PROPOSALS FOR POWERS TO RAISE MONEYS

HC Deb 17 July 1978 vol 954 cc111-55

Lords Amendments: No. 85, in page 29, line 9, at end insert new Clause "E"— ("E. If the Assembly decides that it wishes to make proposals that power should be conferred on the Assembly to raise by taxation moneys to be paid into the Scottish Consolidated Fund, it may communicate such proposals to the Secretary of State who shall lay such proposals before both Houses of Parliament.")

7.15 p.m.

Mr. John Smith

I beg to move, That this House doth disagree with the Lords in the said amendment.

I should make clear at the start of the debate that in considering how we react to the amendment we are not called upon to take a view whether it would be a good thing for the Scottish administration to have tax powers. We have had many debates on this topic, including a longish debate in Committee. It should be clearly understood that, with or without the new clause, the Bill neither confers tax powers nor creates a competence for the Assembly to confer them. We have to consider whether the Bill is improved by the inclusion of this declaratory clause. That is all it is.

The Government have already made clear their view on tax powers. We believe that the main source of finance for the devolved services should be a block fund approved by this House, taking account of the relative needs for public expenditure in different parts of the United Kingdom. There is no question of confining the devolved administration to such revenues as they might be able to raise within Scotland by their own means. But the Government do not rule out—and never have ruled out—the possibility of conferring powers on the devolved administration to raise limited additional revenue for optional additional expenditure by operation of a supplementary tax power.

Nobody has so far identified an appropriate supplementary tax power within our present structure of taxes, but the Government have made clear that if the Scottish administration wish to have available a limited supplementary tax power and are ready to meet the administrative cost, we would be willing to consider their proposals sympathetically, as long as they do not relate to offshore oil. That was set out in the White Paper "Devolution: Financing Devolved Services". That is the background, and I now move on to the new clause.

Mr. Russell Johnston

Surely the White Paper went further than the right hon. Gentleman described. It indicated that if the devolved Assembly desired to have tax powers—for example, income tax powers—the Government would be prepared to consider that, which is rather more than the limited powers that the Minister was talking about.

Mr. Smith

The hon. Gentleman could not have been listening to what I was saying. He will find in Hansard tomorrow that in my last three or four sentences I reiterated precisely what was said in the White Paper. I said that the Government had made clear that they would consider proposals sympathetically, as long as they did not relate to offshore oil. That is an important caveat. It is included in the White Paper and I repeat it because it was not put in lightly.

The objections to the new clause are concerned with its misleading nature and the misunderstanding it is likely to cause. It ignores the cogent objections set out in the White Paper to various specific tax powers. It does nothing to answer the objections. It implies rather that they do not exist. Nor do I think that it reflects the very important proviso contained in the White Paper regarding supplementary taxes on offshore oil which I have just mentioned.

Secondly, the new clause implies that the Assembly requires statutory authority to communicate proposals to the Government, whereas the devolved administration will, in fact, have ready access to the Government on any matter of common concern. The Government have always emphasised their intention to have regular and broadly-based consultations with the Scottish administration. On this question of taxation, we have underlined our readiness to consider specific proposals sympathetically.

What is more—and this is the third objection we offer to the incorporation of this amendment in the Bill—the amendment presupposes a strangely formalistic relationship between the devolved administration and the Government. The Government would expect any viable possibilities for tax powers to emerge not from a formal resolution of the Assembly but from general discussions and public debate, not only in Scotland but in the country at large. The formal adoption of proposals by the Assembly and their formal communication to the Government is hardly likely to be the most helpful way of ensuring progress.

Given the way in which the consideration of subjects is likely to proceed, it would not be appropriate, we think, to require the Secretary of State to lay proposals before both Houses regardless of the form in which they might be—tentative, partly worked out or fully developed. The development of policy in matters of this kind is rarely capable of regulation in such a precise manner. We believe that it would be much wiser if matters were handled in a more informal way.

Finally, the amendment is, I think, misleading—

Mr. Robin F. Cook (Edinburgh, Central)

My right hon. Friend is surely not suggesting that creating a formal basis for such proposals eventually made would preclude all the informal positive and good-faith discussions to which he has referred? Surely it would be perfectly feasible for the Assembly to conduct those discussions along the lines indicated and then, should it find difficulty, to make proposals under this formal mechanism, which would at least give Parliament an opportunity to join in those wide-ranging, good-humoured and well-based discussions.

Mr. Smith

My hon. Friend has not been listening to what I have been saying, because I made it quite clear that the Government wanted the matter to be discussed in that way. Of course, it does not preclude it. Despite the scarcely veiled note of sarcasm in his intervention—and I think I have been very generous in saying it was only scarcely veiled—my hon. Friend indicated that he believed the discussions would take place in a constructive fashion. What is the need, then, for having another formal method of communication?

Mr. Deputy Speaker

Order. Certain hon. Ladies and Gentlemen are unable to hear what the Minister is saying. Perhaps he would address the Chair and then the difficulty would be overcome.

Mr. Smith

I beg the House's pardon. I know that the hon. Ladies and Gentlemen will be very interested in what I am saying on this matter. My hon. Friend the Member for Edinburgh, Central (Mr. Cook) seemed to imply that I was saying that it would not be possible for the Assembly to have informal powers. I think that it is reasonable to say that if we set up the formal means of communication that rather implies that it is impossible to do it in any other way.

I do not know what the purpose of this amendment is. It was never very fully explained in the House of Lords what its purpose was. I follow the argument which has been put forward as to whether there should be tax powers. That is a clear argument, which we have been involved in before. But this is a declaratory clause which merely says that the Assembly should have a statutory opportunity to communicate suggestions to the Government who would then lay them before Parliament. Whether that is satisfied by putting them in the Library or in a White Paper or actually producing a Bill which is to be knocked down on Second Reading in this House, I am not clear. I am not arguing about the question of taxation powers. I say that it really does not make any sense to put this provision into the Bill.

There is one danger, as I am sure my hon. Friend the Member for Edinburgh, Central will agree. It would be quite wrong to give the impression that the Bill envisaged the granting of tax powers as part of the devolution proposals. The Bill should be quite clear whether there are tax powers. There should be no misunderstanding by the electorate, particularly in the context of the referendum, as to what the Bill means. I am sure that my hon. Friend, who might take a marginally different view from me on some of these matters, will at least agree that the facts should be known to the public and that there should be as little misrepresentation as possible.

I have read an article in The Daily Telegraph, or some such other organ, by my hon. Friend the Member for West Lothian (Mr. Dalyell) who said that he would vote for this clause. I think his argument amounted to saying that he had to be very crude in the referendum and that he would try to mislead as much as he could. My hon. Friend the Member for Edinburgh, Central would have no part of that, I am sure. He represents the respectable part of the Labour "Vote No" campaign. [Interruption.] I notice with interest the tender regard which the hon. Member for Glasgow, Cathcart (Mr. Taylor) has for my hon. Friend the Member for West Lothian. I am afraid that it is very difficult to defend my hon. Friend the Member for West Lothian, because he has already pleaded guilty in The Daily Telegraph to the charge which I was seeking to make. He makes quite clear there that he will have to reply with crude slogans. One of those crude slogans is evidently centred on this amendment.

I do not think that the House should agree with this amendment—despite the entertainment it might cause for my hon. Friend the Member for West Lothian—on the basis that there ought to be any misleading parts in the Bill. It is quite clear that we must reach a decision on tax powers. We have reached consistent decisions on that by fairly large majorities of this House. The House of Lords thought it wise to put in this declaratory provision. It was a fairly narrow vote in the other place. I believe that it was carried by only one vote. We should look at the amendment critically and sceptically because I do not think that it improves the Bill.

Mr. Leon Brittan (Cleveland and Whitby)

In opening this debate, the Minister said that the House was not called upon to consider whether it was a good thing for the Scottish Assembly to have tax powers. I suggest that he tried to confine the debate to a rather narrower position than could conceivably be right. Indeed, the remainder of his argument was inconsistent with his opening assertion, because he went on to say that one of the complaints about what the House of Lords had done was that it had ignored the objection to the particular forms of tax referred to in the White Paper.

In making that point, the Minister is going into the merits of the matter of tax proposals and not confining himself to the form of them. It is quite clear that the reality of the situation is that the House of Lords considered the question of tax-raising powers for the Scottish Assembly, was sympathetic to the concept of those powers and proposed this amendment—which does not go very far —as a compromise measure with two ends in view. The first idea was that this House should, once again, have the opportunity of returning to the matter. Secondly, the idea was to provide at least some mechanism whereby the question of tax raising could be considered and have a place, however modest, in the Bill.

Plainly, if one took the view that it was quite inappropriate for the Scottish Assembly to have tax-raising powers in any circumstances at all, this amendment would be one which one would have to oppose fearlessly and firmly. If we take the view that the Assembly ought never to have tax-raising powers any proposal of this kind is to be rejected.

We have to consider, therefore, the merits of the whole question of tax-raising powers for the Assembly before we can come to a view on this amendment. We have to recognise that in debating this amendment we are at the very centre of the problems and difficulties posed by the Scotland Bill as a whole.

If the Assembly is to be created with the wide powers conferred on it by the Scotland Bill, with the creation in Scotland of a separate Government and bureaucracy, I suggest that in principle the case for granting that Assembly revenue-raising powers is extremely strong. It is perfectly understandable that in another place a method should have been devised for going some way along that road, because if we create an Assembly with a bureaucracy and a separate Government, with a separate Executive as well as with legislative powers, and do not give it any kind of revenue-raising power we are creating a large and powerful body which is financially irresponsible.

7.30 p.m.

Mr. Dennis Canavan (West Stirling-shire)

Will the hon. Gentleman give way?

Mr. Brittan

In one moment. I want to finish developing this point. I shall then certainly give way. If we do that, we shall be acting in a way which is inconsistent with the position affecting the humblest local authority which can raise rates and its own resources. The Scottish Assembly will be able to raise its own resources only by borrowing money or, alternatively, by, as it were, stealing it from the local authorities by taking the money away from the rate support grant which it would otherwise pass on.

Mr. Canavan

The hon. and learned Gentleman has put forward quite a good argument for revenue-raising powers. Will he tell us how he voted the last time that this matter was discussed in the House?

Mr. Brittan

The hon. Gentleman need be under no illusion on that score if he looks at the Division lists. He need be under no illusion when he has finished hearing me either. I shall make the position quite clear by the end of my speech, if he will bear with me. There will be no air of mystery. He may agree or disagree with me, but I promise that he will not be mystified.

If we are to create this type of Assembly, there is a strong argument for revenue-raising power. We have only to look at what Layfield said in his report on local authority financing. He stressed that, without some element of revenue raising, it was not possible to have a responsible body with a responsible set of powers.

Mr. Dewar

rose—

Mr. Brittan

I shall not give way at the moment in view of the guillotine. I may give way at a later stage if I have not clarified the point, but I suspect that I may do so.

If, on the other hand, we envisage the creation of an Assembly with revenue-raising powers, we should in all fairness recognise that such tax powers should be for topping up the amount provided by the block grant, not for providing the bulk of the money. If we accept that the resources should be available on the basis of Scotland's needs, not of its revenue-raising capacities, we should face the fact that we are considering only a topping-up operation.

We can disguise it by saying that we shall hand over to the Scottish Assembly certain revenues derived from certain national taxes en bloc. We can, if we are clever, complete the disguise, or attempt to do so, by seeking to hand over the revenues from those taxes which approximate roughly to the amount that on a needs basis we think the Assembly should have. But it is artificial to do that. If we operate on a needs basis, we shall essentially be involved with the problem of equalisation which all federal countries have to face. At the end of the day, whether we have a block grant or revenue assigned from particular taxes, the balance either way that goes to or from the federal constituent part is calculated on the basis of need.

Therefore, although we have sympathy with the House of Lords' approach and recognise that for an Assembly with these powers to be responsible it must have some form of revenue-raising power, we must accept that, as long as we are still committed to the proposition that what Scotland has to spend on Scottish needs should be dependent on those needs— a proposition to which I think the majority of hon. Members on both sides of the House are committed—any revenue-raising power should broadly be for topping up the money that is provided by whatever mechanism. If we accept that proposition, the whole issue assumes a somewhat lower profile than might otherwise be the case.

If we confine ourselves solely to a block grant arrangement, then, as the Opposition have pointed out again and again, we shall create a situation with this type of Assembly, which is in not a federal but a unitary State, which is redolent of and is bound to lead to conflict between the devolved Assembly and the Westminster Parliament.

The game is given away in one of the Government's earlier White Papers "Our Changing Democracy: Devolution to Scotland and Wales". In paragraph 100 we are told: No neat formula could be devised to produce fair shares for Scotland (and for England, Wales and Northern Ireland) in varying circumstances from year to year. The task involves judgments of great complexity and political sensitivity. Even allowing for the anodyne language in which White Papers are customarily phrased, that must count as the understatement of the century. We all know that if the block grant is the sole means of revenue and the Scottish Assembly decides to spend more on housing and less on education, if at the end of the year, or at the end of four years, when the Scottish Government, as it will be, comes to the Treasury and says "We need more money for education; the block grant as a total must go up because our schools are now falling below the standards in Northumbria, Cleveland, North Yorkshire and Sussex", and the Treasury mandarin turns round with a sweet smile and says to the plenipotentiary of the Scottish Government "I am very sorry. You may have worse schools in Peebles than in Northumberland, in Aberdeen than in Sussex, but you have marvellous housing and education", that mandarin will get a pretty dusty answer. Moreover, protracting it for four years will make the acrimony even more bitter.

The opportunity for the Scottish Assembly to make political capital out of what will be represented and seen to be the parsimony of the British Treasury faced with increasing needs from Scotland which are not met by a block grant which no longer reflects the needs of Scotland has been stressed before, but it needs stressing again. The scheme that the Government are inviting the House to legislate and will be inviting the people of Scotland to enact does nothing to prevent that kind of conflict from arising and does nothing to resolve the conflict when it arises.

As we have pointed out, it is not just a question of every deficiency in Scottish administration being laid at the door of Whitehall. The fact is that if we go along this road, we shall not be able to avoid an English financial backlash. As a Member for a north-eastern constituency, I know that, faced with a situation in which the block grant is paid over to what appears for the first time to be a separate Government as opposed to being spent by the United Kingdom Government for one part of the United Kingdom, I shall not be able to keep my constituents silent. I shall not be able to prevent them from pointing out that roughly 25 per cent. more per capita is spent on Scotland than on England and that the Scots pay £50 per head less in taxes. I shall not be able to avoid dealing with objections of that kind. I can now, but only just. I can now say that the needs of the United Kingdom are met on a United Kingdom basis. But when the needs of the United Kingdom are seen visibly to be met on the basis of a politically motivated haggle between two separate Governments, the pressures from the English backlash will grow.

That is why we say that an Assembly that is dependent on this means of financing will create a source of conflict. That is at the very heart of the Government's scheme, and that is one of the things to which we most object. The financing of the Assembly is one of the central areas of conflict in the Bill and one of the main reasons for the Opposition not supporting an Assembly of this character. There is no means of solving this dilemma. The problems of conflict with England exist under the Government's arrangements, but they will not disappear even if revenue-raising power is given. As I pointed out—and I saw ministerial nods of assent at least to that part of my remarks—the block grant will still represent the bulk of the resources of the Assembly and the Executive, and the revenue raising at best can be only a topping-up operation.

So if one went along that road there would remain the arguments about the proper size of the block grant in relation to the needs of Scotland. The Assembly would have to cover those needs with the block grant and use any revenue-raising powers it had only for special purposes. It is only in that way that the basic policy and philosophy of meeting Scotland's needs would be met.

There is therefore no solution to this problem within a scheme of this kind. In any event, no viable proposals have been put forward for revenue-raising powers. I find the arguments in the Government's White Paper convincing at least to the extent that they amount to a challenge to the advocates of revenue-raising powers to put forward a scheme that on the one hand is sufficient to raise a substantial amount of money which would give the Assembly some genuine extra discretion but on the other hand would not be extremely costly to administer in relation to the money raised. So far no one has responded to that challenge. The question was raised by the Liberal Party, I understand, in its discussions with the Government, but there has been no credible answer to it.

As the hon. Member for West Lothian (Mr. Dalyell) pointed out, his old mentor Lord Kaldor addressed his mind to the problem but was unable, even with his wealth of experience of imposing taxes on countries all over the world, to find an answer that made sense in relation to the needs of Scotland and the structure of the Assembly and Executive proposed in the Bill.

If someone has an answer to the problem and believes that there is a way of squaring the circle and of providing revenue-raising powers, that answer should be put into the Bill. That is why I greatly sympathise with the logical position taken in the House of Lords and recognise that if one is to create an Assembly such as this it makes no sense not to give it any kind of powers.

Mr. Reid

Since there are oil resources worth about £200,000 million in Scottish waters, what percentage of the United Kingdom tax take does that represent over the next 10 years? Has the hon. and learned Gentleman looked at the question of mineral rights in the light of States' rights in Canada and the United States? When he speaks of his constituents, is he referring to them as British or English?

Mr. Brittan

I am talking about the people who have the right to vote in the constituency of Cleveland and Whitby. There may be mysteries surrounding other matters, but there is none about who my constituents are. The hon. Gentleman's analogies with States of the United States are false. We are repeatedly told by the Government, sometimes in short terms, that the Bill is not a federal Bill and that they are against federalism. If one had to consider solutions applied in a federal context one would have to consider a whole range of other matters. Therefore the hon. Gentleman provides no solution to the problem.

7.45 p.m.

The Government's position bears little scrutiny because they have given a ludicrous pledge which amounts to an admission of total failure. For various political reasons not unrelated to the Lib-Lab pact, they felt it necessary to make sympathetic noises, saying that if devolved administrations wished to have a limited supplementary taxing power and were ready to meet its administrative costs, the Government would be willing sympathetically to consider that in relation to anything but offshore oil.

I cannot recall a wetter statement than that in a Government White Paper. I should have thought that any Government would listen to any proposal by a responsible elected body of this kind, and that statement adds little when reproduced in a White Paper. If the Government are to include wet, anodyne, politically motivated and meaningless statements of that kind in their White Paper they must not be surprised if the House of Lords passes an amendment of which analogous criticisms can be made. Therefore the Government are the authors of their own misfortune. There is no point in having such a pledge in the White Paper, and there is no point in having an anodyne opportunity to put forward proposals in an Act.

Mr. John Smith

The hon. and learned Gentleman criticised the White Paper as being wet, politically motivated and anodyne, and then said that there were analogous criticisms of the House of Lords amendment. Where is the political motivation in the amendment from the House of Lords?

Mr. Brittan

I am not in a position to answer that, but I am dealing with the amendment in a way which I should have thought made it quite clear that, whatever the sponsors of the amendment may have had in mind, we do not share their view.

Mr. Dalyell

I think that I can answer the Minister of State's question. The motivation came from people who are far more sympathetic to him than to me, and I think particularly of Lord Home who has been a great supporter of devolution.

Mr. John Smith

Yes, but he is wet.

Mr. Dalyell

The point is that the amendment was supported by those who are pro-devolution—I may have adjectives which I would not repeat—like Lord Home who want an Assembly, and I do not, but who think that if the Assembly is financially irresponsible, even from their point of view, it will not be a success.

Mr. Brittan

I think that we can all stick to our own adjectives, but I say to the Minister of State that any adjective that he chooses to apply, particularly to distinguished former Prime Ministers ought not to be applied from a sedentary position—

Mr. John Smith

rose—

Mr. Brittan

I will not give way to allow the Minister to make an allegation of that kind. This is too serious for a sedentary interjection.

Mr. John Smith

The hon. Gentleman knows that the point I was making was that he used three adjectives—wet, politically motivated and anodyne—in connection with the White Paper. I take no objection to that. He can abuse it as much as he likes. He then went on to say that he made analogous criticisms of the House of Lords amendment. He must face the fact that if he thinks that either the amendment or the people who composed it are wet, politically motivated and anodyne, he should say so. I do not think that they are. It was he who introduced these adjectives into our discussion.

Mr. Brittan

That will not do. Characteristically the Minister of State is flailing around at random as he gets into difficulties in his argument. All I would say about adjectives is that as long as we have a free parliamentary assembly the Opposition have the privilege to use the adjectives they choose in respect of the people to whom they wish to apply them. The right hon. Gentleman was guilty just now of saying something which on reflection I am sure he will recognise is not true. He said, I think, that he was not applying adjectives to anyone. I do not wish to prolong this part of the argument, but I clearly heard the right hon. Gentleman refer to a former Prime Minister by means of a particular adjective.

Mr. John Smith

Will the hon. and learned Gentleman allow me?

Mr. Brittan

I do not think that any useful purpose will be served by taking more time from a guillotined debate to discuss such a matter—

Mr. Smith

rose—

Mr. Brittan

I will not give way.

Mr. Smith

It is not true.

Mr. Brittan

I will proceed to deal with the rest of the argument—

Mr. Smith

rose—

Mr. Brittan

I will not give way: I have made that clear. These are serious issues and I have tried to make a serious speech, with which the Minister may or may not agree. No useful purpose is served by prolonging this aspect of the argument.

The Government's so-called pledge in the White Paper is not worth the paper it is written on. That is what has caused the right hon. Gentleman to get so het up—because the truth sometimes hurts. The pledge may have been given for political purposes. One may be tempted to follow the line of the hon. Member for West Lothian and seek to include in the Bill something to enable one in a referendum campaign to discredit the Bill by saying, "The Assembly may have revenue-raising powers; there is already a proposal that it should have such powers. Do you want it to have the powers to put up taxes above those applying to England?" But we should not take such a fundamentally irresponsible attitude.

Therefore, just as it is not right for a meaningless declaration to appear in a White Paper, similarly there is no place for it in an Act of Parliament. Above all, we should seek to avoid conflict where possible. The Lords amendment merely requires the Secretary of State to lay proposals before Parliament. It does not even, strictly, ensure a debate on those proposals, but that is the most that it would ensure. If there were any support for proposals by the Scottish Assembly without the amendment it is inconceivable that they would not be debated in this House. If there were so little support for such proposals that there was no effective demand for a debate, a provision in the Bill which appeared to demand a debate would add yet another opportunity for conflict when, as we have said so often, there are enough to be getting on with.

We do not favour an Assembly which sets up a whole separate government, with a bureaucracy, for Scotland as the Bill does, with the tax-raising powers which would logically and necessarily follow. But even if one favoured such an Assembly, the amendment has not solved the problem of what such powers should be. At the very most, it provides an imperfect mechanism for raising this whole issue in a manner at best superfluous and at worst likely to lead to further conflict on top of the great amount of possible conflict which is already embedded in the heart of the Bill. It is for that reason that I cannot advise my right hon. and hon. Friends to support the amendment.

Mr. George Robertson (Hamilton)

It is surprising that this debate, which was to last for about 75 minutes, was preceded by a debate in which lengthy periods were devoted to speculating whether the Scottish Assembly would be part-time or full-time. If we take those lengthy speeches as an indication of the subject matter which will be considered by the Assembly, it is virtually guaranteed that it will meet for the maximum time available.

However, the hypothetical nature of some speeches may be out of perspective and outside the context of devolution. As the hon. and learned Member for Cleveland and Whitby (Mr. Brittan) said, we are talking about opportunities for conflict. Those opportunities are hypothesised from a number of conceivable circumstances. The argument is then extended into areas in which, it is said, conflict is not just possible but will be made inevitable by the creation of the Assembly.

I have been a Member of this House for six weeks tomorrow. Anyone coming into this institution and considering its apparatus and facilities and the powers and constitution within which it operates could speculate for many hours on the opportunities for conflict which are apparent here. We exist as an institution within an unwritten constitution because of good will on both sides and within the country. To suppose that similar good will would not exist in the Scottish Assembly begs an enormous number of questions.

We exist in unbelievable circumstances, without any constraints, apparently without any need for a written constitution, yet we have the arrogance to assume that conflicts, dangers and possibilities of all kinds will arise simply because we create a legislature in Scotland.

Part of the problem in debating the Lords amendments is that we must comprehend not only their precise language but also the motivation behind them. We have learned, only at the end of the hon. and learned Member's speech, that the Opposition would not support Lords Amendment No. 85. That is something of a surprise to those of us who have taken the trouble to plough through the lengthy Lords debates on this matter, especially when we see that practically the whole of the Opposition Front Bench voted for the amendment.

It is important also to note that the amendment was carried by a majority of one. What is intriguing and will inevitably give rise to comment in the debates which follow on the constitution and the composition of the other place in the future running of this country is that if one discounts the hereditary peers for that vote, as well as for a large number of others, a radically different result is clear. Instead of a majority of one for the amendment, it would have been defeated by 27 votes.

Mr. T. G. D. Galbraith (Glasgow, Hill-head)

In making that calculation, was the hon. Gentleman counting as nonhereditary peers hereditary peers of first creation, or was he not counting them?

Mr. Robertson

On this and a number of other Lords amendments, I calculated that those hereditary peers who were in the Chamber for the first time should be counted as life peers, as being created in their own right, and that those hereditary peers who were there because they were now life peers, again the next time around, were also to be taken as life peers. The majority was still 27 votes against the amendment.

In any event, we are here considering an amendment which says something but which really says nothing at all. It is interesting that the Opposition in this Chamber now so clearly disagree with the views of the Opposition in the other Chamber. I believe very strongly that the Scottish Assembly should have tax-raising powers. I believe that it will be weakened seriously in the long term if it is denied tax-raising powers. It can be strengthened effectively as a legislative Assembly in the future only if it has the power to levy taxes and to take responsibility for those taxes. But, having said that, I disagree very strongly with Lords Amendment No. 85. Apparently it says that there is a simple formula for establishing a tax-based system.

After this debate, should this amendment be agreed to—which clearly will not happen—it will be suggested that there was some mechanism which usefully could be brought into operation and which would allow taxation to be levied.

Mr. Reid

The hon. Member agrees very strongly with tax-raising powers for the Scottish Assembly. What sort of tax-raising powers has he in mind?

8.0 p.m.

Mr. Robertson

If the hon. Member will allow me to finish, I shall try to establish that I and a large number of other people in Scotland, if asked which tax-raising powers could be levied bearing in mind the restraints we have placed upon ourselves, would find it very difficult to say. I believe strongly that it is the Assembly itself which eventually will have to take the initiative in this matter. I do not believe that establishing formulae which are not formulae but which give the appearance that there is a short route through which suggestions can go is the right answer.

Paragraph 2 of Schedule 2 still leaves the major initiative in terms of revenue-raising power with Westminster. How- ever, at some stage I think that the Assembly itself will have to face the prospect of levying the taxes and taking responsibility for doing so. At this stage, however, given the constraints which most people agree are already there about introducing a tax system, we shall have to content ourselves with looking to the future for that.

Mr. Dalyell

My hon. Friend may be a fairly new Member of Parliament, but he is as experienced as any of us in this argument because he occupied important and pivotal positions in the discussions in Scotland. Therefore, it is fair to ask him to ponder how it is that after four or five long years, with his experience and mine, given the resources of the Treasury, the Privy Council Office, the Scottish Council of the Labour Party and heaven knows who else, with a public request from my right hon. Friend the Secretary of State to economists up and down the length of the kingdom to come up with something, not one practical proposal has emerged? How can the Assembly think of a practical proposal when the rest of us, some of whom have had great motivations for doing so, have failed?

Mr. Robertson

My hon. Friend attempts to suggest that no one has come up with any suggestions. In fact, large numbers of people have come up with an even larger number of suggestions for levying taxes. The Scottish National Party, for example, is full of suggestions. Various permutations are invented every day.

However, at the moment the discussion is taking place in a vacuum. The Scottish Assembly does not yet exist. If any suggestion is to be considered seriously, it has to be a tax proposal which fits into the constraints of the United Kingdom with which we agree and which I believe the Assembly will agree. But it is one that the Assembly will devise. It is one for which the Assembly will be able and willing to take responsibility. Only that form of tax system and not one imposed by this House prior to the Assembly being established will do the strengthening of the legislation which will be necessary at the end of the day.

I do not believe that by going into a referendum and by pretending that here in Lords Amendment No. 85 we have a formula which will allow the Assembly at some later stage to come up with an invention which will be thrown out by the House of Commons is the way to resolve this problem. I believe that there are possibilities for taxation and that they can be examined. The principle is clear cut, and I think that most people now agree with it. However, we have not got the formular exactly correct, and Lords Amendment No. 85 in no way goes near enough the formula which clearly at this stage will establish a basis for a strong, powerful and meaningful Assembly.

Mr. Mick Buchanan-Smith (North Angus and Mearns)

From the way that the debate has gone so far no one would think that we were operating under a guillotine. Many of us are trying to make our contributions to these debates. I promise to be very brief because in my view it is important in these debates that the opinions of as many hon. Members as possible are heard.

Given that the House of Lords had this debate and made this amendment, we see demonstrated the serious way in which it has dealt with this Bill and sought to find means of improving it. The fact that this amendment is rejected by the Government should not lead anyone to denigrate the House of Lords for what it has tried to do.

I do not intend to go over all the arguments, especially those put forward so eloquently by my hon. and learned Friend the Member for Cleveland and Whitby (Mr. Brittan), about the desirability of the Assembly having tax-raising powers. If the Assembly had tax-raising powers, I think it would be very much more responsible and very much more effective as a result.

I believe that the Government probably are right in rejecting this Lords amendment because what it proposes does not stand up in practical terms to very much scrutiny. But that brings me to the point made by the hon. Member for West Lothian (Mr. Dalyell). How is it that in five years, despite all the Government's invitations, no one has come up with a solution? In my view, the reason does not lie in any blame that can be attached to the Bill, because I do not think that the Bill lends itself to solutions to problems of tax raising and so on.

The criticism is much more basic and fundamental, and I touched upon it in our debate in Committee. It is simply that the taxation system is so overcentralised that unless we are prepared to try to reform it in a radical way, it is impossible to break down and delegate or devolve taxation in any way. The hon. Member for West Lothian is right when he suggests that there is no answer to this question to be found in a Bill such as this. There cannot be. The answer can come only if we are prepared to look at our fiscal system and take away from it the centralisation which we have at present.

I do not intend to take the argument any further. It is obvious to all of us. We know it from the way that PAYE works, and VAT has followed it. We have a highly centralised, top-heavy administration.

I regret that we are unable to write into the Bill some tax-raising powers for the Scottish Assembly. I regret that the House of Lords, like the rest of us, has failed to come up with a practical workable solution. I hope that the Scottish Assembly works. I hope that parallel with the Assembly being set up, a future Conservative Government will take the opportunity of looking at the basis and structure of taxation to see whether we cannot break it down and introduce some decentralisation. At the end of the day, that will not only enable tax-raising powers to be given to the Scottish Assembly at a later stage; at the same time it will also solve some of those difficult problems in local government to which Layfield drew attention. If only it can be looked at in that way, I believe that we shall find an answer at the end of the day.

Mr. Buchan

I am glad to be called to speak after the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) because frequently in the past in these discussions I have found myself in a great deal of agreement with him. He is perfectly right. The reason that we have not come up with a solution is not that there is not a solution but that no one is prepared to face up to the solution.

It is perfectly feasible to have income tax, for example, applied in the Scotland context and applied by the Assembly, within the topping-up concept, if it were not for the complexities of shifting it. I think that it will be expensive and administratively difficult. But it is a nonsense to say that it is not possible. Of course it is possible, and it is what I think should happen. I think that it is the fairest tax and the best. I shall deal more with that shortly.

I make one point in passing. It is not simply because of over-centralisation of taxation. Part of the problem about income tax is not so much over-centralisation but the attempt to have dispersal of part of the functions of various Government offices in different places, which have then run in a cross-border direction and, sometimes with the best of intentions have produced this peculiar difficulty.

Mr. Reid

Does the hon. Member accept that the Inland Revenue itself, giving evidence to Kilbrandon, said that it would be relatively easy to shift all income tax matters back to Scotland and that the net cost would be about £7 million, creating 2,000 jobs?

Mr. Buchan

The hon. Member had better be very careful when he talks about creating jobs because his party's policy would strip Scotland of many thousands of civil servants' jobs which are done for the whole of the United Kingdom or for England and Wales. We should lose 5,000 jobs in the Post Office Savings Bank tomorrow with an independent Scotland, because 95 per cent. of the accounts are from England and Wales. The hon. Member cannot have his cake and eat it, even in Alloa and Clackmannan.

The other tax is the sales tax. Why not have a sales tax? It would be fairly easy to apply. It is applied in the United States. The answer, again, is that it would be unpopular. No one would like it. There are taxations in various parts of the Federal Republic of Germany which, to my mind, certainly run as far counter to the EEC as a sales tax would in Scotland. I see no reason why that could not be a possible solution. The reason that it is not accepted is that it would be unpopular and everyone is scared to bring it forward.

The hon. and learned Member for Cleveland and Whitby (Mr. Brittan) said that in this debate we were getting to the heart of the matter. He took 30 minutes to say anything at all. It was a most tedious speech and was not helpful. In the course of it, he neither clarified the historical fact whether the Conservative Party had supported tax-raising powers in the past, nor made clear in his last sentence whether he would abstain, as usual, on this occasion. I am not yet sure whether the hon. and learned Member will abstain or vote against. No doubt the passing of time will encourage him, if not to be wet, at least to act decisively for once.

The real heart of the matter is that those of us who are concerned with this know that we are facing not only opportunities in an Assembly but great dangers, too. All of us are concerned that we remove the dangers. It is no use my hon. Friend the Member for Hamilton (Mr. Robertson) saying that, after all, this place operates only on the basis of good will. It operates on two things.

It operates first because we have had centuries of growth of custom and habit, and a modus vivendi has developed which we all accept. When one has a new creation, one does not have it at that period of time, and it is in that situation that the danger of a possible crack-up occurs. That is the first point.

Secondly, I agree completely that if we were to write out the British constitution, it would look a very strange bird indeed and we could all shoot it down in flames. But the reason that it can exist and the reason for that good will is that there is an acceptance that the State as we now have it, the United Kingdom, should continue as a United Kingdom. But the problem and the dangers that we face in the Scottish Assembly lie in the belief that there is at least one political party that does not accept that concept of a United Kingdom.

I am glad that the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid) is nodding in agreement. This is a historical moment. The hon. Member agrees that his party does not accept the United Kingdom. This is the first time that SNP Members have admitted that they exist to break up the United Kingdom. Hitherto they have denied it. It is very interesting. I must thank the hon. Member for that first admission. I have taken two years to get it out, and, lo and behold, we get it out by accident.

The SNP is devoted to that principle. Therefore, the question of financial opportunities for the Assembly becomes important, because without finance-raising power we are facing an irresponsible Assembly.

8.15 p.m.

At present, if I argue the case for a new school in my constituency, I must accept that I have also to accept the consequences, which is more taxes or more rates. Only that is what makes councillors responsible. Only that makes the Government and Members of Parliament ultimately responsible—that we have to face up to the financial consequences of our own actions. Without finance-raising powers—and this is why my hon. Friend the Member for Hamilton, as I do, accepts this—that irresponsibility exists in which demands can be made, and the demands can be literally insatiable, because there is nothing to stop the demands being made and there is no means of satisfying them except at an unfair expense on the rest of the United Kingdom.

Mr. Dewar

Would not my hon. Friend accept that responsibility will be bred by choice and that one has to afford one's school at the expense of something else, and that choice, in fact, is responsibility? Does he accept that the logic of his argument is that as the direct grant slice of local government revenue increases, by definition local authorities must be getting more irresponsible by the day? That seems to be a very unfair way of looking at the matter.

Mr. Buchan

There are two points to be made here. I accept, of course, that a great deal of responsibility comes from choice, if we have to decide between a road and a school. But in this case that choice is not present. It will be said "We want both the road and the school, and it is the people in London who are preventing us from having them." That is the whole problem. The restraint of choice in bringing responsibility applies only when the people who have to apply the choice and face up to the consequences of that choice are those who are taking the financial responsibility.

I would love to be asked whether I wanted a road or a school when someone else was to pay for it. I would say "I want both". Indeed, it will then become a duty upon the Assembly to ask for both. It will take a great deal of restraint on the part of the Assembly without that safeguard. That is why I think that one of the three pillars on which I gave my support for the Assembly is now missing without the financial aspect.

It is for this reason that I am slightly chary about the answer given by my right hon. Friend. I am a little fed up with Governments dealing with amendments and saying "We want you to reject this amendment because it is not necessary" —one—"and because it does not achieve anything"—two. If it is not necessary, it does not seem a very important reason for removing it. I think that there is a greater danger, and that is that it might create the illustion that we have written in finance-raising powers. I accept that the Minister said that. That was his third point.

But there is also a useful place for the declaratory in legislation. As a result of today's debate, if we leave that impression by not supporting the amendment—I cannot support it for the reasons given—we would be in a graver danger if we suggested that we would, therefore, stop the quest or the push to achieve finance-raising powers for the Assembly.

My right hon. Friend was right in saying that there is nothing to stop this discussion going on in any case, but I have no doubt whatsoever that the initial attitude of the Assembly will tend to be "What can we get out of the present negotiating position on the block grant?", instead of saying "We have to get our heads together to see what solution to come up with." The only sensible thing, in some ways, that the hon. and learned Member for Cleveland and Whitby said—he did not say much in half an hour—I will forgive him, it has gone completely from my mind. It was so difficult to ascertain the point that was concrete in his half an hour that it has completely slipped my mind.

I should like to see going out from the House a message to say, first, that the finance-raising power is necessary for the Assembly; secondly, that it is not true and not correct to say that it cannot be achieved; thirdly, that the Assembly as well as the community must bend its mind, to finding a solution; and, fourthly, that this House will be receptive to solutions when they come forward, and irrespective of the rejection of this particular amendment, the House will be prepared to discuss and examine closely what proposals come forward without the illusion that, because they are difficult, therefore solutions are impossible. It is the end of the line for all political thought if we say that, because there are difficulties, it is impossible. It is not, and it is time that we recognised that we have solutions.

Mr. Grimond

I certainly do not intend to trample over the ground of taxation again. I am in favour of a type of federalism for Scotland. If we had agreed on that, we should have found this matter a great deal easier in many ways, and one of them would be the question of taxation.

I agree that at present there is every possibility not only of conflict but of extremely unfortunate pressures being brought not so much on the Scottish Parliament as on the Scottish Government. The view is that they could be constantly pressing the United Kingdom Government for more money which they could not raise themselves and that they might well be tempted to raid the rate equalisation grant. I believe that the fact that the Executive and the Scottish Assembly will have no power over the economy or the nationalised industries is one of the most serious deficiencies in the Bill.

I am rather puzzled about the Consevative Party's attitude. I understand that it is in favour of devolution of some sort and of taxing powers being given to the Scottish Assembly, whatever it may be, so I should have thought that the inevitable conclusion was that one must have some sort of federal system. However, I am not sure that that is the conclusion that the Conservative Party has come to.

It is not only a question of establishing the Assembly. It is also extremely important to devolve taxing powers to local government—and here I agree with the hon. Member for North Angus and Nearns (Mr. Buchanan-Smith) that taxation is far too centralised. I am therefore very much disposed to view this amendment rather favourably.

The argument against it, as I understand the Minister, is that it would create uncertainty. But I do not know that it would create any more uncertainty than most of the Bill does. That does not seem to me to be a convincing argument. From what he said, I understand also that the Government would be willing to give taxing powers if they could only think some up.

Here I agree with the hon. Member for Renfrewshire, West (Mr. Buchan). If the Government really wanted to give taxing powers to the Assembly, there are all sort of taxes that they could give it. It would be very much easier if we had a proper federal structure, but I should be delighted if it could be done. To say that it cannot be done is rather like the situation before the war when people said "The country must be defended; are you going to buy Spitfires or Hurricanes?" It was the responsibility of the Government to decide whether to buy one or the other. It is not the business of the Opposition to tell them what to do in such circumstances. Therefore, it seems to me that if we are all agreed that taxing powers should be given to the Assembly we should find some way of doing it.

Mr. Dalyell

Now that we are four years into this argument, the right hon. Gentleman says that taxing powers can be given even if we do not have a federal State, in which, I agree, it would be much easier. But he has access among his colleagues to Professor Peacock and others who think like him. Why have they not come up with something?

Mr. Grimond

I cannot enlighten the hon. Gentleman why other people have not come up with proposals for taxing powers. My argument is that if I am put into the Government, I shall come up with a federal system that will have taxing powers, for I shall then have the Civil Service at my disposal and a lot of other help of that sort. I am not prepared to say exactly what the taxes should be.

The other argument of the Minister of State against the amendment was that it would make no difference because the Assembly could put forward proposals. The answer to that, first, is that if the amendment makes no difference one might as well accept it. But I see that that argument will not be wholly convincing to everyone here.

In fact, I think that the amendment does make a certain amount of difference. It seems one thing to say, quite rightly, that the Executive can make proposals of a non-formal sort to the United Kingdom Government about taxing powers but that these proposals in the amendment would have to be done formally. They would do what the House would want done—that is to say, with the Civil Service at the disposal of Scotland, the proposals would have to be worked out and then laid before this House and debated. I do not say that that would be a very great advantage but there is more to be said for it than has been said so far.

Secondly, by writing the amendment into the Bill we should at least firmly draw attention in the Bill to the awful hiatus of taxing powers. We should be drawing the attention of the Assembly to this great failure of the Bill. It is agreed on both sides of the House to be a failure of the Bill, and at least we should be saying to the Assembly "You put forward proposals on this matter, which we have failed to deal with." At least such proposals must be seriously put. While I am not a great advocate of the amendment, I think that it does not deserve to be brushed aside quite so unanimously as it has been.

Mr. Dewar

I agree that it would be possible to have taxation powers for the Scottish Assembly. It is not absolutely impossible. When looking at the various proposals for direct or indirect taxation we see that it is a question where the balance of convenience lies. Are they too expensive to collect? Are they too clumsy? Would they lead to difficulty in the internal economy of the United Kingdom? I must confess—although I say it with sorrow, but less than some other hon. Members—that I have come to the conclusion that all the schemes brought to my notice have substantial objections in terms of practicality or expense or of in-gathering.

While I would not close my mind to the possibility of taxing powers for the Assembly, I have not been convinced by any of the proposals from the Liberal Party or from the Scottish National Party or anywhere else that we have found the key to the problem. I do not say that with quite the same sorrow as most hon. Members have shown who have spoken in the debate, because I am a slightly unusual figure in the devolution controversy. I strongly believe in the Assembly, its usefulness and its ability to improve the government of Great Britain. But I do not couple that position with a determination that in some way the whole operation is flawed or in danger of being destroyed because no taxation powers are attached to it.

A great deal of ingenuity has been exercised in both Houses of Parliament. The theory that seems to have been taken up by most people is that if one is to have representation taxation must go with it. Indeed, there were suggestions that without the taxation powers we shall be seeing in Scottish harbours the Boston Tea Party in reverse. That was suggested by more than one noble Lord in another place, and I must confess I could not understand the relevance. But that was how strongly they felt on the issue.

I do not accept that that is the position. After all, the Scottish taxpayer will still be paying his taxes to one part of the sovereign Parliament—that is the House of Commons and the United Kingdom Administration—and he will have representation both in the House of Commons and in the Assembly. It is not a case of people being taxed and not represented. Indeed, as opponents of the Bill are constantly pointing out, there is perhaps too much representation to go with the taxation and not too little.

I cannot see any reason why, if in general political terms there is a strong case for it, there is some sort of constitutional heresy in suggesting that the money should be collected at the United Kingdom level—by the Westminster tier of Government—and that a tranche should then be cut out of it and given to the Assembly, which would administer it, spend it and legislate. There is nothing basically wrong in that situation, and I should be prepared to stay with it.

Mr. Robin F. Cook

The whole objection is not that the taxation will be raised at the Westminster level but that, by the nature of the tax raised at Westminster, it will be collected on a United Kingdom basis and thus, those elected in Scotland who may vote and decide on better services in Scotland will not be responsible for going back to the electorate and explaining to the voters that they will have to pay for those better services.

Mr. Dewar

I do not see the argument that, because one is not collecting the taxes oneself but has merely been given the job of spending the budget, one is in some way going to be irresponsible. It seems a quaint idea, which has been advanced again and again, that in some way a non-elected board can spend money and not be irresponsible, but as soon as people are elected one has to be raising taxes at that point and at that level of government. Let us take the analogy with local authorities, because it is a fair one.

I put this point to my hon. Friend the Member for Renfrewshire, West (Mr. Buchan) but he did not get round to dealing with it. If those hon. Members who make this point are right, we are facing an extremely dangerous and alarming situation with local government. We all know that local authorities year after year are depending more and more on money raised by the central Government and less and less on the money they raise through their own form of taxation, the rates. Well over half the authorities—the figure would be up to 80 per cent. or 90 per cent. in the Highlands region—are not raising the money themselves but have it handed down to them by the central Government to spend.

8.30 p.m.

The wife of my hon. Friend the Member for Renfrewshire, West is a member of the Strathclyde regional council. I know the lady. Occasionally I may think that she is irresponsible, but I do not think that, by definition, she is getting more irresponsible year by year because she is raising less of her money herself and getting more and more of it handed down in the form of a budget. It is an argument which I do not accept.

Mr. Buchan

My hon. Friend is wrong, if I may say so, and I am sorry that he made reference to a particular person. The trouble is that one knows how irresponsible the press can be. I think that my hon. Friend is wrong in his analogy with local government, for two reasons. First, local government has tax-raising powers, and ratable value, and this con- tinues, even though it has been decreased. Secondly, it is the case that all local authorities continually seek more from central Government for more and more projects. Very many of the applications being made by local government are rejected by the central Government.

The difficulty is that we are facing a polarised situation in which all the demands are coming from one section and all the rejections are being made by another body. It is the polarisation of the argument that is the danger here. There is no danger, even with my wife in Strathclyde, of that body announcing UDI.

Mr. Dewar

I apologise if I embarrassed my hon. Friend. My comment was not meant in any way to be embarrassing. It was just an example that was to hand.

I should like to sum up what I feel about this. I do not believe that the Scottish Assembly willl be irresponsible in the classic sense, because it is an elected body. It has an electorate to which it must answer and which can call it to account. I do not think that it will be irresponsible in the other sense, because it has choice as a discipline. At the end of the day it has to decide how to spend its money. It has to make itself clear as to its priorities. It has to answer to its electorate for those choices and those priorities. I do not believe, therefore, that it will be irresponsible in that broader sense, either.

I do not rule out the possibility, at the end of the day, of having taxation powers. If new schemes are proposed, I shall certainly be prepared to look at them. I come down against the schemes which are on the table at the moment. I do not think that this is a fatal impediment to the success of the Assembly, which, I hope, will take wise decisions in the legislative field and wise decisions in the field of public expenditure in Scotland.

I do not want to dwell on this, because I want to be brief, but it is interesting to look at the debates in the Lords. After all, the reason that the amendment is before us is that the Lords, and particularly Lord Vaizey, as well as Lord Harmar-Nicholls, produced proposals which they hoped would become practical suggestions for giving taxation powers to the Assembly. They all fell down, or were withdrawn, or were not pressed, because it was realised that they were flawed.

Mr. Robin F. Cook

That is not so, with respect to my hon. Friend. Lord Vaizey, in the speech in which he withdrew the amendment, made it perfectly plain that his sole reason for withdrawing it was that it was trespassing on the prerogative of the House of Commons to put forward matters relating to taxation. It is quite wrong of my hon. Friend to pretend that the position was any different from that.

Mr. Dewar

I thought that there were other reasons, and certainly many other objections were raised in the debate. The hon. and learned Member for Cleveland and Whitby (Mr. Brittan) would certainly be voting against Lord Vaizey's suggestion, because Lord Vaizey was not arguing on the needs principle at all but was departing from it. He was suggesting that we should have a system whereby, if the Scottish Assembly decided to raise additional taxation which had to be borne by the Scottish people, it would, if it decided to reduce taxation, have it taken out of the block grant. If the total revenue available to the Scottish Assembly were not sufficient to meet the needs of the Scottish people, that would be just too bad. That was Lord Vaizey's argument, as I understand it, and it obviously would not meet with the approval of the hon. and learned Member, if I understood his speech earlier this evening.

Perhaps the point that was made by Lord McCluskey ought to be repeated in this House. Suppose we take even 10 per cent. of the block grant at current rates, and assume that we are talking of about £200 million, we are looking then at about 15 per cent. of the estimated income tax take in Scotland, at 45 per cent. of the total rates take, and probably—although it would be very impractical to separate it out—at about 130 per cent. to 140 per cent. of corporation tax.

To have a proper system at all, the top-up, in order to produce even 10 per cent. of the block grant, or something of that order, will have to be a very substantial impost upon the taxpayer of Scotland, if it is a form of direct taxation. For that reason, therefore, I do not think that it would be practical.

Mr. Robin F. Cook

It would be unpopular, too.

Mr. Dewar

I think that in terms of current politics it would be impractical, and it would be undesirable, too, because it would lead to various distortions within the United Kingdom.

In a sense, this Lords amendment is not of great practical significance but it is of some symbolic significance, and it is meant to be of some symbolic significance. As I have said, their Lordships could not produce a practical scheme, and they withdrew from the brink of actually writing something into the Bill. Instead, they said that they would put this provision in as a marker of future intent, as an incitement, as I see it, to try to keep in people's minds the intention that the Assembly is expected to produce such a scheme at some future date.

In my view, we do not need any such marker. We are all aware that this will be a continuing subject for debate. It is one which, as I have said, I may pursue with less enthusiasm than some hon. Members may show, but we have the assurance of the Minister of State that the Government would be prepared to look at any scheme which was produced. As has been said, if a scheme is produced —if it is plausible and if it has the support of the Assembly—it is inconceivable that time would not be found, if only by the Opposition, if I may say so, to embarrass the Government by such a debate on the Floor of the House.

It seems to me, therefore, that this is an exhortatory clause, and I disagree here with my hon. Friend the Member for Renfrewshire, West in that I do not like clauses of that nature. By and large, clauses in Bills ought to do something; they should change or lay down the law and not merely exhort or incite us towards a discussion at some future date. Because I do not like that kind of clause, I hope that it will be resisted by the House tonight.

Mr. Reid

The last three speeches have demonstrated that there is a basic lack of political will in the House to allow the Scots people revenue-raising powers. All hon. Members know that if that will existed it could be done. They know that the Government of Alberta in Canada have basic mineral rights. States within the USA have basic oil rights. Going back 50 years, hon. Members know very well that Northern Ireland got specific revenue-raising powers. Therefore, as I say, if the will existed to give the Assembly tax powers, it could be done.

The hon. Member for Glasgow, Garscadden (Mr. Dewar) talked about the balance of convenience in terms of the Scots Assembly having revenue-raising powers. His real problem, as he knows very well, is that the Treasury is the enemy and, as long as we have Keynesian demand management throughout the United Kingdom, the people of Scotland will never get off the ground in terms of growth and the eradication of poverty.

The right hon. Member for Orkney and Shetland (Mr. Grimond) gave us a nice warm woolly speech which dribbled away a bit. The most important centralist speech of all, I think, came from the hon. Member for Renfrewshire, West (Mr. Buchan). It seems to me at times that the hon. Gentleman so adores talking about politics that he is inclined to miss the basic point. He castigated the SNP in terms of étatisme, as he so often does, but he is still the same Member who, I believe, has a certain warm attachment for the Basques as a nation without a state, and certainly he and his Left-wing friends in the Tribune Group are prepared to call for the smallest speck of an island in the Pacific to be given its independence and its rights in terms of its guano—that is, being given its basic resources and therefore home taxation powers.

Mr. Buchan

First, I ask the hon. Gentleman to withdraw his opening comment. It is not true that the last three speeches showed a lack of political will. On the contrary, two out of the three—those by the right hon. Member for Orkney and Shetland (Mr. Grimond) and by myself—stressed precisely the will for that kind of taxation.

Second, the members of the Tribune Group or I or anyone else who loves freedom has never denied the right of any people to have their independence if they choose. But nor do we deny the right of those who do not choose independence to say so. We give the Scottish people the complete right to choose independence if they want it. The hon. Gentleman must give us the right to recommend that that is not the correct course. That is the difference between people who are suffering oppression and who have universally demanded independence and the myth which the hon. Gentleman creates about oppression in Scotland.

Mr. Reid

If I were sitting on the Government side, I should be very concerned about the Scots people having taxation powers, because I think that that would be the way to try to stop the Scots going all the way to independence. What will happen in Edinburgh is that, once the Assembly is set up, the Scots people will find that they have been sold a pup, because the level of expectation has been raised out of all proportion to what the Assembly itself can deliver. The Scots people will then say "We have been told by a Government which promised the Scots people a "powerhouse" that the Scottish Assembly can do such-and-such on education, such-and-such on roads and such-and-such on other forms of expenditure". But they will find that the basic needs element is utterly determined by this House. Thereafter they will say "Since we have an Assembly, that Assembly should advance further, using Scottish resources, to full independence, because that is the only way we can get our country moving economically".

That was the basic question which I put to the Tory Front Bench. I asked what percentage of United Kingdom tax-take would come from Scotland over the next 10 years, and how it would be spent. I got no answer whatever. It reminds me of the lines in Punch: When Mr. De Valera, Changed Ireland's name to Eire, Britain did not change her name, She remained England just the same. That is the traditional English response in this House: Britain cannot change her name; she must remain England just the same. That is why Members argue that only through Keynesian demand management, and only by taking the United Kingdom economy as one global whole, can this country be kept on a common tack.

I come back to the question of Left-wing Labour Members, and also Conservative Members, who believe in the sovereign rights of the United Kingdom. I want to take the point in terms of the Common Market. I find it rather curious that if we sat in this Chamber with a Parliament in Brussels laying down levels of expenditure—"There is your block grant. England—Britain?—now go and spend it"—howls of protest would arise both from the Left wing and the Right wing about interference in sovereign British affairs. Of course, that is exactly what is happening to my country—Scotland—in terms of this Bill.

Mr. Robert Hughes (Aberdeen, North)

I thought that the hon. Gentleman supported the Common Market, so what is he belly-aching about?

Mr. Reid

I support the Common Market simply because I do not believe in utter sovereignty. I think that each small country—I take Britain to be a small country—must put a bit of its sovereignty into the common pot. I believe that the hon. Member for Aberdeen, North (Mr. Hughes) still thinks that the United Kingdom is in the same league as the Soviet Union, China and the United States. At this point in time, that view is rather absurd.

I am sure that hon. Members will accept that right from the start the SNP has put forward a very simple form of dealing with this problem. We have gone back to something which the hon. Member for Garscadden has let slip away from his boyhood past. We have returned to what the founding members of the Labour Party—the ILP, the Maxtons, the Kirkwoods and the Keir Hardies—put forward in terms of relationships between the people of Scotland and the other nations of the United Kingdom. We have said, as in the Barr Bill, that there should be a Scots treasury taking all personal taxation, all royalties, all revenues in Scotland. These imposts should go into a common Scots pot. In terms of devolved services vis-a-vis continuing imperial services, be it defence or foreign affairs, let us find what the difference is and we shall then pay back the difference from a Scots treasury to a United Kingdom treasury. That strikes me as being a very reasonable way of doing things.

I return to my basic point: if the political will existed, this House could put revenue-raising powers through. But we know what the difficulty on the Labour Benches is. In the 302 hours of debate on the Scotland and Wales Bill and on the Scotland Bill, we have all heard the fears expressed by the hon. Member for Renfrewshire, West and from hon. Members from the north-east, Merseyside and Tyneside. They are frightened that Scotland will steal a march on the rest of the United Kingdom. They are frightened that by getting a cut of their own resources the people of Scotland will get a better deal than the people of Merseyside.

I come back to the point which was put by the hon. Member for Aberdeen, North. I look at this question in terms of a European whole. I should feel happier about the Labour Party if it held out its hand to its fellow Socialists in Belgium, Holland and Germany instead of sitting like curious, imperialist little moles. I should feel happier if the hon. Member for Aberdeen, North and his hon. Friends did not feel that abroad was bad. I am prepared to sink my country into a European identity. I wonder wheher he is prepared to lose his own basic imperialism.

8.45 p.m.

Finally, Scotland's basic problem is that in the Assembly we are being invited to rob Peter to pay Paul. The Scots people have been taught by the Labour Party that through the Assembly they will get better houses, better roads, better hospitals and better nursery schools, that Nirvana is coming. It is a con, because no new money at all is involved. The Labour Members of the Assembly are to be the new Scottish czars, because the whole thing is a con.

I support the Assembly for the one reason: that it is the most that we can get from this House. I look forward to constitutional change when we move from the present Keynesian economic structure to the sort of structure which is found in Canada, in Germany and in the United States where there is resource-based expenditure for one's own people in one's own land. That is the way things are going, and it is right that Members of the Assembly—be they Labour, Tory, SNP or Liberal—should at least have the chance to devise their own economic structure.

Mr. Robin F. Cook

I am grateful for the opportunity to say a few words towards the end of this debate because it enables me to go back to the speech of my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) which I would rather do than follow the many different openings presented by the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid).

With the greatest respect to my hon. Friend the Member for Garscadden, I put it to him that he confused the concept of being sensible with that of being responsible. I have not the slightest doubt that those elected to the Scottish Assembly will be sensible, down-to-earth people with both feet on the ground and without their heads in the clouds. I am quite convinced that they will wish to make a go of it.

Nevertheless, the fact remains that the Members of the Assembly are being put in a situation in which they are not responsible for the consequences of their actions. They are not responsible for the financial consequences of what they may propose for public services. That means that they are not responsible for ensuring that the programme that they put before the electorate has the financial counterpart to it.

We are all familiar with what that means when we run for Westminster, and every local councillor is conscious of what it means when he runs for his local council, despite anything that my hon. Friend may say. Having been in local government, I can assure him that everybody in local government—however small the proportion that is raised from rates—is very conscious that public expenditure at local level can have a rating consequence which is electorally unpopular. Therefore, when local councillors or those at local level put forward a programme for an election which contains proposals for better public services they are conscious that they must be prepared to take the consequences, which is greater taxation or greater rates.

It is also perfectly feasible for the other side—as it appears that the Tories will do at the next election—to put forward a programme for worse public services but on the basis that it will be possible to cut taxation and the rates and the money will be able to go into people's pockets. Both those things are perfectly feasible.

However, the position in which we are putting Members of the Assembly does not match either of those situations. They will not be responsible—I will not go into whether they will be irresponsible—for the financial consequences of the programme that they will be putting before the electorate. What the hon. Member for Clackmannan and East Stirlingshire said was correct. Members of the Assembly will therefore be encouraged to bid up public expectations because it will be in the interests of every party to put forward a programme for the best public services because no party will be asked how it proposes to raise the taxation. We are going through that process to raise public expectations when the real crisis facing western democracy at present is one of rising expectations which we cannot satisfy.

I do not believe that there is no solution to the problem, that there is no way in which we can find taxes. Indeed, I invite my hon. Friend to read the speech made by Lord McCluskey in response to the amendment moved by Lord HarmarNicholls. In the course of his reply Lord McCluskey admitted that the proposals met all the criteria which the Government had set forward in Cmnd. 6890—that is to say, that the tax proposed is supplementary, that it prescribed a limit to that tax, that it was additional to Westminster revenues and that the administrative costs would fall on the Assembly.

Having admitted that the proposals met all the criteria set out in Cmnd. 6890, he nevertheless invited the House of Lords to reject the amendment because it would produce higher taxes in Scotland. The truth is that, while it is not impossible or impractical to find a tax which can be raised in Scotland, it will, of course, be desperately unpopular. It will inevitably produce taxes that are higher in Scotland. The whole point of public government and democracy is to put the proposition to people that they can have services, but as a consequence they will have to pay more in taxation.

It has been suggested during this debate, and it was suggested several times in the House of Lords, that those who have pressed for tax-raising powers for the Assembly wish to use this argument to sink the Assembly in the referendum. I hope that that will not be suggested of me because I was in favour of tax-raising powers at a time when I was even prepared to support devolution. I might even say that I was in favour of tax-raising powers before the Government were persuaded by the case for holding a referendum.

The reason why I want to see tax-raising powers included is that I fear we are putting a false prospectus before the electorate. We are telling the electorate that we shall give them better public services through an Assembly but that it will not cost them a penny. That is irresponsibility in every sense of the word, and it will not solve the problem in any way. We shall merely postpone it until the very first clash between the Assembly and Westminster over the demand for an Assembly block grant which this House will not be prepared to meet. When that time comes in this House there will not be one hon. Member in this place who will not wish that we had given the Assembly tax-raising powers in the first place.

Mr. Tim Renton (Mid-Sussex)

I am very pleased to follow the speech of the hon. Member for Edinburgh, Central (Mr. Cook). Like him, I am inclined to vote for this amendment because I feel that unless there is such an amendment, however loosely drafted and unsatisfactory it may be, the prospectus at the time of the referendum will be false. People in Scotland will be led to believe that they are getting an Assembly which will cost them nothing. They will be told that they will have greater control of their own affairs, their own Assemblymen and all the apparatus that goes with them, but that it will not cost a bean.

This is simply not true. The Assembly is bound to cost something. The great difficulty of Scottish Members, on either side of the House, in voting for this amendment is that it is extremely difficult politically for them to say in the referendum that they have voted for an Assembly that will involve additional taxation powers for the Scottish people.

But it must come to that—that must be the end of the road. Just as in the eighteenth century the American colonials shouted that there must be no taxation without representation, the reverse is equally true. There can be no representation without taxation. There is no point in having this elected authority unless in the end it has a taxation power.

Although the Minister of State has told us that he will entertain and is ready to listen to proposals as to how those tax-raising powers should be implemented, without the Lords amendment there is not a single word in the Bill about tax-raising powers. It is far more likely that those campaigning in the referendum will make constant reference to schedule 2, paragraph 4(1) which says: A provision is not within the legislative competence of the Assembly if it would impose, alter or abolish any tax That must be the impression that will be given by those campaigning for the Assembly in the referendum, and I oppose that.

I hope that when the Minister of State replies, he will answer a specific question on the allocation of the rate support grant through the block grant. My understanding is that that amounts to about £1,100 million. How will the right hon. Gentleman ensure that the Assembly passes on to the local authorities all that part of the block grant that is relevant to the rate support grant, and how will he stop the Assembly keeping a part of it for itself? He cannot do so, and that is one of the great fallacies in the Bill. The Assembly is bound to keep some of the money for itself. However, the position is not clear in the Bill. Therefore, I believe that the Lords amendment, however defective in some ways, should be supported.

Mr. John Smith

The hon. Member for Mid-Sussex (Mr. Renton) put forward some sort of case for the amendment by saying that there should be some reference to taxation powers in the Bill. One has to go a little further and argue that there would be strong reasons for having this kind of provision in the Bill and that it would improve the Bill. Everybody has recognised that this Bill does not confer on the Assembly tax-raising powers. But the Lords Amendment does not solve the problem of taxation; it is merely of a declaratory kind. The hon. and learned Member for Cleveland and Whitby (Mr. Brittan) may have his own views whether it is wet, anodyne or politically motivated.

Let me make one thing clear. In my earlier reference to which he referred I was using a reference to a former Prime Minister as being a problem the hon. and learned Gentleman had to deal with rather than myself. I take this opportunity to make that clear because he did not allow me to do so earlier. But I am afraid that it is one of the consequences of saying or implying—as clearly happened, as Hansardwill show—that the amendment was wet, anodyne and politically motivated. One consequence is that it might be considered by some to be casting aspersions on those who moved the amendment in another place.

Mr. Brittan

The Minister of State said that Lord Home was wet.

Mr. Smith

It is a little much for the hon. and learned Gentleman to make that statement when he remembers that he refused to allow me to intervene earlier.

Mr. Brittan

1 let the Minister of State intervene twice.

Mr. Smth

Let us get to the main point of the debate, which is much more interesting.

It is difficult to talk about the subject of taxation in general without coming to the particular. We must have in mind the particular tax proposal that is being advocated. Most tax proposals have good and bad points. Many people have said "We are generally in favour of taxation powers, but we are against a sales tax or income tax". But they have to come forward as specific proposals.

My hon. Friend the Member for Renfrewshire, West (Mr. Buchan) said that he favoured a sales tax.

Mr. Buchan

I did not. I said that I favoured income tax.

Mr. Smith

My hon. Friend implied that it would be quite possible to have a sales tax. With great respect, I believe that he is wrong. It is not possible to do this within the context of the EEC, and what happens in West Germany does not provide a solution to the problem. My hon. Friend said that he favoured an income tax. I can follow that suggestion, and in many ways it is the fairer proposal. But at the same time one must asked whether one could face the figure of £50 million but with a figure of £16 million in costs of collection. The cost of collection would amount to a figure of 32 per cent. as opposed to the normal income tax collection system of 1 per cent. or 2 per cent. in respect of PAYE.

We must weigh these factors. It is not just the question whether it would be popular or unpopular. I, personally, would not be in favour of having the additional income tax at a cost of £16 million a year, having regard to what it would raise. That is a relevant and important consideration. On these occasions we have to examine particular points.

Our tax system is not immutable. The hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) was right to say that many of our difficulties stem from the way in which we choose to collect tax, including the PAYE system. It may change in future, but with the present structure it is difficult to devise a genuine, sensible and reasonably efficient system of devolved taxation. Indeed, our present structure of taxation could hardly make the task more difficult.

This amendment does not solve any of the problems which we have discussed many times in these debates. The House would be wise to reject declaratory or exhortatory amendments as put by my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar), who introduced a sound note of realism into the debate. Do we want to decorate the Bill with this sort of expression of opinion or sentiment which does not add anything to the powers of the Assembly or detract from those powers?

It is because I do not believe that the amendment will help us and because, as my hon. Friend the Member for Renfrewshire, West agreed, it might be misleading, that I think that it would be unwise to include it in the Bill. It was only narrowly carried in another place, which is a factor that we are entitled to take into account.

It being Nine o'clock, Mr. DEPUTY SPEAKER proceeded, pursuant to the Order [4th July], to put forthwith the Question already proposed from the Chair.

Question put, That this House doth disagree with the Lords in the said amendment:—

The House divided: Ayes 266, Noes 35.

Division No. 273]	AYES	[7.0 p.m.
Allaun, Frank	Bishop, Rt Hon Edward	carmichael, Neil
Anderson, Donald	Blenkinsop, Arthur	Carter-Jones, Lewis
Archer, Peter	Boardman, H.	Cartwright, John
Armstrong, Ernest	Booth Rt Hon Albert	Castle, Rt Hon Barbara
Ashley, Jack	Boott royd, Miss Betty	Clemitson, Ivor
Ashton, Joe	Bottomley, Rt Hon Arthur	Cocks, Rt Hon Michael (Bristol S)
Atkins, Ronald (Preston N)	Boyden, James (Bish Auck)	Cohen, Stanley
Atkinson, Norman	Bradley, Tom	Coleman, Donald
Bagier, Gordon A. T.	Bray, Dr Jeremy	Concannon, J. D.
Bain, Mrs Margaret	Brown, Hugh D. (Provan)	Cook, Robin F. (Edin C)
Barnett, Guy (Greenwich)	Buchan, Norman	Corbett, Robin
Bates, Alf	Buchanan, Richard	Cowans, Harry
Bean, R. E.	Butler, Mrs Joyce (Wood Green)	Craigen, Jim (Marrhill)
Belth, A. J.	Calleghan, Jim (Middleton & P)	Crawford, Douglas
Benn, Rt Hon Anthony Wedgwood	Campbell, Ian	Crawshaw, Richard
Bennett, Andrew (Stockport N)	Canavan, Dennis	Cronin, John
Bidwell, Sydney	Cant, R. B	Crowther, Stan (Rotherham)
Cryer, Bob	Johnson, Walter (Derby S)	Roberts, Gwilym (Cannock)
Cunningham, G. (Islington S)	Johnston, Russell (Inverness)	Robertson, George (Hamilton)
Cunningham, Dr J. (Whiteh)	Jones, Alec (Rhondda)	Robinson, Geoffrey
Davidson, Arthur	Jones, Barry (East Flint)	Roderick, Caerwyn
Davies, Bryan (Enfield N)	Jones, Dan (Burnley)	Rodgers, George (Chorley)
Davies, Rt Hon Denzil	Judd, Frank	Rodgers, Rt Hon William (Stockton)
Davies, Ifor (Gower)	Kaufman, Rt Hon Gerald	Rooker, J. W.
Davis, Clinton (Hackney C)	Kelly, Richard	Roper, John
Deakins, Eric	Kerr, Russell	Rose, Paul B.
Dean, Joseph (Leeds West)	Kilfedder, James	Ross, Stephen (Isle of Wight)
de Freitas, Rt Hon Sir Geoffrey	Kilroy-Silk, Robert	Ross, Rt Hon W. (Kilmarnock)
Dempsey, James	Kinnock, Neil	Rowlands, Ted
Dewar, Donald	Lamble, David	Ryman, John
Doig, Peter	Lamborn, Harry	Sandalson, Neville
Dormand, J. D.	Lamond, James	Sedgemore, Brian
Douglas-Mann, Bruce	Latham, Arthur (Paddington)	Sever, John
Duffy, A. E. P.	Lee, John	Shaw, Arnold (llford South)
Dunn, James A.	Lestor, Miss Joan (Eton & Slough)	Sheldon, Rt Hon Robert
Dunnett, Jack	Lever, Rt Hon Harold	Shore, Rt Hon Peter
Dunwoody, Mrs Gwyneth	Lewis, Ron (Carlisle)	Short, Mrs Renée (Wolv NE)
Eadie, Alex	Litterick, Tom	Silkin, Rt Hon John (Deptford)
Edge, Geoff	Loyden, Eddie	Silkin, Rt Hon S. C. (Dulwlch)
Edwards, Robert (Wolv SE)	Luard, Evan	Silverman, Julius
Ellis, John (Brigg & Scun)	Lyon, Alexander (York)	Skinner, Dennis
Ellis, Tom (Wrexham)	Lyons, Edward (Bradford W)	Smith, Rt. Hon. John (N Lanarkshire)
English, Michael	Mabon, Rt Hon Dr J. Dickson	Spriggs, Leslie
Evans, Gwynfor (Carmarthen)	McCartney, Hugh	Stallard, A. W.
Evans, loan (Aberdare)	MacCormick, Iain	Steel, Rt Hon David
Evans, John (Newton)	McDonald, Dr Oonagh	Stewart, Rt Hon M. (Fulham)
Ewing, Harry (Stirling)	McElhone, Frank	Stoddart, David
Ewing, Mrs Winifred (Moray)	MacFarquhar, Roderick	Stott, Roger
Fernyhough, Rt Hon E.	McGuire, Michael (Ince)	Strang, Gavin
Fitch, Alan (Wigan)	McKay, Allen	Summerskill, Hon Dr Shirley
Flannery, Martin	MacKenzie, Rt Hon Gregor	Swain, Thomas
Fletcher, Ted (Darlington)	Maclennan, Robert	Taylor, Mrs Ann (Bolton W)
Foot, Rt Hon Michael	McMillan, Tom (Glasgow C)	Thomas, Datydd (Merioneth)
Ford, Ben	McNamara, Kevin	Thomas, Jeffrey (Abertillery)
Forrester, John	Madel, David	Thomas, Mike (Newcastle E)
Fowler, Gerald (The Wrekin)	Magee, Bryan	Thomas, Ron (Bristol NW)
Fraser, John (Lambeth, N'w'd)	Mahon, Simon	Thompson, George
Freeson, Reginald	Mallalieu, J. P. W.	Thorne, Stan (Preston South)
Freud, Clement	Marks, Kenneth	Thorpe, Rt Hon Jeremy (N Devon)
Garrett, John (Norwich S)	Marshall, Dr Edmund (Goole)	Tlerney, Sydney
George, Bruce	Marshall, Jim (Leicester S)	Tilley, John
Gilbert, Dr John	Maynard, Miss Joan	Tinn, James
Ginsburg, David	Meacher, Michael	Tomlinson, John
Golding, John	Mellish, Rt Hon Robert	Tomney, Frank
Gould, Bryan	Mikardo, Ian	Torney, Tom
Gourlay, Harry	Millan, Rt Hon Bruce	Tuck, Raphael
Grant, John (Islington C)	Miller, Dr M. S. (E Kilbride)	Urwin, T. W.
Grimond, Rt Hon J.	Mitchell, Austin (Grimsby)	Varley, Rt Hon Eric G.
Grocott, Bruce	Mitchell, R. C. (Soton, Itchen)	Wainwright, Edwin (Dearne V)
Hamilton, James (Bothwell)	Molloy, William	Walker, Harold (Doncaster)
Hamilton, W. W. (Central Fife)	Morris, Alfred (Wythenshawe)	Walker, Terry (Kingswood)
Hardy, Peter	Morris, Charles R. (Openshaw)	Ward, Michael
Harrison, Rt Hon Walter	Morris, Rt Hon J. (Aberavon)	Watkins, David
Hart, Rt Hon Judith	Morton, George Martin	Watkinson, John
Hattersley, Rt Hon Roy	Moyle, Rt. Hon. Roland	Weetch, Ken
Hayman, Mrs Helene	Mulley, Rt Hon Frederick	Weitzman, David
Heffer, Eric S.	Murray, Rt Hon Ronald King	Wellbeloved, James
Henderson, Douglas	Noble, Mike	Welsh, Andrew
Hooley, Frank	Oakes, Gordon	White, Frank R. (Bury)
Hooson, Emlyn	Ogden, Eric	White, James (Pollok)
Horam, John	O'Halloran, Michael	Whitehead, Phillip
Howell, Rt Hon Denis (B'ham, Sm H)	Orbach, Maurice	Whitlock, William
Howells, Geraint (Cardigan)	Orme, Rt Hon Stanley	Wigley, Dafydd
Hoyle, Doug (Nelson)	Ovenden, John	Willey, Rt Hon Frederick
Huckfield, Les	Padley, Walter	Williams, Rt Hon Alan (Swansea W)
Hughes, Rt Hon C. (Anglesey)	Palmer, Arthur	Williams, Alan Lee (Hornch'ch)
Hughes, Mark (Durham)	Pardoe, John	Williams, Sir Thomas (Warrington)
Hughes, Robert (Aberdeen N)	Park, George	Wilson, Gordon (Dundee E)
Hughes, Roy (Newport)	Parker, John	Wilson, Rt Hon Sir Harold (Huyton)
Hunter, Adam	Parry, Robert	Wilson, William (Coventry SE)
Irvine, Rt Hon Sir A. (Edge Hill)	Pavitt, Laurie	Wise, Mrs Audrey
Irving, Rt Hon s. (Dartford)	Pendry, Tom	Woodall, Alec
Jackson, Colin (Brighouse)	Penhaligon, David	Woof, Robert
Jackson, Miss Margaret (Lincoln)	Perry, Ernest	Wrigglesworth, Ian
Janner, Greville	Price, C. (Lewisham W)	Young, David (Bolton E)
Jay, Rt Hon Douglas	Price, William (Rugby)
Jeger, Mrs Lena	Radice, Giles	TELLERS FOR THE AYES:
Jenkins, Hugh (Putney)	Rees, Rt Hon Merlyn (Leeds S)	Mr. Thomas Cox and
John, Brynmor	Richardson, Miss Jo	Mr. Ted Graham
Johnson. James (Hull West)	Roberts, Albert (Normanton)
NOES
Aitken, Jonathan	Gow, Ian (Eastbourne)	Montgomery, Fergus
Alison, Michael	Gower, Sir Raymond (Barry)	Moore, John (Croydon C)
Amery, Rt Hon Julian	Grant, Anthony (Harrow C)	More, Jasper (Ludlow)
Arnold, Tom	Grieve, Percy	Morgan, Geraint
Atkins, Rt Hon H. (Spelthorne)	Griffiths, Eldon	Morgan-Giles, Rear-Admiral
Awdry, Daniel		Morris, Michael (Northampton S)
Baker, Kenneth	Grist, Ian	Morrison, Charles (Devizes)
Banks, Robert	Grylls, Michael	Morrison, Hon Paler (Chester)
Bell, Ronald	Hall-Davis, A. G. F.	Mudd, David
Bendall, Vivian	Hamilton, Michael (Salisbury)	Noave, Airey
Bennett, Sir Frederic (Torbay)	Hampson, Dr Keith	Nelson, Anthony
Bennett, Dr Reginald (Fareham)	Hannam, John	Neubert, Michael
Benyon, W.	Harrison, Walter (Wakefield)	Newton, Tony
Berry, Hon Anthony	Haselhurst, Alan	Normanton, Tom
Biggs-Davison, John	Harvie Anderson, Rt Hon Miss	Nott, John
Blaker, Peter	Hamilton, Archibald (Epsom & Ewell)	Oppenheim, Mrs Sally
Body, Richard	Hastings, Stephen	Osborn, John
Boscawen, Hon Robert	Havers, Rt Hon Sir Michael	Page, John (Harrow West)
Bottomley, Peter	Hawkins, Paul	Page, Rt Hon R. Graham (Crosby)
Bowden, A. (Brighton, Kemptown)	Heath, Rt Hon Edward	Page, Richard (Workington)
Boyson, Dr Rhodes (Brent)	Hicks, Robert	Patkinson, Cecil
Braine, Sir Bernard	Higgins, Terence L.	Pattie, Geoffrey
Brittan, Leon	Hodgson, Robin	Percival, Ian
Brocklebank-Fowler, C.	Holland, Philip	Peyton, Rt Hon John
Brooke, Peter	Hordern, Peter	Pink, R. Bonner
Brotherton, Michael	Howe, Rt Hon Sir Geoffrey	Powell, Rt Hon J. Enoch
Brown, Sir Edward (Bath)	Howell, David (Guildford)	Prentice, Rt Hon Reg
Bryan, Sir Paul	Howell, Ralph (North Norfolk)	Price, David (Eastleigh)
Buchanan-Smith, Alick	Hunt, David (Wirral)	Prior, Rt Hon James
Buck, Antony	Hunt, John (Bromley)	Pym, Rt Hon Francis
Budgen, Nick	Hurd, Douglas	Raison, Timothy
Bulmer, Esmond	Hutchison, Michael Clark	Rathbone, Tim
Burden, F. A.	Irving, Charles (Cheltenham)	Rees, Peter (Dover & Deal)
Bullet, Adam (Bos worth)	James, David	Reea-Davies, W. R.
Carlisle, Mark	Jenkin, Rt Hon P. (Wanst'd & W'df'd)	Renton, Rt Hon Sir D. (Hunts)
Chalker, Mrs Lynda	Jessel, Toby	Renton, Tim (Mid-Sussex)
Channon, Paul	Johnson Smith, G. (E Grinstead)	Rhodes James, R.
Churchill, W. S.	Jones, Arthur (Daventry)	Rhys Williams, Sir Brandon
Clark, Alan (Plymouth, Sutton)	Jopling, Michael	Ridley, Hon Nicholas
Clark, William (Croydon S)	Joseph, Rt Hon Sir Keith	Ridsdale, Julian
Clarke, Kenneth (Rushcliffe)	Keberry, Sir Donald	Rifkind, Malcolm
Clegg, Walter	Kellett-Bowman, Mrs Elaine	Rippon, Rt Hon Geoffrey
Cockcroft, John	Kershaw, Anthony	Roberts, Michael (Cardiff NW)
Cooke, Robert (Bristol W)	Kimball, Marcus	Roberts, Wyn (Conway)
Cope, John	King, Evelyn (South Dorset)	Rodgers, Sir John (Sevenoaks)
Cormack, Patrick	King, Tom (Bridgwater)	Ross, William (Londonderry)
Corrie, John	Kilson, Sir Timothy	Rossi, Hugh (Hornsey)
Costain, A. P.	Knight, Mrs Jill	Rost, Peter (SE Derbyshire)
Crowder. F. P.	Knox, David	Royle, Sir Anthony
Dalyell, Tam	Lamont, Norman	Sainsbury, Tim
Davies, Rt Hon J. (Knutsford)	Langford-Holt, Sir John	St. John-Stevas, Norman
Dean, Paul (N Somerset)	Latham, Michael (Melton)	Scott, Nicholas
Dodsworth, Geoffrey	Lawrence, Ivan	Scott-Hopkins, James
du Cann, Rt Hon Edward	Lawson, Nigel	Shaw, Giles (Pudsey)
Durant, Tony	Lester, Jim (Beeston)	Shelton, William (Streatham)
Dykes, Hugh	Lewis, Kenneth (Rutland)	Shepherd, Colin
Eden, Rt Hon Sir John	Lloyd, Ian	Shersby, Michael
Edwards, Nicholas (Pembroke)	Loveridge, John	Silvester, Fred
Elliott, Sir William	Luce, Richard	Sims, Roger
Emery, Peter	McCrindle, Robert	Sinclair, Sir George
Fairbairn, Nicholas	Maefarlane, Neil	Skeet, T. H. H.
Falrgrieve, Russell	MacGregor, John	Smith, Dudley (Warwick)
Farr, John	MacKay, Andrew (Stechford)	Smith, Timothy John (Ashfield)
Fell, Anthony	Macmillan, Rt Hon M. (Farnham)	Speed, Keith
Finsberg, Geoffrey	McNair-Wilson, M. (Newbury)	Spence, John
Fisher, Sir Nigel	McNalr-Wilson, P. (New Forest)	Spicer, Jim (W Dorset)
Fletcher, Alex (Edinburgh N)	Madel, David	Spicer, Michael (S Worcester)
Fletcher-Cooke, Charles	Marshall, Michael (Arundel)	Stainton, Keith
Fookes, Miss Janet	Marten, Nell	Stanbrook, Ivor
Forman, Nigel	Mates, Michael	Stanley, John
Fowler, Norman (Sutton C'f'd)	Mather, Carol	Steen, Anthony (Wavertree)
Fox, Marcus	Maude, Angus	Stewart, Ian (Hitchin)
Fry, Peter	Maudling, Rt Hon Reginald	Stokes, John
Galbralth, Hon T. G. D.	Mawby, Ray	Stradling Thomas, J.
Gardiner, George (Reigate)	Maxwell-Hyslop, Robin	Tapsell, Peter
Gardner, Edward (S Fylde)	Mayhew, Patrick	Taylor, R. (Croydon NW)
Gilmour, Rt Hon Ian (Chesham)	Meyer, Sir Anthony	Taylor, Teddy (Cathcart)
Gilmour, Sir John (East Fife)	Miller, Hal (Bromsgrove)	Tebbit, Norman
Glyn, Dr Alan	Mills, Peter	Temple-Morris, Peter
Godber, Rt Hon Joseph	Miscampbell, Norman	Thomas, Rt Hon P. (Hendon S)
Goodhart, Philip	Mitchell, David (Basingstoke)	Townsend, Cyril D.
Goodhew, Victor	Moate, Roger	Trotter, Neville
Goodlad, Alastair	Molyneaux, James	van Straubenzee, W. R.
Gorst, John	Monro, Hector	Vaughan, Dr Gerald
Viggers, Peter	Weatherill, Bernard	Wood, Rt Hon Richard
Walder, David (Clitheroe)	Wells, John	Younger, Hon George
Walker, Rt Hon P. (Worcester)	Whitelaw, Rt Hon William
Walker-Smith, Rt Hon Sir Derek	Whitney, Raymond	TELLERS FOR THE NOES:
Wall, Patrick	Wiggin, Jerry	Sir George Young and
Walters, Dennis	Winterton, Nicholas	Lord James Douglas-Hamilto
Warren, Kenneth

Division No. 274]	AYES	9.0 p.m.
Allaun, Frank	Freeson, Rt Hon Reginald	Molloy, William
Anderson, Donald	Garrett, John (Norwich S)	Molyneaux, James
Archer, Rt Hon Peter	George, Bruce	Morgan, Geralnt
Armstrong, Ernest	Gilbert, Rt Hon Dr John	Morris, Alfred (Wythenshawe)
Ashley, Jack	Golding, John	Morris, Rt Hon Charles R.
Ashton, Joe	Gould, Bryan	Morris, Rt Hon J. (Aberavon)
Atkins, Ronald (Preston N)	Gourlay, Harry	Morton, George Martin
Atkinson, Norman	Graham, Ted	Moyle, Rt. Hon. Roland
Bamelt, Guy (Greenwich)	Grant, John (Islington C)	Mulley, Rt Hon Frederick
Bean, R. E.	Grocott, Bruce	Murray, Rt Hon Ronald King
Benn, Rt Hon Anthony Wedgwood	Hamilton, James (Bothwell)	Newens, Stanley
Bennett, Andrew (Stockport N)	Hardy, Peter	Noble, Mike
Bidwell, Sydney	Harrison, Rt Hon Walter	Oakes, Gordon
Bishop, Rt Hon Edward	Hart, Rt Hon Judith	Ogden, Eric
Blenklnsop, Arthur	Hattersley, Rt Hon Roy	O'Halloran, Michael
Boardman, H.	Hayman, Mrs Helene	Orbach, Maurice
Booth, Rt Hon Albert	Heifer, Eric S.	Orme, Rt Hon Stanley
Boothroyd, Miss Betty	Hooley, Frank	Ovenden, John
Bottomley, RI Hon Arthur	Horam, John	Palmer, Arthur
Boyden, James (Bish Auck)	Howell, Rt Hon Denis (B'ham, Sm H)	Park, George
Bradley, Tom	Hoyle, Doug (Nelson)	Parker, John
Bray, Dr Jeremy	Huckfleld, Les	Parry, Robert
Brown, Hugh D. (Provan)	Hughes, Rt Hon C. (Anglesey)	Pavitt, Laurie
Brown, Robert C. (Newcastle W)	Hughes, Mark (Durham)	Pendry, Tom
Buchanan, Richard	Hughes, Roy (Newport)	Perry, Ernest
Budgen, Nick	Hunter, Adam	Prico, C. (Lewlsham W)
Butler, Mrs Joyce (Wood Green)	Irvine, Rt Hon Sir A. (Edge Hill)	Price, William (Rugby)
Callaghan, Jim (Middieton & P)	Irving, Rt Hon S. (Dartford)	Radlce, Giles
Campbell, Ian	Jackson, Miss Margaret (Lincoln)	Rees, Rt Hon Merlyn (Leeds S)
Cant, R. B.	Janner, Greville	Richardson, Miss Jo
Carter-Jones, Lewis	Jay, Rt Hon Douglas	Roberts, Albert (Normanton)
Cartwright John	Jeger, Mrs Lena	Roberts, Gwllym (Cannock)
Castle, Rt Hon Barbara	Jenkins, Hugh (Putney)	Robertson, George (Hamilton)
Clemltson, Ivor	John, Brynmor	Robinson, Geoffrey
Cocks, Rt Hon Michael (Bristol S)	Johnson, James (Hull West)	Roderick, Caerwyn
Cohen, Stanley	Johnson, Walter (Derby S)	Rodgers, George (Chorley)
Coleman, Donald	Jones, Alec (Rhondda)	Rodgers, Rt Hon William (Stockton)
Concannon, Rt Hon John	Jones, Barry (East Flint)	Rocker, J. W.
Corbett, Robin	Jones, Dan (Burnley)	Roper, John
Craig, Rt Hon W. (Belfast E)	Judd, Frank	Ross, Rt Hon W. (Kilmarnock)
Crawshaw, Richard	Kaufman, Rt Hon Gerald	Ross, William (Londonderry)
Cronin, John	Kelly, Richard	Ryman, John
Crowder, F. P.	Kerr, Russell	Sandeilson, Neville
Crowther, Stan (Rotherham)	Kilroy-Silk, Robert	Sandelson,Neville
Cryer, Bob	Klnnock, Neil	Sedgemore, Brian
Cunningham, Dr J. (Whiten)	Lamborn, Harry	Sever, John
Davidson, Arthur	Lamond, James	Shaw, Arnold (ilford South)
Davies, Bryan (Enfield N)	Latham, Arthur (Paddington)	Sheldon, Rt Hon Robert
Davles, Rt Hon Denzil	Lee, John	Shore, Rt Hon Peter
Davles, Ifor (Gower)	Lestor, Miss Joan (Eton & Slough)	Short, Mrs Renée (Wolv NE)
Davis, Clinton (Hackney C)	Lever, Rt Hon Harold	Silkin, Rt Hon John (Deptford)
Deakins, Eric	Lewis, Ron (Carlisle)	Sllkin, Rt Hon S. C. (Dulwich)
Dean, Joseph (Leeda West)	Litterick. Tom	Silverman, Julius
de Freitas, Rt Hon Sir Geoffrey	Loyden, Eddie	Skinner, Dennis
Dempsey, James	Luard, Evan	Smith, Rt. Hon. John (N Lanarkshire)
Dewar, Donald	Lyon, Alexander (York)	Snape, Peter
Dolg, Peter	Lyons, Edward (Bradford W)	Sprlggs, Leslie
Dormand, J. D.	Mabon, Rt Hon Dr J. Dickson	Stallard, A. W.
Drayson, Bumaby	McCartney, Hugh	Stanbrook, Ivor
Duffy, A. E. P.	McDonald, Dr Oonagh	Stewart, Rt Hon M. (Fulham)
Dunn, James A.	McElhone, Frank	Stoddart, David
Dunnett, Jack	McGuIre, Michael (Ince)	Stott, Roger
Dunwoody, Mrs Gwyneth	McKay, Allen	Strang, Gavin
Eadle, Alex	MacKenzle, Rt Hon Gregor	Summerskitl, Hon Dr Shirley
Edge, Geoff	Maelennan, Robert	Swain, Thomas
Edwards, Robert (Wolv SE)	McMillan, Tom (Giasgow C)	Taylor, Mrs Ann (Bolton W)
Ellis, John (Brigg & Scun)	Madden, Max	Thomas, Dafydd (Merioneth)
Ellis, Tom (Wrexham)	Magee, Bryan	Thomas, Mike (Newcastle E)
English, Michael	Mahon, Simon	Thomas, Ron (Bristol NW)
Evans, loan (Aberdare)	Mallalleu, J. P. W.	Tlerney, Sydney
Evans, John (Newton)	Marks, Kenneth	Tilley, John
Ewlng, Harry (Stirling)	Marshall, Dr Edmund (Goole)	Tomlinson, John
Faulds, Andrew	Marshall, Jim (Leicester S)	Tomney, Frank
Femyhough, Rt Hon E.	Maynard, Miss Joan	Torney, Tom
Fitch, Alan (Wigan)	Meacher, Michael	Tuck, Raphael
Flannery, Martin	Mellish, Rt Hon Robert	Urwin, T. W.
Fletcher, Ted (Darlington)	Mlkardo, Ian	Vartey, Rt Hon Eric G.
Fookes, Miss Janet	Millan, Rt Hon Bruce	Wainwright, Edwin (Dearne V)
Foot, Rt Hon Michael	Miller, Dr M. S. (E Kilbride)	Walker, Harold (Doncaster)
Forrester, John	Mitchell, Austin (Grimsby)	Walker, Terry (Kingswood)
Fraser, John (Lambeth, N'w'd)	Mitchell, R. C. (Soton, Itchen)	Ward, Michael
Walkins, David	Whitlock, William	Woodall, Alec
Watkinson, John	Willey, Rt Hon Frederick	Woof, Robert
Weetch, Ken	Williams, Rt Hon Alan (Swansea W)	Wrigglesworth, Ian
Weitzman, David	Williams, Alan Lee (Homch'ch)	Young, David (Bolton E)
Wellbeloved, James	Williams, Sir Thomas (Warrington)
White, Frank R. (Bury)	Wilson, Rt Hon Sir Harold (Huyton)	TELLERS FOR THE AYES:
White, James (Pollok)	Wilson, William (Coventry SE)	Mr. Alf Bates and
Whitehead, Phillip	Wise, Mrs Audrey	Mr. James Tinn.
NOES
Bain, Mrs Margaret	Howells, Geraint (Cardigan)	Steel, Rt Hon David
Beith, A. J.	Hughes, Robert (Aberdeen N)	Stewart, Rt Hon Donald
Canavan, Dennis	Kilfedder, James	Thomas, Dafydd (Merioneth)
Carmichael, Neil	Lamble, David	Thompson, George
Craigen, Jim (Maryhill)	MacCormick, Iain	Thorne, Stan (Preston South)
Crawford, Douglas	Pardoe, John	Watt, Hamish
Dalyell, Tam	Penhaligon, David	Welsh, Andrew
Evans, Gwynfor (Carmarthen)	Reld, George	Wigley, Dafydd
Ewing, Mrs Winifred (Moray)	Renton, Tim (Mid-Sussex)	Wilson, Gordon (Dundee E)
Freud, Clement	Robertson, John (Paisley)
Grimond, Rt Hon J.	Rose, Paul B.	TELLERS FOR THE NOES:
Henderson, Douglas	Ross, Stephen (Isle of Wight)	Mr. Robin F. Cook and
Hooson, Emlyn	Sillars, James	Mr. Russell Johnston.

Question accordingly agreed to.