DEVELOPMENT LAND TAX BILL

HC Deb 22 June 1976 vol 913 cc1404-61

As amended (in the Standing Committee), considered.

60	of any continuous period of twenty-four months, it is used in such circumstances that it does not constitute property used for the industrial purposes of a trade carried on by the chargeable person; and accordingly the non-qualifying use shall be taken to be established at the expiry of the 365th day in that period on which the building or other land or part thereof is so used.
65	(7) For the purposes of this section a disposal of the relevant interest (in the following provisions of this section referred to as "the primary disposal") forms part of a sale and lease-back transaction if—
70	(a) it is either a disposal of the whole of the relevant interest or a part disposal of that interest which falls within paragraph (b) of subsection (1) of section 3 above; and
75	(b) it forms part of a transaction whereby, at or immediately after the time at which the relevant interest or, in the case of a part disposal, the granted interest is acquired as a result of the primary disposal, the person by whom that interest is so acquired grants a lease to the person who was the chargeable person in relation to the primary disposal; and
	(c) the lease subsists in the whole or any part of the land in which the relevant interest or, as the case may be, the granted interest subsists.
80	(8) If, after the primary disposal, there is a disposal of the lease referred to in paragraph (c) of subsection (7) above, subsection (5) above shall have effect as if, at the time of that disposal, the conditions in paragraphs (a) and (b) of that subsection were fulfilled with respect to so much of any building or other land as is the subject matter of the lease.
85	(9) If, in a case where the primary disposal is such a part disposal as is referred to in subsection (7)(a) above, there is a subsequent disposal of the interest which is the retained interest in relation to that part disposal, subsection (1) above and section 27 below shall apply as if in place of, but to the like effect as, that subsequent disposal there were a part disposal of the relevant interest.
90	(10) For the purposes of subsections (1) and (5)(a) above, a disposal shall be treated as a disposal of the relevant interest if it is a disposal of an interest in land of which the relevant interest is a part for the purposes of Part I of Schedule 2 to this Act.'.
—[Mr. Denzil Davies.]

Brought up, and read the First time.

5.23 p.m.

The Minister of State, Treasury (Mr. Denzil Davies)

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

Mr. Deputy Speaker (Mr. Oscar Murton)

With New Clause 1 we are to take Government Amendments Nos. 55 and 63 to 68 inclusive.

Mr. Davies

I shall explain to the House why this new clause has been put on the Order Paper at this stage. Hon. Members opposite succeeded in convincing the Standing Committee that Clause 19, which gives deferment from development land tax for industrial use, should be extended to cover commercial use, with the exception of offices. I said in Committee that the Government would consider their reaction to this and that I had some sympathy with the arguments. I did not give a commitment that we should seek to change the position on Report, and, having considered this matter in detail, we have decided that we do not want to extend the deferral of the tax to cover commercial use at all. That is why this new clause and the consequential amendments appear on the Order Paper.

We are debating a new clause which is basically similar to the original Clause 19 before it was amended in Committee. There are some differences, because there were difficulties in drafting the original Clause 19, and in the new clause we have put right some of these anomalies. However, in substance it is the same as the original Clause 19.

I see that hon. Gentlemen opposite have put down an amendment to extend deferral even further to include all commercial developments, even offices. We debated this matter at length in Committee.

Originally it was not intended that there should be any deferral for even industrial use. The Government felt that it was not right to give exemptions of any kind. But representations were made to us that this might inhibit the development of factories and industrial land because many industrialists own land which they may wish to use to expand their factories.

As a result of representations, and because of the appalling state of British manufacturing industry and the problems of the last 25 years, the Government felt that they would not want to do anything that some people might think would deter industrial development. In the light of this, we gave a limited exemption.

But once that kind of exemption has been given, there are demands for extending it, and these demands led to the amendments from Opposition Members in Committee. But I cannot accept the amendments, because our exemption was a specific one to help industry, and we draw a distinction between industrial and commercial development. This distinction can be drawn in the light of the present state of British manufacturing industry compared with the fairly thriving state of commercial development.

There is no shortage of commercial development and no lack of profit in this area. One has to contrast that with industrial development, which has lagged far behind in this country ever since the war, and even before.

Mr. Robert Adley (Christchurch and Lymington)

Is the Minister saying that he can help manufacturing industry by hampering and hindering commerce?

Mr. Davies

We are not helping manufacturing industry by hindering commerce, because we are not concerned here with the same kind of development. We are concerned with industrial development, which in most cases is different from commercial development. We are concerned with factories, as opposed to hotels and offices. In 95 per cent. of cases they are mutually exclusive. The fact that we give this exemption to industrial development and not to a shopping precinct does not mean that we are penalising one for the other, because the two cases are quite different.

I do not accept that we are hampering one to help the other. We are giving an additional incentive to industry and to industrial development. We have to try to improve the base of our manufacturing industry, and we are merely giving it an additional incentive to try to bring it up to the level of commercial development which has been thriving.

5.30 p.m.

Mr. Andrew Bowden (Brighton, Kemptown)

Does the Minister accept that towns like mine depend very largely upon the tourist trade? We are in the process of building a large new conference centre in Brighton which will attract a good number of international exhibitions. It will earn a great deal of money for this country. Does not the Minister accept that we need to encourage rather than penalise the hotel and catering industry?

Mr. Davies

No one has suggested that that industry should be penalised in any way. It is not being penalised. That kind of development has been very profitable. One has only to travel around Britain to see how commercial development has been thriving while industrial development has suffered from a lack of funds and investment. We are trying to assist industry by not including in the Bill a provision which might be thought to impede industrial development.

Mr. Michael Spicer (Worcestershire, South)

How can the Minister argue that to impose a lax and then to remove it for one section is actually to assist that sector? How can he argue that when he maintains that the tax on another sector is not penalising it? I do not follow what he is saying.

Mr. Davies

I do not think we ate penalising it, because many cases are mutually exclusive. There are different developments and different operations. We are dealing with hotel, office and commercial developments on the one hand and with factories on the other hand. We are not penalising commercial development. We are giving an advantage to industrial development in the form of the deferral of the tax. We are not saying that industrial development shall not pay the tax. We are saying only that it will be deferred from the commencement of the development where an industrialist develops land for his own use.

Mr. Adley

Will the Minister deal with the case where a hotel buys land intending to extend upon it at a future date and thus create more jobs? What is the position in those circumstances?

Mr. Davies

If the act of extending on to the land throws up a development or betterment profit, the tax will be payable at that point. Commercial development for own use does not enjoy the deferral, but industrial development for own use does enjoy it. If an industrialist sells the land, or if other factors are taken into account and trigger oil the tax, he pays the tax.

By giving exemption to industrial own use, we are to some extent creating a distortion and an unfairness, because the developer who develops on a new site not for his own use may pay the tax. That creates a discrimination between the normal property developer and the industrialist who develops on his own land.

I appreciate that there are arguments on both sides. Conservative Members cannot see the importance of distinguishing between industrial and commercial development. If industry had thrived as much as commerce in the last quarter of a century, it would not have been necessary to include this exemption, but because it has not been thriving we must give every opportunity to enable it to do so. The clause would overthrow Clause 19 as amended in Committee.

Mr. Tim Sainsbury (Hove)

I recall rather unhappy comment on one occasion on the performance of the football team which my hon. Friend the Member for Brighton, Kemptown (Mr. Bowden) and I support. It was "I am glad to say that, having started the season badly, it has got a great deal worse." I hope that the Report stage of the Bill will not follow a similar course. We certainly seem to have started badly for a number of reasons, not least that it seemed that the Minister, doing his best, did not really have his heart in the new clause or in turning back the amendments to the original Clause 19 as accepted in Committee.

My objection is not only to what the Government are proposing but to the method. It is strange that we should be presented with a clause very similar to the original unamended Clause 19 instead of being presented with the appropriate amendments to correct the drafting defects. I am surprised that the Minister should feel it necessary to try to remove the amendments made in Committee. Our objection goes even further than to what is being done and how. It should extend, I believe, to those who are doing it.

I intend no criticism of the Minister when I say that it is strange that when a matter of considerable importance to the retail and the hotel and catering trades is discussed the sponsoring Department for those industries is not represented in the debate. The new clause is not entirely the same as Clause 19 and the Minister has not told us much about some of the changes. I hope that he will explain one or two of them when he winds up.

I do not think that the change in subsection (2)(a) from "that" to "such a" is one we need to spend too long on.

I am interested to see the words at the end of that paragraph which refer to property which is for or incidental to the generation of electricity". Those words are completely superfluous if the generation of electricity is a process incidental to the industrial process. The implication of putting in these words is that the generation of electricity for resale is included in this category. I should be grateful if the Minister would say something on that.

I also ask the Minister to look at the words in subsection (5)(a) and (b) which have been changed since we were dealing with Clause 19. The last line of paragraph (a) includes the words "for the time being", and the second line of paragraph (b) includes the words "at all". I hope I am correct in assuming that those words have been added in response to what was said in the commendably short debate in Committee, when I moved Amendment No. 355, and the Minister gave us an undertaking that he would bring forward an amendment on Report to meet the point I had in mind. I hope I am correct in assuming that those words have been put in to meet that point.

The main point is this discrimination—I think that is the right word—against commerce in all its guises. Perhaps in this House we tend to exaggerate the diligence and care with which the public attend to the details of our proceedings, and, indeed, the attention they pay to the precise words spoken, particularly those spoken from the Treasury Bench. In legislation as complex as this, even if close attention is paid to it, I should be slightly surprised if everyone were able to comprehend entirely the meaning of it. I think we would all agree that what is important here is the impression that is given. That will be of importance in relation to the confidence and the morale of the interests concerned.

I have the very strong impression, from what the Minister has said, that an old discrimination, which seems to be ingrained in the Socialist approach to many aspects of life, is coming out again. The phrase "ordinary working people" is frequently used in such a manner that it seems to exclude from that category such people as managers, designers, salesmen—indeed, presumably Members of Parliament. But perhaps that is a bit of special pleading. We find that there is, in the Socialist image of the world, an idea that ordinary working people can only work in a factory, and that there is something mysteriously virtuous in being on the shop floor. If someone gets promotion and is sent out to sell, perhaps overseas, the product that is manufactured, he ceases, it would appear, to be an ordinary worker. It would appear that he loses status by going to work in an office.

I find it a very strange and disturbing approach that retailers, people who work in the vitally important catering and hotel trade, and in offices, seem to lack respect in Socialist eyes.

I thought I detected a lack of enthusiasm from the Minister when he moved the clause. Perhaps he was responding to pressures from elsewhere, but I know not. I hope that we shall hear at length, for example, of the views of the very important and long-established co-operative movement on this particular point.

I hope that the Minister will be able to do a little better on the rest of the new clauses. He seemed to be arguing that industry is a total disaster area, and that there is such an all-embracing lack of success in industry that anything which might in any way inhibit development in industry should be avoided. If we were to see a sudden conversion to this idea and it were very effectively pursued through the different aspects of the Government's legislation, I am sure that it would be very welcome. If the Government would reflect whether the Dock Work Regulation Bill might in any way inhibit industrial development and, having so reflected, if they were to withdraw that absurd and unwanted piece of legislation—unwanted even by many on their own side—they might be doing something useful and helpful for industry.

5.45 p.m.

Here the Government seem to have detected a genuine obstacle which would indeed deter the industrialist from development. The industrialist is not usually an expert in property matters. An industrialist may have some land on which he hopes to carry out an extension. He may know what the land cost him initially or it may have been bought as part of a much larger parcel, in which case he may not have a separate price for it. Suppose he wishes to carry out an extension and calls in his experts, who then say that, were it not for New Clause 1, he would be liable for development land tax. The industrialist will then say "Thank you very much for New Clause 1", in exactly the same way as the retailer, the hotelier, or any other commercial developer, might say it. Even then the industrialist will only get deferral.

The Minister, probably by a slip of the tongue, referred at one moment to exemption. We are concerned with referral, not exemption.

This brings me back to a point I mentioned in the short debate on the Money Resolution—that the build up of all these deferrals in company accounts is a thoroughly undesirable matter. If we are to have deferrals of this nature we ought to look at the question of having them expunged from the record after a stated time. If inflation continues to gallop along in the way in which it has been the tax payable after 10 years will be very insignificant. Even so, the accumulation of deferred liability for tax in company accounts, and particularly in the case of smaller companies, is a thoroughly undesirable feature, and something we should endeavour to avoid.

The Minister has advanced the argument that we need New Clause 1 instead of amended Clause 19 because of the difficult state of industry. He contrasted it with a world of booming prosperity, as far as I could see, in commerce. I do not know how closely the Minister studies the reports of the Price Commission on the state of the retailing trade, or whether he believes what he reads, but he will not find quite such glowing prosperity indicated there. There has been a reported downturn of 25 per cent. in the amount of new construction orders for retailing. There does not seem to be too much evidence of booming prosperity there.

I wonder if the Minister has read of some of the difficulties experienced by the hotel trade at the present time. A number of bankruptcies have been reported, and developments have been stopped or deferred. The prosperity is not as wide spread as he suspects. Not every hotel has a bid for it in terms of millions of pounds from the Middle East.

I wish to make it absolutely clear that we are in no way criticising the relief for industry. We welcome it, and think that it is very valuable. We are glad that the Government have recognised, in this piece of legislation at least, if not in others, that they should try to avoid inhibiting industrial investment. Our complaint is about the thoroughly artificial division between industry and all other activities in which people are employed and producing earnings in this country.

I have already declared my self-evident interest in retailing. I hope the Minister is aware of the report on industrial strategies in the distributive trade prepared under the auspices of the National Economic Development Office by a working party under the chairmanship of Mr. W. T. Welch, a very distinguished executive of the co-operative movement. The report said: The rôle of the distributive trades is to provide a convenient way in which the public may obtain the goods they want, thus meeting their constantly changing requirements, in such a manner as to make a profit on the resources employed. In carrying out this role, distribution adds about £8½ billion to the gross domestice product, employs over 2½ million people, and is an important tourist attraction. I do not believe that a single industry can begin to approach those figures. They are an indication of the importance of retailing to this country. The report went on: Any degree of inefficiency in the distribution system would impair efficiency in manufacturing and weaken the competitive strength of our production system as a whole. Later, it displayed a rare foresight of what was to happen on the Government side when it said: There were doubts whether this was fully appreciated by those on both sides of industry and government who are influential in the formulation of policy and public opinion, with the result that a number of measures taken to influence economic development have seriously increased the difficulties under which the distributive trades are having to operate, particularly during the current recession. I hoped the Minister would have studied this report and agreed with the working party that fiscal equality between distribution and manufacturing is logical and fair.

I referred earlier to the importance of the impressions we give in the House. A certain impression was given by the Chancellor of the Exchequer when he wrote to the Chairman of the Retail Consortium on 4th December last year saying: I accept the view that in principle commercial buildings should receive capital allowances. The difficulty—which I fear is a very serious one, particularly at the present time—is the cost. I think you will understand that we could not give the allowances to buildings used in the retail trade without also giving them to commercial buildings generally. We are not concerned here with the cost. That is not a factor presented by the Minister in support of his case. I fail to understand why, as the Chancellor wrote seven months ago saying that he accepted the principle of capital allowance, they cannot appear here now.

The Retail Consortium speaks for practically everybody in retailing. It includes the Co-operative Union, the Mail Order Traders' Association of Great Britain, the Multiple Food and Drink Retailers' Association, the Multiple Shops Federation, the National Chamber of Trade, the Retail Alliance, the Retail Distributors Association and the Scottish Retail Federation. Its reaction to the Chancellor's letter was: It is particularly regrettable therefore, that in spite of past statements and agreements in principle, far from rectifying some of the inequities, this new legislation is to add further fiscal discrimination between manufacturing industry and retail distribution. I do not think industry would regard the Minister's explanation of the new clause as adequate. It is clear that retailing organisations, like industrialists, very often have land which is available for extension and which they may have owned for some time. It is also clear that, at present and for some time to come, there will be far fewer large-scale redevelopment projects. We have rightly taken a new view about some of the massive programmes of destruction and rebuilding we have seen in the past, and much greater emphasis is now being paid to renovation, enlargement and improvements in the functional efficiency of existing buildings. By attempting to refuse this concession to retailing, the Minister is giving discouragement in a vital area of the economy at exactly the wrong moment.

I hope the importance of tourism to the economy is recognised by the Government. I am sure there are those on this side who, from positions of great knowledge of the industry, will describe that importance much more ably than I can. I was impressed by a document "Tourism in Britain—The Broad Perspective" issued in January this year, the same date as the NEDO publication to which I referred earlier. The document on tourism carried the same authority, by reason of its authorship, as did the other document. It was a joint report by the British Tourist Authority, the English Tourist Board, the Scottish Tourist Board and the Wales Tourist Board. I hope the last name at least will strike a chord in the Minister's heart and perhaps enable him to soften in his attitude on this matter.

One of the most salient points in the report is that Britain was comparatively late in recognising the economic advantages of developing tourism. The Labour Government of 1966 to 1970 introduced for the development of hotels encouragements which were particularly unfortunate because they concentrated mainly on London and at the top end of the market. It is clear that far more of the money and encouragement should have gone to provincial hotels and the middle and lower end of the market.

I hope the Minister will read the report. It is clear that there are problems for those in the hotel and catering trade in meeting the requirements to enable us to continue to respond to the considerable opportunities in the growing international tourist trade so that the nation can derive substantial benefits from it. The report says: One of the biggest weaknesses in tourism in Britain is the difficulty of containing costs to cope with inflation and so to remain competitive. Increased operating costs threaten the viability of recent investments and the high cost of capital has inhibited new investment of the conventional kind. That is a direct reference to the difficulties the industry is having in carrying out investments.

The report says later that there are certain imbalances in the supply of hotels. There is a surplus of higher-priced accommodation, but the forecast growth in demand is mainly for lower-priced hotels. This situation poses long- term problems for hotels, because it is not considered profitable to build and operate conventional hotels for lower-priced accommodation, especially in London.

This is a critical time for the industry. It has considerable opportunities in the international growth in tourism from which we have been able to derive fairly substantial benefits and from which more may be obtained. The Minister is putting an obstacle in the way of the industry.

The British Hotels, Restaurants and Caterers Association wrote recently to the Under-Secretary of State for Trade. It stated: This amendment is of immense importance to the tourist industry, of which the hotel and catering industry is the largest single sector, because without it the Bill's provisions for the charging of development land tax on a single 'deemed disposal' could seriously inhibit the development of tourist amenities and facilities, such as the extension or enlargement of hotels and restaurants. It could not have made the matter clearer, but the Minister seems to be turning a totally blind eye to that aspect.

The industry, like the retailing industry, could feel that its representations, importance and needs have been totally under-estimated by the Minister. Judging by the current attendance on the Government Benches and the absence of ministerial support for the industries to which I have referred, it is apparent that the Government have little feeling for retailing or the tourist trade.

6.0 p.m.

The Minister has advanced no rational argument for a need to introduce a fresh degree of fiscal discrimination against commerce. Anyhow, there is the difficulty of drawing the line between industrial and commercial operations. I do not need to go right through all the arguments about SET, but the example of warehousing is worth mentioning. Under SET a warehouse operation, if attached to industrial operation, drew a premium. If it was an independent, freestanding operation it was neutral. If it was attached to a retailing operation it had to pay a surcharge. The identical operation under SET could be subject to three different tax treatments. Warehousing, like retailing, is an integral part of the complete industrial process.

To try to draw these arbitrary and artificial lines and to discriminate against commerce, which is what the Minister is proposing, is not only difficult but damaging. There is no third party involved. We are not concerned with a tax loophole. I am glad that the Minister has not advanced that claim as an argument to support the clause.

There seems to be a total contradiction between the Minister's approach and what the Chancellor wrote in his letter of 4th December. The Minister, through the devious method of introducing a new clause instead of submitting amendments to Clause 19, is totally under-estimating and under-valuing the importance of commerce to the economy. He has misrepresented a very valuable development, especially in retailing and in the hotel and catering trades.

It is for those reasons that I hope my right hon. and hon. Friends will join me in opposing the clause and seeking to retain Clause 19 as it was amended in Committee.

Mr. Adley

First, Mr. Speaker, I seek your guidance. I ask whether it is admissible and whether it is your intention that with New Clause 1 we take the amendments which have been selected in a group—namely, the folowing:

Government Amendments Nos. 55 and 63 to 68.

The following amendments to the proposed New Clause 1:

1. (a) in line 7, after 'industrial', insert 'or commercial'.
2. (b) in line 10, after 'industrial', insert 'or commercial'.
3. (c) in line 21, leave out paragraph (a) of'.
4. (d) in line 37, after 'industrial', insert 'or commercial'.
5. (e) in line 40, at end insert 'or commercial'.
6. (f) in line 50, after 'industrial', insert 'or commercial'.

Amendment No. 56, in Clause 19, page 29, line 37, leave out 'other than for offices'.

Amendment No. 57, in page 29, line 42, leave out 'other than for offices'.

Amendment No. 58, in page 30, line 11, leave out 'paragraph (a) of'.

Amendment No. 59, in page 30, leave out lines 22 to 24.

Amendment No. 60, in page 30, line 37, leave out 'other than for offices'.

Amendment No. 61, in page 31, line 5, leave out 'other than for offices'.

Amendment (g) to the proposed New Clause 1, in line 90, at end insert— '(11) For the purpose of subsection (1) there is no first subsequent disposal by reason only of the receipt of a sum under a policy of insurance against the risk of any kind of damage to, or loss of a building'.

Amendment No. 62, in Clause 19, page 32, line 13, at end insert— '(11) For the purpose of subsection (1) there is no first subsequent disposal by reason only of the receipt of a sum under a policy of insurance against the risk of any kind of damage to, or loss of a building'.

I think that that was the intention, Mr. Speaker, but I should be grateful for your confirmation.

Mr. Speaker

That is not exactly as I put the grouping before the House, but if it is for the convenience of the House I think it would be a good thing to take the amendments together. They cannot be proposed at this stage, but they may be discussed together.

Mr. Adley

I am grateful, Mr. Speaker.

First, I declare an interest, as I did some few hours ago, as European Marketing Director of Commonwealth Holiday Inns of Canada Ltd. and a member, unfortunately unpaid, of the National Executive of the British Hotels Restaurants and Caterers Association, to which my hon. Friend the Member for Hove (Mr. Sainsbury) has recently referred. Unfortunately, I am merely an executive of that company, but I have a reasonable day-to-day working knowledge of what goes on. Perhaps it might be possible at some stage in our proceedings to find some way of declaring statutorily that one has an interest in certain matters when one raises them in the House for debate. If such a declaration is not made, one is in danger of being accused of advertising!

The Development Land Tax Bill spent a long time in Committee. I have done my best to plough through as much of it as I can. First, I congratulate my hon. Friend the Member for Hove on the way in which he moved his amendment during the nineteenth sitting, which has resulted in the Government bringing forth the new clause. I have read most carefully what he said—column 1020—and I have also read what the Minister said. The hon. Gentleman stated: the Government are not seeking to be beastly to nasty commerce and good to industry."—[Official Report, Standing Committee J, 6th May 1976; c. 1030.] That may be the spoken intention of the Government, but I am bound to say that it is not the impression that we have gathered during the past two years as we have faced motion after motion, Bill after Bill, and Order after Order from the Government, every one of which seems to have had the declared motive of sanctifying industry and damning commerce.

I hope that it is not immodest in this debate to quote one sentence in an Adjournment debate which I had on 12th December 1972, which, I think, is completely relevant to our proceedings. On that occasion I said: I have always believed that hotel buildings should be regarded as industrial buldings for tax purposes".—[Official Report, 12th December 1972; Vol. 848, c. 405.] That point has been made by many of my hon. Friends over a period of years. I am bound to say that the Conservative Government were not much more receptive to it than the present Government, but the present Government have added to their lack of enthusiasm for service industries a positive discrimination against them, as well as hostility towards invisibles. That is a very serious charge to make against any Government, but I do not make it lightly.

I am bound to repeat to the Minister the proposition that I put to him when he opened the debate—namely, that one has the impression that he is seeeking to help manufacturing industry by kicking commerce and trade where it hurts most. I remind him of the current position that invisibles occupy in our balance of payments. For the first quarter of 1976 the current balance was minus £60 million while the invisible balance was plus £410 million. For April and May the projections for current balance in total were minus £133 million and minus £212 million while the projections for invisibles were plus £130 million and plus £130 million respectively.

If the hon. Gentleman studies the foreign currency earnings from travel and tourism, he will find that they play an important role. Whereas for 1975 we had a current balance deficit on net earnings of minus £1,702 million, the foreign currency earnings on travel and tourism showed a surplus of £273 million. The Minister will never achieve economic success if he seeks to promote the interests of manufacturing industry by damaging those industries—and they are not too many, I am sorry to say—where we have a success story on our hands.

The Minister has referred to the development of land which is in the use of organisations owning it. That is what we are discussing. I was horrified to listen to what the Minister said about an hotel which deliberately buys a piece of land and seeks to develop it in two or three phases. I should advise him that it is a common occurrence for hotels to provide themselves initially with facilities for 100 or 150 rooms with the intention of continuing development by adding another 100 or 150 rooms later. What the Minister said in answer to my intervention was a deterrent to those who are seeking to build, operate and develop their hotels.

My hon. Friend the Member for Hove put this matter politely. I shall put it more bluntly: the Government are job snobs. They believe that a job in coal mining is a plus job and that a job in an hotel as a receptionist is a minus job.

The company with which I am connected recently opened an hotel in Newcastle on Tyne, with the benefit of Government assistance as it is in a development area. If the Minister visited that hotel, he would find that many people had been employed at that hotel from the day that it opened. The hon. Gentleman will know that these people would have great difficulty in finding alternative employment in the North-East. I plead with him to do what he can to change his attitude—if it is not his attitude, it is certainly the attitude of most of his right hon. and hon. Friends—to jobs in service industries and to stop regarding them as being only half-jobs.

The need for a healthy tourist and hotel industry is directly related to the success or otherwise of our overall balance of payments position. The Minister is seeking to remove the slight chink of light that had been shone upon the hotel industry by the amendment that was carried in Committee.

The Minister should be aware that the industry is suffering grievously from legislation passed not only by this Government, but by their predecessors. The Fire Precautions Act is hitting very hard, small hotels of the type referred to by my hon. Friend the Member for Hove. The health requirements and regulations are being used viciously and unscrupulously in a few places where the environmental health officers should not be looking whilst other more vulnerable places seem to be ignored. The industrial tribunals, in their activities following the Employment Protection Act, seem to be hammering at the service industries as well. Hotels have been particularly hard hit by massive rate increases. The process does not stop.

At one o'clock this morning we had a ridiculous Order placed before and passed by this House—the Government Whips were on—which insisted that restaurants could serve wine only in carafes in sizes that the Government stated were acceptable, and, if the sizes were not acceptable, the Government were not going to allow carafe wines to be sold. That was another ridiculous and wholly unnecessary Order.

My hon. Friend the Member for Hove referred to the absence from the debate of any Ministers from the sponsoring Department for tourism—the Department of Trade. In fairness to the Minister, I must say that is not a unique position. That was sometimes the situation under the Conservative Government. I hope that the hon. Gentleman will accept that I am not making a partisan comment.

The tourist industry is sick and tired of being treated not only as a Cinderella industry—ignored at every opportunity by Ministers who are supposed to be responsible for it—but of seeming to find itself the butt of all the nastiest and most pernicious legislation that the Government can bring forward. I suspect that this has a great deal to do with the lack of trade union muscle able to be mustered by those working in the hotel and catering industry.

My hon. Friend the Member for Hove touched on this matter. It is a sad fact that by no means all of the 800,000 people who work in the hotels and catering industry, many of whom are self-employed, are members of the British Hotels Restaurants and Caterers Association. I hope that if and when the day comes that those people are properly represented, the Government will take more notice of their representations than they seem to be taking of points made by Conservative and other Opposition Members.

6.15 p.m.

The Treasury is at least consistent in the way in which it seeks to deny to hotels their legitimate rights as an industry employing people and providing jobs. I saw my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) enter the Chamber just now. I recall that when he was at the Treasury 20 Conservative Back-Benchers went to see him to extract a promise of assistance to the small hotels and boarding houses which were being severely affected by the Fire Precautions Act. Out of that was born the Fire Precautions (Loans) Act. The same industry will be adversely affected if the Minister succeeds tonight in removing the amendment that was carried in Committeee.

I should like to draw the attention of the House to another matter which shows that the hotel industry is not receiving parity of tax treatment with manufacturing industry and demonstrates that this country is very much the odd man out with the EEC. I asked the Chancellor of the Exchequer to list for all nine EEC countries, whether or not the structure of an hotel is allowable for tax purposes, as a charge against depreciation; and what is the rate in each country.

The Minister replied giving the percentage rate of depreciation as follows:

"Belgium	…	Yes	3.0
Denmark	…	Yes	1.0
France	…	Yes	2.8
Germany	…	Yes	2.0
Ireland	…	Yes	10.0
Italy	…	Yes	3.5
Luxembourg	…	Yes	2.2
Netherlands	…	Yes	5.0
United Kingdom	…	No.

—[Official Report, 14th April 1976; Vol. 909, c. 609.]

That is only one of numerous examples that I could quote of the discrimination that is being suffered by the British hotel and catering industry. I certainly hope that the Minister, even at this late hour, will recognise the importance of the industry to our economy and that it is in every way entitled to be given parity of treatment with manufacturing industry on the proposition that a job in an hotel is as important to the person doing it as is a job in a coal mine.

Mr. Norman Miscampbell (Blackpool, North)

It is inevitable that in discussing the new clause the hotels industry and its problems will be canvassed. Before turning to the Minister's arguments, it is worth noticing that there are two quite different groups of hotels. There are those which obviously come to mind—the London hotels, the Stratford hotels and the great Scottish hotels in areas of tourist attraction—which earn a high proportion of foreign currency. Indeed, the occupancy of their rooms may be as much as 70 per cent. or 80 per cent. by people who pay in foreign currency. I should have thought that the argument for allowing the clause to include them was overwhelming.

The other group consists of hotels of the type to be found in the area represented by my hon. Friend the Member for Blackpool, South (Mr. Blaker) and myself. I think that between us we represent the greatest conglomeration of small to medium-sized hotels in the country, if not in the world. Although they earn a proportion of foreign currency, clearly, from the conferences which take place in Blackpool and the people who holiday there, it is not so obvious that they contribute so markedly to the national economy. Yet they do. The choice of whether to go to a hotel of the type found in my constituency or to a hotel on the Costa Brava is a fine point. The cost may be a little more to go abroad. But there is no doubt that the great tourist centres for English people contribute negatively by attracting people who take their holidays in England and do not spend foreign currency.

I now turn to the Minister's argument, which I first read in the report of the Committee's debate on clause 19. At that time I was struck by the oddity of the clause, just as I was struck with its oddity when it was again propounded this afternoon. The argument is perfectly tenable if the Minister seeks to impose a tax whose purpose purely and simply is the raising of revenue. It is possible to say that there are some people who cannot bear the tax and that they must be exempted from it. If it is sought to impose a tax not simply to raise revenue but to extend Socialist doctrine, it is a strange argument to say "Having decided to do this, we shall exempt industry as it is too weak to bear the tax, but we shall not defer the tax for the others." It is not within the Minister's power to say "It is no disadvantage to the others. It is a disadvantage to my constituents. I do not wish to harp on parochial matters, but this proposal is clearly to the disadvantage of the town which I represent. This is an odd way of raising taxation.

I differ profoundly from the Minister's view of what has happened to commercial enterprise as distinct from industrial enterprise in the past 10 or 15 years. The experience of my constituency has not been that commercial enterprise has found the going easy. It may be true that, south of a line from Birmingham to the Wash, office and hotel development and new shops and precincts, have gone on apace. But as a generality nothing could be further from the truth north of that line.

Only one major new hotel has been built in Blackpool—and that is always teetering on the verge of going on or not. Only one major hotel has been built in Blackpool since the war. We had to give up the prospect of a comprehensive downtown development. There has been no noticeable increase in shopping or office facilities. However, such development as has occurred will be hit hardest by this Bill. There has been a revolution in that existing hotels have been developed. Hotel owners have built on the land already available to them by adding rooms and carrying out improvements. I use the word "revolution" deliberately. The town's hotel industry has changed immeasurably for the better over the past 15 years. Rooms and accommodation have been improved. The numbers of rooms have been increased. The facilities available have changed out of all recognition. However, it is just that kind of development, which has taken place on a considerable scale, that will attract the tax. As a result, damage will be done to the town and the industry.

I wonder why it is necessary to inhibit that kind of enterprise. We wonder how that will help our country or assist in building the kind of society which the Government say they wish to see in this country—a profitable and prosperous society in which people may have decent jobs.

It is not only hotels that we require. Perhaps the most crying need is for office development. Hon. Members representing other constituencies in the Fylde area are present. They will know that Blackpool and the Fylde area produce young people who are well trained, not necessarily in industrial skills, and who seek to follow in the steps of their fathers in office jobs, often in the great Civil Service Departments which are in Blackpool.

Mr. Denzil Davies

The hon. Member for Hove (Mr. Sainsbury) excluded offices from his clause, which is now Clause 19. The hon. and learned Gentleman obviously does not agree with his hon. Friend concerning office development.

Mr. Miscampbell

I appreciate that. The same argument and the same intervention took place in Committee.

As I understand it, we are dealing with all the group of amendments. I am making a general rather than specific point. I should not support anyone who sought to remove offices from the scope of the clause. This point has a validity and a general application that goes further than merely this debate. It applies to many areas, especially Fylde.

In the Fylde, a large number of young people are coming forward who would like to work in that area. They seek predominantly the kinds of office jobs which have always existed in that area. However, there is not the increase in commercial activity or office building that will provide those jobs. Young people are leaving school and are finding that unemployment runs into double figures in the area.

I hope that the clause will not be accepted and that we shall revert to the position which I hoped had been established by the Committee when it considered the matter a few weeks ago. That position was welcomed, correctly, by our local Press and industry in Blackpool.

I do not believe that the Minister has unguarded moments. He is frank and straightforward in dealing with these matters. He said that in considering the clause he could see that there were arguments on either side. I am glad of that. When he considers the matter clearly, I am sure he will feel that the imposition of this tax upon our productive wealth—it deals not with matters such as the pure development of land for housing but with industry and commerce—will do nothing to help our country or its economy.

Mr. Bowden

I was not a member of the Standing Committee. However, I read the report of the Committee's debate on Clause 19 and the amendments.

The House has great sympathy with the Minister, who is presenting his case without believing it to be the right one. I suspect that he struggled hard and long to persuade his colleagues that the amendments passed in Committee should be accepted but that tragically he lost. Therefore, he has the difficult task of persuading the House to reverse the decisions that were made in Committee.

As the debate on the clause proceeds, the weight of evidence for not accepting it, and for maintaining the present position in the Bill, becomes increasingly strong. We may see the weight gathering on the Minister's shoulders almost minute by minute as he sags lower and lower into his seat, reluctantly knowing that sooner or later he must yet again justify his case. I say this with great respect, because clearly he won the admiration of all members of the Committee for his straightforwardness. He is playing on a difficult wicket. I am sure that he would much rather be at Lords, even if there are only a few minutes to go before close of play, than have to reply to this debate in an hour or so's time.

I shall be unashamedly parochial in the context of the speeches made by some of my right hon. and hon. Friends who represent towns such as Blackpool and Bournemouth, all of which come within the top three or four, with Brighton and Hove top of the league.

6.30 p.m.

We in Brighton have in the last few years taken a number of major decisions involving the investment of a large amount of ratepayers' money. We are in process of building a great conference centre in Brighton which will be visited by the vast majority of hon. Members in the next few years when the respective party conferences are held in Brighton.

Mr. Miscampbell

And in Blackpool.

Mr. Bowden

With great respect to my hon. and learned Friend the Member for Blackpool, North (Mr. Miscampbell), we shall be delighted to have a change from Blackpool because we feel that we should alternate between one or two of the major seaside towns.

That project will involve a large investment by the people of Brighton. The decision was taken with great courage by Brighton Corporation, because the total cost will be well in excess of £8 million. The conference centre will attract a large number of international conferences. Already the publicity officer of Brighton has been contacted by organisations in Canada, most of the European countries and even the United States of America which wish to hold conferences in the new building. It will earn for this country many millions of pounds of overseas currency in the years ahead. Therefore, it is absolutely tragic that the present Government should bring forward a Bill of this type, because it can only be detrimental to the efficiency and effectiveness of the tourist and catering industry throughout the country.

Brighton has been seeking to build up an off-season as well as an on-season industry. In the past, the area has often been forced to put people out of work during the off-season because there has not been a sufficient number of visitors in the town to justify keeping on catering and hotel workers in the town. The building of the conference centre will mean that conferences will be held in Brighton all the year round. It will provide employment and will minimise the effects of "on" and "off" seasons.

However, the Bill can only harm the developments that will be needed to run in conjunction with the new conference centre. The great new marina that is being built in Brighton will provide additional facilities that will benefit the hotel and catering industry. However, the Government, instead of encouraging the industry, are seeking to clobber it, and their efforts will discourage the industry from expanding and providing new jobs. This can only have a pernicious effect on the future of the industry.

In the last 10 years the hotel and catering industry has suffered a large amount of additional legislation. Indeed, it has reached a point at which the burden is almost unreasonable. A director of a leading firm of caterers in Brighton—his organisation also covers Hove—recently wrote to me saying that he had to spend so much of his time in dealing with legislation that he found it difficult to cope with the problems of running his business. The fact that he is so bogged down by a mass of Government legislation, controls, restrictions and all the rest has meant that a disproportionate amount of his time is spent in dealing with that burden alone. That surely is a gross misuse of manpower.

It may be said "Why does not the company use professional advisers and experts to undertake that work?" Those services are extremely costly. There comes a time when the smaller companies cannot go on using the services of highly qualified and expensive professionals to deal with forms and the complex situation that faces business. This Bill is yet another step in that direction and will put yet another burden on industry.

It amazed me that the Minister, in presenting his case, appeared to act as though industry and commerce had nothing to do with each other—in other words, that it did not matter whether the Government were tougher on one because they were relieving the other. Surely the hon. Gentleman knows that the effective operation of our economy depends on industry and commerce running together as two effective efficient units rather than on division. There must be a partnership in which one industry actively supports and encourages the other. One cannot penalise one without affecting the other.

Mr. Adley

Does my hon. Friend feel that if Mr. Jack Jones were chairman of the British Hotels Restaurants and Caterers Association the story might be different?

Mr. Bowden

I do not know whether Mr. Jack Jones could be persuaded to advise the association. My hon. Friend the Member for Christchurch and Lymington (Mr. Adley), who is on the executive committee of that association body in an unpaid position, might be in a position to offer Mr. Jack Jones such a job, but I shall leave him to raise the matter at the association's next meeting.

In recent months there has been a great cry from the Labour Benches about the lack of investment by industry, but for years the Labour Government and their supporters have been placing burdens on industry and bleeding it white. This has resulted in a situation in which industry has been unable to make sufficient profits and, therefore, has not been able to achieve the amount of investment in new equipment, buildings and development that it would wish. Labour Members cannot have it both ways. They cannot take money out of industry and commerce through taxation and at the same time stalk the country demanding more and more investment.

Even at this late hour in terms of the Bill, I ask the Minister to think again and to withdraw the clause. If he does, he will do a great service to the hotel and catering industry.

Mr. Walter Clegg (North Fylde)

I wish to support the argument advanced by my hon. Friend the Member for Brighton, Kemptown (Mr. Bowden) and especially the case put forward by my hon. and learned Friend the Member for Blackpool, North (Mr. Miscampbell), many of whose arguments apply to Fleetwood and Cleveleys.

I wish to look at this matter in the context of the unemployment figures published today. I refer especially to the unemployment among school leavers. In the Fylde, as in other areas around our coasts, many of the school leavers are looking forward to working in the service industries, which are basic industries on which we all depend. Near my constituency is a famous technical college that trains people for catering and hotel work. Graduates from that college will be looking for jobs in the near future.

The Minister said that there was a difference between manufacturing industry and commerce. That is a difficult distinction to understand. I believe that the two are linked because one is the customer of the other. We must face the situation that we now have over 1 million unemployed workers and the largest number of unemployed school leavers ever in this country. The new clause proposed by the Government will put yet another obstacle in the way of commerce and of the hotel and tourist industries.

The Minister's arguments are totally false. If obstacles are put in the way of the development of the service industries, custom will be removed from the manufacturing industries. Hotel expansion involves the construction industry, which is going through hard times, the steel, potteries and many other industries.

Mr. Michael Latham (Melton)

Is my hon. Friend aware that in an answer today the Government said that 206,000 construction workers were unemployed compared with 113,000 in March 1974? The figure has almost doubled.

Mr. Clegg

That makes my point. The inhibition of development in the service industries will lead to more unemployment, not less.

There is a good case for exempting the service industries, because they are inseparable and would give a boost to industry generally. We are told that we need a surge in manufacturing industry but how can that be created if the orders are not there? The expansion of hotels and commercial buildings of all kinds would provide an incentive for investment in industry.

Fleetwood, in my constituency, has experienced the trauma of the Icelandic dispute and people are being laid off. There is little land left on which to develop manufacturing industry. In the rest of the constituency there are large green-belt areas containing little land for the development of manufacturing industry. But there are areas on the coast and inland where the service industries such as hotels and restaurants could be developed. If they are to be inhibited, my constituency will suffer in a particular way. Several of my hon. Friends wish to speak, so I shall not argue the case further. But what I least understand about the Government proposal is that it will increase unemployment. After today's figures, the Government have every reason to withdraw the clause.

Mr. Michael Spicer

I want to look briefly at the Minister's argument in defence of his indefensible position. Some of his asides led me to suppose that he also thinks that his position is indefensible. The Minister based his argument on the assumption that there are two sectors or identities in society. He assumed that in the economy there is something called the industrial sector, which is good because it is bad and not doing well and, therefore, should receive the support of a regime which supports bad things, usually with public money or through nationalisation.

Mr. Sainsbury

Is that not the support of lame ducks?

6.45 p.m.

Mr. Spicer

That is what it is all about.

We apparently have a sector called industry which is to be treated in a special way. We also have another sector or identity called commerce which, because it is good, is bad, and because it is doing well is something to be discriminated against. I do not want to spend too long on that argument but I want to look carefully at whether one might hypothesise that those two sectors, as my hon. Friend the Member for Brighton, Kemp-town (Mr. Bowden) indicated, are more interlinked than would be supposed from this discriminatory legislation.

My hon. Friend the Member for Hove (Mr. Sainsbury) has already considered the possibility that far from thriving, commerce—in the retail trade, for instance—might be doing badly. It could be argued that a fundamental reason for the most depressed areas being depressed is precisely that they have a poor services sector.

I am familiar with the North-East because I fought there as a candidate over 10 years. I would argue that the reason the North-East is depressed and that business will not invest is that of the poor services sector. In most parts of the region there is poor provision of hotels, shops and other services. A link exists between the poverty of the services and the commercial aspects of the region—which the Minister believes to be thriving and, therefore, not to be helped—and the manufacturing industry which is depressed. Services are crucial and are totally missed in the premise which, apparently, underlies the Bill.

I support my hon. Friend the Member for Hove in saying that it is not true that the commercial services sector is particularly thriving. It may be thriving in London to some extent, but it is not in the rest of the country. We depend on the total balance of goods and services in those areas which are a particular problem and about which the Government are correctly concerned. They determine the poor performance which the Minister has said exists in industry. In those areas commerce and the service sectors are not doing well. Because of that manufacturing industries in those areas lack that investment which we all try to encourage. A major reason why people do not invest in the North-East, why management is difficult to attract, and why brighter people, having been educated there, leave is that the qualitative and commercial side of life is lacking.

The argument that there is a distinction between those two sectors and that the commercial sector is thriving is fallacious. Since that is the argument on which this particularly absurd piece of legislation is based we have to reject it and ask the Minister to produce something better.

Mr. Nick Budgen (Wolverhampton, South-West)

I wish to declare two interests. First, I have an interest as one who owns a small amount of land which either has or may attract planning permission. Secondly, I declare interest as a barrister, although I do not specialise in this area of law. Ironically, my profession will be amongst those sections of the community that most benefit from the legislation, which is both oppressive and complex.

The balance of argument today and in Committee has been, on this side of the House, not only in terms of those who have spoken but because we have won the argument against the Minister, who lacks no eloquence or intellectual ability. He knows, as we do, that his position is nonsensical. All of us on this side of the House have acquired a great deal of respect, admiration and affection for him. The sad thing is that his position is typical of that of the social democrats in the Labour Party in that he is prepared to go along with proposals that he knows to be nonsense.

The proposal before us is to distort the economy in favour of manufacturing industry. I have nothing against manufacturing industry. Many of my constituents are directly engaged in it, and my family has been engaged in it for generations. My proposition is advanced on the basis not that there is anything good or bad about manufacturing industry but that it is wrong for the State to attempt to distort the economy in favour of any one section. Here we see the traditional prejudice of the Labour Party in favour of manufacturing industry to the detriment of all other sectors of the economy.

Even the most intelligent and farsighted politician or economist can never predict how the economy will more over the next two years, and certainly not over the next decade or two. Who would have thought 20 years ago that today we should have our own supply of North Sea gas and oil—

Mr. Stephen Ross (Isle of Wight)

Who would have thought that Wolves would be in the Second Division?

Mr. Budgen

Indeed. Perhaps even the Labour Party of 20 years ago recognised that the City of London was already contributing a great deal by invisible earnings to meeting the problem we then had, with fixed exchange rates, of trying to run a surplus on our balance of payments.

Why have the present Government, like all previous Labour Governments, an extraordinary fixation with manufacturing industry? We hear so often about the boredom and the repetitious work on the assembly line at British Leyland, for instance. We hear how people become so fed up that they organise some form of trade union activity. If I were working on the assembly lines of British Leyland I should be bored, and I should be even more Bolshy than I am here. If I had the privilege of being elected, I should be a trade union leader and should do my best to disrupt the work as the only way to try to relieve the tedium.

It is not enough for the Government to say that the citizens of today are to be locked into that way of life. The Government want to lock those citizens' children and grandchildren into manufacturing industry. They want to fossilise and distort the economy so that that way of life can continue for ever. Is it what the people want? Why are we increasingly educating more and more people in various forms of higher education, in a way which rightly gives them expectations of a more varied and exciting way of life, and yet telling them "You cannot go into commerce or the hotel industry. We shall distort the economy so that you must go into manufacturing industry and continue in a way of life which your father has rightly regarded as less attractive than the new ways of life which a free economy would evolve for you."?

Let us look at the extraordinary attitude of the intellectuals of the Labour Party. They are for ever talking about the need to give more and more aid to the Third World countries, yet at the same time they propose import controls and distortions of the economy in favour of domestic manufacturing industry. They do not seem to realise that, as any advanced country proceeds, the wages in it are bound to be relatively higher than in the developing countries. As a result, the advantage will tend to flow towards the developing countries, as they turn to manufacturing industry and in some instances inevitably undercut the manufacturing industry of the developed and advanced country.

We are told that we must distort our economy to lock our citizens into a form of employment which many of them have demonstrated by their own activities they do not enjoy and do not wish to continue. This proposal is as good an example as any we have seen, even by comparision with SET, for example.

The result of the proposal will be that when a firm, such as commercial distributors, wishes to take over premises being used inefficiently by manufacturing industry, in respect of which there is a deferred liability to DLT, it will say "We can't take them over because if we do there will be a triggering of liability to DLT." We shall see yet another way in which the profitable and expanding use of resources is distorted by Government intervention.

It is all part of the wider problem that people are being prevented from living as they wish. There is nothing more democratic, nothing fairer, than the market response to the millions and millions of preferences of free people. When those free people express a preference for some form of commercial activity, they give that preferred commercial activity the profits to buy space and take people into employment. The Government are distorting those preferences by saying "You cannot take over manufacturing industry. We shall stick an extra tax on premises which were previously used by manufacturing industry, so that to take them over you will have to pay a whacking great lot of tax." In that way, the Government express their preferences over those of the consumer and the ordinary citizen.

My hon. Friends have asked why it is being done. I suppose that partly it is the heavy price we are all paying for the unique and extraordinary relationship between the Government and the trade union movement. Even the most cursory analysis of the trade union movement reveals that, although it directly represents only half the work force, it tends to represent that part which is engaged in manufacturing industry. Therefore, it is believed that to distort the economy in favour of manufacturing industry will enable the Government to ingratiate themselves with their lords and masters in the trade union movement.

7.0 p.m.

My hon. Friend the Member for Christchurch and Lymington (Mr. Adley) suggested that the proposal was motivated by job snobbery. I wish that it were, because snobbery is a trivial and stupid enough emotion. I suggest that it is something worse than that. This proposal is motivated by the desire of a Labour Administration to go in for a bit of social and political engineering, because, just as they believe and hope that if they keep people in council houses they will tend to vote Labour, so they believe that if they keep people in manufacturing industry they will also vote Labour. The Government believe that if a man is taken out of a factory and put into an office or warehouse, he may change his attitude and, as those in the Labour Party would say, betray ordinary working people. So we are continuing to pay the price for retaining this present Government in power. We are paying it in loss of job opportunities for the future, in loss of profit and in further distortion of our economy.

Finally, may I take up a point made by my hon. Friend the Member for Hove (Mr. Sainsbury) on the danger of large liabilities for tax being deferred and held over the heads of companies. Today, unhappily, we see more and more interference by Government in all forms of commercial activity. We see it not only in a general way but also, do we not, in the most detailed way, for instance in the Price Code? One of the dangers of having these deferred liabilities for tax is that a Government of any complexion when they are trying to lean upon a particular industry, or even a particular firm, may threaten it with triggering off liability for tax, a liability which individual firms and individual industries may know they have absolutely no chance of paying off.

When one thinks, for instance, of the machinations that are centring on the Price Code at the present time, which will no doubt continue to be a part of our way of life until we break out of that extraordinary arrangement, is there not a real danger that future Governments may say to individual industries "If you do not agree to our particular ideas about the Price Code, we give you due warning that we will trigger off the liability for taxation under DLT."? If we believe in freedom, we are giving to this Government and to successive Governments a very dangerous weapon when we allow them to hold above the heads of many of our great industries this postponed liability to DLT.

Mr. Nicholas Ridley (Cirencester and Tewkesbury)

My hon. Friends have well deployed the case that there is here severe discrimination in favour of manufacturing industry and against commercial activities of a different nature. It has always been a part of the Labour Party prejudice that unless one wears a boiler suit one is not an ordinary working person. I must say I admire the eloquence of my hon. Friend the Member for Worcestershire, South (Mr. Spicer) and my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) and I shall not seek to explore too deeply the ground which they so ably opened up, except to say that this really is shades of SET. Lord Kaldor walks again. I have always wondered why a Hungarian should share this particular dislike of modern activity and wish to stick in the past, but there is one flaw which always gets people into trouble when they seek to persecute more modern activities than hitting pieces of iron with a hammer.

There is something called the co-operative movement which cannot by any stretch of the imagination be classified as an industrial activity. So just as with SET we find with this Bill that the co-operative movement is singled out for excessive taxation just because it is not a manufacturing industry. In Committee, if I understand it right, some hon. Gentlemen who have an interest in the co-operative movement found it expedient to be absent from the Committee Room when a vote was taken on this point. I congratulate them. I even suspect that one of them may be in the Chamber now, but I do not know. I would not wish to drag out of any hon. Gentleman interests which he has not declared in a standing position; but if that be so, surely they would be right to do so now, because discrimination in all its forms is odious.

The point I wish to explore is: what is manufacturing industry? How do we define which are sheep and which are goats? It was the same point which gave rise to endless discussion on SET. If I remember rightly there was something called "standard industrial classification" which gave glorious meat to the Opposition and which, understand ably, has not been produced again on this occasion; but there is something very nearly as good. That is Schedule 4 paragraph 7, Class E (a), which is referred to in the new clause, under which those activities regarded as industrial purposes of any trade are defined as: (a) the carrying on of any process for or incidental to any of the following purposes, namely— (i) the making of any article or of any part of any article, or the production of any substance;"— such as candyfloss— (ii) the altering, repairing, ornamenting, finishing, cleaning, washing, freezing, packing or canning, or adapting for sale, of breaking up or demolishing of any article". I want to tell my hon. and learned Friend the Member for Blackpool, North (Mr. Miscampbell) and my hon. Friends the Members for Blackpool, South (Mr. Blaker) and Brighton, Kemptown (Mr Bowden), who complained that the con- ference industry is outwith the scope of this relief that demolition of any article can take place at a party conference without any DLT at all, so they can get out of it in that way.

What of "washing any article"? I happen to have a kitchen where three weary times a day my housekeeper washes up dishes, so she is regularly washing articles in my house. Does that let me off? I should have thought probably it did, but I am reminded of the story of a Lord Wimborne of one or two successions ago who had a house adjacent to the Ritz Hotel in Piccadilly. One day the Ritz Hotel wrote to him saying "We are considering extending our hotel. If you ever thought of selling your house we should be most grateful if you would let us know so that we can put in the first offer". That Lord Wimborne wrote back saying "Thank you very much for your kind letter. I am not thinking of selling my house at present, but I am thinking of extending it. If you are ever thinking of selling your hotel I should be grateful if you would let me know because I should like to put in the first bid." Here, of course, such transactions would be hit by DLT. The Ritz Hotel is regularly cleaning, washing and freezing. What else do they do in the laundries and kitchens of that hotel? They are continually cleaning, washing and freezing—

Mr. Michael Spicer

And breaking up things.

Mr. Ridley

My hon. Friend anticipates my words. I am sure that that Lord Wimborne, too, was continually breaking articles, so one has only to have someone breaking up old champagne bottles to be breaking up articles as in trade.

So what is the definition of "industry"? There is no definition of "industry". There is no rigid distinction between those who engage in a meaningful activity in the community and those who do not. For example, those who are engaged in computer programming are not allowed to defer development land tax if they extend their computer programming premises. Consultants, the City of London, banking and insurance, all bogy men to Government supporters—if only there were a few of them present—are the people who are earning our living. They are the people who have been slightly alleviating the enormous imports of industrial machinery by their invisible exports. So, says the Minister, they are the ones who can take the clobbering, and it is industry which must be allowed to go scot free.

What is the yield of the relief that we are giving to industry by this new clause, and what would it be if we gave the relief to commerce, too? I do not know, but I think that those questions should be answered, because I suspect that the cost of extending this relief to commerce is just a small amount of money, and probably much less than the cost of giving it to industry. Before we make the prejudicial discrimination based on that ancient prejudice of the Labour Party for no other reason than doctrinaire hate, as advised by Lord Kaldor, we should know what it would cost.

I have news for the Minister, because the matter can be taken forward. I go back to the new clause and I quote from subsection 1(b): the deemed disposal, relates to a building or other land to be used, in whole or in part, for the industrial purposes of that trade". What does "in part" mean? It does not say "as to half", or "as to a quarter". It just says "in part". So, all that Lord Wimborne has to do is to have one man engaged in trade somewhere beyond the green baize door. It could be a lady knitting sweaters, or someone making pottery, quietly stuffed away. Lord Wimborne would say "Oh, yes. My house is used in part for purposes connected with the trade of pottery", and he gets through.

There is no possibility of determining which part of which enterprise is engaged in trade and which part is engaged in industry. There is no way that we can discriminate without throwing up all these problems of demarcation, the extent to which it is industrial and the extent to which it is commercial.

Then there are the difficult questions of large companies which have part commercial and part industrial activities. This piece of discrimination will give rise to endless confusion, doubt, litigation and so on.

I see the point which the Government make, of course, that to impose any further burden on industry might be a mistake, especially when it is one which in a sense is gratuitous and not connected to a company's activities as a manufacturer. If it is fortunate in getting a big gain on the development of some site it should be relieved of paying tax on that. I think that we can accept that point of view, but if it is true of industry, that this is not a proper subject for taxation, how much more true is it of commerce, and, if it is true of commerce—hotels, banking, insurance and so on—how much more true is it of anyone else?

By this new clause the Government have said to the world at large "Our tax is so bad, so pointless, so arbitrary and so discriminating that we cannot allow it to apply in cases where we think that it matters", the supposition being that in no other case does it matter, but the evidence is that this is a bad Bill introducing a bad tax, and the fact that the Government seek to exempt industry will give away the story that the Government do not have confidence in their own tax.

Let the Government heed what has been said by my hon. Friends who represent areas of tourism, hotels, and many of the other activities which are alleged to be commercial and not industrial. Let them for once do something about it. Let them accept the amendments at least extending the relief to commerce. Because the way that the Government go on legislating their prejudices and hates is what is driving this country under—this discrimination, and this desire to make come true, in the form of legislation, all the ancient dogma, of the bad industrial periods long before the Government's present supporters were born, which they have had handed down to them by their fathers and grandfathers, and which is now legend. It is too late to start legislating these prejudices. It would be better if they came into the real world and realised that it is not just manufacturing industry which earns this country a living but many diverse activities which do not involve overalls but which keep large numbers of British manufacturing industries going by the contributions which they make to the balance of payments and to the nation's revenues.

7.15 p.m.

Mr. Michael Latham

After the heady wine and brilliance of the oratory of my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley), the House must now return to the dull cloudy sediment of mine, because I want to ask a number of detailed questions of the Minister and to do so simply because we are in the last detailed stage of the Bill.

There is no discussion of the Bill in the House of Lords. This is a taxing Bill. We have to get it right now, and we have to get it right tonight because the Government have introduced a clause now which was not discussed in Committee. The detailed job which should have been done in Committee cannot be done now, and certainly it cannot be done in the House of Lords. For that reason, I have some questions to put to the Minister before I go on to make one or two general observations.

The first matter that occurs to me on reading the clause is its remarkable similarity to Clause 19 as it was previously drafted. Reading through the very few changes in New Clause 1 from the wording in Clause 19, the dark theory in my mind is that perhaps the Government thought that they had better discuss the clause earlier on and try to reverse the Committee's amendment when they had some of their troops around rather than in the watches of the night when the House came to consider the amendments put forward to Clause 19. If that is not the intention, there is no reason why the Government should have wasted the paper required to print New Clause 1 when 95 per cent. of it is identical to wording currently in the Bill.

I come now to one or two points on the new clause. I am not allowed, of course, to refer to amendments which are not selected, but I can refer to the words of the clause. Looking at line 22 of the clause, I see that there are new words there: or for or incidental to the generation of electricity". These are additions to the list currently contained in page 107 of the Bill under Class E, to which my hon. Friend the Member for Cirencester and Tewkesbury referred so amusingly.

I do not need to read that list, because my hon. Friend went through most of it, but I cannot understand why, suddenly, the generation of electricity has been put into the Bill. It has nothing to do with the remainder of the clause or with the list under Class E. Why include elec- tricity? Why not gas, coal or nuclear power? There is a great energy conference taking place today. Why have we discriminated in this clause in favour of one form of energy without listing all the others? What is the reason why those words have been inserted although they were not in the previous clause? The Minister made no attempt to explain that.

Next, looking at lines 51 and 52 we see the words "any trade at all". They replace the previous words in the Bill, which were "that trade". What is the reason for that change? "That trade" was quite specific and what it meant was clear. The phrase "any trade at all" is a very wide, catch-all phrase. There must be some reason why the draftsmen have changed those words. What was it? Perhaps the Minister will be able to get guidance from his officials—although I do not know how he will physically be able to do so as I notice that his Parliamentary Private Secretary has left the Chamber. Perhaps these messages come by telepathy.

In line 84 we have a new qualification, the addition of "(a)". As previously drafted, the clause talked about "subsection (7) above". Now it is related solely to "subsection (7)(a) above". What is the purpose of that restriction? In the original clause we see that certain things were specified in subsection (7) which will now apparently no longer be the case for the purpose of subsection (7)(a) here. Why has that restriction been made?

When new clauses are brought forward on Report, given that there is no detailed consideration in the House of Lords, we must get matters on record and get them right. That is what Parliament is here for. We shall expect an explanation from the Minister on these detailed points.

I turn from the particular to the slightly more general. I want to express my serious concern about the fact that the Minister made no attempt to carry out the undertakings—semi-undertakings, I concede—that he gave to the Standing Committee on 11th May. I want to quote in full what he said so that the House may see it fairly. He said: Perhaps I could say something about the Opposition amendment which was carried last week. Since the Committee decided in that way, we are looking again, hut without prejudice, at the arguments put. We are looking at them with an open mind to see whether it is possible to give some expression to the will of the Committee. But I want to make it quite clear that it is not a commitment: we have not changed our mind. However, in all fairness to the Committee, since it decided in the way it did, we should look at the argument again."—[Official Report, Standing Committee J, 11th May 1976; c. 1046–47.] Having given that undertaking and having, presumably, looked at the matter again, the Minister came to the conclusion that he should not actually make any change, so I cannot see how he looked at it "with an open mind". The Committee had made a particular decision and had particularly changed the wording. At that stage the Minister could have said "I disagree with the decisions of the Committee. When the Bill goes to the Floor of the House, I shall ask my right hon. and hon. Friends to try to restore the original position." We should not have liked it, but the Minister could have done that. He did not do that. He raised our hopes. He said that he would look at it with an open mind, but he then reconsidered the matter and has come forward with the same clause. He says "What does it matter? That is what the House is for—to decide these things."

It matters, however, to people outside the House, who are saying "The Minister raised our hopes and we made all sorts of decisions as a result of his hint, but now he comes forward with the same clause." To do this makes an absolute farce of the semi-undertaking that he gave.

Anyone who has studied the Committee's proceedings carefully will feel that the Minister has not done anything to help us in regard to his undertakings. When he was considering the amendment moved in Committee by my hon. Friend the Member for Hove (Mr. Sainsbury), he took exception to its wording because he said that the word "commercial"—which is the purpose of our Amendment (a)—was not sufficiently specific and clear to enable him to accept it in its form. He said that the word "commercial" has no meaning so far as I am aware, in any fiscal legislation. That is all very well, but if the Minister took the view that the wording was imprecise he should not have given the impression, which he did, that the word- ing was what he was quarrelling with rather than the principle. He said: If the hon. Gentleman is now saying that he wants the exclusion of retail shops and hotels, that is another argument, and I suggest It would be another amendment. We are being asked to incorporate an amendment to add 'commercial'. I think I am making a fair point. The Minister went on to say, One could not possibly argue on the one hand that 'trade' is too wide and 'commercial' is not."—[Official Report, Standing Committee J, 6th May 1976; c. 1034–5.] Again, therefore, at that point the Committee was given reason to believe that the Minister was dissatisfied with the wording of the original amendment but was not wholly out of sympathy with its spirit. It is all the more disappointing, therefore, that we have the same wording as before.

Finally, I want to express some degree of concern about the way in which we have to proceed on these very technical Government new clauses. As I have said, this is a taxing Bill and, therefore, the other place has no part in the matter. It cannot amend the Bill, so we must get the Bill right here. If Ministers are to bring forward major new clauses of this type and those which are to follow, which must be discussed in the House on Report, they should give far more notice than they have on this occasion so that those directly concerned with these matters are able to let hon. Members, on both sides of the House, have their full comments. What we are doing cannot be said in any way to be a satisfactory procedure, because we are changing irrevocably in this Session the law of the land and we are introducing a major new tax. No one listening to our deliberations, despite the great efforts being made on all sides in relation to this matter, could say that these proceedings were basically satisfactory as regards putting legislation on the statute book.

Mr. Stephen Ross

I am delighted to follow the speech of the hon. Member for Melton (Mr. Latham). He was good enough to say some kind things about me on Second Reading. Hon. Members on both sides of the House recognise his knowledge of the subject. He has certainly put some very sound points to the Minister. We look forward to hearing the answers.

I shall not speak for long. I wanted to hear the arguments about the new clause. I did not serve on the Committee. To begin with, I felt that the Government had something on their side in that they were giving whatever relaxation there was to be to industry. I think that everyone must agree that it is to the industrial side and to our exports that we must give assistance. On the retailing side, and certainly in the distributive trade and hotel industry, there has been a great deal of activity in recent years. Even the hon. Member for Hove (Mr. Sainsbury) would have to accept that. There have been varied developments and new ideas over the last few years.

Nevertheless, a case has been made. I think that my grandmother, long since dead, would find it amusing. She was a great Tory, if ever there was one. When my father told her that he was going into trade, she was horrified. Yet speaker after speaker on this side has spoken in defence of commerce, such is the change in 50 years.

Many hon. Members have spoken on behalf of holiday areas. My constituency, the Isle of Wight, is certainly such an area. Unemployment figures on the island are down from nearly 9 per cent. in January to 5.4 per cent., according to figures issued today. I welcome that drop. I am delighted about it, but I know the real reason for it. That is the tourist industry. It is the holiday season which has taken up a lot of the slack.

In the island some advantage was taken of the grants made available to hotels by the previous Labour Government, but they were nothing like enough. A great deal more will have to be done if we are to continue to attract tourists to the island. Therefore, it is of great importance to the hotel and the tourist industry generally that it should not be dissuaded from moving forward and from carrying out the necessary improvements which must be made.

I should declare an interest. I live next door to an empty pub in the centre of Newport. I understand that the brewery is about to reopen it and convert it into a small hotel. I was supporting the licensing legislation the other day, but I am not so sure I should have done, for if the pub is to be reopened juke boxes may be put in and music may well go on till midnight. If the new clause is not amended, I shall be in great difficulty, because if I want to sell my house to the brewery, it will have to pay the tax immediately and will not be able to defer it. So the likelihood is that it will not buy.

Warehousing connected with industry is excluded, but general warehousing should also get this deferment.

I feel that the Government ought to reconsider their position because I think that the argument which has been put from this side of the House, despite a great deal of the flourish which has gone with it, does come from a sound base. I would hope that the Government, even at this late hour, will relent, and agree that the new clause should include commerce as stated in the main amendment.

7.30 p.m.

Mr. Nicholas Fairbairn (Kinross and West Perthshire)

I do not know whether language has any meaning, but if it does the commitment which the Minister gave in Committee was that the Government would look again at our proposals with an open mind. It is quite clear from the proposition in the new clause that they looked again at our propositions with a closed mind.

In the definition clause there is no definition of "industrial purposes". As I understand it, that is the purpose of the new clause—that we should discover what industry is all about. I do not know how the Government intend to limit their new clause to "industrial purposes", but it is simple to look up the meaning of the word "industry". It means: … diligence or habitual employment in useful work". I should have thought that there were very few people employed in any activity who could not be said—so long as they are employed—to be habitually employed in useful work. During the debate in Committee we constantly asked the Government what the reason was for making this distinction and why it was necessary to restrict the preference to industrial activity.

I represent a constituency in which there is almost total employment but almost no industrial activity. I represent a constituency in which it is very likely, since it has a large area of land, that there will be constant dealings and transactions which will be caught by this tax. I have to ask myself upon what possible basis the Government think it right, wise, or principled, to exclude every person whom I represent from these generous provisions.

The argument, so far as I recall, that the Minister used in Committee was that if we started making definitions and categories, it became too difficult for all of us to draw the distinction between factories on the one hand and commercial developments on the other. He went on to say: I make these points again, in all sincerity, merely to show the difficulty once one gets away from the tight industrial manufacturing classification."—[Official Report, Standing Committee J, 6th May 1976; c. 1036.] I do not know what the Minister meant by "tight industrial classification". What is it? It is so tight that there is no activity which one cannot say may or may not fall within it. Let us look at the tightness of the industrial classification. If a person sells cups, he is not within the tightness of the industrial classification, but if he puts a little painting on the cup before he sells it, he comes within the tightness of the industrial classification.

If a person receives white heather in his shop and sells it, that is not an industrial classification, but if he puts a nice piece of ribbon on it and the words "A Wee Present Frae Bonnie Scotland", presumably it comes within the tightness of the industrial classification.

The whole proposition is humbug and bogus. There is no end to the obvious exceptions and distinctions and qualifications that one could make. So tight indeed is "tight industrial classification" that it requires a clause of 1,750 words in order to make the Government's tight purposes clear.

Mr. Denzil Davies

I hate to interrupt the hon. and learned Gentleman in the full flow of his oratory, but Schedule 4(7) sets out fairly coarsely the classification that we have in mind when we talk about industrial purposes.

Mr. Fairbairn

I appreciate that in Schedule 4(7) there is an attempt to describe what is called "a tight industrial classification" but that will not do. The classes of purposes mentioned are: Use as a dwelling-house or for the purpose of any activities which are wholly or mainly carried on otherwise than for profit, except use for a purpose falling within Class B, C or E: That does not strike me as being tight, clear, or all that simple. To whom does it apply? Does it apply to any of the industrial activities, or manufacturing activities, or activities in which something is changed into something else? The: Use as an office or retail shop: is excluded. So is the: Use as a hotel, boarding house or guesthouse, or as premises licensed for the sale of intoxicating liquors for consumption on the premises: I am glad that at least the Labour Party understands that drinking is not an industrial activity. So is the: 'Use for the purpose of any activities wholly or mainly carried on for profit except— (a) use as a dwelling-house or for the purposes of agriculture or forestry: Why is it that all these activities are looked upon as anti-social? Why should forestry and agriculture be exempted from a Government who talk of "Food from your own resources"?

Mr. Budgen

They tend to vote Tory.

Mr. Fairbairn

Yes, indeed. It is only the activities of which the trade unions may have a grasping control which are allowed to have an exemption. I can find no other category or classification. The Minister is a distinguished lawyer and I look forward to his telling us of the tightness of his category of industrial activity.

Mr. Sainsbury

Perhaps my hon. and learned Friend will cast his eyes a little further down and consider what might be done with his white heather under Class E(a)(ii) which states: the altering, repairing, ornamenting, finishing cleaning, washing, freezing, packing or canning, or adapting for sale, or breaking up or demolishing of any article;

Mr. Fairbairn

Of course, as my hon. Friend the Member for Hove (Mr. Sainsbury) will appreciate, this is a constant activity in Scotland. Needless to say, there are no members of the Scottish National Party present, because there is no industrial activity in Scotland, apparently, and they are not interested. We are constantly altering, repairing, ornamenting, finishing cleaning, washing, freezing, packing or canning, or adapting for sale, or breaking up or demolishing white heather. It is one of the main interests in Scotland. It would be marvellous for that activity to be exempted, particularly the breaking up of white heather. I invite the Minister to come to my constituency and break up white heather. It is one of the most rewarding and creative industrial activities there is.

When their own legislation is stuck back down their throats and they pretend that this is a tight definition, the Government are naked in the face of their own hypocrisy. They did not look at it again with an open mind. They did not look at it with any mind at all. They just said to themselves "We are against commerce. We do not like people to indulge in commercial activity. We do not like self-employed people. We do not like small businesses. We like big organised industry. We will give them the preferences, and the exemptions, and we will ensure that those who earn their living, and most of the living for this country, are those against whom the distinction is made."

If the Minister can tell me tonight one single basis upon which this asinine and long distinction which he uses to describe the word "tight" other than doctrinaire prejudice, I shall be delighted to hear it. I shall be delighted to hear from his lips as counsel the opinion that I should write of what is an industrial activity. I shall be delighted if he can tell me how it can be so tightly drawn in a clause that requires 1,750 words to specify it and in a schedule that gives as disparate a group of activities as altering, repairing, ornamenting, finishing, cleaning, washing, freezing, packing, canning, adapting for sale, breaking up and demolishing.

There is no ejusdem generis about that clause. The Government have decided to exclude commerce. They have never liked any of the activities of those who engage in commerce, although they have always relied on the profits made by those people to indulge in their own various schemes. Their pretence tonight that there is any principle behind New Clause 1 is one of the major hypocrisies to which the House has had the misfortune to listen.

Mr. Graham Page (Crosby)

My hon. Friends have deployed fully and effectively the arguments against the discrimination shown in the new clause in favour of industrial activity and against commercial activity. I am grateful for the support of the hon. Member for the Isle of Wight (Mr. Ross), but it is surprising that there has been no word from the Government Benches about the new clause, not even in justification of it, other than from the Minister himself. I cannot think that hon. Members who are sponsored by the co-operative movement can be happy about the discrimination against retail shops shown by the clause. They do not come here to support those who sponsor them.

Although the debate has been deployed on general principles of discrimination between industry and commerce, I should like to come down to the narrow point of the clause itself. From the point of view of development land tax arising out of a deemed disposal, there can be no distinction between industrial and commercial undertakings. We are not dealing with a gain from selling or disposing of a property. This is one of the fictitious gains in the Bill—the ficitious gain of developing property, what we have come to understand from Clause 2 as "deemed disposal".

Under this new clause we are dealing not even with a deemed disposal, which is a development of property for the purpose of disposing of it eventually, but with a development of property for use by an industrial concern—we would include commercial concern—already operating. It is not a question which bears upon the speculative developer.

The Minister said that if the clause were extended to commence, we should be discriminating against the speculative developer. There is a distinction between the person who develops on his own land to extend his own business and improve his service to the public, and the speculative developer who is not building custom-built property but wishes to make his profit on the disposal of the property.

Therefore, the benefit being given here to industry is not really a benefit at all. It is a relief from tax which those con- cerned might otherwise, under this disastrous Bill, be called upon to pay for having the enterprise to develop their own premises and businesses. What distinction can there be between the industrialist who develops his own premises and extends his business and the commercial man who does the same?

The Minister made the distinction by saying "We want to help industry because of the appalling state of manufacturing industry." That was an exaggeration. He then compared that state with the thriving state of commercial development. Does he realise that there has been practically no office development in the last three years? He is thinking of the time some years ago when there was a boom in that type of property development.

7.45 p.m.

There is no real distinction between the industrialist and the owner of the retail shop. In each case we are talking about a man who owns a concern already, who is developing and extending his own property and business—a man, for example, who moves into a new and expanding estate in the suburbs and starts up a corner shop but has enough foresight to know that that estate will develop and he will in due course be able to turn his business into a supermarket. This tax will prevent him from making that development.

I want to direct the Minister's attention to the particular case of the wholesale warehouse, whether it is treated as a business on its own or as part of the industrial premises. The effect of Amendment (c) which would leave out the words "paragraph (a) of", is to include the whole of Class E on page 107 as an industrial process. It would include warehouses for industrial premises.

If an industry extends its premises by building warehouses, as the Bill stands it will be called upon to pay the tax immediately on a deemed disposal. The amendment would bring into the relief the warehouses of the industrialist who extended his premises to build a warehouse. Beyond that, however, is there really any distinction between the factory and the warehouse, even when it is not connected with any particular factory? The wholesale warehouse serves a useful purpose for industry. In fact, industry could not do without it. If it is expanded, however, it will not get relief in the payment of this tax.

The case for hotels and restaurants has been effectively argued today, and I support everything that my hon. Friends have said about the damage this will do to hoteliers who wish to extend their premises and give greater services to their clientele. Although the enterprising people in commerce of this sort will be deterred by this tax, there has, strangely, crept into the new clause a reference to the generation of electricity. That is an industry which will get the relief of not having to pay the tax at once if it develops its own property. How that crept in, I do not know. Why electricity? Why not gas or hydraulic power? I should be only too happy to extend this relief further. Why stop at electricity?

The other amendments deal with the addition of the word "commercial". Amendment (g) deals with premises which have been expanded and which then suffer destruction, for example by fire, and the owner receives the insurance. In the normal way that would be an actual disposal. He would be receiving money for disposal, albeit a disastrous disposal, of his property. Obviously, in this case the fact that he has been relieved from the tax should not trigger off a liability. In other words, if an industry has expanded its premises which are subsequently burned down, and up to that stage the tax has been deferred, the tax liability should not be triggered off and the deferment ended simply because the owner received insurance money. I do not see why the Minister should not accept our Amendment (g).

Mr. Sainsbury

This is another case on which the Minister in Committee undertook to look at the matter. I assume that he looked at it, and he should be in a position now to say something definitive about it.

Mr. Page

Yes, that is so. We had an assurance that the Minister would look at this. I think it was an assurance which was given with some confidence that we were on to a correct point.

There is a little complication about the voting on the new clause, because the Minister has done it in a rather peculiar way. He is putting in an existing clause as a new clause. This leaves us in difficulty. If he intends to relieve people—in this case industry—from the tax, we are in favour of that, but, of course, we would rather have Clause 19 as it appears in the Bill at the moment. If I ask my hon. Friends to divide, it is not because we do not like the relief that is being given to industry. It is because we prefer Clause 19 as it is, because it gives greater relief. I do not want there to be any misunderstanding about that. I assume that when we reach Amendment (a), which would add commerce to the new clause, we may have a Division on it.

We feel that the new clause does not carry out the undertaking that we hoped the Minister was giving in Committee. Neither has he put forward any new arguments for refusing the amendment to the clause that we won in Committee.

Mr. Denzil Davies

We have had another very full debate. We had thought that the Opposition would welcome discussing the new clause at this stage because at least that enables the debate to take place in the hours of daylight. But the real reason it has been introduced now is purely procedural. If we had arrived at Clause 19 there would have been consequential drafting amendments and there would have been difficulty about putting down those amendments. I assure hon. Members that there is no device or ploy here. It is unfortunate, but there is no other procedural way of going about it.

I accept entirely what the right hon. Member for Crosby (Mr. Page) said about voting on New Clause 1. I accept that he and his colleagues would not be voting against relief for industry, because voting in that way is part of the procedural way of getting rid of Clause 19. The Government want to vote on Amendment (a) as well.

Mr. Graham Page

On consideration of the Minister's answer, I think it would be sufficient to divide just on Amendment (a) and save a lot of time.

Mr. Davies

Yes, I accept that, beccause it is Amendment (a) which is substantive.

The hon. Member for Hove (Mr. Sainsbury) asked about the differences in the new clause from the original Clause 19. Apart from restoring the restriction of relief to industry, the new clause contains other changes made in Clause 19 in Committee. These include the provision that sale and lease back transactions should not trigger off the deferred tax. They also meet an undertaking given in Committee that the deferred tax would not be triggered off if the owner of an industrial property wished to use that property for a different trade.

They also provide for the development of the generation of electricity to qualify for relief. This remedies an anomaly by which the development of other energies is exempt from tax because the processes in use fall into Class E. At the moment electricity generation does not fall into this category. This change brings electricity into line with other fuels.

The hon. Member for Melton (Mr. Latham) discussed subsection (a), which is slightly different from the corresponding provision in Clause 19. This is purely drafting. It refers back to subsection (7)(a) and not to subsection (7), because subsection (7)(a) describes the disposal. This drafting change does not alter the substance in any way.

I thought that the hon. Member for Melton was rather nit-picking, but I think that hon. Members recognise that I made a clear statement in Committee that I was not giving a commitment to reverse what the Committee decided. I said that the Government would look at it with an open mind. This we have done, and just because we have come to a different conclusion from that which the hon. Member would have liked does not mean that we did not look at it in good faith.

As far as Amendment (a) is concerned, "commerce" is not a term which means much in fiscal legislation. If the House accepted the amendment, we should have to look at the word "commerce" and perhaps change it to "trade".

I have been asked why this new clause was put down so late. Hon. Members have complained that no one could make representations because of this lateness. But most people would not order their affairs on the basis of something that happened in Committee before the Report stage of a Bill. I informed hon. Gentlemen some time ago that we should be seeking to reverse Clause 19. I did so by this rather strange procedural way of a new clause.

The hon. Member for Kinross and West Perthshire (Mr. Fairbairn) invited me to write his opinions. I would if I could have his fee. The wording goes back to town and country planning legislation, and is also contained in the development gains legislation for which his party was responsible.

8.0 p.m.

Mr. Fairbairn

Will the Minister confirm that in subsection (2)(b) of the new clause the wording is used otherwise and that a dwelling-house, for the welfare of workers employed in such a trade could cover a miners' welfare institute?

Mr. Davies

I expect that it would, but the phrase "industrial purposes" is well known in planning and fiscal legislation.

Mr. Graham Page

Since the Minister has not mentioned Amendments (c) and (g), I presume that he is prepared to accept them.

Mr. Davies

I am not prepared to accept Amendment (c), which deals with warehouses. Of course, if they are warehouses within the curtilage of industrial premises, they would be covered, but if they are not within it, they would not be. To draw a distinction between "industrial" and "commercial" and then to bring in warehouses would present difficulties, because it would be impossible to maintain the distinction.

Amendment (g) deals with the situation where compensation or insurance moneys are received for the destruction of a property. The amendment argues that that should not rank as a part disposal. The hon. Member for Hove said that I gave an undertaking to the Committee on this point. I undertook not to bring forward an amendment but merely to look at the matter.

The Bill already contains sufficient protection. The receipt of insurance moneys ranks as a part disposal, but the amount of tax triggered is determined by the board or, on appeal, the commissioners who decide what is just and reasonable. The commissioners therefore decide how much tax should be triggered, and in most cases they would say that it was not reasonable for there to be any triggering of liability.

Mr. Adley

May I take up the point about what is just and reasonable? Will the Minister say something for future reference for inspectors who are faced with the problem? Is it just and reasonable for a hotelier who built a hotel two years ago intending to develop it over 10 years, and in five years' time provides kitchen development, to find that the development does not qualify for relief even though it was in the original plan?

Mr. Davies

I am not sure whether the hon. Member is directing his mind to the amendment. I think that he is going further. The general or special commissioners will decide what is just and reasonable. If during the operation of the tax it appears that hardship is created, I give the assurance that we shall look at the matter to see whether we can provide for that situation. Nevertheless, I should have thought that the common sense of the commissioners would be a sufficient safeguard.

I return to my general argument. In principle there is no case for a deferment, no case for a distinction between industrial and commercial. But, because of the poor state of industrial development and because commercial development has been thriving, we do not want anyone to suggest that we might have impeded industrial development by our proposals. They do not do that, but we cannot take any risk with manufacturing industry, and that is the reason for the deferment.

I accept that there is a gulf between the two sides about the importance that should be attached to a distinction between industry and commerce, or perhaps between the provision of goods and services. I know that my arguments will not commend themselves to the Opposition, but I urge my hon. Friends to support the clause.

Mr. Sainsbury

On a point of order, Mr. Deputy Speaker. Are we to have a debate on Amendments (a) to (f) and Amendments Nos. 56 to 61? We have not discussed these amendments. The arguments were directed to the first group on the selection list.

Mr. Deputy Speaker (Mr. Bryan Godman Irvine)

The hon. Member must have been out of the Chamber when Mr. Speaker explained this matter. I was under the impression that he had announced that with the first group of amendments there would also be taken the second and third groups. They have therefore been debated.

Mr. Sainsbury

It was my impression that Mr. Speaker said that it was in order to refer to the points covered by the second group, but not that we were actually debating them.

Mr. Deputy Speaker

Mr. Speaker indicated to me when I took the Chair from him that those amendments were being debated.

Mr. Sainsbury

I was the first Back Bencher to speak in this debate and what Mr. Speaker said was said after I had spoken. I have therefore not had the opportunity to make the remarks I wanted to make on Amendment (c).

Question put and agreed to.

Clause read a Second time.

Amendment proposed: (a) in line 7, after "industrial", insert "or commercial".—[Mr. Graham Page.]

Question put, That the amendment be made:—

The House divided: Ayes 269, Noes 285.

Division No. 190.]	AYES	8.10 p.m.
Adley, Robert	du Cann, Rt Hon Edward	Hordern, Peter
Aitken, Jonathan	Dunlop, John	Howe, Rt Hon Sir Geoffrey
Alison, Michael	Durant, Tony	Howell, David (Guildford)
Arnold, Tom	Edwards, Nicholas (Pembroke)	Howell, Ralph (North Norfolk)
Atkins, Rt Hon H. (Spelthorne)	Elliott, Sir William	Howells, Geraint (Cardigan)
Awdry, Daniel	Emery, Peter	Hunt, David (Wirral)
Baker, Kenneth	Evans, Gwynfor (Carmarthen)	Hunt, John
Banks, Robert	Eyre, Reginald	Hutchison, Michael Clark
Bell, Ronald	Fairbairn, Nicholas	Irving, Charles (Cheltenham)
Bennett, Dr Reginald (Fareham)	Fairgrieve, Russell	James, David
Berry, Hon Anthony	Fart, John	Jenkin, Rt Hon P. (Wanst'd & W'df'd)
Biffen, John	Fell, Anthony	Jessel, Toby
Biggs-Davison, John	Fisher, Sir Nigel	Johnson Smith, G. (E Grinstead)
Blaker, Peter	Fletcher, Alex (Edinburgh N)	Jones, Arthur (Daventry)
Body, Richard	Fletcher-Cooke, Charles	Jopling, Michael
Boscawen, Hon Robert	Fookes, Miss Janet	Joseph, Rt Hon Sir Keith
Bottomley, Peter	Forman, Nigel	Kaberry, Sir Donald
Bowden, A. (Brighton, Kemptown)	Fowler, Norman (Sutton C'f'd)	Kershaw, Anthony
Boyson, Dr Rhodes (Brent)	Fox, Marcus	Kimball, Marcus
Bradford, Rev Robert	Fraser, Rt Hon H. (Stafford & St)	King, Evelyn (South Dorset)
Braine, Sir Bernard	Fry, Peter	King, Tom (Bridgwater)
Brittan, Leon	Galbraith, Hon. T. G. D.	Kitson, Sir Timothy
Brocklebank-Fowler, C.	Gardiner, George (Reigate)	Knight, Mrs Jill
Brotherton, Michael	Gardner, Edward (S Fylde)	Knox, David
Brown, Sir Edward (Bath)	Gilmour, Rt Hon Ian (Chesham)	Lamont, Norman
Bryan, Sir Paul	Gilmour, Sir John (East Fife)	Lane, David
Buchanan-Smith, Alick	Glyn, Dr Alan	Langford-Holt, Sir John
Buck, Antony	Godber, Rt Hon Joseph	Latham, Michael (Melton)
Budgen, Nick	Goodhart, Philip	Lawrence, Ivan
Bulmer, Esmond	Goodhew, Victor	Lawson, Nigel
Burden, F. A.	Goodlad, Alastair	Le Merchant, Spencer
Butler, Adam (Bosworth)	Gorst, John	Lloyd, Ian
Carlisle, Mark	Gow, Ian (Eastbourne)	Luce, Richard
Chalker, Mrs Lynda	Gower, Sir Raymond (Barry)	McAdden, Sir Stephen
Channon, Paul	Grant, Anthony (Harrow C)	MacCormick, Iain
Churchill, W. S.	Gray, Hamish	McCrindle, Robert
Clark, Alan (Plymouth, Sutton)	Grieve, Percy	Macfarlane, Neil
Clark, William (Croydon S)	Griffiths, Eldon	MacGregor, John
Clarke, Kenneth (Rushcliffe)	Grist, Ian	Macmillan, Rt Hon M. (Farnham)
Clegg, Walter	Grylls, Michael	McNair-Wilson, M. (Newbury)
Cockcroft, John	Hall, Sir John	McNair-Wilson, P. (New Forest)
Cooke, Robert (Bristol W)	Hall-Davis, A. G. F.	Madel, David
Cope, John	Hamilton, Michael (Salisbury)	Marshall, Michael (Arundal)
Cordle, John H.	Hampson, Dr Keith	Marten, Neil
Cormack, Patrick	Hannam, John	Mates, Michael
Corrie, John	Harvie Anderson, Rt Hon Miss	Mather, Carol
Crawford, Douglas	Havers, Sir Michael	Mawby, Ray
Critchley, Julian	Hawkins, Paul	Maxwell-Hyslop, Robin
Crouch, David	Hayhoe, Barney	Mayhew, Patrick
Crowder, F. P.	Henderson, Douglas	Meyer, Sir Anthony
Davies, Rt Hon J. (Knutsford)	Heseltine, Michael	Miller, Hal (Bromsgrove)
Dean, Paul (N Somerset)	Hicks, Robert	Mills, Peter
Dodsworth, Geoffrey	Higgins, Terence L.	Miscampbell, Norman
Douglas-Hamilton, Lord James	Holland, Philip	Mitchell, David (Basingstoke)
Drayson, Burnaby	Hooson, Emlyn	Moate, Roger
Monro, Hector	Renton, Tim (Mid-Sussex)	Stewart, Ian (Hitchin)
Montgomery, Fergus	Rhys Williams, Sir Brandon	Stokes, John
Moore, John (Croydon C)	Ridley, Hon Nicholas	Stradling Thomas, J.
More, Jasper (Ludlow)	Ridsdale, Julian	Tapsell, Peter
Morgan, Geraint	Rifkind, Malcolm	Taylor, R. (Croydon NW)
Morgan-Giles, Rear-Admiral	Rippon, Rt. Hon Geoffrey	Taylor, Teddy (Cathcart)
Morris, Michael (Northampton S)	Roberts, Michael (Cardiff NW)	Tebbit, Norman
Morrison, Hon Peter (Chester)	Roberts, Wyn (Conway)	Temple-Morris, Peter
Mudd, David	Rodgers, Sir John (Sevenoaks)	Thomas, Rt Hon P. (Hendon S)
Neave, Airey	Ross, Stephen (Isle of Wight)	Thompson, George
Nelson, Anthony	Rossi, Hugh (Hornsey)	Townsend, Cyril D.
Neubert, Michael	Rost, Peter (SE Derbyshire)	Trotter, Neville
Newton, Tony	Royle, Sir Anthony	Tugendhat, Christopher
Normanton, Tom	Sainsbury, Tim	van Straubenzee, W. R.
Nott, John	St. John-Stevas, Norman	Vaughan, Dr Gerard
Onslow, Cranley	Scott, Nicholas	Viggers, Peter
Oppenheim, Mrs Sally	Shaw, Giles (Pudsey)	Wakeham, John
Page, John (Harrow West)	Shelton, William (Streatham)	Walder, David (Clitheroe)
Page, Rt Hon R. Graham (Crosby)	Shepherd, Colin	Walker, Rt Hon P. (Worcester)
Parkinson, Cecil	Shersby, Michael	Wall, Patrick
Pattie, Geoffrey	Silvester, Fred	Walters, Dennis
Penhaligon, David	Sims, Roger	Warren, Kenneth
Percival, Ian	Sinclair, Sir George	Watt, Hamish
Peyton, Rt Hon John	Skeet, T. H. H.	Weatherill, Bernard
Pink, R. Bonner	Smith, Cyril (Rochdale)	Wells, John
Powell, Rt Hon J. Enoch	Smith, Dudley (Warwick)	Welsh, Andrew
Price, David (Eastleigh)	Speed, Keith	Whitelaw, Rt Hon William
Prior, Rt Hon James	Spence, John	Wiggin, Jerry
Pym, Rt Hon Francis	Spicer, Jim (W Dorset)	Winterton, Nicholas
Raison, Timothy	Spicer, Michael (S Worcester)	Wood, Rt Hon Richard
Rathbone, Tim	Sproat, Iain	Young, Sir G. (Ealing, Acton)
Rawlinson, Rt Hon Sir Peter	Stainton, Keith	Younger, Hon George
Rees, Peter (Dover & Deal)	Stanbrook, Ivor
Rees-Davies, W. R.	Stanley, John	TELLERS FOR THE AYES:
Reid, George	Steen, Anthony (Wavertree)	Mr. W. Benyon and
Renton, Rt Hon Sir D. (Hunts)	Stewart, Donald (Western Isles)	Mr. Jim Lester.
NOES
Abse, Leo	Concannon, J. D.	Garrett, John (Norwich S)
Allaun, Frank	Cook, Robin F. (Edin C)	Garrett, W. E. (Wallsend)
Anderson, Donald	Corbett, Robin	George, Bruce
Archer, Peter	Cox, Thomas (Tooting)	Gilbert, Dr John
Armstrong, Ernest	Craigen, J. M. (Maryhill)	Ginsburg, David
Ashley, Jack	Cryer, Bob	Golding, John
Ashton, Joe	Cunningham, G. (Islington S)	Gould, Bryan
Atkins, Ronald (Preston N)	Cunningham, Dr J. (Whiteh)	Gourlay, Harry
Atkinson, Norman	Dalyell, Tam	Grant, George (Morpeth)
Bagier, Gordon A. T.	Davidson, Arthur	Grant, John (Islington C)
Barnett, Guy (Greenwich)	Davies, Bryan (Enfield N)	Grocott, Bruce
Barnett, Rt Hon Joel (Heywood)	Davies, Denzil (Llanelli)	Hamilton, James (Bothwell)
Bates, Alf	Davies, Ifor (Gower)	Hardy, Peter
Bean, R. E.	Davis, Clinton (Hackney C)	Harper, Joseph
Benn, Rt Hon Anthony Wedgwood	Deakins, Eric	Harrison, Walter (Wakefield)
Bennett, Andrew (Stockport N)	Dean, Joseph (Leeds West)	Hart, Rt Hon Judith
Bidwell, Sydney	de Freitas, Rt Hon Sir Geoffrey	Hattersley, Rt Hon Roy
Bishop, E. S.	Dell, Rt Hon Edmund	Hatton, Frank
Blenkinsop, Arthur	Dempsey, James	Hayman, Mrs Helene
Boardman, H.	Doig, Peter	Heffer, Eric S.
Booth, Rt Hon Albert	Dormand, J. D.	Hooley, Frank
Boothroyd, Miss Betty	Douglas-Mann, Bruce	Horam, John
Bottomley, Rt Hon Arthur	Duffy, A. E. P.	Howell, Rt Hon Denis
Boyden, James (Bish Auck)	Dunn, James A.	Hoyle, Doug (Nelson)
Bradley, Tom	Dunnett, Jack	Huckfield, Les
Bray, Dr Jeremy	Dunwoody, Mrs Gwyneth	Hughes, Mark (Durham)
Brown, Hugh D. (Provan)	Eadie, Alex	Hughes, Robert (Aberdeen N)
Brown, Robert C. (Newcastle W)	Edge, Geoff	Hughes, Roy (Newport)
Brown, Ronald (Hackney S)	Edwards, Robert (Wolv SE)	Hunter, Adam
Buchan, Norman	Ellis, John (Brigg & Scun)	Irvine, Rt Hon Sir A. (Edge Hill)
Buchanan, Richard	Ellis, Tom (Wrexham)	Irving, Rt Hon S. (Dartford)
Butler, Mrs Joyce (Wood Green)	English, Michael	Jackson, Colin (Brighouse)
Callaghan, Jim (Middleton & P)	Ennals, David	Jackson, Miss Margaret (Lincoln)
Campbell, Ian	Evans, Fred (Caerphilly)	Janner, Greville
Canavan, Dennis	Evans, Ioan (Aberdare)	Jay, Rt Hon Douglas
Cant, R. B.	Ewing, Harry (Stirling)	Jeger, Mrs Lena
Carmichael, Neil	Fernyhough, Rt Hon E.	Jenkins, Hugh (Putney)
Carter, Ray	Fitt, Gerard (Belfast W)	John, Brynmor
Carter-Jones, Lewis	Flannery, Martin	Johnson, James (Hull West)
Cartwright, John	Fletcher, Raymond (Ilkeston)	Johnson, Walter (Derby S)
Castle, Rt Hon Barbara	Fletcher, Ted (Darlington)	Jones, Barry (East Flint)
Clemitson, Ivor	Ford, Ben	Jones, Dan (Burnley)
Cocks, Michael (Bristol S)	Forrester, John	Judd, Frank
Cohen, Stanley	Fowler, Gerald (The Wrekin)	Kaufman, Gerald
Coleman, Donald	Fraser, John (Lambeth, N'w'd)	Kelley, Richard
Colquhoun, Ms Maureen	Freeson, Reginald	Kerr, Russell

Kilroy-Silk, Robert	Mulley, Rt Hon Frederick	Smith, John (N Lanarkshire)
Kinnock, Neil	Murray, Rt Hon Ronald King	Snape, Peter
Lambie, David	Newens, Stanley	Spearing, Nigel
Lamborn, Harry	Noble, Mike	Stallard, A. W.
Lamond, James	Oakes, Gordon	Stewart, Rt Hon M. (Fulham)
Latham, Arthur (Paddington)	Ogden, Eric	Stoddart, David
Leadbitter, Ted	O'Halloran, Michael	Strang, Gavin
Lee, John	Orbach, Maurice	Strauss, Rt Hon G, R.
Lestor, Miss Joan (Eton & Slough)	Orme, Rt Hon Stanley	Summerskill, Hon Dr Shirley
Lever, Rt Hon Harold	Ovenden, John	Swain, Thomas
Lewis, Arthur (Newham N)	Owen, Dr David	Thomas, Jeffrey (Abertillery)
Lewis, Ron (Carlisle)	Padley, Walter	Thomas, Mike (Newcastle E)
Lipton, Marcus	Palmer, Arthur	Thomas, Ron (Bristol NW)
Litterick, Tom	Park, George	Thorne, Stan (Preston South)
Lomas, Kenneth	Parker, John	Tierney, Sydney
Loyden, Eddie	Parry, Robert	Tomlinson, John
Luard, Evan	Pavitt, Laurie	Tomney, Frank
Lyons, Edward (Bradford W)	Peart, Rt Hon Fred	Torney, Tom
Mabon, Dr J. Dickson	Pendry, Tom	Tuck, Raphael
McCartney, Hugh	Perry, Ernest	Urwin, T. W.
McElhone, Frank	Phipps, Dr Colin	Varley, Rt Hon Eric G.
MacFarquhar, Roderick	Prentice, Rt Hon Reg	Wainwright, Edwin (Dearne V)
McGuire, Michael (Ince)	Price, C. (Lewisham W)	Walden, Brian (B'ham, L'dyw'd)
Mackenzie, Gregor	Price, William (Rugby)	Walker, Harold (Doncaster)
Mackintosh, John P.	Radice Giles	Walker, Terry (Kingswood)
Maclennan, Robert	Rees Rt Hon Merlyn (Leeds S)	Ward, Michael
McMillan, Tom (Glasgow C)	Richardson, Miss Jo	Watkins, David
McNamara, Kevin	Roberts, Albert (Normanton)	Watkinson, John
Madden, Max	Roberts, Gwilym (Cannock)	Weetch, Ken
Magee, Bryan	Robertson, John (Paisley)	Weitzman, David
Mahon, Simon	Robinson, Geoffrey	Wellbeloved, James
Mallalieu, J. P. W	Roderick, Caerwyn	White, Frank R. (Bury)
Marks, Kenneth	Rodgers, George (Chorley)	White, James (Pollok)
Marquand, David	Rodgers, William (Stockton)	Whitehead, Phillip
Marshall, Dr Edmund (Goole)	Rooker, J. W.	Whitlock, William
		Willey, Rt Hon Frederick
Marshall, Jim (Leicester S)	Ross, Rt. Hon W. (Kilmarnock)	Williams, Alan (Swansea W)
Mason, Rt Hon Roy	Rowlands, Ted	Williams, Alan Lee (Hornch'ch)
Maynard, Miss Joan	Sandelson, Neville	Williams, Rt Hon Shirley (Hertford)
Meacher, Michael	Sedgemore, Brian	Williams, Sir Thomas
Mellish, Rt Hon Robert	Selby, Harry	Wilson, Alexander (Hamilton)
Mendelson, John	Shaw, Arnold (Ilford South)	Wilson, William (Coventry SE)
Mikardo, Ian	Sheldon, Robert (Ashton-u-Lyne)	Wise, Mrs Audrey
Millan, Bruce	Shore, Rt Hon Peter	Woodall, Alec
Miller, Mrs Millie (Ilford N)	Short, Rt Hon E. (Newcastle C)	Woof, Robert
Mitchell, R. C. (Soton, Itchen)	Silkin, Rt Hon John (Deptford)	Wrigglesworth, Ian
Moonman, Eric	Silkin, Rt Hon S. C. (Dulwich)	Young, David (Bolton E)
Morris, Alfred (Wythenshawe)	Sillars, James
Morris, Charles R. (Openshaw)	Silverman, Julius	TELLERS FOR THE NOES:
Morris, Rt Hon J.(Aberavon)	Skinner, Dennis	Mr. Ted Graham and
Moyle, Roland	Small, William	Mr. James Tinn.

Question accordingly negatived.

Clause added to the Bill.