§ Mr. Denzil DaviesI beg to move amendment No. 4, in page 13, line 25, leave out '£2,145' and insert '£2,250'.
§ Mr. Deputy Speaker (Mr. Bernard Weatherill)With this it will be convenient to discuss the following amendments:
- No. 5, in page 13, line 28, leave out '£1,375' and insert "£1,445'.
- No. 7, in page 13, line 36, leave out '£770' and insert '£805'.
§ Mr. DaviesThe amendment seeks to increase what are known as the personal tax allowances or the tax thresholds beyond what is set out in the Bill. It seeks to increase the single person's allowance so that a person earning just over £27 a week would not pay any tax. It seeks similarly to increase the married couple's allowance on a joint income to just over £42 a week. It proposes a corresponding increase for the additional personal allowance in respect of one-parent families.
The purpose of the amendment is to increase the allowances by the effective amount that the Chancellor did not increase tax thresholds in general in the Budget. The right hon. and learned Gentleman said that, in view of the abolition of the reduced rate band, the effective increase in tax thresholds was about 11 per cent. and not 17 per cent., which was the rate of inflation.
The amendments under discussion seek to increase personal allowances, with some rounding up and some rounding down, by approximately 6 per cent. They are put forward because the Government abolished the reduced rate band and would not reinstate it when we debated these matters in Committee. These are alternatives to the abolition of the reduced rate band. My preference, as I argued in Committee, is still for a reduced rate band. There is a division between people who are experts and those who are not. It has always been my opinion that it is ridiculous to have a starting rate of tax of 30 per cent., or even 25 per cent., without an intermediate band. The reduced rate hand fulfils that function. I accept 1630 that the argument is not all on one side but my preference has always been for the reduced rate band.
The amendments, if carried, would not benefit exactly the same groups who lost some benefit as a result of the abolition of the reduced rate band. They cannot be completely co-terminous. Our intention, however, is to benefit some of the groups who have lost benefit. Many hon. Members might consider these modest amendments. I am sure that the Financial Secretary will say that they are modest. On the other hand, I do not think that we could have gone further.
The cost would not be great, but if one is talking of increased public expenditure there are other areas at which one has to look. One cannot look at tax in isolation. There is, for instance, the question of child benefits. We would argue that child benefits should have been increased fully in line with inflation. We cannot put down amendments to the Bill to increase child benefits because the benefits are now a public expenditure item and not tax expenditure, as was the case with child lax allowances.
There are other areas that warrant public expenditure. That is why we have put forward modest amendments. We felt that we could not put all the emphasis on cuts in taxation, partly because allowances benefit everyone up the scale. They benefit those at the top as well as those at the bottom. We would not want to give more benefit to those who have already benefited greatly from the last two Budgets.
The amendments have three aims. The aim, first, is to alleviate in a modest way the poverty trap, and, secondly, to increase the incentives for the working population about which we heard so much from the Government, although, with no work around, the incentives do not seem to count much. It is no good Conservative Members humming and hawing. In South Wales, the North-East and the North-West, there is no work. To talk of incentives seems unrealistic. On the other hand we have heard a considerable amount about incentives. The raising of the tax threshold will increase incentives slightly.
Thirdly, at a small cost—the Financial Secretary will no doubt give the cost to 1631 the PSBR this year—the amendments will provide a modest stimulus to the economy.
Hon. Members are by now familiar with the poverty trap in which an individual or a family has an increase in gross income but, despite the increase, the tax take, together with the loss of family income supplement and other means-tested benefits, leaves the individual or the family little better off as the result of the increase in gross income. As argued from both sides in Committee, the Budget has increased the depth of the poverty trap by abolishing the reduced rate band. It has been estimated by the Low Pay Unit that, of the 64,000 families receiving family income supplement but paying tax, 50,000 were within the reduced rate tax band abolished by the Budget.
About 12,000 families were taken out of tax completely as a result of the increase in allowances. On the other hand, it has been calculated that about 9,000 new families have been brought into the poverty trap as a result of the Budget. Those 12,000 families which have momentarily been taken out of the poverty trap will go back into it again as the year and inflation progress. The amendments are an attempt to help people on low pay a little by increasing the thresholds in the wake of the Government's abolition of the reduced rate band.
The question arises of incentives to work. We were told by the Conservatives, when in Opposition, that the important element in taxation was the marginal rate. The marginal rate of tax at the moment is 30 per cent., which is ridiculous for poor families and people on low income. They come into tax at an immediate rate of 30 per cent. which is far too high. That is why we favour the reduced rate band.
Given that the Government do not accept that argument, they should at least accept the amendments to increase the tax threshold a little so that fewer people are brought into tax at the 30 per cent. rate. The Low Pay Unit first calculated that the tax threshold this year, as a percentage of the average earnings of male workers in manufacturing industry is for a man with a two-child family, at its lowest since the war. The figure is 42.4 per cent. of the average manufacturing industry wage. 1632 That is the low level to which the tax threshold has fallen. The amendments would slightly raise it and alleviate the problem.
The amendments would provide a modest stimulus to the economy. The Financial Secretary will no doubt tell us the figure, but I should have thought that the cost would be less than £500 million on the PSBR this year. That is not a very large sum on a PSBR of £8.5 billion. Even if the cost of the amendment is higher, we would still contend that it would be acceptable, since a PSBR of £8.5 billion is much too low for the British economy at a time of depression and high unemployment.
§ Mr. LawsonWill the right hon. Gentleman say at what level he would like to see the PSBR this year?
§ Mr. DaviesWe have given that figure. If the Financial Secretary had studied the reports of our debates he would have known that we put the figure forward during the debate on Second Reading of the Bill. We suggested that it should be £11.5 billion. It is possible to finance that size of PSBR, especially during a depression, when there is no danger of crowding out the private sector—which was one of the arguments for reducing the PSBR.
A considerable amount of money is now coming into the pension funds, partly as a result of 20 per cent. wage settlements and partly as a result of the pensions legislation. If the Financial Secretary is so confident that inflation will fall this year—I should have thought that interest rates would also fall in that case—that would be a very good time to fund a higher PSBR. If only the Financial Secretary would read Professor Friedman and his own chief economic adviser at the Treasury—his latest economic progress, or perhaps it should be lack of progress, report—he would see the sensible argument that at a time of depression the PSBR should be allowed to increase.
If unemployment goes beyond 2 million the Government, so we were told by the Financial Secretary earlier in our debates, will cut public expenditure to pay for the additional unemployment benefit. According to the Treasury's evidence to the Select Committee, it would like to put up national insurance payments to 1633 pay for that extra unemployment benefit. That would be as deflationary as cutting public expenditure. Therefore, it is no good Ministers coming to the Dispatch Box, holding up their hands in horror and saying that an £11.5 billion PSBR would be too high. It is not too high. It could be funded, and at lower rates of interest.
The Government will obviously argue that the amendments would cost too much and that the PSBR should be reduced progressively. What on earth is the point of reducing the PSBR over the years, especially when revenues are coming in from North Sea oil? That will merely depress the economy still further. The end result will be that all the oil revenues will be used to pay to keep people on the dole.
There are three reasons for the amendments. The first is to alleviate the impact of the poverty trap. The second is to try to provide help for those who are on low pay and to create an incentive for them to work. The third is to provide a modest reflation of the economy. I hope that even at this late stage the Government will recognise the force of the case and will accept the amendments.
§ Mr. CookI support my right hon. Friend the Member for Llanelli (Mr. Davies) in the moderate and reasonable amendments that he has moved. As he pointed out, on the same page to which the amendments refer there is a new clause that abolishes the lower rate band of taxation. It is entirely relevant to take into account the effect of the amendments on the allowances and weigh that against the effect of the abolition of the reduced rate band. The combined effect of the abolition of the reduced rate band and the failure of the Government to increase personal allowances faster than inflation will be that more income earners will pay tax this year than last year, and that they will be paying it at a higher marginal rate than ever before.
If we look back over history we see clearly the way in which more and more low-income families have been brought into the tax threshold. In 1955 a worker had to earn an average wage before he entered the tax threshold. That is not that long ago—it is within even my re- 1634 collection. Moreover, in 1955 when he entered the tax threshold on average income he paid tax at the rate of 9 per cent. By last year, the tax threshold had shrunk to 45 per cent. of the average wage. With less than half of the average wage the income earner became liable for taxation. Even then he paid taxation at the rate of 25 per cent. From November he will need to earn only 42 per cent. of the average wage to become liable for tax at the full standard rate of 30 per cent.
We can see more clearly the effect of those policies on the low-paid if we consider one group—those who receive family income supplement. In 1974 only one-fifth of those receiving family income supplement found themselves liable for taxation. By November of this year, as a result of the increase in the family income supplement eligibility level, and as a result of the policies contained in the Bill, not one-fifth but four-fifths of those receiving family income supplement will find themselves liable for taxation at the full standard rate. I regard that as a disgrace. The rate of taxation on the low-paid has trebled within 25 years and is now higher than in any other Western country, with the possible exception of Australia.
In a previous debate this evening on the amendment that I moved relating to age allowances, I drew the attention of the House to the position of some single women between the ages of 60 and 65 who found themselves simultaneously liable for taxation and eligible for supplementary benefit. After that debate, one hon. Member observed that that was not an uncommon position. I accept that it is not uncommon, but that does not mean that we must accept it. It reveals the scandal of the position.
In November of this year a married man with two children will be liable for taxation on a wage of £51, but the supplementary benefit scale level will be £60, and the family income supplement eligibility level will be £74. There is no rhyme or reason for the House deciding that it will supplement the income of wage earners on less than £74 because they are living in poverty and simultaneously deciding that it will make them liable for taxation. If they are so poor that they require supplementary income, they are too poor to pay taxation and 1635 should be taken out of the tax threshold altogether.
I wish to pick up a point made by my right hon. Friend the Member for Llanelli. We have heard a great deal about incentives from the Government. We have heard a great deal about the incentive to work. When we debated the last Budget, "incentives" was the keynote of the speeches from the Treasury Bench. We were promised that the incentives provided in the Budget would galvanise the entrepreneur.
Each hon. Member received a letter from the British Institute of Management, to which I referred during the Committee stage of last year's Finance Act, in which it called upon its members to respond to those tax cuts with
enterprise, strategic boldness, personal effort and leadershipIf we look back over the waste of our industrial and economic experience during the past 12 months, we search in vain for those new qualities. The truth is that last year we were sold the tax cuts on humbug. Last year there were tax cuts for the top 10 per cent., and we were sold those cuts on the argument that they would invigorate industry. Plainly they had nothing to do with our economic strength or our industrial position. The arguments adduced last year were mainly a pretext to provide handouts to the very rich.Surely it is curious that a Government who last year cut the higher rates for the top 1 million higher income earners should this year be proposing a tax change which will increase the tax burden of the bottom 4 million income earners. There is no conceivable way in which one can reconcile that difference in attitude, either in economic theory or on any fiscal principle. One can explain it only by the fact that the Government are pursuing class policies which benefit the wealthy at the expense of the poor.
My right hon. Friend's amendment would go some way towards diminishing those policies. For that reason, I confidently predict that the Treasury will resist it and that it will give Labour Members yet another opportunity of registering our opposition to the way in 1636 which the Government's policies are affecting the poor.
§ Mr. HooleyI strongly support the arguments put forward by my right hon. Friend the Member for Llanelli (Mr. Davies) which were endorsed by my hon. Friend the Member for Edinburgh, Central (Mr. Cook).
The origin of this argument goes back to what came to be called the "Rooker-Wise" amendment, which perhaps more correctly should have been called the "Rooker-Wise-Lawson" amendment, as I understand the Financial Secretary was a party to that manoeuvre. It indexed personal allowances. This year, the Government have displayed a characteristic piece of chicanery which is on all-fours with their 54-week pension year, because, being forced under legislation to raise personal allowances, they have got their own back on the lowest-paid by abolishing the reduced rate of income tax.
I entirely agree with my right hon. Friend that it is in the lower rate band that the adjustments should be made. I have never entirely accepted the argument about automatic indexation of personal allowances. However, I believe that it was a serious mistake some years ago when Mr. Roy Jenkins scrapped the lower rate of tax. It was a very good move on the part of my right hon. Friend the Member for Leeds, East (Mr. Healey), as Chancellor, to restore it in 1977 or 1978, because it was a long overdue reform of our personal tax system.
It is absolutely preposterous that a married couple on supplemenetary benefit plus rent allowance should get just about the same income as a person who, if he were earning a wage, would be liable to the standard rate of tax. It is preposterous that a person should be liable to the standard rate of tax at £42 a week, particularly when that standard rate is set at 30 per cent., which is about the highest initial tax band in the world. That is absolutely outrageous.
Of course, it will become worse over the years, because with inflation and the general drift of incomes more and more people will go into the tax-paying band. We shall then have the absurd situation that people earning possibly less—I think 1637 that the figure already mentioned was 42 per cent. of average earnings—will become standard rate taxpayers at a full 30 per cent. The amendment makes only a modest adjustment in that respect, and I agree that a more far-reaching adjustment would be infinitely preferable. The amendment will at least give some compensation for the double-dealing of the Government on indexation of personal allowances. I hope that we shall divide against the Government on this issue.
§ Mr. LawsonQuite properly, we have covered much of the ground in these amendments that we covered in Committee when we discussed the lower rate band. Part of this brief debate centred round the discussion of the relative merits of the lower rate band and the higher threshold in our tax system.
I was astonished to hear the right hon. Member for Llanelli (Mr. Davies) say that he has always preferred the existence of a lower rate band to higher thresholds. He has a short memory. That was certainly not the position he took in 1977, which was not very long ago. He said then:
If the cost of the reduced rate band had to be met by keeping the tax threshold lower than it would otherwise be, it would widen the poverty trap by enlarging the overlap between tax liability and entitlement to means-tested benefit "—[Official Report. 3 March 1977; Vol. 927, c. 747–8]He was right then, and I am sorry that he has shifted his position now. It was because we were concerned that we decided to maintain the full real value of the thresholds, and increase the thresholds this year, even though we were obliged to finance it partly by abolishing the lower rate band.I accept entirely the point about the thresholds being too low. But they are higher now in real terms than when the Labour Ciovernment were in office. We raised them substantially in real terms in the 1979 Budget, and maintained their real value in the 1980 Budget. They are now significantly higher in real terms than they were when we took office.
The hon. Member for Edinburgh, Central (Mr. Cook) looked back 25 years, saying that the burden of income tax has risen substantially over those 25 years, and that more and more people had gone further down the income scale. He is 1638 right, but why has that happened? It has happened because Governments of both parties, but particularly the Labour Government, have insisted on higher and higher public expenditure, which has had to be financed. The main means of financing it is by income tax. But where will the money be found? It will not be found by ever taxing the small minority of the rich. Inevitably, money on that scale has to be found by taxing the generality of the population.
§ Mr. CookThe proportion of the national income that is disappearing in direct taxation has remained constant throughout those 25 years. Within the proportion that goes in direct taxation, the proportion received from the corporate sector has collapsed. That collapse has to be made good by income tax. If the balance could be transferred back to the corporate sector, the tax on income could be relieved.
§ Mr. LawsonThere is a half truth in that, but not in the relationship between income tax and indirect taxes, which has deteriorated. But the hon. Gentleman is right in saying that corporation tax now accounts for a small proportion of the total tax yield. That is inevitable if profits are declining. We have had 20 to 25 years of declining profits. But the tax revenue on profits also declines. The problem is what has been happening to profitability. I hope I have the support of Labour Members for profitability over the next 25 years.
10.30 pm
It is a great illusion to assume that the only form of corporate taxation is the corporation tax. There are many other taxes that fall on companies, not least local government rates, which for many companies is a very real tax and a more serious tax than corporation tax. [Interruption.] But to return to the amendment, as the hon. Member for Bolsover (Mr. Skinner)—always a stickler for the rules of order—has reminded me that I should do, there is the question: given that there is a certain amount of money available, how should it to be used? Should it be used to raise the thresholds or should it be used to have a lower rate band? The House has shown some interest in this question. I accept that the marginal rate of tax at the beginning is now higher as a result of 1639 the abolition of the lower rate band. But this is a marginal disadvantage compared with the advantages of abolishing the lower rate band and increasing the thresholds.
There is one point above all that should be emphasised: switching resources from the lower rate band to increases in thresholds cannot in any way make the lower-paid worse off financially; it must and does make them better off. In the area of work incentives for this group of the lower-paid it means that at that level the incentive is less. But let us consider whether it makes that much difference to the "Why work?" syndrome.
We have had the view of Mr. John Kay, who was one of the advisers to the Sub-Committee of the Treasury Select Committee dealing with taxation. The right hon. Member for Ashton-under-Lyne (Mr. Sheldon) is in his place and will confirm that this is so. Mr. John Kay, in a very detailed study, found that the abolition of the lower rate band would have no significant effect on work incentives.
The poverty trap, it is true, will be deepened by the abolition of the lower rate band for a small number of people, but—to put in another way what I said earlier—the alternative to deepening the poverty trap by abolishing the lower rate band is to widen the poverty trap so that it affects far more people, and that has a far more damaging effect on incentives. That is why we decided to make the switch from the lower rate band to higher thresholds than could otherwise be afforded.
§ Mr. SkinnerPerhaps the hon. Gentleman will bend his mind for a moment or two to the fact that there is another development here which is somewhat different and which has been exaggerated over the course of the past few years, namely, that there are many more thousands of people who have been put on the three-day working week and who are thereby paying tax at a level which is half or three-fifths of their wages. Indeed, it can be argued that in 1973, when the Tories were last in office, the then Prime Minister was sacked for introducing a three-day week policy, and now under 1640 this Government it has become official Tory policy.
§ Mr. LawsonThe hon. Gentleman has an obsession with the events of 1973–74 and seems incapable of living in the world of today or thinking in any other terms.
I was asked what addition there would be to the PSBR if these amendments were accepted—a course that I shall not advise the House to take. There would be an increase in the PSBR of the order of £½ billion this year. [Interruption.] The hon. Member for Bolsover regards that as chicken-feed and the right hon. Member for Llanelli—who now decides that it is politic to take his cue from his hon. Friend the Member for Bolsover—agrees with him. He also wants to increase child benefit and increase public expenditure in various other ways and, indeed, to increase the borrowing requirement by £3 billion. His attitude is "Who cares about that?" The right hon Member for Leeds, East (Mr. Healey) would have cared about that when he was in office. As the right hon. Gentleman is in his place, I shall remind him of what he said in 1977. It is unfair to quote what the right hon. Member for Llanelli said without quoting what the right hon. Member for Leeds, East said in that memorable year. He said that
no responsible Government could shirk their duty for maintaining firm control over the supply of money and using the necessary fiscal and monetary instruments for that purpose."—[Official Report, 20 July 1977; Vol. 935, c. 1731.]Labour Members are now running away from that as fast as possible. What do they propose to do? Do they propose to allow interest rates to go through the roof by borrowing the extra money? Do they propose to print more money? Do they propose to allow the monetary targets to go through the roof? Which will it be? Perhaps the right hon. Member for Llanelli will tell the House. He is not willing to get to his feet, and is muttering from a sedentary position.If the amendment and the increased expenditure were accepted, one of two things would happen. Either interest rates would become higher than they might otherwise be, or monetary growth would be greater than necessary. Inflation would then increase. If inflation were to rise faster than would otherwise be 1641 the case, interest rates would have to increase. Labour Members have shown themselves once again to be opportunistic and irresponsible. I invite the House to throw out the amendment.
§ Mr. Denzil DaviesThe Financial Secretary has not attempted to answer the points raised, nor has he addressed his mind to the problem. He began by reiterating the arguments about the reduced rate band and the tax thresholds. We have had those arguments. We accepted that we were beaten, and we put forward the amendments as an alternative. Apart from at the end of his speech, the Financial Secretary did not explain why he would not accept the amendment. He said that it would cost the PSBR £500 million. The PSBR stands at £8.5 billion this year. Another £500 million will not have any effect on interest rates, particularly as the hon. Gentleman is confident that the rate of inflation will have decreased to 16½ per cent. by the end of the year.
If that were to happen, it would be easy to fund £9 billion at a lower rate of interest. We have been told that we shall get £500 million from the EEC. Presumably that will reduce the PSBR this year. Apparently we shall receive that money by the end of the fiscal year. If the hon. Gentleman does not wish to increase the PSBR, the money could he used to raise the tax thresholds. There can be no argument.
§ The amendment concerns £500 million. That would give some assistance to a small number of people who are suffering from low pay and poverty. If the Government cannot increase the PSBR by that much, they do not deserve to address themselves to our economic problems. That is why we shall vote in favour of the amendment.
§ Mr. SkinnerIs my hon. Friend aware that the make-up of the PSBR must be examined? According to the Minister of Agriculture, Fisheries and Food, £7 million of the current PSBR of £9 billion will be taken up by unemployment benefit, tax rebates, lost tax, lost production, and so on. Although the PSBR was of that dimension when the Labour Party was in Government, and although unemployment took a large slice, it did not take seven-ninths. If the PSBR is comprised of such ingredients, it can help the economy.
§ Mr. DaviesMy hon. Friend is quite right. The Government are borrowing money and spending money to put and keep people on the dole. In a modest way the amendment asks the Government to spend a little more money in order to get people back to work. That is why we shall vote in favour of it.
§ Question put, That the amendment be made:—
§ The House divided: Ayes 239, Noes Noes 288.
1645| Division No. 407] | AYES | 10.39 pm |
| Abse, Leo | Canavan, Dennis | Douglas-[...]ann, Bruce |
| Adams, Allen | Carmichael. Neill | Dubs, Alfred |
| Allaun, Frank | Carter-Jones, Lewis | Duffy, A. E. P. |
| Alton, David | Cartwright, John | Dunnett, Jack |
| Anderson, Donald | Clark, Dr. David (South Shields) | Dunwoody, Mrs Gwyneth |
| Archer, Rt Hon Peter | Cocks.Rt Hon Michael (Bristol S) | Eadie, Alex |
| Armstrong, Rt Hon Ernest | Cohen Stanley? | Eastham, Ken |
| Ashley, Rt Hon Jack | Coleman, Donald | Edwards, Robert (Wolv SE) |
| Ashton, Joe | Concannon, Rt Hon J. D. | Ellis, Raymond (NE Derbyshire) |
| Atkinson, Norman (H'gey, Tott'ham) | Conlan, Bernard | Ellis, Tom (Wrexham) |
| Bagler, Gordon A. T. | Cook, Robin F. | English, Michael |
| Barnett, Guy (Greenwich) | Cowans, Harry | Evans, Ioan (Aberdare) |
| Barnett, Rt Hon Joel (Heywood) | Cox, Tom (Wandsworth, Tooting) | Evans, John (Newton) |
| Beilh, A. J. | Crowther. J. S. | Faulds, Andrew |
| Benn, Rt Hon Anthony Wedgwood | Cryer, Bob | Field, Frank |
| Bennett, Andrew (Stockport N) | Cunliffe, Lawrence | Fitch, Alan |
| Bidwell, Sydney | Cunningham, Dr John (Whitehaven) | Flannery, Martin |
| Booth, Rt Hon Albert | Dalyell, Tam | Fletcher, L. R. (Ilkeston) |
| Boothroyd, Miss Betty | Davidson, Arthur | Fletcher, Ted (Darlington) |
| Bradley, Tom | Davies, Rt Hon Denzil (Llanelli) | Foot, Rt Hon Michael |
| Bray, Dr Jeremy | Davies, Ifor (Gower) | Ford, Ben |
| Brown, Hugh D. (Provan) | Davis, Clinton (Hackney Central) | Forrester, John |
| Brown, Robert C. (Newcastle W) | Davis, Terry (B'rm'ham, Stechlord) | Foster, Derek |
| Brown, Ronald W. (Hackney S) | Deakins, Eric | Foulkes, George |
| Brown, Ron (Edinburgh, Leith) | Dempsey, James | Fraser, John (Lambeth, Norwood) |
| Buchan, Norman | Dewar, Donald | Freeson, Rt Hon Reginald |
| Callaghan, Rt Hon J. (Cardiff SE) | Dixon, Donald | Garrett, John (Norwich S) |
| Callaghan, Jim (Middleton & P) | Dobson, Frank | Garrett, W. E. (Wallsend) |
| Campbell, Ian | Dormand, Jack | George, Bruce |
| Campbell-Savours, Dale | Douglas, Dick | Gilbert, Rt Hon Dr John |
| Ginsburg, David | McTaggart, Robert | Sandelson, Neville |
| Gourlay, Harry | McWilliam, John | Sever, John |
| Graham, Ted | Magee, Bryan | Sheerman, Barry |
| Grant, George (Morpeth) | Marshall, David (Gl'sgow, Shettles'n) | Sheldon, Rt Hon Robert (A'ton-u-L) |
| Grant, John (Islington C) | Marshall, Dr Edmund (Goole) | Shore, Rt Hon Peter (Step and Pop) |
| Hamilton, James (Bothwell) | Marshall, Jim (Leicester South) | Silkin, Rt Hon S. C. (Dulwich) |
| Hamilton, W. W. (Central Fife) | Martin, Michael (Gl'gow, Springb'rn) | Silverman, Julius |
| Hardy, Peter | Mason, Rt Hon Roy | Skinner, Dennis |
| Harrison, Rt Hon Walter | Maynard, Miss Joan | Smith, Rt Hon J. (North Lanarkshire) |
| Hattersley, Rt Hon Roy | Meacher, Michael | Soley, Clive |
| Haynes, Frank | Mikardo, Ian | Spearing, Nigel |
| Healey, Rt Hon Denis | Millan, Rt Hon Bruce | Spriggs, Leslie |
| Heffer, Eric S. | Miller, Dr M. S. (East Kilbride) | Stallard, A. W. |
| Hogg, Norman (E Dunbartonshire) | Mitchell, Austin (Grimsby) | Steel, Rt Hon David |
| Holland, Stuart (L'beth, Vauxhall) | Mitchell, R. C. (Soton, Itchen) | Stoddart, David |
| Home Robertson, John | Morris, Rt Hon Alfred (Wythenshawe) | Stott, Roger |
| Homewood, William | Morris, Rt Hon Charles (Openshaw) | Strang, Gavin |
| Hooley, Frank | Morris, Rt Hon John (Aberavon) | Straw, Jack |
| Horam, John | Moyle, Rt Hon Roland | Summerskill, Hon Dr Shirley |
| Howell, Rt Hon Denis (B'ham, Sm H) | Newens, Stanley | Taylor, Mrs Ann (Bolton West) |
| Howells, Geraint | Oakes, Rt Hon Gordon | Thomas, Jeffrey (Abertillery) |
| Huckfield, Les | Ogden, Eric | Thomas, Mike (Newcastle East) |
| Hughes, Mark (Durham) | O'Halloran, Michael | Thomas, Dr Roger (Carmarthen) |
| Hughes, Robert (Aberdeen North) | O'Neill, Martin | Thorne, Stan (Preston South) |
| Janner, Hon Greville | Orme, Rt Hon Stanley | Tilley, John |
| Jay, Rt Hon Douglas | Owen, Rt Hon Dr David | Tinn, James |
| John, Brynmor | Paisley, Rev Ian | Torney, Tom |
| Johnson, James (Hull West) | Parker, John | Urwin, Rt Hon Tom |
| Jones, Rt Hon Alec (Rhondda) | Parry, Robert | Varley, Rt Hon Eric G. |
| Jones, Barry (East Flint) | Pavitt, Laurie | Wainwright, Richard (Colne Valley) |
| Jones, Dan (Burnley) | Pendry, Tom | Walker, Rt Hon Harold (Doncaster) |
| Kaufman, Rt Hon Gerald | Penhaligon, David | Watkins, David |
| Kerr, Russell | Powell, Raymond (Ogmore) | Weetch, Ken |
| Kilfedder, James A. | Prescott, John | Welsh, Michael |
| Kilroy-Silk, Robert | Race, Reg | White, Frank R. (Bury & Radcliffe) |
| Lambie, David | Radice, Giles | Whitehead, Phillip |
| Leighton, Ronald | Rees, Rt Hon Merlyn (Leeds South) | Whitlock, William |
| Lewis, Arthur (Newham North West) | Richardson, Jo | Willey, Rt Hon Frederick |
| Lewis, Ron (Carlisle) | Roberts, Albert (Normanton) | Williams, Rt Hon Alan (Swansea W) |
| Litherland, Robert | Roberts, Allan (Bootle) | Williams, Sir Thomas (Warrington) |
| Lofthouse, Geoffrey | Roberts, Ernest (Hackney North) | Wilson, Gordon (Dundee East) |
| Lyon, Alexander (York) | Roberts, Gwilym (Cannock) | Winnick, David |
| Lyons, Edward (Bradford West) | Robertson, George | Woodall, Alec |
| McCartney, Hugh | Robinson, Geoffrey (Coventry NW) | Woolmer, Kenneth |
| McDonald, Dr Oonagh | Rodgers, Rt Hon William | Wrigglesworth, Ian |
| McElhone, Frank | Rooker, J. W. | Wright, Shella |
| McKay, Allen (Penistone) | Roper, John | Young, David (Bolton East) |
| McKelvey, William | Ross, Ernest (Dundee West) | |
| MacKenzie, Rt Hon Gregor | Ross, Stephen (Isle of Wight) | TELLERS FOR THE AYES |
| Maclennan, Robert | Rowlands, Ted | Mr. George Morton and |
| McNally, Thomas | Ryman, John | Mr. Joseph Dean. |
| NOES | ||
| Adley, Robert | Braine, Sir Bernard | Cranborne, Viscount |
| Aitken, Jonathan | Bright, Graham | Critchley, Julian |
| Alexander, Richard | Brinton, Tim | Crouch, David |
| Alison, Michael | Brittan Leon | Dean, Paul (North Somerset) |
| Amery, Rt Hon Julian | Brocklebank-Fowler, Christopher | Dorrell, Stephen |
| Ancram, Michael | Brotherton, Michael | Douglas-Hamilton, Lord James |
| Arnold, Tom | Brown, Michael (Brigg & Sc'thorpe) | Dover, Danshore |
| Atkins, Rt Hon H. (Spelthorne) | Browne, John (Wincheser) | du Cann, Rt Hon Edward |
| Atkins, Robert (Preston North) | Bruce-Gardyne, John | Dunn, Robert (Dartford) |
| Atkinson, David (B'mouth, East) | Bryan, Sir Paul | Durant, Tony |
| Baker, Kenneth (St. Marylebone) | Buchanan-Smith, Hon Alick | Dykes, Hugh |
| Baker, Nicholas (North Dorset) | Buck, Antony | Eden, Rt Hon Sir John |
| Banks, Robert | Budgen, Nick | Edwards, Rt Hon N. (Pembroke) |
| Beaumont-Dark, Anthony | Bulmer, Esmond | Elliott, Sir William |
| Bell, Sir Ronald | Butcher, John | Eyre, Reginald |
| Bendall, Vivian | Butler, Hon Adam | Fairbairn, Nicholas |
| Bennett, Sir Frederic (Torbay) | Carlisle, Kenneth (Lincoln) | Fairgrieve, Russell |
| Benyon, Thomas (Abingdon) | Carlisle, Rt Hon Mark (Runcorn) | Faith, Mrs Sheila |
| Benyon, W. (Buckingham) | Chalker, Mrs. Lynda | Farr, John |
| Best, Keith | Channon, Paul | Fell, Anthony |
| Bevan, David Gilroy | Chapman, Sydney | Fenner, Mrs Peggy |
| Biffen, Rt Hon John | Churchill, W. S. | Finsberg, Geoffrey |
| Biggs-Davison, John | Clark, Hon Alan (Plymouth, Sutton) | Fisher, Sir Nigel |
| Blackburn, John | Clark, Sir William (Croydon South) | Fletcher, Alexander (Edinburgh N) |
| Blaker, Peter | Clarke, Kenneth (Rushcliffe) | Fletcher-Cooke, Charles |
| Body, Richard | Clegg, Sir Walter | Fookes, Miss Janet |
| Bonsor, Sir Nicholas | Colvin, Michael | Forman, Nigel |
| Boscawen, Hon Robert | Cope, John | Fowler, Rt Hon Norman |
| Bottomley, Peter (Woolwich West) | Cormack, Patrick | Fox, Marcus |
| Bowden, Andrew | Corrie, John | Fraser, Peter (South Angus) |
| Boyson, Dr. Rhodes | Costain, A. P. | Fry, Peter |
| Galbraith, Hon T. G. D. | Macmillan, Rt Hon M. (Farnham) | Roberts, Wyn (Conway) |
| Gardiner, George (Reigate) | McNair-Wilson, Michael (Newbury) | Sainsbury, Hon Timothy |
| Gardner, Edward (South Fylde) | McNair-Wilson, Patrick (New Forest) | St. John-Stevas, Rt Hon Norman |
| Garel-Jonea, Tristan | McQuarrie, Albert | Scott, Nicholas |
| Glyn, Dr Alan | Madel, David | Shaw, Michael (Scarborough) |
| Goodhart, Philip | Major, John | Shelton, William (Streatham) |
| Goodlad, Alastair | Marland, Paul | Shepherd, Colin (Hereford) |
| Gow, Ian | Marshall, Michael (Arundel) | Shepherd, Richard (Aldridge-Br'hills) |
| Grant, Anthony (Harrow C) | Marten, Neil (Banbury) | Shersby, Michael |
| Greenway, Harry | Mates, Michael | Silvester, Fred |
| Grieve, Percy | Mather, Carol | Sims, Roger |
| Griffiths, Eldon (Bury St Edmunds) | Mawby, Ray | Smith, Dudley (War. and Leam'ton) |
| Griffiths, Peter (Portsmouth N) | Mawhinney, Dr Brian | Speed, Keith |
| Grist, Ian | Maxwell-Hyslop, Robin | Spence, John |
| Grylls, Michael | Mayhew, Patrick | Spicer, Jim (West Dorset) |
| Gummer, John Selwyn | Meyer, Sir Anthony | Spicer, Michael (S Worcestershire) |
| Hamilton, Hon Archie (Eps'm &Ew'll) | Mills, Iain (Meriden) | Sproat, Iain |
| Hamilton, Michael (Salisbury) | Mills, Peter (West Devon) | Stainton, Keith |
| Hampson, Dr Keith | Miscampbell, Norman | Stanbrook, Ivor |
| Hannam, John | Mitchell, David (Basingstoke) | Stanley, John |
| Haselhurst, Alan | Moate, Roger | Steen, Anthony |
| Havers, Rt Hon Sir Michael | Monro, Hector | Stevens, Martin |
| Hawkins, Paul | Montgomery, Fergus | Stewart, Ian (Hitchin) |
| Hawksley, Warren | Moore, John | Stewart, John (East Renfrewshire) |
| Heddle, John | Morris, Michael (Northampton, Sth) | Stokes, John |
| Henderson, Barry | Morrison, Hon Charles (Devizes) | Stradling Thomas, J. |
| Heseltine, Rt Hon Michael | Morrison, Hon Peter (City of Chester) | Tapsell, Peter |
| Hicks, Robert | Mudd, David | Taylor, Robert (Croydon NW) |
| Higgins, Rt Hon Terence L. | Murphy, Christopher | Taylor, Teddy (Southend East) |
| Hill, James | Myles, David | Tebbit, Norman |
| Hogg, Hon Douglas (Grantham) | Neale, Gerrard | Temple-Morris, Peter |
| Holland, Philip (Carlton) | Needham, Richard | Thomas, Rt Hon. Peter (Hendon S) |
| Hooson, Tom | Nelson, Anthony | Thornton, Malcolm |
| Hordern, Peter | Neubert, Michael | Townsend, Cyril D. (Bexleyheath) |
| Howe, Rt Hon Sir Geoffrey | Newton, Tony | Trippier, David |
| Howell, Rt Hon David (Guildford) | Normanton, Tom | Trotter, Neville |
| Howell, Ralph (North Norfolk) | Nott, Rt Hon John | van-Straubenzee, W. R. |
| Hunt, David (Wirral) | Onslow, Cranley | Vaughan, Dr Gerard |
| Hunt, John (Ravensbourne) | Oppenheim, Rt Hon Mrs Sally | Viggers, Peter |
| Irving, Charles (Cheltenham) | Osborn, John | Wakeham, John |
| Jenkin, Rt Hon Patrick | Page, John (Harrow, West) | Waldegrave, Hon William |
| Johnson Smith, Geoffrey | Page, Rt Hon Sir R. Graham | Walker, Rt Hon Peter (Worcester) |
| Jopling, Rt Hon Michael | Page, Richard (SW Hertfordshire) | Walker, Bill (Perth & E Perthshire) |
| Joseph, Rt Hon Sir Keith | Parkinson, Cecil | Walker-Smith, Rt Hon Sir Derek |
| Kaberry, Sir Donald | Patten, Christopher (Bath) | Wall, Patrick |
| Kellett-Bowman, Mrs Elaine | Patten, John (Oxford) | Waller, Gary |
| Kershaw, Anthony | Pattie, Geoffrey | Walters, Dennis |
| Kimball, Marcus | Pawsey, James | Ward, John |
| King, Rt Hon Tom | Percival, Sir Ian | Warren, Kenneth |
| Kitson, Sir Timothy | Pink, R. Bonner | Wells, John (Maidstone) |
| Knight, Mrs Jill | Pollock, Alexander | Wells, Bowen (Hert'rd & Stev'nage) |
| Knox, David | Porter, George | Wheeler, John |
| Lang, Ian | Price, David (Eastleigh) | Whitelaw, Rt Hon William |
| Langford-Holt, Sir John | Proctor, K. Harvey | Whitney, Raymond |
| Latham, Michael | Pym, Rt Hon Francis | Wickenden, Keith |
| Lawrence, Ivan | Raison, Timothy | Wiggin, Jerry |
| Lawson, Nigel | Rathbone, Tim | Wilkinson, John |
| Lee, John | Rees, Peter (Dover and Deal) | Williams, Delwyn (Montgomery) |
| Le Marchant, Spencer | Rees-Davies, W. R. | Winterton, Nicholas |
| Lennox-Boyd, Hon Mark | Renton, Tim | Wolfson, Mark |
| Lester, Jim (Beeston) | Rhodes James, Robert | Young, Sir George (Acton) |
| Lewis, Kenneth (Rutland) | Rhys Williams, Sir Brandon | Younger, Rt Hon George |
| Lloyd, Peter (Fareham) | Ridley, Hon Nicholas | |
| Loveridge, John | Ridsdale, Julian | TELLERS FOR THE NOES |
| Lyell, Nicholas | Rifkind, Malcolm | Mr. David Waddington and |
| MacGregor, John | Roberts, Michael (Cardiff NW) | Mr. Peter Brooke. |
| MacKay, John (Argyll) |
§ Question accordingly negatived.