HC Deb 10 July 1972 vol 840 cc1208-37


move, That the Clause be read a Second time.

The House will appreciate that the proposals in the Clause stem from the debates that we had in various stages in Committee. It is concerned with what the hon. Member for Birmingham, All Saints (Mr. Brian Walden) described as the famous television rentals Amendment. It so happens that the form of the drafting requires it to be put forward as a new Clause rather than in the form in which it was moved in Committee. But its intention is clear.

I hope not to detain the Committee too long, but I think it is appropriate to spell out precisely what it is that we have in mind. There was considerable discussion in Committee on the philosophy of double taxation and so forth, and there were some differences of opinion in various parts of the Committee about it, though I pointed out that the expression was a nebulous one and might refer to a situation where both VAT and revenue duties were charged but that this might well be to the advantage of those concerned, depending on what my right hon. Friend proposed next year.

I also said that it might not be possible in all circumstances to avoid double taxation, especially when one was virtually reforming the whole of our indirect tax structure, which is what we are doing by abolishing purchase tax and SET and introducing VAT. None the less, my right hon. Friend has put forward proposals designed to overcome the general problem of purchase tax paid stocks in terms of sale or return arrangements or the transitional period. But we appreciate that that may not be a perfect solution. It is generally accepted that no perfect solution is available.

That is a separate question. The matter with which this Clause is concerned is the situation that arises because VAT will be charged on television rentals and some of the sets involved may already have paid purchase tax. Whatever one's views on double taxation, I think that we are right to be concerned about the disruption of trade. Therefore, we were impressed by the arguments in Committee about the disruption of trade which might arise in connection with television rentals.

I understand that there is a manuscript Amendment, Mr. Deputy Speaker, and that you are considering selecting it. I do not know whether you wish it to be discussed with the new Clause or whether you intend the House to come to it at a later stage—

Mr. Deputy Speaker (Miss Harvie Anderson)

I think it will be convenient to discuss the manuscript Amendment, but I was proposing to say that after putting the Question, "That the Clause be read a Second time". It is in order to discuss it.

Mr. Higgins

I am not clear whether the House is familiar with the content of it. As we are on Report and not in Committee, I should be in some difficulty in replying to the manuscript Amendment later, and I do not know whether I should be allowed to speak a second time. However, if you wish us to proceed as you suggest, Mr. Deputy Speaker. I am happy to do so.

I turn, therefore, to the new Clause—

Mr. Alfred Morris (Manchester, Wythenshawe)

The hon. Gentleman will recall that, with the hon. Member for Hampstead (Mr. Geoffrey Finsberg) and representatives of the Retail Consortium, I saw him at the Treasury about the problem of double taxation as it affects retail trade as a whole. I appreciate that the hon. Gentleman is dealing with a specific matter here. But in the course of his speech will he give us any further information that may be available about the representations that we made to him?

Mr. Higgins

I should be out of order if I did that. This is a special case about the position of rental agreements as against the normal position of tax paid stocks.

For the benefit of the House, perhaps I might set out what we propose. I think that it is the case that the time limit that we have in mind is clear from the wording of the Clause itself. But the Clause will give us power to make an order which will propose relief, and it is right to outline to the House what our intention is about that order, although it will be considered by the House in due course. Our intention, if the House accepts the Clause, is to make an order which will have the effect of reducing the rental charge on which VAT will be calculated. Our present intention is to reduce the charge on television rental contracts entered into before 1st April, 1973, by two-thirds in 1973–74 and by one-third in 1974–75. The relief will terminate on 31st March, 1975, and VAT will then be charged in the normal way on the full rental of each set. The relief will not apply to contracts entered into on or after 1st April, 1973.

It is difficult to make accurate estimates of the cost of the relief because of the increasing speed with which colour television sets are replacing monochrome sets. But it is likely that the cost of the Clause on the basis that I have outlined would be of the order of £20 million in 1973–74 and between £5 million and £10 million in 1974–75.

I explained in Committee that consultations about the detailed arguments for transitional relief had not been completed. Since then, we have been carrying out further consultations not only with the larger companies involved but also with representatives of the smaller companies because a number of rental agreements are made by comparatively small retailers. As a result, we now bring forward these proposals.

If I understood you correctly, Mr. Deputy Speaker, you do not wish me to deal with the manuscript Amendment now. But if I have the leave of the House at a later stage I shall seek to deal with the various points which may be made upon it.

It is worth while stressing that we were naturally concerned about the problem of the disruption of trade. It was for that reason that we thought it right to table the new Clause. But I repeat what I said in Committee. The rental industry generally has already benefited from the reductions in purchase tax. It will benefit further from the switch to VAT, and I do not think that anyone argues that television sets as such should not be within the scope of VAT. It is also the case that the industry will gain from the abolition of SET. As I explained in Committee, although the figure that it gains may only be one per cent. of turnover, that might be the equivalent of 10 per cent. of profits.

I add a word about the basis on which we have sought to look at the degree of relief. It was explained in Committee that there were essentially four elements in rental payments which it was right to distinguish. I stress again that all these figures are necessarily very approximate and that they may vary considerably from one trader to another. The first element is the recovery of the capital cost of the set. That is probably of the order of one-third of the total charge. The second element is the repair, maintenance and servicing costs, which might be of the order of 20 or 25 per cent. of the total. The third element is the recovery of overhead costs and interest on capital. The fourth element is profit.

I think that it will be accepted in principle that VAT should be charged on the total rental charge and that, as the only element of the total charge which already has been subject to taxation is the capital cost of the set, there is no reason why transitional relief should go wider than this element. It would create an indefensible situation in relation to the taxation of other trades if the proportion of the television rental charge representing the recovery of overhead costs, including interest on capital, profit and so on, were not subject to VAT. This is an argument which the Committee accepted, and I hope the House will feel it right to accept it this afternoon.

5.0 p.m.

In essence, we are proposing relief of the kind which I outlined in my opening remarks. We have concluded, looking at the subject in as much depth as we could and after consultation with many of the trade interests involved, that a relief which is about three times the annual average recovery of the capital cost of a television set, but compressed into a two-year period, and with a revenue cost of the order I have outlined goes as far as it is reasonable to go to meet the arguments put forward for transitional relief. We think this is a fair and reasonable solution and hope the House will support it.

We think it is right to split the relief on a two-thirds and one-third basis over a two-year period for two reasons. First, it is in the interests of the efficient management of the economy that relief should be over as short a period as possible and, secondly, it meets the point raised by many traders that the maximum possible relief is desirable in 1973–74 as it will be then that there will be most incentive for other firms to operate in such a way that trade is disrupted. I am sorry to weary the House at such great length, but I thought it right to put forward the thinking behind the new Clause.

Mr. Deputy Speaker

Before I call the hon. Member for Ashton-under-Lyne (Mr. Sheldon), I should like to make it clear that I think it would be the wish of the House to discuss the new Clauses and manuscript Amendment as we have already begun to do, but that if a Division is required it will be in order to call for a Division after the new Clause has been read a Second time.

Mr. Robert Sheldon (Ashton-under-Lyne)

Thank you for that ruling, Mr. Deputy Speaker. I have tabled a manuscript Amendment to new Clause 52, in line 1, after "set" insert or other goods which have been charged to purchase tax at a rate in excess of 10 cent.". At the outset I should explain why this is a manuscript Amendment. Obviously, it is not for the convenience of the House that this be the normal way in which Amendments are moved, preventing, as it does, any interested person having full access to it before it is selected and before the House meets. The reason is that new Clause 52 was put down as a starred new Clause so the Opposition did not have an opportunity until today to examine it and putdown an Amendment. I mention this so that the background is clearly understood.

The new Clause is welcome so far as it goes. We must bear in mind that the new Clause has arisen as a result of an Amendment in Committee moved by my hon. Friend the Member for Birmingham, All Saints (Mr. Brian Walden) which sought to enunciate the general principle that where purchase tax had been paid on an article which was subject to a rental agreement stretching over the period of the introduction of value added tax double taxation should not be imposed. The Financial Secretary, resisting that Amendment, made a number of points to which I shall return. In the new Clause the Government have accepted the major part of the Amendment moved by my hon. Friend.

It must be understood that this part, whereby no relief was intended on television sets, is probably one of the least defensible parts of a Bill which contains a number of indefensible elements. Why is it that, having accepted the principle that where purchase tax has been paid on a television set the subject of a rental agreement, that same principle is not accepted for other articles of an almost identical character? This is the most important of the elements whereby agreements are made to rent certain items which contain an element of purchase tax. The hon. Gentleman has reluctantly—certainly he seemed very reluctant in Committee to accept either the principle or the particular example—has now accepted it for television sets. Why?

I should like to explain the Opposition's attitude to the new Clause. The Financial Secretary said that he would spell out precisely what he had in mind: It is a great pity it was not so spelt out in the new Clause, which cannot be accepted as a very happy form of legislation. It gives wide powers to the Government to introduce orders intended to reduce the element of double taxation. The specification of those orders is not to be the subject of any Finance Bill; it is to be by means of orders and regulations, and we know what that means.

Upstairs we had what amounted to a very good and rigorous scrutiny of the Bill which did credit to both sides. I hope that the way in which the Government were tested will be repeated on future occasions. However, when we come to this part of the Bill we know that that kind of scrutiny, that kind of examination and testing, will not be possible because we are giving the Financial Secretary power to introduce an order into the House, which will probably occur late at night, with no possibility of amendment or of thorough discussion of the kind which we had upstairs. The kind of scrutiny which we have a right to expect and on this occasion obtained will not be possible on an important element of the Bill, in terms not so much of total money, but of numbers of people affected, because about 10 million people would be paying substantial amounts as a result of the double taxation inherent in the Bill before the new Clause was proposed.

We have all been bombarded with letters from interests as well as constituents justifiably complaining about this lack of provision for excluding double taxation. The size of the problem is readily understood when it is known that of the 17 million television sets installed by 1st April next year 60 per cent, approximately will be rented. That gives the measure of the seriousness and extent of the problem.

The Government have had two years to think about this matter. We have frequently been told that those two years have been spent in full and thorough discussion and negotiation with the various interested parties concerned, which obviously include the television rental people. Yet we found the Bill made no concession in that area. Then, because of arguments brought out in Committee, the concession was won. I am sure that the Financial Secretary will not mind my saying that the method to be adopted is rather difficult to understand. It is less of a concession than we thought we would get, and we might therefore want to return to this issue. On the spur of the moment I am not prepared to accept this as the kind of concession that was debated in Committee.

The hon. Gentleman said that the cost of this concession will be about £25 million to £30 million. The principle of the Amendment moved in Committee was that no goods subject to purchase tax and a rental agreement before 1st April, 1973, the rental for which spread over into the period of VAT, should be subject to double taxation, and the hon. Gentleman gave the cost of that as £30 million to £40 million.

Mr. Higgins

The hon. Gentleman has not quoted correctly what I said in Committee. The figure which he has quoted was for the Amendment which appeared on the Notice Paper. I sought to show then—and I have repeated it today—that there are a number of elements in the hiring charge which have previously not been taxed and which it is right should come within the scope of VAT.

Mr. Sheldon

I thought that I had made that point. I thought I said that that was the cost of the Amendment, the principle of which was that tax should not be charged on goods on hire. The cost of the Amendment was given as £30 million to £40 million. The Financial Secretary said in Committee: Acceptance of the Amendment"— this relates to goods subject to purchase tax and a rental agreement going over into the period of VAT— —which I do not recommend—would involve the substantial cost of approximately £30 million or £40 million in the first year, declining as the assets were depreciated over future years."—[Official Report,Standing Committee E; 14th June, 1972, c. 984.]

Mr. Higgins

That was the cost of the Amendment, but the hon. Gentleman will recall that the Amendment set out in column 978 does not refer specifically to television sets. Secondly, it does not refer merely to the capital cost element which has borne purchase tax. The figure is therefore correspondingly greater.

Mr. Sheldon

I understand that. My point is that having taken the higher figure, and having subtracted from it the lower figure given by the Financial Secretary, one is left with the net balance being the cost of that element of the Amendment which is not covered by the new Clause.

It is necessary to discover the cost of extending this principle to all the other goods involved. It is obviously small, because the major element arises from television rentals. It is therefore necessary to examine why, if the hon. Gentleman has seen fit to accept this principle for television sets, he is not prepared to apply it to car rentals, office equipment and other matters.

5.15 p.m.

There are a number of other areas concerned but, because of the late arrival of the new Clause, full representations on it have not been possible. If the hirer happens to be a business he will be allowed the VAT as an input, but if it is a private hiring with a rental agreement that is binding there will be some loss either by the hiring firm concerned or, depending on the contract entered into, by the person doing the hiring. If the hon. Gentleman says that this kind of double taxation is wrong and he has therefore introduced the Clause to remedy it, he should extend that remedy over the whole field, and not confine it to one aspect.

Another example which springs to mind is that of office equipment purchased by an exempt trader or some other body. In that situation, the person concerned will find himself subject to double taxation of precisely the kind that one finds with television rentals. I do not see why the hon. Gentleman should have introduced a narrow Clause when he could have dealt with the matter comprehensively.

I disagree with the breadth of the new Clause and the fact that it does not spell out that which can be examined in the way that we examined other Clauses in Committee. It says that where purchase tax has been paid on an article, namely, a television set, VAT will be reduced. How is it to be reduced? We are not told. The method is to be specified in an order to be introduced later. If the Financial Secretary is not prepared to spell out in detail how VAT will be reduced, he should apply the principle to things such as car rentals and other goods in respect of which there are rental agreements.

I know that the problem is that of discovering the component parts and levying the tax accordingly. The tax on the purchase price of a television set does not represent the entire amount that will need to be relieved from VAT. The system proposed by the hon. Gentleman is a very rough and ready way of working it out, because there will be wide variations in the proportions of the capital costs of rental companies buying the sets, and a much wider variation in servicing costs between firms in London and those elsewhere. As a proportion of the total rental, servicing costs in London will obviously be much higher than those in my constituency. If the hon. Gentleman is prepared to accept this rough and ready approach for television sets, why not adopt a similar approach for other articles?

The whole point is that this well-prepared Finance Bill needs a certain amount of time for negotiation. During the two years which he had at his disposal the hon. Gentleman did not take advantage of the opportunities offered for negotiation, with the result that companies and individuals will suffer when the Bill becomes law. I hope that I shall be proved wrong, and that the hon. Gentleman will find that he is committed to accepting the Amendment because he has so readily accepted the principle of no double taxation. The hon. Gentleman's acceptance of the Amendment would give us a great deal of satisfaction.

Perhaps I may refer to the Financial Secretary's final comment on this point. He said, talking about the cost of £30 million to £40 million in the first year; As the Committee will appreciate, that sum is sufficiently substantial to involve a possible change in the rate"— this almost sublime rate of 10 per cent. which has been chosen for VAT— which the Government are anxious to maintain at the level envisaged by my right hon. Friend the Chancellor of the Exchequer."—[Official Report,Standing Committee E, 14th June, 1972; c. 984.]

The hon. Gentleman has now accepted the cost of £30 million, but I notice that the rate has not been changed. So those arguments in Committee about the need to defend that rate at all costs suddenly seem to have melted away. When I saw new Clause 52 I looked for another new Clause that would amend the rate, but I failed to find it. So the strength of those arguments used so assiduously in Committee prove not to have the massive foundations which were then so frequently and monotonously asserted.

I ask the Financial Secretary to consider most carefully the arguments in favour of these other firms in precisely similar circumstances. It would be grossly unfair if because there are large numbers of people concerned he rightly accepted the principle in respect of television sets, but failed to apply in respect of a much smaller sum of money the identical principle which would ensure equity all round.

Mr. A. P. Costain (Folkestone and Hythe)

I thank my hon. Friend the Financial Secretary for the concession. I have had a number of letters from constituents expressing real concern, and a number of letters from old-age pensioners who depend so much on their television sets but feared that the addition of VAT to their rentals would be crippling. Those fears may have been somewhat exaggerated, but when one hears my hon. Friend speak of £20 million being involved one gets some idea of what is being conceded.

I should like to ask the Financial Secretary one or two straight questions. Will he explain how he gives away two-thirds and one-third in two successive years? Will he come to some arrangement with the rental companies by which this concession having been made, they will explain to their hirers that it has been assumed that by the end of 1975 the purchase tax on the capital element has been repaid? Will it be made certain in so doing that the rental companies will reduce rents to this degree so that we avoid what has happened so often before, which is that when SET has been taken off—it will be VAT now—the consumer has seldom had the advantage but that when new taxation is put on he gets the disadvantage. Further, will my hon. Friend come to some arrangement with television rental companies that where there has been a combined sale of, say, a tape recorder and a television set the agreement makes quite clear how the rental will be split between the two.

Mr. Dalyell

As one who in Committee went on at some length about the needs of the industry, I feel that there are two separate problems here. First, there is the problem of the consumer, and the representations we have had from retailers big and small, and, secondly, there is the problem of the industry.

We have all had letters from British Relay, constituents of mine, sent to us by Mr. Sleith and Mr. Browne, and also from the Radio and Television Retailers Association of Scotland, saying that the cost to them should be about £40 million. As I understand it, the give-away in the Clause is £25 million, so there is a difference of about £15 million between what the retail interests asked for and what they are being given. I do not say that it is wrong that that should be so: I am just trying to establish what the erosion is to the Revenue under the Treasury Proposals. Is it £25 million?

In the Standing Committee, along with the hon. Member for Surrey, East (Mr. William Clark), I put the argument based on representations that we had from the television manufacturing industry. Here, I must say that at first sight that is really what has determined the Treasury, and if it is the representations of the industry rather than those of the retailers it behoves those who argue that the industry has a priority over even that of the retail trade to say "Thank you" to the Treasury.

Having said that, I should like the Financial Secretary to give further details of the discussions that took place with the manufacturers. He himself said that the disruption of the industry was the major cause. If that was the major reason for the Treasury tabling this new Clause, can we be told whether the manufacturers themselves are happy with what has been arrived at?

Mr. Higgins

I am never quite clear what will or will not make any particular group of people happy, but as to the point made by the hon. Gentleman a moment ago, and which I then hesitated to deal with, I said that on the basis I have outlined—that is, two-thirds in one year, and declining—the cost will be of the order of £20 million in 1973–74 and of the order of £5 million to £10 million in 1974–75. Those were the figures I gave earlier. I appreciate that it is sometimes difficult to pick them up very quickly, but those are the figures.

Mr. Dalyell

If those are the figures, I guess that they are about £10 million or £15 million short of what the retailers asked for. That may or may not be right compared with other priorities, but it should be established as fact that the Treasury has gone perhaps two-thirds of the way to meet the retailers, but has not gone the whole way. I see the hon. Member for Folkestone and Hythe (Mr. Costain) shaking his head.

Mr. Costain

The point I tried to make in my short contribution was that this related to the capital element and the purchase tax involved in the rental, and so on.

Mr. Dalyell

That may or may not be so. I return to the problems of the industry itself and ask the Treasury whether in those discussions, which seem to have weighed more heavily than any others that it had, the industry was satisfied, because it seems on the crucial question of the third that something has been achieved. I therefore ask whether the industry after its discussions with the Treasury is reasonably happy from a production point of view with what has been done.

5.30 p.m.

Mr. William Clark

Everyone welcomes the Treasury's concession on television rentals, because what was worrying members on both sides of the Standing Committee was the disruption that could have occurred in the industry resulting from uncertainty. There are at present 10 million television sets on rental, and the uncertainty would have affected future orders.

I do not accept the strictures made by the hon. Member for Ashton-under-Lyne (Mr Sheldon), because a 10 per cent. flat rate is the lowest in Europe and this consequently means that renting a television set will be so much cheaper than it was before. The present purchase tax of 25 per cent. on a television set has to be paid by the rental company. If one does one's arithmetic, one finds that for a set the capital cost of which is £154—in view of the introduction of colour television that is not an out-of-the-way price—if it is subjected to purchase tax at present rates, the annual rental under the rental agreement will be £51.37, which is roughly £1 per week. As to post-purchase tax, with VATin its place, for a similar set which cost £154 the rental over a five-year period will be £41.31. Tribute should be paid to my right hon. Friend for the introduction of VAT because, for the television rental industry rentals will be much cheaper under VAT than under purchase tax. I know that the hon. Member for Erith and Crayford (Mr. Well-beloved) wholly agrees with me about this.

Mr. Joel Barnett

How has the hon. Gentleman made his calculation that it will be very much cheaper under VAT bearing in mind that there was no purchase tax on the profit, which, as has been made clear, is very high, and on the servicing element which is equally quite high and which will now bear VAT?

Mr. Clark

I am in the same profession as the hon. Member for Heywood and Royton (Mr. Joel Barnett). Without the figures in front of me, he would not expect me to quote them. But I will tell him how my £51 and £41 is worked out. The hon. Member should also remember that, although VAT will be imposed on the service charge, and I accept that, a 25 per cent. rate of purchase tax is the equivalent of, I think, an 18⅔ per cent. VAT. I hope that my hon. Friend will correct me if I am wrong in that. Consequently, with a 10 per cent. rate of VAT, there is a saving. So we welcome the concessions given by my hon. Friend.

One of the difficulties we had in Standing Committee, apart from the disruption of the industry because of uncertainty, was the feeling that because VAT sets would be cheaper to rent than purchase tax sets there would be uncertainty in the industry because television rental companies would hold off ordering, with a consequent rundown in the manufacture of sets.

But this does not overcome the problem of double taxation. The hon. Member for Ashton-under-Lyne is entirely right about this. If one has double taxation, what is the difference whether it is on a television set, a typewriter or a piece of office machinery? I take this point entirely. However, the hon. Member should remember that 99.9 per cent. of television sets in Britain are purchased or hired by the general public and not by registered traders. I assure the House that I have no interest to declare in this matter. But most of the other equipment, office machinery, computers, typewriters and so on, is hired under rental—even motor cars, which are in a rather different position from that of television sets; I shall return to that point—

Mr. Frank Tomney (Hammersmith, North)

The articles to which the hon. Member refers are correctly also charged against profits.

Mr. Clark

For example, office machinery being hired out is normally hired to firms which are registered traders. As registered traders, if my hon. Friend charged a VAT, this would be an input tax which the trader could charge as a credit to his output tax. There is, consequently, not the same hardship concerning office machinery. But there is the question of double taxation regarding television sets.

My hon. Friend has accepted this point and has come back with the new Clause saying, as I understand it, that of the first year's rental on sets hired before 1st April, 1973, two-thirds of the rental will be exempted from VAT, and the following year one-third of the rental will be exempted.

With 10 million television sets in the-country, all under varying terms of hire, some of which may have one year to run and others four years, and so on, I am assured that the average period for hiring out a television set from rental companies is about seven years; a set lasts about seven years through the hiring mechanism. This takes no account of servicing and maintenance. Obviously, having accepted the principle of VAT, the House must accept the principle that VAT will be charged on maintenance on any piece of equipment, be it a television set, a typewriter or anything else. Consequently if a television set has a life of seven years, I suppose that one could take the average and say that most television sets have a life of 3½ years or more, and this means that a set upon which purchase tax has been paid, shall we say, just before 1st April, 1973, has seven years life in front of it on which purchase tax has already been paid.

In the last two years or so the cost of television sets has risen enormously. That had nothing to do with inflation. It was because so many people have been swapping from monochrome to colour television, which is much more expensive. The Amendment which we tried to convince the Treasury to accept did not specify any period as to when VAT should be charged on a television set because, as hon. Members on both sides of the House will accept, administratively it would be an impossible task for the Customs and Excise to police all sets in the country for the period of their life.

Consequently, as the hon. Member for Ashton-under-Lyne said, it has to be a sort of rough and ready rule. It will harm some; it may please others. I should have thought that with a two-thirds' exemption for the first year and one-third for the second year, a two-year remission of VAT is a little niggardly. It could have been a much longer period. As I said in Standing Committee, where hon. Members on both sides supported my argument, I should have preferred possibly three or four years as the time over which we should have this remission. My hon. Friend has given a two year remission, up to 1975. My only criticism of his concession is that I think he could have gone a little further.

Mr. Higgins

I must choose my words carefully, because this is rather a com- plicated area but it was generally agreed in Standing Committee, and my hon. Friend altered the figures he quoted at an early stage of the proceedings and accepted that the capital element of the charge was likely to be about one-third. What we are proposing, therefore, is that we shall take it very approximately as being the one-third figure, but where these may have relief of two-thirds of the charge in the first year and one-third in the second, it is, so to speak, concertinaed into that two-year period. We think that this would be the right way of doing it because it gives more relief in the early period, when we are told that there will be the greatest danger of disruption. But the total amount is two-thirds' relief in the first year and one-third in the second year, but spread over two years.

Mr. Clark

I accept that. If my hon. Friend would like me to put words into his mouth, I should have taken it as one-third in the first year, one-third in the second year and one-third the following year, as the length of time for remission of VAT. One can never work it out accurately that someone who has paid purchase tax must get that exact amount as relief from VAT. Nevertheless, we welcome the concession.

I should like to ask my hon. Friend about two further points. From a reading of the new Clause, I presume that if a television set is supplied on hire for a period beginning before 1st April, 1973, this covers every television set that was out on hire, irrespective of for how long, before 31st March, 1973.

Secondly, we have the two years up to 31st March, 1975. If in the two years from 1st April, 1973, there is a change of hirer, can my hon. Friend assure the House that the concession given here will still be given to that particular television rental?

Mr. J. Bruce-Gardyne (South Angus)

The hon. Member for Ashton-under-Lyne (Mr. Sheldon) never disappoints us. I sometimes think that if he were presented with a crock of gold at the end of the rainbow he would say that it was an absolute scandal, that it was platinum, that it had arrived at an extremely inconvenient moment, that he would like to know precisely what all the small print meant on the document committing the deed of gift, and, furthermore, if there were no small print there ought to be.

As the hon. Gentleman knows very well, although the Amendment which we discussed in Committee was in drafting terms a wide one, in practice the entire argument which was advanced in its favour by the hon. Member for Birmingham, All Saints (Mr. Brian Walden) and the discussion in Committee were concentrated on the issue of television rental agreements. We all understood clearly the reason for this; namely, that this was by far the widest category of consumer items held by private individuals who were not taxable persons from the point of view of VAT but who would stand to suffer double taxation unless a Clause such as the one which my hon. Friend has produced were put forward.

I realise that it always goes against the grain for Oppositions to say "Thank you", and perhaps it was too much to expect that the hon. Member for Ashton-under-Lyne could actually muster his forces to the extent of muttering those unseemly words. We on this side of the House should in all fairness recognise the effort that my right hon. and hon. Friends have made to smooth the rough places in this Bill. I think we have every reason to thank my hon. Friend the Financial Secretary for the concession which he has made and for the spirit in which it has been made. It seems to me that, notwithstanding even the muted reservations which my hon. Friend the Member for Surrey, East (Mr. William Clark) expressed, the essence of the case has been met, that what did seem to be grounds for genuine unfairness have been resolved, and I personally would like to express a very hearty word of thanks to my hon. Friend the Financial Secretary.

Mr. Higgins

The hon. Member for Ashton-under-Lyne (Mr. Sheldon) began by explaining—I say "explaining" rather than "apologising"—why he felt it necessary to move the manuscript Amendment. I think the House will appreciate the reasons which motivated him in doing this. Perhaps I may also in turn explain why this Government new Clause is starred and why other Government Amendments are starred. It might seem that the Government have been dis- courteous to the House but I assure hon. Members that that is not the case.

We naturally gave careful consideration to what was said in the Committee stage. As I explained at the beginning, we have been anxious to carry out widespread consultations with the whole of the trade—this is the point which was made by the hon. Member for West Lothian (Mr. Dalyell)—not only with the large renters of television sets but also with the association which is responsible for the smaller retailers who are in some respects in a different position, and we needed to consider also the position of the manufacturers. I will return to that point in a few moments. That being so, we were anxious to get the Clause on the Notice Paper as quickly as possible.

5.45 p.m.

However, it is right to point out that the reason why this set of Clauses is starred is rather unusual. Strictly speaking, Mr. Deputy Speaker, this is a matter for you rather than for me, but, as I understand it, it arises from the fact that the House sat for a long time on Thursday night and that, so far as the House of Commons was concerned, Friday did not exist. As the House will no doubt remember—as a matter of fact, I was still here at mid-day on Friday—we did not conclude Thursday's proceedings until some time Friday afternoon. Because Friday did not exist, these Clauses, which would normally have appeared on the Order Paper on Friday and would have been starred then but would not have been starred today, did not appear on Friday's Order Paper and so they appeared starred today. In fact, I am not sure whether there was an Order Paper on Friday.

I understand that the notice of Amendments containing this one and most of those which are starred on today's Order Paper was available in the Vote Office from 10 a.m. on Friday, 7th July. I thought it right to explain that to the House because the Government would not like the House to feel that we had been discourteous.

Equally we understand the pressures under which the Opposition are working and the reason why a manuscript Amendment has been put down, which, if I may say so, virtually repeats the position which was debated in Committee upstairs. Of course, a new situation has now arisen. The Government have thought it right to make a change about television rentals, and the position is that the Opposition have thought it right to put in their request for the broader concession. We understand that. [Interruption.]

The hon. Member for Heywood and Royton (Mr. Joel Barnett) from a sedentary position says that we have accepted the point of principle. He may recall that in Committee upstairs I was rather careful in putting forward our views on the question of principle with regard to double taxation. I pointed out, as I did this afternoon, that when one is reforming the whole of the indirect taxation system it may not always be possible to avoid double taxation altogether. Indeed, in some cases it may not even be desirable. But what we were anxious to do was to ensure that the transition from purchase tax and SET to VAT should proceed on an orderly basis. We were convinced that so far as television rentals are concerned there was a case for taking the measure which is now embodied in this new Clause. I will say a word or two more in a moment about the effect on manufacturers and so on, because a number of my hon. Friends have spoken on this point.

I shall deal first with the point made by the hon. Member for Ashton-under-Lyne when he argued that we should extend the scope of the concession. As my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) said, it is always the task of an Opposition, no matter how generous the Government of the day may be, to say that not enough has been done. We quite understand that.

Mr. Joel Barnett

There is nothing generous here.

Mr. Higgins

It is £20 million to £25 million in the first year and £5 million to £10 million in the second. It depends what one means by "generous". That brings out the point I am making, that what the Opposition think generous may not necessarily be what the Government would regard as reasonable.

Mr. Sheldon

Before claiming credit for generosity, perhaps the hon. Gentle- man will explain to the 10 million people concerned why they should ever have to pay twice the amount of tax which they would otherwise have to pay?

Mr. Higgins

I do not understand the hon. Gentleman's figures. It is a question of what is reasonable, and I put it on the basis of reasonableness. I do not wish to overstate my case. [Hon. Members: "Hear, hear."] Whatever may be said, it remains true that, although the measure of welcome may have varied in different parts of the House, no hon. Member has actually opposed the introduction of the new Clause.

The manuscript Amendment is designed to ensure that the relief goes wider. Both the hon. Member for Ashton-under-Lyne and his hon. Friend the Member for West Lothian raised the question of the figures. The figure which I gave in Committee, of about £40 million a year tapering, related to the Amendment then before the Committee. The manuscript Amendment now before us goes wider than the new Clause in two respects. First, it covers the whole of the rental charge and not just that part which has borne purchase tax; that is, the capital cost. Second, it covers more than television rentals.

On the second point, some hon. Members opposite sought to estimate what the cost of widening the concession would be to cover the unspecified list of items which they had in mind. I have to tell the House that it is not possible to put a precise figure on the cost which would be involved. However, I think it right none the less to discuss the manuscript Amendment and the points made by hon. Members in support of it.

One can reasonably say that television rental is a special case. It was clear from the speeches made in Committee that a number of hon. Members recognise that. We estimate that, at the time when the value added tax is introduced, there will be about 10 million television sets out on hire which have borne purchase tax. These will include some sets out on hire to the infirm and the elderly, and there would be a degree of hardship for them if relief were not given. This was one of the thoughts motivating us.

The same transitional arguments, however, do not apply with the same force in other cases. In the first place, most of those items will bear, or will have borne, purchase tax at a significantly lower rate than that applying to television sets, in spite of the reductions in purchase tax on television sets which we have made.

Second, the average life of most of the other items to which the concession might apply is, generally speaking, a great deal shorter than is the life of television sets. For example, the rate of taxon evening dress suits let out on hire is only 11¼ per cent., and these items probably do not last as long as television sets. Some hon. Members opposite say that they are not, on the whole, items used by the most impoverished members of the community—[Interruption.]—though whether those who hire them are more impoverished than those who buy is an interesting question. The House will recall the interchange between my right hon. Friend and my hon. Friend the Member for Macclesfield (Mr.Winterton) about his second-hand suit which he would hand on to his son. However, I shall not digress into that.

Generally speaking, the rate on these items is lower, the life of the asset is less, and we believe that the number of them out on long-term hire is not significant.

Mr. John Gorst (Hendon, North)

Can my hon. Friend give any figures or estimates regarding privately hired motor cars? Second, could he say something about telephone systems for communication between flats and the front door for the opening of front doors, which at the moment are invariably on long-term hire arrangements? Would those and similar systems be subject to VAT or would they be exempted under Group 7 of Schedule 4?

Mr. Higgins

My hon. Friend tempts me to expand on other fairly complex parts of the Bill. The new Clause relates purely to television sets. The Amendment proposed by the Opposition would widen it a great deal. I do not believe that the disruption of trade likely to result, except in the case of television sets, will be significant.

It is worth emphasising that capital goods and office machinery will, generally speaking, not have borne purchase tax. Some items, for example, linen, carpets and so on, may have borne purchase tax, and to the extent that they are hired out on long-term contracts commencing before 1st April, 1973—I understand that some of them are—they would benefit from the proposals put forward by the Opposition. But it is important to stress that most of those hiring these items are likely to be taxable traders. They could, therefore, take credit for the VAT invoiced to them, and transitional relief would not be needed. I think that the hon. Member for Ashton-under-Lyne recognised that point.

My hon. Friend the Member for Folkestone and Hythe (Mr. Costain) asked whether we would ensure that the hirer explained that this relief was being given and, therefore, rents should be reduced. It is generally true that the level of taxation under VAT will be less than it will be during the transition period. If that were not so, there would not be the problem which we are discussing on the new Clause.

We have already made two substantial reductions in purchase tax. I think that there is some indication that the second of these was not passed on to an enormous extent by some firms. Obviously, this is a consideration which we should bear in mind.

It is essential that the transition be smooth, and we think it right, therefore, to adopt our proposal in regard to television rentals. My hon. Friend the Member for Surrey, East (Mr. William Clark) pointed out that what we have in mind—this is subject to what the House may approve in the order—is relief for two-thirds and then for one-third. We consider that that would create a smoother change-over than would otherwise be possible. We had very much in mind also that if we had not given relief in respect of television rentals the effect of the change-over might have been significant not only on renters but on producers of television sets. We were, naturally, very anxious that that should not be the case and that the transition should proceed in such a way that the actual manufacture of television sets and, therefore, the employment of those who were engaged in producing television sets should not be disrupted.

6.0 p.m.

My hon. Friend the Member for Surrey, East asked me two specific questions—

Mr. Dalyell

Are the producers generally content?

Mr. Higgins

I sought to indicate earlier that I am never sure when any particular group is content but I also sought to indicate that the proposals we have made, depending upon one's viewpoint, can be regarded as generous or, at any rate, reasonable. What cannot be disputed is that the new Clause will go a long way towards ensuring that the change-over from purchase tax and SET to VAT will go more smoothly.

My hon. Friend the Member for Surrey, East asked me two specific points which were related. He asked whether the provision would be applied on all sets and on a change of hirer. This is an important point which I wish to clarify, and I refer the House to the wording of the Clause. The proposed relief will apply only to television sets supplied under a contract of hire entered into before 1st April, 1973. It may be that some old sets which have borne purchase tax will be the subject of a new hiring agreement after 1st April, 1973. I hope I have made that clear. A monochrome set may be given up in exchange for a new colour set, and the old set may be rented out to a new hirer. But these new hirings are only a marginal part of the business and are usually made at competitive rates below the cost of comparable new sets. Therefore, their inclusion in the transitional scheme of relief which is limited to two years would produce complications both for the trade and for Customs, and some traders have expressed the view that they would find it easier to operate a distinction between a pre-VAT dated contract and a post-VAT dated contract than between a pre-VAT dated set and a post-VAT dated set.

It will considerably assist Customs in verifying the tax due if it can do this by reference to the contract rather than to the individual set and the date on which it was rented. But, bearing in mind the overall interest that we have, which is that the transition should be smooth, what we have proposed here will go a very long way to meet the case which has been made to us. We have given it the most careful consideration possible. I think it will generally commend itself to the House, and I hope, therefore, that the House will be prepared to accept it.

As for the manuscript Amendments tabled by the Opposition, I cannot recommend that they should be accepted, and I hope that the House will therefore feel it right to reject them.

Mr. Sheldon

If I may, by leave of the House, I should like to speak again. The hon. Member for South Angus (Mr. Bruce-Gardyne) referred to the new Clause as "a crock of gold".

Mr. Bruce-Gardyne


Mr. Sheldon

Let me put it another way. He said that if the Government were to come to the House with a crock of gold, I would find something to complain about. It is not often, whether in Standing Committee or elsewhere in Finance Bill debates, that the hon. Member for South Angus can come to the ready defence of the Government and it may be that his action on this occasion was purely to improve his record. If that is so, his timing is singularly bad. It is hardly a crock of gold when 10 million people—and it should not be forgotten that that means perhaps 20 million voters—receiveback part of their money which the Government otherwise wished to take from them. I do not see that the Clause is as generous as the hon. Member makes out and, therefore, the Government are not to be particularly congratulated on bringing it forward. It is only right and proper.

If anything, the Government should be taken to task for not accepting the whole principle of which the Clause is only a part. It would be extremely easy for the Government to agree to the Opposition Amendment because the amount of money involved is very small indeed. It is so small that the Financial Secretary was unable to put a figure to it. We know it is small because we have had the figures relating to a much wider Amendment which was discussed in Standing Committee.

One of the difficulties of the new Clause is that it is drawn loosely. One of the advantages of the Opposition Amendment is that it can be fitted in easily. In the Amendment we say that in the new arrangement and in the new regulations which the Government will bring before the House they can take account of the other cases with which we are concerned. I know that normally it is difficult for a Government to accept new Clauses and Amendments to new Clauses. The art of drafting is held to be very difficult. I am not sure exactly how true that is, but that is what we are told when we want to amend Bills. In this instance the draftsman's art is not required. We have tagged on to the drafting which the Government have used and we say that whatever they do in respect of one case shall apply to the other. The principle is one of double taxation of goods where purchase tax has been paid and where VAT is to be charged initially. The situation is met for television sets, and we say that it should be dealt with for the other articles which fall within the same provision.

This is one of those occasions when the Government can have nothing to say about drafting and about the principle. The Financial Secretary did not even take up the question of the principle because he knew perfectly well that he was conceding it in the biggest area and yet not conceding it in respect of other provisions. Therefore, when the time comes I shall

ask my right hon. and hon. Friends to divide in support of the Amendment.

Question put and agreed to.

Clause read a Second time.

Mr. Speaker

The hon. Member for Ashton-under-Lyne (Mr. Sheldon) may now formally move his three manuscript Amendments.

Mr. Sheldon

I beg to move, as a manuscript Amendment to the proposed Clause, in line 1, after "set" insert or other goods which have been charged to purchase tax at a rate in excess of 10 per cent. The two other manuscript Amendments are in line 2, leave out "is" and insert "are", and in line 3, leave out "is" and insert "are".

Question put. That the Amendment be made: —

The House divided: Ayes 200, Noes 221.

Division No. 280.] AYES [6.7 p.m.
Abse, Leo Deakins, Eric Jay, Rt. Hn. Douglas
Albu, Austen de Freitas, Rt. Hn. Sir Geoffrey Jenkins, Hugh (Putney)
Allaun, Frank (Salford, E.) Dell, Rt. Hn. Edmund Jenkins, Rt. Hn. Roy (Stechford)
Allen, Scholefield Dempsey, James John, Brynmor
Archer, Peter (Rowley Regis) Doig, Peter Johnson, James (K'ston-on-Hull, W.)
Ashton, Joe Dormand, J. D. Johnson, Walter (Derby, S.)
Atkinson, Norman Douglas, Dick (Stirlingshire, E.) Johnston, Russell (Inverness)
Bagier, Gordon A. T. Driberg, Tom Jones, Barry (Flint, E.)
Barnes, Michael Duffy, A. E. P. Jones, Dan (Burnley)
Barnett, Guy (Greenwich) Dunnett, Jack Jones,Rt.Hn.Sir Elwyn(W.Ham,S.)
Barnett, Joel (Heywood and Royton) Jones, Gwynoro (Carmarthen)
Baxter, William Eadie, Alex Kaufman, Gerald
Edwards, Roberts (Bilston) Kelley, Richard
Benn, Rt. Hn. Anthony Wedgwood Ellis, Tom Lambie, David
Bennett, James (Glasgow, Bridgeton) Ewing, Harry Lamborn, Harry
Blenkinsop, Arthur Faulds, Andrew Latham, Arthur
Booth, Albert Fletcher, Raymond (Ilkeston) Lawson, George
Bottomley, Rt. Hn. Arthur Fletcher, Ted (Darlington) Leadbitter, Ted
Boyden, James (Bishop Auckland) Foley, Maurice Lee, Rt. Hn. Frederick
Bradley, Tom Foot, Michael Leonard, Dick
Broughton, Sir Alfred Ford, Ben Lestor, Miss Joan
Brown, Bob (N'c'tle-upon-Tyne,W.) Fraser, John (Norwood) Lewis, Ron (Carlisle)
Brown, Hugh D. (G'gow, Provan) Freeson, Reginald Lipton, Marcus
Brown, Ronald (Shoreditch & F'bury) Galpern, Sir Myer Lomas, Kenneth
Buchan, Norman Garrett, W. E. Lyon, Alexander W. (York)
Callaghan, Rt. Hn. James Gilbert, Dr. John Mabon, Dr. J. Dickson
Campbell, I. (Dunbartonshire, W.) Golding, John McBride, Neil
Cant, R. B. Grant, George (Morpeth) McCartney, Hugh
Carter, Ray (Birmingh'm, Northfield) Grant, John D. (Islington, E.) McElhone, Frank
Castle, Rt. Hn. Barbara Griffiths, Will (Exchange) McGuire, Michael
Clark, David (Colne Valley) Grimond, Rt. Hn. J. Mackenzie, Gregor
Cocks, Michael (Bristol, S.) Hamling, William Mackie, John
Concannon, J. D. Hannan, William (G'gow, Maryhill) Maclennan, Robert
Conlan, Bernard Harper, Joseph McMillan, Tom (Glasgow, C.)
Harrison, Walter (Wakefield) Marsden, F.
Corbet, Mrs. Freda Hart, Rt. Hn. Judith Marshall, Dr. Edmund
Cox, Thomas (Wandsworth, C.) Hattersley, Roy Mason, Rt. Hn. Roy
Cronin, John Healey, Rt. Hn. Denis Meacher, Michael
Cunningham, G. (Islington, S.W.) Horam, John Mellish, Rt. Hn. Robert
Dalyell, Tam Houghton, Rt. Hn. Douglas Mendelson, John
Davidson, Arthur Hughes, Rt. Hn. Cledwyn (Anglesey) Mikardo, Ian
Davies, Denzil (Llanelly) Hughes, Robert (Aberdeen, N.) Millan, Bruce
Davies, Ifor (Gower) Hunter, Adam Miller, Dr. M. S.
Davis, Clinton (Hackney, C.) Irvine, Rt. Hn. Sir Arthur (Edge Hill) Morgan, Elystan (Cardiganshire)
Davis. Terry (Bromsgrove) Janner, Greville Morris, Alfred (Wythenshawe)
Morris, Charles R. (Openshaw) Robertson, John (Paisley) Tinn, James
Morris, Rt. Hn. John (Aberavon) Rodgers, William (Stockton-on-Tees) Tomney, Frank
Moyle, Roland Roper, John Torney, Tom
Mulley, Rt. Hn. Frederick Rose, Paul B. Tuck, Raphael
O'Halloran, Michael Ross, Rt. Hn. William (Kilmarnock) Urwin, T. W.
O'Malley, Brian Rowlands, Ted Varley, Eric G.
Orme, Stanley Sheldon, Robert (Ashton-under-Lyne) Wainwright, Edwin
Oswald, Thomas Short, Rt. Hn. Peter (Stepney) Wallace, George
Paget, R. T. Short,Rt.Hn.Edward(N'c'tle-u-Tyne) Watkins, David
Pannell, Rt. Hn. Charles Silkin, Rt. Hn. John (Deptford) Wells, William (Walsall, N.)
Pardoe, John Silkin, Hn. S. C. (Dulwich) White, James (Glasgow, Pollok)
Parker, John (Dagenham) Silverman, Julius Whitehead, Phillip
Pavitt, Laurie Skinner, Dennis Whitlock, William
Pentland, Norman Small, William Willey, Rt. Hn. Frederick
Perry, Ernest G. Spearing, Nigel Williams, Alan (Swansea, W.)
Prentice, Rt. Hn. Reg. Spriggs, Leslie Williams, Mrs. Shirley (Hitchin)
Prescott, John Stallard, A. W. Williams, W. T. (Warrington)
Price, J. T. (Westhoughton) Steel, David Wilson, Alexander (Hamilton)
Probert, Arthur Stewart, Donald (Western Isles) Wilson, William (Coventry, S.)
Rankin, John Stoddart, David (Swindon) Woof, Robert
Rees, Merlyn (Leeds, S.) Strang, Gavin
Rhodes, Geoffrey Summerskill, Hn. Dr. Shirley TELLERS FOR THE AYES:
Roberts, Albert (Normanton) Thomas, Jeffrey (Abertillery) Mr William Hamilton and
Roberts, Rt.Hn.Goronwy (Caernarvon) Thomson. Rt. Hn. G. (Dundee. E.) Mr. James Wellbeloved.
Adley, Robert Eyre, Reginald Lane, David
Alison, Michael (Barkston Ash) Farr, John Langford-Holt, Sir John
Atkins, Humphrey Fell, Anthony Le Marchant, Spencer
Awdry, Daniel Fenner, Mrs. Peggy Lewis, Kenneth (Rutland)
Baker, Kenneth (St. Marylebone) Fidler, Michael Longden, Gilbert
Barber, Rt. Hn. Anthony Finsberg. Geoffrey (Hampstead) Luce, R. N.
Batsford, Brian Fisher, Nigel (Surbiton) McAdden, Sir Stephen
Beamish, Col. Sir Tufton Fortescue, Tim MacArthur, Ian
Bell, Ronald Foster, Sir John McCrindle, R. A.
Bennett, Sir Frederic (Torquay) Fox, Marcus McLaren, Martin
Benyon, W. Fraser.Rt.Hn.Hugh(St'fford & Stone) McMaster, Stanley
Berry, Hn. Anthony Fry, Peter McNair-Wilson, Michael
Biggs-Davison, John Gardner, Edward McNair-Wilson, Patrick (New Forest)
Blaker, Peter Gibson-Watt, David Madel, David
Boardman, Tom (Leicester, S.W.)
Gilmour, Ian (Norfolk, C.) Marten, Neil
Gilmour, Sir John (Fife, E.) Mather, Carol
Body, Richard Glyn, Dr. Alan Maude, Angus
Boscawen, Robert Godber, Rt. Hn. J. B. Maxwell-Hyslop, R. J.
Bossom, Sir Clive Goodhew, Victor Meyer, Sir Anthony
Bowden, Andrew Gorst, John Mitchell, David (Basingstoke)
Braine, Bernard Gower, Raymond Moate, Roger
Bray, Ronald Grant, Anthony (Harrow, C.) Money, Ernle
Brewis, John Gray, Hamish Monro, Hector
Brinton, Sir Tatton Green, Alan Montgomery, Fergus
Brown, Sir Edward (Bath) Grieve, Percy Morgan, Geraint (Denbigh)
Bruce-Gardyne, J Griffiths, Eldon (Bury St. Edmunds) Morgan-Giles, Rear-Adm.
Bryan, Paul Grylis, Michael Morrison, Charles
Buck, Antony Gummer, J. Selwyn Mudd, David
Bullus, Sir Eric Gurden, Harold Murton, Oscar
Butler, Adam (Bosworth) Hall, Miss Joan (Keighley) Noble, Rt. Hn. Michael
Campbell, Rt. Hn. G. (Moray&Nairn) Hall, John (Wycombe) Normanton, Tom
Carr, Rt. Hn. Robert Hall-Davis, A. G. F. Nott, John
Chapman, Sydney Hamilton Michael (Salisbury) Onslow, Cranley
Chataway, Rt. Hn. Christopher Hannam, John (Exeter) Oppenheim, Mrs. Sally
Churchill, W. S. Harrison, Col, Sir Harwood (Eye) Osborn, John
Clark, William (Surrey, E.) Havers, Michael Page, John (Harrow, W.)
Clegg, Walter Hawkins, Paul Parkinson, Cecil
Cooke, Robert Hicks, Robert Peel, John
Cooper, A. E. Higgins, Terence L. Percival, Ian
Cordle, John Hill, James (Southampton, Test) Peyton, Rt. Hn. John
Corfield, Rt. Hn. Frederick Holland, Philip Pink, R. Bonner
Cormack, Patrick Hordern, Peter Powell, Rt. Hn. J. Enoch
Costain, A. P. Hornby, Richard Price, David (Eastleigh)
Critchley, Julian Hornsby-Smith.Rt.Hn.Dame Patricia Prior, Rt. Hn. J. M. L.
Crouch, David Howell, Ralph (Norfolk, N.) Proudfoot, Wilfred
Crowder, F. P. Hunt, John Quennell, Miss J. M.
d'Avigdor-Goldsmid,Maj.-Gen.James Hutchison, Michael Clark Raison, Timothy
Dean, Paul James, David Ramsden, Rt. Hn. James
Deedes. Rt. Hn. W. F. Jenkin, Patrick (Woodford) Redmond, Robert
Digby, Simon Wingfield Jessel, Toby Reed, Laurance (Bolton, E.)
Dixon, Piers Johnson Smith, G. (E. Grinslead) Rees, Peter (Dover)
Dodds-Parker, Douglas Kellett-Bowman, Mrs. Elaine Rees-Davies, W. R.
Dykes, Hugh King, Evelyn (Dorset, S.) Renton, Rt. Hn. Sir David
Eden, Sir John King, Tom (Bridgwater) Ridley, Hn. Nicholas
Elliot, Capt. Walter (Carshalton) Kinsey, J. R. Ridsdale, Julian
Elliott, R. W. (N'c'tle-upon-Tyne.N.) Knox, David Roberts, Michael (Cardiff, N.)
Emery, Peter Lamond, James
Roberts, Wyn (Conway) Stewart-Smith, Geoffrey (Belper) Vaughan, Dr. Gerard
Rossi, Hugh (Hornsey) Stoddart-Scott, Col. Sir M. Walder, David (Clitheroe)
Rost, Peter Stokes, John Walker, Rt. Hn. Peter (Worcester)
Russell, Sir Ronald Stuttaford, Dr. Tom Ward, Dame Irene
St. John-Stevas, Norman Tapsell, Peter Warren, Kenneth
Sandys, Rt. Hn. D. Taylor, Sir Charles (Eastbourne) Weatherill, Bernard
Scott-Hopkins, James Taylor,Edward M.(G'gow,Cathcart) Wells, John (Maidstone)
Sharples, Richard Taylor, Frank (Moss Side) Wiggin, Jerry
Shaw, Michael (Sc'b'gh & Whitby) Taylor, Robert (Croydon, N.W.) Wilkinson, John
Shelton, William (Clapham) Tebbit, Norman Winterton, Nicholas (Macclesfield)
Sinclair, Sir George Temple, John M. Wolrige-Gordon, Patrick
Skeet, T. H. H. Thatcher, Rt. Hn. Mrs. Margaret Woodhouse, Hn. Christopher
Smith, Dudley (W'wick & L'mington) Thomas, Rt. Hn. Peter (Hendon, S.) Woodnutt, Mark
Soref, Harold Tilney, John Worsley, Marcus
Speed, Keith Trafford, Dr. Anthony
Spence, John Trew, Peter TELLERS FOR THE NOES:
Sproat, Iain Tugendhat, Christopher Mr. Michael Jopling and
Stainton, Keith Turton, Rt. Hn. Sir Robin Mr. John Stradling Thomas
Stanbrook, Ivor

Question accordingly negatived.

Clause added to the Bill.

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