§ Mr. Tony Newton (Braintree)I beg to move Amendment No. 259, in page 37, line 15, leave out from 'year' to 'and' in line 17 and insert 'is' 15 per cent.'.
§ Mr. SpeakerWith this we may take the following amendments:
No. 260, in page 37, line 15, leave out from 'year' to 'and' in line 17 and insert 'is 12½ per cent.'.
No. 261, in page 37, line 15, leave out '20' and insert '15'.
No. 262, in page 37, line 15, leave out '20' and insert '12½'.
§ Mr. NewtonI hope you will not rule me out of order, Mr. Speaker, if I thank you for the courtesy and kindness you have shown during a number of representations made to you about my amendments. I am grateful that you have allowed this group to be added to those already selected.
Although the motor industry and those of us who have argued about cars as benefits in kind are happy with many of the concessions the Government have made, there are a number of points still causing concern and my amendments cover one of them. Cars which are deemed to have an insubstantial business use will be taxed at 20 per cent. of the original market value for the first four years and at 10 per cent. for the remaining period. In Committee, we moved an amendment to reduce those rates to a straight line basis of taxation at 12½ per cent. over the whole period. I was not particularly happy with the Government's arguments at that time and I am even less happy now, following the concessions they have made in almost every other part of the Bill. The harshness of the provisions for cars which have an insubstantial business use stand out starkly against what has been done elsewhere and the amendments which the Government are to move later.
In Committee the Financial Secretary undertook to consider phasing the introduction of these provisions, with the possibility of applying them at half rate in 1032 the first year or so. He has scrapped the phasing proposal in other parts of the Bill, but has halved the rates concerned anyway. Here we still have the original harsh levels.
Amendment No. 259 would substitute for the 20 per cent. and 10 per cent. figures, a straight line basis of 15 per cent. Amendment No. 260 would substitute a straight line basis of 12½ per cent. The other amendments propose a reduction of the 20 per cent. figure to 15 per cent. or 12½ per cent. Those are the choices. I am not dogmatic about which is best. I shall await the Financial Secretary's response before making a judgment.
The proposed basis of the charge is excessive. At the 20 per cent. rate, a person will have been taxed 80 per cent. of the value of the car within four years. Even with the drop to a 10 per cent. rate of charge after those four years, he will have been taxed on the entire value of the vehicle after only six years. That is a high basis of charge by any standard.
Whatever the level at which the charge is thought to be right, the ratio between the first four years and the subsequent years would seem to be wrong by comparison with the rest of the Bill. That presupposes a drop of one-half in the tax charge at the four-year break point.
In almost every case the differential, under the amended schedule, is only one-third between the charge for the first four years and that for the subsequent period. Whatever the level of the charge, it is difficult to see why there should be a differential of one-half in these provisions compared with a differential of only one-third in almost all the other provisions relating to the charge on cars. On that basis the 20 per cent. figure is too high. A charge of 15 and 10 per cent. would be fairer and more in line with the rest of the Bill than the 20 per cent. and 10 per cent. charge.
I now refer to the possible practical effect of the proposals on the car market. There is a considerable risk that the net result of these proposals will be to encourage people to keep their cars significantly longer. For example, a car whose original market cost now is £5,000 will create for the beneficiary a tax charge of 1033 £1,000 in the early years. At the end of the four years, it will drop to £500. The person involved will have reduced his tax burden to that extent. The firm may wish to replace that car. The car that cost £5,000 originally may have to be replaced by one costing £7,000, which would mean a tax charge of £1,400. By having his car replaced at that point, the person involved would incur an additional charge to tax of £900 a year. That will give him an incentive to ask his employer not to replace the car but to allow him to carry on with the older model.
But I am not concerned with the effects on the person. But that process may do considerable damage to the demand for cars such as Rover and Jaguar at the prestige end of the British motor car industry. That cannot be to the benefit of the British motor car industry, which depends significantly for its overseas markets and profitability on those kinds of vehicles.
Under the heading of the practical effect on the car market, there must be a considerable chance that some people will find it better and more sensible to buy their own cars and claim against the company for whatever business mileage they do rather than have a company car. It is not easy to work out the figures. However, there is a point—under these proposals we shall be close to it—at which the employee would be significantly better off to borrow to buy a car and build up an asset of his own rather than pay this level of tax charge on a car provided by the company. The consequence of that might easily be once again to divert demand from British cars, which are on the whole purchased by companies for fleet purposes, to imported cars, which are notoriously more popular with those who buy cars for themselves.
10.15 p.m.
The effect of both those factors may be marginal. One cannot readily judge. However, it is clear that under neither head can there be any benefit to the British motor car industry and under both heads there could be some disadvantage to that industry.
The fourth point concerns the practical effect of these proposals on individuals. At the moment, cars in this 1034 category are taxed under Inland Revenue rules at only 12½ per cent. compared with the proposed 20 per cent. Some firms, depending on the agreements that they have with the Inland Revenue, are taxed at only 10 per cent. That means that for many individuals there will be a doubling of the tax charge at high marginal rates of taxation on quite expensive cars. Those people, though they are not amongst the poorest sections of our community, are amongst those managers who, according to what the Chancellor has repeatedly said, have been having a hard time under the tax and pay policies. The disincentive effects on those people, whom the Chancellor is now anxious to help, will do great damage to British industry. These proposals go in the opposite direction from any desire to help middle and upper management in British industry. They will hit many of those people very hard, as many hon. Members who have had letters from Unilever and other companies know. The Government cannot lightly dismiss that point in present circumstances.
There is also the issue of fairness between different individuals. I should like to quote from a letter which appeared in the Financial Times this morning which gives an example of the difference in the tax charges which would now arise, depending on which side of the quite narrow line the taxation provisions fell whether they were taxed as cars available for private use or as having insubstantial business use. The letter reads:
Case 1. Business car costing £6,000—user doing, say, 5,000 business miles and unlimited private milage, would have additional taxable earnings—under the proposals that we shall be discussing later—of between £175 and £350 depending on engine size.Case 2. Company car also costing £6,000 but with insufficient mileage to classify a business car would, assuming, say, 4,000 business miles and 14,000 total mileage have additional taxable earnings calculated as follows.The figures are then given. I shall not go through them in detail. However, as far as I can see, the writer of the letter rightly arrives at a total taxable benefit of £857. Therefore, with a very narrow dividing line, individuals in very much the same position could end up on this figuring with a taxable benefit of between £175 at one 1035 end of the scale and £857 at the other end. If that situation could conceivably arise, I do not think that it could possibly be defended as being fair.From talks that I have had with people in industry who may be affected by these provisions, one point emerges. It is not a statistical point nor in some ways a point of political argument, but it is one which the Financial Secretary cannot dismiss. It is that, in practice, those individuals and companies which have been honest and open in their dealings with the Inland Revenue will be penalised compared with those who, frankly, have bent the rules.
That point has been made to me by some who work for large international companies in this country which, contrary to popular impression, are amongst the most scrupulous in not appearing to dodge or bend the tax rules in any way. They have made arrangements with the Inland Revenue which have openly acknowledged that the business use is insubstantial in circumstances where others might easily have sought to bend the rules and gain some benefit for their employees. People in these companies are now saying "Look where you have got us by being honest in your dealings and playing it absolutely straight. We shall be clobbered, whereas those who have been bending the rules will get away with lower tax burdens."
It is not an argument on which I would want to put too much stress except that we are already building up a situation in which far too many people have come to the conclusion that it simply does not pay to be honest in their dealings over tax. We are creating a situation in which we are encouraging a growing tax immorality in the sense that these proposals appear to penalise people who have played it absolutely straight for the way in which they have played it absolutely straight. These proposals will only do additional damage, and that is an important political reason why the Financial Secretary should reconsider them.
§ Mr. Hal Miller (Bromsgrove and Redditch)I must apologise to my hon. Friend the Member for Braintree (Mr. Newton), and to the House, for missing his first sentence when he rose to move his amendment, with which I have every sympathy.
The Government are to be belatedly congratulated on recognising that they 1036 have made an absolute nonsense of this whole proposal to tax company cars. The reasons why it is a nonsense are completely self-evident. As stated the other day, in response to a question from me, sales of company cars amount to between 50 per cent. to 60 per cent. of the new registrations in this country, and, of those sales of these new registrations, about 85 per cent. to 90 per cent. in the company sector are British cars.
It will be readily seen that the weight of imports, now amounting to 35 per cent. of new registrations, falls in the private sector. It is no wonder that the Government have had to reconsider their original proposals, and we must be thankful for that. But tomorrow afternoon we are to have unveiled the report of the tripartite group working on the motor industry—the Government, management and unions—under the auspices of NEDC. The House will recall the statement we had last week on the Government's industrial strategy. We do not need this great unveiling to remind us that, long ago, the little Neddy of the motor industry made it plain that one of the greatest disincentives to the motor industry in this country was the constant changing of Government policy of which we have a prize example once more before us this evening.
But that is not all, because the Government are continuing to change the rules for the motor industry at the present time. I do not wish to stray beyond the bounds of order, but it is perhaps within the recollection of the House that the Secretary of State for Industry gave me an assurance that there was to be no move away from the road fund licence towards a tax on petrol. Yet, two days later, the Secretary of State for Energy announced that it was still under active consideration in his Department. What are we to make of a Government who handle their affairs in this way? More importantly, what is the British motor car industry to make of it? How is that industry to make cars when the ground rules are being constantly changed? That is the question to which the Financial Secretary has to address himself this evening.
The remaining points have been more than adequately covered by my hon. Friend the Member for Braintree. I am 1037 merely trying to underline, and emphasise, the seriousness of the steps which are being taken this evening on the industrial front. As a taxpayer, I always had to pay between 12½ per cent. and 20 per cent. for the private use of the company car that I used to enjoy. I cannot see why the Government have not paid more attention to enforcement and, if necessary, to an increase of such well understood rules rather than introducing a whole lot of new provisions which will only create uncertainty and damage to the car industry while, at the same time, the Government are pouring in thousands of millions of pounds of our money in order to sustain that industry. It makes no sense whatever.
I hope that the Financial Secretary will address himself seriously to the case we are making, not in any partisan spirit but as part of the Government's own industrial strategy. For heaven's sake let us have some continuity in fiscal policy towards the motor industry.
§ Mr. Peter Hordern (Horsham and Crawley)I had not intended to speak in the debate, but I noted that my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller) said that company cars accounted for 60 per cent. of new registrations from the entire British motor industry. I cannot, therefore, understand how these provisions could have been put in the Bill in the first place. It is, of course, all of a piece with the other proposals which appeared in the Bill affecting tied houses and airline employees. First, we found that the proposals regarding tied houses caught a senior union official. Then it was found that under the provision directed at airline employees railwaymen also would be caught, so that was dropped.
Until now, however, the provision at present under debate has remained in the Bill. If my hon. Friend is right—I am sure that he is—in telling us that 60 per cent. of new registrations from the British motor industry are accounted for by company cars and Civil Service cars, that is a very high proportion. As I understand it, 35 per cent. of new registrations are accounted for by imports.
It is pretty obvious that the pool cars and other Civil Service cars and company cars are, by and large, of British manu- 1038 facture. Therefore, the free market is only 40 per cent., and 35 per cent. of it is taken by foreign imports, which means that only 5 per cent. are genuinely bought by people acting on their own account. That is the proportion which they are prepared to buy from the British motor industry.
I wonder what Lord Ryder thinks about it all. We are told that he gets to his office every morning at half-past seven, but then he looks at the newspapers and sees that the Government propose to make these charges and tax those who have company cars.
§ Mr. Hal MillerI should not like my hon. Friend to be misled by the rather jumbled way in which I presented the figures. In fact, it is 60 per cent. of total new registrations, and of that 60 per cent. about 15 per cent. are imports, the remaining 85 per cent. of the 60 per cent. being British made. It is not, therefore, quite fair to say that the private motorist buys only 5 per cent. of British cars.
I hope that I have made the position clear: 15 per cent. of the 60 per cent. represents imports in the company car sector. A large part of import sales goes to the private sector, and the great damage which is being done here—if I may be a hit technical—is that market demand will be pushed down to the smaller car, where our performance and manufacturing capacity is weakest.
§ Mr. HordernI am grateful to my hon. Friend. I thought for a moment that he was about to tell me what Lord Ryder had for breakfast, but I am obliged to him for his explanation because I now understand that the situation is not quite as weak as I originally thought. Nevertheless, it is still pretty bad, so what Lord Ryder thinks when he goes to the British Leyland factories and tells the workers that they must carry on with their production becanuse otherwise funds will not be forthcoming for investment, and he sees at the same time this proposal from the Government, I simply cannot imagine. I assume that during his remarks to the workers he does not enjoy telling them that the Government propose to make these charges on those who receive assistance from their companies in acquiring their cars and that they are to be heavily taxed.
1039 The Government have put in fresh proposals, and rightly so, but any additional burden on the individual who will now be assessed at a higher rate of tax must be recognised as a burden on the British motor industry itself. I cannot imagine how the Government ever thought it right to place this additional burden on the British motor industry, which is already under enormous competition and pressure and is currently looking for assistance from the Government in other directions. The Government must be absolutely crazy to produce this kind of provision.
10.30 p.m.
In order to qualify for any reduction in the assessment, employees have to show that they have driven 25,000 miles in a year. For many salesmen that is a high mileage. People will therefore be travelling in ever-widening circles to carry out their work. That is no incentive to efficiency, but the provision will have that kind of adverse effect.
I am surprised that, instead of scrapping the whole proposal, the Government have decided slightly to amend it. It is bound to be an extra burden on the motor industry which can ill afford that at this time. The Government would have been better to scrap the proposal.
§ Mr. David MitchellI wish to question the Minister on another aspect of the proposal. I refer to the small business man, such as the farmer, market gardener or shopkeeper, who uses his vehicle as an essential part of his daily business life. He will not travel 25,000 miles in a year. He will probably have an estate-type car so that he can collect and deliver goods but he will not use it much in his private life because business will be his way of life. There are many people such as that particularly in rural areas, who will say to me "Is it right that a Minister who uses his car for work should pay no tax whereas, as a business man doing fewer than 25,000 miles a year, I shall be clobbered?" How do I reply to that?
§ Mr. Robert SheldonSome of the arguments used in the debate have related to amendments which are to be debated later and it might be better if I dealt with them at that time. The 25,000-mile argument is in that category. That amendment concerns those cars in substantial 1040 business use. I take the point made by the hon. Member for Horsham and Crawley (Mr. Hordern) about the motor industry.
I do not believe that the amendment is the subject of much controversy and feeling about the future in the motor industry because we are dealing with a small proportion of cars. One figure that I have seen shows that about 2,000 out of the 700,000 company cars in use are involved. That is only one estimate, but it helps to indicate the number that now engages our attention.
§ Mr. NewtonWe are concerned with the upper end of the car market and 2,000 out of such quality, prestige cars is a greater proportion than the Minister implies.
§ Mr. SheldonMy information seems to cast doubt on that. We are concerned with cars that are in insubstantial business use. A common example would be those which are legitimately made available to a secretary or a director's wife. A large number of those cars—I do not know the proportion—would be fairly small vehicles.
§ Mr. NottWhere does the figure of 2,000 come from? It is important that we know how large a part of the total it is.
§ Mr. SheldonThis is just the Inland Revenue's own assessment of what it might be [HON. MEMBERS: "Oh."] I hedged it round with qualifications from the beginning.
But these are not the normal circumstances in which company cars are made available for the large proportion of those concerned. This reflects the way in which the motor industry approaches the problem. Under the present system the benefit is taxed on the basis of 12½ per cent. of the cost when new. When we examined the proposed changes concerning the amounts of benefits and the methods by which they should be taxed we had to see how circumstances had changed over a period of years.
That this particular issue is not the motor industry's main concern is evidenced by the fact that the industry has not made the point with any particular force, nor was it put to us in this way by the Society of Motor Manu- 1041 facturers and Traders. It is the other amendments and changes that should concern us when we are thinking about the motor industry's future.
The annual value basis of 12½ per cent. was set in 1960, when interest charges were very different. They are a relevant item in the value of the benefit received. The leasing charge by commercial companies for cars in the categories about which we are talking is about 30 per cent. That does not have to be the rate we choose, but there is some connection between the big rise in interest rates since 1960 and leasing charges.
§ Mr. Victor Goodhew (St. Albans)The important point is the extent to which someone who has one of these cars provided for him uses it for private purposes. Leasing charges do not come into it. The more a company director or whatever uses a car on business, the less likely he is to want to drive around in it at weekends. He will be delighted to sit at home rather than drive it around all the time.
§ Mr. SheldonThat might be a valid point if we were not talking about cars with substantial business use. If they had substantial business use they would be taxed differently. We are talking about cars with insubstantial business use purchased by employers for the convenience of the people concerned. We do not want to deprive them of a normal and reasonable way of providing cars if they wish. The matter of heavy business use will arise on subsequent amendments.
We are considering the rate that should apply to those who have the facility of a car for private use made available to them. If it were 12½ per cent. in 1960, when interest rates were so much lower, we think it reasonable that the rate should be 20 per cent., dropping to 10 per cent. after four years. I hope that that will be accepted by the House.
§ Mr. NottWe are very dissatisfied with this whole matter. I shall not take the opportunity of going over the whole debate on company cars and the manner in which the Government have handled this part of the Bill. It is getting late and we must deal specifically with the amendment.
I must point out to the Financial Secretary that nowhere is the term "substan- 1042 tial" or "insubstantial" defined. This matter was debated at some length in Committee. Surely it is unsatisfactory that no one outside the Revenue knows exactly where the line will be drawn. The definition has not been made known to the House or the country, nor to those who use the cars. We do not know where the line will be drawn.
My hon. Friend the Member for Braintree (Mr. Newton) referred to an example that appears in today's issue of the Financial Times. If we are not wholly dependent upon the whim of the Revenue, we are dependent upon it to the extent of where the line is drawn between substantial and insubstantial.
§ Mr. Robert SheldonThey will be for substantial business use.
§ Mr. NottThe Financial Secretary says that both cases are for substantial business use. He told us that Mr. Dewsbury, who wrote to the Financial Times, will not have an extra £857 added to his taxable income, only £175 to £350. But we are talking about £500 or so of that man's taxable income. The hon. Gentleman throws that across the Floor of the House as if it is a mere gesture. He seems to suggest that Mr. Dewsbury is all right because he will not have to pay the tax on an extra £500. The hon. Gentleman chucks it across the Floor of the House as if it is nothing. I know that he was trying to be helpful and that I am always attacking him when he is trying to be helpful, but that is not the way in which our tax legislation should be handled. We cannot have £500 of someone's taxable income left to Revenue discretion. It is those who are on the frontier between substantial and insubstantial use who do not know where they are. They have no idea what their tax will be. It is for them that we speak.
I turn to the impact on the motor industry. It is all very well for the hon. Gentleman to say that the Revenue estimates that only 2,000 cars are involved. That may or may not be right. It is only the Revenue that can assess the number because it is only the Revenue that can define the difference between substantial and insubstantial use. But if that is the Revenue's estimate, let us take it. The fact is that the burden will still fall substantially on the higher priced cars. Many of the problems that resulted 1043 from the Government's original proposals were related to the higher priced cars. We were concerned with the impact upon the investment programmes of Rolls Royce and Jaguar, for example. Their investment would have been severely damaged by the original proposals. That is one of the reasons for them being changed.
The proposal that 20 per cent. of the value of the car is taken for the first four years and 10 per cent. thereafter means that there will be a disincentive at the end of four years not to buy another car. The motor industry rightly says that not having one rate throughout the period will affect the sale of new cars particularly in the expensive bracket.
10.45 p.m.
My hon. Friend the Member for Braintree is right to have tabled an amendment which would involve a straight-line depreciation of 12½ per cent. throughout the period. Surely that is a better solution of the problem. There would then have been no disincentive to buying a new car at the end of the four years because there would be a 12½ per cent. scale throughout the period of its life.
The motor industry has made this point. in a memorandum. I do not understand why it is not possible for the Government to consult the motor industry on these matters before they bring in proposals. The motor industry prefers a single-figure throughout the life of the car. The Government prefer figures of 20 and 10 per cent. But the industry's figures over the period could have been to average out to the same amounts as the Government are proposing on their figures.
Let me return to the main point involving the impact of these arrangements on the individual. We cannot have legislation going through this House where people who have a motor car, admittedly a more expensive motor car in the £4,000£5,000 bracket—
§ Mr. Robert SheldonThe hon. Gentleman refers to a more expensive car. What evidence has he that more expensive cars
§ are involved in this particular form of obtaining cars?
§ Mr. NottBecause 20 per cent. of £5,000 is more than 20 per cent. of £3,000. Therefore, if somebody has a more expensive car, his taxable income will be higher by virtue of the fact that the value of that car is greater.
§ Mr. Robert SheldonWhat makes the hon. Gentleman think that a car bought in this way would be one of the more expensive cars?
§ Mr. NottBecause the more expensive car will place somebody in a higher tax bracket than would be the case with a cheaper car. Therefore, the impact of these proposals will fall more heavily on more expensive cars than on less expensive cars.
The point I am seeking to make is that the person who has a car that falls on the borderline—and we do not know where that borderline is—in terms of substantial or insubstantial business use will not have the slightest idea, until the Revenue so decides, whether his taxable income will be £300 a year or £857 a year extra. That is not the open kind of way in which tax should be dealt with. We think that the Government are wrong and I hope that my colleagues will support the amendment.
§ Mr. NewtonI am thoroughly dissatisfied with the answer. I shall seek leave to withdraw Amendment No. 259 and I shall seek a Division on Amendment No. 260. I beg to ask leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Mr. NewtonI beg to move Amendment No. 260, in page 37, line 15, leave out from "year" to "and" in line 17 and insert "is 12½ per cent.".
§ Question put, That the amendment be made:—
§ The House divided: Ayes 107, Noes 162.
1047| Division No. 254.] | AYES | [10.50 p.m. |
| Atkins, Rt Hon H. (Spelthorne) | Butler, Adam (Bosworth) | Crowder, F. P. |
| Berry, Hon Anthony | Carlisle, Mark | Dodsworth, Geoffrey |
| Biggs-Davison, John | Clark, William (Croydon S) | Drayson, Burnaby |
| Blaker, Peter | Clegg, Walter | Emery, Peter |
| Boscawen. Hon Robert | Cockcroft, John | Fairbairn, Nicholas |
| Bowden, A. (Brighton, Kemptown) | Cooke, Robert (Bristol W) | Farr, John |
| Boyson, Dr Rhodes (Brent) | Cope, John | Finsberg, Geoffrey |
| Buck, Antony | Crouch, David | Forman, Nigel |
| Fry, Peter | Mates, Michael | St. John-Stevas, Norman |
| Gardiner, George (Reigate) | Meyer, Sir Anthony | Scott, Nicholas |
| Glyn, Dr Alan | Miller, Hal (Bromsgrove) | Shersby, Michael |
| Godber, Rt Hon Joseph | Mitchell, David (Basingstoke) | Sims, Roger |
| Goodhew, Victor | Moate, Roger | Smith, Dudley (Warwick) |
| Goodlad, Alastair | Montgomery, Fergus | Speed, Keith |
| Gow, Ian (Eastbourne) | Morgan, Geraint | Spicer, Jim (W. Dorset) |
| Grant, Anthony (Harrow C) | Morgan-Giles, Rear-Admiral | Spicer, Michael (S Worcester) |
| Hawkins, Paul | Morrison, Charles (Devizes) | Stanbrook, Ivor |
| Hayhoe, Barney | Neave, Airey | Stanley, John |
| Higgins, Terence L. | Nelson, Anthony | Stewart, Ian (Hitchin) |
| Holland, Philip | Neubert, Michael | Tebbit, Norman |
| Hordern, Peter | Newton, Tony | Townsend, Cyril D. |
| Howe, Rt Hon Sir Geoffrey | Nott, John | Trotter, Neville |
| Howell, David (Guildford) | Onslow, Cranley | Vaughan, Dr Gerard |
| Hurd, Douglas | Page, Rt Hon R. Graham (Crosby) | Viggers, Peter |
| James, David | Paisley, Rev Ian | Wakeham, John |
| Johnson Smith, G. (E Grinstead) | Parkinson, Cecil | Walker, Rt Hon P. (Worcester) |
| Kellett-Bowman, Mrs Elaine | Percival, Ian | Warren, Kenneth |
| Kirk, Sir Peter | Price, David (Eastleigh) | Weatherill, Bernard |
| Lamont, Norman | Prior, Rt Hon James | Wells, John |
| Lane, David | Pym, Rt Hon Francis | Whitelaw, Rt Hon William |
| Langford-Holt, Sir John | Raison, Timothy | Wiggin, Jerry |
| Lawrence Ivan | Renton, Rt. Hon Sir D. (Hunts) | Winterton, Nicholas |
| Lawson, Nigel | Rhys Williams, Sir Brandon | Younger, Hon George |
| Le Marchant, Spencer | Ridsdale, Julian | |
| Macfarlane, Neil | Rifkind, Malcolm | TELLERS FOR THE AYES: |
| MacGregor, John | Roberts, Wyn (Conway) | Mr. Carol Mather and |
| Madel, David | Rossi, Hugh (Hornsey) | Mr. Fred Silvester. |
| NOES | ||
| Abse, Leo | Garrett, John (Norwich S) | Orbach, Maurice |
| Archer, Peter | Garrett, W. E. (Wallsend) | Orme, Rt Hon Stanley |
| Atkinson, Norman | George, Bruce | Ovenden, John |
| Barnett, Guy (Greenwich) | Golding, John | Owen, Dr David |
| Barnett Rt Hon Joel (Heywood) | Grant, George (Morpeth) | Palmer, Arthur |
| Bates, Alf | Grant, John (Islington C) | Park, George |
| Beith, A. J. | Grimond, Rt Hon J. | Pavitt, Laurie |
| Benn, Rt Hon Anthony Wedgwood | Hamilton, James (Bothwell) | Pendry, Tom |
| Bennett, Andrew (Stockport N) | Hamilton, W. W. (Central Fife) | Penhaligon, David |
| Bidwell, Sydney | Hardy, Peter | Perry, Ernest |
| Booth, Rt Hon Albert | Harper, Joseph | Prentice, Rt Hon Reg |
| Boothroyd, Miss Betty | Harrison, Walter (Wakefield) | Richardson, Miss Jo |
| Brown, Robert C. (Newcastle W) | Hooley, Frank | Roberts, Gwilym (Cannock) |
| Brown, Ronald (Hackney S) | Huckfield, Les | Robinson, Geoffrey |
| Butler, Mrs Joyce (Wood Green) | Hughes, Robert (Aberdeen N) | Rodgers, George (Chorley) |
| Callaghan, Jim (Middleton & P) | Irvine, Rt Hon Sir A. (Edge Hill) | Rooker, J. W. |
| Carter, Ray | Irving, Rt Hon S. (Dartford) | Roper, John |
| Carter-Jones, Lewis | Jackson, Colin (Brighouse) | Ross, Stephen (Isle of Wight) |
| Cartwright, John | Janner, Greville | Sandelson, Neville |
| Castle, Rt Hon Barbara | Jay, Rt Hon Douglas | Sedgemore, Brian |
| Clemitson, Ivor | Jeger, Mrs Lena | Selby, Harry |
| Cocks, Michael (Bristol S) | Johnson, Walter (Derby S) | Shaw, Arnold (Ilford South) |
| Coleman, Donald | Johnston, Russell (Inverness) | Sheldon, Robert (Ashton-u-Lyne) |
| Colquhoun, Ms Maureen | Kelley, Richard | Shore, Rt Hon Peter |
| Conian, Bernard | Kerr, Russell | Silkin, Rt Hon John (Deptford) |
| Cook, Robin F. (Edin C) | Kinnock Neil | Silkin, Rt Hon S. C. (Dulwich) |
| Corbett, Robin | Lamborn, Harry | Silverman, Julius |
| Cox, Thomas (Tooting) | Lamond, James | Skinner Dennis |
| Crawshaw, Richard | Latham, Arthur (Paddington) | Smith, John (N Lanarkshire) |
| Cronin, John | Lestor, Miss Joan (Eton & Slough) | Snape, Peter |
| Crosland, Rt Hon Anthony | Lipton, Marcus | Spearing, Nigel |
| Crowther, Stan (Rotherham) | Loyden, Eddie | Stallard, A. W. |
| Cryer, Bob | Luard, Evan | Steel, David (Roxburgh) |
| Cunningham, G. (Islington S) | Lyons, Edward (Bradford W) | Stewart, Rt Hon M. (Fulham) |
| Davidson, Arthur | Mabon, Dr J. Dickson | Strauss, Rt Hon G. R. |
| Davies, Bryan (Enfield N) | MacFarquhar, Roderick | Thomas, Mike (Newcastle E) |
| Davies, Denzil (Llanelli) | MacKenzie, Gregor | Thompson, George |
| Davies, Ifor (Gower) | Madden, Max | Tierney, Sydney |
| Davis, Clinton (Hackney C) | Mallalleu, J. P. W. | Tinn, James |
| Deakins, Eric | Marks, Kenneth | Tomlinson, John |
| Dell, Rt Hon Edmund | Marquand, David | Torney, Tom |
| Dormand, J. D. | Marshall, Jim (Leicester S) | Wainwright, Richard (Colne V) |
| Douglas-Mann, Bruce | Maynard, Miss Joan | Walker, Harold (Doncaster) |
| Ellis, John (Brigg & Scun) | Meacher, Michael | Ward, Michael |
| Evans, Fred (Caerphilly) | Mendelson, John | Watkins, David |
| Evans, Gwynfor (Carmarthen) | Mikardo, Ian | Weetch, Ken |
| Evans, Ioan (Aberdare) | Miller, Dr M. S. (E Kilbride) | Weitzman, David |
| Foot, Rt Hon Michael | Morris, Rt Hon J. (Aberavon) | Welsh, Andrew |
| Ford, Ben | Moyle, Roland | White, Frank R. (Bury) |
| Forrester, John | Mulley, Rt Hon Frederick | Whitehead, Phillip |
| Fowler, Gerald (The Wrekin) | Newens, Stanley | Whitlock, William |
| Fraser, John (Lambeth, N'w'd) | Ogden, Eric | Wigley, Dafydd |
| Williams, Alan (Swansea W) | Wilson, Gordon (Dundee E) | TELLERS FOR THE NOES: |
| Williams, Alan Lee (Hornch'ch) | Wise, Mrs Audrey | Mr. David Stoddart and |
| Williams, Rt Hon Shirley (Hertford) | Woodall, Alec | Mr. Ted Graham. |
Question accordingly negatived.