ZERO-RATING

HC Deb 15 May 1972 vol 837 cc105-80

6.55 p.m.

Mr. Denis Howell (Birmingham, Small Heath)

I beg to move Amendment No. 32, in page 101, line 34, at end add:

GROUP 14—SPORT

Item No.

1. Sport Admission Charges.

The First Deputy Chairman: With this Amendment it will be convenient to discuss the following Amendments: No. 53 in page 101, line 34, at end add:

GROUP 14—SPORT

Item No.

I. Admission to football grounds.

No. 78, in line 34, at end add:

GROUP 14—ASSOCIATION FOOTBALL

Item No.

1. Football League game admission charges.

No. 96, in line 34, at end add:

GROUP 14—RUGBY LEAGUE FOOTBALL

Item No.

1. Rugby League game admission charges.

and No. 120, in line 34, at end add:

GROUP 14—SCOTTISH FOOTBALL CLUBS

Item No.

1. Admission to football grounds in Scotland.

Mr. Howell

The effect of value added tax upon sport is a matter of considerable concern to all sports bodies. There are probably 70 different sports played in this country which are in affiliation to the Sports Council. Most of those sports will want their case represented today. That would be an impossible proposition for anyone moving the Amendment and indeed for the Minister who had to reply. However, I assure those sports that the fact I am selecting only one or two for mention in no way detracts from the case for the other sports. I am sure the Financial Secretary to the Treasury will accept that position.

The one matter about which all sports bodies are of one mind is the iniquity of the proposal to impose value added tax on admission charges to sport. Very rarely do the sports bodies come together to mount anything approaching a political campaign. I use the word "political" with a small "p", not in the sense of a party political campaign. I am well aware that the sports bodies have properly lobbied and had undertakings and expressions of sympathy from hon. Members on both sides of the Committee about the tremendous burden to sport of a 10 per cent. value added tax. As I said, the sports bodies have come together and written to every hon. Member and the dozen or so most important and influential governing bodies in sport. I am grateful for that, as it saves me having to read to the Committee the letter which was sent.

We are not talking about a tax on equipment. The sports bodies, like other bodies, whatever they think about value added tax, accept that they could not be in a special position regarding the buying of equipment. They do not like it, but if it becomes the law of the land they accept that that law applies to them. The Amendment is exclusively concerned with what the sports bodies regard as the monstrous proposal that value added tax should be paid on admission charges to sports events.

The Financial Secretary to the Treasury (Mr. Terence Higgins)

I hope that the hon. Gentleman will not be too exclusive. Will he tell the Committee what will happen to the rate of tax on equipment as a result of changing from purchase tax to value added tax?

Mr. Howell

I do not want to follow that line at this early stage. We have plenty of time and will come back to it. We are dealing here with the principle of the application of VAT to admission charges. That is the essential point of our objection and of the sports bodies' case.

The hon. Gentleman had a distinguished athletic career. When I asked the British Amateur Athletic Board what it was doing about making representations, it said: "The man to whom we should be making our representations will be confounding us at the Dispatch Box in the course of the debate." That seems to be the case, so we shall listen with added interest to anything he has to say.

The sports bodies regard the principle and the imposition of value added tax upon admission charges as a reintroduction of the old entertainment tax which they fought for 40 years and in the end were successful in defeating. I concede that success was mainly through the endeavour of the Government who in the end were responsible for removing that tax. They should be given credit for that.

Therefore, the Committee will understand that the sports organisations find it even more inconceivable that the right hon. Gentleman, who in the end accepted the case for the removal of entertainment tax from sport, should now reimpose it in this changed form. That it is an entertainment tax, there can be no doubt.

Entertainment tax, the Committee will recall, was not removed at a stroke, to use a popular jargon, but was removed at three strokes. First, it went off amateur sport. Then, by what can only be described as one of those quirks, it was removed from cricket in isolation by the right hon. Gentleman who is now the Secretary of State for Foreign and Commonwealth Affairs. Finally, in 1958, it went altogether. That was a matter of comfort to us.

Now we have this proposal before us. I shall shortly try to show the Committee the effect of this burden upon and the serious situation this brings for sport. I start, as the Under-Secretary of State for the Environment with responsibility for sport would expect—I am glad that he is present—by quoting what the newly appointed chairman of the Sports Council, Dr. Roger Bannister, had to say about this matter.

In many ways, as the Minister will know, this is something of a test case. He and I have had little arguments whether we should have a completely independent Sports Council. There is plenty to be said on both sides of that argument. The clinching argument from his point of view is that an independent Sports Council would be outside the Government machine, would be listened to, and its advice would be accepted by the Government. This is the first time that that proposition has been put to the test.

Dr. Bannister, in a report in the Daily Telegraph on 24th November last year, said: Sport needs encouragement, not stiffer taxation. I thought this had been accepted in Whitehall when the old entertainment tax on sport was abolished. A little later in the same article, speaking for the whole of sport, he said: I cannot see the logic of creating an independent sports council charged with the task of developing sport nationally and then imposing VAT in such a way that it may cripple many of the sports we are trying to help. That is the nub of part of the case which the Government have to answer today.

About six or seven years ago sport started to receive a modest contribution from the Government for its development. This was started by the now Lord Chancellor. That was taken up by the Labour Government in which I had the honour to serve in a similar capacity to the Minister who is responsible for sport.

The financial contribution towards the development of sport is very much a shoestring contribution compared with the grants to the Arts Council whose affairs the House discussed last week.

Another aspect of the financial argument needs to be pointed out. The Arts Council receives three or four times more Government money for the development of the arts than sport. No one in sport has ever objected to the amount which the Arts Council gets, although, compared with the massive numbers of people we are trying to assist, we are badly off.

Sport has one other consideration which should be, and I am sure is, uppermost in the Chancellor's mind. The Exchequer, by means of taxation, particularly from the betting tax on pools and other forms of betting, already takes out of sport a considerable sum. The Minister might be able to tell us the Government's income from the betting duty on pools, for example, when we get to the detailed subject of football. I am sure the Chancellor will accept that there is an earnest desire and a great financial interest on the part of the Government to keep sport in good heart and health and in a sound position. The sports bodies believe that this will be a crippling tax upon them. It is therefore a serious matter for the Chancellor to consider.

Mr. David Mitchell (Basingstoke)

I am grateful to the hon. Gentleman for giving way and I apologise for interrupting him. I am following his argument with great interest. Could he guide me about the kind of admission charges which are now being charged by the groups and sports societies to which he is referring?

Mr. Howell

If I followed that bait and dealt with the 64 different sports and the millions of people involved in them, I should be here for the next three hours giving the hon. Gentleman a catalogue of the charges, because they vary enormously.

Mr. David Mitchell

By what amount?

Mr. Howell

One can pay £5 for a Cup Final ticket, but if one goes to watch Altrincham and Sale Football Club in the Chancellor's constituency, one does not pay anything like £5 for a ticket. These are relative matters. Therefore, I hope I can carry the hon. Gentleman with me in saying that there will not be much purpose in either of us pursuing this line of argument.

Mr. David Mitchell

The hon. Gentleman has put the upper limit at £5. Will he indicate the general run at the lower end?

Mr. Howell

One can pay as little as 5p to watch a schoolboys' swimming gala. This is an impossible proposition to follow. We shall come back to one or two interesting examples.

The last thing that I want to do from this Dispatch Box today is to make a speech in a party political spirit because to the best of my knowledge and after six years' experience I think I can say that not many of the administrators of sport would galvanise themselves into action to vote in favour of the party which I support, but as they have told me what they think of the Government's proposals I assume that they feel even more strongly about the matter than I do.

I start with a letter from my county cricket club. Its secretary, one of our finest cricket administrators, Mr. Leslie Deakins, says: If the suggested 10 per cent. tax is imposed it is obvious that it will far outweigh any saving that may be made on the cancellation of Purchase Tax and S.E.T., and it will in effect put County Clubs back in the same position they were in prior to the abolition of Entertainments Tax—a step that was necessary at the time to their very survival…this despite the existence of a strong Supporters' Association and a sound membership…We are at the moment living in an age when it is the Government's apparent desire to introduce increased leisure, and at the same time to provide opportunities for the public to take advantage but this will be of little value if, at the same time, the Organisations whose pleasant duty it is to provide leisure activities are faced with a Tax of this kind, which in some instances will seriously reduce their ability to serve their public, and in others literally force them out of existence. It has also to be remembered that the present Government is asking everyone in the country 'to stand on their own two feet' and then proceeds to make it increasingly difficult for them to do so. Those are impeccable sentiments and they are motivated, not by any political factors but simply by a desire to express the feelings of many sports administrators.

Captain Walter Elliot (Carshalton)

I think the hon. Gentleman will agree that financially and in the number of supporters it attracts county cricket is at a low ebb. How does he account for that fact when there is no tax at all on the sport?

Mr. Howell

The hon. and gallant Gentleman is right. County cricket is at a low ebb, but the only logic of his intervention is that it ought to be put out of business altogether. I have never heard anybody on either side of the House make that point before.

Captain W. Elliot

I am suggesting that county cricket is at a low ebb for reasons entirely unconnected with financial matters.

Mr. Howell

I do not think that that is altogether fair. Obviously there are conflicting opinions about the exciting and challenging nature of cricket in this country today, and we all have our theories about how the matter can he put right, but the hon. and gallant Gentleman is not being altogether fair. Because of the Gillette Cup and other competitions there has been a remarkable upsurge of public interest in the game.

Where cricket is suffering considerably is in the three-day county game, which to a certain extent has been overtaken by the age in which we live. I could give the Committee a long dissertation on this topic. Suffice it to say that it is much to the credit of the cricket authorities that they keep the three-day game going, because if they did not cricket would lose a great deal. If cricket is to mean a swashbuckling performance for 40 overs for each side, then cricket as many understand and love it will soon die. I welcome the Benson and Hedges Competition as 1 do the Gillette Cup Competition as being designed to give cricket life and prosperity, but I do not kid myself—and I hope that the hon. and gallant Gentleman will not kid himself, either—that the long-term salvation of cricket as a sport—one might almost say a religion can be allowed to depend on the one-day game.

Sir Gerald Nabarro (Worcestershire, South)

The hon. Gentleman is a Warwickshire supporter, whereas I am a Worcestershire supporter, but he has missed the point. It is the inclemency of the English weather that is the principal cause of the decline in popularity of cricket. For example, on 29th April I turned up at the Worcestershire County Cricket ground to watch the first of a three-day game, Worcestershire versus the Australians, but not a ball was bowled. It poured with rain all day.

7.15 p.m.

Mr. Howell

Dr. Grace faced a similar problem. Cricket has to be played out of doors, and from the first day on which the noble doctor took up his bat he had to face the difficulties of the weather. I do not think that we ought to proceed too far with that.

Whatever the gates at cricket, the game is an essential part of the English scene. Indeed, it is part of the history of England and there is still tremendous public interest in it. It is enough for my purposes to say that if in the present parlous state of the game, the Government add to its difficulties by imposing this tax they will do a disservice to cricket and therefore to the nation as a whole

The sport of athletics is also facing an extremely serious situation. Athletics is not a sport which attracts tremendous gates. Its activities can be associated with a four-year period. They reach their peak in the year when the Olympic Games are held. I have here some figures for last year produced by the British Amateur Athletic Board. If ever a sport struggled manfully, with only a small income at its disposal, to survive and provide opportunities for the public, it is the sport of athletics.

Last year there were three principal events for the British Amateur Athletic Board. The first of these was at Meadow-bank, in Scotland, which produced an income of £2,304. Then there was a match at Crystal Palace against West Germany. That was easily the highlight of the year, and it produced an income of £6,300. There followed a match against France at Portsmouth which, I am sorry to tell the Committee, produced an income of only £200.

Those three events produced a total income of £9,000. Under these proposals the British Amateur Athletic Board would have to pay £900 in VAT. I come back to the point made by the hon. and gallant Member for Carshalton (Captain W. Elliot). It is not the case that large numbers of the public want to get in to see these meetings but are locked out. It is not possible to increase charges without affecting the gate, and imposition of this tax will have a serious effect on athletics.

Less than an hour ago Mr. Arthur Gold, the Secretary of the British Amateur Athletic Board phoned and asked me to make the point that the proposed rate of tax would mean the board having to pay £900 out of its income of £9,000 last year. But what is likely to happen in future years when there is not as much interest in athletics as there was last year? Let us suppose that the British athletics team does not cover itself with glory at the Olympic Games, although we all hope that it will. The first year after the Olympic Games is, in any event an off-peak year, and if the team does not do particularly well the task of getting gates anything like those of last year will be tremendous. The Minister will be acquainted with the problems of athletics. He must bear in mind that they frequently, if not usually, make a loss, which is bound to be the case with gates of that size.

Participants in athletics cannot be charged large sums to contribute towards the running of their sport. Competitors already make considerable financial sacrifices for the privilege of representing their country. In addition to travelling to small meetings all over the country they have a great many athletic commitments to meet.

The same applies to swimming. The Amateur Swimming Association is not in such a parlous financial state as the athletics authorities, although it has considerable difficulties. The Association has raised an interesting point which although it may have been discussed in our earlier debates should receive further comment from the Minister. It asks what will be the position if clubs organise events on its behalf. Clubs are frequently asked to organise championships. Will their efforts count for VAT purposes? Will each individual club be assessed separately, even though it is organise a championship on behalf of the governing body of the parent association?

The Association estimates that the income from swimming in this context is between £10,000 and £12,000 a year. It must be remembered that there is only limited seating accommodation for spectators. If one correlated the incomes of the various swimming clubs the sum would, of course, be considerably greater.

Boxing also deserves a mention. I raise the subject in the hope that emotions will not be stirred. Differing views are held about this sport on each side of boxing—

Sir G. Nabarro

Do not forget wrestling.

Mr. Howell

If the hon. Gentleman is talking about professional wrestling, then I do not regard that as a sport.

Sir G. Nabarro

Shame!

Mr. Howell

It is entertainment.

Sir G. Nabarro

Professional wrestling is and always has been classified as a sport, and notably women's wrestling.

Mr. Howell

When I was in office I inquired into this matter of the relationship between sport and entertainment. I found that the majority of professional wrestlers were affiliated to the Variety Artistes Federation, and for me that settled the matter. I remain of the opinion that professional wrestling is primarily entertainment.

The Committee may be interested to know that the gross takings from professional boxing in 1970 were £372,852, and there was no SET or purchase tax to be offset. This means that £37,300 will be claimed in VAT, when no tax has been levied since 1958.

Rugby League is a sport which should also receive our attention, particularly in a week when its Cup Final has been played at Wembley. The governing body's enterprising national secretary, Mr. Bill Fallowfield, made the position clear in a recent letter in which he pointed out that the difficulties that will face the sport will make it extremely difficult for those who administer it to sustain the sport, particularly in the North.

Hon. Members should accept that certain areas of the country which do not enjoy the lush entertainment that exists in London will be penalised if this tax is levied on sport in the way the Government propose. Rugby League is particularly popular in the North and those living in, for example, Lancashire and Yorkshire will be greatly hit unless the Amendment is accepted.

I come to my sport of football and I will be brief because a number of my hon. Friends wish to speak of the plight of sport in their constituencies.

Mr. Arthur Lewis (West Ham, North)

I think that in calculating the 10 per cent. tax which it is proposed to levy my hon. Friend has mistakenly under-estimated the sum that will be removed from sporting bodies. In addition to the 10 per cent., additional tax will be levied on programmes and all the services and facilities that go with the sports which my hon. Friend mentioned. In some instances it could be 10 per cent. plus another 10 per cent. or even 20 per cent.

Mr. Howell

My hon. Friend is right if he is talking of the whole effect of VAT. For the purpose of the Amendment we must confine ourselves to admission charges. That is what I am doing and that is the source of the major dissatisfaction on the part of the sporting bodies.

Mr. Higgins

It is a pity that the hon. Gentleman was unable to see the expression on the faces of some of his hon. Friends seated behind him when he referred to confining the debate to admission charges, for he seems to have overlooked the fact that there is a deduction of input from output tax. One must, therefore, take into account what is levied on earlier items in the progression, such as programmes and so on.

Mr. Howell

No doubt the Minister will tell us what representations he has been making to the Government on behalf of athletics and sport. I am informed by the sports bodies, especially those which have come together to discuss this issue, that the position could be even worse than the case I am adducing.

Mr. Higgins

We are making full allowance for input tax, which is completely deductible in terms of output tax. I trust that the hon. Gentleman will bear this in mind.

Mr. Howell

None of that would have any effect on admission charges.

Mr. Higgins indicated dissent.

Mr. Howell

Perhaps I have misunderstood the Financial Secretary. One cannot offset the amounts that will be levied by, for example, reducing admission charges. [Interruption.] We are talking about the effect that VAT will have on the number of people who pass through the turnstiles. At the end of the day that is the only aspect that matters from the point of view of the sports organisations.

Mr. Higgins indicated dissent.

Mr. Howell

It is all very well for the Financial Secretary to shake his head in disagreement. Perhaps we are missing the point. I assure the hon. Gentleman that we will not miss him, unless he fails to reply adequately to this case. I am sure that we will find the Minister's contribution even more illuminating than anything my right hon. Friend the Member for Manchester, Cheetham (Mr. Harold Lever) might have said.

Mr. Dennis Follows, Secretary of the Football Association, a man who is not given to extravagant language—is a man of moderate and temperate views— concludes his statement on this subject by saying: The argument, therefore, that value added tax is a fair replacement for selective employment tax and purchase tax is a 'phoney'. It is clearly an additional burden which must be and is being vigorously opposed by all the football interests. He points out that for the first time the clubs—this applies particularly harshly to the smaller clubs—will have to erect a tax gathering machine. Not since 1958 have the clubs had to indulge in much an exercise, he points out.

7.30 p.m.

The Committee may be familiar with what happens at the Badminton three-day horse trials. The local "squirearchy", who regard it as their duty to maintain the trials, stand with their supporters at the various gates and collect such money as they can from people entering. But all that must go. The sort of voluntary, easy approach to the collection of entrance fees must go under these proposals. The whole panoply of the law has to be established at the Badminton three-day horse trials and at many small sports grounds to ensure that the tax is being collected. It would be a serious matter if there were any tax evasion when the law is upon the Statute Book.

Mr. Ray Carter (Birmingham, Northfield)

And polo matches.

Mr. Howell

We will not talk about polo matches. I am not a great expert on them. No doubt that is a subject on which its principal supporter might express himself with even more than his customary eloquence if given the opportunity.

The Football Association has produced a fantastic amount of information about the situation with which it is faced. It has kindly sent me a schedule of replies, taken exactly as they came in, from the first 40 clubs which replied to a questionnaire as to what is being paid now by football clubs in SET and purchase tax, and what, on last year's figures, would be the situation for these clubs.

Although football is thought to be a very wealthy sport, we all know that by far the majority of professional clubs in England, Wales and Scotland constantly make a loss. The total of purchase tax and SET which these 40 clubs paid last year was £150,660. If they had had to pay 10 per cent. of last year's gates as SET—the position we now face—they would have had to pay in tax £555,000. In other words, the imposition of tax on Association Football, under these proposals, is four times the amount of tax that the clubs are now paying in purchase tax and SET. That is even worse when one remembers that they are not asking for their equipment, jerseys and so on, and all the equipment that they buy, to be exempted from VAT. This is in addition to the £555,000 which these 40 clubs alone have to pay. The conclusion of the Football Association that the tax burden on football would be at least four if not five times as much as it now is cannot be challenged.

Mr. Higgins

The hon. Gentleman seems to have misunderstood what the tax is all about. He says that it is a 10 per cent. tax on the charges for admission. He is not making allowance for the input tax.

Mr. Howell

It would still be on admission charges, whatever the hon. Gentleman says about it.

Mr. Higgins indicated dissent.

Mr. Howell

If I am wrong, no doubt when the hon. Gentleman replies he will explain how the £555,000 can be offset against anything else?

Mr. James Hamilton (Bothwell)

My hon. Friend is omitting another important point arising from the Ibrox disaster in Glasgow. The Wheatley Commission's findings will mean that virtually every club in the country, including my club, Glasgow Celtic, will require to carry out improvements. That will be a further imposition on many smaller clubs. The larger clubs will be able to do this, but the smaller clubs will not. Consequently, this could mean the demise of football in many parts of the country.

Mr. Howell

My hon. Friend is right, but lie has reached my conclusion a few minutes before I would have reached it. I shall return to that point.

Mr. Arthur Lewis

On a point of order, Miss Harvie Anderson. Unfortunately, my hon. Friend has touched upon only some of the clubs. I should like, all would probably all hon. Members, the full details. It would take time if my hon. Friend were to read them out. Would it be in order, with the permission of the Committee, to ask that my hon. Friend's figures be circulated in the OFFICIAL REPORT? The facts and figures will be useful to the Committee.

The First Deputy Chairman

The hon. Member will have heard what his hon. Friend has said. It is not a matter for the Chair.

Mr. Lewis

Would my hon. Friend care to do that?

Mr. Howell

I should be delighted to have any facts of mine circulated in the OFFICIAL REPORT, if that is possible. But I can help my hon. Friend by saying that, if he tries to catch your eye, Miss Harvie Anderson, I shall see that he Bets the figures for West Ham United, a club close to his heart, which I was not about to quote.

I shall take a few clubs at random to show the effect upon them. First, for Liverpool, which is thought to be one of the very rich clubs, the estimated total of SET and purchase tax last year was £9,100. On 10 per cent. of last year's gate its value added tax commitment would be £52,640. That would virtually wipe out the club's profit for that year. But Liverpool is one of the richer clubs which is fortunate enough to be able to make a profit. A different situation arises when those figures are related to other clubs. I am sorry that my right hon. Friend the Opposition Chief Whip is not present, for Millwall—always an interesting club to examine—has a present tax commitment of £6,127. Its value added tax commitment would be over £9,000. That is despite the fact that it made a loss for the year of £72,000 on its reparations as a football club. A burden of this sort is very serious for that club.

These figures are very interesting. Middlesbrough made a payment last year of about £3,600. If Middlesbrough had to pay 10 per cent. on VAT, and someone has to pay it—it is no good the Chancellor laughing it has to come from gate money—it would amount to an imposition on this club of £17,700, and that amount of VAT on the gate money has to he considered in association with Middlesbrough's loss last year of £87,000. This club is already in dire financial difficulties and is struggling to keep its second division status.

I cannot allow this opportunity to pass without referring to the Altrincham Association Football Club, a club well known to the right hon. Gentleman the Chancellor of the Exchequer. The right hon. Gentleman has no doubt already tried, obviously not very successfully, judging by the letter I have with me, to explain to that club what his hon. Friend is saying, that the position has been overstated. The amount of SET that Altrincham Football Club paid last year was £170. The amount of purchase tax paid was £100. So the club's total tax commitment last year was £270. It had receipts of £9,000, which would mean under these proposals a VAT commitment of £900. One cannot imagine that even in Altrincham, with all the inspiration that the Chancellor can give to his local football club, thousands of supporters are willing and anxious to rush through the gates to make up for the hardship which the Chancellor is to impose upon his own club. Last year the Altrincham club made a loss of £13,500, to which loss the Chancellor proposes to add.

I turn, finally, to the point rightly made by my hon. Friend the Member for Bothwell (Mr. James Hamilton) about the Wheatley Report, which has just been issued. This very interesting document was born of the great tragedies of two Scottish clubs. Lord Wheatley has done a first-class job in telling us what the new obligations of the clubs should be with a view to securing public safety. The Government have announced that they accept the Report. Lord Wheatley says in paragraph 60 that he considered with Treasury officials the prospect of the Government making money available to clubs which are to have imposed upon them a considerable additional financial responsibility for making their grounds safe. Lord Wheatley said that he got no joy out of the Treasury when he asked about the prospect of Government help for making football grounds safe.

The football authorities tell me, and I have no doubt that they tell the Government, that the proposals before us will mean three new financial burdens for them. I hope that the Minister of State, who has interrupted me several times, when he tells the Committee that the clubs will do well out of these proposals will also answer this detailed case. The inflationary cost effect on clubs, on the normal cost of their operations this year, has been estimated to be at least 10 per cent. to 12 per cent. On top of that, the Government are to impose the burden necessitated by the clubs complying with the Wheatley Report, and that will cost many millions of pounds to implement. The Government very properly demand that grounds should be made safe but, in imposing this financial obligation on clubs, they make no commitment to assist the clubs, even though it is from these very clubs that the Exchequer receives such an enormous income as a result of the taxation of one-third on football pool betting. Those are two tremendous impositions on football clubs.

On top of the normal inflationary increase and on top of the tremendous cost of implementing the Wheatley Report, there is to be the 10 per cent. VAT. One leading football legislator can be forgiven for saying to me, "What on earth have the Government got it in for football for?" All this is being imposed simultaneously on football in a manner which football cannot accept. It shows a fundamental lack of understanding of the nature of the problems facing association football.

The cumulative effects of all this could be very serious for sport, and certainly for football. I believe that the case has been more than adequately made out for the Amendment. Spokesmen of all political affiliations and of none, who are struggling to maintain sport because of its tremendous importance in our national life, believe that the Government are dealing a grievous blow at their efforts to entertain the country and to provide healthy opportunities for young people to enjoy sport. If ever a proposition should be pressed to a Division, this is it.

7.45 p.m.

Sir G. Nabarro

I oppose the Amendment on a matter of principle. Before stating my reasons for opposing the Amendment, I declare my interest in sporting ventures of a wide range and application. I am the President of the Broadway United Football Club. I am the President of the Broadway Cricket Club. I am the President of the Vale of Evesham Swimming Pool Association. I am a patron of the Worcestershire Swimming Association. I am a member of the Worcestershire County Cricket Club. I have other interests in a wide range of sporting activities.

The reason I oppose the Amendment is simply that the amount of special pleading which has gone on in Committee on the Bill to exclude this service or that service, to exclude this interest or that interest, to exclude children's clothing, children's shoes, surgical appliances, proprietary medicines, funerals, cremations, and now sport—

Mr. Carter

Spirits.

Sir G. Nabarro

If the hon. Member for Birmingham, Northfield (Mr. Carter) would like to intervene, I will give way at once.

Mr. Carter

In a minute.

Sir G. Nabarro

No. The hon. Gentleman should not shout from a sedentary position. Does he wish to intervene?Mr. Carter: Will the hon. Member explain why he has listed all those exclusions when he has his name to a number of Amendments asking specifically for exclusions, one of them being whisky—spirits?

Sir G. Nabarro

I will explain at once. I explained it last Thursday morning at about one o'clock. Alcoholic beverages are already taxed to the extent of approximately £1,000 million in a full year. So far as I am aware, sport is not taxed already to the extent of £1,000 million. Sport is hardly taxed at all, save only for the purchase tax which is applicable to sporting equipment. Purchase tax on sporting equipment is at 25 per cent. Purchase tax is a wholesale tax. The value added tax is a retail tax. Putting them both on the same basis, I declare that a purchase tax of 25 per cent. wholesale is equal to a value added tax retail of 15 per cent. to 16 per cent. Therefore, by the very act of substituting value added tax for the purchase tax on sporting equipment my right hon. Friend the Chancellor of the Exchequer is at a stroke reducing the tax on sporting equipment by approximately 10 per cent.

My objection to this kind of Amendment is simply that we are substituting value added tax for purchase tax and selective employment tax, to end very largely the violently discriminatory character of the purchase tax. It would be out of order on this Amendment if I were to seek to demonstrate how violently discriminatory purchase tax has always been. The fact remains that by a 10 per cent. value added tax we are ending a great deal of the discrimination.

My position has been made perfectly clear throughout a number of speeches on value added tax. If I had my way the value added tax would be applied to all food, all fuel, all transport and all of those items which are excluded in the Finance Bill, save only the remission on exports. The wider the tax in its application, the lower the rate of tax might be. Were it applied right across the board the rate of value added tax would not be 10 per cent.; my calculation is that it would be about 4 to 5 per cent. If we are to enter the Common Market, it would be in consonance with the European practice of applying the tax across the whole sphere of goods and services, including food, which will undoubtedly be the position with which we would have to harmonise in the coming years. It is very easy to tug at the heart chords and to say how hard up the sporting clubs are and how much their financial position will be worsened if the tax is applied. I have a letter upstairs—unanswered, because it arrived on my desk only this morning—from the Worcestershire County Cricket Club, a small club because it comes from an area with a relatively small population and therefore has a relatively small market upon which to draw. But it is a club of illustrious record, having twice in recent years won the county cricket championship. It is losing money today in spite of the energetic efforts of the supporters' club. I do not doubt that it will he marginally worse off through having to pay VAT, and it would be dishonest to try to plead any other basis. But I am prepared to sacrifice the Worcestershire County Cricket Club's marginal deficit arising from the value added tax in order to pursue the important principle that no goods and services should escape the tax.

Every time the Chancellor is tempted by pressure or otherwise to exempt a particular product or a particular service, ipso facto he does two things: he brings in train a vast volume of additional pleading for special treatment. Every time he exempts a particular class of goods or a type of service from the incidence of the VAT, he places a larger burden on the remaining goods and services which are paying the tax.

Why, for example, should cricket be excluded from the tax in order to increase the burden of tax on children's shoes? Why should children's shoes be excluded in order to increase the burden on funeral services and cremations? Why should funeral services and cremations be excluded in order to increase the burden of the tax on proprietary medicines and surgical appliances? The volume of special pleading is made infinitely worse every time the Chancellor of the Exchequer succumbs either to the pressure of private Members in this House or the diktats of his own conscience.

Mr. Brian Walden (Birmingham, All Saints)

I am very interested in what the hon. Member is saying but I think he is falling below his usual standards of fiscal logic. It may be true that there will be a marginal gain on the equipment tax that is paid by cricket clubs, but the buying of shirts, bats, stores and rollers and such things is not the decisive factor in the entertainment industry. The decisive factor is what is charged on the gate, and the tax will mean a charge at the gate which will force attendances down. That is the significant point.

Sir G. Nabarro

I am not disputing that at all and I am not falling below the standard of fiscal logic as the hon. Member suggests. I prefer to leave a Treasury Ministery replying to the debate to give the precise details of revenue and the comparative sums entailed, because no private Member can command expertise of that kind, save only from Treasury sources. What I believe is indubitable logic in this application is this simple proposition: whereas the sporting clubs themselves will be worse off financially because of the tax on their admission charges, they will be marginally better off from two sources. The first of the two sources is that they will be relieved of paying selective employment tax on their employees. I have not looked it up and I have not asked parliamentary Questions which would be the only way to elicit the information, so that I do not know how much selective employment tax was paid by clubs in respect of professional footballers. I doubt whether it has ever been stated.

The second source—and here I correct the hon. Member for Birmingham, All Saints (Mr. Brian Walden)—will be provided by a decline, which is not a marginal decline, in the taxation on sporting equipment. It is, in fact, a very large decline from 25 per cent. to about 15 to 16 per cent. Whereas I admit at once that the purchase of footballs, jerseys and other kinds of sporting equipment is not a major part of the expenditure, of a sporting club—I do not dispute that it is a small part—nevertheless the rate of tax has almost been halved.

I shall incur odium from the numerous sporting ventures with which I am associated, directly or indirectly in my constituency or other—wiseonly last Wednesday evening I was guest of honour at a the annual dinner of the International Sports Fellowship. Opprobrious comments will be made about my conduct by the members of the Worcester County Cricket Club, I have no doubt, and they will threaten the withdrawal of their support from my Conservative cause. But I shall be bound by fiscal equity and logic, contrary to what was indicated by the hon. Member the Member for Birmingham, All Saints, in this important matter and demand that my right hon. Friend the Chancellor does not relax in any way the application of value added tax across the whole sphere as denoted in the Bill. I shall oppose Amendments calling for relaxation, save only in respect of alcoholic beverages. These beverages are already taxed to the extent of about 1,000 million and it would be wholly inequitable, if not reprehensible, if they were subject to double taxation.

8.0 p.m.

Mr. Tam Dalyell (West Lothian)

If the Broadway United Football Club and the Broadway Swimming Club—

Sir G. Nabarro

No! You have got it wrong—the Broadway Cricket Club.

Mr. Dalyell

Very well, the Broadway Cricket Club. If those organisations are in any way typical of the small football and cricket clubs throughout the country, I suspect that we have been listening to their ex-president, by the time this Committee stage is over.

I was wondering whether we could have one thing straight at an early stage in the debate. This arose out of the exchange between my hon. Friend the Member for Birmingham, Small Heath (Mr. Denis Howell) and the Financial Secretary. I want to know what it was precisely that the Financial Secretary was trying to tell us in his intervention. Was he saying that admission charges will not be raised, because all the information we have is that there is considerable elasticity in this and that if admission charges are raised we can expect that in all but the most famous football clubs attendances will go down. Is the Financial Secretary saying that in the view of the Treasury admission charges will not be raised? Is that the purport of his intervention? If not, what was he trying to say?

My hon. Friend the Member for Birmingham, Small Heath and my hon. Friend the Member for Birmingham, All Saints (Mr. Brian Walden) were right and the Financial Secretary was wrong in his intervention.

Mr. Higgins

The hon. Gentleman knows enough about this tax, if his hon. Friend the Member for Birmingham, Small Heath does not, to know that in arriving at the total tax burden, input tax is deducted from output tax and the tax is not 10 per cent. of the admission charges.

Mr. Dalyell

The input tax and the output tax may or may not be. What we want to know is this: are the Government denying that admission charges will be raised substantially? Of course the truth is that they will, and this is the subject of the pleadings we have had from a whole series of football clubs.

I want to argue the Scottish case. I have talked at great length to Desmond White chairman of Celtic. Celtic may be atypical, but we have to look at the top clubs first, and my hon. Friend the Member for Glasgow, Gorbals (Mr. McElhone) knows that Celtic has been an extremely successful club.

These are the figures and I make no apology for going into them in detail. In season 1967–68, the total drawings were £358,592. Of this the gate money was £330,228. The profit was £29,583. In the season 1968–69 drawings were £350,356 and the gate was £326,608. This club had a good run, not only in the Scottish Cup but in the European Cup. Yet the loss was £11,894. For season 1969–70 the total drawings were £473,349, the gate was £452,809 and the profits £63,439. For the season 1970–71, total drawings were £376,478, the gate was £359,410 and the profit £32,742.

Mr. Cecil Parkinson (Enfield, West)

Will the hon. Gentleman give way?

Mr. Dalyell

No.

The point is that with the value added tax the calculation of Desmond White, a trained accountant, is that in all these years except for one the club would be in the red. This is the story of an astoundingly successful club. In the figures Denis Follows gave to several of my hon. Friends, only the two Merseyside clubs were in a similarly strong financial position. If Celtic is to get into trouble, imagine the difficulties that many less successful and smaller clubs will have, especially, as my hon. Friend the Member for Bothwell (Mr. James Hamilton) said, when they have not only VAT but in conjunction with that they have to face the full implications of implementing the Wheatley Committee report.

Reverting to Celtic, even to bring one part of a ground that has been modernised up to Wheatley standard would cost next year another £25,000 at least. This is the calculation of Desmond White. There are many grounds not up to the standard of Parkhead. There are many, including Ibrox, where vast sums of money are needed to bring them up to the standards which the Government accept. I hope that in the wind up to the debate the Government will clearly say where the money will come from for the implementation of the Wheatley Committee report. It makes no sense to have this kind of debate without a clear indication of how these clubs are to get the money.

I know that my hon. Friend the Member for Islington, East (Mr. John D. Grant) is anxious to catch your eye, Miss Harvie Anderson, and if he is successful in doing so he will bring out the problems of a club such as Arsenal at Highbury. It makes no sense for the Government Front Bench to give us a reply which does not go into the details of how they hope to implement Wheatley.

So far I have kept to the famous, big clubs. Consider, Edinburgh Hibernian, a medium-sized club. Mr. C. F. Graham, its secretary, points to an overdraft last year amounting to £36,473. This is a club which has gone into the final of the Scottish Cup yet which has considerable financial problems. Great sums of money will have to be found to bring Easter Road up to Wheatley standards. There are less successful clubs, such as Dunfermline Athletic, with whose accountant I spent a half-hour yesterday afternoon. This is a very sad story because the club is in debt to the extent of £40,000 and this will be the last straw that breaks the camel's back. The Dunfermline figures, which I will send to the Treasury, from Mr. McConville, their secretary, indicate the plight of these smaller clubs.

What this means in the view of accountants is that the survival of these clubs is at stake. Are clubs in the Scottish Second Division and, according to our briefing from Denis Follows, in the Third and Fourth Division of the English League expected to survive? My hon. Friend the Member for Mansfield (Mr. Concannon) has a long list of figures relating to Mansfield Town.

In England the clubs that get into Europe, including the Fairs Cup, are the famous clubs. In Scotland we have a different problem because of the nature of our league, as a result of which clubs such as Dunfermline and Dundee get the opportunity from time to time to play in Europe. To undertake a tie in Eastern Europe costs £4,000 plus about another £1,500. Because of the rules of the European competition this has to be found out of the home gate. This is all right for Celtic, who can get a gate of £75,000. If it is Dunfermline the maximum gate is 18,000 to 19,000. It will be impossible for such clubs to take part in European competitions in future, if this proposal is approved. Mr. Lindsay, of Hearts, Vice-President of the Scottish League, thinks the future of Scottish football is at stake.

I had a phone call yesterday from Mr. Gordon, Secretary of Elgin City. It is a pity that the Secretary of State for Scotland is not here; Elgin is in his constituency. This is a club which, if it is lucky, has on average 1,000 of 1,500 spectators. It has debt of over £9,000, and, as with every other small club, the elasticity of demand is absolutely crucial. If Elgin City increases its entrance charge from 40p, its crowds will, in its opinion, diminish and its net income will be less.

Is that what the Government want? We are talking here about the grass roots of sport. In a sense, I care a good deal more about Elgin City, Bo'ness United and other junior clubs than I do about Celtic. Celtic, Arsenal, Leeds United and, as my hon. Friend the Member for St. Helens (Mr. Spriggs) knows, Manchester United can look after themselves. Smaller clubs may not be able to do so. The last straw could break the camel's back.

It is a question not only of the smaller clubs but of the smaller sports. I was talking yesterday to Alex Boyd, secretary of the Scottish Amateur Swimming Association. I must tell my hon. Friend the Member for Small Heath that if the English association is in relatively good financial fettle, the Scottish association certainly is not. It says that it will make losses on its galas. The maximum attendance is about 1,000. If the association is in a financial plight, the clubs are in an even worse financial plight. They do not know how they will make ends meet.

Organisations such as the Scottish Amateur Swimming Association and many English sports bodies rely on shoestring administration. From where are the administrators to come to collect a tax which is far more complicated than the entertainments tax of the 1950s? My hon. Friend the Member for Small Heath spoke a little lightheartedly about the problems of Badminton. I suspect that the horse show people will be able to look after themselves. But the burden which will be put on the grass roots sports administrators throughout the country is enormous. They do not know how they will cope with the tax.

This is not only a financially hard but a ludicrous tax from a Government who go round the hustings saying how they will simplify administration. This tax will make administration so complex that people will put stickers on their cars saying, "Come back SET, all is forgiven". I speak as an ex-president of the Scottish Amateur Basketball Association. It is a small sport. We are not a very grand organisation but the numbers in the sport are increasing.

People who work in an amateur capacity in sport say that this tax is ludicrous. The Government should look at it again and at Amendment No. 53. I hope that we shall return to the matter, if not in Committee, then on Report. I have listened for many hours, last year and on previous occasions, to the Chief Secretary telling us how life will be simplified. Here is a classic case in which life can be simplified, and it is in the hon. Gentleman's power to do it.

Mr. Cecil Parkinson (Enfield, West)

I am sorry that the hon. Member for West Lothian (Mr. Dalyell) did not give way to me. When I tried to intervene in his speech, he was making the same point which the hon. Member for Birmingham, Small Heath (Mr. Denis Howell) had made. He was quoting the situation as it affected Celtic Football Club. The hon. Member for Small Heath had mentioned Middlesbrough. The impression which the hon. Members gave was that the income from attendances and profits were tied together. However, anybody who knows anything about football accountancy knows that a major item on the expenditure side or on the income side is the transfer of players. Anyone who knows anything about football accountancy knows that any club which is in danger of making a profit looks round for a player to buy because the cost of the player is written off in the year in which he is purchased. This is one way of deflating the income.

8.15 p.m.

One cannot simply say that Middlesbrough lost £87,000 and it is therefore proved that its loss would have been even greater if VAT were in operation. The club might have had its own reasons for choosing to buy or to sell players. The accounts of football clubs are not strictly comparable with the accounts of any other commercial enterprise. The hon. Gentleman was using statistics which were not strictly meaningful.

Mr. Denis Howell

It may be true in one or two isolated cases that a club is faced with making a profit and can therefore indulge in the luxury of buying a very expensive player in order to dispose of its profits. But that is a very limited situation. Ninety per cent. of all football clubs consistently make losses. The Oldham Athletics and Newport Counties of this world do not make such profits that they cause problems. My hon. Friend the Member for Nottingham, Central (Mr. Dunnett), who is chairman of Notts County, is not faced with the prospect of his club making such large profits that his problem is to dispose of them. The problem for most football club directors is the opposite. Year in and year out their clubs make losses.

Mr. Parkinson

The hon. Gentleman's point is valid, but unless he can assure us that, in the year in which it lost £87,000, Middlesbrough had not exercised its option, the figure which he quoted was not strictly valid. It is misleading to quote the income and loss and to say that the situation would have been worse or better if value added tax had been imposed. I know a certain amount about football accountancy.

No one would deny that the finances of sporting associations are not in a strong state. I speak as one who did a lot of athletics at one time, and I now spend quite a lot of time trying to help other people to enjoy athletics and to obtain the same pleasure from it that I once did—if "pleasure" is the right word. It is much more pleasurable with the benefit of hindsight than when I was struggling over the last 50 metres of a 400-metre race.

The hon. Member for West Lothian has not established that attendances will fall because of the imposition of VAT. We read of 5,000 spectators making the journey to Italy to watch football. We read that when Manchester United came to London 30,000 people came with them to watch them play. It is easy to say that an extra 3p or 4p will be the breaking point, but even 300p or 400p will not stop thousands of people travelling every week to watch their favourite club. I do not flinch from the fact that admission charges may go up, but I do not think that if Elgin City's attendance falls from 1,500 to 1,400 or 1,300 it will be a decisive factor in whether it remains in existence. I can think of many instances in which it will not be a decisive factor. I cannot believe that whether the Amateur Athletic Association survives will depend on the £800 or £900 VAT which it will pay.

The finances of sport must be examined, but the problem is much more deeply rooted. Immediately after the war 35,000 people paid entertainments tax to watch Oxford and Cambridge run against Harvard and Yale. Last year, with no tax, 1,100 people went to watch the same match. This does not add up to the fact that the tax is the crucial factor. The hon. Member for Small Heath knows better than anyone that one could not give away tickets to watch certain clubs, whereas other clubs are bombarded with applications for tickets, whatever price they charge. The hon. Gentleman said that sporting finances were in a bad state, but he did not prove that VAT will make them worse. He has made no case for saying that sports will disappear because of its imposititon. The problems of the AAA are there whether VAT is in existence or not, and a far more deep-rooted solution to the problems needs to be sought than trumpeting all these sorts of argument about VAT.

I agree with my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) that the simplicity of the tax and the low rate at which it is to be levied are absolutely crucial, and I believe that exceptions such as the hon. Gentlemen opposite have been seeking today will serve to create more of the anomalies about which they spend so much of their time complaining. It seems to me that they spend half of their time complaining about anomalies and the other half trying to ensure that there are even more. I believe that the simplicity of the tax and the low rate justify it, and I have no compunction at all, as a lover of sport and a lifelong participant, in supporting it.

Mr. Leslie Spriggs (St. Helens)

I make a plea to the Minister to answer the question which my hon. Friend the Member for Birmingham, Small Heath (Mr. Denis Howell) put earlier in relation to entrance fees. This is a crucial question. I should like the Minister, if he will, to explain whether it is the Government's intention to increase entrance charges by any means whatever.

I make a special plea on behalf of Rugby League football. This is a part-time and working man's sport. Anyone who attended Wembley to see the Rugby League Cup final last Saturday afternoon will support what I have to say, that it is a highly skilled game. By the way, the cup was won by St. Helens on this occasion. I hope the Committee will join me in congratulating St. Helens on a fine game, and in congratulations, too, to Leeds, who lost the game but played well.

I have had a look at several of the Rugby League clubs' finances. I understand that selective employment tax is not charged on part-time sport. That is the reason why I ask the Minister to indicate tonight whether it is the Government's intention to implement value added tax on entrance charges and gate charges. This is most important because most of the clubs whose last current financial reports I have examined very carefully, with the exception of a few able to cover themselves with glory, are sportingly fighting on against great odds.

I mention a few of the clubs' financial reports. Hull Kingston Rovers has a debit balance of £2,805; Warrington, a net loss on last year's account of £19,360, and an accumulated deficiency of £20,336; Huddersfield, a debit balance of £1,172; Halifax, an excess of expenditure over incomeof£1,196;Featherstone Rovers—

Mr. Joseph Harper (Pontefract)

My club.

Mr. Spriggs

—an excess of expenditure over income of £3,306.24½p; Dewsbury, a net loss of £194; Bradford Northern, a net loss for the year, £3,350; Blackpool Rugby League Club, a profit for last year of £1,439 but with a deficiency carried forward of £4,186. St. Helens, who have been able to cover themselves with glory, and Leigh, our next-door neighbour, have done fairly well, with a profit for the last financial year for St. Helens of £6,312 and for Leigh, one of the top clubs in the country, of £8,562.

I hope that the Financial Secretary appreciates our concern about part-time sport. I am told by the clubs' managements with whom I have discussed the position that they dare not put up the gate prices. They believe they have gone as far as they dare. It is a game which is loved by the people of our northern towns. That is the reason why I appeal to the Financial Secretary, his right hon. Friend, and all his colleagues and the Government as a whole, to look sympathetically at this sport. If we are not very careful, we may kill it. I want to see quite the opposite. I want to see more encouragement given to this sport, and I should like to see it extended throughout the country. It is an interesting game.

I appeal to the Financial Secretary to put an end to our agony. Let us know whether it is his intention to put 10 per cent. value added tax on the gate money.

[MR. HAROLD GURDEN in the Chair]

Mr. David Mitchell

Today we have had a field day, or one may, perhaps, say a sports day for the Opposition in attacking the Government's proposals for value added tax applied in this field. However, it is not only sport but every single pressure group in the country the Opposition has sought to satisfy by making a case for exemption from VAT. As one casts one's eye down the Notice Paper at the massive number of Amendments and their subject matter one sees that there is scarcely a group in the country for whom exception is not sought.

Mr. J. D. Concannon (Mansfield)

. Will the hon. Gentleman cast his mind back two years and tell the Committee how many Amendments of a similar nature he put his name to on the Transport Bill?

8.30 p.m.

Mr. Mitchell

The Transport Bill has no resemblance to the VAT which we are discussing. I am sorry that I wasted the time of the Committee by giving way.

If the Government were to yield on this Amendment and the associated Amendments they could do so only at the expense of increasing the 10 per cent. rate. I am delighted that the rate is as low as 10 per cent. and I am determined to see that everything is done to keep it at 10 per cent. and no higher. There appears to be a concerted plan by the Opposition to insert into the Bill so many exemptions that the 10 per cent. rate will be lost and the Government will have to move to a higher rate.

Mr. James Johnson (Kingston upon Hull, West) rose—

Mr. Mitchell

I have already given way once, and the hon. Member for Kingston upon Hull, West (Mr. James Johnson) has not spoken. I am sure he will have the opportunity to catch your eye, Mr. Gurden.

A whole series of hon. Members have referred to the parlous condition of club finances. It was said of Middlesbrough that a £17,000 liability for VAT would fall "as a charge on this club", but this is not true. The charge for VAT does not fall on the club; it falls on those who attend. The hon. Member for Birmingham, All Saints (Mr. Brian Walden), referred to pads, shirts and stumps, as having nothing to do with the finances involved here. I agree with him and accept that. Equally, he must accept that his hon. Friends who have been arguing that the money has to be paid out of the profits of the club are putting forward a fallacious argument. The reality is that the money comes from the public who pay for admission.

Mr. Brian Walden

I agree with the hon. Member for Basingstoke (Mr. David Mitchell), that the charge falls on the final consumer, but has he, as I have, looked at the elasticity of demand and realised what it will mean to many clubs, especially professional soccer clubs, in which I have a particular interest, if they have to add these increases to the increases they will already have to pay because of the rise in prices generally? Surely the hon. Gentleman accepts that it will mean a sharp decline in attendance?

Mr. Mitchell

May I give notice, Mr. Gurden, that, having given way so many times during my speech so that the thread of what I am saying is liable to be lost, that is the last time I shall give way.

The hon. Member for All Saints has omitted from his interesting series of deductions a fundamental fact. It is true that the elasticity of demand is such that if these admission prices in isolation were to be increased by 10 per cent. people would go to alternative entertainments, but the hon. Gentleman does not seem to realise that the same VAT charge will apply to every form of entertainment, and people are not going to sit at home and twiddle their thumbs.

Mr. Denis Howell rose—

Mr. Mitchell

The hon. Member for Small Heath made a speech to which I listened with considerable care. The hon. Member for All Saints missed the important point that it we took gate money in isolation what he says would be true, but since we are taking it on the basis of the coverage of all the alternative activities, it is untrue. One comes down to the question how much it will cost. Is it the sort of money which will drive people away? Let us look at that. I tried to get the Opposition spokesman to tell me how much was involved, and I understand why he was so coy in answering me. He spoke of £5 for a Cup Final, and I agree, although those who travel long distances with great enthusiasm to attend a Cup Final will be asked to pay no more than they pay for a rattle to use at the event.

The reality is that for the vast majority we are dealing with figures which are far lower. We are dealing at the lower end with 5p—according to the hon. Gentleman. What would be the value added tax on that? It would be ½p So we have gone to the two extremes. What is the average run in the middle? It is probably about 30p on which the value added tax would be 3p. I am told that the Birmingham Small Heath Football Club admission charge is 20p, in which case we are talking about value added tax of 2p for two hours' entertainment at a cost per hour of spending a penny. It is one-third the cost of a newspaper. It is one-tenth the cost—

Mr. Denis Howell

The hon. Gentleman has mentioned my constituency team, which ceased to be Small Heath 50 years ago and is now Birmingham City, and is in the First Division. The minimum charge next year will be about double what he tells us, as we certainly must get some money to buy players. Of the difficulties facing Birmingham City and the other First Division clubs, not the least is that if these few extra pence are added to the admission charge that addition will cause catastrophic hold-ups at the turnstiles with people trying to get change at these odd prices of admission which are totally foreign to the sums normally charged at our sports grounds.

Mr. Mitchell

I have never heard a more specious or unsound argument. The hon. Gentleman says in one breath that clubs cannot cope with these odd sums of money at the turnstiles, yet says in the next breath that next year his club will increase admission charges, which will inevitably involve adding an odd amount to the admission charge.

The point I am making is that this very small value added tax, ranging from ½p to two or three pence, has to be considered against, for example, the cost of going to the ground to watch the game; the very substantial rail charges; the whole train hired by supporters to go to watch their club. The cost incurred by those people are 10 times, and sometimes even 100 times, the amount of value added tax which is to be charged. Therefore, to talk in terms of a value added tax being such as to destroy the gate attendance is a gross exaggeration, and hon. Members who have been peddling this argument must know that it is a gross exaggeration.

The Opposition have to take a very simple fact on board. If they are to press for numerous exemptions, such as this and many others on the Notice Paper, the 10 per cent. rate has either to be increased or it must be applied to a number of things which are now zero-rated. Do the Opposition want to see it added to food, to fuel or to any other essentials which affect the cost of living of the old-age pensioner? What they want is the best of both worlds. [Interruption.]

The Temporary Chairman

Order. I hope hon. Members will allow the hon. Member for Basingstoke (Mr. David Mitchell) to make his speech.

Mr. Mitchell

I am grateful to you, Mr. Gurden, because it is very difficult to proceed against heckling from so many seated hon. Members opposite, particularly as I was about to try to support the hon. Member for West Ham, North (Mr. Arthur Lewis), which will astonish him as well as myself. The additional charges which VAT will add to gate money—3p, 4p and occasionally 5p—when considered against the background of the massive reductions in taxation which my right hon. Friend made in the Budget, whereby every taxpayer is 1 a week better off, are very small indeed. When one puts the tax reductions alongside the petty cash which hon. Members opposite are talking about, one begins to get a sense of proportion. Most village cricket clubs and most amateur clubs will be exempt under the small traders exemption. Even with the 10 per cent. VAT, British football and rugby match admission prices will be amongst the lowest in Europe.

I hope that my hon. Friend the Chief Secretary can give us a little more guidance. The hon. Member for West Ham, North drew attention to the cost of various things like printing programmes, pads and other sports equipment. He suggested that these would incur VAT, which must be taken into account. I assure my hon. Friend that the Financial Secretary to the Treasury said, "Ah, but you have forgotten that it can be allowed as an input tax and is offset, and therefore you have to take this factor into account. It does not mean a straight 10 per cent. increase in the selling price for tickets."

Surely my hon. Friend the Chief Secretary will agree that the Financial Secretary was wrong. Surely there is only an offset to the extent that there has been an additional expenditure and therefore there is no relationship whatever between the pads and the printing and the fact that VAT will now be an addition to the gate money of 10 per cent. If both the hon. Member for West Ham, North, and I, finding ourselves in curious alliance, are wrong, I shall be delighted to hear it.

The Chief Secretary to the Treasury (Mr Patrick Jenkin)

I did not hear what my hon. Friend the Financial Secretary said, but it would greatly surprise me if he had got the wrong answer. Probably no one in the Committee knows more about VAT than he does. I can only imagine that he possibly misunderstood the point.

Mr. Mitchell

Finally, then, I ask my hon. Friend the Chief Secretary to confirm that both the hon. Member for West Ham, North and I are on this occasion correct.

Mr. Arthur Lewis

Is the hon. Gentleman giving way?

The Temporary Chairman

Order. The hon. Member for Basingstoke (Mr. David Mitchell) has not given way. He has sat down.

Mr. Arthur Lewis

On a point of order, Mr. Gurden. The hon. Gentleman nodded when I asked if he was giving way. He will agree that he did nod when I asked him.

The Temporary Chairman

Order. I judged the hon. Member for Basingstoke to have finished his speech.

8.45 p.m.

Mr. Harper

In the very few minutes I need to deploy the case for the Rugby League game, I wish to follow the trend of the argument adduced by my hon. Friend the Member for St. Helens (Mr. Spriggs) and speak specifically to Amendment No. 96, of which I am a signatory. It deals with the Rugby League game. I am the only Member of Parliament who is doubly fortunate in that I have two Rugby League teams in my constituency—Castleford and Featherstone, both of which have been at Wembley three times during the last five years.

I congratulate my hon. Friend the Member for St. Helens on the marvellous display of his team last Saturday. In passing, I would point out that television, which has done a lot to popularise Rugby League football, failed to justify the game on Saturday. It was much better being there than watching it on television. It was a much better game than that which took place at Wembley seven days earlier.

There seems to be a wide gulf between the two sides of the House on this matter. I have heard hon. Members opposite argue that VAT is a fair replacement for SET and purchase tax. That is a phoney argument. I will explain why. Rugby League football is a part-time game, which means that the effect of SET, in reference to players, is nil, because they are all part time. I agree that VAT, in itself, may break even compared with SET and purchase tax in terms of the purchase of sports equipment, but the Rugby League world is worried about the VAT of 10 per cent. on admission charges. It will be a dead loss of 10 per cent. of our receipts. It is tantamount to a reintroduction of entertainment tax, which was removed years ago in order to allow sport to survive.

I want to speak about one of my two teams—the team whose balance sheet comes readily to hand, namely, Featherstone Rovers Rugby Football Club. I give the team's receipts for the last year, all duly audited and signed as correct. The first team's receipts for the full season of first-class, attractive football, were £5,343. The receipts of the second team amounted to £130. Cup ties brought in £4,821, so that the grant total was £10,294.

As soon as VAT conies in, Featherstone Rovers will have to find £1,030, which compares very un favourably with the less than £100 that the club is now paying in SET. The loss now amounts to £3,306, which will mean that if everything runs true to form the following season the loss will be £4,336, or getting on towards £5,000.

I am sorry that the hon. Member for Enfield, West (Mr. Parkinson) is not here. He referred to clubs selling players to get rid of their massive surpluses. I cannot remember the last year in which my club made a surplus. If it were not for the dedication and hard work of the supporter's club and the charitable efforts of many other people, the club could not function. When it is applied, VAT will put some Rugby League clubs out of existence. What amount of tax will the Government get? Perhaps £50 to £100, or not even that. We have never bought players. We would have liked to have bought some players but we have never had any money. In the area in which I live, which saw the creation of Rugby League football, we have to transfer players in order to survive. Even some right hon. and hon. Members opposite will know that what I am saying is correct.

I am pleading for Rugby League football—no more, no less. I may be selfish in that attitude, but if we have to pay value added tax then we go out as a club. It is as simple as that. This is at a time when there may be a shorter working week and more time for leisure. If some relief is not given to Rugby League football and value added tax operates, there is a dismal future for the league. What will happen is that a handful of clubs will be left.

I am sorry that the hon. Member for Enfield, West (Mr. Parkinson) is not present. The hon. Gentleman talked a lot of trash. He just did not know what he was talking about. Neither did his hon. Friend who followed him, who has now bolted. I wish both hon. Members had stayed behind, listened to some reasonable arguments and tried to conserve a sport which in my opinion is the best sport of the lot. It is a sport that needs men to play it.

Mr. Anthony Fell (Yarmouth)

Rubbish.

Mr. Harper

The hon. Member does not know anything about it.

I hope that when to the debate he will a zero-rating on the admission charges games.

Miss Mary Holt (Preston, North)

In my constituency there is a famous football club, Preston North End. It is one of the founder members of the Football Association. The people of Preston have for many years followed with pride and affection the fortunes of that football club.

I must declare an interest. I am both a supporter and a shareholder of Preston, North End.—[Interruption.] It has never paid a dividend. Like most football clubs it is running at a loss. Indeed. 90 per cent. of football clubs in the Football Association are running at a loss.

I wish to voice the disquiet of my constituents about value added tax. If a fresh imposition in the shape of value added tax is added to what they have to bear, association football will disappear from many industrial towns and cities in the north. Preston has had much pleasure from its football team, and it would be a great loss to the town if the club were forced to close down. Representations have been made to me by the chairman of Preston North End. He is well aware of the position of football clubs in the Football League and Football Association. He foresees the closing down of football clubs all over the north if value added tax is put on the impositions that the clubs already have to meet.

There has been a suggestion that the minimum charge for admission should be put up in the forthcoming season. However, Preston North End supporters say that if this happens and value added tax is added the club will be back where it started. The club will probably have to meet the extra burden of providing for ground safety to comply with the requirements of the Wheatley Report. I should be happy if the Chancellor could give some assurance to the football clubs that their fears are not justified.

Mr. Roy Hughes (Newport)

Many hon. Members find valued added tax an obnoxious feature of the Government's policy. However its imposition on admission charges for sport would be as punitive as entertainment tax which had to be discarded almost 20 years ago. All major organised sports are united in their opposition to this proposal. Among them are the Cricket Council and the Football Association, the Rugby League and the Rugby Football Union. The two latter have formed what might be described as an unholy alliance. The Government have at least succeeded in uniting two bodies which have been hostile to each other for a very long time. Value added tax would produce more revenue by increasing admission charges.

I thought that the hon. Member for Worcestershire, South (Sir G. Nabarro) was a bit confused about the application of purchase tax. I understand that from 21st March this year there is 25 per cent. on cricket bats and footballs, but that on football jerseys there is no purchase tax. However, the latter item will certainly go up in price with the application of a 10 per cent. value added tax.

The addition of value added tax to admission charges will cut attendances at sporting events and produce what I call more television watchers. I should have thought that the Government would make every effort to encourage interest in sport due to the changes which are rapidly taking place in society. New industrial techniques, automation, computerisation, and so on, will inevitably mean a shorter working week in industry with more time for leisure. Surely financial obstacles should not be put in the way of this healthy development.

The Government should have learned their lesson from the debâcle which took place over entertainment tax. First it was withdrawn from amateur sport and eventually from professional sport. If sporting organisations contribute more to the Exchequer there will be less money available for the provision of amenities at the grounds. We know only too well that more and better seating arrangements are required, that terraces need to be improved, and that better refreshment facilities ought to be made available.

My hon. Friend the Member for Birmingham, Small Heath (Mr. Denis Howell) referred to the vital safety factor. The Wheatley Report recently called attention to this important aspect. It is certainly not a moment too soon, recalling that 18 months ago we had a most tragic incident in Glasgow.

The Government appointed Dr. Roger Bannister to head the Sports Council. I understand that he has declared himself quite firmly opposed to value added tax. The Government should take note of what their appointed representative says. I notice that in a report out today, which is referred to in the Evening Standard, Dr. Bannister says that British sport needs a £350 million transfusion. Yet all the Exchequer seems to be doing is to try to extract even more revenue out of sport.

I am particularly interested in this matter from the regional aspect of sport in Wales. The Welsh Football Association has made every effort to plough back money into local soccer clubs in Wales. Soccer in Wales faces competition not only from television but also from the fact that Rugby Union has a strong following. Wales has four clubs in the English League, and it can honestly be said that they are all suffering indifferent fortunes. Not one can remotely be described at wealthy.

Perhaps I may here declare a slight constituency interest. Newport County has for a long time had a difficult job to survive, but towards the end of the season there was a revival of its fortunes which took it nearly to the middle of the League. Much credit is due to the directors of the club and to its steadfast supporters, even though they are only small in number. Newport County's problem throughout has been essentially financial, and this increased burden could be the straw that broke the camel's back. The imposition of this tax will be a tragedy for soccer in South Wales.

9.0 p.m.

At the English League's annual meeting on 2nd June a proposal is to be made by the management committee to increase the minimum attendance fee from 30p to 40p. That in itself will not help to increase attendances. I understand that the English League distributes its 4 per cent. net match takings evenly, but that there is a proposal from Crystal Palace that greater efforts should be made during this financial year to help the more struggling clubs. The point that I am trying to make is that it would be the height of folly for the Government to make things even more difficult for teams such as Newport County which are struggling to maintain themselves, and have been doing so for some time.

I now turn to the other game in Wales which is a focal point there, and that is Rugby Union. It is thriving, but gates are still low. It is very much an amateur game, and there tends to be great reliance on voluntary workers, with the result that little SET is paid.

I should perhaps declare another small interest, because in Newport Athletic Club we have one of the finest clubs of its kind in the country. Rugby is undoubtedly the most famous sport, the one that rakes in the most money, but this famous athletic club also caters for cricket, hockey, netball, bowls, tennis, squash and many other games. It is administered exclusively by voluntary effort. Are these people to be turned into Government tax collectors? Surely an organisation such as Newport Athletic Club, which is such a power for good in the community, should not be taxed in this way?

In reply to two Questions the Chancellor of the Exchequer said last Thursday that he had received many representations from both soccer and rugby interests opposed to the imposition of VAT. Nevertheless, the Chancellor indicated that he proposed no form of relief for admission to sporting events, and I find that difficult to understand. The only concession that he is prepared to make is that clubs whose turnover in taxable goods and services does not exceed £5,000 will be exempt from tax. It may seem fair on the surface to tax the giants and let the tiddlers go free, but this shows a fundamental misunderstanding of the problem.

The Welsh Rugby Union stages several internationals at Cardiff each season before capacity crowds, but any surplus of income is distributed among the junior and struggling clubs, so nurturing the grass roots of the sport. These matches are essentially all-ticket affairs. Tickets are allocated to affiliated clubs which distribute them to their members. When events like this, exclusively for members, take place, is it necessary for VAT to be levied? There seems to be a loophole here of which the Chancellor might care to take advantage.

I assure the Committee that this whole issue is being taken extremely seriously in Wales. A special committee of the Welsh Sports Council under the chairmanship of Mr. Kenneth Harris, treasurer of the Welsh Rugby Union, has been established to examine and make representations on this problem. In view of the representations that have already been made to the Chancellor, I urge him to think about the whole matter again.

Captain Walter Elliot (Carshalton)

I came to this debate prepared to accuse hon. Gentlemen opposite of playing party politics with sport. I confess that they have not done that.

It is clear that the various Amendments in this group have been supported by them entirely on the basis of sentiment. I make no complaint about that, especially as I am arguing in a similar vein. They want their own clubs or sports freed from VAT, while being prepared to let all the others have the tax levied on them.

The hon. Member for Birmingham, Small Heath (Mr. Denis Howell) was not as logical as he usually is. He seemed surprised when I intervened on the question of county cricket, yet he agreed with me that attendances at county grounds were low, but not for financial reasons. He immediately went on to stress how big attendances were at the Gillette Cup and similar attractions. He proved my point that low attendances at county grounds have nothing to do with the cost of admission. I was astonished to hear the hon. Member for Newport (Mr. Roy Hughes) put forward the Welsh Rugby Union as a justification for tax concessions. He said that admission to Cardiff Arms Park was by ticket only. He must be aware that if that were not the case, the whole ground would be chock-a-block with spectators because people would come from far and wide to see their heroes in red jerseys on the field. The same applies to the Gillette Cup and other major attractions. Welshmen will pay anything to get into Cardiff Arms Park, and an extra 2p or 3p on the price of a ticket would not stop them going there.

Mr. Charles Loughlin (Gloucestershire, West)

While accepting that the Gillette Cup and similar attractions are extremely remunerative, may I ask the hon. and gallant Gentleman whether he is saying that county cricket clubs should have an additional burden of VAT imposed on them because there is something lacking in the sport they offer?

Captain Elliot

I shall not go into that. I do not want to take up too much time. All I am saying is that the decline in attendances at the county grounds has nothing to do with the price of admission, or very little.

The Amendments cover amateur sport as well. Many amateur clubs rely on their gates to a small extent and they use the small sums they receive. The Opposition seem to he doing an astonishing injustice to sportsmen and followers. These people are a robust crowd. Generally, they do not suffer the disabilities of the less fortunate. They play and watch games for enjoyment. They are the last people in the world who would begrudge a contribution to the nation's finances. Hon. Members opposite may laugh, but I shall continue my argument.

Naturally we want to encourage outdoor sports and activities of every sort. This is helped a great deal by the supporters, particularly in some sports. But for amateur sport, the decision whether or not VAT is imposed will make not the slightest difference. People will play and their supporters will watch and pay the small difference. If they are aware of the tax—they will probably not be—they will enjoy their chosen sport even more in the knowledge that they are contributing to the nation's finances, as long as we do not, here or anywhere else, go into all the sob stuff about their having to pay an extra 2p or 3p, which is absolutely ludicrous.

Mr. James Hamilton

Regarding amateur sport, I agree with the hon. and gallant Gentleman totally and do not depart from what he has said. But he must recognise the arguments put forward from the Opposition benches. The Football Association has now decided that it must increase charges not only because of VAT but because most of the clubs cannot survive at present. Our argument is that those of us who are not capable of participating in sports as amateurs and who want to watch professional football, for example, which is my enjoyment, will be denied that because many clubs will not be able to operate.

Captain Elliot

I was about to turn briefly to professional sport. I do not want to go into all the finances. There may be something in what the hon. Gentleman said. I have made only the general proposition that if the clubs play the game attractively, people will go to watch. I was reading only the other day about the rewards given to the Leeds United players. I shall not embarrass hon. Members opposite by repeating them, but they were very considerable. People will go to watch attractive snort, whatever the sport or wherever it is played.

Mr. Eddie Griffiths (Sheffield, Brightside)

The hon. and gallant Gentleman has referred to a report of financial rewards given to the Leeds players. Would he care to compare those with the financial rewards of players in teams such as Hartlepool and others seeking re-election for the Fourth Division?

Captain Elliot

Obviously the top men will be paid very much more, but I do not see why those who do not play very well should reap large rewards. However, professional sport can be fairly asked to contribute. We shall hear from my hon. Friend the Financial Secretary in due course exactly how much the spectator will have to contribute for his seat at a game, but I do not believe that it will be very much.

9.15 p.m.

The hon. Member for Pontefract (Mr. Harper), who made a moving appeal for Rugby League, pointed out what a good game it was at Wembley—I with him—and that the stadium was full. At that match there were 100,000 people, tens of thousands of whom came from the north. Is it suggested seriously that such people will object to a few pence on the price of the ticket? Such supporters of sport will not mind incurring such expense in following and supporting their favourite sport. It will be practically painless and will be a legitimate source of revenue.

My only reason for speaking in this debate is that I have played most games and have probably spent far too much time playing them. I am prepared to argue with my friends why they should accept this small burden. I am prepared to say to spectators who enjoy their sport and to sportsmen who enjoy their exercise that they will do so to an increased extent in the knowledge that not only will they be benefiting themselves but they will also be helping the country and helping others who are, perhaps, not in such a fortunate state of health.

I ask hon. Members opposite to drop these misguided Amendments. T say "misguided" deliberately, because I accept that hon. Gentlemen wish to encourage sport and sportsmen, but it would be misguided to free a section of the population which is well able to shoulder this small burden.

Mr. Frank McElhone (Glasgow, Gorbals)

It is wholly appropriate that Amendment No. 120 should have been selected, not because it stands in my name but because it refers specifically to Scottish football. My Amendment was not tabled for any sentimental reason. I take the point made by the hon. Lady the Member for Preston, North (Miss Holt), who mentioned an industrial aspect in regard to this debate about football clubs. Football originated in Scotland, and other countries have attempted to copy us with varying degrees of success.

Mr. James Hamilton

My hon. Friend might usefully remind the Committee also that it was a Scottish club which was the first to win the European Cup.

Mr. McElhone

That is a very relevant point, not least because the team was Glasgow Celtic, which has been mentioned so often tonight.

The very high transfer fees are only paper transactions. Often the size of the fee involved in no way reflects the finances of the club or clubs involved. Many football clubs depend upon their development clubs, which are run by the supporters' associations, for their sur- vival. The extra burden that will fall on the clubs, certainly in Scotland——

Mr. Loughlin

And England!

Mr. McElhone

I am restricting my remarks to Scotland—

Mr. Charles R. Morris (Manchester, Openshaw)

May I draw the hon. Member's attention to the impact of the value added tax on Manchester United Football Club? The burden will be in excess of £50,000. Manchester United pays a mere £2,400 in selective employment tax, so that value added tax will add £48,000 to their financial difficulties.

Mr. McElhone

I fully accept what my hon. Friend said about Manchester United. It has been said that we might be putting down Amendments for sentimental reasons but that does not take account of the fact that practically every club in Scotland will be involved in the very heavy expense of conforming to new safety requirements.

My hon. Friend the Member for West Lothian (Mr. Dalyell) leads us in matters of sport in a very active manner. I pay tribute to his chairmanship of the sports committee. He has brought these questions before us from time to time. I believe that the tax will cripple many of the smaller clubs. If the costs of the Wheatley proposals are added to the cost of VAT, the increased burden will sound the death knell for many of the smaller clubs.

Football is a way of life in Scotland, perhaps different from any other part of the country. We do not follow the Philistine sports of Rugby League, cricket and the other sports mentioned tonight. In Scotland we have a staple diet of football at the senior, junior and certainly at the amateur levels. This has an effect on Scotland's industrial situation. We are faced with a very difficult situation which gets worse every time there is a Tory Government. The Government are in the process of creating new regional policies, and this means attracting industry to areas such as Glasgow and the remote parts of Scotland. The City of Glasgow has an overspill housing scheme which means some families having to move 60 miles away. It is no exaggeration to say that football has a bearing on these matters because it is the mainstay interest of many of the fathers, certainly many of the children—

Mr. James Hamilton

And the mothers?

Mr. McElhone

Yes, and the mothers. My hon. Friend refers to the mothers and no doubt his wife, like mine, enjoys watching Celtic play.

The Temporary Chairman

Order. If the hon. Member could persuade his hon. Friends to cut down on their good-natured interruptions we should get on faster.

Mr. McElhone

They would take advice from the Chair more quickly than they would take it from me.

I come to the Highland Football League. The previous Government created the Highlands and Islands Board with the intention of attracting industry to the area. Football plays a prominent part in the social life of that area. Anyone who has watched some of the teams in the Highlands knows that they are vigorous teams, anxious to keep football as part of the way of life. Rising costs have reduced the gates and this tax will sound the death knell for many of these clubs.

English and Welsh Members do not appreciate the value of football to Scotland. If this tax is imposed at the rate of 10 per cent. with the possibility of rising to 20 per cent. it will have a serious effect, and not just on the senior Scottish clubs. Mr. Desmond White of Celtic has been mentioned already. I discussed the position with him, and he is very anxious about the B Division clubs and the junior clubs. Celtic and Rangers will survive as will Liverpool and Everton and perhaps Arsenal. I am talking about the junior clubs which are the bedrock of football and which supply players for most of the major teams. They are part of the social life of Scotland and they add to the quality of life there. I hope that the Treasury will have second thoughts about the application of this tax.

[Sir ROBERT GRANT-FERRIS in the Chair]

Mr. Concannon

I want to be brief—[HON. MEMBERS: "Hear, hear."]—and I will be all the more brief if some of my colleagues will cut out the cheering. The Amendment dealing with rugby football to which I added my name has already been dealt adequately with by my colleagues. I have played most sports, including cricket and football, and have represented my county at basketball. I am possibly the only Member of Parliament who at one time wanted to be 7 feet tall and coloured so that he could play for the Harlem Globetrotters. We have great difficulty in selling this game here. Once a year the Harlem Globetrotters are brought to this country. Incidentally, they are at Wembley Pool this week. It is becoming increasingly difficult to bring this team over to show the world's greatest basketball players in action, and this tax will make it even more difficult. This tax covers the minor sports as well as the major sports.

I represent a constituency in Nottinghamshire where the football clubs, with the exception of that in the constituency of my hon. Friend the Member for Nottingham, Central (Mr. Dunnett), Notts County, have been relegated, one from the First Division, and my own team, Mansfield, from the Third Division to the Fourth Division. It is all right for my hon. Friends who represent Manchester United, Liverpool and Arsenal and such First Division teams to say that this will amount only to a cut of 5,000 in the gate. Possibly the big teams can afford to lose 5,000. But that is Mansfield Town's gate. It is the Mansfield Towns which keep football going and which make the Manchester Uniteds, Liverpools and Leeds Uniteds.

9.30 p.m.

I have had representations from the secretary of my local club. He signs himself as the secretary, but I know that he and secretaries of similar clubs do just about everything else in the club in order to save money. In 1971, my local club. Mansfield Town, made a profit of £61,600. It has been said that Middlesbrough made a loss of over £80,000 in the same year. The point that we must remember about football finances is that the money stays in the game, or it has done up to now. Middlesbrough lost over £80,000 and Mansfield made a profit of over £61,000 because we sold our best young player to Middlesbrough for about that sum. The gate receipts of Mansfield Town for the whole of that year were £45,500.

What the secretary of Mansfield Town is frightened of is that the club will be priced out of business. If that happens to Mansfield Town and other clubs, it will have a disastrous effect on football. Football in Mansfield is as integral as mayor-making; it is part and parcel of the town. We have discussed in the local council chamber whether it would be possible to help the team from the rates, but we were denied the opportunity because the Minister said that this would be a disallowed charge. In order to make the ground more comfortable, the club had to buy a second-hand stand flint Kempton Park racecourse. It was dragged up the motorway in pieces and re-erected at Mansfield.

The small clubs are afraid of the value added tax. They fear that this extra burden might have a disastrous effect not only on the Football League, but on cricket and many other sports. I add my voice to those of my colleagues in hoping that football clubs and sport in general will be zero-rated.

Mr. Loughlin

I have no team like Manchester United or Leeds United in my constituency, or a team like the Leeds team which lost to St. Helens on Saturday. My hon. Friend the Member for Pontefract (Mr. Harper) talked about Featherstone Rovers—a very third-rate team compared with Hunslet.

I am faced with an entirely different situation. I wish to speak not about a First Division football club but about a series of football clubs which do not have such wealth. I may amuse the Committee when I say that I am vice-president of Coleford United, Redbrook Rovers and Harrow Mill football clubs. [AN HON. MEMBER: "Never heard of them."] Of course not, but we produced in our area young Steven Bowsley for Derby County. We have produced other youngsters for the big national clubs.

What worries me—and perhaps the Financial Secretary to the Treasury will give me some guidance on this—is that VAT may apply to gate receipts of the amateur football clubs not only in my constituency but throughout the country. What I want to know is whether VAT will apply to the gate receipts of the clubs of villages which have no professional football clubs and which are remote from the main industrial towns which do have them. Does the Government's proposal mean that VAT will apply to those village clubs? If it does, it almost spells the death knell of a great number of football clubs throught the country.

I will pause and wait for the conclusion of that conference between the Financial Secretary and the Parliamentary Private Secretary. I want to know the answer to this question because it is extremely important in areas of the kind of which I am speaking, where there are amateur clubs which perform an essential function in the life of the community. I want to know whether they are to have value added tax imposed on their gate receipts.

The second point I want to make is in relation to cricket clubs. As I understand it, from representations which have been made to me by Gloucestershire County Cricket Club, most county cricket clubs are extremely concerned about the affect of value added tax on their very existence. I resigned from Gloucestershire Cricket Club over apartheid, but, nevertheless, I recognise that there are a considerable number of people, county by county, who are concerned about the existence of county cricket clubs. Is the Financial Secretary prepared to say that value added tax will be imposed on county cricket clubs even though it may mean that many of the county cricket clubs will go out of existence?

These are the two points with which I want the Financial Secretary to deal: one, the effect of VAT on amateur football clubs in areas such as my own where such clubs perform a very useful function in the community; secondly, the effect on county cricket clubs. My information is that the effect will be diastrous. Can the Financial Secretary give us some assurance on these points tonight? If, under the present proposals, the points I have put are accurate, will the Financial Secretary agree that some variation in the tax, or even elimination of the tax, will be introduced to see that the adverse effect on both these types of sporting clubs is nullified?

Mr. Michael McGuire (Ince)

I wish to speak briefly to Amendment No. 96 which concerns the Rugby League clubs. Unlike most other hon. Members who have spoken, I have no constituency interest to declare as there is no Rugby League club in any of the seven towns which make up the constituency of Ince. The vast majority of my constituents support the Wigan Rugby League Football Club, some will support Leigh and some will probably support the team which I support, the Saints—the St. Helens Rugby League Club who did the right thing on Saturday and beat Leeds. It was a good match which most people enjoyed—I certainly did. It is sometimes forgotten that Rugby League is a game played by both amateurs and professionals. The amateur Rugby League is getting a poor deal. Quite a lot of money has been given to other sports, but the amateur Rugby League is not receiving as much as it should, and I ask the Minister responsible for sport to see what he can do to help it.

My hon. Friend the Member for St. Helens (Mr. Spriggs) read out a long list of clubs and gave details of their financial positions. Almost all Rugby League clubs make a loss. If the Rugby League clubs thought that the gates could stand the extra few "coppers" they would increase the admission charges. They all need the money, and the only reason they do not increase the charges is the law of diminishing returns. Fewer and fewer people would come to watch the game because of the rival attractions of the television. My hon. Friend the Member for Newport (Mr. Roy Hughes) is a Rugby Union follower and I have often heard him speak of the prowess and skill of the Welsh Rugby Union. He was right in saying that one effect of this tax will be to make more and more television addicts and fewer and fewer people will pay to watch the games.

Rugby League is played in an area which does not have many of the good things of life apart from the qualities of the people who live there, and sometimes the scenery. It is played in the oldest industrial areas of the country—Lancashire and Yorkshire. It was born out of honesty. Honest men said that if the players could play the game well enough they would pay them professionally, and that is how the great split came about in 1895. It is part of the scenery and part of the way of life in Lancashire and Yorkshire, but only in certain parts of those counties—in South-West Lancashire, part of East Lancashire, Rochdale and Oldham, the southern part of Cumberland, Whitehaven and Workington, and the West Riding, and Hull is a stronghold. The hon. and gallant Member for Carshalton (Capt. W. Elliot) spoke of the crowd of 90,000 at Wembley on Saturday and the thousands who cannot be accommodated who want to get in to Welsh Rugby Union games. That does not prove that the clubs are thriving—they are not. These games are great social events.

I ask the Financial Secretary to accept the Amendment, which will be of so much benefit. The Government are spending millions of pounds on encouraging people to participate in sport but by this proposal some Rugby League clubs in the United Kingdom will be destroyed and our rich heritage will be lost.

I know very well that teams like Manchester United and Celtic will survive but, in a way, their survival depends on the healthy grassroots of sport. Clubs like that do not want to play each other week in and week out; they want a nation-wide game. The tax will bring a small return for the Government—it may even be a diminishing return. As I have said, if these clubs felt that admission could stand an extra bob or two or an extra copper or two they would have put their charges up. The Rugby League clubs certainly would have done because about 90 per cent. of them are already in financial difficulties. So I ask the Government to withdraw their proposals so far as they affect Rugby League.

9.45 p.m.

Miss Joan Hall (Keighley)

I am glad to be called after the hon. Member for Ince (Mr. McGuire) and to be able to talk in particular about the Rugby League clubs. We have one such club in Keighley. These clubs may not be in the top class but those in them are good sportsmen. They draw good crowds on Saturdays and Sundays, and supply a very valuable asset to the life of the community. That is something we tend to forget. If a club does not appear on television, it tends to be forgotten. Only a few clubs appear on television, but the majority of them which do not really are the backbone of Rugby League.

Those of us who watch Rugby League matches can say that it is not always the antics on the field that attract us. I myself find it a very interesting occupation to watch the crowds who attend. This sport appeals to both men and women, and to all ages. In an age when so many people are prepared to do nothing but complain that nothing is laid on for them, and perhaps spend their time in vandalism and harming the community, those aspects of our life that help the community should have every assistance.

In that connection I think particularly of sport, and of Rugby League football in particular. Those south of Bawtry do not understand the interest of the game—I am learning. It is not just a question of attending the match and seeing what happens on the field. As in everything else today, people have more time and more money, and want more than just the game. They seek the companionship which it brings, which they find in the various activities before the game starts, during the break in the middle of the game, and afterwards, and particularly in the bars and tearooms. They want the general conviviality.

It costs money, particularly today when standards are rising, to get pleasant surroundings for such conviviality. In the pubs we have got rid of the spit and sawdust conditions—they are now warm, happy places—and the same applies to the bars of our Rugby League clubs. As elsewhere, those attending matches also want places where they can enjoy themselves in a civilised atmosphere. The money needed for all this has to come from the gate receipts. Anything, therefore, that harms the future of our clubs is detrimental to the social life and to the good of the country.

As my hon. Friend the Financial Secretary, a sportsman of considerable renown, is interested in sport and has played a very valued part in our sporting life and appreciates the problems involved, I hope that he will, in particular, view with favour Amendment No. 96.

Mr. Alan Fitch (Wigan)

I appeal to the Chancellor to withdraw value added tax from sport because it will be detrimental to all types of sporting organisations. I represent the constituency of Wigan and, as my hon. Friend the Member for Ince (Mr. McGuire) said, many of his constituents and a great many of mine follow the fortunes of Wigan Rugby League Club. I do not need to sing its praises because most hon. Members already know something about this very famous club. Happily, its finances are pretty good, so I do not plead my case only on financial grounds. But even clubs such as Wigan, St. Helens and Leeds, whose finances are in a reasonably good condition, are suffering from a drop in attendances and the tax will accelerate that process.

The hon. Lady the Member for Keighley (Miss Joan Hall) mentioned the growth of vandalism and hooliganism. I am glad to say that both vandalism and hooliganism, and everything associated with such behaviour, is almost unknown in Rugby League circles, both on the ground and off the ground among the spectators. But it would not be true to say that that is so generally among the community at large. Unfortunately, vandalism and hooliganism and petty crime are increasing. I believe that one of the ways to deal with the situation is to encourage more and more people to take part in sporting activities. I regret very much, therefore, any tax likely to retard such encouragement. I appeal to the Chancellor to think again.

Mr. James Johnson

This is a most important debate. It has taken a significant turn in the last half hour or so. It is one of the most human debates in which I have ever taken part. We are talking about people we know in our pubs, whether in Keighley, or Hull, or Ince, or Wigan or anywhere else. No hon. Member who has spoken will have been closer to his constituents than in this debate. Many of my hon. Friends from Yorkshire and Lancashire, and also the hon. Member for Keighley (Miss Joan Hall), have spoken about the importance of Rugby League in the North of England. I have two Rugby League clubs in Hull, one in West Hull and the other in East Hull. My hon. Friend the Member for Glasgow, Gorbals (Mr. McElhone) spoke of the need to nurture League football in Glasgow, and other hon. Members have referred to soccer as being a way of life. I played for 20 years, and have altogether spent 40 years in the game. But I wish that all games had as much discipline, as much decency and, if I may say so, as much deportment on the field as Rugby League. Sometimes I am ashamed, as an old soccer supporter, when I see many of my people—some of them I know—tugging shirts, checking the referee, and behaving like adolescents, even like school kids, on the field, vet being paid £100 a week or more, while men from the docks and the mines of Yorkshire and Lancashire behave themselves so well on the field.

It is important in the North to keen a game like this going. In our debate on the tax proposed on lifeboats, I, as Member for a deep-sea-fishing constituency, appealed to the Minister of State, because as Member for St. Ives, he has more lifeboats in his constituency than there are in any other constituency—and I succeeded.

I appeal to another Minister who, like myself, has been an athlete. He, like the Minister of State, Treasury, should listen to hon. Members on both sides of the Committee talking about the games they love. Of all people, he is the executioner. In fact, he is worse than that, with his 10 per cent. tax axe upon clubs, and detailed figures have been given by hon. Members.

What is the matter with the Government? My hon. Friend the Member for Birmingham, Small Heath (Mr. Denis Howell) spoke of what lie termed the Minister's misunderstanding of sport such as football, athletics, badminton and basketball. There is no misunderstanding, only disease. Those whom the gods love die young, but those whom the gods wish to destroy they first make mad.

The people on the benches opposite who play games are mad when they talk about taxing clubs for which they once played. I listened to a former noted footballer—the hon. and gallant Member for Carshalton (Captain W. Elliot)—who has played on ten occasions at Twickenham. He showed a paternalistic attitude towards us. He said that football clubs would be delighted to give this money in taxation to his Government. Let him go into any public house in Hull or Wigan and see whether they are delighted to give this money. What nonsense! I have letters from Mr. Fallow-field, Secretary of the Rugby League and from Hull. This tax will add 10 per cent., if not more, to the admission charges.

It is no good saying one thing and thinking another. Such an addition will mean a lot to people earning only £20, or even as little as £15 a week. At the end of the day, if admission charges are raised fewer people will attend. That is what happened in transport when bus fares were raised. People will not go to see the match; they will watch it on television.

The Ministers say that no one is against sport. They say that they all love it. It is like sin; no one is against it. But we all want to expand sport. How will the Government expand it in this way? We have had figures from the Front Bench and from back bench Members about the impact of the tax on sport. The Government are chiselling and chipping away the attendances at matches.

Hull City—our local soccer club—lost just under £60,000 last year. Their gate receipts are just over £200,000, which means that VAT must add another £20,000 to their deficit of £60,000. The two Rugby League sides in Hull are composed of dockers, miners and other manual workers. They play this manly game of Rugby League. It means very much to them as a way of life. Hull Rugby League Club lost over £4,000 in 1967–68. What did they do? They did not start bingo or sweepstakes and the women did not run tea parties. They made extra money by allowing a speedway team to construct a track round the perimeter of their ground, the Boulevard. But who wants to have a speedway track running round a football pitch? My constituents complain about the noise. But some people in Rugby League clubs are forced to invite the speedway, so that they can make a marginal profit.

Hull Kingston Rovers, like Hull Rugby League Football Club, have been to Wembley, just as have St. Helens and Leeds, yet in 1970–71 even Hull Kingston Rovers lost almost £5,000. Last year the total receipts amounted to £25,000, paid by under £100,000 spectators, of which £2,500 will now be taken by VAT. I can only say in the saddest tones I can muster that I wonder how men who have played games can apply an axe of this nature to the games they love so well.

My advice to the Government, as it was to the Treasury Minister last week about lifeboats, is to think again. If they could take off the tax on lifeboats, they can take off a tax on those who watch sport. I advise them to do so.

10.0 p.m.

Mr. Higgins

It may be for the convenience of the Committee if I intervene at this stage. Certainly a great many points of interest have been made by hon. Members of both sides. I should like to express my thanks to the hon. Member for Birmingham, Small Heath (Mr. Denis Howell) for his kind remarks about my athletic past. I think that would be the best way of expressing it. I could not help reflecting that there was probably some difference between our two respective sports. The hon. Gentleman felt it appropriate to blow his whistle at about 45 minutes. I shall seek, as most athletes and I think Ministers do, to cover the ground in the shortest possible time. However, having raised those expectations, I must point out that I have slowed down over the years. I cannot promise to do it in 47 seconds or thereabouts.

I will begin by taking up some of the points which I was seeking to make in interventions in the hon. Gentleman's speech. Although it is not easy to explain or to probe these matters in interventions, the hon. Gentleman seemed to be basing his remarks on a misconception which arose from the idea that the tax was simply a flat 10 per cent. rate on turnover. It is a tax which ultimately falls on consumption. None the less, in computing the tax, as is clear from both the Green Paper and the White Paper, one charges the output tax, but one is allowed to deduct from it the input tax on any particular items which may have arisen.

I was out of the Chamber for only a few minutes in the course of the entire debate. However, I understand that the hon. Member for West Ham. North (Mr. Arthur Lewis) intervened on the matter of programmes. I should make the position clear on that matter. If the programme is produced by the taxable person concerned, the particular sporting club. the amount which is charged for it will appear as output tax, but the amount paid in input tax would probably be deductible. Taking all the various operations which a particular club is engaged in, one needs to total the amount of the output tax which will be at 10 per cent., but one will be able to deduct the input tax on the various items which make up the entire operation. That is the case with transfer fees where the normal operation of the VAT credit mechanism will pass forward in this as in many other cases with which we have been dealing.

Mr. Dalyell rose—

Mr. Higgins

s: I have spelt it out at some length. The hon. Member for West Lothian (Mr. Dalyell), who has been present throughout all our debates, will be familiar with this situation. I think it is quite clear to those hon. Members who have been here over the last three or four days of our debates.

Mr. Dalyell rose—

Mr. Higgins

I turn to the points made by the hon. Member for Small Heath. First, he emphasised at some length that in his view and that of some of those persons who have written to him this is a reintroduction of the entertainment tax. I will make two points on that matter. The first I have made on a number of previous occasions in the debates we have had on the Finance Bill this year. Value added tax is by its nature a comprehensive tax. We are not reintroducing an entertainment tax which discriminates against a particular form of consumption, namely, expenditure on entertainment.

It is a broadly based tax and there is not a case in this instance, as in some others, for giving particular preferential treatment and excluding it from the broad base of the tax. One of the letters quoted by the hon. Gentleman said this would take us back to where we were with entertainments tax. As I understand it, the level of entertainments tax was a good deal higher than the kind of figure about which we are talking and it was not possible to deduct the input tax paid by the trader at earlier stages.

It is important—and this point has been running through much of our debate this evening—to distinguish between the tax on participating sports and the tax on what the Americans call spectator sports.

In this connection perhaps I might take up the point which the hon. Gentleman made about my sport, athletics. The hon. Gentleman referred to the burden which would be likely to fall on athletics and he said that on last year's figures there would be a tax due of £900. I want to emphasise the point which I sought to make in my first intervention in his speech, which is that this Government have substantially reduced the tax on sports equipment. We reduced the tax from 36⅔ per cent. to 30 per cent. in July, 1971, and to 25 per cent, in this year's Budget, which is the equivalent of 16⅔ per cent. of VAT, which is a retail sales tax as my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) said. That being so, we have significantly reduced by a number of stages the level of tax which is applied to sports equipment. That is significant.

Mr. Denis Howell

The hon. Gentleman is on a false point both on his input argument and on his argument about purchase tax on equipment, because the governing bodies of both swimming and boxing do not buy any equipment and therefore do not pay purchase tax. They do not have that sum to offset. For swimming, the purchase tax is paid by the individual swimmer who buys his swimming trunks. The same is true of athletics. The sum of 900 is purely gate money. The Minister ought to know that the governing body of athletics buys no equipment and pays no purchase tax, and therefore has nothing to offset.

Sir G. Nabarro

I wonder whether, in reply to that intervention, my hon. Friend would care to make the point that swimming depends on swimming pools, and that every swimming pool attracts large sums of SET, which is being abolished?

Mr. Higgins

I think that one would need to look at the position of individual sports. It is the case that in some instances there will be a substantial amount of input tax to deduct, while in others the sum will not be significant. The point that I am seeking to make—and it is important—is that the Government's proposals for the reform of indirect taxation must be looked at as a whole. We are introducing VAT, and abolishing purchase tax and SET.

The point made a moment ago by my hon. Friend the Member for Worcestershire, South is important. The fact that we are reducing the tax on sports equipment is also something which one would need to take into account in evaluating the overall effect of the proposals in the Bill. If the hon. Gentleman cares to do the arithmetic—I did a few calculations myself on the basis of my own experience of buying athletic shoes, and so on—allowing for the reductions in purchase tax to which I have referred and comparing the two systems of taxation—one under his Government, and one as it will be under VAT—he will find that the sums of money involved for the sport as a whole, participants as well as governing body, will set up a balance sheet which is not at all unfavourable.

I do not for one moment deny—indeed, this is apparent—that the imposition of VAT will fall on a number of sporting bodies and clubs. This is because VAT, although computed in the way I have described, is a tax on final consumption, and it seems to the Government right that those who attend sporting events and pay for their admission charges should be included in the scope of VAT.

I say that because this is a comprehensive tax. For example, the hon. Member for Birmingham, All Saints said that it was a tax on entertainment. Another hon. Member said that we were taxing a social activity. This is all true. If, however, we are to have a broadly based tax at a low level, which is what we propose, it is important not to introduce anomalies, which means that the tax should be as broadly based as possible.

It has been suggested that the Government are not acting in a way consistent with the importance they attach to sport. It is important in this context to consider not only the question of the imposition of a broadly based tax but also the assistance which the Government give more generally to sport. This aspect arose in our debate the other night on the theatre, when it was suggested that it was illogical on the one hand to tax something and on the other to give Government assistance to it. I shall come to this subject later.

It is worth while emphasising what the Minister responsible for sport pointed out on 15th July last when he said that the Government had done a great deal to help sport. The Sports Council grant has been virtually doubled. We are freeing local authorities to use their locally determined schemes for investment in local sport, all proving that the Government are making a major contribution in this sphere. There has also been help in terms of infrastructure aid. These are important incentives for the development of sport.

It is vital for the Committee to remember the importance of this tax falling on a broad base, and the reason is straight forward. If one seeks to give relief both by direct Government help and by discrimination within the tax system, one creates a great many anomalies. One must work in a flexible way and the system of grants enables us to operate in a way which directs help to where it is most required.

There is a basic difference of view here, but there is no illogicality in what the Government are doing. By including the item within a broad base for tax purposes and giving help on a massive scale to the sports concerned—

Mr. Denis Howell rose—

Mr. Higgins

I trust that the hon. Gentlemen will allow me to proceed for a short while without interruption.

Mr. Denis Howell

I must point out two aspects to the hon. Gentleman before he continues. We cannot argue the whole question of the finance of sporting activities at this stage. While it is true that an increased grant will be available, whereas the expenditure of the Sports Council in terms of administering the grant was previously met by the Council it must now be met out of the grant, which means that the net increase is not as great as the hon. Gentleman would have us believe. Although the Minister talks of help to sports clubs, it is a matter of considerable regret that for the first time voluntary sports clubs are not to receive Government grants.

10.15 p.m.

Mr. Higgins

There is no question that the Government cannot stand on their record, compared with the performance when the hon. Member for Small Heath occupied the position which my hon. Friend the Minister responsible for sport now occupies.

But I want to express a view on the various points raised about attendances. One needs to look at other factors besides taxation, as my hon. Friend the Member for Enfield, West (Mr. Parkinson) said. In looking at the decline which has been taking place very often in attendances, undoubtedly the effect of television has been very considerable. Certainly attendances at White City are not at the level at which they were perhaps 15 or 20 years ago. The same is true for a great many other sports.

[Mrs. JOYCE BUTLER in the Chair]

When one considers the impact of this tax on attendances at sports meetings, one must also look at the other measures we have taken in the Budget. For example, the fact that those paying income tax will be £1 a week better Off—[HON. MEMBERS: "Oh."] It is therefore likely that we shall see more money spent on attendances. One also needs to look at the fact that the tax is not regressive. That being so, less tax will be charged on certain essential items—food, for example and—therefore people will have a very considerable amount as a result of that which may be redistributed in this direction. But it would be a mistake in my view to distort the working of tax in such a way as to create a great many anomalies. It is right and proper that a tax at the level we have proposed should fall on this range as it falls on a broad range of other items.

Mr. Denis Healey (Leeds, East)

My hon. Friend the Member for Birmingham, All Saints (Mr. Brian Walden) will be dealing with the bulk of the hon. Gentleman's argument shortly. But is the hon. Gentleman saying that he is still taking credit for this 1 that the Chancellor is said to have given away, when there was a 12 per cent. rise in food prices last year, largely created by deliberate policy actions of the Government, when we are expecting this year an 11 per cent. rise in rates, a possible doubling of council house rents and a whole range of new imposts as a direct result of government policy? On top of that, is the hon. Gentleman proposing to get increased charges for sports out of the same pound note?

Mr. Higgins

That was not a very illuminating intervention because one needs also to take into account the fact that the VAT is not regressive. Therefore, it is right that we should include this in the scope of the tax sand it is an imposition which can be carried by the sports concerned.

One final point, not even referred to by the hon. Member for Birmingham, Small Heath, though his hon. Friend the Member for Newport (Mr. Roy Hughes) referred to it, as did the hon. Member for Gloucester—

Mr. Loughlin

Gloucestershire, West.

Mr. Higgins

That was in regard to the position of the small trader relief. Many sporting clubs will fall within the scope of the relief my right hon. Friend proposes should be given to those with a taxable income of less than £5,000. This will give relief for many of the smaller clubs which will, consequently, not be subject to VAT.

If one takes the overall effect of our proposals, I have no doubt that it is right to reject the Amendments. It is right that such a tax, which is designed to cover a wide range of consumer expenditure, as was pointed out by my hon. and gallant Friend the Member for Carshalton (Captain W. Elliot), my hon. Friend the Member for Basingstoke (Mr. David Mitchell) and others, should be a comprehensive tax. If it is not, we shall find that it is necessary to raise the standard rate. On that basis, I invite the Committee to reject the Amendments.

Mr. Arthur Lewis

The Minister has given a very disappointing reply. I join those of my hon. Friends who have supported soccer, Rugby League, cricket and other sports. Everyone who has spoken so far has been asked to support his own club. I have been asked by Bobby Moore to say that all the England footballers are annoyed with the Government. I said to Bobby Moore, "You put them in. You will have to get them out". However, it was not the soccer supporters who put the Government in.

I speak on this matter with a clear conscience. Some of my hon. Friends have been offside during this game, because many of those who have opposed the VAT voted for entry into the European Economic Community. We all know that the tax is tied up with the question of the Common Market. The Minister has proclaimed loudly that the tax will be at a nominal 10 per cent. He and I know that all the EEC countries, with the exception of Italy, operate this tax on all forms of entertainment.

If, as may well be the case, on our entering the Common Market the Council of Ministers accepts the Commission's advice to harmonise the tax, not at 10 per cent., but at 17 per cent. or at 20 per cent., and if the Council of Ministers reaches an agreement, would not the House of Commons have to accept it without any possibility of amendment? If I am right about that, I warn my hon. Friends who voted for Britain's entry into Europe, that this 10 per cent. tax could well be 15 per cent. or 17 per cent., as it is in some EEC countries.

This evening my hon. Friend the Member for Durham, North-West (Mr. Armstrong) and I should have been attending a boxing dinner at the World Sporting Club, but we have put our duties here first. The Minister probably did not understand the point I made in my intervention. My good friend Jack Solomons is running the affair this evening. Harry Levine organises events at the Empire Pool. The Empire Pool is let to Harry Levine at a certain charge. If the Wembley authorities have to increase the charge because they must pay VAT, ipso facto Harry Levine must increase his charges and he will have to charge more in admission prices.

Whatever our views, and whatever the nature of our support for sports, everyone knows that unfortunately Britain is falling down on the aid and support it gives to sporting activities compared with Iron Curtain countries. The Iron Curtain countries pour a great deal of money into their sporting activities but here we try everything we can to damp them down, and in so doing we are harming the prestige of British sport and we are harming our national activities. I ask the Minister to bear this in mind because the people of this country are very disappointed with the Government's attitude about sport and this tax.

Sir Harry Legge-Bourke (Isle of Ely)

The hon. Member for West Ham, North (Mr. Arthur Lewis) mentioned boxing. I cannot help being reminded of the first British heavyweight champion I ever knew, who was called Phil Scott. He had a habit of saying publicly, "I will now regain my former position". This he invariably did by landing flat on his back in about two rounds. When I listen to hon. Members of the Opposition talking about this matter I cannot help feeling that they are flat on their backs when it comes to facing up to arguments.

Whenever they have been in Government they have invariably tended to increase taxation. They took pride in doing so. The Government have reduced taxation in two years by more than it has ever been reduced before. I should have thought that every form of professional sport must tend to benefit by lower taxes increasing the public's purchasing power. The less the Government take in taxation——

Mr. Arthur Lewis

Tell the railwaymen!

Sir H. Legge-Bourke

I thought for a moment we were talking about sport, but I will deal with the railwaymen if the hon. Gentleman wishes. I should have thought it was in the interests of sport that the maximum amount of purchasing power should be left in the hands of the public so that they could choose to see sport as I hope more of them will instead of watching it on television as I have to do. If I have to watch it on television I would sooner listen to Eddie Waring talking about Rugby League than to some of the commentators on soccer.

Perhaps this is a bad Monday to raise this matter because I do not think the reputation of British soccer is particularly high after what happened on Saturday afternoon which did neither Germany nor England very much good because of the way the game was so unsporting and fought to a draw. It must be in the interests of sport to keep taxation as low as possible.

Mr. Lewis

Tell the railwaymen!

Sir H. Legge-Bourke

If the hon. Member for East Ham, or North Ham, or South Ham must make remarks from a sitting position——

Mr. Arthur Lewis

I was saying that the hon. Gentleman was probably right but thousands of railwaymen do not pay tax. How can they save tax when they earn £;17 a week?

Sir H. Legge-Bourke

The hon. Member has picked a bad example. I have several hundred railwaymen in my constituency and I know that many of them pay tax. They resent it bitterly, I do not blame them. But they have to pay far more when the Socialists are in power than when we are in power. Those people who are interested in sport have to choose whether they would sooner have taxation as low as possible or have a form of taxation which is expensive to administer.

The whole principle underlying the imposition of VAT is that it simplifies the form of tax collection, it is kept as low as possible and as a result the total amount taken from our people is lower than it could be if a Socialist Government were in power. I do not doubt for a moment the sincerity of hon. Members opposite when they talk about their interest in sport. If only they thought for two minutes they would realise that their policies have tended to increase taxation while the present Government's policies have reduced taxation and it must be in the interests of all forms of sport to see that taxation is kept as low as possible. For that reason I hope that my hon. and right hon. Friends will resist this Amendment.

10.30 p.m.

Mr. John D. Grant (Islington, East)

Unlike many hon. Members who have spoken I have been here throughout the debate. I am conscious of the desire of many of them to get away to their various sporting activities so I will be brief.

My hon. Friend the Member for West Lothian (Mr. Dalyell) mentioned my constituency interest in that I have in my constituency the club with the best record in British football, Arsenal. I do not want to weary hon. Members with the number of cups and medals they have won, but I want to pass on a problem raised with me by the secretary of that club, one of the most respected administrators in the game.

It is a question raised briefly by my hon. Friend the Member for Birmingham, Small Heath (Mr. Denis Howell), namely the extraordinary administrative muddle that seems likely to be caused by the 10 per cent. figure. I wrote to the Chancellor about this on 10th April and explained to him the dilemma posed over admission prices. If the price is 30p and 10 per cent. is added, it will make it 33p, which will present difficulties at the turnstile in accepting money and giving change. If the Government had a view on this—they have had a long time to think about it—perhaps the Financial Secretary would like to intervene and tell me what it is. I will gladly give way.

Obviously he does not want to do so and presumably he has not got an answer. It may be that clubs will feel obliged to round up their admission charges to 50p or even £1. Football is an integral part of the lives of many people and this will be a most inflationary move. It is no good the Financial Secretary talking about the 1 he saves putting everything right. That I seems to have been designed to cover every sort of increase.

I had intended to deal with the question of the effect on leisure-time facilities generally, which will be damaged by the Bill, but in view of the hour I will not do so.

The Chancellor sems to be turning back the stopwatch considerably and nothing we have heard from the Financial Secretary can give us any reassurance. I do not think that the Chancellor has any personal interest in sport but it seems as if he is about to achieve a remarkable sporting treble—he has probably hit his own wicket, kicked the ball into his own net and he might become known as Britain's best-known horizontal lightweight.

Mr. Joseph Ashton (Bassetlaw)

I shall not waste time by cheering for a particular team.

The Minister hardly mentioned the question of tax avoidance or evasion or implementation of the value added tax and the way in which it may affect football, as it has in the Common Market countries. The Minister seemed to assume that practically 95 per cent. of the income of a football club came through the turnstiles. He did not seem to be aware that in many football clubs there is a club producing income to run the football club—in other words, there is a supporters' club which may have a turnover of £ £15,000, £20,000 or £30,000 a year. It could run dances on which it might have to reclaim V.A.T. and then hand over the money to the parent club. There is then an anomaly. The parent club can claim back the tax which the supporters' club has paid. For instance, Sheffield Wednesday has a restaurant and a night club. The restaurant sells hot dinners on the match days. It has a supporters' club which runs dances to raise funds for the parent club.

There are many aspects of this matter which the Minister has failed to recognise and which could lead to loopholes through which the tax could be avoided. I understand that £4 million goes from football into the Exchequer. It is probably the first time that the Government have taken as much as this off the top of the game.

In Italy there has been a great deal of patronage in sport. The big football clubs there have been subsidised to a tremendous extent by firms such as Fiat and Olivetti. Denis Law went to play for an Italian football club and discovered that, although his wages came from the club, the flat in which he lived belonged to a prominent industrialist in the town and another prominent industrialist provided him with a motor car for his own use. Another industrialist might give something as a gift to the club so that it did not receive income on which it had to pay tax. Patronage and sponsorship have come into the game to a substantial extent. Not just 2 per cent. or 3 per cent. but often as much as 25 per cent. of a club's income may come in the form of gifts.

In the past, supporters have provided the resources for building a stand. In future will a supporters' club buy a player and give him to the club and pay his wages? Small clubs such as Workshop and Retford, in order to avoid the £5,000 limit, take a blanket round the ground and people put money in it instead of charging for admission at the gate. How would the income be assessed in these cases? Suppose the club donated blocks of free tickets to schools to encourage school children to go to a match. How would that be assessed?

I am convinced that, once this tax is in operation, we shall see a dramatic extension of sponsorship, tax fiddling, tax evasion and marginal tax avoidance. I wish that the Minister had spoken after my speech so that he could have replied to my points.

Mr. Brian Walden

I am sure that it is your wish, Mrs. Butler, and that of the Committee that I be brief. Therefore, I greatly regret having to put a point of order to you. It is apparent to the Chair, is it, that the Opposition will wish to press not only Amendment No. 32 but Amendment No. 53 to a Division?

The Temporary Chairman

I understand that the Chairman of Ways and Means has agreed that there should be a separate Division on Amendment No. 53 when we reach it on the Notice Paper.

Mr. Walden

Thank you very much, Mrs. Butler.

I will try, as I say, to be brief despite the fact that it has been a long debate and a great many points have been raised, and the fact that there were some fairly long speeches from the Front Benches. For once I do not want to emulate them.

It must be apparent to all reasonable people in the Committee, and I take them to be the whole Committee, that what is happening here is a kind of legerdemain: when a point has been made it is denounced by the making of another point. When one says that this is a sort of entertainments tax the hon. Member for Worthing (Mr. Higgins) says, "It cannot be, because everything else is being taxed as well". If anyone says it is not an entertainments tax because it does not fall on all entertainments—and that is true—and it is suggested that all may be zero rated, then the hon. Member for Worthing says, "That just shows the danger of making exemptions, and we must know where we are". When anyone says that this will be imposed on football clubs, to take one example, since that relates to Amendment No. 53, on which we shall vote tomorrow, then hon. Members opposite say that it will be more than offset by the removal of purchase tax and selective employment tax. It is like trying to nail red currant jelly to a wall: one never knows what exactly one has got hold of.

I do not want to detain the Committee by taking time to rebut all the points, but I want to knock very firmly on the head the argument put several times that what is being put on admission charges of football clubs is substantially less than purchase tax and selective employment tax. It is not. It is a massively greater imposte, and I have figures to demonstrate that.

Nottingham Forest Football Club in 1970–71 paid in SET £6,326 and in purchase tax £555; it paid a total of £6,881. It took in gross receipts at the gate £166,350. I have figures which I will gladly give the Financial Secretary, and which I could quote, from Swindon, Bolton and Gillingham. I have clubs from different divisions. They all reveal the same picture—that the VAT charge on admissions will be double SET and purchase tax. One of my hon. Friends is saying that in one case it will he four times as much.

It is absurd to talk about there being some sort of rebate through the buying of jerseys and boots and socks. The clubs do not depend on that kind of thing. They depend on the money they get at the gates.

The Government would be right if there were no elasticity in demand, and if this 10 per cent. on admission charges were put on the same number of people, but there will be a smaller number. The final consumer is to pay another 10 per cent. There will not be the same number of customers. The hon. Member for Basingstoke (Mr. David Mitchell), normally an exceedingly staunch supporter of the Government, said that it does not matter because everything else would similarly bear the burden in the entertainment world. He was quite wrong. The person who watches games on the television will not pay the tax. Hon. Gentlemen opposite frequently tell us on these benches that if a commodity for which demand is elastic has to bear increased prices the same number of purchasers must not be expected, and there will not be the same revenue. Whatever the Treasury may think of that, soccer and rugby clubs depend absolutely on what they take at the gates.

10.45 p.m.

Does the Minister know that of the 92 clubs in the Football League only 12 make a profit? Those 12 cannot exist in a 12-club league. They depend on the other 80 not simply for playing fixtures—because there are four divisions—but for buying players and developing the nature of the game. Without transfer fees clubs in the lower division could not exist; they exist only by selling players. The Minister says that there will be no VAT on transfer fees, but there will be VAT on admission charges and—to be frank and even brutal—nothing would drag me to see clubs like Darlington anyway, and if I had to pay another 10 per cent. I would not go at all.

With all due respect to the inhabitants of Darlington, Doncaster and Altrincham, nothing would persuade me to go to their matches. Third and fourth division clubs are not particularly attractive anyway and with more and more media coverage of sport we shall not be able to put up admission prices and the blow will fall on the clubs. The Minister and the Treasury Bench are wrong to say that this is a minor matter of no great consequence. It will have a serious effect, particularly on professional sport. As the hon. and gallant Member for Carshalton (Capt. W. Elliot) said, it may be that there are groups of sturdy amateurs who will happily cough up another 10 per cent. for the Government because they think they will be helping England——

Captain W. Elliot

The hon. Member is misquoting me. I did not say anything of the sort. I said that the drop in attendance at sporting functions was often for other than financial reasons.

Mr. Walden

Of course, but what difference does that make to the argument? Let us suppose that soccer is not attractive to watch; why should we expect to get more people to watch it by sticking another 10 per cent. on the gate? I do not see the logic of the argument.

Captain W. Elliot

If admission were free for some soccer teams, that would not raise the attendance.

Mr. Walden

That may be so, but we have to face the present situation, as every rational Conservative should know. It may be that cricket is a boring game as now played; it may be that soccer is no longer played attractively; boxing may not be what it was; we may have a heavyweight boxing champion even worse than Phil Scott. But we have to face the present situation, and no one can suppose that it will be improved by making it more difficult for spectators to watch.

Captain W. Elliot rose—

Mr. Walden

Not again, as I am trying to wind up the debate and I want to make one or two other points.

It is completely false to say that purchase tax will be offset. In sports such as boxing, swimming and athletics the governing bodies do not provide the equipment from the gate money. The players themselves provide it, so there will not be an offset in that respect. The Minister said that the effect of VAT will be considerable, but I do not think he has thought how considerable it will be. He said that those paying income tax were I a week better off and could afford to pay more at the gate. I want to know just how much further this £1 a week is to be bent. Every time we

speak of a rent increase, they say that we are a £ a week better off. Every time we refer to a rates increase, we are told that we can pay it out of that 1 a week. Now it seems that people will have to go to watch Derby County and Arsenal out of that famous £1 a week—which, as the hon. Gentleman well knows, will be markedly eroded before ever the next football season starts.

The hon. Gentleman then said that the relief to small traders would affect many clubs, but he has not thought it through, and the Government have not thought it through on sport at all. Many of the small clubs are in any case terrified to put up their admission charges because to do so will put them over the £5,000 turnover rate and they will then be liable for VAT. That turnover concession is not very much after all—it is on turnover, not on profits. It is marginal, and many clubs are just about at that level and dying to claim the exemption. They cannot afford to put up admission charges because they cannot afford VAT, but they will have to raise them in any case because of the general rise in prices.

I could say a good deal more, but the House would not wish me to do so. I could deal with a number of other points, but I do not need to do so. I am sure that I have already said enough to convince my right hon. and hon. Friends that on this Amendment, as on so many other Amendments, they can do no better for the activity concerned, in this case, for me, professional sport—although we are concerned with sport in general—than to vote against what is a monumentally ill-thought-out tax.

Question put, That the Amendment be made:—

The Committee divided: Ayes 232, Noes 255.

Division No. 180.]	AYES	[10.52 p.m.
Abse, Leo	Blenkinsop, Arthur	Cocks, Michael (Bristol, S.)
Albu, Austen	Boardman, H. (Leigh)	Concannon, J. D.
Archer, Peter {Rowley Regis)	Booth, Albert	Corbet, Mrs. Freda
Armstrong, Ernest	Broughton, Sir Alfred	Cox, Thomas (Wandsworth, C.)
Ashley, Jack	Brown, Bob (N'c'tle-upon-Tyne, W.)	Cronin, John
Ashton, Joe	Brown, Hugh D. (G'gow, Provan)	Crosland, Rt. Hn. Anthony
Atkinson, Norman	Brown, Ronald (Shoreditch & F'bury)	Crossman, Rt. Hn. Richard
Bagier, Gordon A. T.	Buchan, Norman	Cunningham, G. (Islington, S. W.)
Barnes, Michael	Buchanan, Richard (G'gow, Sp'burn)	Cunningham, Dr. J. A. (Whitehaven)
Barnett, Joel (Heywood and Royton)	Callaghan, Rt. Hn. James	Dalyell, Tam
Baxter, William	Campbell, I. (Dunbartonshire, W.)	Davies, Denzil (Llanelly)
Benn, Rt. Hn. Anthony Wedgwood	Cant, R. B.	Davies, Ifor (Gower)
Bennett, James (Glasgow, Bridgeton)	Carter, Ray (Birmingh'm, Northfield)	Davis, Clinton (Hackney, C.)
Bidwell, Sydney	Carter-Jones, Lewis (Eccles)	Davis, Terry (Bromsgrove)
Bishop, E. S.	Castle, Rt. Hn. Barbara	Deakins, Eric
de Freitas, Rt. Hn. Sir Geoffrey	Kaufman, Gerald	Pentland, Norman
Dell, Rt. Hn. Edmund	Kelley, Richard	Perry, Ernest G.
Dempsey, James	Kerr, Russell	Prentice, Rt. Hn. Reg.
Doig, Peter	Kinnock, Neil	Prescott, John
Dormand, J. D.	Lambie, David	Price, J. T. (Westhoughton)
Douglas, Dick (Stirlingshire, E.)	Lamborn, Harry	Price, William (Rugby)
Duffy, A. E. P.	Lamond, James	Probert, Arthur
Dunnett, Jack	Latham, Arthur	Reed, D. (Sedgefield)
Eadie, Alex	Lawson, George	Rees, Merlyn (Leeds, S.)
Edelman, Maurice	Leadbitter, Ted	Rhodes, Geoffrey
Edwards, William (Merioneth)	Lee, Rt. Hn. Frederick	Richard, Ivor
Ellis, Tom	Leonard, Dick	Roberts, Albert (Normanton)
English, Michael	Lestor, Miss Joan	Robertson, John (Paisley)
Ewing, Harry	Lever, Rt. Hn. Harold	Roper, John
Faulds, Andrew	Lewis, Arthur (W. Ham, N.)	Rose, Paul B.
Fitch, Alan (Wigan)	Lipton, Marcus	Ross, Rt. Hn. William (Kilmarnock)
Fletcher, Ted (Darlington)	Lomas, Kenneth	Rowlands, Ted
Foley, Maurice	Loughlin, Charles	Sandelson, Neville
Foot, Michael	Lyon, Alexander W. (York)	Sheldon, Robert (Ashton-under-Lyne)
Ford, Ben	Lyons, Edward (Bradford, E.)	Shore, Rt. Hn. Peter (Stepney)
Foster, Sir John	Mabon, Dr. J. Dickson	Short, Rt. Hn. Edward (N'c'tle-u-Tyne)
Fraser, John (Norwood)	McBride, Neil	Short, Mrs. Renée (Whampton. N.E.)
Freeson, Reginald	McCartney, Hugh	Silkin, Hn. S. C. (Dulwich)
Galpern, Sir Myer	McElhone, Frank	Sillars, James
Garrett, W. E.	McGuire, Michael	Silverman, Julius
Gilbert, Dr. John	Mackenzie, Gregor	Skinner, Dennis
Ginsburg, David (Dewsbury)	Mackie, John	Smith, John (Lanarkshire, N.)
Golding, John	Mackintosh, John P.	Spearing, Nigel
Gourlay, Harry	Maclennan, Robert	Spriggs, Leslie
Grant, George (Morpeth)	McMillan, Tom (Glasgow, C.)	Stallard, A. W.
Grant, John D. (Islington, E.)	McNamara, J. Kevin	Stoddart, David (Swindon)
Griffiths, Eddie (Brightside)	Mahon, Simon (Bootle)	Stonehouse, Rt. Hn. John
Griffiths, Will (Exchange)	Mallalieu, J. p. W. (Huddersfield, E.)	Strang, Gavin
Grimond, Rt. Hn. J.	Marks, Kenneth	Summerskill, Hn. Dr. Shirley
Hamilton, James (Bothwell)	Marsden, F.	Swain, Thomas
Hamilton, William (Fife, W.)	Marshall, Dr. Edmund	Thomas, Rt. Hn. George (Cardiff, W.)
Hamling, William	Mason, Rt. Hn. Roy	Thomson, Rt. Hn. G. (Dundee, E.)
Hannan, William (G'gow, Maryhill)	Mayhew, Christopher	Tinn, James
Harper, Joseph	Meacher, Michael	Torney, Tom
Harrison, Walter (Wakefield)	Mellish, Rt. Hn. Robert	Tuck, Raphael
Hart, Rt. Hn. Judith	Mendelson, John	Urwin, T. W.
Hattersley, Roy	Mikardo, Ian	Varley, Eric G.
Healey, Rt. Hn. Denis	Millan, Bruce	Walden, Brian (B'm'ham, All Saints)
Heffer, Eric S.	Miller, Dr. M. S.	Walker, Harold (Doncaster)
Hooson, Emlyn	Milne, Edward	Wallace, George
Horam, John	Mitchell, R. C. (S'hampton, ltchen)	Watkins, David
Houghton, Rt. Hn. Douglas	Morris, Alfred (Wythenshawe)	Weitzman, David
Howell, Denis (Small Heath)	Morris, Charles R. (Openshaw)	Wells, William (Walsall, N.)
Huckfield, Leslie	Morris, Rt. Hn. John (Aberavon)	White, James (Glasgow, Pollok)
Hughes, Rt. Hn. Cledwyn (Anglesey)	Moyle, Roland	Whitehead, Phillip
Hughes, Mark (Durham)	Mulley, Rt. Hn. Frederick	Whitlock, William
Hughes, Robert (Aberdeen, N.)	Murray, Ronald King	Willey, Rt. Hn. Frederick
Hughes, Roy (Newport)	Oakes, Gordon	Williams, Alan (Swansea, W.)
Hunter, Adam	Ogden, Eric	Williams, Mrs. Shirley (Hitchin)
Irvine,Rt.Hn.SirArthur(Edge Hill)	O'Halloran, Michael	Williams, W. T. (Warrington)
Janner, Greville	Orbach, Maurice	Wilson, Alexander (Hamilton)
Jay, Rt. Hn. Douglas	Orme, Stanley	Wilson, Rt. Hn. Harold (Huyton)
Jenkins, Hugh (Putney)	Oswald, Thomas	Wilson, William (Coventry, S.)
Jenkins, Rt. Hn. Roy (Stechford)	Paget, R. T.	Woof, Robert
John, Brynmor	Palmer, Arthur
Johnson, James (K'ston-on-Hull, W.)	Pannell, Rt. Hn. Charles	TELLERS FOR THE AYES:
Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)	Parry, Robert (Liverpool, Exchange)	Mr. James Wellbeloved and
Jones, Gwynoro (Carmarthen)	Pavitt, Laurie	Mr. James A. Dunn.
Jones, T. Alec (Rhondda, W.)	Pendry, Tom
NOES
Adley, Robert	Body, Richard	Carr, Rt. Hn. Robert
Alison, Michael (Barkston Ash)	Boscawen, Robert	Cary, Sir Robert
Allason, James (Hemel Hempstead)	Bossom, Sir Cilve	Channon, Paul
Amery, Rt. Hn. Julian	Bowden, Andrew	Chapman, Sydney
Archer, Jeffrey (Louth)	Braine, Bernard	Chataway, Rt. Hn. Christopher
Astor, John	Bray, Ronald	Churchill, W. S.
Atkins, Humphrey	Brewis, John	Clark, William (Surrey, E.)
Awdry, Daniel	Brinton, Sir Tatton	Clegg, Walter
Baker, Kenneth (St. Marylebone)	Brocklebank-Fowler, Christopher	Cooke, Robert
Baker, W. H. K. (Banff)	Brown, Sir Edward (Bath)	Cooper, A. E.
Barber, Rt. Hn. Anthony	Bruce-Gardyne, J.	Cordle, John
Beamish, Col. Sir Tufton	Bryan, Paul	Corfield, Rt. Hn. Frederick
Bell, Ronald	Buchanan-Smith, Alick (Angus, N&M)	Cormack, Patrick
Bennett, Dr. Reginald (Gosporl)	Buck, Antony	Costain, A. p.
Berry, Hn. Anthony	Bullus, Sir Eric	Crouch, David
Blaker, Peter	Burden, F. A.	Crowder, F. P.
Boardman, Tom (Leicester, S.W.)	Butler, Adam (Bosworth)	Davies, Rt. Hn. John (Knutsford)

Deedes, Rt. Hn. W. F.	King, Evelyn (Dorset, S.)	Quennell, Miss J. M.
Dixon, Piers	King, Tom (Bridgwater)	Raison, Timothy
Drayson, G. B.	Kinsey, J. R.	Rawlinson, Rt. Hn. Sir Peter
du Cann, Rt. Hn. Edward	Kirk, Peter	Redmond, Robert
Dykes, Hugh	Kitson, Timothy	Reed, Laurance (Bolton, E.)
Eden, Sir John	Knight, Mrs. Jill	Rees, Peter (Dover)
Edwards, Nicholas (Pembroke)	Knox, David	Rees-Davies, W. R.
Elliot, Capt. Walter (Carshalton)	Lambton, Antony	Renton, Rt. Hn. Sir David
Elliott, R. W. (N'c'tle-upon-Tyne, N.)	Lamont, Norman	Ridley, Hn. Nicholas
Emery, Peter	Lane, David	Ridsdale, Julian
Eyre, Reginald	Langford-Holt, Sir John	Rippon, Rt. Hn. Geoffrey
Farr, John	Legge-Bourke, Sir Harry	Roberts, Wyn (Conway)
Fell, Anthony	Le Marchant, Spencer	Rost, Peter
Fenner, Mrs. Peggy	Lewis, Kenneth (Rutland)	Russell, Sir Ronald
Fidler, Michael	Longden, Gilbert	Scott, Nicholas
Fisher, Nigel (Surbiton)	Loveridge, John	Sharples, Richard
Fletcher-Cooke, Charles	Luce, R. N.	Shaw, Michael (Sc'b'gh & Whitby)
Fookes, Miss Janet	MacArthur, Ian	Shelton, William (Clapham)
Fortescue, Tim	McGrindle, R. A.	Simeons, Charles
Foster, Sir John	McLaren, Martin	Sinclair, Sir George
Fowler, Norman	Maclean, Sir Fitzroy	Skeet, T. H. H.
Fox, Marcus	Macmillian, Maurice (Farnham)	Smith, Dudley (W'wick & L'mington)
Fraser, Rt. Hn. Hugh (St'fford & Stone)	McNair-Wilson, Michael	Soref, Harold
Galbraith, Hn. T. G.	McNair-Wilson, Patrick (New Forest)	Speed, Keith
Gardner, Edward	Maddan, Martin	Spence, john
Gibson-Watt, David	Madel, David	Sproat, Iain
Gilmour, Ian (Norfolk, C.)	Marples, Rt. Hn. Ernest	Stainton, Keith
Gilmour, Sir John (Fife, E.)	Marten, Neil	Stanbrook, Ivor
Godber, Rt. Hn. J. B.	Mather, Carol	Stewart-Smith, Geoffrey (Belper)
Goodhart, Philip	Maude, Angus	Stoddart-Scott, Col. Sir M.
Goodhew, Victor	Maudling, Rt. Hn. Reginald	Stokes, John
Gorst, John	Mawby, Ray	Stuttaford, Dr. Tom
Gower, Raymond	Maxwell-Hyslop, R. J.	Sutcliffe, John
Grant, Anthony (Harrow, C.)	Meyer, Sir Anthony	Tapsell, Peter
Gray, Hamish	Mills, Peter (Torrington)	Taylor, Sir Charles (Eastbourne)
Green, Alan	Miscampbell, Norman	Taylor, Edward M. (G'gow, Cathcart)
Griffiths, Eldon (Bury St. Edmunds)	Mitchell, Lt.-Col. C. (Aberdeenshire, W.)	Taylor, Frank (Moss Side)
Grylls, Michael	Mitchell, David (Basingstoke)	Tebbit, Norman
Gummer, J. Selwyn	Moate, Roger	Temple, John M.
Hall, Miss Joan (Keighley)	Money, Ernle	Thatcher, Rt. Hn. Mrs. Margaret
Hall, John (Wycombe)	Monro, Hector	Thomas, John Stradling (Monmouth)
Hall-Davies, A. G. F.	Montgomery, Fergus	Thomas, Rt. Hn. Peter (Hendon, S.)
Hamilton, Michael (Salisbury)	More, Jasper	Thompson, Sir Richard (Croydon, s.)
Hannam, John (Exeter)	Morgan, Geraint (Denbigh)	Trafford, Dr. Anthony
Harrison, Brian (Maldon)	Morgan-Giles, Rear-Adm.	Trew, Peter
Haselhurst, Alan	Morrison, Charles	Tugendhat, Christopher
Hastings, Stephen	Mudd, David	Turton, Rt. Hn. Sir Robin
Havers, Michael	Murton, Oscar	van Straubenzee, W. R.
Hayhoe, Barney	Nabarro, Sir Gerald	Vaughan, Dr. Gerard
Heseltine, Michael	Neave, Airey	Waddington, David
Hicks, Robert	Noble, Rt. Hn. Michael	Walker, Rt. Hn. Peter (Worcester)
Higgins, Terence L.	Normanton, Tom	Walker-Smith, Rt. Hn. Sir Derek
Hiley, Joseph	Nott, John	Warren, Kenneth
Hill, James (Southampton, Test)	Onslow, Cranley	Weatherill, Bernard
Holland, Phillip	Oppenheim. Mrs. Sally	Wells, John (Maidstone)
Hordern, Peter	Osborn, John	White, Roger (Gravesend)
Hornby, Richard	Owen, Idris (Stockport, N.)	Wiggin, Jerry
Howe, Hn. Sir Geoffrey (Reigate)	Page, Graham (Crosby)	Wikinson, John
Howell, Ralph (Norfolk, N.)	Page, John (Harrow, W.)	Winterton, Nicholas
Hunt, John	Parkinson, Cecil	Wolrige-Gordon, Patrick
Hutchison, Michael Clark	Percival, Ian	Wood, Rt. Hn. Richard
Iremonger, T. L.	Peyton, Rt. Hn. John	Woodnutt, Mark
Jenkin, Patrick (Woodford)	Pike, Miss Mervyn	Worsley, Marcus
Jessel, Toby	Pink, R. Bonner	Wylie, Rt. Hn. N. R.
Johnson Smith, G. (E. Grinstead)	Powell, Rt. Hn. J. Enoch	Younger, Hn. George
Jopling, Michael	Price, David (Eastleigh)
Kaberry, Sir Donald	Prior, Rt. Hn. J. M. L.	TELLERS FOR THE NOES:
Kellett-Bowman, Mrs. Elaine	Proudfoot, Wilfred	Mr. Paul Hawkins and
Kershaw, Anthony	Pym, Rt. Hn. Francis	Mr. Kenneth Clarke.
Question accordingly negatived.
To report Progress and ask leave to sit again.—[Mr. Barber.]
Committee report Progress: to sit again tomorrow.