HC Deb 13 May 1976 vol 911 cc758-803
Mr. David Mitchell (Basingstoke)

I beg to move Amendment No. 64, in page 15, line 23, leave out "£2,250" and insert "£3,000".

The Deputy Chairman

With this amendment we will take Amendment No. 66, in page 15, line 23, leave out "£2,250" and insert "£5,000".

Mr. Mitchell

This amendment concerns the amount which a self-employed man may spend on an annuity for his retirement. I shall not detain the Committee very long, but this is an important matter for the self-employed. Therefore, we must have a fuller reply from the Financial Secretary than we had in the previous debate. The hon. Gentleman indicated that he felt under some constraints due to pressure of time. I do not think that he need worry about that.

Until this year a self-employed person was permitted to spend a maximum of £1,500 a year or 15 per cent., if the lesser amount, which was allowed for tax. That figure was fixed in 1971

Why, in 1976, do the Government propose to increase that figure by only 50 per cent. when since 1971 prices have gone up by 89–9 per cent.? I think that my figures are probably two to three weeks out of date and the percentage will now be greater. No doubt it can now be rounded up to 90 per cent. When prices have gone up so much, why do not the Government increase the allowance for those who are contributing to their pensions by at least as much?

We are dealing with pensions which will be drawn many years hence. A man may be contributing over perhaps 10 or 15 years of his working life, starting possibly at the age of 48 or 50 until he retires at 65. Therefore, we are considering contributions paid now for a pension to be drawn in 10 or 15 years.

I believe that the Government ought, at least in part, to take a much longer view of the effects of inflation on the self-employed and the money that they can contribute to their pensions. I suggest that the allowance ought to be increased by more than the increase in the cost of living. Old-age pensions and other national insurance benefits over which the Government have control have moved broadly in line with inflation. It seems wholly unfair and unjustifiable that the self-employed should be put in a different position. Indeed, since this Government came into office the self-employed have been hammered on every possible occasion and in every direction.. Only yesterday the economic progress report from the Treasury indicated that average disposable income rose by 22 per cent., but by only 12¼ per cent. for the self-employed. That is one indication of how the self-employed are falling behind.

As a group, the self-employed—whether it he the man running a plumbing or wood sawing business, those engaged in country crafts, doctors, artists, musicians and a whole host of other people who supply ancillary services to industry through their various skills—are suffering from the effects of inflation. They find that they have to put more money into their businesses. Yet, the Government are always taking more away from them.

We cannot fail to consider the very unhappy position of the self-employed in relation to the national insurance contribution. For a man on the higher limits of earnings this contribution has gone up by £104 this year. He has to pay £104 more. In order to have that net extra £104 in his pocket, it would take three-quarters of the permitted increase of £6 a week which is allowed under the restraint of wages and salaries.

8.0 p.m.

Sir John Hall (Wycombe)

The increase in the wage related contribution of £104 more than swallows up the maximum tax concession given by the Chancellor for a married man with two children. That amount is about £86.

Mr. Mitchell

I think the amount is £87.50, but my hon. Friend is right—whichever way one looks at it, the self-employed have to find this extra amount of money. They are being ill-treated. This is part of a pattern in which the self-employed are constantly overlooked or damaged.

Mr. Powell

The hon. Member referred to the limit on the increase of income. In what possible sense could this limit be applied to or be binding on the self-employed? There is no contract or agreement made on their behalf by the TUC, and there is no legislation whatsoever which controls or limits the increase in remuneration available to them.

Mr. Mitchell

While it may be true that some sections of the self-employed are free to some extent, there are many areas of self-employed people who are not only adjured to conform to the Government's prices and wages control legislation, but whose net income is fixed by the Government in one form or another. Doctors are a good example.

We are dealing in this amendment with someone who is self-employed and whose increase in earnings has been limited by the Government. Such a self-employed person gets very little in the way of additional benefit from the substantial increase in national insurance contributions which he has had to find out of his post-tax income. There are 13 benefits given to the ordinary employed man which do not go to the self-employed, and this fact is generally overlooked. There are other benefits to which a self-employed man is entitled but which he does not claim or from which he does not get value for money. I refer to sickness benefit.

A self-employed person is entitled to sickness benefit in the same way as an employed person, but a self-employed person with backache or a cold does not go to the doctor and lay up for a week. He carries on working and does not make a claim. In any estimation of the relative merits of the benefits to which he is entitled, he does much worse than the ordinary employed man.

This strengthens the case for the Chancellor of the Exchequer to do something to help such a person by making the national insurance contributions of the self-employed, at least in part, allowable for tax. The employer's contribution to the national insurance stamp is allowed for tax, so it is quite wrong that a proportion of the self-employed contribution should not be allowed for tax as well.

The figures in the amendment of permitted contribution to a self-employed person's annuity go up to £2,250, and some people might think that is a large sum. But a typically self-employed small business man is someone who through many years of his life has been unable to afford to contribute to a pension fund because he has been ploughing all his spare money into his business in order to try to build it up. Only when he is in his 50s is he able to say "I have to do something about my old age"

In order to do something which will give him a relative retention of living standards in his old age, he then starts to contribute to a self-employed person's annuity. In order to get a reasonable return, he needs to be able to make a large contribution, as he will be starting in the later days of his working life.

We are dealing here with small business men who have been harmed by the Government, who have actively discouraged the older man from building up his business by introducing their capital transfer tax. With the death grip of capital gains tax and capital transfer tax as well, it is virtually impossible for the older business man to make it worth while to build up a business to transfer to the next generation.

Automatically he is going to think "I will safeguard my future by paying into a pension fund". But the Government have limited the increased contribution he can pay into that pension fund to the point where it does not keep pace with inflation. In the name of logic and justice the Government should allow this amendment.

Mr. Wakeham

I support this amendment because it is a move in the right direction. But even the amendment is wholly inadequate for dealing with the problems of the self-employed. I say that not necessarily because I believe that the figure in the amendment is wrong, but because I think this is a wrong way of looking at the problem. It is a misconception of the problem of the self-employed.

That misconception arises because we look at this problem of a self-employed person's income on an annual basis. It is reasonable for most people on salaries to look at their income on an annual basis. For the self-employed man, while for purposes of taxation it is practical to look at it on an annual basis, his income is what is left over after he has paid the expenses of running a business.

Most self-employed professional people, builders, shop-caterers and traders, have good years and bad years. Some years their profits are up, other years they are down; so provision for retirement arrangements for the self-employed need to be more flexible than they are.

While I accept that the amendment is a move in the right direction, even that is not sufficiently flexible. It is not necessarily correct to say that when a self-employed person has had a particularly good year, has had a high income and is able to go up to the maximum on the arrangements made, this is the year he is best able to make provision for his retirement. In fact, it is probably the year in which his cash flow problems are worst. He has his debtors to pay and his stocks are up. While on paper he has made a good profit and may seem able to take the maximum advantage of it, in fact this is probably the most inconvenient year for him to do so.

It may well be a year in which things have not gone so well and his cash resources are under pressure so that he is unable to put quite so much into a self-employed retirement premium. The whole system of considering self-employment on an annual basis, while it might be convenient in some respects, is not therefore necessarily the best way of dealing with the situation. It would be better to take an average of the income of three years in order to determine what a self-employed person earns.

Perhaps in future we should look at this matter by fixing a limit on a percentage basis to allow the taxpayer to carry forward any relief that he has been unable to use in a given year, so that he can use it against his income for a subsequent year. There is an argument for reversing that process, but tonight I restrict myself to carrying the reliefs forward.

That would be more flexible and would give greater justice to the self-employed. It would show a greater understanding of the realities facing this group of people.

Sir John Hall

I have a great deal of sympathy with my hon. Friend's amendment. As he pointed out, one of the problems facing the self-employed is that in the early days of their careers they are probably putting all their spare money into developing and furthering their business and they have very little to spare to put by for the future. It is probably not until they reach middle age that they begin to think about making some provision outside the normal provision which they make through building up the value of their business which they hope to sell on retirement, thus realising a reasonable capital sum for investment on which they hope to live.

The changes in the tax structure have made that difficult. Capital transfer tax and the investment surcharge make it difficult for the self-employed man to safeguard his future and his pension period in that way.

Mr. David Mitchell

I hope that my hon. Friend will not overlook the enormous importance of the capital gains tax in this respect. It levies heavily on a man who has spent his lifetime building up a business. The Government have so far done nothing to offset the effects of inflation here. Not only is he taxed at 30 per cent. on the increase in the real value of what he has built up, but he is taxed on the paper increase in that value, so that he ends up with very little for so much hard work.

Sir J. Hall

I apologise to my hon. Friend for having overlooked the capital gains tax among the many additional taxation burdens imposed upon the self-employed.

Let me compare the position of the self-employed with that of other groups. We have heard a great deal in recent debates about the pension arrangements for civil servants. I do not object to those arrangements. I have always favoured indexing, although I should warn the Government that to index only some things will impose great strains on the economy. For indexing to be successful it must be applied across the board. The pension arrangements for the Civil Service give protection, so far as it can be given. against inflation.

Many private enterprise employees participate in their employers' pension schemes and generally find that their retirement pension is related to the last two, three, or five years of service, depending on the conditions of the scheme. That in itself safeguards them against inflation, because their pension is related to their retirement salary.

It is not, however, a complete safeguard. Those in the higher income bracket are not safeguarded, because their increases have been curtailed by the Government's pay policies and their pay has not maintained its true value. To a large extent employees are safeguarded against inflation. Many large companies have over recent months put large sums into their pension schemes in order to make sure that their cover is maintained.

8.15 p.m.

However, that is not so with the self-employed. I share the amazement expressed by my hon. Friend the Member for Basingstoke (Mr. Mitchell) that the increases proposed by the Government should be so out of line with the trend of inflation over the period. I do not understand why the Government have been prepared to go a little way towards compensating the self-employed for the fall in the value of money but have not been sufficiently courageous to go the full way towards complete indexation.

That is in complete contrast to the way in which we as Members of Parliament have treated our pension scheme. Our system is that, although it has been decided that Members of Parliament should not receive the £8,000 plus as recommended by the Boyle Committee because that is too big an increase, our pension is to be calculated on the basis that it has been paid. I know of no other case in this country where a pension scheme is calculated on the basis of a mythical higher salary. I do not object to the system because I could be one of the beneficiaries in the course of time. But our behaviour there contrasts with the way in which we are prepared to treat thousands of self-employed people who make such an enormous contribution to our economy.

I hope that the Minister will take our argument seriously. I know that he normally does, but he is hamstrung by the brief that he has been given. I beg him to depart from that brief—to tear it up. I ask him to respond as the intelligent and warm-hearted man I know him to be. Let him give the concession which I know is in his heart to give. He should forget what he is told by his Department—the representatives of which are watching him from the Box.

This is a very modest amendment. With the present rate of inflation it does not go far enough. That is especially so in view of the inflation we are likely to experience over the next 12 months.

Mr. David Mitchell

There are other more generous amendments on the Order Paper. I chose the figure in my amendment because I was anxious not to make it difficult for the Minister to say "Yes". My figure involves the Government in no extra expenditure. This is an occasion when we can encourage a deserving sector of the community. I think that the Financial Secretary could accept such a moderate amendment. I hope that he will take my hon. Friend's advice, tear up his brief and speak from the heart.

Sir J. Hall

I am grateful for that explanation. I hope that the Minister will accept one of the more generous amendments, though I have no great hopes of that. No doubt we shall get the usual sort of answer with the old threadbare arguments against accepting the amendments.

However, we should not be discouraged. We should go on pressing the Minister to accept the justice of the case and perhaps at a later stage of the Bill's passage we may be able to effect a change of heart.

Mr. Boscawen

My hon. Friend the Member for Wycombe (Sir J. Hall) is not optimistic that the Minister will tear up his brief. Neither am I, because the Labour Party does not care for the self-employed. It has hit the self-employed very hard both above and below the belt.

I very much welcome this modest amendment, which would help self-employed people to put aside a little more money for their retirement. It is particularly important for those aged over 50 who are starting to think of retirement and have been unable previously to start making provision for that time. They do not have many years left in which to make contributions towards a reasonable pension. It is vital that they should be allowed to put aside a little extra so that they can catch up with inflation.

We must remember that what would have been a reasonable provision for old age a few years ago has become "peanuts" as a result of the massive inflation of the past few years. I hope the Chancellor, who has recognised the problem and raised the limit a little, will go the whole way and raise the limit by the amount by which the cost of living has increased since the last adjustment.

The self-employed have been hit extremely hard, particularly over national insurance contributions. I add my plea, though it is not the subject of this amendment, for tax relief to be given on the employer content of these contributions.

Treasury and Social Security Ministers have given many explanations in attempts to prove that the self-employed are not doing too badly under the present arrangements. But the self-employed do not believe it. They see their contributions have been increased enormously in the past few years and they do not see much benefit from these increases—certainly not the amount of benefit gained by employed people.

I wish that the amendment had gone even further. Let the Minister consider the case of people aged over 50. If they lose this opportunity to catch up on inflation by making extra contributions over the next 10 to 15 years, they will never be able to catch up.

Mr. Peter Rees (Dover and Deal)

I support the amendment and declare a personal interest. I am a member of the self-employed and have made my own contributions to a personal retirement benefits scheme under the provisions of the 1956 Act. I am not sure whether my declaration in the Register of hon. Members' Interests covers this point but I place on the record that I have a personal interest. If I tend to wax a little partisan in my short intervention I know the House will discount a little of it because of my personal interest.

This debate takes some of us back to the debates we had last summer, when this matter was first ventilated in Committee on an amendment to the Finance Bill moved by one of my hon. Friends. After a certain amount of pressure, the Financial Secretary conceded that there was a problem to be reviewed. He did not appear entirely to understand the basis on which this small measure of relief was introduced in the Finance Act 1956. He called it a concession. Let us not play with words. It was a measure affecting self-employed people and even one or two directors and employees. We are not talking only of the self-employed. There were other categories for whom provision had to be made in the 1956 Act.

I did not regard what was introduced in the 1956 Act as a concession. It was a belated recognition of the fact that certain classes in the community had been disadvantaged in pension schemes and that the considerable tax reliefs and advantages which had been conceded over the years were of no value to them. Self-employed people are permitted to defer during their working lives only a small proportion of their taxable income so that they may enjoy it after retirement.

The Financial Secretary was inclined to play this up as a massive concession, and he told us that the pensions were treated as earned income. What an amazing concession! Even in 1956, it was a long-overdue measure of justice, and the position has altered considerably since then. That is why my hon. Friends and I raised the matter last summer. The Financial Secretary undertook to view the matter sympathetically and, on that undertaking, we withdrew our amendment. Today we are judging in Clause 27 the measure of the Financial Secretary's sympathy and generosity. I hate to say this, but I have found his sympathy and generosity a little constricted and a little mean. My hon. Friend the Member for Wycombe (Sir J. Hall) was tempted to see that constriction and that meanness as being introduced by forces mobilised behind and beyond the Financial Secretary in his Department. Well, we shall see.

Clause 27, to which the amendment is directed, is defective. It fails to meet the justice of this case for a variety of reasons. First, it comes into operation only in 1976–77. I need not point out the effects of inflation over the past year. It would have been a very small matter for the Financial Secretary to have made his clause retrospective for a year to allow people to "top up" in relation to the past year the contributions that they had already made. I commend that idea to him.

8.30 p.m.

He has increased the ceiling from £10,000 to £15,000, but the percentage remains the same. I contrast Clause 27 unfavourably with the measure of relief introduced in 1971 by Lord Barber. On that occasion, the ceiling was increased from £7,500 to £10,000, but the percentage was increased from 10 per cent. to 15 per cent., and that against a background of inflation which was minimal compared with what we have had to endure in the past two years.

I support the amendment warmly, although it could go a great deal further, and there are various other amendments which we shall reach later that amplify it. But, as a first break into this problem, I commend the amendment warmly.

[MR. VICTOR GOODHEW in the Chair]

Mr. David Mitchell

I hope that I shall be in order in drawing my hon. and learned Friend's attention to Amendment No. 71, which has not caught your eye, Sir Myer, as being appropriate for selection. That amendment would have met many of the points being made by my hon. and learned Friend, in that it would have suggested that the Chancellor of the Exchequer should in each subsequent tax year review the level of tax relief available for approved retirement annuity contracts for the purpose of determining whether it had retained its value in relation to the general level of earnings and prices. I believe that if the Government were to accept that principle it would go a long way to take account of the matters raised by my hon. and learned Friend.

There are other matters in that amendment which might or might not meet with the approval of the Government, but one very important item of it which I hope will appeal to my hon. Friend the Member for Guildford (Mr. Howell) is that it would provide for the Minister to have to lay a draft uprating before the House and, if he did not intend to uprate it, he would have to give his reasons. Too often decisions are made by Governments without reporting to the House their reasons for doing so.

Mr. Rees

I would never accuse my hon. Friend the Member for Basingstoke (Mr. Mitchell) of a want of generosity or a want of perception. I have not read the amendment in the context of the other amendments tabled by him and by others of my hon. Friends. However, the points to which I am directing my criticisms would not be covered by that amendment, although I recognise that inflation lies at the heart of so many of the problems that we are debating and will debate on this Bill.

Perhaps I may come to the matters which I feel the Financial Secretary should consider. This debate inevitably must be a comparative exercise. The retirement annuities of the self-employed cannot be viewed in isolation. The Government must consider whether a fair amount of justice is being done to the self-employed by comparison with the reliefs, the advantages and the benefits which are extended under a tax system to other sections of the community.

My hon. Friend the Member for Wycombe was right to draw attention to the pensions which we have voted ourselves, based on a rather curious formula. I shall not open up the debate to defend or to attack the basis of that formula, but it is right to observe that perhaps this House has been a little more generous to its own Members than the Financial Secretary is disposed to be to the self-employed.

Again, employees who have the benefit of retirement benefit schemes are in a considerably more advantaged position. In the first place, there is no ceiling to the contributions made on their behalf. That is a crucial point. Again, it is quite possible for the companies, institutions or organisations which employ them to make up the position of late entrants. I shall come to the case of the self-employed. But it is difficult for a person wanting to start on a retirement benefit scheme on his own, that he is in his 40s or 50s, to make up the ground which has been covered already by his friends and neighbours who are in pensionable employment.

Again, it is always possible, and indeed there have been very many cases over the past few years, for an employer to top up such pension schemes to protect them from the ravages of inflation, and these topping up contributions will always be tax deductible in calculating the employer's profits for tax purposes. So is the employee, provided his employer remains solvent, is potentially in a much stronger, sounder position.

Coming to the pensions of civil servants, this is a delicate subject and always arouses strong emotions. It is perhaps unfair to single them out when those who enjoy them, or will potentially enjoy them, are unable perhaps to answer for themselves on the Floor of the House, but the Financial Secretary is well aware of their position because it has been raised in other debates. Let me remind the Committee that a civil servant, if he serves long enough, may enjoy a pension of two-thirds of his retirement salary, so immediately it is geared to the inflation that has been persisting up to the point of his retirement. Thereafter, under an Order passed a few years ago, it is inflation-proof.

Beyond that, the civil servant may enjoy a lump-sum tax-free payment roughly equivalent to one and a half times his retiring salary. I remember making this point in Committee and challenging the Financial Secretary, who showed a certain reluctance to accept it. But evidence was given on this point to the Select Committee on Wealth Tax and never challenged. This very day the Prime Minister was disposed to say that there was nothing more inflammatory and more irritating to the country than the golden handshake. What, in principle, is the difference between the lump-sum retirement figure paid to a civil servant and the golden handshake given to an employee or director who retires? If we are going to attack golden handshakes, we must reconsider the principle of the lump-sum tax-free gratuities.

I should like to see a broad, even measure of justice. Let there be golden handshakes in genuine cases where people's expectations have been cut short, and let civil servants have lump-sum tax-free gratuities. But if narrow, partisan points are to be made from the Government Benches about golden handshakes, let us view the problem in the round and not be too selective in the examples we choose to bolster our cases.

I am sure the Committee will agree that by these standards in pensionable employment, whether in the public or the private sector, what is proposed for the self-employed is mean. Indeed, some interesting figures have been prepared to show just what kind of percentage allowance would be needed to provide an inflation-proof pension for a self-employed person on retirement, on certain assumptions. I know that the Financial Secretary has had a copy of these figures. They have been prepared with a wealth of actuarial evidence and submitted to him, and therefore I shall draw liberally on them, but on the assumption that other members of the Committee in general have not been given them, I hope that the Committee will bear with me if I read them out.

If one starts with the assumption that inflation may run at a rate of 71 per cent. per annum—and I remind the Financial Secretary and the Committee that the Government Actuary, in certain recent calculations he has made in the social security field, has been budgeting for inflation at the rate of 8 per cent.—if a self-employed person is to start making contributions at the age of 25 and is to equip himself with a retirement annuity to cover such a rate of inflation he will have to make contributions at the rate of 17 per cent. I put it to the Committee that there are not many mem- bers of the self-employed who are in a position to start making such contributions at the age of 25. If I may inflict on the Committee my own experience, I was certainly in no position to do so and was probably showing a negative income for a few years after that, such are the hazards of life in my profession. I should certainly not have been in a position to contribute 17 per cent. of anything I was earning.

Let us suppose that such a person started a scheme at the age of 35. The percentage contribution required from such a person would be 22 per cent.—way above the figure that the Government, in their generosity, are prepared to concede under the Bill. if a person enters into a scheme at the age of 45, at which age many people probably are at the peak of their earning power and their children are not making so many demands upon them—the percentage contribution required to secure an inflation-proof pension would be 30–5 per cent. If a person is so unlucky as to defer his entry into the scheme to age 55, his contribution would need to be at a rate of 47 per cent.

Measured against those figures, what the Government now propose is niggardly in the extreme. The Financial Secretary will say that under the wise and beneficent rule of the Chancellor of the Exchequer the rate of inflation will be nothing like as high as it has been, and we must bear that point in mind.

Let us assume that the pension will not increase at all after retirement but will remain static—in other words, at a fixed figure, year by year. It must be against the Committee's experience that there is likely to be no inflation at all in the coming years. For a person entering a scheme at the age of 35, the percentage contribution will need to be at a rate of 9 per cent.—well within the Government's margin. A person entering the scheme at the age of 45 would need to make contributions at a rate of 121 per cent. A person entering at the age of 55 would need to contribute at a rate of 32 per cent.

Let us contrast their position with that of a person who is employed in the private sector. His employer could make adequate provision for him, because there is no ceiling on contributions. The provision would be tax-deductible for the employer and could be topped up at any time against the ravages of inflation. One is led to the ineluctable conclusion either that the Financial Secretary is not applying himself to the problem or that he is working under some constraints, which I hope he will uncover when he replies to the debate.

I do not wish to wax sentimental about the virtue of contributions for the self-employed; they have their own distinctive place in our national life. But it is fair to say that without the salt and savour that they give, something would go from our national scene. It is fair to to point out that for this important debate there is a very low attendance on the Labour Benches; and there is a total absence of minority parties. I hope that the country will note who are the champions of the self-employed.

Do the Government recognise that there is still a place for the self-employed in our social and economic structure? Does the Financial Secretary believe that they have an important contribution to make, or does he see us all eventually as State employees in one form or another?

Amendment No. 64 seeks to bring a small measure of justice to a much-oppressed class. Amendment No. 66 seeks to explore the problem of late entrants, whose difficulties do not appear to have been brought into focus by the Financial Secretary.

Some of my hon. Friends have emphasised how much the self-employed have suffered in the past two years, whether it be in terms of social security provision, inflation levels, or pressures of business or professional life.

The Chancellor of the Exchequer is prone to talk about equality of sacrifice. When he does so, I am not certain what he means. He appears to believe that we are about to enter a period of difficulty. In the past two years the self-employed have suffered a sharp drop in their standard of living. It is not a question of their tightening their belts for the cold winds to come; they have already tightened their belts over the past two years. All that my hon. Friends are asking, and what I am pressing for, is a small measure of justice for them—some recognition of what they have had to undergo and what they will have to endure in retirement against accelerating inflation. All we are asking tonight from the Financial Secretary is a modest measure of relief, which will cost the Exchequer very little. We shall await with interest the reply to this debate.

8.45 p.m.

Mr. Cecil Parkinson (Hertfordshire, South)

I rise to support my hon. and learned Friend the Member for Dover and Deal (Mr. Rees). In Committee on the Finance Bill last year I moved the amendment which led to the undertaking from the Financial Secretary that he would review the position of the self-employed and the controlling director. I must thank him for honouring that undertaking and coming to the House tonight with an amendment which improves the position of the controlling director and the self-employed. But I must say that we have to be extremely careful when we discuss the arrangements which we are prepared to allow other people to make for their pensions.

There is tremendous resentment outside the House of Commons that we as Members of Parliament have agreed that our pensions should be based on a figure of £8,000, the figure which we would have been paid had we accepted the recommendations of the Boyle Review Body; but we did not accept them. As we all know, our pension arrangements are now based on a figure which is much higher than our income and it is perfectly possible to argue that if we had taken the £8,000 recommended by Lord Boyle, although there would have been rows about it, our pension arrangements at least would be consistent.

The public at large does not see it like that and says that as we did not accept the Boyle recommendations, we must accept the consequences and must not start making special arrangements allowing Members of Parliament to protect their pensions from the consequences of their own action.

Mr. Andrew Bowden (Brighton, Kemptown)

I would submit to my hon. Friend that he is not being absolutely fair to us as MPs. After all, can he think of any other body of people who have had their salaries reviewed by a totally independent group, consisting of a wide range of people from very distinguished positions in industry, the trade unions and professions, who, having looked at the salaries being paid and the responsibilities and duties of the job, said "Members of Parliament should be paid £8,000 now", Members who then said, "Our salaries having been considered by an independent group, we decide suddenly that Members of Parliament should not take the £8,000 and that the amount should be reduced to £5,750"?

Can my hon. Friend think of that having been done in any other case? I should have thought that that was a great example. Is it not fair and reasonable that for the future, when many of us will retire either voluntarily or not quite so voluntarily, and earn the full pension—and we have to be here well over 20 years to do so—there should be a reasonable pension in return for long and hard service to the nation?

Mr. Clement Freud (Isle of Ely)

May I point out to the hon. Gentleman that a Member must serve for 40 years to earn a full pension? Would he not agree that the time to say that—

Mr. Robin Maxwell-Hyslop (Tiverton)

One a point of order, Mr. Goodhew. Is it not a little unusual to permit an intervention in an intervention?

The Temporary Chairman

It is somewhat unusual, but I hope that this intervention is connected with the previous one so that the two can be asked together, and I hope that it will be short.

Mr. Freud

I am grateful, Mr. Goodhew. The hon. Member did give way to me. My point is simply that obviously the time to say that we would not accept the full wage increase to £8,000 but that we would take the pension was at the time when we said that £5,750 would do us at that moment, but that our pensions should be based on the notional £8,000 which we were refusing. The controversy has come as a result of the time lag between the non-acceptance of the Top Salaries Review Board's recommendation and our subsequent decision to base our pensions on it.

Mr. Parkinson

I find myself in the difficult situation of being tempted to agree with both hon. Members. The point which the hon. Member for Isle of Ely (Mr. Freud) has made is a very fair one and boils down to the fact that we are appallingly bad at handling our own affairs. We are diffident about making arrangements which appear to benefit us. I have a great deal of sympathy with the point of my hon. Friend the Member for Brighton, Kemptown (Mr. Bowden), but, as he has seen in leaders in the newspapers and probably in his own postbag, many people do not take that view. They feel that once again Members of Parliament have reserved for themselves a privilege which is not available to other people.

Sir Edward Brown (Bath)

A second part of the report has yet to come. The Prime Minister and his predecessor have had it in their office. That is the part dealing with pensions. This has not yet appeared although it has been notified to every hon. Member since November last year. That is another consideration which should be taken into account.

Mr. Parkinson

I do not want to strain your good nature, Mr. Goodhew. We are not debating Members' pensions; we are debating the self-employed. It would be adding to our insult to the self-employed if we seemed to prefer to debate our own affairs.

Mr. Bowden

I too, do not want to strain your good will, Mr. Goodhew, but in both cases we are dealing with natural justice. However, if we do not have the courage to say that in both cases we do not think justice is being done, we do ourselves no service.

Mr. Parkinson

We can all feel better for this brief excursion into the problems of Members of Parliament, but the fact is that the public do not understand us. I believe this is the constant complaint of the husband to his attractive girl friend—that his wife does not understand him. Perhaps we shall also get into that dilemma in referring to ourselves.

The only point I was making is that, having set up a most unusual situation for ourselves by preserving our pensions, we have to be careful when we discuss arrangements which we are prepared to allow other people to make for their own pensions—in particular, the self-employed and controlling directors. Civil servants and those who advise Ministers must also feel a little intimidated when they examine amendments of this kind.

The Civil Service has inflation-proofed its pensions and is in a highly privileged position. My hon. and learned Friend the Member for Dover and Deal pointed out that the golden handshake is not something known only to commerce; it affects top civil servants and the Civil Service generally. They have the power to commute part of their pension entitlement and take it as a tax-free lump sum. Golden handshakes and inflation-proofed pensions are available to civil servants.

We have voted large sums to nationalised industries to eliminate losses supposedly incurred through price restraint. We once gave the Post Office a subvention of about £132 million. When one of my hon. Friends investigated the Post Office accounts, it turned out that the reason was not price restraint. The largest element in the deficit was over £100 million for the Post Office Pension Fund, which had been ravaged by inflation. Parliament helped to sustain the pensions of postmen. Many of us thought it was sharp practice to use price restraint legislation to slip through huge sums to prop up a pension fund.

So a variety of arrangements are made in the public service, the Civil Service and in the House to enable some of us to look forward to a satisfactory pension. Under the Government's pension scheme, the nation will be issued with an inflation-proof IOU dated 1992. The right hon. Member for Blackburn (Mrs. Castle) promised that if we paid our contributions and behaved ourselves, we should get this IOU when we retired. The Conservative pension scheme, which this Government abandoned, was far more realistic and sensible.

No Government can promise that the working population of the 1990s will treat pensioners more generously than ever before and yet not set aside money to meet the commitment. It would have to be met from the revenue of the day. The mind boggles at the arithmetic involved in that kind of guarantee. The pensioned population is increasing and the working population is shrinking, yet our pensions are to be inflation-proofed.

This Government have a fixation about the poor old self-employed. They regard them as a bunch of untrustworthy fiddlers to be persecuted in every possible way. The self-employed pay more than the rest of us in national insurance contributions yet receive smaller benefits. The reasoning is that they are not trustworthy, they are on the make, and must be penalised.

Once against, thanks to the Treasury, this group will be entitled to pay increased contributions, to get tax relief but to have no guarantee of inflation proofing. The figures do not reflect the effect of inflation even since the last review. To do so they would have to be nearer £3,000 than £2,250. Yet we are saying that we will be broadminded and generous and will allow them to make an additional contribution for themselves. Who knows, in a few years' time, if some Government can pluck up the courage, they will allow them to come back and press us for another review. We are not extending to them the same privileges which civil servants have arranged for themselves, which those in the nationalised industries can expect, and which can be expected by many others when they retire.

9.0 p.m.

We are saying that this is a very special, suspect group and that we reserve the right to look at their contributions from time to time. If the Labour Party is in power, it is likely that the group will fall back in the race against inflation. If inflation continues, it is likely that the self-employed will not be able to provide an adequate pension for themselves. We are saying that that is their bad luck because they have committed the unforgiveable—they have chosen to work for themselves and therefore they are a group against whom we are entitled to discriminate.

Conservative Members do not see the self-employed and controlling directors in that light. Even the right hon. Member for Bristol, South-East (Mr. Benn) made a point of exempting small businesses from his criticism when he was Secretary of State for Industry. Whatever plans he had for nationalisation, he always said that he would do nothing to damage the prospects of small businesses because they created the dynamism and the growth, were the giants of the future, and must be looked after. The right hon. Gentleman often paid tribute to small businesses.

The subject is becoming almost a bore. We are making the small business man and the controlling director big-headed as we sing their praises. But when we have a chance to allow them to make better arrangements for their pensions, we talk of them as a dodgy group. We are happy to sing their praises and to admit that one-third of the population relies on them for jobs, but when it comes to practical arrangements, we revert to type and refuse them the privileges which everyone else enjoys. We say "Why should we take inflation into account?"

Conservative hon. Members do not accept that thinking. We believe that the self-employed and controlling directors are important and deserve the same treatment as others.

Mr. Bowden

I apologise to the Committee for not being in the Chamber earlier in the debate but a series of other engagements kept me away from the House.

The principal amendment is modest.

Mr. Freud


Mr. Bowden

I note that the Liberal spokesman is about to leave the Chamber, which is a pity, because I hoped that he would stay. The Liberal amendment is more generous than the principal amendment, and the Committee should support it. The main Opposition party felt that it did not want to ask for too much, and hoped that by keeping its request at a fairly reasonable level the Government would feel able to accept the amendment to increase the sum from £2,250 to £3,000

None of us would deny that the position and the life of the self-employed person today is far from easy. Indeed, life is not easy for any of us under the present Government, but it is probably more difficult for the self-employed than for most sections of the community. We really shall be suffering very greatly as a nation, both in terms of the spirit and the enterprise that the self-employed show and in the context of our economy, if we continue to drive more and more of these determined, hard-working and able people out of business.

In my own town, Brighton, we have a substantial number of self-employed people—small shopkeepers and people in small businesses—all geared to providing vital services to the people of Brighton and for the hundreds of thousands of people who visit the town each year during the holiday season. Some of those self-employed are geared particularly to the holiday industry for six or seven months of the year. They work extremely long hours, literally from first light until it is dark. Some use their Sundays, if they are not open for business on Sundays—although many still provide their services on Sundays—to do mountains of paper work and form filling to keep the Government happy and to ensure that their VAT returns are kept up to date, along with the requirements of the other Regulations.

Unless they get a fair and reasonable return for these long and gruelling hours, and for being unpaid tax collectors, as so many self-employed people are—unless we give them a fair return for their efforts and their work—they will not continue as self-employed people. Many small shops and small businesses, which provide such a vital part of the economy and such excellent services to the community as a whole, will disappear completely.

It is no exaggeration to say—though some Labour Members may dispute this—that the spirit that motivates the self-employed man is exactly the opposite of Socialism and the dogma and creed for which Socialism stands. The self-employed man can build up a business through his own determination and effort. How many companies have started as one-man or two-man businesses and have grown into great firms providing jobs for thousands of people? In their hearts, however, Labour Members really want to see the self-employed disappear completely, because the self-employed do not fit into the system. They do not fit in with the Socialist dream, in which we would be controlled by the State from the day we were born to the moment when we go into a little box in the ground. It is the complete opposite of the whole creed of Socialism that a person should be able to build up a business, to make profits and to earn a great deal of money—at the same time, however, paying a great deal of tax, which benefits the nation and provides jobs for thousands upon thousands of people.

Therefore, I hope that on this occasion, if on no other occasion in Committee on this Bill, the Government will look with a little sympathy and understanding at this group of amendments, or we shall drive these hard workers out.

When we look at the situation in the context that one of the great problems in the trade union movement today—particularly in relation to wage freezes and wage restraint—can be centred around differentials, we know that this is a problem which will increase, for inevitably differentials are based upon different and various skills, and upon the quality of those skills.

Unless we make due allowance for people who are fortunate enough to have exceptional abilities and skills, for which they should rightly receive extra remuneration, they will go somewhere else in the world, where those skills and hard work will be duly rewarded. Therefore, we are talking not merely of driving out the self-employed but of the inevitable consequences of Government policy in driving out those who are prepared to work long and hard hours.

I do not regard it as a crime, as some hon. Members obviously do, for a person to work far beyond the average working week in order to provide extra standards for himself, for his wife and for his family. I appeal to the Treasury Ministers to reconsider these amendments and to see whether, in common justice, they can agree at least to accept the one that would raise the level to £3,000.

Mr. Nott

The debate on my hon. Friend's amendment arises out of Clause 27, which in its small way we are glad to see in the Bill. The Government undertook last year to review sympathetically the problems of the self-employed with regard to their capacity to put aside money for their retirement. Having done so, the Government have come forward with this very modest increase in the provision which these people may make for their retirement.

I shall outline quickly the history of the arrangements. As my hon. and learned Friend the Member for Dover and Deal (Mr. Rees) said, the system stems back to the Finance Act 1956 which allowed the deduction from relevant earnings of premiums up to 10 per cent., with an earnings ceiling of £7,500. In the Finance Act 1971, the then Chancellor of the Exchequer, Lord Barber, increased the relief to 15 per cent. of relevant earnings for those under 40, and to 20 per cent. of relevant earnings for those over 48 in 1956, with an earnings ceiling of £10,000 a year. Then there was a graduation in between those ages whereby the percentages moved up in 1 per cent. steps.

As my hon. and learned Friend the Member for Dover and Deal said, we are talking here in these new arrangements of a ceiling of £15,000 a year, but the circumstances are entirely different from those prevailing in 1971. Inflation at that time was a mere fraction of what it has been in the past two years. It is the case that members of the professions, those who are not in company pension schemes, and those who are not working in the public sector, have had their past contributions enormously eroded by the rate of inflation over the past couple of years.

To a very large extent, therefore, these people, who have been putting aside money for their retirement, find themselves back not entirely at square one but, having had a great proportion of their past savings eroded, they need to make much greater contributions than they could have imagined would have been necessary in 1971

The proposal before us raises the earnings ceiling to £15,000, and we are glad of that. My hon. Friend the Member for Maldon (Mr. Wakeham), in his very interesting speech, raised a rather general point of principle about the manner in which we deal with these things. He said that he was not sure at all that it was right to look at the pensions of self-employed people on the basis of an annual contribution.

My hon. Friend made the valid point that the provisions must take account of the good years as well as the bad in private business. I think that he sounded a note to which we shall want to return when we review the arrangements, when we consider whether they should be made more flexible. He said that the good years should be taken with the bad, and that may be we should take an average of three years, for example, for deciding the limit of the contribution.

9.15 p.m.

My hon. Friend made the interesting point that if a company has an especially good year it may mean the opposite of the proprietor having more money to put aside for his pension, as the good year might have brought a considerable cash strain upon his business. It may be that in a good year the proprietor has less to put aside for his pension than in a bad year.

My hon. Friend made the valid case that we should look at the whole system again with, first the idea of concentrating on a percentage rather than on a ceiling. That is the basis of the next amendment that we shall be discussing. Secondly, he felt that an average of three years should be taken for deciding relevant earnings. Thirdly, he made the interesting suggestion that if we are to operate on an annual basis, we should allow the self-employed person to carry forward that element of the unused limit that he could not use in one tax year because his business or profession was not generating sufficient income for him to come up to the full limit at that stage.

I believe that my hon. Friends feel some passion on this subject. The present arrangements offend their natural sense of justice. We are talking of discriminatory arrangements against certain sections of the community that are unacceptable. There is no place in equity for those who are self-employed, such as those who run their own businesses, those who are members of professions, such as accountants, solicitors and barristers, and those who are small shopkeepers, to be treated differently in our tax system from those who are in company pension schemes and those working in the public sector.

In economic terms there is something more to be said for those who are contributing to funded schemes. Clearly, there is greater benefit to be derived from the normal pension contributions made by a man in a profession, or by a self-employed person, by those who are actually contributing to a funded scheme where the savings are channelled out into investment. Clearly those contributions are of greater benefit than the public sector scheme, when one is talking about a pay-as-you-go arrangement.

I am sure that it is not right that there should be one set of tax arrangements for those in pension schemes and those in the public sector, and a far less favourable set of arrangements for those working for themselves. I am sure that there is no disagreement across the Committee that the process of saving out of earned income for retirement is highly to be commended. Such saving helps counter-inflation policies and provides funds for investment. Indeed, our legislation in many areas admits of its beneficial effects. Yet as my hon. Friends have said, starting with my hon. Friend the Member for Basingstoke (Mr. Mitchell), who moved the amendment, the contributions are treated very differently. As my hon. and learned Friend the Member for Dover and Deal has said, pensions in the public sector are now inflation-proof. But more importantly—this is a matter that has been raised by others of my hon. Friends—the schemes normally taken account of final salary. That is of enormous benefit to those in public sector schemes compared with the self-employed, because if final salary is taken as the basis on which subsequent pensions are paid, at least there is some protection against inflation up to the moment when the individual retires from the public sector.

There are arrangements in the private sector, as many of my hon. Friends have suggested, including my hon. Friend the Member for Hertfordshire, South (Mr. Parkinson), whereby companies are able to top up their employees' pension funds when inflation is running at a higher level than was anticipated. But there is no way that the self-employed man over 40 can make up for the devaluation of his past contributions in the time remaining before his retirement.

My hon. and learned Friend the Member for Dover and Deal referred to some very interesting figures. I noted them down. My hon. and learned Friend said that if we made certain assumptions—I understand that the assumptions that he made were those made by the Government Actuary, who last year took a figure of about 8 per cent. as being the likely inflation rate for the purpose of calculating Government pension schemes and an interest rate of about 9 per cent.—it would be necessary for somebody aged 45 to be able to set aside over 30 per cent. of his earnings to provide protection against inflation or, if aged 55, over 47 per cent. of his earnings.

We have here a 15 per cent. rate applying to the self-employed. That is in total contrast to the situation if the man were an employee. If a man joins a firm at the age of 55, his contributions need to be 47 per cent., but, through his company's pension scheme, he can get the whole of that 47 per cent. approved for tax purposes. It is allowable if he is an employee, but not if he is self-employed.

The situation is even worse for young people starting out in the professions at, say, 25 years of age. At that young age they will not be making contributions which can protect them against inflation with a limit of 15 per cent. At 25, making the assumptions which my hon. and learned Friend made—the same assumptions as the Government Actuary made—a man would need to make a contribution of 17½ per cent. of his earnings to keep pace with inflation or, at 35, he would need to make a contribution of 22½ per cent. When we consider that a young person entering a profession or starting his own business is almost certainly not going to be able to put aside large sums in the early years, it becomes all the more clear that, under present arrangements, making the same inflation assumptions as the Government Actuary, there is no way that he can keep pace with inflation.

The amendment seeks to increase the cash ceiling. This is a modest amendment, because the cash ceiling proposed goes nowhere near to meeting what we consider to be the essential point. I emphasise that there is no cash ceiling for Government superannuation schemes or approved private employee schemes. Several civil servants and private employers now have overall remuneration exceeding £15,000 per annum, which is the limit with which we are dealing, especially if we include in their remuneration the contributions which would be required to fund their pensions. We are not referring specifically to a salary of £15,000 in the public sector, but to a salary which incorporates sufficient money to fund pensions as well.

Although these arrangements stem from the Finance Act 1956 and were increased in 1971, we are operating in an entirely different environment, because inflation has greatly eroded the contributions already made under these schemes. Unless we have a figure somewhere nearer to 30 per cent. or 40 per cent. of income, there will be no way in which a man in middle age will be able to protect himself in his retirement against the ravages of inflation. We are seeking to bring the tax arrangements for the self-employed more into line with those which exist for the private and public sectors. It is not asking a great deal.

I conclude by commenting on the speech made by my hon. Friend the Member for Wells (Mr. Boscawen). He raised a number of questions about contributions to the national insurance scheme and pointed out that these were out of line with the arrangements for the employed person. I do not want to move into that area because here we are dealing specifically with pensions for the self-employed.

We are not happy that the Government have sufficient understanding of the very special position of the self-employed and we see this as a good example of how they are undoubtedly, under existing tax arrangements, worse off than their contemporaries in the public sector or in companies with private pension schemes. I hope that the Financial Secretary will do his best to answer these points.

Although we prefer the higher limit in the amendment, what we are seeking even more than that is what is embodied in the next amendment—not a cash limit at all, but a percentage limit. Only with a percentage limit will the self-employed be protected against inflation. Only with a percentage limit—and there are no cash limits for private schemes or for the public sector—shall we be able to put this whole thing on a fair and comparable basis.

Mr. Robert Sheldon

I apologise to the Committee for dealing with the previous amendment rather briefly. I understood that the Committee was anxious to move on to the next clause.

I shall give the details of the amendment and its intentions and results as I see them. The present position was that relief is given on premiums not exceeding 15 per cent, of earnings, up to a total of £1,500, or the equivalent of £10,000 in earnings. In the Committee stage upstairs of last year's Finance Bill I gave a commitment to look at this matter sympathetically. I did so and came to the House with what I thought would be received not with ecstasy but with reasonable appreciation. Having undertaken to consider the arguments that were adduced in Committee, I thought there should be some increase, and the increase that I have suggested in this Finance Bill is an earnings limit of £15,000 a year, which means relief up to £2,250

The hon. Member for Basingstoke (Mr. Mitchell) wanted some form of indexation in this year as opposed to previous years. We have not had as many indexation debates as we had last year. The hon. Member for Blaby (Mr. Lawson) has restrained himself considerably throughout our debates, although he has given indications that he is still dedicated to that solution. Even without speaking he had made his view well felt in this Committee.

If we were to accept the indexation argument in general, it would be a matter of great importance, and one that I would not be prepared to accept, for reasons that I have given many times. I need not repeat them. The point was made by the hon. Member for Basingstoke in respect of pension arrangements now being made. He said that pensions should be reasonably in proportion up to 10 or 15 years from now. He said that inflation had to be seen in the long-term context that he envisaged and that as a result there needed to be an increase in the limits of the kind that he had explained to the Committee. Obviously we need to take a long-term view of inflation, but that is one of the most difficult things to do at present. All of us who are dealing with economic matters have been through a quite traumatic year, in which we saw inflation at levels we never dreamed could exist in this country. We are now seeing a rapid reversal of that trend. It would be wrong to make too many assumptions based on experience of the past year.

Mr. David Mitchell

Since the £1,500 limit was set in 1971 there has been an 89 per cent. increase in the rate of inflation. The Financial Secretary's "generous" uplift is only 50 per cent. My argument for looking two years ahead at the rate of inflation was to indicate that the amendment was too moderate and that we should have a much more generous scale.

9.30 p.m.

Mr. Sheldon

I understand the hon. Member's point, but that may not necessarily be the whole picture. If inflation were to grow at the levels he might consider reasonable to assume, reasonable adjustments could be made, in the same way that adjustments were made this year following earlier representations.

The hon. Member said that the Government's actions were unjustifiable and that the Government were—I think he said—the hammer of the self-employed. He was guilty of immoderate language and he failed to take account of the real concern that is being expressed so frequently by the Government for the problems of the self-employed and small businesses.

The wheel has come full circle, where people interested and engaged in the activity of our industries are trying to afford every possible assistance to small firms and to understand the contribution that they make. I always held that view, but it is now becoming more widespread and the hon. Member for Basingstoke has played his part in that process. He said that the self-employed were frequently unable to make a contribution to their pension arrangements until they reached their late forties or early fifties. I agree that there is a great deal in what he says. Such people frequently are engaged in building up their businesses and making sure that all the profits are ploughed back. It is a pity that we do not still have the old corporation tax, which enabled them to do that—

Mr. David Mitchell

Hear, hear.

Mr. Sheldon

I am glad that the hon. Member agrees with me. That was one of the most valuable aspects of the old corporation tax system, which, unfortunately, the last Conservative Government abolished. One of the consequences of the very natural interest of the self-employed in building up their own business is that at the end of it all they have a valuable asset which they can sell or which will produce an income. That is something that the person in private employment does not have. That is one of the reasons for previous Governments' having accepted the need for both the premiums ceiling and the percentage limits of annuity arrangements.

If the arguments put by hon. Members tonight are so conclusive, why have all previous Governments not been persuaded of the need to abandon either total or percentage limits? The reason may be found in the Tucker Committee on the Taxation Treatment of Provisions for Retirement, which led to the 1956 provisions. It produced recommendations that were the precursor of the retirement annuity provisions that we are now considering. The Committee recommended that there should be a restriction on relief for earnings because they usually include an element more in the nature of a return on capital than of reward for work performed, which should not be included in pension provisions.

Not only is there this underlying capital value which must be taken into account in some way—and the method could be subject of a debate—but also the self-employed can decide their own future more readily than employees who have an arm's length transaction with their employers. Restrictions have been devised to meet the differences in the way I have described.

In the end, we realised that there must be some restriction on annuity relief, and the argument becomes how much and in what way.

Mr. Peter Rees

The Financial Secretary has attributed certain motives to the Government who introduced the 1956 provisions, but might they not have done so on the basis that pension schemes for employees were not nearly so widespread, and does he not concede that there are many occupations in respect of which there are no great capital assets to be disposed of when a person retires?

Mr. Sheldon

Both those statements are true in certain respects. Some self-employed people do not build up capital assets, but many do.

The provision of pension schemes has increased, but with that has gone an improvement in the total and percentage limits by which self-employed people can make provision for their retirement.

The hon. and learned Member for Dover and Deal (Mr. Rees) asked me to view this matter sympathetically. I did not expect enthusiasm, but I thought a welcome would have been justified when I returned to the Committee this year with a 50 per cent. increase in the limit. Apart from one or two instances, our proposal was not accorded that welcome.

The hon. and learned Member for Dover and Deal reverted again to the regular replay we have on the question of pensions of civil servants. The Civil Service pension is one-half—not twothirds—of final pay. It is only the lump sum that brings it up to the equivalent of the two-thirds pension. That is the position as I stated it last year. If the hon. and learned Gentleman checks on it this time, he will see that that is correct.

The hon. and learned Gentleman gave some very interesting figures from the Senate of the Inns of Court and the Bar. I am sorry that the large number of figures that he necessarily had to give this Committee were in such a form that they were not readily digestible. My office received these representations only yesterday, and I had the full details only today. For that reason, I have not had time to go into them. They were part of the response which I have had when I announced that I was happy to receive personally observations on the technical and practical provisions of the Finance Bill. I am happy to say that a number of representations have been made to me which obviously will receive close scrutiny. Unfortunately, that scrutiny was in this case not possible before today. Within the time available to me, I was not able to go into them in detail, but it may be that another opportunity will avail itself for me to do so.

Mr. Peter Rees

I am sorry if the hon. Gentleman has not had a chance to digest that important material. If the conclusions are found to be soundly based, will he defer to the recommendations, if not in Committee, at least on Report?

Mr. Sheldon

I can always give an undertaking that if information comes to me as a result of which my mind is changed in any important respect, so far as it is practicable to do so I shall bring changes into the legislation before the Committee; but obviously I can give no undertaking at the moment, given the state of my knowledge of these detailed comments.

Perhaps I may refer to the activities of the Government Actuary in this connection. In his latest report on the National Health Service, he has assumed an earnings increase of 7 per cent. annually and average annual price increases of 5 per cent. That may set the record straight, in comparison with the assumptions of the hon. and learned Member for Dover and Deal.

Perhaps I shall be forgiven if I quote what I said last year about retirement annuity relief limits: Clearly, as time goes on, these limits are subject to change as all limits in taxation, due to inflation, are subject to change. I am inclined to look at the proposal"— the proposal then before the Committee— sympathetically. I have to bear in mind the general review of tax allowances which the Chancellor is at present undertaking and I shall be happy to look at the matter in that light."—[Official Report, Standing Committee H, 3rd July 1975, c. 935.] When I brought forward these proposals, they were a direct result of the observations that I made on that occasion.

I think that right hon. and hon. Members have seen some improvement here. Obviously these matters are always kept under review. I hope that they will accept that this has been a useful step forward.

Mr. Lawson

The sparkling oratory of the Financial Secretary has moved me to intervene in a debate in which I had no intention of speaking.

I was surprised by the hon. Gentleman's suspicion that some of my right hon. and hon. Friends might have lost their interest in indexation. That is not the case. I think that we have a little explaining to do to the Financial Secretary—and we have plenty of time in which to do it in this Committee stage—of the difference between what he calls "revalorisation" and what we mean by "indexation"

At this stage, I do no more than draw the hon. Gentleman's attention to the speech of my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) on Tuesday when he made it clear that what was needed at the very least was that the indexed figures should be printed and published in the Finance Bill so that we should all know where we were and what the new datum point was from which the Government could then make their discretionary changes.

Mr. David Mitchell

Does not my hon. Friend agree that, whether it is called "indexation" or "revalorisation", it is unacceptable if the cost of living has gone up by 89 per cent. to have a concession of only 50 per cent.?

9.45 p.m.

Mr. Lawson

My hon. Friend is of course right; that is unacceptable. Although the difference between indexation and revalorisation is an important one, we shall have plenty of time in Committee to discuss it.

To pass on to a point which I do not think the Financial Secretary has covered in his contribution to this debate so far, there is something to which I should like to draw his attention. It came to me in the guise of a constituency case and it is very germane to this point of saving for retirement among the self-employed.

It must be realised that not every self-employed person starts his working career as self-employed. There are many who will be employed to begin with and will then want to branch out on their own. If they are working for a company to begin with and are in a pension scheme, under the 1970 Finance Act—I have the Revenue document on "Occupational Pension Schemes: Notes on Approval under the 1970 Finance Act"—and the Financial Secretary will know paragraph 13.16—there is the £5,000 rule. If an employee who is a member of a pension scheme happens in any one year—and it may be an unusually good year if, say, he is a salesman and gets a lot of commission—to earn more than £5.000, when he leaves the scheme he cannot take any of his money out. That test should clearly be indexed and I hope that on Report the Government will table an amendment to that effect, because the £5,000 rule, even if right in 1970, is certainly not right now.

This leads on to the self-employed person. What an employee can do in certain conditions is have the deferred pension transferred to a pension scheme of a new employer. But if he becomes self-employed, there is no transfer that he can make. He cannot transfer it to one of these retirement annuities in Clause 27 that we are talking about. This is a further clear example of discrimination in effect against the self-employed, although maybe that was not the intention.

I am surprised that the Financial Secretary has at no time brought the wealth tax into this. He will know that the Diamond Commission in its report on income and wealth has pointed out that the wealth of this country is to a large extent in pensions of one kind or another—savings for retirement, pension rights, and so on. This is a very important aspect of the total wealth.

Those who were on the Select Committee on the Wealth Tax, on both sides—and I am glad to see our distinguished Chairman, the right hon. Member for Battersea, North (Mr. Jay) on the Benches opposite—will know that we spent a great deal of time discussing this subject. One thing that caused us great difficulty was deciding whether all forms of saving for retirement should be treated equally for the purpose of wealth tax, or whether it should be the case that the valuable inflation-proof indexed Civil Service pension rights should not be chargeable for wealth tax, but that the self-employed man saving for retirement—maybe in this kind of retirement annuity, but maybe not; it may consist in the assets he has saved up, everything may be ploughed back into the shop, or whatever it is he owns—should be chargeable for wealth tax. Many of us on both sides of the Committee felt that there was an unfairness here.

I hope, therefore, that we shall be able to get an assurance from the Financial Secretary on two things. First, we should like to learn that the Government have dropped their ideas for a wealth tax, having read very carefuly the many reports of the Select Committee and the voluminous evidence that it took. But I hope the Financial Secretary will also give us an assurance that if there is ever going to be a wealth tax, in elementary fairness all forms of saving for retirement will be treated alike. Either all forms are brought within the charge of the tax or no forms are brought within it.

Our fear is that, judging by the track record of the Labour Government, there is a grave likelihood that some of this wealth—the savings for retirement in the form of public service pensions—will be regarded as being outside the tax and that, as usual, the self-employed will be penalised in terms of the wealth tax as in other forms of taxation. I hope that we can be given either or both those assurances. If we get the first assurance, we shall not need the second, but if we cannot get the first, let us at least have the second.

Mr. Nott

If my hon. Friend the Member for Basingstoke (Mr. Mitchell) seeks to press his amendment, I shall certainly advise my hon. and right hon. Friends to support him in the Lobby.

Although the Financial Secretary was in some respects sympathetic to our comments, I do not think that his reply was satisfactory in every respect. He made a number of comments on the situation, one being that it would be wrong to make assumptions about inflation since the last year had been somewhat traumatic. I hope that he is correct in that forecast.

Assuming that there is no inflation at all, it is still not possible, under the 15 per cent. set aside, for a self-employed person adequately to protect himself against inflation to the same extent as a person working in the public sector is protected by public sector schemes.

It has also been said that if a man enters a pension scheme at age 55, there is no reason under existing approved pension scheme arrangements why the contribution for tax purposes should not rise to 47, 57 or 67 per cent. They are all allowed for tax, even if somebody joins a scheme late in life.

We want the arrangements to be put on a comparable basis. It is not good enough for the Financial Secretary to say that many self-employed people have an asset which is saleable at the end of their working life and that they can live on the income from that asset. That may be true, but there are many people who do not have a saleable asset.

We are extremely glad to learn that the Minister is to study closely the representations from the Senate of the Inns of Court and the Bar. I hope that he will take due note of those representations and report back to the House on the memorandum to which my hon. and learned Friend the Member for Dover and Deal (Mr. Rees) referred and which I have read with some care. I believe that document puts forward an irrefutable case for reviewing these arrangements again and for bringing them more into line with the tax arrangements available to those who work in other sectors of the economy.

I echo the point made by my hon. Friend the Member for Maldon (Mr. Wakeham) about a broader and much more radical suggestion for reviewing the manner in which an annual contribution is now taken for the purposes of limits and percentages. When we come to make a more fundamental review—a review of the kind undertaken by the Tucker Committee—we should examine whether it will be wiser to take average earnings over the years so that good years can be taken with bad years.

Since the Conservative Government in 1971 increased the limit to £10,000—and we are glad that the Financial Secretary has gone as far as he has—the contributions of the self-employed have been greatly eroded by the fantastic rate of inflation in the past few years. The situation now is nothing like the situation in 1971

We want to recapture, to revalorise, or whatever term one likes, some of the contributions actually lost through the rapid inflation since 1971. We wish to bring this whole basis more into line with existing arrangements in the private company and the public sector. Although I must ask my hon. Friends to divide on this amendment, I hope that the Financial Secretary will look at this sympathetically between now and Report, because I believe that we have put forward a very fair case.

Mr. David Mitchell

I am grateful to my hon. Friend the Member for St. Ives (Mr. Nott) for the support he has given to this very modest amendment and I greatly regret that the Financial Secretary to the Treasury has not felt able to accept it. I had hoped, as I believe my hon. Friend had hoped, that on this occasion he would have thrown away his brief and allowed himself to do what I know he believes to be right and to accept this amendment. The Financial Secretary spoke of regretting the lack of warmth with which

we had received the small concessions he has made, but they have to be set against the background of the level of inflation. I can only say that in politics gratitude is a recognition of the anticipation of further benefits to come and I regret that those further benefits have not been greater than they have appeared in the Bill.

The self-employed, the small business man and people of this type have very often gone many years at the end of their working lives before being able to contribute to a fund for their old age. The allowance which the Government are now giving is wholly inadequate for the needs, against the level of inflation as it has built up, and is wholly unfair by comparison with the treatment of civil servants and those in private company schemes.

The Government have not accepted the arguments of my hon. Friend the Member for Blaby (Mr. Lawson) for indexation. If the Government do not accept indexation, there is imposed upon them a double duty—to make sure that at those times when they move the figures, if they are not moving them automatically with indexation, they move them sufficiently adequately to cover inflation since the previous occasion when they were moved. Adequately to cover the movement in inflation since 1971 would require the figure to be lifted by 89.9 per cent.

Because the Government have failed to do this and have let down the self-employed on this occasion as on so many others, I urge all my hon. Friends who support the case for the self-employed to join me in the Lobby in opposing this treatment.

Question put, That the amendment be made:—

The Committee divided: Ayes 119 Noes 127.

Fookes, Miss Janet. MacGregor, John. Roberts, Wyn (Conway)
Forman, Nigel. Macmillan, Rt Hon M. (Farnham) Ross, Stephen (Isle of Wight)
Fowler, Norman (Sutton C'f'd) Mather, Carol. Ross, William (Londonderry)
Freud, Clement. Maude, Angus. Rossi, Hugh (Hornsey)
Gilmour, Rt Hon Ian (Chesham) Maxwell-Hyslop, Robin. Sainsbury, Tim.
Goodlad, Alastair. Mayhew, Patrick. Scott, Nicholas.
Grimond, Rt Hon J. Meyer, Sir Anthony. Shersby, Michael.
Hall, Sir John. Miller, Hal (Bromsgrove) Sims, Roger.
Hamilton, Michael (Salisbury) Mitchell, David (Basingstoke) Sinclair, Sir George.
Hastings, Stephen. Moate, Roger. Smith, Dudley (Warwick)
Hayhoe, Barney. Molyneaux, James. Speed, Keith.
Henderson, Douglas. Moore, John (Croydon C) Spicer, Michael (S Worcester)
Hordern, Peter. Morris, Michael (Northampton S) Steel, David (Roxburgh)
Howe, Rt Hon Sir Geoffrey. Morrison, Charles (Devizes) Stewart, Donald (Western Isles)
Howell, David (Guildford) Morrison, Hon Peter (Chester) Stewart, Ian (Hitchin)
Howells, Geraint (Cardigan) Heave, Airey. Stradling Thomas, J.
Hunt, David (Wirral) Newton, Tony. Tapsell, Peter.
Hurd, Douglas. Nott John. Thompson, George.
Jessel, Toby. Onslow, Cranley. Tugendhat, Christopher.
Kilfedder, James. Page, Rt Hon R. Graham (Crosby) van Straubenzee, W. R.
King, Tom (Bridgwater) Pardoe, John. Wakeham, John.
Knox, David. Parkinson, Cecil. Welder, David (Clitheroe)
Lamont, Norman. Penhaligon, David. Weatherill, Bernard.
Lane, David. Percival, Ian. Welsh, Andrew.
Lawrence, Ivan. Powell, Rt Hon J. Enoch. Whitelaw, Rt Hon William.
Lawson, Nigel. Price, David (Eastleigh) Wiggin, Jerry.
Le Merchant Spencer. Raison, Timothy. Wilson, Gordon (Dundee E)
Lester, Jim (Beeston) Rees, Peter (Dover & Deal) Winterton, Nicholas.
McAdden, Sir Stephen. Rees-Davies, W. R.
MacCormick Iain. Reid, George. TELLERS FOR THE AYES:
McCusker, H. Rippon, Rt Hon Geoffrey. Mr. W. Benyon and
Macfarlane, Neil. Roberts, Michael (Cardiff NW) Mr. Fred Silvester.
Anderson, Donald. Graham, Ted. O'Halloran, Michael.
Armstrong, Ernest. Hamilton, James (Bothwell) Ovenden, John.
Atkinson, Norman. Hardy, Peter. Owen, Dr David.
Bagier, Gordon A. T. Harper, Joseph. Palmer, Arthur.
Barnett, Guy (Greenwich) Harrison, Walter (Wakefield) Park, George.
Barnett, Rt Hon Joel (Heywood) Hayman, Mrs Helene. Peart, Rt Hon Fred.
Bates, Alf. Heffer, Eric S. Perry, Ernest.
Blenkinsop, Arthur. Hooley, Frank. Prentice, Rt Hon Reg.
Booth, Rt Hon Albert. Horam, John. Radice, Giles.
Boyden, James (Bish Auck) Howell, Rt Hon Denis. Robinson, Geoffrey.
Butler, Mrs Joyce (Wood Green) Irvine, Rt Hon Sir A. (Edge Hill) Rooker, J. W.
Cant, R. B. Jay, Rt Hon Douglas. Roper, John.
Castle, Rt Hon Barbara. Jenkins, Hugh (Putney) Rose, Paul B.
Clemitson, Ivor. John, Brynmor. Sandelson, Neville.
Cocks, Michael (Bristol S) Judd, Frank. Sedgemore, Brian.
Coleman, Donald. Kelley, Richard. Shaw, Arnold (Ilford South)
Corbett, Robin. Kilroy-Silk, Robert. Sheldon, Robert (Ashton-u-Lyne)
Cox, Thomas (Tooting) Kinnock, Neil. Short, Rt Hon E. (Newcastle C)
Cryer,Bob. Lamborn, Harry. Silkin, Rt Hon John (Deptford)
Davidson, Arthur. Latham, Arthur (Paddington) Silverman, Julius.
Davies, Bryan (Enfield N) Lestor, Miss Joan (Eton & Slough) Snape, Peter.
Davies, Denzil (Llanelli) Lipton, Marcus. Spearing, Nigel.
Davis, Clinton (Hackney C) Litterick, Tom. Stallard, A. W.
Deakins, Eric. Lyons, Edward (Bradford W) Taylor, Mrs Ann (Bolton W)
Dean, Joseph (Leeds West) Macfarquhar, Roderick. Thomas, Mike (Newcastle E)
Dormand, J. D. McMillan, Tom (Glasgow C) Thomas, Ron (Bristol NW)
Douglas-Mann, Bruce. McNamara, Kevin. Tinn, James.
Duffy, A. E. P. Madden, Max. Tomlinson, John.
Dunn, James A. Magee, Bryan. Walker, Harold (Doncaster)
Dunnett, Jack. Mallalieu, J. P. W. Walker, Terry (Kingswood)
Edge, Geoff. Marks, Kenneth. Ward, Michael.
Ellis, John (Brigg & Scun) Marquand, David. Weetch, Ken.
English, Michael. Marshall, Jim (Leicester S) Weitzman, David.
Evans, Ioan (Aberdare) Maynard, Miss Joan. Wellbeloved, James.
Ewing, Harry (Stirling) Mellish, Rt Hon Robert. Whitehead, Phillip.
Faulds, Andrew. Mendelson, John. Willey, Rt Hon Frederick.
Flannery, Martin. Miller, Dr M. S. (E Kilbride) Williams, Alan (Swansea W)
Fletcher, Raymond (Ilkeston) Miller, Mrs Millie (Ilford N) Williams, Alan Lee (Hornch'ch)
Foot, Rt Hon Michael. Molloy, William. Wise, Mrs Audrey.
Fowler, Gerald (The Wrekin) Morris, Charles R. (Openshaw)
Garrett, John (Norwich S) Moyle, Roland. TELLERS FOR THE NOES:
George, Bruce. Mulley, Rt Hon Frederick. Mr. David Stoddart and
Gilbert, Dr John. Newens, Stanley. Mr. Frank R. White.
Golding, John. Noble, Mike.

Question accordingly negatived.

Mr. Nott

I beg to move Amendment No. 87, in page 15, line 23, leave out '£2,250' and insert '15 per cent.'

The Temporary Chairman

With this we may take the following amendments:

No 63, in page 15, line 21, leave out '£1,500' and insert '15 per cent.'

No. 65, in page 15, line 23, leave out '£2,250' and insert '20 per cent.'

No. 67, in page 15, line 24, leave out '£500' and insert '5 per cent.'

No. 68, in page 15, line 25, leave out '£750' and insert '7 per cent.'

No. 69, in page 15, line 25, at end insert: '(bb) paragraph (a) of subsection (1A), paragraph (a) of subsection (1B), and subsection (1C) of section 227, subsections (1), (2) and (3) of section 228, and the references to subsection (1C), subsections (1) and (2) and £1,500 in subsection (4) of section 228, and the column headed "Sum" in the Table in the last-mentioned subsection, shall be omitted'

No. 70, in page 15, leave out lines 28 to 31 and insert:

Division No. 138. AYES 10.10 p.m.
Atkins, Rt Hon H. (Spelthorne) Hordern, Peter. Powell, Rt Hon J. Enoch.
Baker, Kenneth. Howe, Rt Hon Sir Geoffrey. Price, David (Eastleigh)
Bennett, Sir Frederic (Torbay) Howell, David (Guildford) Ralson, Timothy.
Benyon, W. Howells, Geraint (Cardigan) Rees, Peter (Dover & Deal)
Bitten, John. Hunt, David (Wirral) Rees-Davies, W. R.
Body, Richard. Jesse], Toby. Reid, George.
Boscawen, Hon Robert. Kilfedder, James. Rippon, Rt Hon Geoffrey.
Bowden, A. (Brighton, Kemptown) Knox, David. Roberts, Michael (Cardiff NW)
Bradford, Rev Robert. Lamont, Norman. Roberts, Wyn (Conway)
Brittan, Leon. Lawrence, Ivan. Ross, Stephen (Isle of Wight)
Brotherton, Michael. Lawson, Nigel. Ross, William (Londonderry)
Brown, Sir Edward (Bath) Le Marchant Spencer. Rossi, Hugh (Hornsey)
Churchill, W. S. Lester, Jim (Beeston) Sainsbury, Tim.
Clark, William (Croydon S) McAdden, Sir Stephen. Scott, Nicholas.
Clarke, Kenneth (Rushcliffe) MacCormick Iain. Shersby, Michael.
Clegg, Waiter. McCusker, H. Silvester, Fred.
Cope, John. Macfarlane, Neil. Sims, Roger.
Costain, A. P. MacGregor, John. Smith, Dudley (Warwick)
Davies, Rt Hon J. (Knutsford) Macmillan, Rt Hon M. (Farnham) Speed Keith.
Dodsworth, Geoffrey. Maude, Angus. Spicer, Michael (S Worcester)
Eden, Rt Hon Sir John. Maxwell-Hyslop, Robin. Steel, David (Roxburgh)
Edwards, Nicholas (Pembroke) Mayhew, Patrick. Stewart, Donald (Western Isles)
Emery, Peter. Meyer, Sir Anthony. Stewart, Ian (Hitchin)
Evans, Gwynfor (Carmarthen) Miller, Hal (Bromsgrove) Stradling Thomas, J.
Farr, John. Mitchell, David (Basingstoke) Tapsell, Peter.
Finsberg, Geoffrey. Moate, Roger. Thompson, George.
Fisher, Sir Nigel. Molyneaux, James. van Straubenzee, W. R.
Fookes, Miss Janet. Moore, John (Croydon C) Wakeham, John.
Forman, Nigel. Morris, Michael (Northampton S) Walder, David (Clitheroe)
Fowler, Norman (Sutton C'f'd) Morrison, Charles (Devizes). Weatherill. Bernard.
Freud, Clement. Neave, Airey. Welsh, Andrew.
Gilmour, Rt Hon Ian (Chesham) Newton, Tony. Whitelaw, Rt Hon William.
Goodlad, Alastair. Nott John. Wiggin, Jerry.
Griffiths, Eldon. Onslow, Cranley. Wilson, Gordon (Dundee E)
Grimond, Rt Hon J. Page, Rt Hon R. Graham (Crosby) Winterton, Nicholas.
Hall, Sir John. Pardoe, John. TELLERS FOR THE AYES:
Hamilton, Michael (Salisbury) Parkinson, Cecil. Mr. Anthony Berry and.
Hastings, Stephen Hayhoe, Barney. Penhaligon, David. Mr. Carol Mather.
Henderson, Douglas. Percival, Ian.
Anderson, Donald. Booth, Rt Hon Albert. Corbett, Robin.
Armstrong, Ernest. Boyden, James (Blsh Auck) Cryer,Bob.
Atkinson, Norman. Butler, Mrs Joyce (Wood Green) Davidson, Arthur.
Bagler, Gordon A. T. Cant, R. B. Davies, Bryan (Enfield N)
Barnett, Guy (Greenwich) Castle, fit Hon Barbara. Davies, Denzil (Llanelli)
Barnett, Rt Hon Joel (Heywood) Clemfitson, Ivor. Davis, Clinton (Hackney C)
Bates, Alf. Cocks, Michael (Bristol S) Deakins, Eric.
Blenkinsop, Arthur. Coleman, Donald. Dean, Joseph (Leeds West)

'"1914 or 1915", "1912 or 1913", "1910 or 1911", "1908 or 1909", and "1907" there shall be substituted respectively "1933, 1934 or 1935', "1930, 1931 or 1932", "1927, 1928 or 1929", "1024, 1925 or 1926", and "1923", and for "16", "17", "18", "19" and "20" there shall be substituted respectively "22", "24", "26", "28", and "30"'.

Mr. Nott

We had a full debate on this clause when we discussed the amendment tabled by my hon. Friend the Member for Basingstoke (Mr. Mitchell) and, subject to the views of my hon. Friends, I do not think that there is any need to debate the subject further. If my hon. Friends agree, we shall just divide on the amendment.

Question put, That the amendment be made:—

The Committee divided: Ayes 114, Noes 124.

Dormand, J. D Lestor, Miss Joan (Eton & Slough) Roper, John.
Douglas-Mann, Bruce Lipton, Marcus Rose. Paul B.
Duffy, A. E. P Lyon, Alexander (York) H Sandelson, Neville.
Dunn, James A Lyons, Edward (Bradford W) Sedgemore, Brian.
Dunnett, Jack Macfarquhar, Roderick Shaw, Arnold (Ilford South)
Edge, Geoff. McMillan, Tom (Glasgow C) Sheldon, Robert (Ashton-u-Lyne)
Ellis, John (Brigg & Scun) McNamara, Kevin Short, Rt Hon E. (Newcastle C)
English, Michael Madden, Max Silkin, Rt Hon John (Deptford)
Evans, Ioan (Aberdare) Magee, Bryan Silverman, Julius.
Faulds, Andrew Mallalieu, J. P. W Snape, Peter.
Flannery, Martin Marks, Kenneth Spearing, Nigel.
Fletcher, Raymond (Ilkeston) Marquand, David Stallard, A. W.
Foot, Rt Hon Michael. Marshall, Jim (Leicester S) Stoddart, David.
Fowler, Gerald (The Wrekin) Maynard, Miss Joan Taylor, Mrs Ann (Bolton W)
Garrett, John (Norwich S) Mellish, Rt Hon Robert Thomas, Mike (Newcastle E)
George, Bruce. Mendelson, John Thomas, Ron (Bristol NW)
Gilbert, Dr John. Miller, Dr M. S. (E Klibride) Tinn, James.
Golding, John. Miller, Mrs Millie (Ilford N) Tomlinson. John.
Graham, Ted. Molloy, William Walker, Harold (Doncaster)
Hamilton, James (Bothwell) Morris, Charles R. (Openshaw) Walker, Terry (Kingswood)
Hardy, Peter. Moyle, Roland Ward, Michael.
Harrison, Walter (Wakefield) Mulley, Rt Hon Frederick Weetch, Ken.
Hayman, Mrs Helene Newens, Stanley Weitzman, David.
Hooley, Frank. Noble, Mike Wellbeloved, James.
Howell, Rt Hon Denis. O'Halloran, Michael White, Frank R. (Bury)
Irvine, Rt Hon Sir A. (Edge Hill) Ovenden, John Whitehead, Phillip.
Jay, Rt Hon Douglas Owen, Dr David Willey, Rt Hon Frederick.
Jenkins, Hugh (Putney) Palmer, Arthur Williams, Alan (Swansea W)
John, Brynmor Park, George Williams, Alan Lee (Hornch'ch)
Judd, Frank Pearl, Rt Hon Fred Wise, Mrs Audrey.
Kelley, Richard Perry, Ernest
Kilroy-Silk, Robert Prentice, Rt Hon Reg TELLERS FOR THE NOES:
Kinnock, Neil. Radice, Giles Mr. Joseph Harper and
Lamborn, Harry. Robinson, Geoffrey Mr. Thomas Cox.
Latham, Arthur (Paddington) Rooker, J. W

Question accordingly negatived.

Clause 27 ordered to stand part of the Bill.

To report progress and ask leave to sit again.—[Mr. Coleman.]

Committee report progress; to sit again tomorrow.