§ '(1) Where in any year of assessment tax has been deducted under section 204 of the Taxes Act (pay as you earn) from the earned income of a wife and, apart from this section, a repayment of tax for that year would fall to be made to her husband in consequence of an assessment under Schedule E, so much of the repayment as is attributable to the tax so deducted shall be made to her and not to him.
§ (2) The amount of a repayment attributable to tax deducted as mentioned in subsection (1) above is the excess (if any) of the total net tax so deducted in the year of assessment over the tax chargeable on the wife's relevant earned income included in her husband's total income for that year after allowing—
- (a) any relief for that year under section 19 of the Taxes Act in respect of any payment made by her of the kind mentioned in paragraph 14A of Schedule 4 to the Finance Act 1976 (retirement benefits schemes); and
- (b) any relief for that year to which her husband is entitled under any other provision of the Income Tax Acts to the extent to which it cannot be allowed because his income, exclusive of her earned income, is insufficient;
§ (3) Where in consequence of an assessment under Schedule E any amount is repayable under this section to the wife of the person on whom the assessment is made the inspector shall notify both of them of his determination of that amount and, subject to subsection (4) below, an appeal shall lie against the determination as if it were a decision on a claim.
§ (4) Any appeal under subsection (3) above shall be to the General Commissioners for the division in which the spouses reside or, if they reside in different divisions, for the division in which one of them resides, as the Board may direct, or if neither resides in Great Britain to the Special Commissioners; and on any such appeal by one of the spouses the other shall have the same rights as an appellant, including any right to require the statement of a case for the opinion of the court.
§ (5) Where in a case to which this section applies the amount repaid to a wife or her husband exceeds the amount properly due to that person the excess shall be recoverable from that person as if it were unpaid tax.
§ (6) The Board may make regulations—
- (a) modifying subsection (2) above in relation to such cases as may be specified in the regulations;
- (b) modifying section 47 of the Finance (No. 2) Act 1975 (repayment supplement) in relation to cases in which a repayment falls to be made under this section;
§ (7) This section does not apply to any repayment for a year of assessment—
- (a) for which the husband is chargeable to income tax at a rate or rates higher than the basic rate; or
- (b) for which any earned income of the wife has been assessed otherwise than under Schedule E.
§ (8) For the purposes of this section earned income of a wife has the same meaning as for the purposes of subsection (2) of section 8 of the Taxes Act and relevant earned income of a wife means so much of her earned income as exceeds the relief available in respect of it under that subsection.
§ (9) References in this section to the total net tax deducted in any year under section 204 of the Taxes Act are references to the total income tax deducted during that year by virtue of regulations made under that section less any income tax repaid by virtue of any such regulations.
§ (10) This section applies to any repayment made after the passing of this Act.'.—[Mr. Joel Barnett.]
1260§ Brought up, and read the First time.
§ The Chief Secretary to the Treasury (Mr. Joel Barnett)I beg to move, That the clause be read a Second time.
§ Mr. SpeakerWith this we may take amendment (a), leave out subsection (7).
§ Mr. BarnettHeywood and Royton are very respectable names as well.
This new clause extends the rights of married women to receive their own repayments of pay as you earn tax by statutory right. The new clause will give this statutory right to about 6 million earning wives at present within the PAYE system. Frankly, it is incredible that this has not been done before. I am, therefore, delighted to be able to move this new clause.
Perhaps at the outset I should pay a tribute to the Equal Opportunities Commission, the Woman's Own magazine, The Sunday Times, their readerships, my hon. Friend the Member for Thurrock (Dr. McDonald), my PPS, who has done a great deal, and everyone else who has helped to ensure that this new clause gets on to the statute book, perhaps even including myself.
I must make it clear at the outset that I do not pretend that the clause deals with the fundamental problem of aggregation, which has been on the statute book as long as income tax itself. It goes back to 1806. We have had aggregation all the time in our income tax system.
The Equal Opportunities Commission recognises the major difficulties involved in changing the system of aggregation, and it looks forward, as I do, to seeing results from the replies that there are likely to be to the very interesting document which it has issued setting out the various options for dealing with the major and fundamental problem of aggregation. Arising out of the discussions on that document and discussions which we hope to have, I look forward to the widest consultations to see how it might be possible to resolve some of the inherent difficulties which we shall have in seeking to change the system of aggregation in our income tax arrangements.
As I say, the clause does not deal with that fundamental problem. However, deals with at least one major source of complaint, which is the complaint that 1261 married women genuinely have that their income tax repayments frequently have been paid to their husbands—sometimes husbands who have left them at the time that they have received the income tax repayments. There have been examples of money which should have gone to those wives going to their husbands. I am pleased that this clause will go some considerable way to relieving that problem.
The existing pay as you earn regulations already provide for repayment to a wife of pay as you earn over-payment during the course of a tax year. This clause ensures that repayments of PAYE tax will be made after the year end to the wife where previously they were made to the husband.
There is another important change inherent in this clause for what might be called the breadwinner wife—the wife who is working and who obtains the allowances of her husband, who is not working for a variety of different reasons. In such a case, where a repayment was due as a result of the husband's additional allowances being unused, previously the repayment was made to the husband even though the husband was not working and had no income. Clearly the repayment should have gone to the wife, and that, too, will be rectified under this clause.
As I say, the clause does not provide a complete answer. However, at the same time we are taking some administrative action which will deal with some other legitimate complaints which married women at work have had. One, for example, concerns the question of correspondence, which understandably annoys many married women; where income tax districts should be writing to wives in respect of their earned income, they have been writing to their husbands. Instructions have now been issued to income tax officers to ensure that letters go direct to the married women.
Thene there is a tax form—form 33—which has on the back a form of words which married women find extremely insulting, and I do not blame them for feeling aggrieved about it. It is the form which says "If you are married and living with your husband, do not bother completing this form. Hand it to him." Of course, there are some people who would be only too delighted if they were 1262 told to hand a tax form to someone else to complete. But that form of words rightly offends many married women, and we are proposing to remove them.
The other administrative action whereby we seek to help is where there is an option available to married taxpayers to claim separate assessments. This is quite different from separate taxation, where higher rate taxpayers earning more than a certain amount obtain some financial benefit from claiming separate taxation. A couple can claim to have their tax dealt with separately, although the fundamental problem of aggregation remains. At the moment, far too few married women are aware that this option is available to them, and we shall be issuing leaflets towards the end of this year to explain this option very clearly to married women. I hope that that will enable them to have their tax affairs handled to their better satisfaction.
I shall be happy to answer any questions arising out of the new clause or on any matter related to it. But perhaps at this point, since it relates to provisions in the new clause, I might deal with amendment (a) which seeks to leave out subsection (7) of the new clause.
Subsection (7) means that the relief provided here does not apply either to schedule D taxpayers or to higher rate taxpayers. I want to explain why that is, why, if anything, the amendment would make the position worse and why, therefore, I do not recommend the House to accept it.
For schedule D taxpayers, where a husband or wife is assessed under schedule D, by the very nature of things—because of the way that schedule D works—it would be very difficult to write such a provision into the clause as it stands. Under schedule D, invariably there are very late assessments in respect of any one year. It would require complex legislation to separate the allowances between a husband and wife, and it would be extremely unclear without complex legislation whether the allowances should be allocated to the spouse who is assessed under schedule D or schedule E, PAYE.
The amount of the repayment would depend on how those allowances were allocated to the schedule concerned. Therefore it would not only create extreme difficulty and need very complex 1263 legislation, but it could lead to the very reverse of what we seek to do in this clause. It could lead to awkward disputes between spouses about which of them was entitled to the allowances under schedule D or schedule E. Of course, the simplest solution would be for them to claim separate assessment, which I hope to be able to make clearer during the course of the year.
§ Mr. Tony Newton (Braintree)It seems to me that what the Chief Secretary is saying implies that this affects cases where the husbands have schedule D income. Subsection (7) says nothing about cases where husbands have schedule D income. It relates only to cases where the wives have schedule D income. I am not sure whether the right hon. Gentleman's remarks are strictly relevant to subsection (7) as it stands at the moment.
§ Mr. BarnettThe hon. Member is quite right. The clause applies to cases where the wives have professional or business income assessed for tax under schedule D. But the principle of what I am saying is the same. Whoever has schedule D income, frequently the assessments are made very late. It would be very difficult to see where the allocation of allowances should go—whether to the husband, if he is under schedule E, or to the wife assessed under schedule D. It would mean cases arising much later than under the PAYE system, and it would create very great difficulties. I am perfectly happy to look at this to see whether we can deal with it, but it would require much more complex legislation than this already very long new clause. As I say, the simplest solution for the spouses would be to claim separate assessments. In that way, whether the wife was on schedule D or schedule E, they would be able to have the allowances allocated properly.
On the other part of what the hon. Member for Braintree (Mr. Newton) seeks to do in respect of the higher rate, again the problem is that of splitting the higher rate liability between the spouses. In most cases where the couple have a combined income which makes them liable to the higher rate of tax they already claim separate tax assessment, so it would not apply.
1264 4.0 p.m.
However, it would require somewhat complex legislation to deal with a problem which exists in very few cases. Just to leave out subsection 7 would not deal with the problem with which the hon. Member for Braintree (Mr. Newton) seeks to deal.
The new clause is a first but a most important step along the road which I know the hon. Member for Braintree has wanted to tread for a long time—not since 1806, because he has not been around that long. However, I am bound to say that listening to him for the last four-and-a-half years in Finance Bill Committees it sometimes seems that long. I did not intend that to be uncomplimentary in any way and if it sounds like that, I apologise.
§ Mr. NewtonI freely forgive the Chief Secretary because I know what a charming person he is. I can date the time of my interest in this matter—it was when my wife began to have some substantial earnings.
§ Mr. BarnettI note the hon. Member's personal interest in the matter. It is shared by many hon. Members who have not only a personal interest but an interest on behalf of their constituents up and down the country who feel very badly about the situation. I believe that this new clause does put right a very serious wrong that many married women have suffered. They have waited far too long to have it remedied. I look forward to being able to do much more in the years ahead, but meanwhile I commend the clause to the House.
§ Sir Geoffrey Howe (Surrey, East)I am glad to respond to the Chief Secretary by welcoming the new clause with a number of qualifications. I suppose like many other hon. Members I should begin by declaring an interest. I am not only in possession of—that is the wrong word; I should say that in my almost 25year-long association with my wife, she has been working for quite a lot of that time. Recently she has been deputy chairman of the Equal Opportunities Commission, so it would be more than my life is worth not to join the Chief Secretary in paying tribute to the work done by that body in creating a climate to make the introduction of this clause possible.
1265 I should also pay tribute to the work done in Standing Committee by my hon. Friends the Members for Braintree (Mr. Newton) and Maldon (Mr. Wakeham) who have studied this very closely and have forced the subject on the attention of the Government in this year's debates.
The clause had about it a rather cosmetic quality, and the more we have listened to the Chief Secretary presenting it, the more cosmetic it has appeared. It seems to be a less than adequate response to the growing chorus of complaints about the way in which the present income tax system operates as between the sexes. I do not think that the new clause will go a very long way towards endearing the Chief Secretary of the present Government to the women of this country. We already know that a substantial majority of them are faithful supporters of the Conservative Party, and no doubt they will remain so. But the right hon. Gentleman must do his best. At least he has recognised that there is a problem that is causing genuine and increasing resentment, most of which is still unresolved by this proposal.
The new clause deals with the problem of the refund—the wife's right to secure a refund of her own tax. It is a measure of our inadequacy that we have only just begun to deal with this now. However, the clause does not deal with a number of other things. It does not deal with the problem that arises where the husband is liable to tax at a higher rate, and where the wife is assessed otherwise than under schedule E.
Is there not in the very words of subsection (7) an insight into the latent chauvinism in our system? Subsection 7(a) makes an exclusion in respect of a situation where the husband is chargeable for tax at a higher rate but not where the wife is. Subsection 7(b) makes an exclusion where the earned income of the wife is assessed otherwise than under schedule E. It is very difficult to understand why the exclusion is made only where the wife is, for example, on schedule D although the Inland Revenue is prepared and able to cope with the situation where the husband is on schedule D.
The very fact that in a provision designed to emancipate women from the restrictions that the system imposes upon 1266 them we find these two qualifications lurking in terms of "the husband" and "the wife", shows how far we have yet to go.
There are much more substantial provisions that have not been dealt with. Underpayments of tax by the matrimonial pair will still be the responsibility of the husband. Moreover, underpayments of tax for many years back, even after the wife has flown from the nest, will remain the responsibility of the husband. The wife still has to disclose to her husband her possession of an investment income. She will not be able to maintain or accumulate a secret nest egg. The husband will have to declare his wife's investment income.
The married woman who is paying mortgage payments out of her own salary will not be able to get mortgage relief against her salary without her husband's written consent. The Inland Revenue, although it will reply to letters about the wife's income tax position direct to her, has not undertaken to initiate correspondence with her about her tax position. Thus there are many residual discrepancies in this administrative area. We deceive ourselves if we believe that these problems will go away.
The Chief Secretary concedes that this is a modest first step. He says that any further steps that would be urged by people would be more and more complicated. We must ask ourselves whether we intend to go on adding complexities designed to offset the inherent oddity of the system, leaving the basis of it unchanged, or are to ask more fundamental questions.
Of course the Chief Secretary is right in saying that there have been some changes to make the situation less oppressive. The right to separate taxation introduced by my noble Friend Lord Barber in 1971 and the right to separate assessment help in some ways, but the two are less than completely satisfactory. Also they are by no means widely enough publicised or appreciated for them to be enjoyed as they should be.
The fundamental shortcoming still remains. I thought that it went back to 1799 but the Chief Secretary, with his greater access to accurate sources, takes it back only to 1806. But certainly the fundamental shortcoming in the system 1267 has been with us for a very long time—long before the days of a Labour Government and almost certainly in the days of a Liberal Government—
§ Mr. John Pardoe (Cornwall, North)No, Conservative.
§ Sir G. HoweI think that it is one of those sins for which we must all share collective responsibility over a long period.
It is a remarkable proposition, when one thinks about it, that a woman's income chargeable for income tax should be deemed for income tax purposes to be her husband's and not hers. We have become accustomed over the years to the understandable denunciation of the property law before the Married Women's Property Act of 1882. Therefore, it is remarkable that in tax matters this has gone on for so long.
As long as that is the foundation of the tax regime for husband and wife, it should not surprise us that the system that results gives rise to more and more examples of discrimination that is resented, cannot be justified and makes very little sense in the kind of society in which we live. It may have been all right in 1806, 1842 or 1942, but there have since been huge changes in the nature and scale of the involvement of women in our economic life.
In the first place, more and more women are now at work. In 1951 the percentage of married women at work was less than 12 per cent. of the labour force. The figure is now more than double—about 25 per cent. Two out of three married women between the ages of 40 and 54 are at work. Therefore, the labour force has substantially changed its nature.
Moreover, even before the equal pay legislation arrived on the statute book, the earnings of married women rose substantially. At the same time tax thresholds have fallen. Therefore, in the last four or five years, if we take the position of a married woman manual worker in 1972, 31 per cent. of her income was in the taxable band. In 1976 it had doubled, so that 63 per cent of her income was subject to income tax.
That is only the most recent manifestation of a much more fundamental change. If we have in mind the situation in 1938. 1268 I think I am right in saying that the level at which income tax began to be paid in that year was about two-and-a-half times average industrial earnings. It is now set at less than half industrial earnings.
A huge sea change has taken place. Before the war income tax was payable by the husbands of those who inhabited the "The Forsyte Saga", so to speak. It certainly made no impact on the huge mass of women who were at work. Income tax has long since ceased to be payable only by middle-class men. It is payable by men and women of all classes. That which was designed for "The Forsyte Saga" now bites deeply into the pockets and purses of men and women in "Coronation Street"—indeed, even in Heywood and Royton. The system has been transformed.
Women have become taxpayers on a large scale and increasingly question the basis of the system. This is not something that will go away or change. It is an inevitable consequence of social changes in the last 50 years. At the turn of the century, the average life expectation of a woman was just under 50 years, all told. It has now increased by at least 25 years, or even beyond.
At the turn of the century the average married woman could look forward to having, if that is the right word, a very large family and a large number of children. At present, with the birth control revolution, her average family size is less than three, and nearer to two. At the same time her education has been massively increased. The average married woman now arrives in society better qualified, likely to confine her period of motherhood to a fairly small number of years, and bound to return to the labour market by the time she is 40, at the latest, seeking employment.
Therefore, the Chief Secretary and the Inland Revenue are coping with a world inhabited by large numbers of female taxpayers. One can well understand a reluctance to make changes in the system as we have become used to it. The existing PAYE system has many conveniences for dealing with the complex changing pattern of husbands and wives both at work. As long as the married woman has her married woman's earned income allowance separate and distinct from the married allowance of the husband, she can go into employment and come out of 1269 it quite frequently without there being any need for changes in the code of the husband. That is a real convenience. The Inland Revenue is able, understandably and intelligently, to ignore the earnings of married women below earnings of a modest scale which are below the married woman's earned income allowance.
But I do not believe those conveniences will in the end prove to be a sufficient justification for leaving the present system unchanged. All the developments I have referred to suggest that there is a need for a more fundamental change from the present system to take account of the changes in status which have taken place.
4.15 p.m.
There is a somewhat odd feature about this debate. In theory at least, our tax system, in contrast to others, is based on the concept of the family as the taxable unit—on the aggregation of husband and wife as the unit. The alternative basis which has been discussed by the Equal Opportunities Commission is that the system should be based on the individual as the unit. When we examine the practice in other countries, we see that 11 OECD countries base their tax system on the family, whereas 17 countries have moved over to taxation on an individual basis. Therefore, there has been a movement in that direction. That is an understandable response to pressure from women taxpayers to be treated as individuals by the tax system as a whole.
The odd thing is that, although one would think that the movement from a family basis to an individual basis would damage the family and that our own system which is based on the family is beneficient in its impact on the family, that may well not be the case. A feature of our system which a number of people now notice and complain about is that with two earners in the family, the wife and the husband, both at work, their combined tax allowances are about £2,500, whereas with one earner in the family, taking the husband as the typical case, there is a tax allowance of only £1,500 available. Therefore, the married woman who stays at home and looks after the family, and preserves the family in the traditional sense, does not receive any notional tax advantage from her presence at home. In other words, the balance of 1270 the system favours in fiscal terms the married woman who goes out to work.
A number of people believe that it is wrong that there is insufficient recognition for the work done by the married woman who remains at home as the home-minder, guardian of the family, and so on. Although our system is family-based, we fiscally encourage the wife to go out to work. I am not expressing a value judgment whether a mother should go out to work. It seems to me sensible and acceptable that there should be a freedom of choice. But it is open to question whether we should have a fiscal system which is not neutral in relation to that choice but which encourages the mother and the wife to go to work and which does not give comparable recognition to the part played by the mother and the wife who stays at home. That is one of the other fundamental questions we have to face.
The introduction of child benefits—a "son or nephew" of our tax credit system—helps because child benefits are payable to the wife in relation to the number of children in her family and can be made—this applies in the French system—to some extent to recognise the importance of home care for the family. But the question still remains whether we should be doing more to provide greater recognition for the discharge of home responsibilities by the wife who stays at home.
The Equal Opportunities Commission suggests for consideration a cash payment or tax allowance in respect of that. I am not persuaded that either is necessary or necessarily right, but certainly they are among the options that we should all study. We in the Conservative Party are studying them in the hope of bringing forward conclusions shortly.
I am sure that the objective should be neutrality between the working wife and the non -working wife. It begins to look as though the best way of meeting this as a matter of fiscal policy would be to provide for each individual—husband or wife, or man or woman—a basic personal allowance of the same size regardless of sex or married status but claimable either against his own or her own personal income or against that of the spouse. Therefore, one would be able to aggregate two personal allowances against the combined income of husband and wife. 1271 if both are at work, but against the single income of the husband if he is the only wage earner at that moment. This would involve some alteration in the structure of the allowances and is not a change that could be made overnight, but it would at least achieve a situation in which husband and wife, man or woman, were being treated as individuals in their own right and in which the role of the spouse who stayed at home would be given equal value with the role of the spouse who went to work, so that the tax system would be neutral.
As with any other change, this would involve some alteration in relativities. The two-income family would not be relatively as well-off as the one-income family. But one cannot make the one-income family relatively better off without making the two-income family relatively less well off. These are questions to which those who argue for a fundamental change must address themselves. My hon. Friend the Member for Braintree drew attention to this fact in Committee upstairs.
I hope that it is of some value for me to indicate how far we have to go if we are to make the sort of changes that will become inevitable and are desirable. I do not mean to be too churlish in the limited enthusiasm of my response to the cosmetic of the Chief Secretary because this system has remained unquestioned for a very long time, but the right hon. Gentleman has a long way to go and he must address himself to the failure to disaggregate investment income of husbands and wives. We cannot indefinitely go on proposing changes in the tax treatment of husbands and wives without recognising the injustice of lumping them together for the purposes of taxing investment income.
I welcome the new clause with many qualifications. I am confident that I can rely on the support of the overwhelming majority of women, who already give their support to the Conservative Party, to enable us at the earliest possible opportunity to carry forward the work on which the Chief Secretary has made such a modest start.
§ Mr. NewtonI have already declared an interest indirectly during an intervention in the Chief Secretary's speech. I have an earning wife, though I stand to 1272 secure no financial gain from the passage of the new clause but simply a freedom from my wife's complaints about the way in which the Inland Revenue deals with her and makes repayments to her. That is a blessing to be desired.
I welcome the new clause as a whole, but I should like to refer particularly to amendment (a). Although the Chief Secretary sought to pre-empt the amendment and any arguments that I might adduce for it, I remain more than a little dissatisfied with the arguments he put forward to defeat the point of the amendment.
I tabled the amendment because, as the Chief Secretary acknowledged, the new clause is limited in the context of the argument as a whole, and with subsection (7) left in it, the clause is very limited even in helping those whom it seems to be helping. It clearly does not apply to any wife who is self-employed. It applies only to PAYE deductions, presumably under schedule E, from employment income. We know from subsection (7) and what has been said that it does not apply to any woman who, whether or not she is entirely self-employed, has even a little bit of self-employment. She may have a substantial income under PAYE, but if she has any schedule D income at all, she will be ruled out from the benefits of the clause.
Similarly, if the husband has an income which takes him into the higher tax rates, the wife does not get the benefit of the new clause, but that use of the husband's income in subsection (7) begs the question. By definition, the husband's income at present includes the wife's. Does the subsection mean that where the wife's income, together with that of her husband, takes the pair of them into the higher tax bracket, the wife will be excluded from the benefits of the clause? If so, it must follow from these three exclusions—the self-employed woman, the partially self-employed woman and the couple whose income gets above the higher rate threshold—that the number of people who will benefit is quite small.
There are very many cases where the husband is on, say, average weekly earnings and the wife has an income which may not be at all substantial but together they will be getting close to the higher tax rates. If the subsection means what I think it means, a substantial number of 1273 women will be excluded from the benefits of the new clause.
I shall be interested to hear from the Chief Secretary whether he has made an estimate of how many women might benefit from the new clause as it stands and how many might benefit if the amendment were incorporated in the new clause. I appreciate that it may be impossible to make those estimates, but I suggest that the clause is much more limited than it appears and that it will not benefit anything like as many women as the Chief Secretary implied.
I turn to the broader background of the new clause and the wider remarks of the Chief Secretary and my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe). I am grateful for what my right hon. and learned Friend said about what was done in Committee, and in view of the ground covered there and the opportunity that I had to speak on this subject at that time, it would be wrong for me to take a great deal of the time of the House on the broader issues.
We are all agreed that neither the new clause nor anything the Government have done in the past few weeks touches the fundamental problem of aggregation and the fact that legally the wife's income is that of her husband. I merely restate my view that the acceptability of that position to the majority of women in this country is rapidly disappearing. For understandable reasons, the Chief Secretary has been able to dodge dealing with the big questions this year. I am not seeking to be offensive to the Chief Secretary, any more than he was seeking to be offensive to me.
§ The Financial Secretary to the Treasury (Mr. Robert Sheldon)But the hon. Gentleman is being more successful.
§ Mr. NewtonI understand why the Chief Secretary has preferred not to tackle the really large questions this year, but as a House we shall not be able to continue avoiding them for very much longer.
I welcome what my right hon. and learned Friend the Member for Surrey, East said, because I also believe that the almost inevitable way forward is that we should move to a situation in which each adult is entitled to a personal allowance of his or her own and that for 1274 married couples the allowances should be transferrable not simply from the wife to the husband but when the wife is the breadwinner—and not much attention has been paid to such cases so far—transferrable from the husband to the wife. One of the injustices in the present system is that a wife can get the advantage of the husband's allowances but a husband cannot get the advantage of the allowances his wife could acquire if she were at work. That is another problem that we have to consider.
§ Mr. Ian Wrigglesworth (Thornaby)While logic and equity are on the hon. Gentleman's side, does he not agree that getting to the position that he has described will need a lot more debate and that we shall have to convince people and change attitudes throughout the country? There will be great antagonism from some people, wrongly in my view, to the position that he wants to see brought about.
§ Mr. NewtonThat may be true, but that antagonism is already declining steadily and the antagonism to the existing system and the inevitable humiliation it can involve for a wife in some circumstances—regardless of what the Chief Secretary is proposing—is growing very fast indeed.
As we know from the work of the Equal Opportunities Commission, some marriages have come close to breaking up because the tax system has revealed to one spouse the unknown income of the other. Wives who have struggled to save a little on their own have found the money forcibly disclosed to the husband by the Inland Revenue with significant and sometimes almost disastrous consequences. There is no way of dealing with that sort of problem in modem marriage without tackling the fundamental problem of treating the wife's income as part of the husband's income.
This will raise difficult questions about the reduction in the tax burden that could follow for many high income married couples. It will raise acutely difficult questions, and I suspect that it will be somewhat more difficult for Labour Members than Conservative Members when we come to decide how investment income is to be treated. A number of those who are demanding equal treatment for women run a mile as soon as it is suggested that wives should be allowed 1275 their own separate exemption from the investment income surcharge and, in effect, should be allowed to enjoy the benefits of their own savings. That is another difficult question and I might find it easier to answer it than some Labour Members.
4.30 p.m.
At least I am clear about the direction in which we should be moving. For that reason I greatly welcome the comments of my right hon. and learned Friend the Member for Surrey, East.
I ask the Chief Secretary to say a few words about three subjects which are of special interest and importance to some groups but which are not touched on by the clause. I ask the right hon. Gentleman whether he has any ideas about how he might be able to tackle them, or how he might be able to make improvements.
First, there is the nagging problem of tax relief on mortgage interest where the wife—the issue usually arises in this form—ex-wife or separated wife is paying mortgage interest but for many months finds it almost impossible to get the tax relief transferred from her husband to herself. It is a problem that has been drawn to our attention by a number of outside organisations. They have given case histories where wives have been put in acutely difficult circumstances because they have been repaying the mortgage and have found it almost impossible over a long period to get the Inland Revenue to allow them tax relief.
There is a similar problem, I understand, in a mother obtaining the payment of child tax allowances when she has care and custody of the children, the marriage having broken down. It is often found that the payments are not made to her for some time after the breakdown of the marriage. Again, the problem has been drawn to our attention by outside bodies. It may be that the difficulty will disappear with the impending disappearance of child tax allowances, but meanwhile it appears to be a real problem. I am sure that there axe many who would welcome a word about it from the Chief Secretary today.
Thirdly, there is an issue that is much canvassed by bodies such as the National Council for One Parent Families and the Child Poverty Action Group. I refer to the variation in tax treatment between 1276 different forms of maintenance payments and the difficulties that that can sometimes cause for those who fail to get their arrangements tied up in the best possible legal way. Often difficulties arise because they do not have good advice.
That is a subject of some complexity and I hesitate to take up the time of the House with a long elaboration. However, it appears to be of some importance and, perhaps, of growing importance. In the context of our debate it would be helpful if the Chief Secretary said a few words about it.
I welcome the clause as a whole. I hope that there will be support for the amendment. I hope that the Chief Secretary will give some indication of the way in which he proposes to move forward.
§ Mr. Douglas Crawford (Perth and East Perthshire)I shall speak briefly in support of what the hon. Member for Braintree (Mr. Newton) has said and in support of amendment (a) to new clause No. 50.
We have come a long way since the days when it was the custom for a man not to tell his wife his earnings. I venture to suggest that we have not gone far enough. By the insertion of subsection (7), the Chief Secretary appears to have been a little grudging. It is a pity that the hon. Member for Thurrock (Dr. McDonald) is not present to comment on that.
The crux of my argument is that in Scotland, and no doubt in many other parts of the country that are not as fortunate as London and the south-east, it is often the wife who is the breadwinner. There are parts of Glasgow which have about 50 per cent. male unemployment and very much less female unemployment. That is relevant to the debate. The Chief Secretary seems to be a reluctant convert from being a male chauvinist. I am reminded of St. Augustine, who said "Save me Lord, but not yet."
I should declare an interest. My wife is self-employed. As the hon. Member for Braintree said, many women are self-employed. It seems wrong that there should be the hedging in the new clause, which states:
a repayment of tax for that year would fall to be made to her husband in consequence of an assessment under Schedule E, so much of the repayment as is attributable to the tax so 1277 deducted shall be made to her and not to him.By the insistence of the Treasury that schedule E be the only criterion. I believe that it is denying itself its own case.I am sure that the Chief Secretary is not a male chauvinist, and I hope that he may be seen not to be one. I look forward to his comments on the amendment. I accept that it may be difficult to estimate the cost, but I am sure that we shall all be grateful if the right hon. Gentleman is able to give us some broad indication of the cost of deleting subsection (7).
§ Mr. Marcus Kimball (Gainsborough)On the general principle of the new clause, which everybody seems to be endorsing with much enthusiasm, I express my personal view with a certain lack of enthusiasm for the way in which the clause is going.
The Chief Secretary has made it clear that the clause applies only to earned income. It does not apply to unearned income. I do not believe that there is a horde of hard-working, big-earning women demanding the change that is proposed. In my experience, most women when faced with an income tax demand, or any form of taxing, shove the demand across the table to their husband, or at best pass it to their accountant. I do not believe that there is great demand for this step. I should like to think that it will be activated only by tax-conscious women who take the trouble to write to the Inland Revenue to ask that they be treated in the way that is proposed.
I am relieved that at this stage the clause is not being extended to include unearned income. If a woman is in receipt of a marriage settlement, it seems wrong that she should get the tax repayments that are due to the husband who has probably made the marriage settlement on her. I am glad to see that the Chief Secretary is sympathetic.
I hope that we shall not rush headlong down the slope that is before us. I do not think that there is a great undertone of demand for the step that is proposed. I regard the manoeuvre with some suspicion.
§ Mr. John Wakeham (Maldon)I am sure that the debate would not have 1278 been complete if my hon. Friend the Member for Gainsborough (Mr. Kimball) or another hon. Member had not voiced reservations about any changes that we might make in the tax system.
Those of us who are welcoming the changes that the Chief Secretary is proposing and who would like him to go much further would be right to recognise that the overwhelming majority of taxpayers want not a complicated tax system to achieve equity between husband and wife but a simple and clear system by which they as a family may discharge their joint responsibilities to the taxman in the easiest and most practical way possible. I am certain that to achieve that is to achieve for the majority of taxpayers what they really want.
Nevertheless, we have to recognise that for a substantial number of taxpayers the present system is grossly unfair and unjustifiable. It is right, and long overdue, that Parliament should address itself to the problem. We should pay a warm tribute to the right hon. Gentleman for having the privilege of bringing forward the new clause, even if we may question exactly what his motives were in doing so this year. I am certain that they included the highest of motives, but underneath those it may be that one or two other considerations crossed his mind.
When the right hon. Gentleman paid tribute to all those who have pressed him to take action and have pushed him forward, I noticed that he mentioned my hon. Friend the Member for Braintree (Mr. Newton) and myself, who originally raised the matter in Standing Committee. From the silence on the Government Benches on that occasion, there was no indication that they had any plans to bring a clause forward. We chided them for not having taken action on the Equal Opportunities Commission's report, which had been available for some time.
I welcome what is being done, and I do not want to rehearse again the points made by my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) and my hon. Friend the Member for Braintree. However, it is worth stating once again in a few sentences what I see to be the fundamental problem that must be faced. It is a problem which many who are anxious to make progress in this area still will not take on board. 1279 I refer to the remaining problems of tax legislation.
By and large, the family with the married woman who stays at home is badly treated under our present system. We have a system of personal allowances at approximately two and a half times the single allowance for the family where there are two breadwinners compared with one and half times where only the husband is earning.
There is obviously the question of investment income. I do not see how we can continue much longer to treat all investment income as being aggregated between husband and wife. I recognise that under any fair tax system it will be necessary to continue aggregation for large investment income, but we should be moving towards disaggregation for the lower levels. If we ventilate and discuss the problem sufficiently, we should get the answer in the end.
We should recognise the difficult tax position of families which have only one breadwinner. Many families have gone from a position of two people earning to a position where they have additional expenses with young children and only one breadwinner. In many instances they are some of the hardest pressed members of society. However, they are suddenly presented with a relatively higher tax bill on their income.
In the end, I see no great problem of dealing with support for such families or for the concept that women should as far as possible be treated in the same way as men in our tax system. Each adult should he entitled to a personal tax allowance. That should be the basis of our tax system. However, I recognise that for the higher incomes aggregation will continue to be a feature of our tax system for many years to come.
§ Mr. John Cronin (Loughborough)I think that we have had a remarkably interesting debate on this subject. I think that all right hon. and hon. Members feel that much more should be done to help women—particularly married women.
I was somewhat astonished by the remarks of the right hon. and learned Member for Surrey, East (Sir G. Howe), because he said that the overwhelming majority of women support the Conservative Party. If he believes that, he can believe anything. It is so remote from 1280 the facts of life that it throws discredit on what I think was to a great extent a helpful speech.
I congratulate my right hon. Friend the Chief Secretary to the Treasury on bringing forward the new clause. I have put some pressure on him in the past few years to induce the Treasury to take a more up-to-date view about the position of women in modern society. I am glad that this may have borne some fruit and not fallen on stony ground. The Chief Secretary is an amiable person of very wide views. He is happily married and understands these problems very well. I think that we are fortunate that he should have applied his mind to this matter.
New clause no. 50 is admirable in every way, but I suggest that much more can be done for women than is in the new clause. I appreciate that when dealing with the Treasury, even the most enlightened of people, such as my right hon. Friend, have to cope with a great deal of uphill work. There are built-in prejudices and ideas which have gone on for hundreds of years. For my right hon. Friend to achieve reforms in the Treasury is rather like somebody wearing gumboots wading through a sea of treacle: it is hard work. Nevertheless, something has been achieved, although there is much more to do.
4.45 p.m.
The Treasury must accept two important and basic facts. One is that we have reached the stage in modern philosophy where women are entitled to be treated exactly the same as men for all practical purposes. Of course, they cannot he treated exactly the same as men because of their essential biological differences. My professional education has made me think in wider terms than mere figures and Treasury statistics.
The basic problem is that reproduction, as far as the male is concerned, can take place in a very brief period. But for a woman reproduction involves about nine months plus several years of bringing up the children. The Chief Secretary is looking puzzled. I should have thought that was a truism. It is important that women, who have to go through the reproductive and bringing-up stage, should not be penalised by anyone, least of all by the Treasury. Women who are unable to go out to work, because they have to bring up children in the early stages of their 1281 married life, should not be penalised by taxation. They are penalised, because one earner gets tax allowances of about £1,500 whereas two earners get tax allowances of £2,500. I suggest that is a clear-cut discrimination against women when they are going through an important phase in the interests of the whole of civilisation as we know it. I suggest to my right hon. Friend that, although reforms have been made in the Treasury, there is room for much more.
A strong case was made by the right hon. and learned Member for Surrey, East in favour of there being a difference in the treatment of investment income of husband and wife. There is no logical reason why they should be treated absolutely separately. Nevertheless, the Treasury is to a substantial extent treating them together. I suggest, that although the reforms introduced by my right hon. Friend are excellent and point the way for the future, much more progress can be made. The time has come when the idea that men and women should be treated differently on taxation matters is an absolute nonsense. I think that it should be stopped. Therefore, I suggest that, despite the excellent work done by my right hon. Friend, much more needs to be done. I am sure that right hon. and hon. Members on both sides of the House will applaud him if he achieves it.
§ Mr. Joel BarnettFirst, I thank my hon. Friend the Member for Loughborough (Mr. Cronin) and all right hon. and hon. Members who have spoken in the debate for their kind, though sometimes churlish, welcome to the new clause. I could not quite understand why the right hon. and learned Member for Surrey, East (Sir G. Howe) should have been churlish. I have not totted up the figures, but I think that there have been more Conservative Governments than Labour Governments since 1806 and they failed to deal with the problem. Therefore, he need not have been quite so churlish.
I recognised at the outset of my remarks, as did the right hon. and learned Gentleman, that this fundamental problem was the cause of many of the difficulties with which the hon. Member for Braintree (Mr. Newton) asked me to deal. Although the new clause was welcomed 1282 by the hon. Member for Braintree, I noted that the right hon. and learned Member for Surrey, East was careful—I do not blame him for being so careful—to talk about one of the variety of options which the Equal Opportunities Commission had suggested for dealing with the fundamental problem of aggregation being a home responsibility allowance in cash or changing the tax allowance.
The right hon. and learned Member for Surrey, East was correct to say that the major problems involved in making this fundamental change are the net gainers and the net losers that inevitably there would be in the change that he described and to which the Equal Opportunities Commission referred in its booklet. I appreciate the right hon. and learned Member's deep understanding of these matters.
I know that the hon. Member for Braintree will claim to be innocent of being a chauvinist in this context. But the right hon. and learned Member for Surrey, East made a somewhat chauvinistic slip when he began to talk about his possession—namely, the deputy chairman of the Equal Opportunities Commission who is his wife. The right hon. and learned Gentleman quickly changed what he was about to say. I am sure that whatever he might have said he did not intend to say it. I absolve him from what he nearly said. I know the difficulties that he might otherwise encounter with the deputy chairman of the Equal Opportunities Commission.
I do not know why he attacked the clause for what it seeks to do. He said that the clause had a cosmetic quality and that it was a less than adequate response. He said that it would not endear me to women. But that is my major objective at all times, at least to one particular woman—my wife. My wife is always at the head of the list of women to whom I wish to endear myself. By saying that this is not an adequate response, the right hon. and learned Gentleman shows that he does not understand what I said earlier.
The new clause does not deal with the fundamental problem of aggregation. The right hon. and learned Gentleman's remarks about the days of "The Forsyte Saga", when working married women 1283 did not pay income tax, were remarkable. Of course they did not pay income tax. They did not have much income either. We are now in a different situation. I hope that the right hon. and learned Gentleman was not suggesting that we should go back to the position when married working women—and married working men—did not pay income tax. I am sure that the majority prefer the existing system.
I do not wish to be as controversial as the right hon. and learned Gentleman. I recognise that there is a problem relating to aggregation. I await the results of the consultations that will arise out of the Equal Opportunities Commission document and the wider consultations that we hope to have so that we can move forward as quickly as possible.
I turn to the case made by the hon. Member for Braintree. I am sorry that he and his hon. Friend the Member for Maldon (Mr. Wakeham) are upset because I did not pay tribute to their efforts. I included them among the etceteras. I assumed that they understood that I intended to include all those who put pressure on me to take this action.
The hon. Member for Braintree asked some specific questions. The mortgage interest problem stems largely from the fundamental problem of aggregation. He must know that because of aggregation the husband is liable to pay the wife's tax as well as receive her repayment.
The hon. Member tabled an amendment to clause 19 in Committee dealing with maintenance payments. The amendment was not selected. He referred to that matter in passing and the Minister of State said that we would examine the problem. We shall see whether there is any way of moving forward on this matter.
The hon. Member for Braintree also asked about child tax allowances. Problems arise if there is a dispute, when a marriage breaks up, about who is responsible for the children of the marriage. Whenever possible, we seek to ensure that there is a split of the child tax allowances. But in the future that will not be so much of a problem as we move away from child tax allowances.
My hon. Friend the Member for Loughborough said that he did not wish to penalise women. I am sure that I do 1284 not have to tell him that the last thing in the world that I would wish to do is to penalise women, or anyone else, whether married or single. The move that we have made on child benefits is a greater help to the family than child tax allowances. It is widely recognised as a move towards helping in particular those families in which the wife does not go out to work because she chooses to bring up the children herself. Child benefit is an enormous help in that direction.
Amendment (a) would delete subsection (7). I have pointed out the problems that are created by that proposal. If the amendment were carried, the problems would be considerable. The hon. Member for Perth and East Perthshire (Mr. Crawford) asked about the cost of accepting that amendment. It is not intended to cost anything, but it is not workable. We have examined the proposition carefully to see whether it could be made workable. There is a problem in ascertaining the amount of the wife's schedule D income. In cases where the sum is small and the woman is working under PAYE it is taken into account in the code for the year in question. But there are problems involved in delayed assessments. It is difficult for the Inland Revenue to know when the schedule D tax is paid. The husband might have already paid it in his assessment for his wife.
If subsection (7) were removed, hon. Members would not achieve their objective. They would create considerable problems and argument between spouses about where the allowances should fall. The amendment could in practice make the position worse.
I turn to the question of the higher rate tax liability. The hon. Member for Braintree said that more couples would be brought into higher rate tax. I am sure that he recognises that the couple's joint income, even when only the personal allowances are involved, would have to be in excess of £10,000.
The hon. Member for Braintree said that a large number of couples would be caught by subsection (7) as it stands. But that is not so. In practice all the 6 million working wives under PAYE will be able to obtain this benefit. If we remove that subsection the objective will not be achieved and the position will be made extremely difficult. However, if 1285 between now and next year we can move in the appropriate direction in order to help, I shall be happy to examine the matter again.
§ 5.0 p.m.
§ Sir G. HoweIt is an unusual, not to say exhilarating experience to have absolution pronounced upon me by the Chief Secretary. Among the many roles that he has occupied, to find him in this quasi-episcopal role is unnerving. He was more true to type when he was misunderstanding my reference to "The Forsyte Saga", because I am sure that neither he nor I would wish to go back to the lower real living standards of "The Forsyte Saga" times. My point is that because of rising living standards and the rising capacity of the State to tax the citizen, a great number of women have moved into the tax net, and we need to make changes of the kind we discussed to deal with that.
One matter that we should in some way place on the record is that in this debate, the first of the afternoon devoted to the taxation of women, and married women in particular, not surprisingly, no member of the Liberal Party has spoken, although its economics spokesman, the hon. Member for Cornwall, North (Mr. Pardoe), was here showing an alert interest in these proceedings. It is, however, surprising that throughout the proceedings not one woman has spoken or even been present to listen to the proceedings of this gallant male gathering which is seeking to do what it can to advance the condition of women in the face of the tax system. Perhaps most surprising of all is that the Scottish National Party, of which no less than 18 per cent. of its parliamentary membership is accounted for by women, has not taken part in the debate.
§ Mr. Joel BarnettWill the right hon. and learned Gentleman permit me to put on the record that my hon. Friend the Member for Thurrock (Dr. McDonald), who is my Parliamentary Private Secretary, is in a Select Committee and has apologised to me for not being able to be present?
§ Sir G. HoweThe Chief Secretary's Parliamentary Private Secretary has been in a special position throughout these proceedings because in the Standing Com- 1286 mittee upstairs she was provoked, goaded and taunted into expressing a view on these matters. As I understand from what I have read, she was making vigorous facial expressions throughout the proceedings without actually uttering a word, and it is interesting to reflect on what must have been going on.
It is still odd that in these proceedings today, on a day when the Government have made a move of this kind, not one woman has spoken or attended to our proceedings.
§ Mr. CroninI understand the right hon. and learned Gentleman's point, but is it not a long-established tradition that those who have some financial advantage in a debate do not participate in it?
§ Sir G. HoweThe hon. Member for Loughborough (Mr. Cronin) is always a stickler for parliamentary etiquette and protocol, but he raises his standard even higher than we previously believed possible. We all have an interest of a kind in these proceedings, but on this particular matter all that the Chief Secretary is proposing is that the money to which women are entitled from the Revenue should go back to them directly rather than through their husbands.
We do not feel that the Chief Secretary has answered satisfactorily the point raised by my hon. Friend the Member for Braintree (Mr. Newton) in his amendment. The right hon. Gentleman said that it would not be workable to make the changes that would follow deletion of subsection (7). That is, no doubt, what previous Chief Secretaries were being told only weeks ago about the fundamental purpose of the clause. It is remarkable how unworkability can finally be overcome.
The surprising aspect of that proposition is that it is workable to make special provision for the husband in paragraph (b) and for the wife in paragraph (a). Because we find that an unconvincing position I invite my hon. Friends to vote in support of my hon. Friend's amendment, if only pour encourager the Chief Secretary or his successors in office, who will shortly be succeeding him, to carry on the good work at which the amendment makes a start.
§ Question put and agreed to.
1287§ Clause read a Second time.
§ Amendment (a) proposed to the proposed clause, in line 39, leave out subsection (7)—[Mr. Newton.]
| Division No. 254] | AYES | 5.06 p.m. |
| Adley, Robert | Grant, Anthony (Harrow C) | Morgan, Geraint |
| Aitken, Jonathan | Gray, Hamish | Morgan-Giles, Rear Admiral |
| Alison, Michael | Grieve, Percy | Morris, Michael (Northampton S) |
| Arnold, Tom | Hall-Davis. A. G. F. | Morrison, Charles (Devizes) |
| Atkins, Rt Hon H. (Spelthorne) | Hamilton, Archibald (Epsom & Ewell) | Morrison, Hon Peter (Chester) |
| Atkinson, David (B'mouth, East) | Hamilton, Michael (Salisbury) | Neave, Airey |
| Bain, Mrs Margaret | Hampson, Dr Keith | Nelson, Anthony |
| Baker, Kenneth | Hannam, John | Neubert, Michael |
| Banks, Robert | Harrison, Col Sir Harwood (Eye) | Newton, Tony |
| Bell, Ronald | Harvie Anderson, Rt Hon Miss | Normanton, Tom |
| Bendall, Vivian | Haselhurst, Alan | Nolt, John |
| Bennett, Sir Frederic (Torbay) | Hastings, Stephen | Onslow, Cranley |
| Bennett, Dr Reginald (Fareham) | Havers, Rt Hon Sir Michael | Oppenheim, Mrs Saliy |
| Benyon, W. | Hawkins, Paul | Osborn, John |
| Biggs-Davison, John | Hayhoe, Barney | Page, John (Harrow West) |
| Blaker, Peter | Hicks, Robert | Page, Rt Hon R. Graham (Crosby) |
| Body, Richard | Hodgson, Robin | Page, Richard (Workington) |
| Boscawen, Hon Robert | Holland, Philip | Parkinson, Cecil |
| Bottomley, Peter | Hordern, Peter | Pattie, Geoffrey |
| Bowden, A. (Brighton, Kemptown) | Howe, Rt Hon Sir Geoffrey | Percival, Ian |
| Boyson, Dr Rhodes (Brent) | Howell, David (Guildford) | Peyton, Rt Hon John |
| Braine, Sir Bernard | Howell, Ralph (North Norfolk) | Pink, R. Bonner |
| Brittan, Leon | Hunt, David (Wirral) | Prentice, Rt Hon Reg |
| Brocklebank-Fowler, C. | Hunt, John (Ravensbourne) | Price, David (Eastleigh) |
| Brooke, Hon Peter | Hurd, Douglas | Prior, Rt Hon James |
| Brotherton, Michael | Hutchison, Michael Clark | Pym, Rt Hon Francis |
| Brown, Sir Edward (Bath) | Irving, Charles (Cheltenham) | Rathbone, Tim |
| Bryan, Sir Paul | James, David | Sees, Peter (Dover & Deal) |
| Buchanan-Smith, Alick | Jenkin, Rt Hon P. (Wanst'd&W'df'd) | Rees-Davies, W. R. |
| Buck, Antony | Jessel, Toby | Reid, George |
| Budgen, Nick | Johnson Smith, G. (E Grinstead) | Renton, Rt Hon Sir D. (Hunts) |
| Bulmer, Esmond | Jopling, Michael | Renton, Tim (Mid-Sussex) |
| Butler, Adam (Bosworth) | Joseph, Rt Hon Sir Keith | Rhodes James, R. |
| Carlisle, Mark | Kaberry, Sir Donald | Rhys Williams, Sir Brandon |
| Chalker, Mrs Lynda | Kellett-Bowman, Mrs Elaine | Ridley, Hon Nicholas |
| Channon, Paul | Kershaw, Anthony | Ridsdale, Julian |
| Churchill, W. S. | Kimball, Marcus | Rifkind, Malcolm |
| Clark, Alan (Plymouth, Sutton) | King, Evelyn (South Dorset) | Roberts, Wyn (Conway) |
| Clark, William (Croydon S) | Kitson, Sir Timothy | Rossi, Hugh (Hornsey) |
| Clarke, Kenneth (Rushcliffe) | Knight. Mrs Jill | Rost, Peter (SE Derbyshire) |
| Cooke, Robert (Bristol W) | Knox, David | Royle, Sir Anthony |
| Cope, John | Lamont, Norman | Sainsbury, Tim |
| Cormack, Patrick | Langford-Holt, Sir John | Scott, Nicholas |
| Corrie, John | Latham, Michael (Melton) | Scott-Hopkins, James |
| Costain, A. P. | Lawrence, Ivan | Shaw, Giles (Pudsey) |
| Crawford, Douglas | Lawson, Nigel | Shaw, Michael (Scarborough) |
| Dean, Paul (N Somerset) | Le Marchant, Spencer | Shelton, William (Streatham) |
| Dodsworth Geoffrey | Lester, Jim (Beeston) | Shepherd, Colin |
| Drayson, Burnaby | Lewis, Kenneth (Rutland) | Shersby, Michael |
| du Cann, Rt Hon Edward | Lloyd, Ian | Silvester, Fred |
| Durant, Tony | Loveridge, John | Sims, Roger |
| Dykes, Hugh | Luce, Richard | Sinclair, Sir George |
| Edwards, Nicholas (Pembroke) | MacCormick, Iain | Skeet, T. H. H. |
| Evans, Gwynfor (Carmarthen) | McCrindle, Robert | Smith, Dudley (Warwick) |
| Ewing, Mrs Winifred (Moray) | Macfarlane, Neil | Smith, Timothy John (Ashfield) |
| Eyre, Reginald | MacGregor, John | Speed, Keith |
| Fairbairn, Nicholas | Ma-Kay, Andrew (Stechford) | Spence, John |
| Fairgrieve, Russell | Macmillan, Rt Hon M. (Farnnam) | Spicer, Jim (W Dorset) |
| Farr, John | McNair-Wilson, M. (Newbury) | Spicer, Michael (S Worcester) |
| Fell, Anthony | McNair-Wilson, P. (New Forest) | Sproat, Iain |
| Finsberg, Geoffrey | Madel, David | Stalnton, Keith |
| Fisher, Sir Nigel | Marshall, Michael (Arundel) | Stanbrook, Ivor |
| Fletcher, Alex (Edinburgh N) | Marten, Neil | Stanley, John |
| Ftetcher-Cooke, Charles | Mates, Michael | Steen, Anthony (Wavertree) |
| Forman, Nigel | Mather, Carol | Stewart, Rt Hon Donald |
| Fox, Marcus | Maude, Angus | Stewart, Ian (Hitchin) |
| Fraser, Rt Hon H. (Stafford & St) | Maxwell-Hyslop, Robin | Stokes, John |
| Galbraith, Hon T. G. D. | Meyer, Sir Anthony | Stradling Thomas, J. |
| Gardiner, George (Reigate) | Miller, Hal (Bromsgrove) | Tapsell, Peter |
| Gardiner, Edward (S Fylde) | Mills, Peter | Taylor, R. (Croydon NW) |
| Gilmour, Sir John (East Fife) | Miscampbell, Norman | Taylor, Teddy (Cathcart) |
| Glyn, Dr Alan | Mitchell, David (Basingstoke) | Tebbit, Norman |
| Goodhart, Philip | Moate, Roger | Temple-Morris, Peter |
| Goodlad, Alastair | Monro, Hector | Thatcher, Rt Hon Margaret |
| Gorst, John | Montgomery, Fergus | Thomas, Rt Hon P. (Hendon S) |
| Gow, Ian (Eastbourne) | Moore, John (Croydon C) | Thompson, George |
§ Question put: That the amendment be made to the proposed clause:—
§ The House divided: Ayes 248, Noes 259.
| Townsend, Cyril D. | Walters, Dennis | Wilson, Gordon (Dundee E) |
| van Straubenzee, W. R. | Warren, Kenneth | Winterton, Nicholas |
| Vaughan, Dr Gerard | Watt, Hamish | Young, Sir G. (Ealing, Acton) |
| Viggera, Peter | Weatherill Bernard | Younger, Hon George |
| Wakeham, John | Wells, John | |
| Walder, David (Clitheroe) | Whitelaw, Rt Hon William | TELLERS FOR THE AYES: |
| Walker, Rt Hon P. (Worcester) | Wiggin, Jerry | Mr. Anthony Berry and |
| Walker-Smith, Rt Hon Sir Derek | Wigley, Dafydd | Lord James Douglas-Hamilton. |
| NOES | ||
| Abse, Leo | Evans, Ioan (Aberdare) | MacKenzie, Rt Hon Gregor |
| Allaun, Frank | Evans, John (Newton) | McNamara, Kevin |
| Anderson, Donald | Ewing, Harry (Stirling) | Madden, Max |
| Archer, Rt Hon Peter | Faulds, Andrew | Magee, Bryan |
| Armstrong, Ernest | Fernyhough, Rt Hon E. | Mallalieu, J. P. W. |
| Ashley, Jack | Fitch, Alan (Wigan) | Marks, Kenneth |
| Ashton, Joe | Fiannery, Martin | Marshall, Dr. Edmund (Goole) |
| Atkins, Ronald (Preston N) | Fletcher, Tea (Darlington) | Marshall, Jim (Leicester S) |
| Atkinson, Norman (H'gey Tott'ham) | Foot, Rt Hon Michael | Mason, Rt Hon Roy |
| Bagier, Gordon A. T. | Fraser, John (Lambeth, N'w'd) | Maynard, Miss Joan |
| Barnett, Guy (Greenwich) | Freeson, Rt Hon Reginald | Meacher, Michael |
| Barnett, Rt Hon Joel (Heywood) | Garrett, John (Norwich S) | Mellish, Rt Hon Robert |
| Bates, Alt | Garrett, W. E. (Wallsend) | Mikardo, Ian |
| Benn, Rt Hon Anthony Wedgwood | George, Bruce | Millan, Rt Hon Bruce |
| Bennett, Andrew (Stockport N) | Gilbert, Rt Ron Dr John | Miller, Dr M. S. (E Kilbride) |
| Bidwell, Sydney | Ginsburg, David | Mitchell, Austin (Grimsby) |
| Bishop, Rt Hon Edward | Golding, John | Mitchell, R. C. (Soton, Itchen) |
| Blenkinsop, Arthur | Gould, Bryan | Molloy, William |
| Booth, Rt Hon Albert | Gourlay, Harry | Moonman, Eric |
| Boothroyd, Miss Betty | Graham, Ted | Morris, Alfred (Wythenshawe) |
| Bottomley, Rt Hon Arthur | Grant, John (Islington C) | Morris, Rt Hon J. (Aberavon) |
| Boyden, James (Bish Auck) | Grimond, Rt Hon J. | Moyle, Rt Hon Roland |
| Bradley, Tom | Grocott, Bruce | Murray, Rt Hon Ronald King |
| Bray, Dr Jeremy | Hamilton, W. W. (Central Fife) | Newens, Stanley |
| Brown, Hugh D. (Provan) | Hardy, Peter | Noble, Mike |
| Brown, Robert C. (Newcastle W) | Harrison, Rt Hon Walter | Oakes, Gordon |
| Brown, Ronald (Hackney S) | Hart, Rt Hon Judith | Ogden, Eric |
| Buchan, Norman | Hattersley, Rt Hon Roy | Orbach, Maurice |
| Buchanan, Richard | Hayman, Mrs Helene | Orme, Rt Hon Stanley |
| Callaghan, Jim (Mlddleton & P) | Healey, Rt Hon Denis | Ovenden, John |
| Campbell, Ian | Heffer, Eric S. | Owen, Rt Hon Dr David |
| Canavan, Dennis | Hooley, Frank | Palmer, Arthur |
| Carmichael, Neil | Horam, John | Pardoe, John |
| Carter, Ray | Howell, Rt Hon Denis (B'ham, Sm H) | Park, George |
| Carter-Jones, Lewis | Howells, Geraint (Cardigan) | Pavitt, Laurie |
| Cartwright, John | Hoyle, Doug (Nelson) | Pendry, Tom |
| Clemitson, Ivor | Huckfleld, Les | Perry, Ernest |
| Cocks, Rt Hon Michael (Bristol S) | Hughes, Mark (Durham) | Phipps, Dr Colin |
| Cohen, Stanley | Hushes. Robert (Aberdeen N) | Powell, Rt Hon J. Enoch |
| Coleman, Donald | Hughes, Roy (Newport) | Prescott, John |
| Concannon, Rt Hon John | Hunter, Adam | Price, C. (Lewisham W) |
| Cook, Robin F. (Edin C) | Irvine, Rt Hon Sir A. (Edge Hill) | Price, William (Rugby) |
| Corbett, Robin | Irving, Rt Hon S. (Dartford) | Radice, Giles |
| Cox, Thomas (Tooting) | Jackson, Colin (Brighouse) | Rees, Rt Hon Merlyn (Leeds S) |
| Craigen, Jim (Maryhill) | Jackson, Miss Margaret (Lincoln) | Richardson, Miss Jo |
| Crawshaw, Richard | Janner, Greville | Roberts, Albert (Normanton) |
| Cronin, John | Jay, Rt Hon Douglas | Roberts, Gwilym (Cannock) |
| Crowther, Stan (Rotherham) | Jeger, Mrs Lena | Robertson, George (Hamilton) |
| Cunningham, G. (Islington S) | Jenkins, Hugh (Putney) | Robinson, Geoffrey |
| Cunningham, Dr J. (Whiteh) | John, Brynmor | Roderick, Caerwyn |
| Dalyell, Tam | Johnson, James (Hull West) | Rodgers, George (Chorley) |
| Davidson, Arthur | Johnson, Walter (Derby S) | Rodgers, Rt Hon William (Stockton) |
| Davies, Bryan (Enfield N) | Jones, Alec (Rhondda) | Rooker, J. W. |
| Davies, Rt Hon Denzil | Jones, Dan (Burnley) | Roper, John |
| Davies, Ifor (Gower) | Kaufman, Rt Hon Geraid | Rose, Paul B. |
| Davis, Clinton (Hackney C) | Kelley, Richard | Ross, Stephen (Isle of Wight) |
| Deakins, Eric | Kerr, Russell | Ross, Rt Hon W. (Kilmarnock) |
| Dean, Joseph (Leeds West) | Kilroy-Silk, Robert | Rowlands, Ted |
| de Freitas, Rt Hon Sir Geoffrey | Kinnock, Neil | Ryman, John |
| Dell, Rt Hon Edmund | Lanbie, David | Sandelson, Neville |
| Dempsey, James | Lamond, James | Sedgemore, Brian |
| Dewar, Donald | Latham, Arthur (Paddington) | Sever, John |
| Doig, Peter | Leadbitter, Ted | Shaw, Arnold (llford South) |
| Dormand, J. D. | Lestor, Miss Joan (Eton & Slough) | Sheldon, Rt Hon Robert |
| Douglas-Mann, Bruce | Lever, Rt Hon Harold | Shore, Rt Hon Peter |
| Dunnett, Jack | Lewis, Ron (Carlisle) | Silkin, Rt Hon S. C. (Dulwich) |
| Dunwoody, Mrs Gwyneth | Loyden, Eddie | Silverman, Julius |
| Eadie, Alex | Luard, Evan | Skinner, Dennis |
| Edge, Geoff | Lyons, Edward (Bradford W) | Smith, Rt. Hon. John (N Lanarkshire) |
| Edwards, Robert (Wolv SE) | Mabon, Rt Hon Dr J. Dickson | Snape, Peter |
| Ellis, John (Brigg & Scun) | McCartney, Hugh | Spearing, Nigel |
| Ellis, Tom (Wrexham) | McDonald, Dr Oonagh | Spriggs, Leslie |
| Evans, Fred (Caerphilly) | McGuire, Michael (Ince) | Stewart, Rt Hon M. (Fulham) |
| Stoddart, David | Tomney, Frank | Willey, Rt Hon Frederick |
| Stott, Roger | Torney, Tom | Williams, Rt Hon Shirley (Hertford) |
| Strang, Gavin | Tuck, Raphael | Williams, Sir Thomas (Warrington) |
| Strauss. Rt Hon G. R. | Urwln, T. W. | Wilson, Rt Hon Sir Haroid (Huytor) |
| Summerskill, Hon Dr Shirley | Walker, Harold (Doncaster) | Wilson, William (Coventry SE) |
| Swain, Thomas | Walker, Terry (Kingswood) | Wise, Mrs Audrey |
| Taylor, Mrs Ann (Bolton W) | Watkins, David | Woodall, Alec |
| Thomas, Mike (Newcastle E) | Watkinson, John | Woof, Robert |
| Thomas, Ron (Bristol NW) | Weetch, Ken | Wriggiesworth, Ian |
| Thorne, Stan (Preston South) | Weitzman, David | Young, David (Bolton E) |
| Thorpe, Rt Hon Jeremy (N Devon) | Wellbeloved, James | |
| Tierney, Sydney | White, Frank R. (Bury) | TELLERS FOR THE NOES: |
| Tiley, John | White, James (Pollok) | Mr, James Hamilton and |
| Tinn, James | Whitehead, Phillip | Mr. A. W. Staliard. |
| Tomlinson, John | Whitlock, William |
§ Question accordingly negatived.
§ Clause added to the Bill.