as fate when we decide to increase pensions, benefits and allowances, we always do so at the wrong time and these people have to work late under difficult conditions and in trying weather. They need nourishment, yet if they go along to get a fish supper, a cup of tea and a piece of white bread, their allowance is taxed.

That is miserable, mean and contemptible treatment of loyal people. If some of the militants in industry were to down tools and go on strike they would soon get justice, but because of the loyalty of, for example, the Ministry employees they do not take that kind of action and they rely on the good sense, willingness and co-operation of their employer. In this respect their employer is the Chancellor of the Exchequer. It is time the Chancellor of the Exchequer reciprocated that understanding, willingness and co-operation by being fair to these employees and assuring them that when they work night after night adjusting pension books and supplementary benefit books, what they receive to spend on food and nourishment will not be taxed.

Politics or the difference between the parties do not enter into this matter. We are all human and we must all understand this problem. I am sure that the Minister has some sympathy for loyal employees who suffer such a plight. I hope we shall see evidence of that consideration and that the Minister will indicate his willingness to accept the Clause.

Mr. Alfred Morris

I agree with my hon. Friend the Member for Westhoughton (Mr. J. T. Price) that it should not be necessary to argue the case for this Clause at length. The present 15p tax-free ceiling on luncheon vouchers was agreed in 1948. If the figure of 15p was right in 1948 it is manifestly wrong today.

Many young workers, including young female workers, depend greatly on luncheon vouchers. I hope that the Minister will address himself constructively to all the points made by my hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), who made a strong and compelling case for the Clause.

I was pleased to hear the hon. and gallant Member for Carshalton (Captain W. Elliot) indicate that the Clause has his support. Surely there are few, if any, right hon. or hon. Members in the Chamber who want to resist the Clause. It will be recalled that I had in my own name an Amendment along similar lines to the Clause. I have had representations galore from working people who argue that the value of the luncheon voucher has been depreciated again and again during the past 24 years. I appeal to the Minister to reply constructively. He will have a brief with him, but I hope that he will cast that aside and tell the House that he will accept the Clause.

Mr. Stainton

I do not know much about the intricacies of the luncheon-voucher scheme from the revenue standpoint. My understanding—I might be quite wrong—is that it is a convention which has been accepted by the Inland Revenue authorities. However, logic and fair treatment clearly indicate the increase of the 15p to at least 30p.

Hon. Members

And more.

Mr. Stainton

Thirty pence is in the Clause, and I compromise on that. The Government cannot defend a figure which has been running since 1948, albeit in perhaps a not very formal sense.

The Government now have the clear alternative of accepting the Amendment or of abolishing the scheme. They cannot have it both ways, for 15p is ludicrous and should be ruled out of court or the principle should be acquiesced in at a realistic figure. If a statistician were to get to work on this, he would probably work it out that a realistic figure would now be 90p. However, I will compromise at 30p.

We have heard about how articled clerks go off to the provinces and live it up at clients' expense and then on return to London draw their luncheon vouchers and have a beano once every two or three weeks, but I am sure that such abuses are minimal compared with the totality. I shall be very disappointed if the Government are unable to acquiesce in this reasonable Clause.

Mr. Cronin

I support the Clause, which was admirably moved by my hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon). It is agreeable to know that the Clause is supported by hon. Members on both sides, and I will mention in particular the hon. Member for Sudbury and Woodbridge (Mr. Stainton).

None of us can contest that there is an argument from the point of view of inflation. If the luncheon voucher concession was fixed at 15p in 1948, it must be worth enormously more now. That is such a truism that it is not worth labouring. I cannot understand why the Government resist this. Is it an attempt at self-delusion, a pretence that inflation has not taken place since the war? I cannot think that the Minister of State, who is a most intelligent and kind- hearted person, can listen to our pleas and not make strong representations to the Chancellor that the Clause should be accepted.

Apart from the obvious argument of inflation, there is the point that the concession is available mostly to secretaries, typists and clerks, people who are not organised. It would be mean for the Government to adopt a harsh and repressive attitude to people who do useful work for the community and are not organised. I cannot imagine that the Government would dare to do this to the miners, the railway men or other strongly organised bodies of workers, because the Government would soon have serious trouble on their hands. The people with whom the Government are dealing now are mostly young females who have an unsophisticated attitude to their political rights.

Mr. Stainton

They are dieting.

Mr. Cronin

Yes, but even those on a diet must eat. People who diet often buy more expensive food than those who are not on diets, so that is not an argument in favour of the Government. It is very important that secretaries, clerks and typists who do essential and valuable work should have some consideration from the Government.

From time to time on this side of the House we complain about the balance of payments situation, and from the Treasury Bench we are told how splendidly invisible exports have coped with the situation and saved us from an adverse balance of payments. But the bones and marrow of invisible exports are provided by secretaries, clerks and typists. They are the people in London—

Mr. J. T. Price

And Manchester—

Mr. Cronin

Yes, in Manchester, Birmingham and Glasgow. I would not under any circumstances try to belittle what happens in provincial cities. Work of a most industrious and energetic nature is done by secretaries, clerks and typists in the constituency of Loughborough. With characteristic modesty, I list that town last.

There has been some talk of abuses of luncheon vouchers. That cannot be a serious argument in this debate, because such abuse could occur whether the amount was 15p or 30p. One also hears that vouchers are exchanged for goods in restaurants which serve food across the counter. A very small Amendment could put a stop to such an abuse. We ought to look at this matter in the perspective of what happens to other employees in firms of all kinds. The vast majority of non-white-collared workers have their own canteens and are provided with meals which cost very much more than 15p, and those meals are subsidised in the same way. Large firms have special canteens for secretaries, clerks and typists, and as a result they are subsidised.

Mr. Stainton

I am astounded that the hon. Member does not refer to the directors' dining room.

Mr. Cronin

I appreciate the enthusiasm shown by the hon. Member for Sudbury and Woodbridge for this cause, but I should like to develop my argument in my own way. I appreciate the impetuous feeling he has of wanting to overcome the miserable attitude of the Treasury.

Large firms have canteens for secretaries, clerks and typists, and meals there cost very much more than 15p. High executives also have their canteens and dining rooms, and directors have boardroom dining rooms, and do themselves very well indeed. I hope this meets the point made by the hon. Member for Sudbury and Woodbridge. When one goes to places like the Mirabelle, the Ambassadors or the Savoy Grill—to which I have no objection because they are places which are perfectly desirable for people who take an interest in wine and gastronomy if they can do so from their own pockets—at those expensive restaurants one sees directors and high executives eating the most sumptuous meals and having the most delicious wines.

The Minister of State might say that the cost of those meals and wines is not allowed as an expense against tax. I accept that, but the directors and high executives continue their lavish entertainment in exactly the same way as they did before my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan), the then Chancellor, introduced legislation to put a stop to that. They are now having exactly the same splendid meals; the only difference is that the tax is passed on to the consumer. It is as simple as that.

8.45 p.m.

We have a situation in which directors and executives eat to the highest gastronomic standards; secretaries, clerks and typists in large firms eat meals that are much more expensive than 15p per person; and workers in industry generally also eat meals which cost much more than 15p a head in canteens that are heavily subsidised.

It is an intolerable injustice that the Government should select a relatively small group of the population—a group consisting of secretaries, typists and clerks—which is doing excellent work. Why should such people be selected for this gross injustice? Hon. Members on both sides of the House feel indignant about this. No doubt the Minister of State will rise to much higher ministerial ranks. If he has real political sense he will realise that this is an important issue and that it will make a big difference to him if he can represent to the Chancellor the injustice that is being suffered and persuad him to take steps to put it right.

Mr. Ray Carter (Birmingham, Northfield)

I apologise for coming into the Chamber rather late and missing the speech of my hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon). I may repeat some of the things he has already said.

When we began our deliberations on the Floor of the House I moved a number of Amendments, one of which provided that VAT should not be imposed on catering. I argued in Committee upstairs that we should not impose any form of taxation on food of any kind, however the food was prepared, dispensed or sold, but VAT will be imposed on catering. Therefore, in considering the question of luncheon vouchers we must remember the VAT background, which will have a considerable effect upon prices.

Not only restaurants will be affected; catering establishments within firms will be included. The luncheon voucher system operates in many of our industrial and commercial canteens. One can either exchange the voucher in the canteen or take it outside to a restaurant.

VAT will be imposed on a whole range of possible substitutes, especially confectionery. It will also be imposed on vending machines which dispense meals. No one will be able to escape the effects of VAT when eating at lunch-time or in the evening, or even in the morning.

My hon. Friend the Member for Lough-borough (Mr. Cronin) spoke about workers in city centres. They are not the only people who benefit from luncheon vouchers. Millions of industrial workers use luncheon vouchers and I venture to suggest that the global total in the industrial sector is greater than in the commercial sector.

Mr. Raymond Gower (Barry)

The hon. Gentleman is making a great point about VAT on catering, but does he recall that his own Government rejected Amendments from the then Opposition to exempt catering from selective employment tax? I do not see why the hon. Gentleman should make such a big point of the matter, when it was done by his own Government.

Mr. Carter

I take the point, as I must, but let us take that argument to its logical conclusion. Conservative Members who opposed SET, which had an inflationary effect on the price of food, must surely oppose VAT. I therefore expect the hon. Gentleman to go through the same Lobby as I do tonight. Knowing him as I do, I am sure he will be consistent and do so for a variety of reasons. He is concerned about the way in which VAT will affect the price of food and the way in which inflation is affecting many aspects of our lives, particularly the cost of food. The value of the luncheon voucher pales into insignificance compared with the rate of inflation over the past two or three years, quite apart from the fact that it has not been varied since 1948. It is at an appalling level.

I have a further point which concerns the Government's attitude to food in general. We tried to extract from them in Committee a pledge that they would use the veto in support of the zero-rating of food. Obviously, I should be ruled out of order if I tried to widen the scope of this debate to deal with the zero-rating of food. What worries me is the Government's total attitude towards food. They told us in Committee that VAT is a broad-based tax of a comprehensive nature. Every argument they have deployed, on whatever subject, has been to propel that philosophy forward into every avenue and I suspect that we shall have further evidence of it from the Minister tonight. He is bound to follow the line taken in Committee. Although he promised to look again at the question of luncheon vouchers, as with confectionery and a variety of other things, there was never any assurance of a satisfactory reply. I ask him to bear in mind, however, that any increase in the price of lunches for workers will have a devastating effect on inflation, because they will naturally try to make good any loss through a wage claim. Therefore, it would be a disinflationary step to accept the new Clause and the principles we have argued and increase the value of the luncheon voucher.

The Minister of State, Treasury (Mr. John Nott)

As the hon. Member for Ashton-under-Lyne (Mr. Sheldon) said, the practice of not taxing luncheon vouchers up to a set value has existed since 1948. It arose because of the difficulties in obtaining meals for employees in the immediate post-war period. Because of those difficulties, employers made special arrangements with nearby restaurants and cafes to provide meals for their staff in exchange for luncheon vouchers.

I want to trace the historical background, because it will help the House to understand the present position. The present extra-statutory concession—because in law the cash value of a meal voucher is a taxable emolument of the employee who receives it—was announced formally in Parliament on 20th January, 1959, by then then Chancellor of the Exchequer, Mr. Heathcoat Amory, although the practice of issuing tax-free vouchers had been going on since three years after the end of the war. We are still carrying on under that concession today. The conditions attached to the concession were, first, that the vouchers should be non-transferable and used for meals only; secondly, that when any restriction is placed on their issue to employees they must be available to lower-paid staff; and, thirdly, that the value of the voucher issued to an employee must not exceed 15p for each full working day.

The concession was seen then as justified on the ground that the provision of luncheon vouchers did no more than put employees of concerns which did not have canteen facilities in the same position as workers who had a subsidised canteen. The employee who obtains a cheap meal in a canteen is not liable to tax on what he saves compared with what he would pay in a restaurant. It was argued at the time that the luncheon voucher was the equivalent of an employer's subsidy to a canteen meal. It was not intended to cover the cost of a full meal. It was never the intention at that time, and I do not think it is the intention of hon. Members at present, that the luncheon voucher should be enough to cover the full cost of a restaurant meal.

When luncheon vouchers were first issued, three shillings a day was undoubtedly on the generous side compared with the normal canteen subsidy on each meal served. But 15p is now a defensible estimate of the average canteen subsidy. The subsidies given by outside employers vary widely, but the Civil Service subsidy and subsidies in works canteens are close enough to 15p to enable the present value of the untaxed voucher to be defended on the ground of comparability.

The latest survey which has been conducted by an outside body on the average cost of a subsidy in a works canteen was carried out by the Industrial Society in 1971. It was a survey of canteen prices, costs and subsidies. I believe that the survey is available in the Library. If it is not, I will ensure that it is available in the Library. It indicates that the average subsidy in works canteens is 15p.The hon. Member for Westhoughton (Mr. J. T. Price) asked me about comparisons. I think that that is the true comparison which must be made. This is what we are providing for—a subsidy for an outside meal equivalent to that generally available to the employee who benefits from canteen facilities.

Captain W. Elliot

A works canteen, for example, or even a dining room in a big office block does not have the overheads of the sort of restaurant to which a secretary in the City of London goes for a meal.

9.0 p.m.

Mr. Nott

I believe that in the figures which I quoted from the Industrial Society Survey overheads have been taken into account in arriving at what it states is approximately 15p a day subsidy. If my hon. Friend is saying that we must compare like with like, certainly I have done so as far as possible although overheads will vary widely from one place to another.

Nevertheless it is right that this point should be debated in the House. As the hon. Member for Ashton-under-Lyne said, it is a matter of considerable importance. But I ought to stress that there is nothing to prevent an employer issuing luncheon vouchers to his employees for a value greater than 15p a day. But above 15p a day they will be taxable. All that we are discussing here is the untaxed element at present available.

The Clause sets out to double the value of the exemption currently given by concession to recipients of luncheon vouchers, and it is intended that that should be given the force of statute law. However the Clause could be interpreted as giving an employee an entitlement to luncheon vouchers as opposed to providing for the tax exemption, within limits, of vouchers received. I do not know whether it is the intention that it should be compulsory on all employers to issue luncheon vouchers up to 30p a day. As drafted, that is what the Clause does.

I cannot confirm that the figure of 19 million vouchers in issue is correct. But the present cost to the Revenue of issuing luncheon vouchers is about £6 million—

Mr. Sheldon

If I said 19 million vouchers, it was a slip of the tongue. I meant £19 million worth.

Mr. Nott

I was about to say that possibly what the hon. Gentleman meant was a turnover of £19 million, which would work out at about the £6 million figure that I have given.

I hope that I shall not be accused of wishing to starve all those attractive typists in Loughborough, the City of London, Manchester and elsewhere. We are talking about the tax element of the vouchers, and I have listened with interest and some sympathy to what hon. Members have said.

Mr. J. T. Price

The hon. Gentleman is being extremely urbane about this because he is on a bad wicket. He knows that we know the sort of wicket that he is on. He referred to this practice which goes against all the canons of taxation laid down in the tablets of the Treasury. He says that it is taxable and that it has never been embodied in Statute legislation. However, when Derick Heathcoat Amory made his announcement in 1959, as Chancellor of the Exchequer he was well aware that the 15p had been fixed in relation to what was then the subsidy on an industrial canteen meal. If he knew then, why should the Treasury seek to change the direction of the argument saying that it does not accept there is any difference today since the Industrial Society Survey has made an investigation and says that it is about the same? Derick Heathcoat Amory knew this in 1959. If he thought that 15p was good enough then, even 30p today is not adequate to maintain the standard.

Mr. Nott

A great number of factors may have changed. The average cost of subsidy may have changed since 1959. Nevertheless I do not deny that the cost of meals has risen considerably since 1959.

Of course I cannot give any commitment. The hon. Member for Lough-borough (Mr. Cronin) made a number of kind remarks. But I am sure that I should not stay in my present post for long if I made up my mind suddenly to concede his appeal immediately. That would not be the best way for me to proceed in the direction he has indicated.

I will bring to the attention of my right hon. Friend the appeals that have been made in the debate. I recognise that the cost of meals has increased since this extra-statutory concession was made. We will take all these matters into consideration when we look at the matter afresh. In this regard the present arrangements are extra-statutory. Assuming we were not to embody the arrangements in statutory form, they could in principle be varied at any time.

Mr. Sheldon

With the leave of the House, I should like to reply briefly to the Minister of State.

My hon. Friend the Member for Westhoughton (Mr. J. T. Price) was right that the 15p could never have been the element of the subsidy of the cost of canteens in 1959. That was a patent nonsense at that time. It is obvious in retrospect that the Treasury has managed to find some justification for a figure of 15p. It is interesting and convenient to note that the coincidence of the figures which have been adduced is due to the level of inflation having continued at such a pace that the level of subsidy now happens to be equal to it. That was an obvious nonsense in 1959 and an even greater nonsense in 1948. I suppose that 10 years from now, if the present Government continued in power and 15p were to be reduced in value to 5p, they would find that it was the equivalent of the stamp to send one document from one place to another.

That is not the point of the debate. The debate is about giving assistance to people who have no opportunity of taking meals in the middle of the day to make sure they are not penalised compared with those who have the benefit of a works or factory canteen. We agree and accept that the best way to get a meal in the middle of the day for those who are at work is to do so in an industrial canteen. The luncheon voucher people accept and fully understand that their purpose is to provide meals for people who do not have those facilities.

The point which impresses me is the enormous increase in the number of luncheon vouchers in cities and towns outside London where previously they have been inadequately developed. There has been a big increase in the numbers taking advantage of this scheme.

The Minister mentioned extra-statutory concessions. It is unsatisfactory that we should have a decision that is not enshrined in a Finance Bill or other legislation that comes before the House and is capable of being scrutinised and investigated properly. This decision must be the basis of legislation so that we can make changes as regularly and frequently as we do ordinarily in Finance Bills.

The hon. and gallant Member for Carshalton (Captain W. Elliot) grasped the whole point about overheads which the Minister failed properly to tackle. It is not enough to say that an industrial canteen provides some level of subsidy. The overheads in an industrial canteen, which forms part of factory premises, are not charged to the workers. The little restaurant round the corner has a level of overheads incomparably greater than that of any factory. It is rated and sited differently. It has waitresses who work at different levels of pay because of the problems of running a restaurant compared with the running of a canteen. Its clientele is less assured, so it has extra overheads which are unknown to the factory canteen. But even if the Minister is right in equating the level of industrial subsidy to the level of the luncheon voucher, he is wrong in failing to take into account the way in which a restaurant operates. It is different from that of any industrial organisation, which has a captive clientele.

My hon. Friend the Member for Manchester, Wythenshawe (Mr. Alfred Morris) made the important point about the need for young people to have an opportunity for a midday meal, which is

the only one they have between the time they leave home in the morning and their evening meal.

The Minister's reply is an afterthought by the Treasury in an attempt to defend the indefensible. An argument that we have never heard before is now being trotted out. What is important is how we provide an equivalent service to those who do not have the benefit of an industrial canteen. We say that the new Clause is the way to do it, and we shall vote for it.

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

The House divided: Ayes 192, Noes 213.

Division No. 282.] AYES [9.11 p.m.
Abse, Leo Ellis, Tom Lewis, Ron (Carlisle)
Albu, Austen Evans, Fred Lipton, Marcus
Allaun, Frank (Salford, E.) Ewing, Henry Lomas, Kenneth
Allen, Scholefield Faulds, Andrew Lyon, Alexander W. (York)
Archer, Peter (Rowley Regis) Fitch, Alan (Wigan) McElhone, Frank
Ashton, Joe Fletcher, Raymond (Ilkeston) McGuire, Michael
Atkinson, Norman Fletcher, Ted (Darlington) Mackenzie, Gregor
Bagier, Gordon A. T. Foley, Maurice Mackintosh, John P.
Barnes, Michael Foot, Michael Maclennan, Robert
Barnett, Guy (Greenwich) Ford, Ben McMillan, Tom (Glasgow, C.)
Barnett, Joel (Heywood and Royton) Fraser, John (Norwood) Marsden, F.
Baxter, William Freeson, Reginald Marshall, Dr. Edmund
Benn, Rt. Hn. Anthony Wedgwood Galpern, Sir Myer Mason, Rt. Hn. Roy
Bennett, James (Glasgow, Bridgeton) Garrett, W. E. Meacher, Michael
Blenkinsop, Arthur Gilbert, Dr. John Mellish, Rt. Hn. Robert
Booth, Albert Ginsburg, David (Dewsbury) Mendelson, John
Bottomley, Rt. Hn. Arthur Golding, John Mikardo, Ian
Boyden, James (Bishop Auckland) Grant, George (Morpeth) Millan, Bruce
Broughton, Sir Alfred Grant, John D. (Islington, E.) Miller, Dr. M. S.
Brown, Bob (N'c'tle-upon-Tyne,W.) Griffiths, Will (Exchange) Morgan, Elystan (Cardiganshire)
Brown, Hugh D. (G'gow, Provan) Hamilton, James (Bothwell) Morris, Alfred (Wythenshawe)
Brown, Ronald (Shoreditch & F'bury) Hamilton, William (Fife, W.) Morris, Charles R. (Openshaw)
Buchan, Norman Hamling, William Morris, Rt. Hn. John (Aberavon)
Campbell, I. (Dunbartonshire, W.) Hannan, William (G'gow, Maryhill) Moyle, Roland
Cant, R. B. Harrison, Walter (Wakefield) Mulley, Rt. Hn. Frederick
Carter, Ray (Birmingh'm, Northfield) Hart, Rt. Hn. Judith O'Halloran, Michael
Carter-Jones, Lewis (Eccles) Hattersley, Roy Oram, Bert
Castle, Rt. Hn. Barbara Healey, Rt. Hn. Denis Oswald, Thomas
Clark, David (Colne Valley) Horam, John Palmer, Arthur
Cocks, Michael (Bristol, S.) Houghton, Rt. Hn. Douglas Pardoe, John
Concannon, J. D. Hughes, Robert (Aberdeen, N.) Parker, John (Dagenham)
Conlan, Bernard Hunter, Adam Pavitt, Laurie
Corbet, Mrs. Freda Irvine,Rt.Hn.SirArthur (Edge Hill) Pentland, Norman
Cox, Thomas (Wandsworth, C.) Janner, Greville Prentice, Rt. Hn. Reg.
Cronin, John Jeger, Mrs. Lena Prescott, John
Crossman, Rt. Hn. Richard John, Brynmor Price, J. T. (Westhoughton)
Cunningham, G. (Islington, S.W.) Johnson, James (K'ston-on-Hull, W.) Probert, Arthur
Dalyell, Tam Johnson, Walter (Derby, S.) Rankin, John
Davidson, Arthur Johnston, Russell (Inverness) Rees, Merlyn (Leeds, S.)
Davies, Denzil (Llanelly) Jones, Barry (Flint, E.) Rhodes, Geoffrey
Davies, Ifor (Gower) Jones, Dan (Burnley) Roberts, Albert (Normanton)
Davis, Clinton (Hackney, C.) Jones,Rt.Hn.Sir Elwyn(W.Ham,S.) Roberts,Rt.Hn.Goronwy (Caernarvon)
Davis, Terry (Bromsgrove) Jones, Gwynoro (Carmarthen) Roper, John
Deakins, Eric Jones, T. Alec (Rhondda, W.) Rose, Paul B.
de Freitas, Rt. Hn. Sir Geoffrey Judd, Frank Ross, Rt. Hn. William (Kilmarnock)
Dempsey, James Kaufman, Gerald Sheldon, Robert (Ashton-under-Lyne)
Doig, Peter Lambie, David Shore, Rt. Hn. Peter (Stepney)
Dormand, J. D. Lamborn, Harry Short,Rt.Hn.Edward N'c'tle-u-Tyne)
Driberg, Tom Lathham, Arthur Silkin, Hn. S. C. (Dulwich)
Duffy, A. E. P. Lawson, George Silverman, Julius
Dunnett, Jack Leadbitter, Ted Skinner, Dennis
Eadie, Alex Lee, Rt. Hn. Frederick Small, William
Edelman, Maurice Lestor, Miss Joan Spearing, Nigel
Edwards, Robert (Bilston) Lever, Rt. Hn. Harold Spriggs, Leslie
Stallard, A. W. Tuck, Raphael Willey, Rt. Hn. Frederick
Stewart, Donald (Western Isles) Urwin, T. W. Williams, Mrs. Shirley (Hitchin)
Stoddart, David (Swindon) Varley, Eric G. Williams, W. T. (Warrington)
Stonehouse, Rt. Hn. John Wainwright, Edwin Wilson, Alexander (Hamilton)
Strang, Gavin Walker, Harold (Doncaster) Wilson, Rt.Hn. Harold (Huyton)
Summerskill, Hn. Dr. Shirley Wallace, George Wilson, William (Coventry, S.)
Thomas,Rt.Hn.George (Cardiff,W.) Watkins, David Woof, Robert
Thomas, Jeffrey (Abertillery) Wellbeloved, James
Thomson, Rt. Hn. G. (Dundee, E.) Wells, William (Walsall, N.) TELLERS FOR THE AYES
Tinn, James White, James (Glasgow, Pollok) Mr. Joseph Harper and
Tomney, Frank Whitehead, Philip Mr Donald Coleman
Torney, Tom Whitlock, William
NOES
Adley, Robert Goodhew, Victor Nott, John
Astor, John Gorst, John Oppenheim, Mrs. Sally
Atkins, Humphrey Gower, Raymond Osborn, John
Awdry, Daniel Grant, Anthony (Harrow, C.) Owen, Idris (Stockport, N.)
Baker, Kenneth (St. Marylebone) Gray, Hamish Page, Rt. Hn. Graham (Crosby)
Barber, Rt. Hn. Anthony Green, Alan Page, John (Harrow, W.)
Batsford, Brian Grieve, Percy Parkinson, Cecil
Beamish, Col. Sir Tufton Griffiths, Eldon (Bury St. Edmunds) Peel, John
Bell, Ronald Grylls, Michael Percival, Ian
Bennett, Sir Frederic (Torquay) Gummer, J. Selwyn Pink, R. Bonner
Benyon, W. Gurden, Harold Powell, Rt. Hn. J. Enoch
Berry, Hn. Anthony Hall, Miss Joan (Keighley) Price, David (Eastleigh)
Biggs-Davison, John Hall-Davis, A. G. F. Prior, Rt. Hn. J. M. L.
Blaker, Peter Hamilton, Michael (Salisbury) Proudfoot, Wilfred
Body, Richard Harrison, Col. Sir Harwood (Eye) Pym, Rt. Hn. Francis
Boscawen, Robert Havers, Michael Quennell, Miss J. M.
Bossom, Sir Clive Hawkins, Paul Ramsden, Rt. Hn. James
Bowden, Andrew Hicks, Robert Rawlinson, Rt. Hn. Sir Peter
Bray, Ronald Higgins, Terence L. Redmond, Robert
Brinton, Sir Tatton Hiley, Joseph Reed, Laurance (Bolton, E.)
Brown, Sir Edward (Bath) Hill, John E. B. (Norfolk, S.) Rees, Peter (Dover)
Bryan, Sir Paul Hill, James (Southampton, Test) Rees-Davies, W. R.
Buck, Antony Holland, Philip Renton, Rt. Hn. Sir David
Bullus, Sir Eric Hordern, Peter Rhys Williams, Sir Brandon
Butler, Adam (Bosworth) Hornby, Richard Ridsdale, Julian
Campbell, Rt.Hn.G.(Moray&Nairn) Hornsby-Smith,Rt.Hn.Dame Patricia Roberts, Michael (Cardiff, N.)
Carr, Rt. Hn. Robert Howell, Ralph (Norfolk, N.) Roberts, Wyn (Conway)
Chapman, Sydney Hunt, John Rossi, Hugh (Hornsey)
Chataway, Rt. Hn. Christopher Iremonger, T. L. Rost, Peter
Churchill, W. S. James, David Russell, Sir Ronald
Clark, William (Surrey, E.) Jenkin, Patrick (Woodford) Scott-Hopkins, James
Clarke, Kenneth (Rushciffe) Jessel, Toby Sharples, Richard
Clegg, Walter Johnson Smith, G. (E. Grinstead) Shaw, Michael (Sc'b'gh & Whitby)
Cooks, Robert Jopling, Michael Shelton, William (Clapham)
Corfield, Rt. Hn. Sir Frederick Kellett-Bowman, Mrs. Elaine Simeons, Charles
Cormack, Patrick Kershaw, Anthony Sinclair, Sir George
Costain, A. P. King, Evelyn (Dorset, S.) Skeet, T. H. H.
Critchley, Julian Kinsey, J. R. Smith, Dudley (W'wick & L'mington)
Crouch David Knox, David Soref, Harold
Crowder, F. P. Lamont, Norman Speed, Keith
d'Avigdor-Goldsmid.Maj.-Gen.James Lane, David Spence, John
Dean, Paul Le Merchant, Spencer Sproat, Iain
Deedes, Rt. Hn. W. F. Longden, Gilbert Stanbrook, Ivor
Digby, Simon Wingfield Luce. R. N. Stewart-Smith, Geoffrey (Belper)
Dixon, Piers McAdden, Sir Stephen Stoddart-Scott, Col. Sir M.
Dodds-Parker, Douglas MacArthur, Ian Stokes, John
Dykes, Hugh McCrindle, R. A. Stuttaford, Dr. Tom
Elliott, R. W. (N'c'tle-upon-Tyne.N.) McLaren, Martin Taylor,Edward M.(G'gow.Cathcart)
Emery, Peter Macmillan,Rt.Hn.Maurice (Farnham) Taylor, Frank (Moss Side)
Eyre, Reginald McNair-Wilson, Michael Taylor, Robert (Croydon, N.W.)
Farr, John McNair-Wilson, Patrick (NewForest) Tebbit, Norman
Fell, Anthony Madel, David Temple, John M.
Fenner, Mrs. Peggy Marten, Neil Thomas, John Stradling (Monmouth)
Fidler, Michael Mather, Carol Thomas, Rt. Hn. Peter (Hendon, S.)
Finsberg, Geoffrey (Hampstead) Maude, Angus Tilney, John
Fisher, Nigel (Surbiton) Maxwell-Hyslop, R. J. Trafford, Dr. Anthony
Fletcher-Cooke, Charles Mitchell,Lt.-Col.C.(Aberdeenshire,W) Trew, Peter
Fookes, Miss Janet Mitchell, David (Basingstoke) Turton, Rt. Hn. Sir Robin
Foster, Sir John Moate, Roger Vaughan, Dr. Gerard
Fox, Marcus Money, Ernle Vickers, Dame Joan
Fraser,Rt.Hn.Hugh(St'fford & Stone) Monks, Mrs. Connie Walder, David (Clitheroe)
Fry, Peter Monro, Hector Walker, Rt. Hn. Peter (Worcester)
Gardner, Edward Morgan, Geraint (Denbigh) Walker-Smith, Rt. Hn. Sir Derek
Gibson-Watt, David Morgan-Giles, Rear-Adm. Ward, Dame Irene
Gilmour, Ian (Norfolk, C.) Morrison, Charles Warren, Kenneth
Gilmour, Sir John (Fife, E.) Mudd, David Weatherill, Bernard
Glyn, Dr. Alan Neave, Airey Wells, John (Maidstone)
Godber, Rt. Hn. J. B. Noble, Rt. Hn. Michael Wiggin, Jerry
Goodhart, Philip Normanton, Tom Wilkinson, John
Winterton, Nicholas Woodhouse, Hn. Christopher TELLERS FOR THE NOES
Wolrige-Gordon, Patrick Woodnutt, Mark Mr. Tim Fortescue and
Wood. Rt. Hn. Richard Worsley, Marcus Mr. Oscar Murton.

Question accordingly negatived.

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