HC Deb 17 December 1981 vol 15 cc467-85

Question proposed, That the clause stand part of the Bill.

4.22 pm
Mr. J. W. Rooker (Birmingham, Perry Barr)

I rise to oppose clause 1 standing part of the Bill. I hope that the Government are not too surprised to see the Order Paper not littered with the amendments that it had last year. We make no apology for that, and I trust that we shall not be subject to any accusation by Conservative Members that we are seeking to amend the Bill, or any part of it, because that is certainly not the reason.

Last year we tried to rewrite the Bill so as to abolish certain parts of the contributions procedure for national insurance. However, we took the view this year that—having had extensive debates last year on what is a highly technical Bill on which we cannot discuss matters of great principle—the Committee would be better served if we simply had a debate basically on clauses 1 and 2 stand part and discussed one or two points of concern. I shall certainly refer to the parts of clause 1 with which we are unhappy, but we have proposed no amendment.

The rise in the earnings limit that the Government have announced in clause 1, in so far as national insurance contributions are concerned and especially the lower earnings limit, causes considerable distress. The figure in the Bill is £29.50, rising from £27. It is well known—it is a matter of statutory requirement—that the lower earnings limit should reflect more or less the basic State retirement pension. If I remember correctly, it must be not much higher but not more than 49p less than the State retirement pension. An amendment that we would have wished to move—that is, not £29.50 but, say, £30—would technically have been out of order unless we had tabled a whole lot of amendments changing both the Social Security Act 1975 and the Social Security Pensions Act 1981.

I should like to explain why we think the £29.50 figure is too low. It is true that it reflects within lop the new retirement pension of £29.60, but everyone knows—the Government have admitted it—that the new retirement pension is not at the correct figure required by statute—namely, the reflection of the previous year's inflation. The Government have admitted that it is about 2 per cent, less than what it would otherwise have been. Having agreed to that rise next year—we are not going to argue about it today—there seems no justification for basing the lower earnings limit on a false retirement pension figure. It is known in advance that it is 2 per cent. less. The Bill comes before the Committee this week but it will not take effect until the tax year starting in April 1982. Therefore, we think that the Government could make that small change in the lower earnings limit.

The reasons, in so far as the lower paid are concerned, are academic. It is probably not generally known outside the Committee that once one passes the threshold—the lower earnings limit for national insurance contributions—the national insurance contribution of 8¾ per cent., as it will be from next April, is paid on all earnings. I estimate that someone earning £30 a week next April will be about £2.60 a week worse off than if the Chancellor had raised the lower earnings limit to the correct amount of £30. In other words, someone receiving a £1 increase next April—from £29 to £30—and not paying national insurance contributions with the correct lower earnings limit in operation, will find himself with a net loss of about £1.60. A £1 rise—in fact, it can be less than £1—can cause a loss of about £2.60 in national insurance contributions at that amount of weekly wages.

It may be thought that not many people in the country are on a wage of about £30 a week. It is the sort of figure that Conservative Members might spend on a lunch. It has to be appreciated that for part-timers—[Interruption.] If the Minister says he spends 76p, that is fine. I withdraw the charge against him, but it would be nice to know what his hon. Friend pays for his lunch.

I make the point in jest to point out that a restaurant bill can be about £30 for many hon. Members, but it is also the wage of many people. They are in general part-timers who, by definition, are mainly women. The overwhelming majority are women. They are cleaners doing part-time evening shifts, twilight shifts in factories, early morning cleaning in offices—maybe four hours a day or something of that order—at about £1.50 an hour. That will bring in, over five days, about £28 to £30 in earnings.

In the discussions on last year's Bill in Committee upstairs, Ministers quoted examples of low-paid people caught in the twilight zone for part of the year paying very heavy national insurance contributions but not being eligible for the benefits that flow from those contributions. It is the unfair change in the lower earnings limit to which we take exception. It is a hidden form of tax. No one will deny that. Under the present rules, there has to be a lower earnings limit. I shall come to the point about abolishing it, but under the present law there has to be a lower earnings limit. Given that it is tied to the pension, given that the pension figure is inaccurate by everyone's admission, and that it is going to be put right, we thought that the Government ought to take an early opportunity to deal with the lower earnings limit as well. Only the lower paid are affected by the lower earnings limit. Once a person is on two-thirds average earnings, he is caught in the trap of national insurance and social security contributions like everybody else.

4.30 pm

The so-called 1 per cent. in national insurance is spread unfairly over the working population. It is not as though everyone has to pay 1 per cent. extra in national insurance. That is not so. For a person on average earnings, or two-thirds of average earnings, the increase is 1p in the pound on those earnings. For a person in receipt of five times the average earnings, the increase in national insurance contribution—not taken together with tax—is only 0.7 per cent. For the fortunate person who is on 10 times average earnings—about £70,000 a year—the increase in the national insurance contribution is only 0.3 per cent. That is less than a third of the increase paid by someone who is on two-thirds of average earnings. That would seem to be a little unfair, and it arises as a result of the operation of the upper earnings limit. There is a cut-off point, at present £200—from next April it will be £220—above which national insurance contributions are not payable.

From next April, a person on five times average earnings—£35,000 a year—will pay only 2.9 per cent. of his income in national insurance, whereas someone on average earnings, £140 a weeek, or on two-thirds of average earnings, sometimes less than £100 a week, will pay 8.5 per cent. in national insurance contributions. That is grossly unfair, and it is a highly regressive part of our overall tax and social security system, bearing heavily on the average earner and those on less than average earnings.

Why should someone on five times average earnings contribute, in proportional terms, towards pensions and other social security benefits—including the part that goes to the National Health Service—only a third of the amount paid by the person on average earnings? There is gross unfairness and, notwithstanding that there are now earnings-related pensions, we are convinced that there is a need to change the system that was introduced by the previous Labour Government. That is necessary to make the system less regressive than it has become over the last two or three years.

When the Conservative Government came to office, the national insurance contribution was set at only 6.5 per cent. By next April, the increase over three years will be 8.75 per cent. Ministers will no doubt say that an increase is needed to pay for the increased benefits, but in real terms benefits have been cut, not increased. I do not intend to repeat the points that I made in that respect on Second Reading.

The purpose of having a percentage figure to pay for national insurance was that, once a figure had been set and as earnings rose each year, it would automatically bring in extra national insurance contributions to pay for the benefits at a constant real rate. It is true that for two of the last three years, earnings have risen ahead of inflation, but there has now been a substantial increase in the rate of contribution. That is why the change proposed in clause 1 will bring about a substantial increase in income to the fund. According to appendix 1 of the Government Actuary's report, the figure will be about £850 million. that will arise because of the increase in earnings limit coupled with the increase in the standard rate. On top of that, one can build an estimate of the earnings increase for next year. The overall effect will be to produce substantial extra revenue to the Government.

Mr. Mike Thomas (Newcastle upon Tyne, East)

I support most of the hon. Gentleman's general argument, but a few moments ago he said that he and his hon. Friends now regard the system laid down in the Social Security Pensions Act 1975 as unsatisfactory. That would seem to be a Second Reading point. On Second Reading, when Social Democratic and Liberal Members were making exactly that point, why did the hon. Gentleman and his hon. Friends fail to mention it?

Mr. Rooker

I do not think that I was making a Second Reading point. This time last year the hon. Member for Newcastle upon Tyne, East (Mr. Thomas) was a Labour Member. I have no doubt that he has looked at the proceedings on the Bill that was rushed through in a week last year. We attempted to put right what we saw as the greater regressiveness in the system that has arisen in the last two years.

There was some hit and miss about the measure as it started in 1975. The late Brian O'Malley made it clear that it was a brand new system and that it would take a few years to see how it worked in practice. Payments under the new earnings-related pension scheme have been made only in the last two years. In considering whether in 1975 the Government devised the right system in terms of the upper and lower earnings limits, one has only to look at how they were chosen. It was done in a very hit and miss way. It was almost by accident that the system was tied to the basic pension increase. Then the upper earnings limit became six-and-a-half or seven-and-a-half times the pension figure. That was not the original formula. It was chosen only because the original figure was about one-and-a-half times average earnings.

Therefore, when the 1975 Act began to operate, it was to a considerable extent operating in uncharted waters. No one denied it at the time. Since, on behalf of the Opposition, I have had responsibility for social security matters, I have learnt that the 1975 measure was not as cut and dried as it appeared to be on the surface to those who did not take a detailed interest in it.

In dealing with the similar measure last year, we tried to eliminate the regressiveness in terms of the upper earnings limit. We wanted to abolish it or to put it on a sliding scale. It was clear that some well-paid people could get large State retirement pensions if we abolished the upper earnings limit. That is one of the problems. It would bring in the extra revenue, but substantial changes would be required in the original Act. We also sought to abolish the lower earnings limit, so that national insurance contributions were collected only on earnings above the lower earnings limit. We wanted to make it work like a tax threshold. When a person crosses the tax threshold, he pays income tax on the earnings above the threshold, but the national insurance system does not work like that.

Last year, when we dealt with the similar measure, it was about 5 am before our amendment was reached. I said that I had a rough idea what the amendment might cost, but that I would prefer the Government to produce an accurate figure. A few minutes later I was told that the figure would be about £4½ billion. In the circumstances, the amendment was withdrawn.

A substantial amount of revenue is gained from earnings below the lower earnings limit. The figure for this year must be nearly £5 billion. At that end of the national insurance system, complex technical changes will be required in our social security legislation. Opposition Members have deliberately set out not to try to rewrite the Bill in the way that we did last year, because we have made good our points and they do not bear repetition today.

Mr. Mike Thomas

Has not the hon. Gentleman, whose convolution exceeds only his fluency, been induced to put only one radical subclause into his speech—which is more appropriate for a Second Reading debate—because Social Democrat and Liberal Members put some radical thought into the matter on Second Reading?

Mr. Rooker

The hon. Gentleman must appreciate that when I replied for the Opposition on Tuesday I said in the first paragraph—I did not realise that my statement was quite so bald—that I did not intend to refer to the Bill but that I would do so today in the same way as last year. My response on Tuesday was directed to one part of the Opposition's reasoned amendment—the real cuts in benefits.

It would be easy for Opposition Members to repeat verbatim their speeches and amendments on last year's Bill because, apart from one narrow point on which we have an amendment, it is almost word for word the same as last year. Only a few figures have been changed. I am dealing now in a general way with clause 1 to cover the detailed points that I made last year. The Opposition's stance is entirely consistent with what we said last year, when the hon. Member for Newcastle upon Tyne, East was a Member of the Labour Party. It cannot possibly be a reaction to what was said by Liberal and Social Democrat Members on Tuesday, because their arguments and advocacy of new forms of taxation were shot to pieces.

The Secretary of State for Social Services (Mr. Norman Fowler)

Does the hon. Gentleman agree that the alternative put forward by the SDP on Tuesday was very radical? The hon. Member for Newcastle upon Tyne, East (Mr. Thomas) said that there should be a radical increase in income tax. If the SDP wishes to campaign upon that issue, I suggest that it makes the matter public. It was also apparent that precisely the opposite point was being put forward by the Liberal Party spokesman in the debate.

Mr. Rooker

That is correct. I have read the speech of the hon. Member for Truro (Mr. Penhaligon), which was in conflict with the speech of the hon. Member for Newcastle upon Tyne, East on that point. I speak for the official Opposition. The members of the Social Democratic Party can speak for themselves. We have made it clear during the past two years that, because of the changes made by the Government—some for technical reasons because of the way in which the new pension scheme operates, and others for cost-cutting public expenditure reasons—the system has become more regressive. We wish to have radical changes.

Mr. Mike Thomas


Mr. Rooker

Yes. That is what I said last year, when the hon. Gentleman was still a member the Labour Party. The hon. Gentleman did not contribute to the debate last year. However, we made the point that instead of a penny in the pound increase in national insurance contributions to raise revenue it would be fairer to increase the standard rate of income tax by about 1.2p in the pound.

Mr. Mike Thomas

That is exactly what we said.

Mr. Rooker

That is what the Labour Party said last year. I agree in part with the hon. Member for Newcastle upon Tyne, East—who must stop interrupting from a sedentary position—because I have not disowned his conclusion about amalgamating the two systems. That was the point that I made last year on behalf of the Labour Party, which the hon. Gentleman then voted for and agreed with. He seems to be doing the same today.

Mr. Mike Thomas

It is called consistency.

Mr. Rooker

Yes, consistency by the official Opposition. As I said, it would be fairer if the money required were raised via income tax. In order to amalgamate the two systems, we must abolish the tax threshold system so that income tax is collected on all income and we no longer have personal allowances, or we must abolish the lower earnings limit. We must do one or the other if the systems are amalgamated.

Mr. Mike Thomas

We do not have to do that.

Mr. Rooker

We must do that and we must take account of the fact—

Mr. Mike Thomas

The hon. Gentleman's attitude is that we should do nothing.

4.45 pm
Mr. Rooker

I am happy to give way to the hon. Member for Newcastle upon Tyne, East. We are in Committee so he knows that he can speak as often and for as long as he wishes. I have no doubt that he has a valid contribution to make. However, I wish to make my point. We must be wary and not sell the public something that we cannot deliver. We must take account of the vast amount of revenue raised by the national insurance contribution on earnings below the lower earnings limit, which is £5 billion. That is somewhat more than a penny in the pound on income tax. Therefore, we must be more careful about the method by which the systems are amalgamated than simply adding the two sums together, calling it all income tax, and collecting it in that much fairer way.

Mr. David Ennals (Norwich, North)

On Second Reading the hon. Member for Newcastle upon Tyne, East (Mr. Thomas) on behalf of the Social Democratic Party, said: We must do what successive Governments and the two old parties have ducked for so long, and that is to consider the questions of poverty, social security, pensions and taxation together."—[Official Report, 15 December 1981; Vol. 15, c. 198.] During my three years as Secretary of State for Social Services I do not recall the hon. Gentleman telling me that I was ducking the issue. The 1975 Bill was agreed by both sides of the House and by the right and left wings of the Labour Party. The hon. Gentleman voted for it then. I do not know what he is talking about now.

Mr. Rooker

My right hon. Friend speaks with some experience in the matter. If representations were not made at the time, the hon. Member for Newcastle upon Tyne, East can now tell us in detail how the two systems would be amalgamated. However, this Bill is not the right vehicle for that, because one cannot table the necessary amendments to put a coherent case about income tax.

Mr. Mike Thomas


Mr. Rooker

I shall give way to the hon. Gentleman once more. Then I intend to complete my speech without giving way to him, irrespective of the number of times that he interrupts.

Mr. Mike Thomas

I am grateful to the hon. Gentleman. Does he wish to collect the £5 billion from the lower paid? If not, his argument is entirely specious.

Mr. Rooker

Therein lies the problem. The sum of £5 billion is collcted not from the lower paid but from every wage earner because the contribution comes from the first slice of income up to £30. The average earner pays the national insurance contribution on his earnings between nought and £30, which is why such a large amount of money is collected. There is no easy answer to the problem. I could find £5 billion in many places, but I should be out of order if I started to itemise them. The Opposition are taking steps within their internal structure to discuss that issue. We shall in due course issue a set of coherent proposals to clear up the problem of the interaction between the income tax and social security systems.

The increases that I have detailed as they affect average earners, five times average earners and two-thirds average earners, must be set against the fact that they will pay for contributory benefits. That is one of the other problems. It has always been a part of our system that contributions have been separated from the income tax system and that it should not be possible for a Government to cut or abolish benefits. However, the Government are trying to abolish the contribution principle. That will provide the Opposition with the welcome opportunity to return to square one and to reconsider the entire system.

The increases in contributions must be set against reductions in benefits. There are some who argue that the Government are perpetrating a social security fraud, but I suspect that those who report our proceedings will not take that on board.

What will be the effect of the changes in clause 1 on employees? I shall not read out a long list of statistics, because the Committee would find that boring and because those who report our proceedings do not find it easy to take down a mass of statistics. In putting some comparisons before the Committee, I shall assume that the basic 30p flat rate will remain in the next financial year. Under the Government's proposals, someone on half average earnings will pay 38.75p in the pound on each extra pound that he receives. I refer to combined income tax and national insurance contributions. The rate for someone in receipt of twice average earnings will be 30p in the pound. Those will be the rates from next April.

It is crazy that someone in receipt of half average earnings—perhaps £80 by next April—will have 38.75p taken from every extra pound that he receives in the form of overtime payments or bonuses, while the higher paid will lose less. Someone in the same factory or company on twice average earnings—perhaps £250 a week—will lose only 30p in every extra pound. I suspect that that person's payments will not be in the form of overtime. He or she will pay a smaller amount in the pound because there will be no loss in the form of extra national insurance contributions.

It is relevant to compare the respective positions in 1978. Those on half average earnings were then paying 31.5p in the pound on every extra pound, while those on twice average earnings were paying 33p. The result of the 1978 Budget, which was the last effective Budget that the Labour Government introduced, was that those on half average earnings paid less in the pound in the marginal rate of tax and in national insurance contributions than those on twice average earnings. This Government have reversed the respective positions. I do not think that any other comparison can show more effectively the unfairness of the extra tax burden that has been imposed by the Government. It has been shifted from those who earn more than average earnings to those who earn only half average earnings. The effect of the Government's changes from April 1982 will stem entirely from the large increase in the national insurance contribution rate that is contained in clause 1 and the extra 1 per cent. this year.

It is my understanding that these increases will wipe out the benefit that many wage earners enjoyed following the reduction in the standard rate of income tax from 33p in the pound to 30p. The Government are not trying to keep the increased national insurance contributions a secret, but the measures that contain such changes are usually carried through the House of Commons by order at about this time of the year, and often fairly late at night. The Government have had to introduce a Bill this year—they had to do so last year—largely for arithmetical reasons, except for the current redundancy payments change. I hope that they will learn their lesson and recognise that in future they should keep increases within the limit provided in the original Act. That would avoid taking up the time of the House of Commons with primary legislation.

It is generally true that we introduce the changes that we are discussing during December and that they come into operation in the following April. The Budget judgment is presented in March, when the Chancellor of the Exchequer makes great pronouncements, on income tax and tax thresholds, that appear in headlines. Increases in income tax are never highlighted at that time but the changes are already coming into effect and they will hit people's pay packets in the form of national insurance contribution increases, which can have a greater effect on pay packets than almost any other announcement that the Chancellor might make in his Budget judgment.

When the increased contributions take effect many of our constituents say "This was never discussed in Parliament at the time of the Budget. Why do Members of Parliament let these things through without debate or scrutiny?" We, the Opposition—I am sure that this applies to previous Oppositions—can point to late night debates shortly before Christmas when no one pays a great deal of attention to the minutae of what is passing through the House of Commons. The effect of what we are doing now on the pay packets of more than 20 million wage earners will be catastrophic, especially for the low-paid. It will have the effect of shifting the balance of tax contributions from the higher paid to the lower paid.

The attendance in the Chamber is not very great. Although we are not allowed to refer to it, the attendance of the press representatives who report our proceedings is even less great. The national insurance system has become so complicated that hon. Members and members of the press are almost frightened to consider and discuss it. That has happened because of the scale of the complexity and the magnitude of the Budget, which involves £30 billion. That being so, we tend to lose sight of the effect on the individual.

We must find a way of organising our debates and enacting social security legislation, especially that which bears on contributions and benefits, so that hon. Members may play a greater part in our debates. We shall be able to do that only if the consequences of legislation are made more clear to hon. Members. I do not criticise the notes on clauses that have been provided by the Government on this or on any other Bill, but the briefings that we receive from groups outside the House, such as the Low Pay Unit and the Child Poverty Action Group, are couched in much more humane terms than anything that we receive from the Government. The briefing from outside groups tell us in clear terms what the effect of proposed legislation will be on ordinary families. Of course, we are aware of the effect of Government action when we attend our surgeries and undertake constituency work. I urge the Government to take steps to provide clearer information.

It may be upsetting even for Ministers to note that not one Conservative Back Bencher is in the Chamber. They must be worried when they find that none of their supporters is seeking to participate in the debates. Many more hon. Members should be seeking to catch the eye of the Chair. The Bill is fundamental to the British people. We shall oppose the clause for the reasons that I have detailed. The clause is grossly unfair. Our reasons for opposing it are the same as those that were advanced when we considered last year's Bill.

I hope that we do not have another such Bill. The Government must find a better way to order the tax and social security system. They must not make further impositions and further cut benefits.

5 pm

Mr. Ennals

I entirely support what my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) said, but I do not agree that the Government are concerned about the fact that the Benches behind them are empty. They wish to get the measure through and get the extra money for the Treasury. The quicker that they can do that and the fewer people who notice it, especially among the press, the happier they will be.

This is just a Treasury Bill. As I said on Second Reading, it places a heavy impost on working people when their cost of living is rising. Rents and prescription charges are increasing and inflation is not coming down in the way that the Government promised. Burdens are being piled on working people, yet they are told that they must accept low wages.

Under the Government the national insurance burden is getting higher and higher. When Parliament introduced earnings-related contributions, it was not the intention constantly to have Bills to raise the percentage of earnings. As earnings rise, earnings-related contributions rise. In a well-ordered system, with a Government who knew what they were doing, Parliament would not have to be asked year after year to increase the percentage.

The system was introduced because it was fairer and because it would prevent the nonsense year after year of increasing the amount that people had to pay. The 1974 White Paper announcing the new scheme, Cmnd. 5713, stated at paragraphs 33 to 35: The Government Actuary estimates … that a combined contribution from employers and employees of not more than 16½ per cent. of employees' earnings up to the scheme's ceiling would be required to finance the scheme in its early years if 8 million employees were contracted out. This contribution would compare with the 14 per cent. combined contribution proposed for April 1975 under the Social Security Amendment Bill now before Parliament. It covers all national insurance benefits, industrial injuries benefits, a contribution to the national health service and the employer's contribution to the Redundancy Fund", which this Bill does too. The balance between the scheme's income and expenditure will be affected by the number of occupational scheme members who are contracted out. For example, a contribution of not more than 16 per cent. would be needed in the early years if the number contracted out turned out to be 6 million, rather than 8 million. The Government have not yet mentioned the numbers contracted out of the State scheme and I hope that the Minister will deal intelligently with the matter in his reply.

Paragraph 35 states It is not necessary to decide the initial contribution rate firmly at this point … it is thought right to illustrate the effects of the scheme by assuming an initial contribution of 16½ per cent. and the figures shown in the text of this White Paper are on that basis. Of a 16½ per cent. contribution, if that proved appropriate, the employee would pay 6½ per cent. and the employer 10 per cent. In 1977 those were the percentages. The employee was asked to pay 6½ per cent. However, last year the employer's contribution was increased to 7.75 per cent. and a further 1 per cent. increase is proposed. With the employee's contribution at 13.7 per cent., the total is 21.45 per cent.

The original proposals were made by the Labour Government and accepted by the Conservative Opposition. However, the Government have now got themselves in a mess, not only over the insurance system but over increased unemployment. On Second Reading the Secretary of State said that a high proportion of the money went to the large number of elderly people and it has not changed.

People asked to pay the extra 1 per cent. will wonder what they will get for it. They will get nothing. There will be no improvement in benefits. Last year unemployment benefit was increased by 5 per cent. under the rate of inflation, which was an effective cut, and the earnings related supplement has been stopped. The Government have completely undermined the contributory system.

Does the Secretary of State believe in the contributory principle or does he see the Bill simply as a system of taxation? If the latter, it has grave weaknesses. It is extremely regressive to use national insurance contributions as a tax system. It does not take a higher percentage from people with incomes above a certain level, who, in any case, get special tax concessions from the Government. If contributions are increased but contributory benefits reduced, it is bound to undermine confidence in the contributory principle.

The Social Security (No. 2) Act 1980 abolishes the earnings-related supplement from next January. It increased certain contributory benefits by 5 per cent. less than the rate of inflation, although it retained price protection for non-contributory benefits such as supplementary benefit. The Act took away the right which people believed that they had through paying their national insurance contributions.

If the Government believe that the contributory principle is a load of old codswallop and wish to throw it out of the window, we must think again. The basis of the new pension scheme and the whole basis of earnings-related pensions was that people would better understand and, therefore pay their contribution because they knew what they were getting from it.

Mr. Mike Thomas

I have sympathy with what the right hon. Gentleman says, but do people really understand the contributory principle? The level of contributions and the tax-gathering aspect have so undermined the principle that people can conceive of it no longer.

Mr. Ennals

The hon. Gentleman is making the same point as I am. Successive actions by the present Government, during the period when he was a member of the Labour Party, have steadily eroded the contributory principle. That principle has been accepted by the House ever since the Beveridge report was implemented and strong arguments have been made for it. I remember Richard Crossman delivering the Herbert Morrison memorial lecture and arguing that people are prepared to pay when they can see that they are buying a worthwhile benefit. Earlier still—in 1942—the Beveridge report stated: It is, first and foremost, a plan of insurance—of giving in return for contributions benefits up to subsistence level, as of right and without means test, so that individuals may build freely upon it. It was the contributory principle which the Social Security Pensions Act 1975, approved by both parties, sought to strengthen. Moreover, it is the essential element in the new pensions scheme which, thank goodness, up to this moment has not divided the two parties but has been accepted, and is now three years into its 20-year maturity period.

It would be disastrous if the principle written into that Act, and accepted by Parliament and by the people, of paying contributions in order eventually to receive benefits were ignored. It is a pay-as-you-go scheme. Today's earners are paying for benefits received by those who are retired or unemployed. There is an honesty about that, but that honesty is now being undermined as year after year the Government change the percentage of contributions, using it simply as a taxation measure.

We shall discuss the reduction of the Treasury supplement later and I shall not go into it now. However, it is another example of the Treasury obliging the DHSS to turn national insurance into a system of tax collection in an anti-social and unsatisfactory way which hits the poorest hardest and the richest least.

For those reasons, I shall happily and willingly support my hon. Friend the Member for Perry Barr in voting for the amendment.

5.15 pm
Mr. Andrew F. Bennett (Stockport, North)

Clause 1 should be deleted. We are involved in an utterly ridiculous procedure. If the proceedings on the Bill were submitted as a script for "Yes, Minister" I suspect that they would be rejected as a subject for humour because they are so ridiculous as to lack any credibility whatever.

We are discussing one-third—the contributions—of a three-part equation. We cannot discuss the benefits to be paid, or the level of income tax which in part makes up the contribution side. We cannot discuss all three together because, traditionally, income tax contributions and benefit levels are set in the Budget while national insurance contributions are set several months earlier.

Most people would be more sympathetic to being asked to pay an extra 1 per cent. if they knew that extra benefits were to be paid. They might also take a different view if they knew the level of tax to be imposed on them by the Budget, and particularly whether the tax thresholds would be raised. Yet here we are asked to consider one part of a three-part equation while remaining blindfolded with regard to the other two. We should be able to debate all three at the same time. Income tax, national insurance contributions and benefit levels should be set at the same time, either now or at the time of the Budget. To decide one part of the equation now and the other two later is absurd. The situation seems to have come about because national insurance is based on a weekly contribution while income tax is based on an annual contribution. That is one major contradiction to be considered in seeking to amalgamate the two.

A number of absurdities result from national insurance contributions being on a weekly basis. For instance, a person who earns £50 per week for half the year and does not work for the other half pays considerably more in contributions than a person who earns £25 per week for the whole year. On the other hand, a person perhaps working on a North Sea oil rig who manages to earn £300 per week for half the year and does not work for the other half pays considerably less in national insurance contributions than the person who earns £150 per week throughout the year. That is another absurdity to be taken into account when considering whether national insurance contributions should continue to be on a weekly basis.

If the contributions were based not on weekly but on annual earnings, the national insurance contribution could be adjusted at the same time as the tax contribution. That would make far more sense.

Such a change would also solve some of the problems of those in the lowest income groups who are in and out of the system as a result of increases in the lower earnings limit and who, sadly, end up with only half a year's contributions and therefore no entitlement to benefit because the lower earnings limit has changed or because they have received a small rise which, if it is less than £2, usually results in a cut in income so that they have to plead with their employer not to give them a rise which would take them just over the lower earnings limit. Again, that is absurd.

When the Minister attempts to justify the clause, will he give some answers to people who are in and out of the system as a result of yo-yo-ing around the lower earnings limit? Would not it be fairer to make refunds to those who cannot make sufficient contributions to qualify for benefit? If he is not prepared to do that, will he consider crediting in those people who are unable to make a complete set of contributions because for part of the time their earnings are too low?

I turn to the question of those who are already credited in for benefits, particularly those in youth opportunities schemes. I understand that those at present participating in such schemes are credited in for some but not for all benefits. Will the Minister explain what happens in these cases, particularly for those young people who are out of work for a considerable period and are in and out of a youth opportunities scheme or some other scheme of that kind and thus cannot contribute for a lengthy period? This has an impact on their pension rights, and, although their pensions may still be far in the future, they are entitled to our concern on that point. The Government must also consider carefully the problem facing those aged 60 to 65 who are unemployed but receiving no benefit and can no longer contribute to their pension entitlement, particularly the earnings-related element.

Finally, what will be the position with regard to the new training schemes? The Department of Employment seems to have decided that the participants will receive only pocket money rather than any real income. Will they receive full credits in relation to national insurance contributions?

The national insurance system has reached such a farcical position that it is logical now to reject the clause and force the Government to bring back a unified system in their Budget proposals. National insurance contributions and income tax rates can then be considered at the same time and we may begin to iron out the major anomalies between the two systems.

Mr. Fowler

This has been a wide-ranging debate, although only relatively few hon. Members have taken part in it. I agree with the right hon. Member for Norwich, North (Mr. Ennals) that we should aim to seek as much agreement as possible on issues such as pensions. The first speech that I ever made on social services was as Opposition spokesman on Brian O'Malley's Bill. I call it Brian O'Malley's Bill because I am sure that Mrs. Barbara Castle would not seek to say other than that he was the major author of that Bill.

There was general agreement, which I hope will continue, on the contributory principle. The hon. Member for Newcastle upon Tyne, East (Mr. Thomas) said that the contributory principle is very different from a funded scheme. That is correct. It is a pay-as-you-go system, with today's contributors funding today's benefits. Therefore, it makes no sense to criticise the extra 1 per cent. as not earning extra benefits.

Mr. Mike Thomas

Will the right hon. Gentleman define the difference between the contributions as now made and a tax?

Mr. Fowler

My point is that the pay-as-you-go contribution system is a system whereby people who are contributing now are paying for the benefits to today's pensioners. If the hon. Gentleman wishes to call that a tax, it is a matter for him.

Mr. Ennals

The Secretary of State cannot get away with what he has just said. The whole basis of the contributory principle that he is now justifying does not apply. We are telling people that they must now pay, not just more money, but a higher percentage of their income, and we have already taken away some of the benefits that they thought they would get for the money they paid. Surely the contributory principle has gone.

Mr. Fowler

I was talking about pensions. The right hon. Gentleman's remarks show the unwisdom of my making generous comments and going wider than necessary on clause stand part. I should have thought that there was still a consensus on pensions, whatever other differences there might be between the two sides of the House.

Mr. Clement Freud (Isle of Ely)

Does not the Secretary of State agree that this is not so much a pay-as-you-go system but a we-pay-as-they-go system?

Mr. Fowler

Yes; that is the definition of pay-as-you-go.

Mr. Andrew F. Bennett

Does not the Secretary of State accept that even on pensions the Government have torn up the agreement because people made contributions on the basis that pensions would rise in line with earnings and prices? The Government changed the rules and pensioners are now about £5 a week worse off.

Mr. Fowler

We are now going back to fighting every battle that we have fought on social security over the past two and a half years.

I sympathise with the hon. Member for Birmingham, Perry Barr (Mr. Rooker), in believing that it is difficult in a debate such as this to try to get a human assessment of the effects of the legislation. The House should remember what the Bill—and particularly clause 1—seeks to do. Next year we shall be spending almost £30 billion on social security benefits—an increase of £2½ billion. Of that, about £19 billion will come from the national insurance fund. Of that £19 billion, £13½ billion will be spent on the retirement pension—about £1½ billion more than this year. That is one of the essential justifications of the Bill and, indeed, the clause.

In clause 1, in raising those contributions, we are seeking as far as possible to try to protect the employer and the self-employed on the grounds that, although we are talking essentially about benefits, the major aim of any political party and any Government must be to secure the recovery of industry and a reduction of unemployment. That is why we have so weighted the clause.

Clause 1 raises the lower and upper earnings limits for class 1 contribution liability from £27 and £200 a week to £29.50 and £220 a week respectively. That forms part of the annual exercise for reviewing national insurance contributions. Clause 1(2) raises the employee's contribution from 7.75 per cent. of liable earnings to 8.75 per cent. Of that extra 1 per cent., 0.3 per cent. is to keep the national insurance fund balanced; a further 0.25 per cent. is to compensate for the reduction in the Treasury supplement; 0.35 per cent. is the additional employment protection allocation; and 0.1 per cent. is an allocation to the National Health Service, which has so far been unquestioned, or has not been raised seriously either today or on Second Reading.

Mr. Ennals

I should hate the Secretary of State to believe that that will not be challenged. I challenge it, not because I do not want more money to be spent on the National Health Service—all present and past Secretaries of State for Social Services want that—but because the Secretary of State is making up for the fact that the Treasury does not give him the money that he needs for the NHS and therefore he has to put a higher load on the contributor through the national insurance system. It is another way of saving the money that the Treasury might otherwise have contributed, if it had been wiser or more generous, to the National Health Service.

Mr. Fowler

We have sustained spending on the National Health Service. We have increased spending on the NHS by 5 per cent. in real terms since 1979, and this is a further contribution to the increase in spending. I should have thought that the right hon. Gentleman would have welcomed the fact that we are spending more on the NHS and employing more doctors and nurses. We then come to the question of how it will be paid for. The vast bulk comes from general taxation—87 per cent. There is nothing particularly sacrosanct or special about the exact percentage that comes from the NHS contribution, but the right hon. Gentleman should know that compared with the early 1960s we are now spending less as a percentage of the NHS contribution than we were then.

The Opposition always omit the fact that six out of 10 people are exempt from prescription charges, and accordingly I believe that this is a fair and reasonable way of financing the NHS and achieving growth in it during a period of recession. That is what we are talking about—the growth of the Health Service during a difficult period of economic recession.

5.30 pm
Mr. Mike Thomas

I wonder how stupid the right hon. Gentleman thinks the public are. If he puts up the charges on every employed person, that will affect their pay packets at the end of the week. How can he believe that they will be conned with the idea that at the same time the Government are keeping the income tax level down to 30 per cent. or, depending on the next Budget, to 25 per cent.? Does he really believe that the public distinguish between NHS charges raised in this way and those raised through income tax? The only distinction they make is the way in which this bears grotesquely unfairly on the low paid.

Mr. Fowler

I would have considerably more respect for the hon. Gentleman if during his period—

Mr. Thomas

Cheap abuse.

Mr. Fowler

I do not want to get involved in cheap abuse, but I intend to offer the hon. Gentleman a few hints. It is easy for Members on both Front Benches to tall about radical solutions, and the hon. Gentleman has not asked us to come forward with a radical solution. All he has said is that we should be thinking about one. The only radical solution that he has proposed is a vast increase in income tax. That is certainly radical, and I hope that he campaigns on it. If he is asking whether I think that there is a difference between income tax and the amount that goes to the NHS through this contribution, my answer is "Yes". By definition, this money is earmarked for the NHS, and that is an important part of the contributory principle that some of us hold to be important.

Mr. Andrew F.Bennett


Mr. Fowler

I shall not give way, not even to the hon. Gentleman.

If clause 1 was deleted, there would be a loss to the national insurance fund as a result of not raising contribution rates. That must be clear. Secondly, it would mean holding the lower and upper earnings limits at their present levels.

Such a move should, therefore, be resisted for three major reasons. First, it would result in a deficit in the working balance in 1982–83 of about £1½ billion in the national insurance fund. That would reduce the balance in the fund to about £3.3 billion, which represents only nine weeks of benefit expenditure. As the House knows, the fund has no borrowing powers, and a working contingency reserve is a necessary part of the scheme about which we are talking.

Secondly, it would be regressive—that word has been used time and again—to hold the upper earnings limit at its present level, as this would place a disproportionately greater burden on the lower paid. It would bring into contribution liability low earners, especially part-timers, who have hitherto escaped because of the fact that the earnings limit has kept ahead of their earnings. In addition, to compensate for the loss of the £225 million income to the national insurance fund in 1982–83 by not raising the earnings limit, the contribution rates would have to go up by a further 0.2 per cent. That is the effect of the proposals, and that would hit hardest the lowest paid. Keeping the upper earnings limit down would mean that people at the upper end of the earnings scale would pay less in contributions than their proper share.

Additional pension rights are earned on the band of earnings between the lower and upper earnings limits. By compressing that band by artificially keeping the earnings limits down would disappoint the legitimate expectations of people on higher earnings about the amount of additional pension to which they would be entitled as well as have the effect on low earners that I have described.

Thirdly, as was fairly mentioned by the hon. Member for Perry Barr, the lower earnings limit must by law be kept broadly in line with the basic pension rate of £29.60. It must, therefore, be increased as the Bill proposes.

Even if no changes were made in the rate of the Treasury supplement or the NHS allocation, an increase in contributions would be needed to avoid a deficit in the fund. It has been the policy of successive Governments to keep the income and the expenditure from the fund broadly in balance. The Opposition must, therefore, accept that some increase in contributions was inevitable.

I have already indicated why the earnings limits should be raised. I find it hard to believe that the Opposition do not accept the need for contributions to be levied on a higher band of earnings to reflect the increase in inflation. To leave them as they stand would benefit higher wage earners and penalise the lower paid—precisely the opposite to what the Opposition have argued.

The upper earnings limit must be between six and a half and seven and a half times the basic pension rate. The present limit of £200 was 7.37 times the pension rate in 1981–82. To leave it at that level in 1982–83 would reduce the multiple to 6.76 at a time when income to the national insurance fund needs to be bolstered to match expenditure on benefits.

Many other points could be made about the Bill and the clause, but I strongly urge the House to resist the arguments advanced for leaving out the clause.

Mr. Rooker

I do not accept what the Secretary of State has said would be the consequences for the upper and lower earnings limits as a result of removing clause 1. As I have already said, we should like to see other changes. Our basic contention is that, if the Government put people back to work, by definition more earners would pay contributions at existing rates and less unemployment benefit would have to be paid. That is the main reason why we shall register a protest, and we shall do so in the only reasonable and logical way possible, which is to vote against clause 1.

Question put, That the clause stand part of the Bill:

The Committee divided: Ayes 271, Noes 218.

Division No. 34] [5.40 pm
Adley, Robert Brown, Michael(Brigg&Sc'n)
Aitken, Jonathan Brovme, John(Winchester)
Alexander, Richard Bruce-Gardyne, John
Alison, Rt Hon Michael Bryan, Sir Paul
Amery, Rt Hon Julian Buchanan-Smith, Rt. Hon. A.
Ancram, Michael Buck, Antony
Arnold, Tom Budgen, Nick
Atkins, Rt Hon H.(S'thorne) Bulmer, Esmond
Atkins, Robert(PrestonN) Burden, SirFrederick
Baker, Nicholas (N Dorset) Butcher, John
Banks, Robert Butler, Hon Adam
Bell, Sir Ronald Carlisle, John(Luton West)
Bendall, Vivian Carlisle, Kenneth(Lincoln)
Benyon, W. (Buckingham) Carlisle, Rt Hon M. (R'c'n)
Bevan, David Gilroy Chalker, Mrs. Lynda
Biffen, RtHon John Chapman, Sydney
Biggs-Davison, Sir John Churchill, W.S.
Blackburn, John Clark, Hon A. (Plym'th, S'n)
Blaker, Peter Clark, Sir W. (Croydon S)
Body, Richard Clarke, Kenneth(Rushcliffe)
Bonsor, SirNicholas Clegg, Sir Walter
Bottomley, Peter(W'wich W) Cockeram, Eric
Bowden, Andrew Colvin, Michael
Boyson, Dr Rhodes Cope, John
Bright, Graham Corrie, John
Brinton, Tim Costain, SirAlbert
Brittan, Rt. Hon. Leon Cranborne, Viscount
Critchley, Julian Knight, MrsJill
Crouch, David Knox, David
Dean, Paul (North Somerset) Lang, Ian
Dickens, Geoffrey Langford-Holt, SirJohn
Dorrell, Stephen Latham, Michael
Douglas-Hamilton, LordJ. Lawrence, Ivan
Dover, Denshore Lawson, Rt Hon Nigel
du Cann, Rt Hon Edward LeMarchant, Spencer
Durant, Tony Lennox-Boyd, HonMark
Dykes, Hugh Lester, Jim (Beeston)
Eden, Rt Hon Sir John Lewis, Kenneth (Rutland)
Edwards, Rt Hon N. (P'broke) Lloyd, Ian (Havant & W'loo)
Elliott, Sir William Lloyd, Peter (Fareham)
Eyre, Reginald Luce, Richard
Fairbairn, Nicholas Lyell, Nicholas
Fairgrieve, SirRussell Macfarlane, Neil
Faith, MrsSheila MacKay, John (Argyll)
Farr, John Macmillan, Rt Hon M.
Fell, Anthony McNair-Wilson.(N'bury)
Fenner, Mrs Peggy McNair-Wilson, P. (NewF'st)
Finsberg, Geoffrey McQuarrie, Albert
Fisher, Sir Nigel Madel, David
Fletcher, A.(Ed'nb'gh N) Major, John
Fletcher-Cooke, SirCharles Marlow, Antony
Fookes, Miss Janet Marshall, Michael(Arundel)
Forman, Nigel Marten, Rt Hon Neil
Fowler, Rt Hon Norman Mather, Carol
Fox, Marcus Maude, Rt Hon Sir Angus
Fraser, Peter (South Angus) Mawby, Ray
Fry, Peter Mawhinney, DrBrian
Gardiner, George (Reigate) Mayhew, Patrick
Gardner, Edward (SFylde) Meyer, Sir Anthony
Garel-Jones, Tristan Miller, Hal(B'grove)
Gilmour, Rt Hon Sir Ian Mills, Iain (Meriden)
Glyn, Dr Alan Mills, Peter (West Devon)
Goodlad, Alastair Mitchell, David(Basingstoke)
Gorst, John Moate, Roger
Gow, Ian Montgomery, Fergus
Gower, Sir Raymond Morgan, Geraint
Grant, Anthony (Harrow C) Morris, M. (N'hamptonS)
Green way, Harry Morrison, Hon C. (Devizes)
Griffiths, E. (B'y St. Edm'ds) Mudd, David
Griffiths, Peter Portsm'thN) Murphy, Christopher
Grist, Ian Myles, David
Grylls, Michael Neale, Gerrard
Gummer, John Selwyn Needham, Richard
Hamilton, Hon A. Nelson, Anthony
Hamilton, Michael (Salisbury) Neubert, Michael
Hampson, Dr Keith Newton, Tony
Hannam, John Nott, Rt Hon John
Haselhurst, Alan Onslow, Cranley
Hastings, Stephen Osborn, John
Havers, Rt Hon Sir Michael Page, John (Harrow, West)
Hawkins, Paul Page, Richard (SWHerts)
Hawksley, Warren Parkinson, Rt Hon Cecil
Hayhoe, Barney Parris, Matthew
Heddle, John Patten, Christopher(Bath)
Henderson, Barry Patten, John (Oxford)
Heseltine, Rt Hon Michael Pattie, Geoffrey
Hicks, Robert Pawsey, James
Higgins, Rt Hon Terence L. Percival, Sir Ian
Hill, James Peyton, Rt Hon John
Hogg, Hon Douglas(Gr'th'm) Pink, R. Bonner
Holland, Philip(Carlton) Pollock, Alexander
Hooson, Tom Porter, Barry
Hordern, Peter Prentice, Rt Hon Reg
Howe, Rt Hon Sir Geoffrey Price, Sir David (Eastleigh)
Howell, Rt Hon D(G'ldf'd) Prior, Rt Hon James
Howell, Ralph (N Norfolk) Proctor, K. Harvey
Hunt, David (Wirral) Pym, Rt Hon Francis
Hunt, John(Ravensbourne) Raison, Timothy
Hurd, Hon Douglas Rathbone, Tim
Irving, Charles(Cheltenham) Rees-Davies, W. R.
Jenkin, RtHon Patrick Ridsdale, SirJulian
JohnsonSmith, Geoffrey Rifkind, Malcolm
Jopling, Rt Hon Michael Roberts, M. (Cardiff NW)
Joseph, Rt Hon Sir Keith Roberts, Wyn (Conway)
Kaberry, Sir Donald Rossi, Hugh
Kershaw, Sir Anthony Rost, Peter
Kitson, Sir Timothy Sainsbury, Hon Timothy
St. John-Stevas, Rt Hon N. Townsend, CyrilD, (B 'heath)
Scott, Nicholas Trotter, Neville
Shaw, Giles (Pudsey) van Straubenzee, Sir W.
Shaw, Michael(Scarborough) Vaughan, Dr Gerard
Shelton, William(Srreatham) Viggers, Peter
Shepherd, Colin(Hereford) Waddington, David
Shepherd, Richard Wakeham, John
Shersby, Michael Waldegrave, HonWilliam
Silvester, Fred Walker, B. (Perth)
Sims, Roger Walker-Smith, Rt Hon Sir D.
Skeet, T. H. H. Wall, SirPatrick
Speed, Keith Waller, Gary
Speller, Tony Walters, Dennis
Spence, John Ward, John
Squire, Robin Watson, John
Stainton, Keith Wells, Bowen
Stanbrook, Ivor Wheeler, John
Stevens, Martin Whitelaw, RtHon William
Stewart, A(ERenfrewshire) Whitney, Raymond
Stewart, Ian (Hitchin) Wickenden, Keith
Stokes, John Wiggin, Jerry
Stradling Thomas, J. Wilkinson, John
Tapsell, Peter Williams, D.(Montgomery)
Taylor, Teddy (S'end E) Wolfson, Mark
Tebbit, Rt Hon Norman Young, SirGeorge(Acton)
Temple-Morris, Peter Younger, Rt Hon George
Thomas, Rt Hon Peter
Thompson, Donald Tellers for the Ayes:
Thorne, Neil(IlfordSouth) Mr. Robert Boscawen and
Thornton, Malcolm Mr. Anthony Berry.
Townend, John (Bridlington)
Abse, Leo Dixon, Donald
Adams, Allen Dobson, Frank
Alton, David Dormand, Jack
Anderson, Donald Douglas, Dick
Archer, Rt Hon Peter Dubs, Alfred
Ashton, Joe Duffy, A. E. P.
Atkinson, N.(H'gey,) Dunnett, Jack
Barnett, Guy(Greenwich) Dunwoody, Hon Mrs G.
Barnett, Rt Hon Joel (H'wd) Eadie, Alex
Beith, A.J. Ellis, R.(NED'bysh're)
Benn, Rt Hon Tony Ellis, Tom(Wrexham)
Bennett, Andrew(St'kp'tN) Ennals, Rt Hon David
Bidwell, Sydney Evans, Ioan (Aberdare)
Booth, RtHonAlbert Evans, John (Newton)
Boothroyd, MissBetty Ewing, Harry
Bottomley, RtHonA.(M'b'ro) Faulds, Andrew
Bradley, Tom Fitch, Alan
Bray, Dr Jeremy Fletcher, Ted(Darlington)
Brocklebank-Fowler, C. Foot, Rt Hon Michael
Brown, Hugh D. (Provan) Ford, Ben
Brown, R. C. (N'castle W) Foster, Derek
Brown, Ron(E'burgh, Leith) Foulkes, George
Buchan, Norman Fraser, J.(Lamb'th, N'w'd)
Callaghan, RtHonJ. Freeson, Rt Hon Reginald
Canavan, Dennis Freud, Clement
Carmichael, Neil Garrett, John (Norwich S)
Clark, Dr David (S Shields) George, Bruce
Cocks, Rt Hon M. (B'stolS) Gilbert, Rt Hon Dr John
Cohen, Stanley Golding, John
Coleman, Donald Graham, Ted
Concannon, Rt Hon J. D. Grant, George(Morpeth)
Cowans, Harry Grant, John (Islington C)
Craigen, J. M. (G'gow, M'hill) Grimond, RtHonJ.
Crawshaw, Richard Hamilton, James(Bothwell)
Crowther, Stan Hamilton, W. W. (C'tral Fife)
Cryer, Bob Hardy, Peter
Cunningham, G. (IslingtonS) Harrison, Rt Hon Walter
Cunningham, Dr J. (W'h'n) Hart, Rt Hon Dame Judith
Dalyell, Tam Hattersley, Rt Hon Roy
Davidson, Arthur Haynes, Frank
Davies, Rt Hon Denzil (L'lli) Heffer, EricS.
Davies, Ifor (Gower) Hogg, N. (EDunb't'nshire)
Davis, Clinton (HackneyC) Home Robertson, John
Davis, T. (B'ham, Stechf'd) Homewood, William
Deakins, Eric Hooley, Frank
Dempsey, James Horam, John
Dewar, Donald Hoyle, Douglas
Huckfield, Les Race, Reg
Hudson Davies, Gwilym E. Radice, Giles
Hughes, Mark(Durham) Rees, Rt Hon M (Leeds S)
Hughes, Robert (Aberdeen N) Richardson, Jo
Hughes, Roy (Newport) Roberts, Albert (Normanton)
John, Brynmor Roberts, Allan(Bootle)
Johnson, James (Hull West) Roberts, Ernest (Hackney N)
Johnson, Walter (Derby S) Roberls, Gwilym(Cannock)
Johnston, Russell (Inverness) Robinson, G. (Coventry NW)
Jones, Barry (East Flint) Rooker, J. W.
Jones, Dan (Burnley) Roper, John
Kaufman, RtHon Gerald Ross, Ernest (Dundee West)
Kerr, Russell Rowlands, Ted
Kinnock, Neil Ryman, John
Lamborn, Harry Sandelson, Neville
Lamond, James Sever, John
Leighton, Ronald Sheldon, Rt Hon R.
Lestor, Miss Joan Shore, Rt Hon Peter
Lewis, Ron (Carlisle) Silkin, RtHonJ.(Deptford)
Litherland, Robert Silkin, Rt Hon S. C. (Dulwich)
Lofthouse, Geoffrey Silverman, Julius
Lyons, Edward (Bradf'dW) Skinner, Dennis
McCartney, Hugh Smith, Rt Hon J. (NLanark)
McDonald, DrOonagh Snape, Peter
McElhone, Frank Soley, Clive
McKay, Allen (Penistone) Spearing, Nigel
McKelvey, William Spriggs, Leslie
Maclennan, Robert Stallard, A.W.
McMahon, Andrew Steel, RtHon David
McNally, Thomas Stewart, Rt Hon D. (W Isles)
McNamara, Kevin Stoddart, David
McTaggart, Robert Stott, Roger
McWilliam, John Straw, Jack
Magee, Bryan Summerskill, HonDrShirley
Marshall, D(G'gowS'ton) Thomas, Dafydd (Merioneth)
Marshall, Jim (LeicesterS) Thomas, Mike (NewcastleE)
Martin, M(G'gowS'burn) Thorne, Stan (PrestonSouth)
Maxton, John Tinn, James
Maynard, Miss Joan Torney, Tom
Meacher, Michael Varley, RtHon EricG.
Mikardo.lan Wainwright, E. (Dearne V)
Millan, RtHon Bruce Walker, Rt Hon P.(W'cester)
Miller, DrM.S. (EKilbride) Watkins, David
Mitchell, Austin(Grimsby) Weetch, Ken
Mitchell, R. C. (Soton Itchen) Wellbeloved, James
Molyneaux, James Welsh, Michael
Morris, Rt Hon A. (W'shawe) White, Frank R.
Morris, Rt Hon C. (O'shaw) White, J. (G'gowPollok)
Morton, George Whitehead, Phillip
Mulley, RtHon Frederick Whitlock, William
Newens, Stanley Wigley, Dafydd
O'Halloran, Michael Williams, Rt Hon A. (S'sea W)
O'Neill.Martin Williams, Rt Hon Mrs (Crosby)
Orme, Rt Hon Stanley Wilson, Gordon (DundeeE)
Owen, Rt Hon Dr David Wilson, RtHonSirH.(H'ton)
Palmer, Arthur Wilson, William (C'trySE)
Park, George Winnick, David
Parker, John Woodall, Alec
Parry, Robert Woolmer, Kenneth
Pavitt, Laurie Wright, Sheila
Penhaligon, David
Pitt, WilliamHenry Tellers for the Noes:
Powell, Raymond (Ogmore) Mi. Joseph Dean and
Price, C. (Lewisham W) Mr. Lawrence Cunliffe

Question accordingly agreed to.

Clause 1 ordered to stand part of the Bill.

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