§ CONTRIBUTIONS
§ Lords amendment: In page 2, line 20, leave out from "£2,500)" to end of line 21.
§ 10.15 p.m.
§ The Minister of State, Department of Health and Social Security (Mr. Brian O'Malley)I beg to move, That this House doth disagree with the Lords in the said amendment.
§ Mr. SpeakerI have to call the attention of the House to the fact that privilege is involved in the amendment.
§ Mr. O'MalleyThis is the fourth debate in the House on what would be a proper and fair level of contributions to be paid to the National Insurance Scheme by the self-employed from next April. When the Bill left the House to go to another place the provision was for a contribution of 8 per cent. on profits or gains arising under Schedule D between £1,600 and £3,600. The amendment moved and carried in the other place reduced that 8 per cent. to 5 per cent.
§ Hon. Members: Hear, hear.
§ Mr. O'MalleyIn view of the cheers from the benches opposite perhaps I should tell the House that the public debate on this subject has been noticeable for the gross distortion of facts by Members of the Conservative Party, including the right hon. and learned Member for Surrey, East (Sir G. Howe) who speaks for his party on these matters—[HON. MEMBERS: "Rubbish."] —I shall demonstrate that to Tory Members who should not shout "Rubbish" before they hear the arguments or learn what their right hon. and learned Friend said.
The first clear indication of this came in a report in the Daily Telegraph of 25th November 1974. In a speech to the National Federation of Self Em- 644 ployed the right hon. and learned Gentleman is quoted as having said:
Our proposals were fair and sensible."—That is what he said about the Class 4 contributions that are being attacked by members of the self-employed federation who are being misled by Opposition Members.The self-employed would have paid at a rate of 5 per cent. on any earnings in excess of £1,150 a year up to a maximum of £2,500.On this basis the maximum payable would have been £67.50 a year. But Barbara Castle proposes swingeing increases in these contributions with nothing in return.The right hon. and learned Member for Surrey, East, who has never openly admitted it, knows from what was said by his noble Friend Lord Aberdare during the Committee stage of the Conservative Bill in another place that the band £1,150 to £2,500 was, as the then Undersecretary of State said, on a ratchet and would move as earnings and benefits moved. The Government have moved the band between £1,150 and £2,500 in the same way as the Conservative Government proposed to do in their Social Security Act 1973. We had better get that straight. If what has been said by the Opposition is not distortion, someone had better tell me what is.What was equally distorting was the party political broadcast on behalf of the Conservative Party on 4th December of this year, when the public were told:
But Labour wants to make many of them "—that is the self-employed—pay at almost twice the rate we proposed.That is not distortion—it just is not true.In the £1,600 to £3,600 band, the difference between the parties, when we were debating whether it should be 8 per cent. or 5 per cent., was not almost double the rate, but the difference between, at most, £115 a year as opposed to £160 in the 8 per cent. proposals that have been put forward by the Government.
Members of the Conservative Party have tried to present this proposal to the public as showing that the Government are hostile to the self-employed and are determined to clobber them. Tory Members have just lost an election, and they think that there are some cheap votes in 645 this. What we should be clear about is that we are discussing the Conservative structure. It was the Conservative Government who introduced the Class 4 contributions in the Social Security Act 1973, and what we are maintaining in this provision is the ratio between the Class 2 contributions along with Class 4 contributions on the one hand, and the total of Class 1 contributions on the other. We have not moved from the ratio and structure that was set down by the Conservative Party in its Social Security Act 1973.
I propose to reply to the new arguments which have been deployed on this subject since the Bill left the House of Commons, but first it is necessary to set out the history of the affair. I shall do so briefly because I set out the facts at great length during the Committee and the Report proceedings of the Bill when it was previously before the House. Between 1948 and 1961, from the inception of the National Insurance Scheme and for 13 years, under successive Governments the ratio of contributions as between the self-employed contributions and Class 1 contributions was about 70 per cent.
When the Boyd-Carpenter graduated pension scheme came in, because it was not possible to apply graduated contributions to the self-employed, the ratio dropped very substantially over the years until, when the right hon. Member for Leeds, North-East (Sir K. Joseph) was considering the restructuring of the National Insurance Scheme in the Bill which became the Social Security Act 1973, he clearly came to the decision that the ratio of about 70 per cent., which had endured for the first 13 years of the National Insurance Scheme and had declined to 40 per cent., was an unsatisfactory position. He therefore sought to move towards a system of earnings-related contributions for the self-employed. We on these benches supported that move and gave the right hon. Gentleman full backing in the House and in the Committee proceedings. The result of the decision to introduce Class 4 contributions was that there was not a move up to the ratio established in the first 13 years of the scheme, but to a ratio set at a new level —which the then Government thought necessary—of about 60 per cent. or somewhat higher.
646 The only decision made by the present Government in amending in any way the proposals as laid down by law in the Social Security Act 1973 was to give greater protection for those self-employed who had lower incomes. When hon. Members on the Opposition side attempt to say that this Government have done nothing for the self-employed, and that we are attacking the self-employed, it would be more becoming if they would point out that between one-third and one-half of the self-employed, according to the latest estimate we have, have incomes at or below £1,600 a year. Therefore at least one-third of the self-employed in this country will be paying less in contributions from April 1975 than they would have done under the Conservatives' proposals. We took a decision not to put up on the ratchet which existed in the 1973 Act the Class 2 contribution from £241 to £2.70, and at least one-third of all self-employed people have benefited as a result of that decision. That is the only amendment we have made in the structure and ratio which was proposed by the Opposition when in Government—
§ Mr. John Gorst (Hendon, North)Can the Minister assist the House by informing us precisely what is the total cost involved in the change which the Lords have made to this aspect of the Bill?
§ Mr. O'MalleyThe cost is £21 million —that is the difference between the 5 per cent. rate and the 8 per cent rate. The figure is £7 million for each 1 per cent.
I turn briefly to the new arguments that have been adduced in another place and by the right hon. and learned Gentleman in the columns of the Daily Telegraph of 10th December. Lord Aberdare said on 5th December that under the 1973 Act the self-employed would have paid an estimated £143 million in 1976–77, that is 3.8 per cent. of the total of all the contributions paid by all classes of contributors.
On the other hand, in this Bill, that figure of 3.8 per cent. is taken to 4.2 per cent., so the noble Lord argued that there should be a reduction of £21 million, which is what the amendment achieves, to go back to the 3.8 per cent. figure which was a part of the 1973 Act.
I believed that that point, which was: newly raised, was a substantial one which needed detailed consideration. I have 647 therefore consulted the Government Actuary, who is an independent and authoritative source of advice and who was responsible for the reports in question. He has advised that this conclusion is not a valid one to draw from his figures because, for technical reasons, the bases for the figures in the two reports are not comparable in that way. The increases in self-employed contributions were based on realistic assumptions about increases in benefits and earnings between July 1974 and 1975–76, but the Class I yields were based on a long-term assumption of an 8 per cent. per annum increase.
Since it is important to the House to have the true comparisons, I have asked the Government Actuary to do a fresh calculation of these figures on comparable bases. These calculations show that the share of total contributions borne by the self-employed under this Bill will be 3.73 per cent. in a full year of operation, or slightly lower than the figure of 3.86 per cent. shown by the figures in Table 4 of the Government Actuary's report on the 1972 Bill.
So far, therefore, from supporting the Opposition's contention that we are increasing the relative share of the cost of the scheme to be met by the self-employed, these figures support to the hilt the Government's claim that we are simply preserving the ratio set in the 1973 Act between self-employed and Class 1 contributors.
It has been a feature of these debates on both sides of the House that there is a recognition that the present arrangements for the self-employed are far from ideal. However, this Government inherited a structure for the ratio as between Classes 2 and 4 contributors and Class 1 contributors. However, in our new proposals to implement "Better pensions", we are re-examining the relationships established by the Conservative Government to see whether there is any way of aligning the position of the self-employed more closely with that of the employed.
We shall need to have regard to the differences in the situation created by our proposals for contracting out and to devise provisions which will be fair and acceptable to both employed and self-employed, bearing in mind that the employed already have to pay a substantial subsidy towards the benefits of 648 the self-employed. This re-examination will have to include a study of both the flat-rate and the earnings-related elements.
All these matters will clearly take some time and I have already undertaken to consult those concerned. For example, the National Federation of Self Employed came to see me only a few days ago, and I gave them that undertaking. In the end, we may face the situation faced by successive Governments wishing to improve the structure of provision for the self-employed and may be able to devise nothing better than the present arrangements. But we are certainly willing to examine the matter in the context of our longer-term plans, and we are doing that at the moment.
These debates over the years have shown, especially in view of the structure which was devised by the previous Government and supported by the then Opposition, that it was felt that, although the situation was far from ideal, the contributions structure was the best that could be devised. I give the previous Government credit for having done that and moved further towards earnings-relation in contributions than any previous administration.
We backed the then Government in bringing those proposals forward. Clearly, what we have is not an ideal situation and we shall need to reconsider the whole question of the self-employed —[Interruption.]—once we get away from the structure of benefits and contributions laid down in the Conservative Social Security Act 1973. The Government have been in power for only a few months. We have already produced our White Paper "Better Pensions", which deals with the long-term provisions on an earnings-related basis with contracting out so that there can be a proper partnership between State provision and occupational schemes. We are now examining the changed situation which should arise because of the new structure laid down in "Better pensions" and how that affects the self-employed.
10.30 p.m.
The Government feel that the ratio set by the previous administration as between Class 2/4 and Class 1 contributions, although with a modification to help the lower-paid self-employed, is the best we 649 have in the present circumstances, although it is certainly not an ideal one. We want to improve that situation and the structure as it affects the self-employed as and if we can, and we are examining all the implications of the long-term proposals of "Better pensions" for the self-employed.
For that reason I ask the House and my hon. and right hon. Friends to reject the Lords amendment.
§ Sir Geoffrey Howe (Surrey, East)The House welcomes this further opportunity of trying even at this late stage to persuade the Government to change their mind and modify what emerges as a particularly unjust and vindictive piece of legislation. Tonight as on previous occasions the Minister has sought to identify this as the responsibility of the last administration, when it is none other than the responsibility of himself and his Government.
I welcome so far as it goes the Minister's observation towards the end of his speech, but I totally deplore the insensitive, arrogant and intolerant attitude which he has deployed throughout previous debates on the subject. There is a reluctance on his part to accept what I shall demonstrate beyond peradventure— the responsibility of the Government for a large part of what is being complained of. The Government should by now have recognised that their arguments have found less and less support on each occasion that they have been examined. When they were examined in another place they commanded so little support that an overwhelming majority of noble lords—87 votes to 28—carried the amendment and rejected the Government's case, and quite rightly so.
§ Mr. George Cunningham (Islington South and Finsbury)They did not understand what was being discussed.
§ Sir G. HoweThe hon. Member says that the peers did not know anything about the argument which is being advanced. He has paid little attention to the fact, for example, that Labour peers were given private teach-ins by Lord Wells-Pestell. They were presented with documents and arguments setting out the facts, but notwithstanding that they rejected, and quite rightly, the arguments that the Government advanced.
§ Mr. CunninghamSome of those peers certainly needed that assistance. One of the noble lords of the Labour Party who spoke vehemently in favour of the reduction of the amount to be paid by the self-employed confessed that he was unaware at the beginning of his speech that self-employed persons carried an entitlement to widows pension. He also confessed when he was put right on that matter, that that took away three-quarters of the substance of his speech.
§ Sir G. HoweThat may be a point the hon. Gentleman is now driven to rely on. The fact is that when the matter had been fully explained to the noble Lord, none other than the former Deputy Leader of the Labour Party, and when that explanation had been confirmed by the officials advising the noble Lord, Lord Wells-Pestell, he voted against the Government, as did other members of the Labaur Party.
§ Mr. George CunninghamHe was wrong again.
§ Sir G. HoweThe case against the Government was supported by not only the former Deputy Leader of the Labour Party, but a distinguished constituent of mine who argued powerfully against the Government, although he did not vote against them, a former chairman of the Parliamentary Labour Party, Lord Houghton. The Government's unwillingness to listen to such advocates is as astonishing as it is insensitive and arrogant.
We have never sought to set on one side the principle of earnings-related benefits, nor have we shrunk from the proposition that if we seek to remove this additional burden on the self-employed we should suggest other ways of meeting the cost. We have put forward three possibilities—an increase in the flat rate, an additional contribution from employed people or an increase in the Exchequer contribution. The last possibility would be the easiest, and it would cost only £21 million.
The fund to which the contributions go, increasingly mythical as it is, will be hugely in credit, substantially because the rate of wage inflation, as the Government Actuary admitted in his report on the Social Security Benefits Bill, is now running at 17½ per cent. a year on his 651 analysis, as opposed to the 8 per cent. a year assumption on which the Government's figures and the Bill are based. The fund is overflowing with the consequences of the breakdown of the social contract. If money must be raised, it can readily be raised from the Exchequer in that way.
The Government do not need the money. The amendment says that, even if they did, they need not and should not resort to the proposed method of finding it.
§ Mr. O'MalleyThe right hon. and learned Gentleman said that the Government do not need the money. It is true that in 1975–76 there will be an estimated surplus of £268 million in the fund. But that estimate makes no allowance for the December 1975 uprating, and an uprating of the illustrative dimensions costing a further £235 million in 1975–76 alone. Therefore, there is not the surplus that the right hon. and learned Gentleman suggests.
§ Sir G. HoweThe Minister misses the point. The calculations on which the Bill is based, calculations by the Government Actuary, are made on the assumption that the Government asked the Government Actuary to accept, of a rate of wage inflation of 8 per cent. In the report supporting the Social Security Benefits Bill the Government Actuary, unled by the Government, has accepted a more realistic assumption of a wage increase of 174 per cent. On that basis, the fund will be full to overflowing. Therefore, there is no reason for maintaining the additional impost on the self-employed.
The Minister suggested that we are challenging the change in the bands of income on which the levy is payable. The amendment is not concerned with that. It is concerned solely with the Government's decision—it is the responsibility of the Government and of no one else—to increase the rate of contribution on the band, whatever it may be, from 5 per cent. to 8 per cent. That is very nearly a doubling of the percentage rate of contribution. That is what we castigate, and what the noble Lords castigated, as unnecessary, insensitive and wholly unjust. It is easy to see why the self-employed feel so aggrieved.
§ Mr. R. J. Maxwell-Hyslop (Tiverton)Is my right hon. and learned Friend aware 652 that the Minister admitted in Committee that in computing the alleged deficit for the self-employed the Government Actuary had assumed a zero rate of inflation? As a result, the percentage of the self-employed that the Minister quotes as falling below £2,500 a year is grossly under-estimated, because as inflation progresses more and more of the self-employed will move into the category which has the 8 per cent. imposition, and the deficit in the fund will therefore be far less than the Minister is telling us.
§ Sir G. HoweMy hon. Friend is substantially supporting the point I have already put. I am grateful to him.
The self-employed feel aggrieved because they are aware of the extent to which they do not receive the same benefits as the employed person. They are also aware that as employers they are having to pay additional contributions to the employed person's stamp, and that under the present Government they are facing higher rates, higher taxes and soaring wages to their employees, unmatched by their own earnings. They feel strongly that they are being discriminated against in this way simply because they are not supported by powerful trade unions, and because they are excluded practically from the social contract and excluded emotionally from the social contract, as the Minister's attitude makes abundantly clear every time he speaks on this subject.
The Government were urged by noble Friends of theirs in another place to see what they are proposing here as an additional hardship on a section of the community which is already suffering severe hardship. That is the argument which commended itself to Lord George-Brown. The Government were urged to see what they are proposing as an attack on a section of the community which is not able to fight back—an argument which commended itself to Lady Burton of Coventry, no friend of ours but an erstwhile supporter of the present Government.
The Minister states that the proportion of contributions paid by the self-employed has been kept as it was under the 1973 Act and he has rehearsed the argument advanced by Lord Aberdare. The fact remains, on the figures published by the Government Actuary, that whereas under 653 the Social Security Act 1973 the self-employed would be paying 3.8 per cent. of all contribution income, under the proposals put forward by the present Government on the analysis of the figures published by the Government Actuary, the share will go up by 4.2 per cent.
The Minister tonight advanced the proposition that there are technical reasons, hitherto not published, why the arithmetic should be set aside. He advanced the reasons at breakneck speed and with an uncharacteristic lack of conviction. We sympathise very strongly with the view which commended itself to Lord Houghton when he said in substance that this is a form of taxation where one should look beyond the arithmetic and at the equity of the matter.
One can see the effect of what the Government have done if one looks at the figures in many different ways. Let us see what has happened to the contributions payable, on the one hand, by the employed person and, on the other hand, by the self-employed person since the Government came to office at the beginning of the year. For the employed person on £50 a week there will from next April onwards be a decrease in his contribution from £2.89 to £2.75, a decrease of 4.8 per cent. For the employed man on £60 a week there will be a small increase of 6.8 per cent., and for the employed man on £70 a week a still modest increase of 23 per cent. These are the figures, showing the way in which different categories of people, employed and self-employed, will be affected as from next April.
The Minister should listen to the consequence for the self-employed of the changes introduced by the present Government. For the self-employed on £50 a week, since the present Government came to power, his contribution from next April will be increased by 98.5 per cent. For the self-employed on £60 a week, his contribution will be increased by 138.7 per cent. For the self-employed on £70 a week—the Minister should hearken to the entire argument—the increase, from the advent of this Government till next April, will be from £1.99 a week to £5.49 a week, an increase of £3.50 a week. That works out at £182 a year non-tax deductible.
The effect of what the Government have done, by the time one takes account 654 of that, is that the self-employed again on £70 a week will have to find £270 extra out of taxed income from next April onwards. It may be said that a part of that is due to the introduction of Class 4 contributions. Indeed, it is true. If the figures are as much as that, they demonstrate the absolute folly of the Government increasing them at all by the deliberate decision to raise the percentage rate of contribution from 5 per cent. to 8 per cent. It shows total political mis-judgment and total failure to understand the difficulties which in any case were going to arise from these provisions.
10.45 p.m.
The effect is something for which the Government bear a large part of the responsibility and in respect of which they have remained continuously insensitive. Yet they have made some concessions to ease the impact of some of their tax changes in relation to business generally. The Chancellor of the Exchequer, rather surprisingly, speaking at the Labour Party Conference on 29th November said:
Whether you like it or not, 7 out of 10 workers work in the private sector and thousands of private companies are so short of cash that they are already beginning to lay off workers and are threatened with bankruptcy even though they have full order books.Because of that situation, the Chancellor altered his earlier Budget judgment and has done something to temper the wind to the shorn lamb.But the Minister of State, with continuing responsibility for this decision to raise the contribution from 5 to 8 per cent., has failed to do any such thing. It is high time for him to repent and show similar compassion, similar good basic political common sense, by accepting the Lords amendment instead of seeking even now to challenge it.
I give one last comparison of the cash actualities. This again is how it looks from the point of view of the self-employed. I take the person on average earnings under the 1973 Act compared with the person on current average earnings today under this Bill. The self-employed person on £32 a week on the 1973 figures would have been paying 129 per cent. of the contribution of the employed person. Under this Government's proposals, the self-employed person on £46 a week—now the national average earnings—will be paying 143 per cent. 655 of the contribution of the employed person. So the gap between the cash payment of the employed person and the cash payment of the self-employed person will be increased at that level by 17 per cent.
Secondly, I compare the position of a man with £60 a week. Under the 1973 provisions, a self-employed person on £60 a week would have been paying 118 per cent. of the contribution of the employed person. Under these proposals, he will be paying 144 per cent. At whatever level one looks at it, as a result of the change from 5 to 8 per cent., there has been a sharp increase in the burden of the self-employed, and the Minister of State and the Government, and no one else, must accept the responsibility.
§ Mr. O'MalleyThe right hon. and learned Gentleman should also deal with the at least one-third of the self-employed at or below £1,600 a year. Not only has there been no increase in their case but in real terms, because the contribution has been maintained at £2.41, there is a decrease from April 1975.
§ Sir G. HoweThat may be so, and it may be legitimate to try to achieve it. But, if the hon. Gentleman wished to make that kind of change, the way to pay for it would be out of the Exchequer contribution—a burden falling on the taxpayer generally in a way which is regarded as acceptable. This was the argument which commended itself to Lord George-Brown, who thought it had a great deal of common sense. If the Minister had accepted that argument instead of persisting with the increase from 5 to 8 per cent., the House would not have been troubled tonight with the Lords amendment.
§ Mr. George CunninghamAre we to take it that Conservative policy is that the Treasury contribution should rise above 18 per cent.? If so, this is the first we have heard of it.
§ Sir G. HoweIt is not a question of Conservative policy, but of how the Government can conceivably defend a decision, taken with their eyes open, to raise the percentage from 5 to 8. It is not for me to answer the hon. Gentleman's question because we have, in debates on this Bill, put forward various alternative ways of meeting the problem.
656 The one dominant feature has been the insensitive unwillingness of the Minister of State, who bears a heavy responsibility for this decision, to respond to representations made to him. I have one last complaint to make about the way in which the Government have responded to representations made. Two different groups of people specially affected by this provision had their cases advanced in another place. On the one hand was the Incorporated Society of Musicians, whose case was put by Lord Platt and on the other hand was the Writers' Guild of Great Britain, whose case was put by Lord George-Brown.
Both groups, as I understand it, sought to see the Minister. I have been told by the Incorporated Society of Musicians that it wrote to the Secretary of State immediately after the debate on 2nd December, delivering the letter by hand on 4th December, asking if it could make representations. Lord Platt referred to that in the other place again on 5th December and hoped that the hon. Gentleman would be available to meet both groups.
The musicians had received no reply by Monday of this week and as a result of a series of telephone calls to the Offices of the Secretary of State and the Minister of State were finally told yesterday that the Minister would be able to see them on Monday 16th December—after this legislation had passed through the House and when it would be too late to change anything. They were told that nothing better could be arranged at short notice. That explanation was a pretty unsatisfactory one.
In view of the pressure on the Minister's timetable I thought that it might have been understandable. Imagine my surprise when I found that this afternoon the Minister was receiving a deputation on behalf of the Society of Authors, the National Union of Journalists and the Writers' Guild of Great Britain. How is he able to receive one deputation but not the other?
§ Mr. O'MalleyThe right hon. and learned Gentleman is making a personal attack upon me on a personal matter and I have to answer it. Immediately I was informed that the Writers' Guild and the NUJ wished to see me I gave them an immediate appointment and saw them this afternoon, before the Bill came on. Immediately I was informed that the 657 Incorporated Society of Musicians wished to see me I examined my diary and found that it was completely full during the whole of today. Of course I would have seen them and I am very willing to see them. No Minister in any Government would turn away or spurn approaches from any group of individuals affected by legislation and that is certainly not what I have done.
§ Sir G. HoweI notice that the Minister responded, as he put it, immediately to the proposition that the Writers' Guild and the NUJ should see him. So be it. Both these unions are affiliated to the TUC. The Minister did not mention the Society of Authors. One cannot resist the conclusion, certainly this is the feeling widely held by those involved, that he rejected an approach on behalf of the Incorporated Society of Musicians because it was not an affiliated organisation.
In the other place Lord George-Brown drew attention to the distinction between affiliated and non-affiliated organisations. It is this approach which we regard as symptomatic of the way in which the Minister has approached the whole of this problem. If he were willing to respond to affiliated organisations this afternoon why could he not have invited the musicians there and then?
§ Mr. O'MalleyAs I am an ex-professional musician does the right hon. and learned Gentleman not think that if there was one group of people in which I would be personally interested it would be the musicians? I examined my diary, as did my Office, and I am giving them the first empty place I have in my diary. I do not think the House would accept that any Minister of any Government would be so remiss as to treat one group of affected individuals differently from other groups.
§ Sir G. HoweThe fact remains that the Minister could readily have invited his former colleagues from the musicians' profession to join him if he had wished, and he failed to do so. An invitation to them to see him at a different date in future is of no validity or significance.
The Minister closed his speech by saying, as apparently he has been saying in other quarters, that in some future consideration, in some future legislation 658 perhaps the problems of the self-employed can be dealt with and some way found of helping them in the context of this legislation. That is an unnecessary deferment of a modest abatement of what they feel to be an injustice. What the Minister needs to do—and it is easy enough for him even now to do it—is to concur, with more modesty than he has been prepared to show, in the amendment. If he does that, he will show what he has not shown so far, namely, that he is capable of responding to reasonable arguments responsibly advanced on behalf of people who feel that they are being unjustly treated.
§ Mr. R. A. McCrindle (Brentwood and Ongar)To listen to the Minister of State one would imagine that we were speaking of a miniscule body of people whose interests could be dismissed without much ado. It is wise to remind the House that we are speaking of something in excess of 2 million people. Nor is it wise for the Minister to suggest that, because we are talking only of the earnings-related contributions of one-third to half that amount, we can equally dismiss the interests of the people concerned. I estimate that with the movement of incomes among the self-employed we are talking of considerably in excess of 1 million people.
Is the Minister suggesting that we can dismiss the interests of more than 1 million people without concentrating far more on the merits of the argument deployed by my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe), by other Members on this side of the House and by members of another place over three debates? The Minister, uncharacteristically, has dealt with the matter in a cavalier fashion. If he concentrated his attenton on the merits of our argument, as a man who has proved to be reasonable and prepared to listen to arguments, he would accept that his speech tonight was considerably below his usual standard.
The Minister in particular and the Government in general are being completely stubborn about the self-employed. They are proving to be singularly incapable of listening to the arguments deployed. They are treating the self-employed as little short of renegades. They have been too much affected by the 659 movement of the self-employed building workers into the lump, and they cannot conceive of self-employed people who are self-employed by choice and for the most respectable of reasons.
The self-employed have no opportunity to set against tax the additional contributions they are being asked to make. In that respect they are singularly unusual. But, more than that, many of the self-employed people on whose behalf I am appealing yet again are small- to middle-sized business men and shopkeepers, and they are additionally prevented from increasing their prices. They are prevented from doing that because of the competition of the supermarkets and the exercise of price controls. Therefore I believe that the Government are getting at the self-employed not only by means of this Bill but in many other ways as well.
11.0 p.m.
The self-employed are being progressively driven out of business. Having listened to the Minister's contributions to debate after debate, I am led to the conclusion that that is not entirely unwelcome either to him or to the Government. I wonder whether I may ask what price the mixed economy, what price the public service, which is directed by the Government, in favour of the small business man?
Is it surprising that one is led to the belief that the attack that has been deployed tonight by the Government against the self-employed is an attack against private enterprise, and is no more than a further turning of the screw of those actions introduced by the Government since they took office in March 1974.
As he came to the end of his remarks the Minister seemed to be uttering mollifying noises. He indicated that the system which we are discussing is by no means ideal. If that is the case, why should the Government go out of their way seemingly to alienate the self-employed, in whose interests the Minister now seems to be speaking?
After the defeat of the Government's proposals in another place, and after the arguments deployed by the Opposition over many debates, is not there now a case for the Government to think again even at the eleventh hour and, if the 660 Minister concedes that the system is defective, to say that the system will have to be looked at again?
As we move towards the time when the more substantial permanent social services proposals will be brought forward by the Government, is not there an argument for thinking carefully as to whether we should not abandon these proposals, which are causing so much distress to the self-employed, until such time as the Government are able to come back to this House, having carefully rethought their proposals, and to put forward fresh proposals which would be much fairer and much more in the interests of the self-employed people of this country?
§ Mr. David Penhaligon (Truro)This is the fourth time we have debated this matter in seven weeks.
I have long believed that the whole National Insurance contributions idea needs to be scrapped and that the people employed by the fund should be found other jobs. I have been confirmed in that belief on hearing the relative mathematics argument concerning the contributions paid by one section as against another.
I believe that the money should be raised by means of another form of taxation, and that this idea should be incorporated into another scheme.
The situation is clear. We are talking about the application of an 8 per cent. tax rate.
Let me simplify the mathematics by pointing out what the 8 per cent. rate means. A self-employed person making £30 per week, in our inflationary-based society, will be taxed at 41 per cent. I have made the point that this charge should be incorporated into other forms of taxation because, in the eyes of the general public and the self-employed, the National Insurance contribution is a straightforward sort of income tax.
§ Mr. George CunninghamSurely a self-employed person earning £30 per week will not be subject to the 8 per cent. tax, because he will be earning under £1,600 per year. He will not have to pay that tax on any part of his income.
§ Mr. PenhaligonThe hon. Gentleman is correct. A self-employed person earning £30 per week in a 52-week year would receive a total of £1,560 and during a 661 53-week year would receive £1,590. We are therefore getting very close to nitpicking over the question of the relevant margins. It is no wonder that people view this rate of taxation as being ridiculous and that the self-employed believe they are being persecuted. Inflation is probably hitting the self-employed as hard as any other section of our society.
Many profits are totally illusory. To someone running a small shop, every year the cost of the goods on the shelves increases, and the money to raise the extra value of those goods, illusory though it is, is raised out of profit. The Chancellor of the Exchequer has said that he will make an allowance for this next year. These people could do with help this year. Much of the profit of the self-employed is little more than interest on capital invested, and now it is proposed to charge the national insurance contribution on interest on capital. No one suggests that this should be done for the employee. But the person making £3,600 a year will find that what in his eyes is income tax will be increased by 20 per cent.—
§ Mr. George CunninghamIn his eyes.
§ Mr. PenhaligonIn the eyes of someone who receives a demand for that amount and has to write a cheque, it does not matter which column it comes under. In his eyes, it will be income tax, and 20 per cent. more is 20 per cent. more. On £3,600, it is £160 more.
It is these people who very often receive the direct anger of the public about inflation, and there is no doubt that certain members of the Government are constantly digging away at them by innuendoes about excessive profiteering.
For the sake of just £27 million, the Government have a chance—a second chance—to prove once and for all that they are not against the self-employed. I beg the Minister to accept the amendment.
§ Mr. George CunninghamWe are discussing this matter for the fourth time, and the elucidation of the issues has proceeded over the four occasions from clarity to ever greater clarity and the facts have become more widely known as we have gone from stage to stage. We take that on faith, because there is no evidence for it on the basis of the 662 debates in this Chamber and in the House of Lords.
The hon. Member for Brentwood and Ongar (Mr. McCrindle) said, and I agree, that we should endeavour to put a rational case and not to express emotion either in support of or in opposition to self-employed people as a class, which would be unjustified. As a result, I tried to note his hard points of argument in favour of his case. I noted two.
The first, with which I agree completely, is that the self-employed are dis-advantaged by comparison with the employed person in that they do not receive tax relief in respect of any part of their contribution. I have said before, I am prepared to say again, and I am ready to vote accordingly, that that should be corrected. However, it cannot be corrected in this Bill. It is a situation which existed throughout the period in office of the Conservative Government, and the Opposition must bear that in mind when they suggest that it should be corrected now. But at some time it should be corrected.
The second point argued by the hon. Member for Brentwood and Ongar is that the self-employed are unable to put up prices in many cases. He suggests two reasons for that. According to him, one reason is price control. However, price control is not price freezing. Price rises are permissible where there is justification for them. I do not know any Chancellor of the Exchequer who would suggest that an obligatory increase in costs deriving from national insurance contributions would be inadmissible as a ground for raising prices, along with all the other grounds which might be relevant to raising them.
The other reason why the self-emploved are unable to raise prices, according to the hon. Gentleman, is that they are up against the competition of supermarkets. I thought that the Tory Party stood for competition and believed that this was the way to keep prices down. It is hard if one argues that the self-employed person should be protected from the free play of the market by having an unnaturally low national insurance contribution.
There has been no mention tonight of what I suggest is the basic starting point from which we must advance with other 663 considerations. The point is whether the self-employed under the new system will be receiving benefits in excess of their contributions. The facts are known to every hon. Member who has taken an interest in this subject.
When these increases take place, the self-employed will still be paying a contribution which is less than that required to pay for the benefits they receive. In saying that, I take account of the fact that they do not receive all the benefits. However, they receive the most expensive benefit, which is the retirement pension, and that accounts for about 70 per cent. of the national insurance benefit, and they are entitled to certain other benefits. The benefits to which they are entitled tot up to about 90 per cent. of the national insurance fund. The self-employed do not pay a contribution which meets those costs.
If the self-employed are not making contributions which pay for the benefits they receive, it is not a burden that falls upon the taxpayer. It is a burden that falls upon the other contributors to the fund. We all know that. There can be a cross-subsidy in favour of one group of contributors only if that subsidy is paid for by another group of contributors.
It is true that there could be a relatively large subsidy for the self-employed at the cost of a relatively small increase in the contribution of other contributors, because the self-employed are only a small number of the total. What hon. Members opposite must face up to but never have faced in these debates is the question: is it fair to make the employed person pay an unnaturally high contribution, even by a small amount, to subsidise the self-employed? I say again that it is ironic that the self-employed—the yeomen of England, who stand upon their own two feet and who are known for their self-reliance—should be the one group of contributors to the national insurance fund who should be subsidised by all the other contributors to the fund.
§ Mr. Kenneth Clarke (Rushcliffe)The hon. Gentleman knows that from the moment national insurance came into existence till the present day it has never been the case that the self-employed have paid the full actuarial bill for their benefits, for the sound reasons that there is 664 no employer element in the total contribution for them, that they do not have tax relief, and many other reasons. Merely to point out what has always been a feature of the national insurance system is not a justification for the sudden increase in the Bill.
§ Mr. CunninghamIt was not always the case that the self-employed did not receive tax relief. They received tax relief from the beginning of the scheme up to 1965. The self-employed have never been required to pay for the full value of the benefits they receive. There is a huge difference between paying for 60 per cent. or 70 per cent. of the value of benefits received and paying for 40 per cent. or 50 per cent.
Tory Members must make a case for saying that, for all sorts of national reasons, employed persons must subsidise members of a group which, of all groups in our society, is known for its self-reliance. If Tory Members want to come up, as they almost did tonight, with a new argument and say that because the self-employed are subject to particular difficulties at present there should be, either in respect of those people or in respect of the whole national insurance fund, a higher Exchequer contribution than 18 per cent., let them do so. But until now we have not heard a word of that upstairs or in any of the proceedings on this Bill. If we were to bump up the Treasury contribution to 20 per cent., it would not get round the cross-subsidy argument. As long as that represented a general increase to the National Insurance Fund, there would still be a cross-subsidy from employees to the self-employed.
§ Mr. Robert Boscawen (Wells)There is a cross-subsidy through the tax system to the lower paid, because they are not paying tax. They are not paying the 20 per cent. contribution.
§ Mr. CunninghamI take it that the hon. Gentleman is referring to the normal taxation system. We cannot keep shifting the argument. We cannot balance a feature of the income tax system with a feature in the National Insurance system. When I strayed into error on Second Reading in this respect, I was rightly rebuked by Conservative Members who said, "If there is something wrong with the taxation system, put it right in the 665 system. Do not balance matters between two entirely different systems." Therefore, I hope that in the remaining stages Conservatives will ask themselves whether it is right for employees to subsidise self-employed contributors to the scheme.
§ 11.15 p.m.
§ Mr. Hugh Fraser (Stafford and Stone)I am sure the Committee must welcome the fact that the hon. Member for Islington, South and Finsbury (Mr. Cunningham), who is so very knowledgeable on these matters, is not the Minister in charge of the Bill. Undoubtedly, if that were so the self-employed person would be asked to make a contribution as both employer and employee. That at least would clear up any metaphysical difficulties on the part of the hon. Gentleman in coping with this simple problem of the rights and wrongs of the matter. If the hon. Gentleman wishes to make a real contribution, I hope that he will table a suitable amendment to see that tax allowances are made to help the self-employed. If the hon. Gentleman decides to take that course, I am sure that many of my hon. Friends and I will support him.
The wider question relates to the impact of inflation on the fund and whether the Minister at present should not be paying more attention to equity rather than to the figures which at the moment the Department seems to be unable to work out. If broadly we take the rate of inflation under the present Government, even a rate of inflation of 10 per cent., which is half the present rate of inflation, and if we project that in terms of a typist employed today in this House, we discover that by the time that lady retires she will be earning £100,000 a year. That is the sort of situation which those who are concerned with insurance, and particularly public insurance, should be considering.
We are at present in the absurd situation that the fund will be grossly in surplus for the next two years. Anybody who wants to speculate on what will happen two years from now needs, not just a crystal ball, but a change of government.
Having listened to Lord George-Brown and other distinguished Labour peers in the other place on this topic. I hope that the Minister will consider the wider implications of the social contract. I 666 suggest that the wider implication of the social contract at this stage, when there is a great deal of turbulence, unhappiness and uncertainty in our society, is to do something about the 2 million people— farmers, small shopkeepers, and others— who often cannot get the advantages of fiscal drag and inflation which others can get, whether they be workers or trade union members. The people to whom I have referred are far more fixed in their incomes than any other section of society, and they do not get any of the admittedly delirious impressions of wealth from this cracking rate of inflation.
Therefore, the Government should consider as a matter of urgency a comparatively small sum of £20 million to £26 million as a means of solving this problem. When there is a huge estimable surplus in the fund, something should be given in the way of a come back from 8 per cent. to 5 per cent. If the Minister will not do that, I suggest that when he winds up he should make an official declaration that when the Finance Bill comes before the House a clause shall be brought in to see that the self-employed get the same tax benefits as the employee.
§ Mrs. Elaine Kellett-Bowman (Lancaster)Like many of my right hon. and hon. Friends, I have had an enormous number of letters from self-employed constituents who are not only angry, but desperately worried at the prospect that their contributions will be increased from 5 per cent. under the 1973 Act to 8 per cent. under this new legislation if the Government succeed in beating this Lords amendment.
This very week a branch of the self-employed association is being formed in my constituency jointly with that of my hon. Friend the Member for Morecambe and Lonsdale (Mr. Hall-Davis).
Shopkeepers are very hard hit. One shopkeeper in my constituency living not far from me was about to mortgage his home to carry out essential improvements to his shop. He is now so worried at the reduction in his liquidity which this increased contribution, if passed, would cause that he has decided not to make the improvements, essential though they be to keep him on a par with nearby supermarkets, but to hang on because he feels that he may need all the money that he can lay his hands on simply to 667 stay in business at his present level, let alone make any improvements.
One category of people—I declare an interest—which is exceedingly hard hit by this proposal, a group which is already in financially difficult waters, is the farmers. The agriculture industry consists of 280,000 self-employed persons. They are in a particular difficulty because the Schedule D income of the self-employed farmer represents not only the income for his labour and management —that is fair enough—but the return on his capital invested in the business, whereas the contribution paid by an employee and by his employer on his behalf relates only to his income from employment.
The national insurance contribution of the self-employed, to be comparable with that of an employed person, should relate only to the return for his labour and management. This is particularly serious in agriculture, because in recent years it has become a highly capital intensive industry. Yet at the same time it has a large number of self-employed people perhaps employing one other person. The element of a farmer's Schedule D income which represents a return on his capital is absolutely vital for reinvestment in the business and for the expansion that the nation needs from him if we are to get a reasonable balance of payments. It is unfair and illogical to gross up this element and base his contribution on it. This argument applies to many classes of people, but it applies particularly strongly to farmers, many of whom are on the verge of bankruptcy. This could be the last straw for many of them between staying in business and going out.
As it is impossible to extract this capital return element from the Schedule D assessment, the only fair alternative is to accept the amendment so that self-employed people pay, as they would have done under our legislation, at the lower rate of 5 per cent. This is the only hope for farmers and the self-employed. They represent an element that we must preserve if we are to preserve our independence, and I beg the Minister to accept the Lords Amendment.
§ Mr. John Farr (Harborough)It is a pity that at this late hour, after a long debate last night, we are debating a matter of this importance. However dili- 668 gent we may be, it may be impossible for some of us to speak for as long as we should like to do or to pay sufficient attention to the debate in the early hours of the morning.
Secondly, I support what my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) said in condemning the Minister's attitude towards the Musicians' Union. It was deplorable that the Minister felt unable to see representatives of that union at a time when it mattered. If the debate is concluded tonight and a decision is taken to rub out the Lords amendment, any visit by the union will be of academic interest.
Thirdly, it is a pity to see any Government trying to amend what I believe is the wish of the people as expressed in the amendment made by the other Chamber. As has been said, the amendment was made not by a few Conservative peers but by men and women of some consequence in the Labour Party. It is deplorable and unwise for any Government to fly in the face of public opinion as the Government are seeking to do.
I want to raise two points. The first one has not been raised during the debate. What attention have the Government given to the position of the general practitioner in this sorry affair? The GP is a self-employed person, and he is forbidden by the British Medical Association and other rules and regulations from forming himself into a company so that he can enjoy the protection of becoming an employed person.
I understand—and perhaps the Minister will confirm this—that a GP cannot seek protection from this legislation by being a member of a group practice which forms itself into a limited company and thus becoming an employee, or by being employed in a health centre which forms itself into a limited company and by that means becoming an employee. I understand that that avenue of escape is ruled out for a GP, and he is in an invidious postion compared with medical practitioners who are not GPs.
There is one suggestion that I should like to make to the Minister in relation to GPs. I do not know whether he has even considered it. He may have read the letter that I wrote to him about three or four days ago. The hon. Gentleman should consider amending the Bill so that the Lords amendment is not entirely 669 eradicated but only part of the increase is implemented for the first year. After that period an assessment can be made of the position. The Government should then decide whether this is fair to all categories of self-employed, including general practitioners, before the full effect of the increase is brought about.
11.30 p.m.
The 300,000 or so who are self-employed in agriculture and horticulture should not be brushed aside as of no consequence. This matter is important not just to those employed in the industry but to everyone in Britain who wants, if not a prosperous, at least a healthy and efficient agriculture and horticulture. Those who pay self-employed contributions do not obtain the same number of benefits. Sickness benefit, for instance, can be obtained but it is more difficult.
I particularly want to underline the anomaly of the Schedule D income of farmers and horticulturists. This is not just an assessment of the effort that a farmer and his wife put into an enterprise. It is also a notional estimate of their return on the tenant's capital in the business. If the tenant's capital in a farm is, to take a low figure, £20,000 or £25,000, at interest of only 10 per cent., that is £2,500 per annum or £50 a week to be added to what is established as the figure for labour put in by a farmer and his family. It is desperately unfair to calculate a farmer's income on that basis.
The present Government's 1974 White Paper on the annual review said:
Farm income is not directly comparable with incomes in most other sectors of the economy, since it includes elements of wages and changes in stock valuation as well as profit. It provides a return to farmers and their wives for their manual and managerial labour, but it also provides a return on the occupier's investment in the farm business.In the light of that quotation from the Government's own White Paper, this situation is manifestly unfair; I call upon the Government to put the matter rightt.
§ Mr. Maxwell-HyslopI made a brief intervention in the speech of my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) because the basis on which the Minister sought advice from the Government Actuary is not relevant to the use which he has made of it. Earlier, he estimated that about a third of the self-employed will be better 670 off as a result of the Bill than would otherwise have been the case. But that assumes static incomes. In a period of howling inflation, we can expect people whose incomes were below the limit to which the amendment refers to be substantially transferred into the class which will suffer the 8 per cent. rate.
§ Mr. James Lamond (Oldham, East)Does not that view conflict with the view of the hon. Gentleman's hon. Friends that it is impossible for self-employed people to raise their incomes because of the pressure of competition by supermarkets and so on?
§ Mr. Maxwell-HyslopIt depends on how the self-employed earn their own livelihood. For instance, if they are under contract to the National Health Service and periodically receive increases, it should be obvious even to the hon. Gentleman that their monetary incomes will increase even if their purchasing power does not.
The point I am making is an irrefutable arithmetical truth that if the monetary total of a person's income increases so that he receives, albeit in a depreciated currency, more than £1,600 a year whereas previously he received less in monetary terms than £1,600 a year, he will move from the category which the Minister claimed was benefited by the Bill into the category which will be penalised by the Bill. Therefore, the arithmetical assumptions which the Minister has made will become more grossly inaccurate the higher the rate of inflation.
The House will be aware that in the course of the recent election the Prime Minister was at pains to try to convince the electorate that the rate of inflation in Britain was 8.4 per cent. when everyone else knew that that was totally incorrect and that the rate of inflation was more than double that—and it is now probably treble that.
Therefore when, in Committee, in answer to a question which I put to him, the Minister of State revealed that the Government Actuary's calculations were done on the assumption of a situation which simply does not exist—namely, a zero rate of inflation—the arguments that follow from that are bound to be vitiated by the inflation which we are experiencing and which any reasonable person will expect to be with us into the foreseeable 671 future, despite the optimistic announcements made every now and again by the Chancellor of the Exchequer unrelated to reality.
It is no good self-employed people heaving a sigh of relief and saying "I do not get caught by the 8 per cent. because my gross income"—gross income, not income after tax—"is under £1,600", because in two years' time if their income is the same, just under £1,600 a year, they could be having only half the standard of living that they are enjoying or enduring at present.
Built into this apparently innocent clause is a massive transfer of self-employed persons from one category to another, from the unpenalised category into the penalised category. This is the point to which the Minister has not addressed himself. He has chosen to ignore it, as if the percentage movement from the one category to the other is an insignificant proportion, whereas he knows that it vitiates the whole basis of his assumption. Nobody in this House knows what, even in a year's time, will be the proportion of the self-employed who move from the unpenalised into the penalised category. All we can reasonably expect is that it will be a very significant proportion.
It may well be that those engaged in retail trade, who will be afflicted more and more by the massive increase in rates, electricity charges, petrol tax and everything of that kind, do not move into the category of those above £1,600, much as they would wish they could move into it.
On the other hand, many other sectors of the self-employed whose earnings, roughly speaking, move pari passu with inflation, can expect to move into this penalised sector. Any assertions by the Minister of State therefore about the proportions of contributions to the National Insurance Fund from the self-employed must be wild guesstimates. As the proportion of the self-employed who move into this penalised category increases so the proportion of the National Insurance Fund which is derived from the self-employed is bound to increase.
I hope, therefore, that the Minister of State will have the humility to say that he has not the first idea what the percentage will be even a year after the Bill 672 receives the Royal Assent, if it does, and that he will not try to make predictions to the House to two decimal points in percentage terms which he must know are bound to be totally misleading, claiming for them a precision which they cannot possibly possess. To present estimates as if they had an inherent accuracy when their basis is fatuous is to do the House a disservice rather than to inform it.
Will the Minister therefore give one undertaking? Will he introduce an amendment—he would have to introduce a one-clause Bill to do it—to provide that as the cost of living increases he will increase the base figure of £1,600 by the same percentage so that the arguments he has offered to the House as justifying a rejection of the Lords amendment retain all the validity he would like to think they have. If he will give that undertaking at least he will be true to his own arguments, even though they are so very incomplete. However, I do not think that he wants that to happen. I think he wants a continued transference from the unpenalised to the penalised sector of the self-employed. He knows that it will happen and the more his Government fail to bring inflation under control the more rapid will be this transference. It will be entirely at the expense of the self-employed and that is why we are entitled to say that the Bill represents an attack on the self-employed and that the Government are doing it knowingly rather than in ignorance.
§ Mr. Robert Hicks (Bodmin)There is always a danger when the House is discussing matters of this nature that we shall become overwhelmed by the statistical evidence and in the process lose sight of the more important aspects. Those are the reasons for the introduction of the measure and its effects on the specific group of people directly involved and on the wider social and economic context in which these matters are set.
I have gained the firm impression from listening to the debates on this issue that the Government realise that they are on very weak ground in assessing these broader issues, that is, the implications for the rôle and functions of the 2 million self-employed persons and specifically the 1 million-plus within the relevant band. That is why the Government have tried to concentrate on the arithmetic.
673 Important though the arithmetic may be, I am far more concerned about the effect of this penal measure on those economic activities which tend to be served by self-employed persons. My hon. Friends have already referred to them—the shopkeepers; the 280,000 farmers and market gardeners—we should not forget the grower, who is subjected to the most intense financial pressures at the present time; the local jobing builders; and above all the local craftsmen—the carpenters, welders and blacksmiths. They are in danger of disappearing.
There are, of course, many other occupations similarly affected, but the people I have mentioned are in business, and remain in business, because they either produce a product useful to the community as a whole or provide a service required by the community. If they did not have a market for their output or their services, they would go out of business. They must produce or serve in order to survive.
Most of these groups are already subjected to severe financial pressures, some created by the present Government, some purely a consequence of the overall economic climate. One has only to think of the farmer and his present difficulties, and the fact that many of our small businesses and retail outlets have had to face enormous increases in their rating burden over the past 12 months or so. They have also had to deal with the various price restraints. I imagine that each of us has received genuine representations during the past few weeks from small companies, retail shops and self-employed persons about their liquidity problems. The Government's failure to take on board the arguments from this side of the House tonight is further evidence of their insensitivity to the problems facing small businessmen and the self-employed in particular.
What are the implications of the imposition of this increase in the National Insurance contribution for people who wish to start a small business? Our nation depends on the inventiveness of its people. The Government's failure to modify their views as illustrated by their squalid attitude will be a further blow to the initiative on which we as a country depend.
§ Mr. Robert Adley (Christchurch and Lymington)On a point of order, Mr. Deputy Speaker. May we have an assurance that in view of the grave implications of the Bill, and its importance, there will be no attempt by the Government to use the guillotine?
§ Mr. Deputy Speaker (Mr. Oscar Murton)That is not a matter for the Chair.
§ Mr. Paul Hawkins (Norfolk, South-West)The most important matter at this time in our history is that the nation's unity be preserved. The Government's action in singling out a particular section of the community for a vicious attack will cause as much disturbance to the unity of the nation as did the attack upon ratepayers in the country districts a few months ago. I feel very strongly about this. My constituency has something like 100 small villages and only three small market towns. We do not have large supermarkets. We have many small shops, perhaps one shop per village, and we depend upon them for the elderly and those people who cannot get buses to the towns to do their shopping.
These people, who are oppressed by the many measures of increased taxation which the Government are taking and, no doubt, have had to take and will take in the future, will give up, and then the position of the elderly, the pensioners and others who depend upon the village shop in the country districts will become much more difficult.
We should have an explanation of this. I understand that as Members of Parliament we are suddenly going to be taken out of this position and will cease to be regarded as self-employed, and therefore we shall not contribute this amount next April. I could not willingly face my constituents with such a situation, and I should like to know how this has come about.
§ Mr. O'MalleyI will tell the hon. Gentleman exactly how it came about. It was contained within the terms of the Social Security Act 1973. No regulations were laid or were necessary. It was as a result of the terms of the Act that Members of Parliament, judges and directors became Class 1 contributors as from April 1975. Therefore, it was the action 675 of the previous Government, and we believe that the previous Government were right.
§ Mr. HawkinsI thank the Minister for the explanation, but at the time of the passing of that Act nobody could know that this sort of thing would happen. Surely we cannot go to our constituents and justify taking ourselves out of this net and keeping others in.
§ Mr. Peter Rost (Derbyshire, South-East)Is my hon. Friend aware that many of the self-employed who are now vastly penalised suspect that the Government are changing the status of Members of Parliament in order to bribe their own back-bench Members not to vote against this measure?
§ Mr. HawkinsI do not want to say much more, but I hope the Government will bear this matter in mind, because it affects us all, and I do not want to face my constituents with it.
§ Mr. Hal Miller (Bromsgrove and Redditch)I am grateful for the opportunity to catch your eye, Mr. Deputy Speaker, having sat in this Chamber for many hours endeavouring to be called, without success until now.
I am also grateful to my hon. Friend the Member for Harborough (Mr. Farr) who raised an objection to the Government introducing such an important measure at such a late hour—an arrangement which I believe some of my hon. Friends feel may not be entirely irrelevant to the debate which took place before this one, in an effort to ensure a sufficient attendance.
I shall resist the temptation to make the speech on the need to retain small businesses which I tried to make last Friday, and I shall come to the substantial points of this most objectionable measure. The notes which I have in my possession were sent by some of my constituents.
I represent a constituency peopled by self-employed of various descriptions.
§ Mr. Gerard Fitt (Belfast, West)Where?
§ Mr. MillerBromsgrove, where we make fishing tackle, needles and so on. Even the hon. Member for Whitehaven (Dr. Cunningham), who appeared to be 676 the most alert Member opposite, has now disappeared. But I am glad to see that there are occupants of the Government Front Bench.
§ Mr. Deputy SpeakerOrder. We must continue with the debate.
§ Mr. MillerI was trying to make myself heard above the seated conversations opposite, Mr. Deputy Speaker. If you would like me to raise my voice, I am happy to continue. The hon. Member for Whitehaven suggested that it was impossible to deal with what he recognised as an inequitable situation tonight, because we would have to have recourse to the Finance Bill. But the remedy is before us in the Lords amendment.
§ Mr. Arthur Lewis (Newham, North-West)May we put the record straight? Will the hon. Gentleman note that my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) spoke in the debate and not my hon. Friend the Member for Whitehaven (Dr. Cunningham), who has not been present?
§ Mr. MillerI am grateful for that correction from the hon. Member for Newham, North-West (Mr. Lewis), with whom I have spent time on delegations. I apologise for the error.
As I was saying, the remedy for the inequitable situation recognised by the hon. Member for Islington, South and Finsbury (Mr. Cunningham) is to accept the Lords amendment, which was made for good reasons. The Government need to recognise that, even if they manage to whip through their own supporters, they have not carried us with them and, more important, they have no hope of carrying the people to an understanding let alone an acceptance of their intentions.
Let us take the case of a small employer and self-employed person who has the duty to make out each week the stamps and records for his employees. One can well understand the feeling of inequity among such people. Supposing their employees are on £50 a week. Such an employee is only paying £2.75, while the employer is paying the employer's contribution on top of that plus his own contribution, which is £3.95 at that level, assuming that he is fortunate enough to obtain that sort of return from his business.
677 Self-employed persons wish to be allowed the opportunity to contribute on a proper basis but in return for the same kind of benefit—in other words, an earnings-related benefit. We have not had a satisfactory explanation as to why the introduction of such a measure is impossible, because, as those of us who come from motor manufacturing constituencies know, the earnings of employees can fluctuate widely from week to week. If they can be accommodated in an earnings-related scheme, it is not clear to the self-employed why they should not be similarly accommodated. I hope that the Minister will see whether this cannot be made done.
It has been suggested to me that the self-employed should be allowed to revert to the previous system of an option whereby they would be allowed to contribute on a voluntary basis, such contributions would be at the full employed rate with the slice on top of the employees' rate to be tax deductible. I should be grateful if the Minister would deal with this.
I return to the main point about the equity and fairness of these provisions. General practitioners have been mentioned. I received today a resolution from my local BMA objecting most strongly to the imposition of this new Class 4 contribution. The local secretary writes:
I am at a loss to understands the difference between a self-employed man earning £3.000 a year and a working man in a factory earning £60 a week. The only obvious action that we as general practitioners can take is to refuse to pay and go to prison.He goes on to suggest that his union may withhold its labour and ends by saying:Group action is our only hope.We are coming to a sorry pass if we have reached the stage when doctors are seriously considering taking such action on this issue. This is quite different from the sort of issue being dealt with by the Minister of State for Health and Social Security who I see has just sat down on the Government Front Bench.
§ I wish to bring home the extent to which this measure is resented in the country by quoting from another letter I have received, from my local chamber of trade which also enclosed a petition.
§ Mr. RostCan my hon. Friend explain why it is that Labour Members who have spoken have not read out any letters which they have received on this matter from their constituents?
§ Mr. MillerObviously because such letters would not make good reading from their point of view. The letter I have received says:
If MPs wish to impose iniquitous poll taxes on other members of the community, from which they excuse themselves, they should not be surprised at the rise of another 'village Hampden'.The letter ends with what strikes me as a genuine, heart-felt complaint when my correspondent says:This Class 4 contribution should be more properly termed a 'class contribution'.
§ The Parliamentary Secretary to the Treasury (Mr. Robert Mellish) rose in his place, and claimed to move, That the Question be now put.
§ Question put, That the Question be now put.
§ The House proceeded to a Division—
§ Dr. Alan Glyn (Windsor and Maidenhead)(seated and covered): On a point of order, Mr. Deputy Speaker. In view of the importance of this issue and the fact that a number of hon. Members wish to speak, I consider that the debate should be continued without interruption from the Government Whips.
§ Mr. Deputy Speaker (Mr. Oscar Murton)The Chair is fully cognisant of all the points. All the relevant factors have been taken into account and a decision has been made.
§ The House having divided: Ayes 297, Noes 281.
683| Division No. 33.] | AYES | [12.5 a.m. |
| Abse, Leo | Atkins, Ronald (Preston N) | Benn, Rt Hn Anthony Wedgwood |
| Allaun, Frank | Atkinson, Norman | Bennett, Andrew (Stockport N) |
| Anderson. Donald | Bagier, Gordon A. T. | Bidwell, Sydney |
| Archer, Peter | Barnett, Guy (Greenwich) | Bishop, Edward |
| Armstrong, Ernest | Barnett, Joel (Heywood) | Blenkinsop, Arthur |
| Ashley, Jack | Bates, Aif | Boardman, H. |
| Ashton, Joe | Bean, Robert E. | Booth, Albert |
| Boothroyd, Miss Betty | Grant, George (Morpeth) | Molloy, William |
| Bottomley, Rt Hon Arthur | Grant, John (Islington C.) | Moonman, Eric |
| Boyden, James (Bish Auck.) | Grocott, Bruce | Morris, Alfred (Wythenshawe) |
| Bradley, Tom | Hamilton, James (Bothwell) | Morris, Charles R. (Openshaw) |
| Bray, Dr Jeremy | Hamilton, W. W. (Central Fife) | Morris, Rt Hon John (Aberavon) |
| Brown, Hugh D. (Glasgow Pr.) | Hamling, William | Moyle, Roland |
| Brown, Robert C. (Newcastle) | Hardy, Peter | Murray, Ronald King |
| Brown, Ronald (Hackney S.) | Harper, Joseph | Newens, Stanley |
| Buchan, Norman | Harrison, Walter (Wakefleld) | Noble, Mike |
| Buchanan, Richard | Hart, Rt Hon Judith | Oakes, Gordon |
| Butler, Mrs Joyce (Haringey) | Hatton, Frank | Ogden, Eric |
| Callaghan, Jim (Middleton & P.) | Hayman, Mrs Helene | O'Halloran, Michael |
| Campbell, Ian | Heifer, Eric S. | O'Malley, Brian |
| Cant, R. B. | Hooley, Frank | Orbach, Maurice |
| Carmichael, Neil | Horam, John | Orme, Rt Hon Stanley |
| Carter, Ray | Howell, Denis (B'ham, Sm H) | Ovenden, John |
| Carter-Jones, Lewis | Hoyle, Douglas (Nelson) | Owen, Dr David |
| Cartwright, John | Huckfield, Leslie | Padley, Walter |
| Castle, Rt Hon Barbara | Hughes, Rt Hon C. (Anglesey) | Palmer, Arthur |
| Clemitson, I. M. | Hughes, Mark (Durham) | Park, George |
| Cocks, Michael (Bristol S) | Hughes, Robert (Aberdeen N.) | Parker, John |
| Cohen, Stanley | Hunter, Adam | Parry, Robert |
| Colquhoun, Mrs Maureen | Irvine, Rt Hon Sir A.(L'pool) | Peart, Rt Hon Fred |
| Concannon, J. D. | Irving, Rt Hon S. (Dartford) | Pendry, Tom |
| Conlan Bernard | Jackson, Colin (Brighouse) | Perry, Ernest |
| Cook, Robin F. (Edin. C.) | Jackson, Miss Margaret (Lincoln) | Phipps, Dr Colin |
| Corbett, Robin | Janner, Greville | Prentice, Rt Hon Reg |
| Cox, Thomas (Wands, Toot) | Jay, Rt Hon Dougias | Prescott, John |
| Cralgen, J. M. (Glasgow M.) | Jeger, Mrs Lena | Price, William (Rugby) |
| Crawshaw, Richard | Jenkins Hugh (Wandsworth) | Radice, Giles |
| Crosland, Rt Hon Anthony | Jenkins, Rt Hon Roy (B'ham, St) | Rees, Rt Hon Merlyn (Leeds S.) |
| Cryer, Bob | John, Brynmor | Richardson, Miss Jo |
| Cunningham, G. (Islington S.) | Johnson, James (Kingston, W.) | Roberts, Albert (Normanton) |
| Cunningham, Dr J. (Whiteh.) | Johnson, Walter (Derby S) | Roberts, Gwilym (Cannock) |
| Dalyell, Tam | Jones, Alec (Rhondda) | Rodgers, George (Chorley) |
| Dav dson, Arthur | Jones, Barry (East Flint) | Rodgers, William (Teesside) |
| Davies, Bryan (EnfleldN.) | Jones, Dan (Burnley) | Rooker, J. W. |
| Davles, Denzll (Llanelli) | Judd, Frank | Roper, John |
| Davies, Ifor (Gower) | Kaufman, Gerald | Rose, Paul B. |
| Davis, S. Clinton (Hackney C.) | Kelley, Richard | Ross, Rt Hon (Kilm'nock) |
| Deakins, Eric | Kerr, Russell | Rowlands, Ted |
| Dean, Joseph (Leeds West) | Kilroy-Silk, Robert | Ryman, John |
| de Freitas, Rt Hon Sir Geoffrey | Kinnock, Neil | Sandelson, Neville |
| Delargy, Hugh | Lamborn, Harry | Sedgemore, B. |
| Dell, Rt Hon Edmund | Lamond, James | Selby, Harry |
| Dempsey, James | Latham, Arthur (Paddington) | Shaw, Arnold (Redbridge, llf.) |
| Doig, Peter | Leadbitter, Ted | Sheldon, Robert (Ashton-u-Lyne) |
| Dormand, Jack | Lee, John | Shore, Rt Hon Peter |
| Douglas-Mann, Bruce | Lestor, Miss Joan (Eton & Slough) | Short, Rt Hon Edward (Newcastle C) |
| Duffy, A. E. P. | Lewis, Arthur (Newham N.) | Short, Mrs Renée (Wolv NE) |
| Dunn, James A. | Lewis, Ron (Carlisle) | Silkln, Rt Hn John (Lewish.) |
| Dunnett, Jack | Lipton, Marcus | Silkln, Rt Hn S. C. (Southwk.) |
| Dunwoody, Mrs. Gwyneth | Litterick Tom | Sillars, James |
| Eadie, Alex | Lomas, Kenneth | Silverman, Julius |
| Edelman, Maurice | Loyden, Eddie | Skinner, Dennis |
| Edge, Geoffrey | Luard, Evan | Small, William |
| Edwards, Robert (Wolv. S.E.) | Lyon, Alexander (York) | Smith, John (N. Lanarkshire) |
| Ellis, John (Brigg & Scun) | Lyons, Edward (Bradford W) | Snape, Peter |
| Ellis, Tom (Wrexham) | Mabon, Dr J. Dickson | Spearing, Nigel |
| English, Michael | McCartney, Hugh | Spriggs, Leslie |
| Evans, loan L. (Aberdare) | McElhone, Frank | Stallard, A. W. |
| Evans, John (Newton) | MacFarquhar, R. | Stewart, Rt Hn Michael (H'smith, F) |
| Ewing, Harry (Stirling) | Mackenzie, Gregor | Stoddart, David |
| Faulds, Andrew | Mackintosh, John P. | Stott, Roger |
| Fernyhough, Rt Hon E. | Maclennan, Robert | Strang, Gavin |
| Fitch, Alan (Wigan) | McMillan, Tom (Glasgow C.) | Strauss, Rt Hon G. R. |
| Fitt, Gerard (Belfast) | McNamara, Kevin | Summerskill, Hon Dr Shirley |
| Flannery, Martin | Madden, Max | Taylor, Mrs Ann (Bolton W) |
| Fletcher, Raymond (Ilkeston) | Magee, Bryan | Thomas, Dafydd (Merioneth) |
| Fletcher, Ted (Darlington) | Mahon, Simon | Thomas, Jeffrey (Abertillery) |
| Foot, Rt Hon Michael | Mallalieu, J. P. W. | Thomas, Mike (Newcastle) |
| Ford, Ben T. | Marks, Ken | Thomas, Ron (Bristol NW) |
| Forrester, John | Marquand, David | Thorne, Stan (Preston) |
| Fowler, Gerald (The Wrekin) | Marshall, Dr Edmund (Goole) | Tierney, Sydney |
| Fraser, John (Lambeth, N) | Marshall, Jim (Leicester) | Tinn, James |
| Freeson, Reginald | Mason, Rt Hon Roy | Tomlinson, John |
| Garrett, John (Norwich S.) | Maynard, Miss Joan | Torney, Tom |
| Garrett, W. E. (Wallsend) | Meacher, Michael | Tuck, Raphael |
| George, Bruce | Mellish, Rt Hon Robert | Urwin, T. W. |
| Gilbert, Dr John | Mendelson, John | Varley, Rt Hon Eric G. |
| Ginsburg, David | Mikardo, Ian | Walden, Brian (B'ham, L'dyw'd) |
| Golding, John | Millan, Bruce | Walker, Harold (Doncaster) |
| Gould, Bryan | Miller, Dr M. (E. Kilbride) | Walker, Terry (Kingswood) |
| Gourlay, Harry | Miller, Mrs Millie (Redbridge) | Ward, Michael |
| Graham, Ted | Mitchell, R. C. (Soton, Itchen) | Watkins, David |
| Watkinson, John | Willey, Rt Hon Frederick | Wise, Mrs Audrey |
| Weetch, Ken | Williams, Alan (Swansea) | Woodall, Alec |
| Weitzman, David | Williams, Alan, Lee (Haver'g) | Wool, Robert |
| Wellbeloved, James | Williams, Rt Hn Shirley (Hertford) | Wrigglesworth, Ian |
| White, Frank R. (Bury) | Williams, W. T. (Warrington) | Young, David (Bolton E.) |
| White, James (Glasgow, P) | Wilson, Alexander (Hamilton) | TELLERS FOR THE AYES: |
| Whitehead, Phillip | Wilson, Rt Hon H. (Huyton) | Mr. Donald Coleman and |
| Wigley, Dafydd (Caernarvon) | Wilson. William (Coventry S.E.) | Mr. Laurie Pavitt. |
| NOES | ||
| Adley, Robert | Fry, Peter | Luce, Richard |
| Aitken, J. W. P. | Galbraith, Hon T. G. D. | MacCormick, lain |
| Alison, Michael | Gardiner, George (Reigate) | McCrindle, Robert |
| Amery, Rt Hon Julian | Gardner, Edward (S. Fylde) | McCusker, Harold |
| Arnold, Tom | Gilmour, Rt Hon Ian (Chesham) | Macfarlane, Neil |
| Atkins, Rt Hon H. (Spelthorne) | Gilmour, Sir John (East Fife) | MacGregor, John |
| Awdry, Daniel | Glyn, Dr Alan | Macmillan, Rt Hon M. (Farnham) |
| Bain, Mrs Margaret | Godber, Rt Hon Joseph | McNair-Wilson, M. (Newbury) |
| Banks, Robert | Goodhart, Philip | McNair-Wilson, P. (New Forest) |
| Beith, A. J. | Goodhew, Victor | Made), David |
| Bell, Ronald | Goodlad, A. | Marshall, Michael (Arundel) |
| Bennett, Sir Frederic (Torbay) | Gorst, John | Marten, Neil |
| Bennett, Dr Reginald (Fareham) | Gow, I. (Eastbourne) | Mates, Michael |
| Benyon, W. R. | Grant, Anthony (Harrow C.) | Mather, Carol |
| Berry, Hon Anthony | Gray, Hamish | Maude, Angus |
| Biffen, John | Grieve, Percy | Maudling, Rt Hon Reginald |
| Biggs-Davison, John | Griffiths, Eldon | Mawby, Ray |
| Blaker, Peter | Grist, Ian | Maxwell-Hyslop, Robin |
| Body, Richard | Grylis, Michael | Mayhew, Patrick |
| Boscawen, Hon Robert | Hall, Sir John | Meyer, Sir Anthony |
| Bowden, Andrew (Brighton) | Hall-Davis, A. G. F. | Miller, Hal (Bromsgrove) |
| Boyson, Dr Rhodes (Brent) | Hamilton, Michael (Salisbury) | Mills, Peter |
| Bradford, Rev Robert | Hampson, Dr Keith | Miscampbell, Norman |
| Braine, Sir Bernard | Hannam, John | Mitchell, David (Basingstoke) |
| Brittan, Leon | Harrison, Sir Harwood (Eye) | Molyneaux, James |
| Brotherton, Michael | Hastings, Stephen | Monro, Hector |
| Brown, Sir Edward (Bath) | Havers, Sir Michael | Montgomery, Fergus |
| Bryan, Sir Paul | Hawkins, Paul | Moore, John (Croydon C) |
| Buchanan-Smith, Alick | Hayhoe, Barney | More, Jasper (Ludlow) |
| Buck, Antony | Heath, Rt Hon Edward | Morgan, Geraint |
| Budgen, Nick | Henderson, Douglas | Morgan-Giles, Rear-Admiral |
| Bulmer, Esmond | Heseltine, Michael | Morris, Michael (Northants) |
| Carlisle, Mark | Hicks, Robert | Morrison, Charles (Devizes) |
| Carr, Rt Hon Robert | Higgins, Terence L. | Morrison, Peter (Chester) |
| Chalker, Mrs Lynda | Holland, Philip | Mudd, David |
| Churchill, W. S. | Hooson, Emlyn | Neave, Airey |
| Clark, Alan (Plymouth, S) | Hordern, Peter | Nelson, Anthony |
| Clarke, Kenneth (Rushcliffe) | Howe, Rt Hon Sir Geoffrey | Neubert, Michael |
| Cockcroft, John | Howell, David (Guildford) | Newton, Tony |
| Cooke, Robert (Bristol W.) | Howell, Ralph (North Norfolk) | Normanton, Tom |
| Cope, John | Howells, Geraint (Cardigan) | Nott, John |
| Cordle, John H. | Hunt, John | Onslow, Cranley |
| Cormack, Patrick | Hurd, D. | Oppenheim, Mrs Sally |
| Corrie, John | Hutchison, Michael Clark | Osborn, John |
| Costain, A. P. | Irving, Charles (Cheltenham) | Page, John (Harrow West) |
| Craig, Rt Hon W. (Belfast) | James, David | Paisley, Rev Ian |
| Critchley, Julian | Jenkin, Rt Hon Patrick (Redbr.) | Pardoe, John |
| Crouch, David | Jessel, Toby | Parkinson, Cecil |
| Crowder, F. P. | Johnson Smith, G. (E. Grinstead) | Pattie, Geoffrey |
| Davies, Rt Hon J. (Knutsford) | Johnston, Russell (Inverness) | Penhaligon, David |
| Dodsworth. Geoffrey | Jones, Arthur (Daventry) | Percival, Ian |
| Douglas-Hamilton, Lord James | Joseph, Rt Hon Sir Keith | Peyton, Rt Hon John |
| du Cann, Rt Hon Edward | Kaberry, Sir Donald | Pink, R. Bonner |
| Dunlop, J. | Kellett-Bowman, Mrs Elaine | Powell, Rt Hon J. Enoch |
| Durant, Tony | Kershaw, Anthony | Price, David (Eastleigh) |
| Dykes, Hugh | Kilfedder, James | Prior, Rt Hon James |
| Eden, Rt Hon Sir John | Kimball, Marcus | Pym, Rt Hon Francis |
| Edwards, Nicholas (Pembroke) | King, Evelyn (South Dorset) | Raison, Timothy |
| Elliott, Sir William | King, Tom (Bridgwater) | Rathbone, Tim |
| Emery, Peter | Kirk, Peter | Rawlinson, Rt Hon Sir Peter |
| Eyre, Reginald | Kitson, Sir Timothy | Rees, Peter (Dover & Deal) |
| Fairbairn, Nicholas | Knight, Mrs Jill | Rees-Davies, W. R. |
| Fairgrieve, Russell | Knox, David | Reid, George |
| Farr, John | Lamont, Norman | Renton, Rt Hn Sir D. (Hunts.) |
| Fell, Anthony | Lane, David | Renton, Tim (Mid-Sussex) |
| Finsberg, Geoffrey | Langford-Holt, Sir John | Rhys Williams, Sir Brandon |
| Fisher, Sir Nigel | Latham, Michael (Melton) | Ridley, Hon Nicholas |
| Fletcher, Alex (Edinburgh N.) | Lawrence, Ivan | Ridsdale, Julian |
| Fletcher-Cooke, Charles | Lawson, Nigel | Rifkind, Malcolm |
| Fookes, Miss Janet | Le Marchant, Spencer | Rippon, Rt Hon Geoffrey |
| Fowler, Norman (Sutton C.) | Lester, Jim (Beeston) | Roberts, Michael (Cardiff N.W.) |
| Fox, Marcus | Lewis, Kenneth (Rutland) | Roberts, Wyn (Conway) |
| Fraser, Rt Hon H. (Stafford & St.) | Lloyd, Ian (Havant) | Ross, Stephen (Isle of Wight) |
| Freud, Clement | Loveridge, John | Ross, William (Londonderry) |
| Rossi, Hugh (Hornsey) | Stainton, Keith | Viggers, P. J. |
| Rest, Peter (SE Derbyshire) | Stanbrook, Ivor | Wainwright, Richard (Colne V) |
| Sainsbury, Tim | Stanley, John | Wakeham, John |
| St. John-Stevas, Norman | Steen, Anthony (Liverpool) | Waider, David (Clitheroe) |
| Scott, Nicholas | Stewart, Donald (Western Isles) | Walker, Rt Hon P. (Worcester) |
| Scott-Hopkins, James | Stewart, Ian (Hitchin) | Walker-Smith, Rt Hon Sir Derek |
| Shaw, Giles (Pudsey) | Stokes, John | Wall, Patrick |
| Shaw, Michael (Scarborough) | Tapsell, Peter | Walters, Dennis |
| Shellon, William (Lambeth St.) | Taylor, R. (Croydon NW) | Warren, Kenneth |
| Shepherd, Colin | Taylor, Teddy (Glasgow C.) | Weatherill, Bernard |
| Shersby, Michael | Tebbit, Norman | Wells, John |
| Silvester, Fred | Temple-Morris, P. | Whitelaw, Rt Hon William |
| Sims, Roger | Thatcher, Rt Hon M. | Wiggin, Jerry (Weston-s-Mare) |
| Sinclair, Sir George | Thomas, Rt Hon P. (Barnet) | Winterton, Nicholas |
| Smith, Cyril (Rochdale) | Thompson, George | Wood, Rt Hon Richard |
| Smith, Dudley (Warwick) | Thorpe, Rt Hon Jeremy (Devon) | Young, Sir George (Ealing) |
| Speed, Keith | Townsend, Cyril D. | Younger, Hon George |
| Spence, John | Trotter, Neville | |
| Spicer James (W. Dorset) | Tugendhat, Christopher | TELLERS FOR THE NOES: |
| Spicer, Michael (S. Worcester) | van Straubenzee, W. R. | Mr. John Stradling and |
| Sproat. lain | Vaughan, Dr Gerard | Mr. Adam Butler. |
§ Question accordingly agreed to.
§ Question put accordingly, That this House doth disagree with the Lords in the said amendment:—
684§ The House divided: Ayes 297, Noes 278.
687| Division No. 34.] | AYES | [12.17 a.m. |
| Abse, Leo | Cunningham, Dr J. (Whiten.) | Hamilton, W. W. (Central Fife) |
| Allaun, Frank | Dalyell, Tarn | Hamling, William |
| Anderson, Donald | Davidson, Arthur | Hardy, Peter |
| Archer, Peter | Davies, Bryan (Enfield N.) | Harper, Joseph |
| Armstrong, Ernest | Davies, Denzil (Llanelli) | Harrison, Walter (Wakefield) |
| Ashley, Jack | Davies, Ifor (Gower) | Hart, Rt Hon Judith |
| Ashlon, Joe | Davis, S. Clinton (Hackney C.) | Hatton, Frank |
| Atkins, Ronald (Preston N) | Deakins, Eric | Hayman, Mrs Helene |
| Atkinson, Norman | Dean, Joseph (Leeds West) | Heffer, Eric S. |
| Bagier, Gordon A. T. | de Freitas, Rt Hon Sir Geoffrey | Hooley, Frank |
| Barnett, Guy (Greenwich) | Delargy, Hugh | Horam, John |
| Barnett, Joel (Heywood) | Dell, Rt Hon Edmund | Howell, Denis (B'ham, Sm H) |
| Bates, Alf | Dempsey, James | Hoyle, Douglas (Nelson) |
| Bean, Robert E. | Doig, Peter | Huckfleld, Leslie |
| Benn, Rt Hn Anthony Wedgwood | Dormand, Jack | Hughes, Rt Hon C. (Anglesey) |
| Bennett, Andrew (Stockport N) | Douglas-Mann, Bruce | Hughes, Mark (Durham) |
| Bidwell, Sydney | Duffy, A. E. P. | Hughes, Robert (Aberdeen N.) |
| Bishop, Edward | Dunn, James A. | Hunter, Adam |
| Blenkinsop, Arthur | Dunnett, Jack | Irvine, Rt Hon Sir A. (L'pool) |
| Boardman, H. | Dunwoody, Mrs. Gwyneth | Irving, Rt Hon S. (Dartford) |
| Booth, Albert | Eadie, Alex | Jackson, Colin (Brighouse) |
| boothroyd, Miss Betty | Edelman, Maurice | Jackson, Miss Margaret (Lincoln) |
| Bottomley, Rt Hon Arthur | Edge, Geoffrey | Janner, Greville |
| Boyden, James (Bish Auck.) | Edwards, Robert (Wolv. S.E.) | Jay, Rt Hon Douglas |
| Bradley, Tom | Ellis, Tom (Wrexham) | Jeger, Mrs Lena |
| Bray, Dr Jeremy | English, Michael | Jenkins, Hugh (Wandsworth) |
| Brown, Hugh D. (Glasgow Pr.) | Evans, loan L. (Aberdare) | Jenkins, Rt Hon Roy (B'ham, St) |
| Brown, Robert C. (Newcastle) | Evans, John (Newton) | John, Brynmor |
| Brown, Ronald (Hackney S.) | Ewing, Harry (Stirling) | Johnson, James (Kingston, W.) |
| Buchan, Norman | Faulds, Andrew | Jones, Alec (Rhondda) |
| Buchanan, Richard | Fernyhough, Rt Hon E. | Jones, Barry (East Flint) |
| Butler, Mrs Joyce (Haringey) | Fitch, Alan (Wigan) | Jones, Dan (Burnley) |
| Callaghan, Jim (Middleton & P.) | Fitt, Gerard (Belfast) | Judd, Frank |
| Campbell, Ian | Flannery, Martin | Kaufman, Gerald |
| Cant, R. B. | Fletcher, Raymond (likeston) | Kelley, Richard |
| Carmichael, Nell | Fletcher, Ted (Darlington) | Kerr, Russell |
| Carter, Ray | Foot, Rt Hon Michael | Kilroy-Silk, Robert |
| Carter-Jones, Lewis | Ford, Ben T. | Kinnock, Neil |
| Cartwright, John | Forrester, John | Lamborn, Harry |
| Castle, Rt Hon Barbara | Fowler, Gerald (The Wrekin) | Lamond, James |
| Clemitson, I. M. | Fraser, John (Lambeth, N) | Latham, Arthur (Paddington) |
| Cocks, Michael (Bristol S.) | Freeson, Reginald | Leadbitter, Ted |
| Cohen, Stanley | Garrett, John (Norwich S) | Lee, John |
| Coleman, Donald | Garrett, W. E. (Wallsend) | Lestor, Miss Joan (Eton 4 Slough) |
| Colquhoun, Mrs Maureen | George, Bruce | Lewis, Arthur (Newham N.) |
| Concannon, J. D. | Gilbert, Dr John | Lewis, Ron (Carlisle) |
| Conlan, Bernard | Ginsburg, David | Lipton, Marcus |
| Cook, Robin F. (Edin C) | Golding, John | Litterick, Tom |
| Corbett, Robin | Gould, Bryan | Lomas, Kenneth |
| Cox, Thomas (Wands, Toot) | Gourlay, Harry | Loyden, Eddie |
| Craigen, J. M. (Glasgow M.) | Graham, Ted | Luard, Evan |
| Crawshaw, Richard | Grant, George (Morpeth) | Lyon, Alexander (York) |
| Crosland, Rt Hon Anthony | Grant, John (Islington C.) | Lyons, Edward (Bradford W) |
| Cryer, Bob | Grocott, Bruce | Mabon, Dr J. Dickaon |
| Cunningham, G. (Islington S.) | Hamilton, James (Bothwell) | McCartney, Hugh |
| McElhone, Frank | Parker, John | Strang, Gavin |
| MacFarquhar, R. | Parry, Robert | Strauss, Rt Hon G. R. |
| Mackenzie, Gregor | Pavitt, Laurie | Summerskill, Hon Dr Shirley |
| Mackintosh, John P. | Peart, Rt Hon Fred | Taylor, Mrs Ann (Bolton W) |
| Maclennan, Robert | Pendry, Tom | Thomas, Dafydd (Merioneth) |
| McMillan, Tom (Glasgow C.) | Perry, Ernest | Thomas, Jeffrey (Abertillery) |
| McNamara, Kevin | Phipps, Dr Colin | Thomas, Mike (Newcastle) |
| Madden, Max | Prentice, Rt Hon Reg | Thomas, Ron (Bristol NW) |
| Magee, Bryan | Prescott, John | Thorne, Stan (Preston) |
| Mahon, Simon | Price, William (Rugby) | Tierney, Sydney |
| Mallalieu, J. P. W. | Radice, Giles | Tinn, James |
| Marks, Ken | Rees, Rt Hon Merlyn (Leeds S.) | Tomlinson, John |
| Marquand, David | Richardson, Miss Jo | Torney, Tom |
| Marshall, Dr Edmund (Goole) | Roberts, Albert (Normanton) | Tuck, Raphael |
| Marshall, Jim (Leicester) | Roberts, Gwilym (Cannock) | Urwin, T. W. |
| Mason, Rt Hon Roy | Rodgers, George (Chorley) | Varley, Rt Hon Eric G. |
| Maynard, Miss Joan | Rodgers, William (Teesside) | Walden, Brian (B'ham, L'dyw'd) |
| Meacher, Michael | Rooker, J. W. | Walker, Harold (Doncaster) |
| Mellish, Rt Hon Robert | Roper, John | Walker, Terry (Kingswood) |
| Mendelson, John | Rose, Paul B. | Ward, Michael |
| Mikardo, Ian | Ross, Rt Hon W. (Kilm'nock) | Watkins, David |
| Millan, Bruce | Rowlands, Ted | Watkinson, John |
| Miller, Dr M. (E. Kilbrlde) | Flyman, John | Weetch, Ken |
| Miller, Mrs Millie (Redbridge) | Sandelson, Neville | Weitzman, David |
| Mitchell, R. C. (Soton, Itchen) | Sedgemore, B. | Wellbeloved, James |
| Molloy, William | Selby, Harry | While, Frank R. (Bury) |
| Moonman, Eric | Shaw, Arnold (Redbridge, IIf.) | While, James (Glasgow, P) |
| Morris, Alfred (Wylhenshawe) | Sheldon, Robert (Ashton-u-Lyne) | Whitehead, Phillip |
| Morris, Charles R. (Openshaw) | Shore, Rt Hon Peter | Wigley, Dafydd (Caernarvon) |
| Morris, Rt Hon John (Aberavon) | Short, Rt Hon Edward (Newcastle C) | Willey, Rt Hon Frederick |
| Moyle, Roland | Short, Mrs Renée (Wolv NE) | Williams, Alan (Swansea) |
| Murray, Ronald King | Silkin, Rt Hn John (Lewish.) | Williams, Alan, Lee (Haver'g) |
| Newens, Stanley | Silkin, Rt Hn S. C. (Southwk.) | Williams, Rt Hn Shirley (Hertford) |
| Noble, Mike | Sillars, James | Williams, W. T. (Warrington) |
| Oakes, Gordon | Silverman, Julius | Wilson, Alexander (Hamilton) |
| Ogden, Eric | Skinner, Dennis | Wilson, Rt Hon H. (Huyton) |
| O'Halloran, Michael | Small, William | Wilson, William (Coventry S.E.) |
| O'Malley, Brian | Smith, John (N. Lanarkshire) | Wise, Mrs Audrey |
| Orbach, Maurice | Snape, Peter | Woodall, Alec |
| Orme, Rt Hon Stanley | Spearing, Nigel | Woof, Robert |
| Ovenden, John | Spriggs, Leslie | Wrigglesworth, Ian |
| Owen, Dr David | Stallard, A. W. | Young, David (Bolton E.) |
| Padley, Walter | Stewart, Rt Hn Michael (H, smith, F) | TELLERS FOR THE AYES: |
| Palmer, Arthur | Stoddart, David | Mr. Walter Johnson and |
| Park, George | Stott, Roger | Mr. John Ellis. |
| NOES | ||
| Adley, Robert | Cooke, Robert (Bristol W) | Gardner, Edward (S. Fylde) |
| Altken, J. W. P. | Cope, John | Gilmour, Rt Hon Ian (Chesham) |
| Alison, Michael | Cordle, John H. | Gilmour, Sir John (East Fife) |
| Amery, Rt Hon Julian | Cormack, Patrick | Glyn, Dr Alan |
| Arnold, Tom | Corrie, John | Godber, Rt Hon Joseph |
| Alkins, Rt Hon H. (Spelthorne) | Costain, A. P. | Goodhart, Philip |
| Awdry, Daniel | Craig, Rt Hon W. (Belfast) | Goodhew, Victor |
| Banks, Robert | Critchley, Julian | Goodlad, A. |
| Beith, A. J. | Crouch, David | Gorst, John |
| Bell, Ronald | Crowder, F. P | Gow, I. (Eastbourne) |
| Bennett, Sir Frederic (Torbay) | Davies, Rt Hon J. (Knutsford) | Grant, Anthony (Harrow C.) |
| Bennett, Dr Reginald (Fareham) | Dodsworth, Geoffrey | Gray, Hamish |
| Benyon, W. R. | Douglas-Hamilton, Lord James | Grieve, Percy |
| Berry, Hon Anthony | du Cann, Rt Hon Edward | Griffiths, Eldon |
| Biffen, John | Dunlop, J. | Grist, Ian |
| Biggs-Davison, John | Durant, Tony | Grylls, Michael |
| Blaker, Peter | Dykes, Hugh | Hall, Sir John |
| Body, Richard | Eden, Rt Hon Sir John | Hall-Davis, A. G. F. |
| Boscawen, Hon Robert | Edwards, Nicholas (Pembroke) | Hamilton, Michael (Salisbury) |
| Bowden, Andrew (Brighton) | Elliott, Sir William | Hampson, Dr Keith |
| Boyson, Dr Rhodes (Brent) | Emery, Peter | Hannam, John |
| Bradford, Rev Robert | Eyre, Reginald | Harrison, Sir Harwood (Eye) |
| Braine, Sir Bernard | Fairbairn, Nicholas | Hastings, Stephen |
| Brittan, Leon | Fairgrleve, Russell | Havers, Sir Michael |
| Brotherton, Michael | Farr, John | Hawkins, Paul |
| Brown, Sir Edward (Bath) | Fell, Anthony | Hayhoe, Barney |
| Bryan, Sir Paul | Finsberg, Geoffrey | Heath, Rt Hon Edward |
| Buchanan-Smith, Alick | Fisher, Sir Nigel | Henderson, Douglas |
| Buck, Antony | Fletcher, Alex (Edinburgh N.) | Heseltine, Michael |
| Budgen, Nick | Fletcher-Cooke, Charles | Hicks, Robert |
| Bulmer, Esmond | Fookes, Miss Janet | Higgins, Terence L, |
| Carlisle, Mark | Fowler, Norman (Sutton C.) | Holland, Philip |
| Carr, Rt Hon Robert | Fox, Marcus | Hooson, Emlyn |
| Chalker, Mrs Lynda | Fraser, Rt Hon H. (Stafford & St.) | Hordern, Peter |
| Churchill, W. S. | Freud, Clement | Howe, Rt Hon Sir Geoffrey |
| Clark, Alan (Plymouth, S) | Fry, Peter | Howell, David (Guildford) |
| Clarke, Kenneth (Rushcliffe) | Galbraith, Hon T. G. D. | Howell, Ralph (North Norfolk) |
| Cockcroft, John | Gardiner, George (Reigate) | Howella, Geraint (Cardigan) |
| Hunt, John | Mitchell, David (Basingstoke) | Shaw, Michael (Scarborough) |
| Hurd, Douglas | Molyneaux, James | Shelton, William (Lambeth St.) |
| Hutchison, Michael Clark | Monro, Hector | Shepherd, Colin |
| Irving, Charles (Cheltenham) | Montgomery, Fergus | Shersby, Michael |
| James, David | Moore, John (Croydon C) | Silvester, Fred |
| Jenkin, Rt Hon Patrick (Redbr.) | More, Jasper (Ludlow) | Sims, Roger |
| Jessel, Toby | Morgan, Geraint | Sinclair, Sir George |
| Johnson Smith, G. (E. Grinstead) | Morgan-Giles, Rear-Admiral | Smith, Cyril (Rochdale) |
| Johnston, Russell (Inverness) | Morris, Michael (Northants) | Smith, Dudley (Warwick) |
| Jones, Arthur (Daventry) | Morrison, Charles (Devizes) | Speed. Keith |
| Joseph, Rt Hon Sir Keith | Morrison, Peter (Chester) | Spence, John |
| Kaberry, Sir Donald | Mudd, David | Spicer, James (W. Dorset) |
| Kellett-Bowman, Mrs Elaine | Neave, Airey | Spicer, Michael (S. Worcester) |
| Kershaw, Anthony | Nelson, Anthony | Sproat, lain |
| Kilfedder, James | Neubert, Michael | Stainton, Keith |
| Kimball, Marcus | Newton, Tony | Stanbrook, Ivor |
| King, Evelyn (South Dorset) | Normanton, Tom | Stanley, John |
| King, Tom (Bridgwater) | Nott, John | Steen, Anthony (Liverpool) |
| Kirk, Peter | Onslow, Cranley | Stewart, Donald (Western Isles) |
| Kitson, Sir Timothy | Oppenheim, Mrs Sally | Stewart, Ian (Hitchin) |
| Knight, Mrs Jill | Osborn, John | Stokes, John |
| Knox, David | Page, John (Harrow West) | Tapsell, Peter |
| Lamont, Norman | Paisley, Rev Ian | Taylor, R. (Croydon NW) |
| Lane, David | Pardoe, John | Taylor, Teddy (Glasgow C.) |
| Langford-Holt, Sir John | Parkinson, Cecil | Tebbit, Norman |
| Latham, Michael (Melton) | Pattle, Geoffrey | Temple-Morris, P. |
| Lawrence, Ivan | Penhaligon, David | Thatcher, Rt Hon M. |
| Lawson, Nigel | Percival, Ian | Thomas, Rt Hon P. (Barnet) |
| Le Marchant, Spencer | Peyton, Rt Hon John | Thompson, George |
| Lester, Jim (Beeston) | Pink, R. Bonner | Thorpe, Rt Hon Jeremy (Devon) |
| Lewis, Kenneth (Rutland) | Powell, Rt Hon J. Enoch | Townsend, Cyril D. |
| Lloyd, Ian (Havant) | Price, David (Eastleigh) | Trotter, Neville |
| Loveridge, John | Prior, Rt Hon James | Tugendhat, Christopher |
| Luce, Richard | Pym, Rt Hon Francis | van straubenzee, W. H. |
| MacCormick, lain | Raison, Timothy | Vaughan, Dr Gerard |
| McCrindle, Robert | Rathbone, Tim | Viggers, P. J. |
| McCusker, Harold | Rawlinson, Rt Hon Sir Peter | Wainwright, Richard (Colne V) |
| Macfarlane, Neil | Rees, Peter (Dover & Deal) | Wakeham, John |
| MacGregor, John | Rees-Davies, W. R. | Walder, David (Clitheroe) |
| Macmillan, Rt Hon M. (Farnham) | Renton, Rt Hn Sir D. (Hunts.) | Walker, Rt Hon P. (Worcester) |
| McNair-Wilson, M. (Newbury) | Renton, Tim (Mid-Sussex) | Walker-Smith, Rt Hon Sir Derek |
| McNair-Wilson, P. (New Forest) | Rhys Williams, Sir Brandon | Wall, Patrick |
| Madel, David | Ridley, Hon Nicholas | Walters, Dennis |
| Marshall, Michael (Arundel) | Rifkind, Malcolm | Warren, Kenneth |
| Marten, Neil | Rippon, Rt Hon Geoffrey | Weatherill, Bernard |
| Mates, Michael | Roberts, Michael (Cardiff N.W.) | Wells, John |
| Mather, Carol | Roberts, Wyn (Conway) | Whitelaw, Rt Hon William |
| Maude, Angus | Ros3, Stephen (Isle of Wight) | Wiggin, Jerry (Weston-s-Mare) |
| Maudling, Rt Hon Reginald | Ross, William (Londonderry) | Winterton, Nicholas |
| Mawby, Ray | Rossi, Hugh (Hornsey) | Wood, Rt Hon Richard |
| Maxwell-Hyslop, Robin | Rost, Peter (SE Derbyshire) | Young, Sir George (Ealing) |
| Mayhew, Patrick | Sainsbury, Tim | Younger, Hon George |
| Meyer, Sir Anthony | St. John-Stevas, Norman | |
| Miller, Hal (Bromsgrove) | Scott, Nicholas | TELLERS FOR THE NOES: |
| Mills, Peter | Scott-Hopkins, James | Mr. John Stradling Thomas and |
| Miscampbell, Norman | Shaw. Giles (Pudsey) | Mr. Adam Butler |
§ Question accordingly agreed to.
§ Committee appointed to draw up a Reason to be assigned to the Lords for disagreeing to their amendment to the Bill: Mrs. Barbara Castle, Mr. Kenneth Clarke, Mr. J. D. Dormand, Sir Geoffrey Howe and Mr. Brian O'Malley; Three to be the quorum.—[Mr. O'Malley.]
§ To withdraw immediately.
§ Reason for disagreement to the Lords Amendment reported, and agreed to; to be communicated to the Lords.