PERSONAL RELIEFS

HC Deb 15 July 1981 vol 8 cc1191-243 4.25 pm

Mr. Robert Sheldon (Ashton-under-Lyne)

I beg to move amendment No. 21, in page 13, line 9, at end insert 'except for widows' bereavement allowance which shall be £800 for the year 1981–82'.

Mr. Speaker

With this it will be convenient to take amendment No. 24, in page 13, line 9, at end insert— '(1A) In subsection (1A) of section 8 of the Taxes Act (personal relief) there shall be inserted after "upwards" the words "or that she was at any time within the year of assessment of the age of sixty and in receipt of a Category A retirement pension under subsection (1) of section 28 of the Social Security Act 1975.".'.

Mr. Sheldon

We come now to the question of personal allowances. We are dealing once again, as we have done on many previous occasions, with the problems of indexation. Unquestionably, there has been a considerable change since the Government came to power, shown by the way in which their views are implemented in the Bill. I have been in favour of indexation on certain conditions. Given that inflation is continuous, large and persistent, I have always seen the case for indexation. I had hoped that it would be possible to wait to see whether the Government were successful in limiting the increase in inflation. If that had happened, it might have been possible to avoid indexation in many, and possibly most, particulars.

The Government have shown that they are unable to limit inflation. It is therefore reasonable for them to consider further indexation and to act as they did in the Finance Act 1980. Under section 24 of that Act, the Government provided for indexation at the basic rates and at the higher rates. I must, however, say that when they introduced indexation they changed the pattern of taxation. They made sure that there were considerable reliefs for the higher incomes. Only after that had been done did they fix the indexation provisions. This is noted as one of the philosophies behind Government action in the matter.

A number of allowances were settled as the basis of indexation, including the single allowance, the married allowance, the additional personal allowance, the age allowance, the higher rate threshold and the investment income surcharge. Also included, under section 24(6) of the 1980 Act, was the widow's bereavement allowance, which is the subject of the amendment now being discussed. It was agreed that there should be a rounding-up to the nearest £10 on each of the indexation provisions. The purpose was to bring about what the Financial Secretary, with his gift for a phrase, called "truth in taxation". One has only to recognise the considerable benefits that were given to the better-off to know that when this Government talk about truth in taxation it is time for ordinary people to look to their purses.

The truth in taxation has benefited the better-off. It has not benefited the less-well-off. In this year's Finance Bill, the Government have not merely failed to revalorise completely. They have failed to make any increases whatever to take account of inflation. This is phenomenal coming from a Government who believe in truth in taxation.

If the Government had said nothing about this matter and had not mentioned that taxation has to take account of inflation in the various complicated ways that they devised when in Opposition, we might have thought that the Government were trying to make use of inflation to finance the objectives that they had in mind. Among the most important of these objectives was to relieve taxation on the better-off. However, the Government made so much of the truth in taxation theory that the Opposition must be concerned when the practice no longer meets the theory. It is not as if we have reached a plateau where one could overlook one year's failure to revalorise. A failure to revalorise has continued over the years and the decades.

I mention as an example the manner in which the threshold has declined over the years. In the 1950s, a married person with two children paid no income tax as long as he was earning about average pay. In the 1960s he was paying income tax if his pay was about 70 per cent. of the average. In the 1970s he was paying income tax if his earnings were about 50 per cent. of average pay. In November 1980 he was paying income tax if his income was about 38 per cent. of average pay.

That is a staggering decline. As we know, this has accounted for the very large numbers of people corning into tax. One can continue in this way almost indefinitely, until one comes up against one particular problem—the interaction between the benefits paid by the Department of Health and Social Security and the tax thresholds at which one is asking people to pay. Once one starts bringing down the threshold at which tax starts, one finds oneself taxing people who are in receipt of benefits. We have had that before, so it is nothing new. However, when one gets so far down, obviously the problems increase—and they have increased spectacularly as a result of the failure to revalorise in this way.

The Government have always held that they are a party of low taxation. [Interruption.] They are; my hon. Friend the Member for Edinburgh, Central (Mr. Cook) should not misjudge them. They are a party of low taxation for the wealthy, but they are also a party of high taxation for the poorer people, the ordinary people of Britain.

Before the Government introduced all their indexation provisions, they made sure that the highest rate of income tax came down to 60 per cent. and that the thresholds and bands were restructured suitably. The quid pro quo—there was one—was a promise of a 25 per cent. rate of income tax, which promise, as we are all aware, has long since vanished from the scene.

Last year there was a change. It concerns our amendment most directly. There was the introduction of the widow's bereavement allowance. I welcomed it. It was a valuable innovation. But—

Mr. Tony Durant (Reading, North)

Will the right hon. Gentleman give way?

Mr. Sheldon

May I just finish this point? I shall be glad to give way then, because I know the hon. Gentleman's deep concern and interest in these matters, which he has pursued on behalf of widows for many years. When he speaks on these matters the House always listens to him with the greatest respect. He will be aware that that widow's bereavement allowance, which we see in legislative form now, was altered considerably under pressure in Committee. I shall refer to that matter shortly.

Mr. Durant

Will the right hon. Gentleman concede that on many occasions when I discussed this matter with him when he was in office he put the point to me, as someone who was keenly concerned about widows' problems, that the blanket approach was much the better approach? The present Government have done something in relation to the widow's bereavement allowance. They have avoided the clawback, which has been one of the most difficult problems for widows in the early stages of bereavement. At least the Government have done that.

Mr. Sheldon

I accept that. I thought that I had said so at the outset. I also said, however, that this was in the context of very large handouts to much wealthier people, so it should be seen in that context. I believe that there was much to be gained by a number of grants of various kinds, which we discussed at great length. The whole House benefits from the actions of the hon. Gentleman and others who have taken an interest in these matters over the years. As I mentioned, it was altered under pressure in Committee, and I think that it was improved and widened as a result.

In Committee last year, the Financial Secretary talked about his concern about widows. He mentioned how much concern there was about widows and the tax system. He said that that concern is particularly acute in the year of bereavement. That is the year when the emotional shock is greatest. It is also the year of an abrupt change from the married allowance to the single allowance. That is why we thought that, even in the context of an economic situation that called for very great stringency, we should do something this year for widows."—[Official Report, Standing Committee A, 10 June, 1980; c. 322–3.] I am not sure about the stringency part, because considerable assistance had been given to the better-off.

As a result of that, the Government came under pressure to do something for those who were less advantaged. The widows were among them. Here I add my voice to the view that I have heard so frequently from the hon. Member for Reading, North (Mr. Durant). At our advice bureaux we frequently see widows. They are one of the sources of the greatest distress that we meet. Nothing can replace a husband and the position that he had in the home, and in the assistance in the transition to a newly altered life one cannot do very much with money, but, at any rate, it provides a cushion for that aspect of it.

I suppose that all of us are to a certain extent social workers in these matters. We try to provide comfort and solace to the best of our inadequate ability. But if there is to be a standstill on the question of revalorisation, if we are to say that our economic position is such that nothing can be done, I should have thought that an exception could have been made for the widows. We are not dealing with all that many. We are dealing with people who are suddenly widowed in that year. If we do not do anything this year, it is no use doing anything next year, because this applies only to those who are newly widowed. That means that those who are widowed this year will not get that increase. The Financial Secretary should bear that in mind. Those who have failed to get the other allowances will be able to benefit next year and in subsequent years, as the Financial Secretary tries—I am sure that he realises that he must do so—to make good the damage done this year.

However, as regards the widow's bereavement allowance, those people who are widowed in the year in which this applies will find themselves disadvantaged and will never receive the allowance as a result of what may be done in the future.

This is the essential basis for our amendment. There are about 3 million widows, and about 330,000 of them are between the ages of 60 and 64. They are the subject of the next amendment. I believe that my hon. Friend the Member for Birmingham, Ferry Barr (Mr. Rooker) hopes to make a contribution to the debate if he catches your eye, Mr. Deputy Speaker. I do not think that any debate on indexation would ever be complete without my hon. Friend's presence, which is always an essential and welcome part of our debates on these matters.

Amendment No. 24 deals with women between the ages of 60 and 64. They will be in receipt of a State pension, but they may also be in receipt of an earnings-related pension. That is their particular problem, because they will now be subject to tax. As I have illustrated, we have lowered the threshold to such a level that we are now not only interfering with any of these ordinary pensions but are at a level which interferes with the State pension.

This can be dealt with by introducing what are called tolerance levels. When we get nonsense of this kind, the Inland Revenue comes to the Minister with the problem and the Minister makes a concession. He says "We shall forgo a certain amount of taxation because we cannot be involved in the nonsense of trying to get money from people who obviously have very limited means." Therefore, the tolerance levels are increased, and this absurdity is avoided.

That is what has happened up to now. Now, for the first time, we are to tax these people. Taxing them is bad enough, but there is worse to come. These widows are in receipt of two pensions, and although the pensions can be as little as 52p a week—that is the average and very modest figure—that brings them above the level of the tolerance. Not only will they be charged tax because they are above the level of the tolerance, but the tolerance provisions will not apply to them. They will be taxed the whole amount. For example, if there is a £100 disregard, there will be £30 tax on that amount. If there is 1p more, not only is tax paid on that penny but the £30 has to be paid as well. That is what amendment No. 24 seeks to alter. It is the loss of the tax on the graduated pension, as well as the loss of the tolerance, that concerns us.

The amendments seek to assist widows who we believe have been wronged, and we seek to remedy the wrong. The first wrong was the failure to uprate the bereavement allowance for widows, and the second was to bring into tax for the first time those whose circumstances had always made them exempt from taxation. If this is truth in taxation, it is a distortion of the truth, and the House should decide accordingly.

Mr. A. J. Beith (Berwick-upon-Tweed)

On a point of order, Mr. Deputy Speaker. I am sorry to intrude in the debate, but a matter has just come to my notice which can be sorted out only in the course of today if the arrangements in the Table Office are to be accommodated.

The House has not yet passed a motion dealing with whether it is to sit on 29 July, and there has been no Business Statement by the Government on that subject. The Table Office—acting, I think, in good faith but, in my view, mistakenly—has taken the view that it should be assumed that the House will not sit on 29 July and that that day will, therefore, be ignored in the notice period for questions to the Chancellor of the Exchequer. The effect is that any hon. Member who expected to table a question to the Chancellor of the Exchequer tomorrow in the normal course of events cannot now do so because at 4 o'clock the Table Office dispatched all the questions on the assumption that Wednesday 29 July was not a sitting day.

I ask you, Mr. Deputy Speaker, to consider the matter and rule on it later. Its effect is to deprive hon. Members of the normal opportunity to table questions, with the chance of being called to put a supplementary question, and that is based on no announcement and no indication from the Government. Clearly, you, or perhaps Mr. Speaker, will have to consider the matter. I bring the matter to your notice in time for alternative arrangements to be made, and perhaps for the sorting of questions—the ballot, so to speak—to be reopened in the light of what I have said.

Mr. Deputy Speaker (Mr. Ernest Armstrong)

I am grateful to the hon. Member for Berwick-upon-Tweed (Mr. Beith). I shall acquaint Mr. Speaker with the matter, and it will be considered.

Mr. Durant

I wish to participate in this short debate about widows, because I wish to say one or two things on behalf of the all-party group on widows and single-parent families.

I accept what the Opposition say in their amendment about the bereavement allowance. The Government did something in this regard, which I mentioned in my intervention, whereby clawback is avoided. However, that has been lost, as the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) said, owing to the change in the tax situation. He has asked for a greater increase in the bereavement allowance to allow for that. I agree with his valid point.

The first period of widowhood is the most important time for widows. Widowhood is not prearranged. No matter how much husbands have thought about it and been persuaded by insurance companies, and so on, people do not suddenly arrange to die. It may be an unfortunate tragedy, but it is also true that people suddenly die, and widows are faced with this enormous problem. Many of them have never faced the problem of running a household, dealing with the bills and the whole business of running a home, which often the husbands have had entirely under their control. For that reason, the bereavement allowance is an important allowance, and society has accepted that fact.

I am worried that the allowance has not kept pace with the cost of living. The right hon. Gentleman seeks to increase the allowance to take account of increases in costs. The Government, by avoiding the clawback, have helped in this regard. The Opposition want the amount to be increased, and the Government say that there should not be a clawback. So there is a double benefit in that there is no taxation and there is an increased benefit. I am not against that. I am simply pointing out that there is a double benefit.

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I discussed the matter many times with Labour Members when they were in Government. They always said "We understand your point of view on behalf of widows, but what about single women who look after households in which there are aged parents, and so on?" I do not deprecate that. I simply put it forward as part of the debate. There has to be a balance.

As the House will know, I have fought the case for widows on many occasions. I am attacked by single people in my constituency who look after aged relations and who say to me "We accept your views about widows, but what about us? We are battling on behalf of aged parents and relations and looking after them, but there is no help for us." We have to strike a balance, as I am sure widows themselves agree, but that does not mean that I am not in favour of what the right hon. Gentleman said.

I want to put my case on record. I shall vote with the Opposition on the amendment because I have no option. The Opposition have a valid case concerning widows. However, we must keep a balance between widows, single women and all the other aspects of society that involve dealing with aged parents and accepting responsibility for capital and expense problems when women are suddenly faced with widowhood.

The right hon. Gentleman has said many times that the overall situation has to be considered. I do not disagree with him. He said that a balance has to be drawn between all the different pressures on society. I believe, because I fight the widows' cause, that they have a unique position in that they do not choose their environment. Even the single woman, to a certain extent, chooses her environment. Widowhood is sudden. There it is. Any of our wives could be left alone suddenly because of all the pressures on society, road accidents, and so on. In spite of all the provisions that we may make, widowhood is not prepared for, psychologically or otherwise.

From the studies that I have made of widowhood, I believe that widows should have every opportunity to get out of their environment of sorrow, problems and difficulties and get back into society. We should do all that we can to make them full members of that society by giving them financial help during a short period. That is why I believe that the proposal is right, and I support it. However, the right hon. Gentleman should remember that a balance must be drawn. Indeed, when he was in Government he accepted the difficulty of striking a balance between the single woman looking after old people and all the other pressures on his Department. We have to keep a careful balance but I accept what the right hon. Member for Ashton-under-Lyne is trying to do. If he is doing it non-politically, I am prepared to go along with it.

Mr. Richard Wainwright (Colne Valley)

The Liberal Bench supports the amendments. I do not wish to repeat the clear and lucid arguments advanced by the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) but I wish to make several comments.

Last year the Government's original proposal in the Finance Bill was for the new allowance to be apportioned to widows on a monthly basis. That meant that anybody who had the misfortune to be widowed late in the tax year would receive only a fraction of the allowance. The House will not be surprised to hear that the right hon. Member for Crosby (Sir G. Page) tabled an amendment to give all widows the full allowance. Since I was the only hon. Member to speak in support of the right hon. Gentleman, I have a special interest in the allowance. To the Government's credit, they accepted the right hon. Gentleman's amendment.

If we must distinguish between different items of misery and different forms of acute need—and I do not believe that we should have to do that—people who are widowed in the circumstances so eloquently described by the hon. Member for Reading, North (Mr. Durant) are the most vulnerable. They will be receiving pensions and income tax assessments.

Income tax assessments are formidable. They are not always correct. Sometimes they are horrendous in the amounts that they involve. They are covered in small print. They engender panic in all types of people, as hon. Members know from their interview sessions.

In my experience, widows are the most panic-stricken when they receive, out of the blue and often for the first time in their lives—because their husbands received the awful documents in the past—all the paraphernalia of an income tax assessment on their pension.

The tolerance of £30 of taxable income a year, which the Revenue chooses not to collect, is not satisfactory for more than about one tax year when widowhood first occurs. I am glad that the Revenue exercises that humanity when there is no time for legislation to put proper authority behind it. But it is intolerable that the House should debate these tax matters year after year in confusion and that the Revenue has to decide whether to collect tax.

Each year the Government's duty is to put statutory authority behind emergency tolerances which, rightly, have been adopted in the meantime. In my view, they should be adopted only temporarily. I fully support an amendment which at least has the effect of regularising the £30. I hope that on reflection the Government will be willing to go a little further. I am sure that the Government do not want the present situation to persist.

It appears that the Chancellor of the Exchequer and his colleagues have said "No indexation this year." The word has gone out that not only are personal allowances not to be indexed but that there is to be no indexation even for the most needy and acute cases. That is an approach without compassion.

The Government are saying sweepingly that they suspend indexation this year. To refuse to apply indexation to widows at a relatively trivial cost will reinforce the Government's image as a Government who go in for diktats and are not prepared to temper the wind to the shorn lamb. If ever there was a case for departing in a small way from a principle, however misguided, that a Government have decided to adopt in a Finance Bill, it is that of the widows. Unless the amendment is carried, widows will receive tax assessments, probably for the first time, and suffer a great deal of misery as well as financial hardship.

Mr. John Horam (Gateshead, West)

The hon. Member for Reading, North (Mr. Durant) has a longstanding interest in widows' rights. He made an interesting and knowledgeable speech. However, he might have misled the House in talking about a double benefit occurring partly from the Government's action on clawback and partly from the amendment. It will be a double advantage only if the amendment is carried. Otherwise, we shall be back in the situation which the Government created. I was delighted to hear that he will be voting for the amendment. I hope that other Government Members will vote for it. The Social Democrats and Liberals also intend to support it.

We are talking not merely of a double benefit but of the rectification of a double wrong. That is a more appropriate way of describing the position. Once again we are dealing with something which I particularly deplore. The side effects of a general change in taxation and the failure to index are for widows the worst aspects of the Budget. That causes us concern.

As the hon. Member for Colne Valley (Mr. Wainwright) said, widows are a cause for anxiety because they must face all the paraphernalia and anxiety associated with tax assessment forms at a particularly distressing time. That should be avoided if possible.

Mr. Durant

I am sorry to interrupt the hon. Gentleman, but I wish to return to the question of double benefit. The Government have dealt with the clawback and, therefore, the allowance is tax-free, in a sense. That means that there is a double benefit. It is not only tax-free, but if the amendment is carried, which is the point I am making, widows will receive a double benefit because they are not involved with tax.

Mr. Horam

The double benefit applies only if the amendment is passed. That is what I was saying. We are talking of a rectification of a double wrong rather than a double benefit.

I agree with the hon. Member for Colne Valley that we are talking not merely about tax that is levied but about all the difficulty and anxiety associated with forms which people in stress have to tackle.

We know from experience of the length to which pensioners go to avoid filling in forms. They do that by investing in building societies, for example, and receiving less money than they might otherwise receive simply to avoid being caught in a tax net and having to deal with tax forms. That is common and leads to people receiving lower incomes but less anxiety.

The Government should pay attention to the lax philosophy about which they boast so much. The present policy has a serious effect on a disadvantaged group. If the Government do not seek to counter that by accepting the amendment, they will appear to be unwieldy and mean-minded in their approach to disadvantaged groups such as widows.

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I fully support the general propositions advanced in the widows' charter. I do not support all the details, but I support the general proposition behind it. I also support the general feeling that not only is the tax position of widows disadvantageous, but that they feel it to be so—rightly or wrongly. That comes across every time I speak to a widow. They feel at a disadvantage in comparison with a married woman, although that is not always so.

We should pay careful attention to the feelings of widows, as well as to their position. I hope that the Government will look favourably on this amendment and that it will be passed by the House.

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

If there is a remote possibility that the Government will accept amendment No. 21, I suspect that there is no possibility that they will accept amendment No. 24. I wish to address my remarks to that amendment.

Amendment No. 24 grants the age allowance—that is, the higher personal allowance—to women above the age of 60. The present age allowance is payable only when they reach the age of 65. That may be convenient for men, because they receive the higher personal tax allowance on reaching their statutory retirement age. However, women have to wait five years after they have reached their statutory retirement age.

I am well aware that amendment No. 24 would not be cheap to implement. I wish to put part of the Financial Secretary's case before he even gets to the Dispatch Box. When talking about a greater use of resources, it may be argued that one would do other things, such as making a reduction in the retirement age for men. Nevertheless, there is a gross inequality for women in the operation of the age allowance in the tax system.

I wish to put some questions to the Financial Secretary. Written parliamentary questions have not done the job that hon. Members desired. We wish to find out how many in that category are affected by the Government's major statement in the Budget about the freezing of the tax allowances. That was a major plank of the Budget. It raises about £2.5 billion in additional revenue.

In answer to a parliamentary question on 20 March, I was informed that by the freezing of tax allowances 1¼ million additional people would pay tax this financial year than would otherwise have been the case—400,000 would be over the age of 65 and 850,000 below that age. I and other hon. Members have sought to find out how many of the 850,000 below the age of 65 are women over the age of 60. For some reason it has not been possible for the Treasury to give the detailed answers required.

On 30 March, in reply to a question from the hon. Member for Anglesey (Mr. Best), the Minister said: It is not known how many single women or widows age 60–64 in receipt of retirement pension have additions to their pension but no other income. The number is not thought to be large, but it is not possible to estimate the extra tax payable".—[Official Report, 30 March 1981; Vol. 2, c. 23.] If the Minister does not know how many single women are in that age range who have an addition to their pension but are without other income, what is the justification for saying that it is not thought to be a large number?

My right hon. and learned Friend the Member for Aberavon (Mr. Morris) asked a question on 24 March of the Chancellor of the Exchequer, who said: The basic retirement pension receivable in 1981–82 by a single woman under 65 will be higher than the single person's tax allowance, but those with no income apart from basic pension will in practice be kept out of tax by the Inland Revenue's administrative tolerances. Some of them who have additions to their basic pension may become liable to tax for the first time in 1981–82. The number is likely to be much less than the figure of 600,000 which has been referred to, but it is not possible to make a realistic estimate." — [Official Report, 24 March 1981; Vol. 1, c. 288.] Now that we are at the end of July, with the pressure of the announcement of the Budget over and the Finance Bill almost through the House, is it possible for the Financial Secretary to put firm figures on the two answers that I quoted? I used the figure of 600,000 erroneously because that happens to be the number of women aged 60 to 64 who have a retirement graduated pension under the old system. I did not infer that the 600,000 would be caught. From information given by the Treasury to the Press Gallery—but not to the House—it would seem that the figure is more likely to be 200,000. The House and the country need to know how many will be hit harder in a new way by the Budget measures.

Mr. Durant

Because we have now moved into a new situation where more people are involved in pension schemes of varying sorts, that number is likely to increase over the years. We may be establishing a precedent for many more people. The hon. Gentleman quoted a figure for this year, and I am not challenging it. However, as time goes on we are moving to an increasing number in the area to which he referred.

Mr. Rooker

The hon. Gentleman is correct. As it is not part of my plank when speaking to the amendment, I have not referred to the additional component to the retirement pension that will come out of what is now the present State pension system—the two parts, contracted in or out, to give every person two pensions. After three years of operation, that is becoming quite large for some people. It will take them straight into the tax net. It takes them out of the administrative tolerance of the Inland Revenue.

My purpose is to try to achieve some equality for women because they are not treated fairly under the tax system. Many women over the age of 60, who are already retired but have not reached the age of 65, never paid into the new system which began in 1978. They paid into the Boyd-Carpenter graduated pension scheme, which most people in this country still remember. They occasionally receive a little chitty from the national insurance computer to tell them how many units they have. They all know that the scheme was a rip-off. That is why it was abandoned after several years. The amount of pension from the contributions will always be payable to those who paid the contributions.

The average payments are not large. For a woman aged 60 to 64, in this year the average payment will be 57p a week. Because the Government froze the single person's tax allowance, which is also the tax allowance for widows, the minute they receive more than 33p a week of graduated pension in addition to their ordinary State retirement pension they are liable for a tax deduction of 57p a week. It is not possible to explain such matters in detail without an overhead projector or a blackboard.

If a woman receives the basic State retirement pension—I refer to women aged 60 to 65—and an additional 32p a week of graduated pension, the tax liability is zero. If she is getting the basic retirement pension and graduated pension of 33p a week or more, the tax liability is 57p a week. It is clear that it pays her not to collect the graduated pension. She is receiving the graduated pension only because she has paid contributions. If she were receiving only 33p or some other small amount, it would pay her to say "Please do not pay me my graduated pension, because I am being crippled by tax." Some of these women are in receipt of supplementary benefit. However, they are paying income tax.

When will the women aged 60 to 65 years to whom I have referred start to pay the increased tax liability? I acknowledge that there is a problem because many widows do not wish to complete tax forms. I think that everyone finds that there are problems when completing a tax form. When it is being done for the first time in the circumstances of the women whom we are discussing, it is an extremely difficult task. It is not generally known outside the House that since the Government took office they have taken two major steps to change the rules about collecting tax on State benefits when the benefits are computable in the annual return for tax.

I ask the Financial Secretary again to tell us when the extra tax will be liable. I asked the Financial Secretary on 14 April: if retirement pensions liable to income tax due to pension increases in November"— that is when the new arrangement will come into effect. It is necessary to take so many weeks of the pension that pensioners receive from April to November and to take account of the pension increase in November to the next April. The tax year is not the same as the pension year. One has to be careful to calculate so many weeks of one pension and so many weeks of another pension to compare like with like.

My question continued: are required to pay the increased income tax before the pension increase is actually received"— namely, from the beginning of the tax year, which begins in April— or whether the annual tax due is collected between the date of the increase"— that is, in the pension in November— and the end of the tax year. The end of the tax year is April. There is a problem. A year's tax liability is triggered off when the pension is increased in the November. There is only five months in which to collect a year's tax liability.

The right hon. Gentleman replied: Pensioners who have another source of income subject to deduction of tax under PAYE are given an amended code number at the time of the pension increase which has the effect of collecting the additional tax between the date of the increase and the end of the tax year. Those whose tax is collected directly by instalments pay the tax on a pension increase in those instalments which remain to be paid." — [Official Report, 14 April 1981; Vol. 3, c. 106] The second part does not matter. The effect of the right hon. Gentleman's answer is that there will be an amended tax code near November, which will be shortly before the date of the increase.

We know that there has been a slight hiccup in the administration of the Inland Revenue due to the Civil Service dispute. That is one of the reasons why hon. Members have not been chased up. At this stage in the past I have received reminders, which have not come from the Cardiff tax office. I know that that has happened to others.

Shortly before November, many women over the age of 60 years who have not been paying tax to date merely because their income has not been above the Inland Revenue's assessing tolerance, or above the personal allowance, will find themselves paying tax for the first time. That is because the Government have frozen the personal allowances and increased the pension in line with inflation. These women may be in receipt of an average graduated pension.

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The women who will be asked to pay tax for the first time will be requested to complete a tax form. They may be 61 or 62 years of age and they may have only recently retired. Those in that position will be receiving the ordinary State retirement pension. They may be married or single. If they are married, they will be receiving the pension in their own right, having paid the contributions. We have not been inundated with mail from our constituents because the tax forms will be not amended forms but initiations in the tax system. The forms have not been sent out. It is not close enough to November for the Inland Revenue to have started doing so. Bearing in mind the dispute that is taking place, it is not possible to say when the system will come into operation.

Mr. Durant

I am not defending the system when I say that the situation that the hon. Gentleman has outlined is not unique. It has happened before under other Governments. Widows have been included on previous occasions. That has happened when there have been increases in the widow's pension. That which the hon. Gentleman has described is nothing new. It is something that happens regularly and we must try to prevent it from happening in future.

Mr. Rooker

The hon. Gentleman is both right and wrong. It is correct to say that what I have described occurs annually for pensioners and newly bereaved widows. However, this year, for the first time, a woman aged between 60 and 65 years, whose only source of income is the State retirement pension and average graduate pension, will be called upon to pay income tax. That has never happened before.

In the past the single person's tax allowance has not been frozen. In the late 1960s, when it was frozen on one occasion, inflation was only 3 or 4 per cent. and the pension was never increased by a large amount. Therefore, women in the position of those whom we are discussing were never taken into the tax net. I stand to be corrected by the Treasury, but this year about 200,000 women aged between 60 and 65 will be called upon to pay tax for the first time. I shall accept any figure that the Treasury cares to submit. So far it has not been able to provide a figure.

The system is computerised and the Treasury should know. It is aware of the age distribution of women and the distribution of graduated pension payments. This information appears annually in "Social Security Statistics".

The Inland Revenue must know about the tax liability for these women. It should be able to provide a figure. These women have not been paying tax since they became 60. Their only source of income is that which. I have described. That income was not taxable because it fell below the allowance, or below the assessing tolerance on top of the allowance.

That will not be the position from the beginning of this tax year. That is my argument. Something will happen this year that has not happened before. Am I correct in assuming that the system will be triggered off and that these women will receive tax forms through their Letter boxes in the course of being asked to pay tax for the first time?

On 26 July 1979 the hon. Member for Welwyn and Hatfield (Mr. Murphy) asked the Chancellor of die Exchequer whether he was aware of the difficulties which pensioners have in understanding their tax affairs; and whether he has any proposals for simplification. That was a straightforward question but it is not the type of question that is to be asked out of the blue. It is clear that the hon. Gentleman had been tipped a nod and a wink. The Minister of State replied "Yes." The answer added that he thought that one of the main problems was that the tax liability was dependent upon pensioners notifying details of their pensions to the Inland Revenue. He added that with his right hon. Friend the Secretary of State for Social Services he had agreed to introduce an arrangement which will reduce the need for pensioners to make returns of their income to the Revenue, and will result in significant administrative savings. The Minister added that with effect from next year—at the time of the answer that was 1980— the DHSS will notify the Inland Revenue of the new rates of pension payable so that the Revenue can proceed with its annual pension recording without having to ask for this information from pensioners themselves".— [Official Report, 26 July 1979; Vol. 971, c. 423–24.] That would save £1 million, even before Sir Derek Rayner got to work.

I am not sure what the connection is between that arrangement and the question which was asked by the hon. Member for Bedford (Mr. Skeet) on 18 January 1980. He asked the Chancellor of the Exchequer whether he has any plan to deal with the difficulties which arise from the present arrangements for taxing national insurance pensions; and if he will make a statement. The reply in Hansard takes up about eight column inches, so clearly it was not thought up on the spur of the moment. The Minister of State said: My right hon. Friend the Secretary of State for Social Services and I have therefore decided to introduce with effect from April 1982 a system under which, in appropriate cases, tax may be deducted through PAYE from national insurance pensions. Therefore, in the pension book which pensioners receive to take to the post office every once in a while—usually weekly—from the financial year 1982, in appropriate cases, tax may be deducted. That is what the Government are planning from next year. The Minister of State went on to say: The net staff saving once the scheme is established will be about 800, representing a net administrative saving of £5.2 million per annum."—[Official Report, 18 January 1980; Vol. 976, c. 892.] The Minister of State also said that there would be some talks about the matter.

I followed that up on 21 January this year and asked whether the talks which had been referred to the previous year had been concluded. I was told by the Minister for Social Security: The Inland Revenue wrote to a number of representative organisations shortly after the proposals were announced, and it will be contacting them again later this year."—[Official Report, 21 January 1981; Vol. 997, c. 181.] Has that been done yet? If so, with what result? As it is now July, can the Financial Secretary confirm that from the tax year starting in April 1982 the process which the Ministers' answers outline will begin?

Hon. Members can see what has happened. There is no fear of tax any more for the bereaved widow or the woman of 60 to 65 who is caught in the tax net. Everything will be done for her. She will not have to worry about tax returns and form filling. The DHSS will tell the Inland Revenue and the Inland Revenue will then tell the DHSS what the tax is. The DHSS will print it on the pension book, and the woman concerned will be able to go down to the post office and collect her pension like any other pensioner. She will not have to fill in forms or bother herself reading the explanatory memorandum or going to Members of Parliament or to the citizens advice bureau.

It is as if she did not even know about it. Tax matters have been taken well out of her hands. The Government have saved much money on administrative chores—800 jobs in one Department—and have saved the widow the job of filling in a tax return, as everything is done by computer.

One can see the Treasury's argument. It wishes to bring more people into the tax net and widen the tax base. That makes it easier to raise the revenue with small change in the rates, because there will be more people in the tax net. We know now that there were 1¼ million more this year. The Treasury could pull the same trick next year, because the easiest way to raise revenue is to freeze or not to raise allowances in line with inflation. In amendment No. 24 we seek at least to protect women of between 60 and 65 who we believe are discriminated against.

Mr. Durant

I am sorry to interrupt the hon. Gentleman again, but I am following his argument closely. There is an interesting argument on both sides of the House. On the Conservative Benches we are tending to economise on administration, but from the Labour Benches the hon. Gentleman is asking for a tax return and for all the evidence to be shown. To be honest, are we not talking about small sums of money? Would it not be better to look at some sort of marginal benefit to those on low incomes who should be outside the tax net? It could be done by a tax return or by altering the benefits—which is the Government's view. I put that to the hon. Gentleman as part of the argument.

Mr. Rooker

I do not wish to fall out with the hon. Gentleman, particularly as he has already more or less said that he will vote with the Opposition. Earlier he said that we should not be political in the House of Commons. I am being party political, and I am not ashamed to say so.

The hon. Gentleman had a golden opportunity in Committee—for all I know, he may have voted with us, although I suspect that he did not—to put up the allowance for women of 60 to 64 and not to give them the full amount of the age allowance. However, we worked out an amendment to raise the allowance, so that it would cost the Government the minimum amount in lost resources. It would have been an extra new allowance to take those women over the assessing tolerance. It would have caught almost 95 per cent. of women affected. It would have lifted the allowance for a single person from £1,375 per annum to £1,425. The sum of £50 added to the allowance—which is £150 in taxable income, plus the assessing tolerance, which is another £100 in taxable income—would have solved the problem. We had a debate and a vote on it and the Government turned it down. They could have solved the problem cheaply. I completely accept that it would have solved the problem only for women aged 64 and not the problem which the Government have created for themselves for widows aged between 50 and 60.

Of course, the sums of money are small to Members of Parliament on £300 a week. That is not a cheap debating point. They are relatively small to Fleet Street editors and journalists. However, they are not small for the recipients or someone who, for getting the extra 30p a week on a graduated pension, will lose up to 57p a week, which is the equivalent of an annual television licence or a quarter's electricity or gas bill. They are not insignificant amounts to the people we are talking about. As I have said, there was an amendment that would have got the Government out of this problem in the cheapest way.

Mr. Durant

I do not disagree with the hon. Gentleman, but I am saying that those sums are small, and, therefore, the Treasury should not be so concerned about them. I am taking the hon. Gentleman's view. I am arguing that they are small amounts, so need we collect them?

Mr. Rooker

That brings us to the use of the assessing tolerance. The Inland Revenue has no statutory authority for the £30 of assessing tolerance off £100 of taxable income. It is not in statute; it is part of extra-statutory concessions—the little book which has the list of the giveaway tax reliefs that affect the well-off. However, perhaps we should put it in statute and bring about a change every year.

Mr. Richard Wainwright

The hon. Gentleman's careful researches are greatly helping the House. From his researches, can he say how the following case will be dealt with under the new anaesthetic arrangement of automatically deducting the tax on the pension books? Let us suppose that such a pensioner as he has described takes into her home a dependent relative and becomes entitled to the dependent relative allowance. What will happen to the automatic deduction of tax from that pension?

5.30 pm

Mr. Rooker

I do not know the answer, but I should be pleased if a Minister from the Treasury or the Department of Health and Social Security could tell us. We shall have to pursue the matter before the beginning of the next financial year. We have not yet passed the operating orders for the social security benefits or pension increases. I presume that we shall do that next week or the week after. They will take effect in November and carry the beneficiaries half-way through the next financial year. I shall be speaking from the Opposition Front Bench, and we shall raise the matter and make time available to discuss it.

The Government did not necessarily plan some of the things that I and my hon. Friends dealt with during previous stages of the Bill. I may get into trouble for this, but I genuinely believe that when they planned the Budget they did not foresee the consequences of freezing tax allowances for the women above the age of 60. If they did, they should have said so. It has never been admitted in correspondence or in parliamentary exchanges that that was part of Tory planning.

On page 27 the Tory manifesto complained: Income tax starts at such a low level that many poor people are being taxed to pay for their own benefits. If the women we are discussing are not poor, I do not know who is. They are being taxed to pay for their benefits under the Tories but they were not under a Labour Government, so what did the Tory manifesto commitment mean? I, therefore, give the Government the benefit of the doubt and assume that they did not understand the interaction of the tax and social security systems for those women who, when they reach retirement age, do not get a retirement tax allowance—most of us think of it as a retirement tax allowance and not an age allowance. The Minister shakes his head. If he wishes to say that it was all part of Tory planning, let us have it on the record. It is not what the Prime Minister said before the election.

The Financial Secretary to the Treasury (Mr. Nigel Lawson)

I was shaking my head at the hon. Gentleman's assertion that it was a retirement tax allowance and not an age allowance. That is incorrect. We are talking about an age allowance.

Mr. Rooker

I shall come to the argument about whether it is a retirement tax allowance or an age allowance.

I see the hon. Member for Braintree (Mr. Newton) in the Chamber. It is unfortunate that he is a Whip. In case he intends to leave the Chamber, I tell him that I shall refer to him shortly.

If before the election, on 17 April 1979 at Gravesend, the Prime Minister was not referring to the people we are discussing, I do not know to whom she was referring. The press release begins: My first Ministerial job in government was at the Ministry of Pensions and National Insurance and I want to set out some of the very good things Conservatives have done for pensioners and those on other benefits. She listed a few measures, and I do not knock them. They included assistance to the disabled. The statement concludes: Those pensioners who have another little pension of their own or some savings and who therefore pay tax will benefit from our Income Tax reductions.

Mr. D. N. Campbell-Savours (Workington)

My hon. Friend needs the special voice.

Mr. Rooker

Yes—the haircut, the lot.

The speech was glossed up. It was widely reported in the press the following day. To pin it down, it was at Gordon school, Lower Higham Road, Gravesend.

That pledge has clearly been broken in the Budget. The Government and the Prime Minister stand condemned. The right hon. Lady gave a pledge before the election that people with a small pension of their own would benefit from Tory tax reduction, but the reverse has happened.

I turn briefly to the age and retirement allowance. On 26 March I wrote to the Prime Minister—I was not aware of the speech that I quoted at the time—about the problem of single or married women with a pension of their own. I said that I believed that the Government's action was unintentional—but I am beginning to think that I may have been wrong. I gave examples of the massive marginal tax rate that they would have to pay, and I gave four examples of how the Government could avoid them, some of which cost more than others.

The right hon. Lady replied on 13 April: As you will appreciate, the proposals which you make in your third paragraph to deal with this problem raise wider issues about the structure of personal income tax reliefs. In effect, she said, "I have, therefore, passed the buck to the Chancellor and his colleagues", although she did not quite put it like that. She said that she would ask them to consider the proposals. I heard part and read other parts of the Financial Secretary's speech on 5 May. It dealt almost entirely with widows. I accept that there is a problem there, but I am dealing with all women between the ages of 60 and 64 who have a State retirement pension paid for through their own contributions.

I had heard nothing else by 10 May, so I asked the Prime Minister to find out what was going on and look into the matter herself. My letter was acknowledged promptly, and on 24 June I received a massive three-page reply from the Chancellor of the Exchequer stating: The justification for age allowance has always been that the taxable capacity of people declines as they get older, because of the extra expenses they incur, and that an additional allowance is justified on this account. One may or may not agree with that assertion, but, in any case, why pick on the age of 65? There are more women than men, and there are more women pensioners than men, so more than half the population reaches retirement age at 60. Why not make it 60 for everyone, although that may rightly be seen as an unfair advantage for the majority of men who are still at work?

I do not accept that it is an age allowance. I believe that it was a Labour Government who introduced the allowance not many years ago. I do not know whether they intended later to give women a different allowance.

However, on 14 June 1977 we debated the matter at length in Standing Committee D. Mrs. Audrey Wise and I tabled certain amendments and voted for certain amendments of the hon. Member for Braintree, who did not get all the credit that he was entitled to. We put down an amendment which was the same as today's amendment No. 24. I warn my hon. Friends and Conservative Members, therefore, that if one is on to a good thing one should keep to it and not draw back. After Mrs. Wise and I had caused all that trouble and won those victories, we decided not to press to a Division the very point that we are now debating. We thought that we had achieved enough and caused enough problems for our own Government. We therefore decided to hold back on that amendment.

Nevertheless, in a discourse with the hon. Member for Braintree, we were all agreed. The hon. Member for Braintree said: I cannot say what would happen in those circumstances"— the circumstances that had described about the reduction in the retirement age for men and whether if that went down to 63, we would bring the age allowance down to 63— but my view is that the age allowance should be reduced in step with the pension age. It is almost inconceivable that if we were to reduce the retirement age there would not be overwhelming pressure to reduce the threshold for the age allowance. I then said: So it is a retirement allowance. The hon. Member for Braintree replied: I am grateful to the hon. Gentleman for his implicit support. I, too, see it as a retirement allowance, and that is how the Committee should see it."—[Official Report, Standing Committee D, 14 June 1977; c. 534.] With all due respect to the Government, the hon. Member for Braintree has a far better record and knows far more about the social security system than the Financial Secretary, who has been wrapped up in tax policy for the past few years. The hon. Member for Braintree and I both regard this as a retirement allowance.

I believe that extra expenses are placed upon women when they retire as compared with when they are at work. It is therefore indefensible to have this discrimination between men and women. I shall not go into the arguments about the retirement age for men, Mr. Deputy Speaker, as you would rightly rule me out of order. Nevertheless, this is clearly a retirement allowance. If the Financial Secretary says that it is an age allowance, I ask him to defend the age of 65.

I draw the attention of the House to the ludicrous position which now obtains. I shall give the examples of two women. For obvious reasons, I shall not disclose the exact circumstances or the names and addresses.

Mrs. R. of Sutton Coldfield is not a constituent of mine, but, like many others, she wrote to me after I had raised this matter. She has a basic rate retirement pension of £27.15 and a 91p graduated pension—so she is in real trouble. She also happens to have a pension of £5.28 per month which, as a widow, she receives from her late husband's former employer. She is 62 years of age. She pays income tax. She also receives £7.15 per week in supplementary benefit because, when her housing expenses are taken into account, her net income after tax is below what we in this country consider to be the poverty line below which no person should be required to live.

5.45 pm

Mr. Durant

I apologise to the hon. Gentleman. This must be about the fourth time that I have intervened. In fairness, it should be pointed out that this was not dealt with by the Labour Government. I understand the hon. Gentleman's argument and I have sympathy with it. Nevertheless, the Labour Government did not deal with it.

Mr. Rooker

The Labour Government went a considerable way towards dealing with the problem by accepting the amendments in Committee. They therefore improved matters. The Conservative Government have made the problem far worse than it has ever been before, for the reasons that I have given.

Mr. Robin F. Cook (Edinburgh, Central)

On 11 May this year, when we were debating the taxation of unemployment benefit and supplementary benefit to strikers, the Chief Secretary said: It would not make sense for a person to be paid supplementary benefit or unemployment benefit and to have tax deducted from that benefit."—[Official Report, 11 May 1981; Vol. 4, c. 563.] Precisely that situation, which the Chief Secretary himself said would not make sense, will occur for tens of thousands of women between the ages of 60 and 65 as a result of the Budget.

Mr. Rooker

My hon. Friend is perfectly correct.

I take the further example of Miss D of Harlow in Essex. The papers have been forwarded to me by the Child Poverty Action Group, which has given permission for me to raise the matter.

Miss D also gave permission for her case to be used as an example. She went to the welfare rights service to see whether she was better off on supplementary benefit or with a rebate. As hon. Members know, one cannot have both. She receives the basic retirement pension of £27.15. Her rent is £10 per week, her rates are £4 a week and there is a further addition for central heating. She is not well off, but she has limited savings of £314 in a building society. Miss D has tax liabilities of £210 for 1981–82—£4 per week. I have before me two sets of calculations to show whether she is better off on supplementary benefit or on a rebate. It is a good job that she went to that office, as she had previously had a rebate. The net effect of the two calculations, however, is as follows: So your income after paying out for rent/rates is under the supplementary benefit heading £28.55 and under the rebate heading £27.34.

This means you are 'better off' on supplementary benefit by £1.21 per week. She should therefore claim supplementary benefit. She is paying £4.06 per week in income tax, yet the calculation of her outgoings under the complexities of the social security system, with housing expenses, needs, and so on, to which any other citizen is entitled, shows that she is better off on supplementary benefit. But the tax liability is not wiped out because she has gone on to supplementary benefit.

The thrust of the Government's argument, therefore, cannot be that they have made things better for the women to whom amendment No. 24 relates. There was one way for the Government to escape the problem, which they have now made worse for themselves. I concede immediately that the amendment is expensive, but it is chickenfeed compared with the Budget judgment of several thousand million pounds a year. However, the sum involved is not insignificant. It must be a few hundred million pounds. A way out was open to the Government in Committee, when they could have accepted the Opposition amendment to raise the single person's allowance by £50 for these women—not for the other 20 million people who are at work. They could have got themselves oat of the problem in that way.

The facts that I have given about what has been agreed among the Treasury, the Inland Revenue and the DHSS are not yet apparent to those on the receiving end of the problem. The hundreds who will be affected in each of our constituencies do not yet know about this. Towards the end of October, after party conference time and towards the end of the recess, however, when, according to the Minister's answer that I have mentioned, the tax returns and amended code numbers will start popping through the letter boxes—subject to the Civil Service dispute being over, I assume that this will happen—I believe that all hell will be let loose. Hon. Members will then be called to account. Constituents will ask "What did you do? Did you vote for this" Did you know about it? Did you make a speech? Did you ask a question? Did you write to a Minister? Is it too late to do anything about it?"

I hope that constituents throughout the country will ensure that when they ask those questions they are given the Division list for today, 15 July. Those who do not get it should write to my hon. Friends, who will ensure that they receive it.

Mr. Andrew F. Bennett (Stockport, North)

I came into the Chamber primarily to listen, in the hope that I should be better informed. As a result of the speech made by my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker), I certainly am. However, unfortunately he did not quite give me the answers that I wanted. I am concerned to give my constituents the advice that my hon. Friend also seeks. Many of my constituents still remember the Tory Party's promise to reduce the tax burden and to simplify government. Clearly, the Government have done neither. The Conservative Party has made government far more complicated, and the Government can now impose themselves on a group of people who did not previously have to put up with the problems of the taxation system.

I hope that I shall receive answers to the questions that I shall ask. What happens to those whose graduated pension—the old Boyd-Carpenter scheme—is in a muddle? Indeed, many of my constituents find that their graduated pensions are in a muddle. One of my constituents recently received a letter that said that those involved were sorry for not having paid him the money that he was entitled to for the past three years. He was delighted to receive the back payments.

Let us suppose that that case had involved a woman who received back payments. If those back payments were less than the crucial figure of 33p and were received in one year, would they push that person over the tax threshold or would they be spread over the previous years? That is important for the individual. concerned. If a woman retires at 64 and receives her graduated pension straight away, she will cross the tax threshold. However, if she leaves everything to bureaucracy and her pension comes through slowly so that she does not receive it until she has passed the age of 65, or the tax year in which she is 65—at which point she becomes eligible for the age allowance—is she all right? Alternatively, is it deemed that she received the money in the previous year despite the fact that she did not? Would she then be taxed on it? If people just exceed the 33p they will be considerably worse off. What happens if people decide not to collect the money? Are they still taxed on it because it is there to be collected, or are they entitled not to be taxed on the money because it has not been claimed? What happens if the money is clained in two or three years' time?

My hon. Friend the Member for Perry Barr mentioned the way in which the Government are excluding the individual and allowing the Treasury and pension computers to talk to each other without involving the individual. Do constituents have a choice about whether to collect their graduated pensions? Is it assumed that the graduated pension must be collected? There are many questions that we should like answers to so that we can give our constituents the right advice. Should they collect their graduated pensions even if they become worse off as a result? Can they defer collecting the money until they are over the age of 65 and then collect it as a lump sum? What happens if, through no fault of their own, graduated pension is not paid at the right time and is eventually paid in a larger amount that puts them over the tax threshold?

I hope that we shall receive answers to those questions. Indeed, it would save the Treasury much time in the long term if it issued hon. Members with a booklet giving them guidance so that they can give the right information to those in this age group. If the Treasury does not issue such a booklet, some Treasury Ministers will have to answer many letters in the next month or two and will have to sort out a lot of anomalies. The answer is for the Government to accept the amendments, to remove the anomaly and to fulfil their election pledge to reduce taxation and bureaucracy.

6 pm

Mr. Lawson

As tends to happen year after year when we discuss Finance Bills, we have had a long debate on the taxation of widows. That is understandable. From our experience of our constituencies we all know the concern that exists among widows about the way in which the tax system affects them.

As the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) said, in many cases the grievance is imagined. When he was a Treasury Minister I heard him say that many times. Nevertheless the grievance is deeply felt. I shall do my best to answer most of the points that have been made. Both the amendments stand in the name of the official Opposition. Amendment No. 21 seeks to increase the widows' bereavement allowance by £30 and is not an expensive amendment in itself. As the hon. Member for Birmingham, Perry Barr (Mr. Rooker) conceded, amendment No. 24 would be very expensive. It seeks to give the full age allowance to women aged between 60 and 64 who have retired and who are in receipt of category A retirement pensions.

I turn to the subject of widows' bereavement allowance. I am grateful to my hon. Friend the Member for Reading, North (Mr. Durant) for his remarks on the subject. I pay tribute to him for the consistent work that he has done for widows through the all-party widows' group, and in other ways. He pointed out that for years the Labour Government had been pressed to introduce something like the widows' bereavement allowance. All of us who deal with the problems of widows understand that they have problems that will last for years. However, the problems, psychological hardships and difficulties of coping are at their greatest in the year of bereavement. The Labour Government were continually pressed, but did nothing. We did something and introduced the widows' bereavement allowance in the last Budget. Although it is a modest step, it is an important one for widows.

My hon. Friend made another point that we should bear in mind. A balance needs to be struck between the undoubted case that widows have and the other hard cases that involve people in different circumstances who nevertheless have financial difficulties and problems with the taxation system. We must always keep the matter in perspective. It must be borne in mind not only that this year we were unfortunately obliged to decide not to increase any of the personal tax allowances or thresholds but that the widows' bereavement allowance is not specified as a particular sum in the legislation. In effect, it is tied to the other allowances and is the difference between the single allowance and the married allowance.

In the year of bereavement, the widow continues to receive the full married allowance. If she has a child, she also receives the one-parent family allowance, the additional personal allowance. It follows that if, regrettably, the single and married allowances cannot be raised this year, the difference between them will remain the same and the widows' bereavement allowance will not increase. The right hon. Member for Ashton-under-Lyne said that somehow that was harder on the widow receiving the widows' bereavement allowance, even though that allowance did not exist when he was a Minister. He said that it was harder because it was for one year only, whereas with other allowances it might be possible to catch up in subsequent years. If that is an argument for anything, it must be an argument for extending the widows' bereavement allowance for a further year beyond the year of bereavement. That does not seem to be an argument for the increase that he suggested.

Mr. Robert Sheldon

I am rather surprised by that comment of the right hon. Gentleman because if it is his intention to introduce an extra year for the bereavement allowance, that is another matter. If that is not his intention, the failure to give the widow a bereavement allowance in the year of her bereavement means that that has gone for ever, because she has it only for that year.

Mr. Lawson

The right hon. Gentleman is getting carried away when he speaks of the failure to give the widow a bereavement allowance. There is no failure to give her a bereavement allowance. She receives it in full, whereas there was no bereavement allowance previously. However, she will not receive an increase.

The hon. Member for Gateshead, West (Mr. Horam) exaggerated the difficulties by understating the effect that a bereavement allowance would have. He spoke of the difficulties for a widow on a pension receiving a tax bill in the year of bereavement. There are difficulties in the cases that the hon. Member for Perry Barr mentioned of people being brought into the tax net—single women and widows between the ages of 60 and 64—as a result of the pension increases this year, while the personal allowance is not being increased. For the year of bereavement, that does not apply because of the existence of the widow's bereavement allowance. That is the one case where it does not apply and where the relatively new allowance introduced last year is of great benefit.

The right hon. Member for Ashton-under-Lyne said that the right solution might have been to increase the assessing tolerances. That would have been the wrong solution. The assessing tolerances are not meant to be an extra threshold. They are an administrative convenience. There is a high administrative cost in collecting small amounts of tax. The assessing tolerances should be at the right level for administrative purposes. If we wish to increase and can afford to increase the thresholds, we shall do that, but not by the back-door method of increasing the tolerances.

Another reason that the right hon. Gentleman gave for increasing the tolerances was to do with the way they operate. It is true that if the taxable income is £100 the tax liability would be £30 or less and no tax is raised because it is below the level of tolerance. If, however, it is slightly above that, the full taxable amount is raised. However, raising the tolerances would not alter that effect but it would happen at a higher level, at £120 or £130. Up to that point, no tax would be levied, but above it the full amount of tax liable is raised. I do not think that there is a case for either of the arguments that the right hon. Gentleman put for an increase in the tolerances.

Mr. Durant

I accept my right hon. Friend's general premise but when a small income is concerned the tolerance level is important. I do not think he should say that it does not matter in the sense that if it is moved to that point the full amount comes into operation. If the figure is small, what matters to those concerned is that it will assist them if the tolerance level is raised.

Mr. Lawson

Nevertheless, there will always be cases where small amounts of taxation are levied. My hon. Friend must accept that. If the tolerance levels are raised, the small amounts will be that bit larger. I accept that, but small amounts of tax must still be levied. In some cases, it is reasonable to strike the assessing tolerances at a level where the administrative costs and the trouble of raising the money are greater than it is worth. The hon. Member for Perry Barr suggested that the Inland Revenue had no statutory authority for the assessing tolerances. [Interruption.] If he did not make that point, I shall not bother to reply to it.

Mr. Rooker

I am not saying that what is being done is illegal. I said that I did not think that it was in an Act, but it was in what is presumably delegated authority to the Inland Revenue, which I know concerns extra-statutory concessions. There are about 40 of those and I understand that this is one of them.

Mr. Lawson

The hon. Gentleman is not correct on this occasion. He is usually accurate, though not always.

In some of his statements in other spheres he has not been so accurate. On this occasion, he has conducted his researches diligently and for a long time. Assessing tolerances are administrative arrangements that the Revenue makes under its powers. That has gone on for years under many Governments, as the hon. Gentleman well knows. The powers are contained in section 1 of the Taxes Management Act 1970 and its predecessors for the care and management of income tax. There is the power under that Act, so that it is not an extra-statutory concession. However, I am not saying that there are not a number of extra-statutory concessions in existence. That situation has existed for a long time.

Mr. Horam

Is the amount of the tolerance a matter for the discretion of the Revenue or is it in the Act? Has it been indexed?

Mr. Lawson

The amount is not in the Act.

The hon. Member for Perry Barr asked a number of searching and penetrating questions. First, he asked how many women were affected in the way that he outlined. Our best guess—we do not have the precise figure—is that there are probably about 50,000. He also asked when the system would come into effect. As he pointed out, I have already answered that.

Mr. Rooker

Is the right hon. Gentleman confirming what he said in that written answer—that is, that it is only when the pension increases take effect in November, halfway through the tax year, that the amended codes will be sent out from the Revenue?

Mr. Lawson

I am sure that the hon. Gentleman will not be surprised to know that my written answers are correct. The fact is that the first request for payment will probably be in November, but the tax is paid in quarterly instalments in arrears. Thus it follows that part of the 1981–82 tax will not be collected until 1982–83.

The hon. Gentleman asked me about the new system of direct deduction of PAYE from national insurance pensions. He asked when that would come into effect. Would it be from April 1982 as we had hoped? I am afraid the answer to that is that I cannot say at present. We do not know when it will come in. April was our original hope.

Mr. Richard Wainwright

Further to the point about automatic deduction at source of tax from pensions, will the right hon. Gentleman answer the question that I put to the hon. Member for Birmingham, Perry Barr (Mr. Rooker) about what happens if a pensioner becomes entitled to another income tax allowance in the course of one tax year?

Mr. Lawson

I am not sure whether the hon. Member for Colne Valley (Mr. Wainwright) is referring to the dependent relative allowance and asking how that will be dealt with. A person's total allowances for the year will be estimated in the usual way, and the PAYE coding will also be worked out in the usual way, whatever allowances a person may have.

The hon. Member for Perry Barr got terribly worked up—

Mr. Robert Sheldon

The House would be grateful if the Minister would give a proper reply to the hon. Member for Colne Valley (Mr. Wainwright). What would happen if a person's circumstances changed during the course of the year? How would that be recorded on the pension book?

Mr. Lawson

I shall be happy to write to the right hon. Member about that. [Interruption.] I am not sure whether the right hon. Member is opposing the change, but it is a good question and I shall be happy to write to him about it.

Sir William Clark (Croydon, South)

If the allowances of any taxpayer change during the course of the fiscal year, on application to the inspector of taxes the code number is automatically changed.

Mr. Lawson

The reason why I said that I would write to the right hon. Gentleman is that it is a new system that has not yet come into effect:. It is primarily done through the DHSS, as the hon. Member for Perry Barr explicitly stated. I shall be happy to do my best to answer the question. I shall, as I said, write to the right hon. Gentleman, and also, of course, to the hon. Member for Colne Valley, who raised the question. I shall, indeed, make sure that the letters are despatched on the same day, so that no distinction will be made between the Liberal Party and the Labour Party. Far be it for me to wish to make such invidious distinctions.

The hon. Member for Perry Barr got terribly worked up in giving the examples of people who were liable to tax on various parts of their income and were also drawing supplementary benefit. This is one of the complexities of our tax and social security system, but there is nothing new about it, as the hon. Gentleman surely knows. It has been happening for years under Governments of both major parties. There have always been individuals who were both liable to tax and eligible for supplementary benefit.

Perhaps I might turn briefly—before I forget it entirely by concentrating too much on the points made by the hon. Member for Perry Barr—to the question asked by the hon. Member for Stockport, North (Mr. Bennett). He asked whether a person could decide not to draw his Boyd—Carpenter graduated pension. The answer is that he can do so.

That leads to the more important question raised by the hon. Member for Perry Ban. The position at the moment is that no one who has simply the basic State retirement pension is liable to tax. The assessing tolerance takes care of that. The hon. Gentleman's point, however, is that there are a number of people who have the Boyd-Carpenter addition as well, and that some of them will be drawn into the tax net. As I said in Committee, they are really no different from any other people with extra income, particularly where there is an occupational pension. The new second State pension is, in a sense, an alternative to an occupational pension, and it draws people into the tax net. Over a period that will get larger and larger. The suggestion that it should not be liable to tax is, therefore, absurd and is wholly contrary to the thinking of those who were responsible for the scheme. There is no reason in equity why a substantial second State pension for the contracted-in employee should not be caught for tax whereas an occupation pension is caught for tax.

6.15 pm

Mr. Rooker

I do not think, with respect, that I sought to base my argument on the new pension scheme, because I accept that that is, in effect, an occupational scheme organised by the State to provide people with a proper pension, to avoid their having to go on to supplementary benefit or means-tested benefit on retirement. No one ever construed the graduated pension scheme started by Boyd-Carpenter as an occupational pension scheme, and no one can say that the average payment that all women will get this year—57p a week—is a substantial pension.

The graduated pension is part and parcel of the retirement system and is not separate from it, like the new system that was started in 1978. This is the first year that it has ever been caught in the tax net. I accept that the new system has to be treated wholly as an occupational pension. But that is no excuse for having the tax threshold so low that people who are on means-tested benefit are paying tax at the same time.

Mr. Lawson

I note what the hon. Gentleman says about the second State pension. It is the Government's contention that the Boyd-Carpenter addition is analogous to that and should be treated in precisely the same way. The hon. Gentleman is absolutely right in saying that this is the first time that that addition has been liable to tax, in a small number of cases. The root of the problem is .a state of affairs in which we were unable—without allowing Government borrowing to become wholly excessive, with grave consequences for the economy—to increase the personal allowances. That is where the difficulty arises.

Hon. Members in all parts of the House should bear that in mind when they are calling for increases in public expenditure, because increases in public expenditure have to be paid for. There is no such thing as a free lunch. It is the cost of those increases in public expenditure that we are debating today.

Mr. Deputy Speaker

It might help the House if at this point I were to give a ruling on the important matter raised by the hon. Member for Berwick-upon-Tweed (Mr. Beith) relating to the application of the rules for notice of oral questions. As 29 July will be a public holiday and the House may not sit on that day, and as a genuine misunderstanding has arisen over the application of the rules, Mr. Speaker has decided that the random selection process for questions for Thursday 30 July will not take place until tomorrow at 4 pm.

Mr. Beith

I thank you, Mr. Deputy Speaker, and Mr. Speaker, for the trouble that you have taken in giving the ruling and for the arrangement that you have made. Perhaps I may express the hope that the Leader of the House will put us all out of our misery tomorrow by stating clearly that the House will not sit on that day.

Mr. Robert Sheldon

I am sure that we all are grateful to you for your intervention, Mr. Deputy Speaker.

I should like to make one or two points in reply to the comments of the Financial Secretary. He failed to answer the major question that concerns those women—single, married or widowed—between the ages of 60 to 64, who, as a result of this legislation, will lose their tolerance of income tax, which can amount to about £30, just because they get a few coppers in the way of State-related pension. For that reason they will lose substantial sums of money. It could have been prevented either by revalorising—the method that we prefer—or by a greater application of the tolerance levels. The right hon. Gentleman sought to avoid either of those two possible escape routes, and because of that we shall divide on amendment No. 24.

Amendment No. 21 deals with the widows' bereavement allowance. We know full well that the allowance was brought in last year, but we also know that those widows who become widowed in this current year will fail to benefit from any uprating, which they had regarded as their due. The right hon. Gentleman's response was wholly inadequate. In fact, he gave no answer except to say that it was related to the personal allowance. Of course it is, but he could have accepted the amendment, which seeks to make a special exception for widows who are bereaved this year. The others can all catch up on the allowances that are forgone this year and on the failure to increase them. The one category of people who cannot so gain is the widows who are bereaved this year.

The right hon. Gentleman accepts that the costs entailed in the amendment are very small, but he is still unable to accept it. We shall therefore divide the House on both issues.

Question put,,That the amendment be made:—

The House divided: Ayes 209, Noes 275.

Division No. 272]	[6.20 pm
AYES
Abse, Leo	Dixon, Donald
Adams, Allen	Dobson, Frank
Alton, David	Dormand, Jack
Anderson, Donald	Douglas-Mann, Bruce
Archer, Rt Hon Peter	Dubs, Alfred
Ashley, Rt Hon Jack	Duffy, A. E. P.
Ashton, Joe	Dunn, James A.
Atkinson, N. (H'gey,)	Dunwoody, Hon Mrs G.
Barnett, Guy (Greenwich)	Durant, Tony
Beith, A. J.	Eadie, Alex
Bennett, Andrew (St'kp't N)	Eastham, Ken
Bidwell, Sydney	Edwards, R. (W'hampt'n S E)
Booth, Rt Hon Albert	Ellis, R. (NE D'bysh're)
Boothroyd, Miss Betty	English, Michael
Bottomley, Rt Hon A. (M'b'ro)	Ennals, Rt Hon David
Bray, Dr Jeremy	Evans, loan (Aberdare)
Brown, Hugh D. (Provan)	Faulds, Andrew
Brown, Ronald W. (H'ckn'y S)	Field, Frank
Callaghan, Rt Hon J.	Fitch, Alan
Callaghan, Jim (Midd't'n & P)	Fletcher, Ted (Darlington)
Campbell, Ian	Ford, Ben
Campbell-Savours, Dale	Forrester, John
Canavan, Dennis	Foster, Derek
Cant, R. B.	Foulkes, George
Carter-Jones, Lewis	Garrett, John (Norwich S)
Clark, Dr David (S Shields)	George, Bruce
Cocks, Rt Hon M. (B'stol S)	Ginsburg, David
Cohen, Stanley	Golding, John
Coleman, Donald	Graham, Ted
Concannon, Rt Hon J. D.	Grant, George (Morpeth)
Conlan, Bernard	Grant, John (Islington C)
Cook, Robin F.	Grimond, Rt Hon J.
Cowans, Harry	Hamilton, James (Bothwell)
Cox, T. (W'dsw'th, Toot'g)	Hardy, Peter
Craigen, J. M.	Harrison, Rt Hon Walter
Crowther, J. S.	Hart, Rt Hon Dame Judith
Cryer, Bob	Hattersley, Rt Hon Roy
Cunningham, G. (Islington S)	Heffer, Eric S.
Cunningham, Dr J. (W'h'n)	Hogg, N. (E Dunb't'nshire)
Dalyell, Tam	Home Robertson, John
Davies, Rt Hon Denzil (L'lli)	Homewood, William
Davies, Ifor (Gower)	Hooley, Frank
Davis, Clinton (Hackney C)	Horam, John
Davis, T. (B'ham, Stechf'd)	Howell, Rt Hon D.
Deakins, Eric	Howells, Geraint
Dean, Joseph (Leeds West)	Huckfield, Les
Dempsey, James	Hughes, Robert (Aberdeen N)
Dewar, Donald	Janner, Hon Greville

Jay, Rt Hon Douglas	Robinson, G. (Coventry NW)
John, Brynmor	Rooker, J. W.
Johnson, James (Hull West)	Roper, John
Johnson, Walter (Derby S)	Ross, Stephen (Isle of Wight)
Johnston, Russell (Inverness)	Rowlands, Ted
Jones, Rt Hon Alec (Rh'dda)	Ryman, John
Jones, Dan (Burnley)	Sandelson, Neville
Kaufman, Rt Hon Gerald	Sever, John
Kerr, Russell	Sheldon, Rt Hon R.
Kilroy-Silk, Robert	Shore, Rt Hon Peter
Lambie, David	Short, Mrs Renée
Leadbitter, Ted	Silkin, Rt Hon J. (Deptford)
Leighton, Ronald	Silkin, Rt Hon S. C. (Dulwich)
Lestor, Miss Joan	Silverman, Julius
Lewis, Arthur (N'ham NW)	Skinner, Dennis
Lewis, Ron (Carlisle)	Smith, Rt Hon J. (N Lanark)
Litherland, Robert	Snape, Peter
Lofthouse, Geoffrey	Soley, Clive
McDonald, Dr Oonagh	Spearing, Nigel
McElhone, Frank	Spriggs, Leslie
McKay, Allen (Penistone)	Stallard, A. W.
McKelvey, William	Steel, Rt Hon David
McMahon, Andrew	Stewart, Rt Hon D. (W Isles)
McNally, Thomas	Stoddart, David
McNamara, Kevin	Summerskill, Hon Dr Shirley
McTaggart, Robert	Taylor, Mrs Ann (Bolton W)
McWilliam, John	Thomas, Dafydd (Merioneth)
Magee, Bryan	Thomas, Jeffrey (Abertillery)
Marshall, D (G'gow S'ton)	Thomas, Dr R. (Carmarthen)
Marshall, Dr Edmund (Goole)	Tilley, John
Martin, M (G'gow S'burn)	Tinn, James
Mason, Rt Hon Roy	Torney, Tom
Maxton, John	Urwin, Rt Hon Tom
Meacher, Michael	Varley, Rt Hon Eric G.
Mellish, Rt Hon Robert	Wainwright, E. (Dearne V)
Millan, Rt Hon Bruce	Wainwright, R. (Colne V)
Miller, Dr M. S. (E Kilbride)	Walker, Rt Hon H. (D'caster)
Mitchell, Austin (Grimsby)	Watkins, David
Mitchell, R. C. (Soton Itchen)	Weetch, Ken
Morris, Rt Hon A. (W'shawe)	Welsh, Michael
Morris, Rt Hon C. (O'shaw)	White, Frank R.
Morris, Rt Hon J. (Aberavon)	White, J. (G'gow Pollok)
Newens, Stanley	Whitehead, Phillip
Oakes, Rt Hon Gordon	Whitlock, William
Ogden, Eric	Wigley, Dafydd
O'Halloran, Michael	Willey, Rt Hon Frederick
O'Neill, Martin	Williams, Rt Hon A. (S'sea W)
Orme, Rt Hon Stanley	Wilson, Gordon (Dundee E)
Palmer, Arthur	Wilson, William (C'try SE)
Parker, John	Winnick, David
Pavitt, Laurie	Woodall, Alec
Pendry, Tom	Woolmer, Kenneth
Rees, Rt Hon M (Leeds S)	Wright, Sheila
Richardson, Jo	Young, David (Bolton E)
Roberts, Albert (Normanton)
Roberts, Ernest (Hackney N)	Tellers for the Ayes:
Roberts, Gwilym (Cannock)	Mr. George Morton and
Robertson, George	Mr. Frank Haynes

NOES
Adley, Robert	Blackburn, John
Alexander, Richard	Blaker, Peter
Alison, Michael	Body, Richard
Amery, Rt Hon Julian	Bonsor, Sir Nicholas
Ancram, Michael	Bottomley, Peter (W'wich W)
Arnold, Tom	Bowden, Andrew
Aspinwall, Jack	Boyson, Dr Rhodes
Atkins, Rt Hon H. (S'thorne)	Braine, Sir Bernard
Atkins, Robert (Preston N)	Bright, Graham
Atkinson, David (B'm'th,E)	Brinton, Tim
Baker, Kenneth (St.M'bone)	Brittan, Leon
Baker, Nicholas (N Dorset)	Brooke, Hon Peter
Banks, Robert	Brotherton, Michael
Beaumont-Dark, Anthony	Brown, Michael (Brigg & Sc'n)
Benyon, Thomas (A'don)	Browne, John (Winchester)
Benyon, W. (Buckingham)	Bruce-Gardyne, John
Best, Keith	Buchanan-Smith, Alick
Bevan, David Gilroy	Buck, Antony
Biffen, Rt Hon John	Bulmer, Esmond
Biggs-Davison, John	Burden, Sir Frederick

Butcher, John	Hunt, David (Wirral)
Cadbury, Jocelyn	Hunt, John (Ravensbourne)
Carlisle, John (Luton West)	Irving, Charles (Cheltenham)
Carlisle, Kenneth (Lincoln)	Jessel, Toby
Carlisle, Rt Hon M. (R'c'n )	Johnson Smith, Geoffrey
Chapman, Sydney	Jopling, Rt Hon Michael
Churchill, W. S.	Joseph, Rt Hon Sir Keith
Clark, Hon A. (Plym'th, S'n)	Kaberry, Sir Donald
Clark, Sir W. (Croydon S)	Kellett-Bowman, Mrs Elaine
Clarke, Kenneth (Rushcliffe)	Kershaw, Anthony
Clegg, Sir Walter	Kimball, Marcus
Cockeram, Eric	King, Rt Hon Tom
Colvin, Michael	Knight, Mrs Jill
Cope, John	Knox, David
Cormack, Patrick	Lamont, Norman
Corrie, John	Lang, Ian
Cranborne, Viscount	Langford-Holt, Sir John
Critchley, Julian	Latham, Michael
Crouch, David	Lawrence, Ivan
Dean, Paul (North Somerset)	Lawson, Rt Hon Nigel
Dickens, Geoffrey	Le Merchant, Spencer
Douglas-Hamilton, Lord J.	Lester, Jim (Beeston)
du Cann, Rt Hon Edward	Lewis, Kenneth (Rutland)
Dunn, Robert (Dartford)	Lloyd, Ian (Havant & W'loo)
Dykes, Hugh	Lloyd, Peter (Fareham)
Eden, Rt Hon Sir John	Loveridge, John
Edwards, Rt Hon N. (P'broke)	Luce, Richard
Eggar, Tim	Lyell, Nicholas
Emery, Peter	MacKay, John (Argyll)
Eyre, Reginald	Macmillan, Rt Hon M.
Fairbairn, Nicholas	McNair-Wilson, M. (N'bury)
Fairgrieve, Russell	McNair-Wilson, P. (New F'st)
Farr, John	McQuarrie, Albert
Fell, Anthony	Madel, David
Fenner, Mrs Peggy	Major, John
Fisher, Sir Nigel	Marland, Paul
Fletcher, A. (Ed'nb'gh N)	Marlow, Tony
Fletcher-Cooke, Sir Charles	Marshall, Michael (Arundel)
Fookes, Miss Janet	Marten, Neil (Banbury)
Forman, Nigel	Mates, Michael
Fowler, Rt Hon Norman	Mather, Carol
Fox, Marcus	Maude, Rt Hon Sir Angus
Fraser, Rt Hon Sir Hugh	Mawby, Ray
Fraser, Peter (South Angus)	Mawhinney, Dr Brian
Gardiner, George (Reigate)	Maxwell-Hyslop, Robin
Gardner, Edward (S Fylde)	Mayhew, Patrick
Garel-Jones, Tristan	Mellor, David
Gilmour, Rt Hon Sir Ian	Miller, Hal (B'grove)
Glyn, Dr Alan	Mills, Iain (Meriden)
Goodhew, Victor	Mills, Peter (West Devon)
Goodlad, Alastair	Miscampbell, Norman
Gorst, John	Mitchell, David (Basingstoke)
Gow, Ian	Moate, Roger
Gower, Sir Raymond	Monro, Hector
Grant, Anthony (Harrow C)	Montgomery, Fergus
Gray, Hamish	Morris, M. (N'hampton S)
Greenway, Harry	Morrison, Hon C. (Devizes)
Grieve, Percy	Morrison, Hon P. (Chester)
Griffiths, E. (B'y St. Edm'ds)	Murphy, Christopher
Griffiths, Peter Portsm'th N)	Neale, Gerrard
Grist, Ian	Needham, Richard
Grylls, Michael	Neubert, Michael
Gummer, John Selwyn	Newton, Tony
Hamilton, Hon A.	Normanton, Tom
Hamilton, Michael (Salisbury)	Onslow, Cranley
Hampson, Dr Keith	Oppenheim, Rt Hon Mrs S.
Hannam, John	Osborn, John
Haselhurst, Alan	Page, John (Harrow, West)
Hastings, Stephen	Page, Richard (SW Herts)
Havers, Rt Hon Sir Michael	Parkinson, Cecil
Hawksley, Warren	Parris, Matthew
Hayhoe, Barney	Patten, Christopher (Bath)
Heath, Rt Hon Edward	Pattie, Geoffrey
Heddle, John	Pawsey, James
Heseltine, Rt Hon Michael	Percival, Sir Ian
Hicks, Robert	Peyton, Rt Hon John
Higgins, Rt Hon Terence L.	Pollock, Alexander
Hogg, Hon Douglas (Gr'th'm)	Powell, Rt Hon J.E. (S Down)
Holland, Philip (Carlton)	Prentice, Rt Hon Reg
Hooson, Tom	Prior, Rt Hon James

Proctor, K. Harvey	Stokes, John
Pym, Rt Hon Francis	Stradling Thomas, J.
Raison, Timothy	Tapsell, Peter
Rathbone, Tim	Taylor, Robert (Croydon NW)
Rees, Peter (Dover and Deal)	Taylor, Teddy (S'end E)
Renton, Tim	Tebbit, Norman
Rhodes James, Robert	Temple-Morris, Peter
Rhys Williams, Sir Brandon	Thomas, Rt Hon Peter
Ridley, Hon Nicholas	Thompson, Donald
Ridsdale, Sir Julian	Thorne, Neil (Ilford South)
Rifkind, Malcolm	Thornton, Malcolm
Roberts, M. (Cardiff NW)	Townend, John (Bridlington)
Roberts, Wyn (Conway)	Townsend, Cyril D, (B'heath)
Rossi, Hugh	Trippier, David
Rost, Peter	Trotter, Neville
Sainsbury, Hon Timothy	van Straubenzee, W. R.
St. John-Stevas, Rt Hon N.	Viggers, Peter
Scott, Nicholas	Wakeham, John
Shaw, Giles (Pudsey)	Waldegrave, Hon William
Shelton, William (Streatham)	Walker, B. (Perth )
Shepherd, Colin (Hereford)	Wall, Patrick
Shepherd, Richard	Walters, Dennis
Shersby, Michael	Ward, John
Silvester, Fred	Warren, Kenneth
Sims, Roger	Watson, John
Skeet, T. H. H.	Wells, John (Maidstone)
Speed, Keith	Wells, Bowen
Speller, Tony	Wheeler, John
Spence, John	Whitney, Raymond
Spicer, Jim (West Dorset)	Wickenden, Keith
Spicer, Michael (S Worcs)	Wiggin, Jerry
Sproat, Iain	Williams, D. (Montgomery)
Squire, Robin	Winterton, Nicholas
Stainton, Keith	Wolfson, Mark
Stanbrook, Ivor	Young, Sir George (Acton)
Stanley, John	Younger, Rt Hon George
Steen, Anthony
Stevens, Martin	Tellers for the Noes:
Stewart, Ian (Hitchin)	Mr. Robert Boscawen and
Stewart, A. (E Renfrewshire)	Mr. Anthony Berry.

Question accordingly negatived.

Mr. Cook

I beg to move amendment No. 23, in page 13, line 9, at end insert— '(1A) Section 8 of the Taxes Act (personal relief) shall apply for 1982–83 as if each amount specified in that section were increased by an amount equal to the aggregate of the increases that would be otherwise payable under the said section 24(5) in respect of the years 1981–82 and 1982–83.'. The amendment seeks to oblige the Government to make good in the next financial year the amount by which they have failed to uprate personal allowances in the current financial year. I admit straight away that we recognise that it is not possible for the House to bind the hands of the House when it meets to consider next year's Finance Bill. However, it is possible for us to bias the judgment of the Government, as they approach next year's Bill, in the direction of carrying out the uprating of personal allowances that they have ducked in this financial year.

I hope that the Financial Secretary will not take exception to the way in which I phrased our amendment. I recollect that when the matter was debated on the Report stage of the 1977 Bill the Financial Secretary took exception to the idea that the Rooker-Wise amendment, which he supported and was involved in drafting, would bias the judgment of future Governments.

On the contrary, the right hon. Gentleman said that, instead of biasing judgment, the amendment would remove the bias by which Governments find it possible to forget about inflation and to forget to index personal allowances in line with inflation, thereby increasing their tax revenue without doing the slightest thing.

If the Rooker-Wise amendment was prudent because it removed that bias from Governments' attitudes and judgments, it would be prudent of the House similarly to provide for a removal of the bias in the Government's judgment next year. We should thus not find the Chancellor of the Exchequer producing, with a sense of triumph, an uprating of personal allowances next year in line with the inflation of the preceding year, conveniently forgetting both that there has been no uprating this year and that, even if he indexes for this year's inflation, personal allowances will be lower in real terms than they were at the start of the past financial year.

The amendment takes us to the heart of the major element of the Budget package. The overall tenor of the package, boiled down in the Bill, is to increase taxation. The Bill provides for a new tax on the banks and for an increase in the vehicle excise duty, although the Government inherited from the previous Labour Government, who, they told us, put an oppressive and onerous tax burden on the nation, a commitment to abolish the duty. Instead of carrying out that commitment, the Government have increased the duty so that it is 40 per cent. higher than the level they inherited from a Government who proposed to abolish it.

We found in Committee signs of increasing desperation on the part of the Treasury to find the money. It even rediscovered a tax on matches, which no one had touched since 1949, and doubled it. We look forward to next year's Budget with trepidation, expecting that the Treasury may rediscover the window tax or another forgotten, mouldering tax that will be included in the Finance Bill to find next year's money.

Nowhere in the Bill do we find a provision for so much increased revenue as the failure to uprate personal allowances. One would not guess that from the Red Book, which includes a column providing for the amount of revenue affected by the provisions of the Budget. The first line of that table is: Retention of 1980–81 main personal allowances and thresholds". The forecast change in taxation provided in the column against that entry is nil.

The Financial Secretary knows that that is not the case. There will be a substantial effect on revenue.

Mr. Lawson

Will the hon. Gentleman give way?

Mr. Cook

If the right hon. Gentleman wishes to refer to the footnote, I should tell him that I am about to come to that.

Mr. Lawson

It is printed in black and white.

Mr. Cook

I shall come to the footnote, but it is equally misleading. The right hon. Gentleman knows that there is a change and it is referred to in the footnote, which states: If these had been increased by 15.1 per cent. as specified … the revenue cost would have been … £2,510 million in a full year. The Financial Secretary went into the matter in great depth in 1977, and he knows that if the tax allowances were uprated that would not reduce the tax revenue of the Treasury from income tax by £2,510 million. It would not reduce the revenue received last year by a single penny.

The change means that instead of an uprating, which would cost the Treasury money, the failure to carry out the uprating gains the Treasury £2,510 million more in income tax than it received last year. It provides another £2½ billion of revenue for the Treasury.

The Financial Secretary knows that an element of dishonesty is involved in the failure to uprate the tax thresholds. He praised the Rooker-Wise principle in 1977 because it brought truth into taxation. In the same debate, on the Report stage of the 1977 Bill, the right hon. and learned Gentleman the present Chancellor of the Exchequer repeatedly referred to the need for truth in taxation. He said: we are angry because, due to the Treasury's failure to change the tax system in line with inflation, the Treasury itself becomes the main body to profit from the inflation that it has failed to check".—[Official Report, 25 July, 1977; Vol. 936, c. 70.] Neither I nor any of my right hon. or hon. Friends could express more succinctly, accurately or pertinently our reaction to the right hon. and learned Gentleman's failure to uprate personal allowances. He is seeking to profit from, as he put it, the inflation that the Government have "failed to check". As a result of the failure to uprate in line with the amendment which he was supporting, he will gain and profit to the extent of £2½ billion of additional revenue.

The Financial Secretary to the Treasury also intervened in the debate. I commend his speech to hon. Members who may be short of reading matter in the course of tonight's debate. They will find that the report of the proceedings on 25 July 1977 makes entertaining reading. The right hon. Gentleman, speaking in support of the principle of indexing tax thresholds, said: Without doubt it is the most important legislative achievement of this Session". That was the Rooker-Wise amendment which the right hon. Gentleman was then supporting. In this Bill, he provides for the Government to get out of the obligation that the amendment imposed on future Governments. The right hon. Gentleman was diffident about the extent to which he had supported the principle in the past. He recognised, in one passage, that he had possibly been expressing his support with too much repetition.

Mr. Lawson

It was an excellent speech.

Mr. Cook

I agree that it was an excellent speech. I wish only that in 1981 the right hon. Gentleman had reached the same conclusion as he reached in 1977 when he said: I have beer pressing this case"— that is, the case for indexation of the thresholds— ever since I entered the House a little more than three years ago, and I apologise to my right hon. and hon. Friends and to some extent to right hon. and hon. Gentlemen opposite if I have become something of an indexation bore in the process. However, no one gets anywhere in this House unless he is persistent, and I have been just as bored in going on and on with my argument as right hon. and hon. Gentlemen on both sides of the House" .—[Official Report, 25 July 1977; Vol. 396, c. 89–90.] I assure the Financial Secretary, in case he feels the same diffidence, that the House is not at all bored with him going on and on about indexation. On the contrary, we yearn to hear from him the same arguments about indexation as he put in 1977 and in the preceding three years. We hark with a sense of nostalgia to hear those arguments about the importance of uprating the tax thresholds in line with inflation, about the need to inject truth in taxation and the need for Governments to avoid the dishonest device of increasing their revenue by failing to uprate the threshold in line with the extent to which they have tolerated a level of inflation.

The right hon. Gentleman knows that one of the strongest grounds for his urging indexation is that failure to uprate tax thresholds does not fall equally on all income earners. Those who suffer the highest increase in tax burdens are those who previously paid no tax until inflation carried them across the tax threshold. As my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) indicated in the previous debate, it is known how many such taxpayers will be carried over the tax threshold.

There are 700,000 who would have been let out of the tax net, had there been an uprating in line with Rooker-Wise, who will now remain within the tax net, and another 500,000 who, for the first time, will be brought into the tax net as a result of the failure to uprate in line with inflation. All of them, by definition, are low-paid. It is now necessary to have an income of only one-third of average income to find oneself carried beyond the tax allowances.

Virtually all the 1¼ million taxpayers who now find themselves for the first time within the tax net earn less than half average income. They are in the bottom quarter of the pile. Many of them are pensioners. This is not surprising. This year, both the single pensioner and the married couple will receive in pension more than the tax allowance for a single person or the tax allowance for a married couple. The results are bizarre.

6.45 pm

There has been reference to the case of Miss D from Harlow. I have also been sent details of the case. I spoke to the Harlow social work department earlier this week. I can confirm that Miss D of Harlow has now applied for £9.06 in supplementary pension and will simultaneously, after receiving the benefit, be paying to the Inland Revenue £4.06 in tax revenue. That is bizarre and lunatic. It is so lunatic that the £9.06 she will receive in supplmentary pension is based on her net, not her gross, income. In other words, it includes an allowance for the £4 that she has to pay to the Inland Revenue. She is to receive £4 from the DHSS in order to make a payment to the Inland Revenue. This shows the lunacy of the position at which we have arrived.

This case is particularly relevant to the amendment before the House. Such occurrences are likely to get worse and more frequent unless the amendment is carried. In his Budget judgment, the Chancellor announced that he estimated that inflation in the year from November of last year to November of this year would be 10 per cent. That estimate was made four months ago. There are very few forecasters who now agree that inflation in the year from November 1980 to November 1981 will be 10 per cent. The mean estimate for inflation over that 12-month period is working out at 12 per cent. Whether it is 12 per cent. or 11½ per cent., it is obvious that inflation for that year will be higher than estimated at the time of the Budget, because one of the consequences of the Budget was to push up the rate of inflation.

It will be recalled that last year the Government overestimated the amount of inflation for the purposes of uprating the State pension. As a result, this year he Government are knocking 1 per cent. off the State pension with meticulous precision on the allegation of an overpayment. It can therefore confidently be assumed that if this year the Chancellor has underestimated the rate of inflation and has under-provided for the increase in the State pension, he will add on next year the 2 per cent. by which he has underestimated the rate of inflation. I am taking at face value the logic of the Financial Secretary. The Chancellor has given an assurance that he will do precisely that.

If next March the Chancellor comes to the House and increases pensions in line with inflation, plus 2 per cent. to restore his underestimate for the current year, but increases tax allowances only by the rate of inflation and no more, he will have carried pensions even further beyond the tax allowance than at present. At that stage, the married couple receiving even an age allowance will find that they receive over the financial year 1982–83 a pension payment that exceeds the combined personal allowance with the age allowance. This means that tens of thousands of people will find themselves in the position of Miss D, and literally hundreds of thousands of pensioners will be simultaneously eligible for supplementary pension from the DHSS and liable to pay income tax to the Treasury out of it.

That imposition on the low-paid is offensive against any sense of fairness and decency. It is doubly offensive when such treatment of the low-paid is compared with the treatment that the Government have initiated with respect to the higher income groups.

This matter was debated when hon. Members considered this clause in the Committee of the whole House. I got into hot water with the Financial Secretary at the time for suggesting that those earning five times average income had received a net reduction in income tax over the life of the Government. The right hon. Gentleman will recall that, initially, he interrupted me from a sedentary position, saying "Rubbish", and then intervened from a standing position to say that the figures were merely speculative.

There is a wide enough gulf in the House between the two Front Benches on fiscal policy without our seeking to find a gulf over our data base. I am happy to try to find a common data base on which to erect our differences over fiscal policy. I am happy to accept the Treasury's figures about what has happened to income tax liability of households over the life of this Government. I refer to the figures submitted by the Treasury to the Select Committee on the Treasury and Civil Service when it considered the public expenditure consequences of the 1981 Budget.

I know that the Financial Secretary differs often enough from his advisers that he may well consider that the figures that they tendered to that Committee are rubbish. But, for the rest of us who approach the Treasury with a due attitude of reverence, we shall treat the figures with cautious respect, and they command that cautious respect. If the Financial Secretary consults the tables on pages 122 and 123 of the Select Committee report, he will find that the following picture emerges.

Between 1978–79—the last full financial year of the Labour Government—and the current financial year, the income tax burden of a married man on average income with two children increased by £2.30 per week. If the Financial Secretary then looks at the column for the married man with two children who is earning twice the average earnings, he will find that his income tax burden has risen by £3.06. That is more, but my hon. Friends will at once notice that it is not pro rata with income. It is only 50 per cent. more than for the man on average income, although the couple to whom I have just referred have doubled the income.

But if we then turn to the column for the married man with two children earning five times the average income, we find that his tax burden has changed more dramatically than that of either of the other two. Whilst the other two are paying more in income tax, that household is paying £16.44 a week less in income tax that it did in the last year of the Labour Goverment.

The Opposition disagree with the Government on the necessity for increasing the tax burden. We do not think that the Government have made their case. We would prefer to see an element of reflation in the Budget judgment. But, if the increased tax burden is necessary, it is an outrage that the Government, who find and finance that increased tax burden by taxing the pensioners and the unemployed, should nevertheless be able to tolerate a reduced tax burden on those who earn more than five times the national average.

The Financial Secretary shakes his head. I quote figures provided by the Treasury. If he wishes to describe the figures provided by his own Department as "rubbish" or "speculative", I shall happily give way to him. But those are the figures that he and his Department supplied to the Select Committee. They are on the record. It is perfectly clear that that is the consequence of the right hon. Gentleman's financial and fiscal policy. The right hon. Gentleman may be prepared to justify it. He may try to do so. But he cannot evade the fact that that is the consequence of the sum of his decisions of the last two and a half years.

That is not what the Conservative Party promised us in the last election campaign. I have with me the Conservative campaign guide. I can commend it to my hon. Friends for spare-time study. The guide contains no fewer than 50 pages on taxation. The full flavour of those 50 pages is caught in the first paragraph. Writing about the result of Labour government, it says: The result is a level of taxation which puts Britain in a class apart from other developed countries. The tax system is being strained to breaking point. Anomalies and injustice abound. Anomalies? What richer anomaly could one find than the case of Miss D from Harlow? Injustice? What worse injustice could one find than those with five times the average income getting an income tax cut whilst pensioners and the unemployed get an income tax increase? That is the consequence of two years of government by the party which put that prospectus before the nation at the election.

If my hon. Friends get hold of this valuable and entertaining publication, I urge them to press on beyond the first paragraph and not to be put off by the obvious irrelevance of the commentary in the first paragraph. I suggest that they turn to some of the interesting tables contained in this document. Let us uncork the real vinegar and see how the figures that the Conservatives quoted in those tables compare with their record in office.

On page 75 there is a table expressing tax and national insurance contributions as a percentage of gross domestic product. The latest year for which figures are provided in the guide is 1975. According to the guide, in 1975 the percentage of tax and national insurance of GDP was 39.8. It is now 42.7 per cent. , after two years of the right hon. Gentleman at the Treasury and three successive Conservative Budgets.

On page 86 there is another table giving the percentage of income that the average household pays in tax. In 1976, the latest year included in the table, apparently the average household paid 20 per cent. of its income in tax. Now, after two years of the right hon. Gentleman at the Treasury and after three successive Conservative Budgets, the average household will pay 21.3 per cent. of its income in tax.

On page 86 there is another table—perhaps the most fascinating table of them all. It compares the level of the tax threshold with the level of supplementary benefit to which a man with three children would be entitled. In January 1977, that supplementary benefit level stood at £43.30 and the tax threshold stood at £37.50. I would entirely agree with the right hon. Gentleman if he wished to condemn that. It is plainly preposterous that we have a supplementary benefit level which is above the tax threshold. The tax threshold, plainly, should be raised so that it is well above supplementary benefit level. I would not dispute with the right hon. Gentleman that that ought to be our objective.

But what will the figure be after two years of the present Government and after three Conservative Budgets? The respective figures will now be: for supplementary benefit level, £81.70; for the tax threshold, £57. The gulf in the intervening five years has moved from £6 to £25. For the household which the Conservatives themselves chose for illustrative purposes, there is now an entitlement to supplementary benefit £25 in excess of the tax threshold for the same household.

The fact is that after the first three Budgets of the present Government the nation is paying more in income tax than before. There are more people paying income tax than before. They are paying it on a larger proportion of their income than before. They commence paying it at a higher marginal rate than they did before. There are also 40 per cent. more people in the poverty trap than before the right hon. Gentleman took office.

Only one final point rests with me to make. I am aware that the Government persist in treating with contempt the suggestion that there is anything that they can do to stimulate the economy. In a speech made shortly after the Budget, the Financial Secretary poured scorn on Keynesian demand management on the basis that the Keynesians could not explain how man succeeded in evolving from the caves. In fairness to Keynes, I must confess that I do not recall his attempting to explain how it was that man managed to evolve from the caves, but if he had attempted an explanation no doubt it would have been mistaken. No doubt the Financial Secretary will explain that the evolution from the cave dwellers was all the result of strict and prudent controls on monetary aggregates.

I shall make a prediction. It is obvious from all the economic forecasts with which we have been deluged in the last three months that there will be no economic revival before the next Budget in the spring of next year. When that time arrives, the great final judgment day of the general election will be less than two years away. I predict that we shall suddenly discover that the Treasury Benches will then have found that it is open to the Government to stimulate the economy, that it is possible for the Government to find ways of reflating and that their reflation will no longer be a threat to inflation. The Financial Secretary will disappear to the back of the cave, juggle with the bones again, and will come to the conclusion that he is getting a different message from the spirit of economists past. He will be advised to reflate.

Having shared that prediction with the House, let me also share with the House a fear. I have a fear that when the Government come to that decision, that next year, suddenly, it will be possible to reflate the economy and that they ought to do so, they will then attempt that reflation by cutting the standard rate of tax. If they do that, they will benefit most those who have already benefited most from their previous tax cuts for the wealthy.

It is therefore prudent for the House to pass this amendment. Then, when the Financial Secretary and his colleagues decide to reflate next year, they will be obliged to do so by putting back into the pockets of the pensioners and the low-paid the money that they have filched from those pockets by failing to protect tax allowances against the inflation that they have created.

7 pm

Mr. Richard Wainwright

It is accepted in most parts of the House that failure to raise the personal allowances for income tax to compensate for inflation is the most sneaky and unfair way of raising large sums in taxation. Whether that sneaky way is adopted by Conservative or Labour Governments, it is equally objectionable. This time, however, the Government's failure to raise the personal allowances is aggravated by the fact that last year they also abolished the reduced rate of income tax. So, although the offence was grave, this time the offence is even more grevious. It means that people who are entering the income tax net at absurdly low incomes—poverty incomes—enter it not at the reduced rate of 25 per cent. that formerly applied but at the full 30 per cent. rate.

It is beyond my comprehension how Ministers can sit on the Treasury Bench—incidentally, it is no wonder that the Chancellor of the Exchequer has not even paid us a passing visit as we toil through the Finance Bill; I did not see him in Committee, nor has he visited us on Report—knowing that they are introducing people on poverty incomes to the income tax system at 30 per cent., and doing so in the light of what they were saying only a couple of years ago. At Solihull, on 24 March 1979, the Prime Minister said: Less than 30 years ago, a family man with a couple of children didn't start paying income tax until he was more or less earning the average industrial wage. Today the tax man calls before he has even got half-way there … Is it any wonder that people ask 'Why work? She went on to develop her party's promise to reduce taxation on low wages and incomes. Now, with this Bill, the level of income at which the typical family starts to pay tax has fallen from 44.7 per cent. of average male earnings in 1979, when the right hon. Lady made those remarks, to a mere 38 per cent. in the coming year. Anyone on 38 per cent. of average male earnings is now introduced to the tax system, and without the benefit of a reduced rate.

It has already been said that the proportion of income paid in tax and national insurance by a typical low-paid family has risen from 21.9 per cent. early in 1979 to 23.6 per cent. now. The result, of course, is that not only do we have the misery of people paying tax out of incomes which are not sufficient to maintain them at a tolerable standard of life but we have the enormous administrative expense of taking money through an elaborate process out of one citizen's pocket and putting it into another pocket through a different elaborate system. That is odd, coming from a Government who never cease to boast about how they are streamlining our Administration and taking the advice of Sir Derek Rayner about how to save money by closing sub-post offices, when in fact they have created the largest and most expensive administrative absurdity of all times.

All this serves to sap the morale of our people and to make them question whether government under our system can ever again provide a fair, equitable and sensibly managed system of taxation and benefits. It is no wonder that some people, under the combined burden of poverty and taxation, are beginning to lose patience.

In 1979 the Tory manifesto said: Raising tax thresholds will let the low-paid out of the tax net altogether". What has happened? As a result of this Bill, more and more of the low-paid will come within the tax net. Moreover, the injustice does not stop there. Under this Government, income tax paying had become more and more of a voluntary club. One joins it just like one signs up for tennis. Piled on top of the injustices that I have outlined there is now the other injustice that a neighbour in the same street" by taking advantage of our lax arrangements and the fact that we do not even bother to send an income tax form to people more than once every five years, on average, may be moonlighting and getting away with a tolerably good living, perhaps from the black economy.

The combination of all those factors is seriously menacing the cohesion of the nation. As we know from the history of the Roman Empire, it is ill-administered and oppressive taxes which can bring down even the most rigorous governmental system. Treasury Ministers should ask the Prime Minister whether, in the light of what is happening in our country today, she really wishes them to press the Bill in its present form to a Third Reading next week. Certainly it would be considerably improved if the amendments, on which I congratulate the official Opposition, were passed. They are the least that we ought to do if we intend to keep our taxation system within the tolerable bounds of justice.

Mr. Horam

This group of amendments ingeniously draws to the attention of the House the failure to raise personal allowances during the course of this year. I and the Social Democratic Party support the amendments.

The steady fall of the tax threshold to lower and lower levels of income is the worst aspect of tax policy as we have known it under successive Governments of both major parties over the past 10 to 15 years. The further massive fall this year, as a result of the Government's failure to index at all, is quite the worst aspect of the Budget—a point that has already been made in the debate today.

The situation was best summarised, ironically enough, by the Chancellor of the Exchequer last year, when he was talking about the real value of personal tax allowances. He argued that a failure to index last year would have a number of undesirable effects. It would lower the starting point of income tax in real terms, compared with a year ago. It would increase the number of taxpayers. It would narrow the gap between tax thresholds and the main social security benefits, and it would impose particularly heavy burdens on those with the smallest incomes."—[Official Report, 26 March 1980; Vol 981, c. 1474.] That is treasury prose, but it is specific and accurate Treasury prose, and on this occasion I do not argue with the Treasury prose or with the speech writer who may have turned it into that accurate account of the situation.

Tax policy in the last 10 to 15 years has been devastating. In 1955 people started to pay income tax on average male earnings. Perhaps that was what the hon. Member for Colne Valley (Mr. Wainwright) was talking about when he quoted the Prime Minister. Today, 25 years later, people start to pay income tax on 38 per cent. of average earnings. In addition, in 1955 people were paying income tax at the bottom rate, which was 9 per cent. Today people start to pay income tax at 38 per cent. of average earnings but at the full 30 per cent. rate. That is how the position has deteriorated under all Governments in the last 25 years.

Let us examine the position of the poorer person. In 1971–72, when the family income supplement was introduced, the tax-free income, as a percentage of family income supplement for a married man with two children, was 90 per cent. As a result of this Government's measures, that figure has fallen to 63 per cent. of family income supplement, which was designed for people in real need.

The Financial Secretary has been asked about the number of people affected by the failure to index personal allowances. I should like to draw him on another matter in relation to the poverty trap. About 1¼ million more taxpayers than last year are drawn into the net as a result of the failure to index. The Secretary of State for Social Services made an estimate before the Budget. He said that the number would be 500,000. On that basis he said that an additional 10,000 people who were drawing family income supplement would be drawn into the tax net. Has that figure changed? Will 10,000 people in receipt of family income supplement now pay tax when they did not pay it before? Has that figure increased since the Budget and the details of the Finance Bill were worked out? That is a worthwhile question since we have had a different estimate from the Government about the effect of the failure to index on people between the ages of 60 to 64 who are subject to tax for the first time as a result.

The important effect is not so much on the person with an average income but on the poor and the very poor. That is the real indictment of the Government's taxation policy. That and the level of unemployment are the real causes for concern.

The hon. Member for Edinburgh, Central (Mr. Cook) said that the cost of full indexation this year would be great. It is clear that the Government have saved a great deal of money by failing to index personal allowances. I argue that we need, and could afford, an increase in the public sector borrowing requirement. We need not fully offset a decision to index personal allowances. Even if we did, I would rather have an increase in the standard rate of income tax than a failure to raise personal allowances. I have no doubt that the arguments of equity and fairness lie in the direction of increasing the standard rate of tax rather than in failing to increase the tax threshold.

Like the hon. Member for Edinburgh, Central, I fear that if, in due course, in spite of the arguments in the last few months, the Government have to introduce a measure of reflation, the standard rate of income tax will be lowered once again. That will increase the inequity of our tax system and increase the burden on people who are least able to afford it. That is the Government's illogical position and it leads to their false choice of priorities.

If we are really concerned about decreasing poverty, our first priority should be to raise personal allowances whenever we can. That is a greater priority than lowering the standard rate of income tax.

7.15 pm

I wish that we could evolve over a longer period a more consistent approach to taxation policy. However, it behoves us to reach a point where the Treasury can consider the effects of its taxation policy in relation to benefit policy. When I was on the Back Benches in the last Labour Administration, I used to ask what research unit existed in the Treasury for examining the effect of benefits and tax policy in a co-ordinated way. That was when the right hon. Member for Leeds, East (Mr. Healey) was Chancellor of the Exchequer. I was told that there was little research effort in that direction.

The matter is one of great complexity, as the hon. Member for Birmingham, Perry Barr (Mr. Rooker) explained. The way in which the two issues interact is enormously complicated, but it has amazing effects on the lives of the poorer people. By and large, the effects are side effects of other decisions taken for other reasons. It is high time that a Government examined the two elements of policy together. A Government with a commitment to attack taxation policy should regard this as a high priority.

The Government have failed to live up to their election pledges. They have failed to come up even with the elements of a c o-ordinated approach. All that I am asking them to do is to examine the taxation and benefits systems from the point of view of the poorer person, or the person on average income, with the same degree of sensitivity as they have examined them from the view of the rich person. That is my fundamental point.

Mr. Albert Roberts (Normanton)

I am surprised that the hon. Member has not mentioned that if the same people about whom he has been talking were natives of France, Belgium or Germany they would not pay tax at all, because the tax ceiling is so much higher there than in Britain.

Mr. Horam

I take that point. I was trying to draw my remarks to a close. I was concentrating on Britain. The circumstances here are wholly within the Government's control. They have failed abysmally to live up to their pledges and to the expectations that people rightly have of a concerned Government.

Mr. David Stoddart (Swindon)

The Financial Secretary has much to answer for. I remember those dark days in 1977 on the Finance Bill Committee when the present Financial Secretary, with great oratory and much persuasion, declared his undying belief in the indexation of allowances. He said that that was the way forward. He said that that was what we must do for people. He said that we must ensure that allowances kept pace with earnings and inflation. He said that if that did not happen people would be disadvantaged and brought into the tax net who should not be there.

I listened to the right hon. Gentleman with awe because he was silvery tongued at that time. He was very persuasive indeed. He was so persuasive that against the will of the then Government he and his colleagues, together with some of my hon. Friends, brought into law the principle of indexation of allowances. As a result, the then Government's Budget judgment went for a Burton. But, of course, that did not worry the Minister or his right hon. and hon. Friends in any sense at all. They had brought off a political coup. No matter about the effect of £350 million being lost—that did not matter because they had pulled off a political coup.

I felt that the hon. Gentleman—is he an hon. Gentleman? Perhaps he is a right hon. Gentleman. I see that he is nodding. I am sorry for my mistake. He deserves to be a right hon. Gentleman on that one issue alone lie defeated the then Labour Government, so he deserves some reward from his Government. He was very silvery tongued. He persuaded the Committee that it should do what the Government did not want it to do. I felt that he believed in that policy very deeply indeed and that when he had the opportunity he would not only retain that principle but would extend it to other areas. If I am not mistaken, he spoke eloquently about indexing all taxes. He wanted to extend it to VAT and other taxes. He believed very much in that principle. I expected that in Government he would remain faithful to what he had said and done in Opposition. Instead, we find that, having gained the opportunity and the power, far from retaining indexation of direct taxation, that has been thrown aside in every Budget since the Conservative Government took office.

The hon. Member for Colne Valley (Mr. Wainwright), who has now left the Chamber, accused both Labour and Conservative Governments of not adhering to Parliament's will on the indexation of tax allowances. I must correct him. Not only did the Labour Chancellor in 1977 not seek to recoup that £350 million, but he obeyed the will of Parliament in 1978 and 1979 and indexed tax allowances. The Labour Government obeyed the will of Parliament. It was left to a Conservative Government, almost as soon as they took office, to overthrow the principle for which they had argued, voted and, indeed, won against the opposition of the Labour Government.

This year, for the first time in 13 years, since 1968, the Government have failed to increase tax allowances at all, let alone index them. There is no doubt that that failure has caused great hardship to many sections of our population, not only to older women between the ages of 60 and 65 but to every working-class family in Britain. They have been disadvantaged for the simple reason that, as inflation has continued to rise, their ability to spend and to keep their families has diminished. That has happened because the Government, who before the election were demanding less taxation, have imposed a greater level of taxation upon ordinary people than has ever been imposed by any other Government.

That policy has come from Conservative right hon. and hon. Members who, before the election, were promising my constituents and other people up and down the country—in factories, offices, shops and in the streets—that the Conservatives would cut direct taxation. They said "We want you to have more money in your pockets so that you can spend it as you wish." They did not say how they would achieve that, although they did deny that there would be cuts in the National Health Service. The Conservatives did not, as the Labour Party suggested they would, double prescription charges: they increased them fivefold. They said that they would not raise VAT to 12 per cent. as Labour had suggested. They did not: they doubled it to 15 per cent.

Those promises were made by the Conservatives before the election. They promised that people would have more money in their pockets to spend as they wished. Far from that happening, people now have less money in their pockets. They have to pay more for the goods that they buy and for the services upon which they rely—services which have been slashed to the bone, and will be slashed even further.

Mr. Clive Soley (Hammersmith, North)

Will my hon. Friend, in his accurate description, also comment on the other justification put forward by the Conservatives? They said that they would regenerate the British economy because the taxes would go into bolstering industry. In fact, we have witnessed a rapid collapse in industry and more bankruptcies than ever before.

Mr. Stoddart

I am obliged to my hon. Friend. That was to be my next point.

The idea of the Conservatives—they have enunciated it for a long time—is that if they release tax, especially to the already rich, the already rich will embark upon entrepreneurial enterprise. They would invest the tax handouts in British industry, new enterprise and new plant and machinery. They would revive and resuscitate the British economy, which would then provide greater employment opportunities and better living standards for our people. Of course, none of that has happened. We knew that it would not happen.

Much of that money has been salted abroad. Far from going into our industries, it has gone into building offices in Brussels or buying Watergates in New York. That is where the additional tax relief given to the rich has gone. It has not gone into British industry, which is collapsing all around us.

Because of the Government's failure to increase, let alone to index, tax allowances, money has been taken out of the pockets of ordinary people who buy the goods that industry produces, thereby causing a slump and exacerbating the recession. The Government say that they are not responsible for unemployment. Nothing ever seems to be their fault. They fought an election to become the Government, and everything that has gone wrong appears to be someone else's fault. It is either the fault of the working people or, more often, the fault of the Opposition. We do not have any say any more, but the Government cannot seem to get to grips with the fact that we are no longer in power. They blame us for things that are going wrong.

Although one accepts that there has been a world recession, the Government, by their failure to index tax allowances or to increase them, have piled home recession upon world recession and thereby caused the slump that has brought about the enormous unemployment problem which is leading to some of the other problems on our streets. Those problems will be exacerbated unless the Government deal with them. Indexation of tax allowances is one way to deal with them. That is why the Government should consider seriously the Opposition's amendment.

The Government will say that the money is not available. In fact, money is slopping around the British economy with nothing to do. It should be used for investment, but it is doing nothing. The public sector borrowing requirement was £1,000 million below the Government's estimate. They have something in reserve. It would be in the interests of the country and in the Government's own interests if they accepted the amendment, which would lead to restoration next year and help to right some of the wrongs that the Government have committed by failing to do what they should have done and what they promised to do in Opposition.

7.30 pm

Mr. Lawson

We have just heard an impassioned speech from the hon. Member for Swindon (Mr. Stoddart). I have great affection for the hon. Gentleman. There was a certain special quality of passion in his speech. We all know from where that came. The hon. Gentleman was the Government Whip in the Standing Committee that considered the 1977 Finance Bill, when the Labour Government were defeated and the indexation provisions were instituted. I understand entirely how the hon. Gentleman feels.

The hon. Gentleman has misunderstood the position that I took in 1977. He will be able to check the reports in Hansard if he wishes, both in Committee and on Report. I said that there should be no such thing as automatic indexation because it was absurd. Governments have to have certain freedom. They must have whatever tax regime they see fit to introduce at the time. Rightly or wrongly, they have to have that freedon for political reasons and for reasons of the state of the economy. I maintain that Governments should be open and above board in what they are doing and that the presumption should be that the datum line is a similar level of personal allowances in real terms and not in money terms. I argued that any change should be made from that datum line. That is what we have done.

Opposition Members have indulged in a great deal of exaggeration. It has been implied that personal allowances in real terms have been reduced dramatically. That is not so. Since we have been in office the reduction in the level of personal allowances for a married man has been 4 per cent. in real terms. That is not a dramatic reduction but it is one that I regret.

Mr. Stoddart

The right hon. Gentleman will remember that there was some indexation of tax allowances in 1980, but to a large degree that was nullified by the removal of the 25 per cent. rate and its replacement with a threshold of 30 per cent.

Mr. Lawson

That was a separate matter. We consistently criticised the reduced rate band when it was introduced by the Labour Government as being an unwise element in our tax system. When we came to office it was natural that we should get rid of it.

Mr. Cook

I fear that the right hon. Gentleman's recent memory is playing him tricks. The Government did not abolish the reduced rate band immediately on taking office. They did so during their second year, in their second Budget. The Chancellor said explicitly in his second Budget Statement that he was abolishing the reduced rate band to recoup part of the cost of the full uprating. He created the linkage between the abolition of the reduced rate band and finding the money to carry out the full terms of the Rooker-Wise amendment for that year. It is legitimate for my hon. Friend the Member for Swindon (Mr. Stoddart) to say that the poor lost the reduced rate band so that the tax thresholds could be protected. Having lost the reduced rate band, the poor find that the thresholds are not being protected.

Mr. Lawson

As my right hon. and learned Friend the Chancellor of the Exchequer said at the time, the beneficiaries of the reduced rate band were conspicuously juveniles and working wives. The change made no great difference to the position of the typically married man or the typical family. There was no trade-off. It was merely a measure to achieve a more sensible structure for the income tax system.

Since we have been in office, the reduction in the threshold of taxation for the married man has been 4 per cent. I deeply regret that. The reduction has occurred because we have introduced no increase in money terms. We have proceeded in the most open way possible. That has been done as a result of the legislation that we introduced. The hon. Member for Colne Valley (Mr. Wainwright), who is something of an agreeable absurdity in our debates, excelled himself when he described the Government's actions as sneaky. No actions could have been less sneaky. In the previous year's Finance Act we introduced a requirement to lay before the House an order stating what the full index figures would be. We ensured that they would be made available openly and that the entire issue would be above board. That provision was designed to make it clear that any reduction would be a reduction in real terms. There was nothing sneaky about that.

Clause 23(1) of the Bill states that section 24(5) of the Finance Act 1980—the indexation provision—shall not apply for 1981–82. That appears in the Bill for hon. Members to debate. It is there for hon. Members to amend. In effect, it is the amendment that we are discussing. Nothing could be more open and above board. To call it sneaky is absurd. Under the old regime of the Labour Government, nothing needed to appear in the Finance Bill in this respect. There was no possibility of amendment. If nothing had been done, the same money allowances and personal allowances would have been retained.

Mr. Richard Wainwright

The right hon. Gentleman knows that I was careful equally to condemn the previous Labour Government, except in the sense that they introduced the reduced rate band. Is he saying that the issue is as plain as the open sky to the common man in the street in Oldham, Huddersfield or Warrington?

Mr. Lawson

Yes. The hon. Gentleman greatly underestimates the intelligence of the man in the street in Warrington, Oldham or Huddersfield.

I have always maintained that automatic indexation is nonsense. That is why I was unable to accept the original so-called Rooker-Wise formulation. That was why I added my amendment in Committee, which was eventually carried, to provide that the Government of the day would have power by order to prescribe a lesser sum. Any Government must have that freedom. That freedom is now in a slightly different legislative form because a change was enacted in the Finance Bill 1980.

I maintained that the issue to which I referred must be open and above board. That is what we have persisted in, and there has been no inconsistency or falling away from the proposition that my right hon. and hon. Friends and I advanced in 1977. The hon. Member said that we had not extended it further, but we have. We have extended it throughout the whole range of income tax bands, the higher rates and the investment income surcharge as well—the main elements of the income tax system. We have not been able to improve on any of them this year, but the provision is there.

The hon. Member for Edinburgh, Central (Mr. Cook) played the old class-war record. He made a great deal of the fact that during our period of office we had made significant reductions in the top rates of income tax. He is right. We have never denied that. We have said that it was essential. Our top rates of income tax were the highest in the civilised world when we came to office. They were absurd. Lord Lever openly said so on a television programme during the Labour Government's period of office. He said that something should be done and that those rates should be reduced. Many other Opposition Members knew that and said so in private conversation, although they would not say so publicly. They did not have the guts of Lord Lever. They had problems with some of their colleagues, but they did nothing about it. We made that change and it was right that we did so. Those taxes were of a purely political nature. They were damaging the economy. The amount of revenue which they brought in was negligible.

The hon. Member for Edinburgh, Central and others made great play of the fact that taxation has risen. They felt that it should fall. I believe that there was a general feeling in the Chamber today that it would be a good idea if income tax were lower. I share that view and so do the Government. We would all like lower taxation. The question is how to pay for it. No answer came from any Opposition Members who were calling for it. Their request was dishonest.

Mr. Robert Sheldon

The right hon. Gentleman cannot get away with that. Surely he remembers that we had amendments to increase the allowances.

Mr. Lawson

The amendment which we are now debating is slightly curious. It is ingenious and I congratulate the hon. Member for Edinburgh, Central on thinking it up. However, it would have no practical effect, as the hon. Gentleman knows. His concern is to bias the judgment of the House in favour of increasing the allowances. We need no such amendment to prejudge us in favour of that. However, the question remains of how that is to be paid for.

The right hon. Member for Ashton-under-Lyne (Mr. Sheldon), a former Cabinet Minister, said that it is easy. All we have to do is troop through the Lobbies, pass the amendment and all our problems will be solved. That is the height of absurdity. I am sure that when he was a Treasury Minister the right hon. Gentleman frequently told the House that he would like to cut taxation instead of increasing it. However, the money has to be found through reductions in public expenditure.

One finds that sometimes on the Conservative Benches there is a certain ambivalence. Some of my hon. Friends favour cutting public expenditure. Others may call for increases in particular areas, which is understandable, human and natural. However, from Opposition Members we hear only calls for more and more public expenditure. For them to call for ever more public expenditure across the board and, at the same time, lower taxation is the height of hypocrisy. On those grounds, if on no others, I ask the House to reject the amendment.

7.45 pm

Mr. Cook

Some points made by the Financial Secretary deserve an answer. I am sure that he would not want to go away from the debate without having received that answer.

With regard to his last point, the right hon. Gentleman knows well that he has succeeded in increasing public expenditure as a percentage of GNP. It is higher under the present Government than it was under the Labour Government. What has happened is that he has simultaneously increased public expenditure and cut public services. The reason why we now have higher public expenditure is to meet the cost of the recession, which was partly induced by the cuts in public services. When we demand higher public expenditure, we are demanding an increase in those public services which would contribute to a recovery from the recession which the Government have engineered.

The Financial Secretary said earlier that there was a reduction in the tax threshold of the married couple of 4 per cent. over the lifetime of the Government. He regretted that cut, which I acknowledge. He also said that it was not dramatic. I accept that a 4 per cent. cut over two years is not dramatic. It is significant and noticeable. However, when the Government put out their manifesto in 1979 they did not say that the reduction in the tax threshold over their period in Government would not be dramatic. They said that they would raise the tax thresholds. Instead of raising those tax thresholds, in three Budgets by this Administration those thresholds have been reduced by 4 per cent. on the Government's calculations.

As my hon. Friend the Member for Swindon (Mr. Stoddart) said in an intervention, the story does not end there. Along the road, in order to pay originally for an increase in tax thresholds, we have had the abolition of the reduced rate band. There is no point in the Financial Secretary saying that that is something which we should have done anyway because it was a desirable idea. The fact is that as a result of the abolition of the reduced rate band he is receiving in tax revenue £1.1 billion more than he would have received if the reduced rate band had not been abolished. As he knows, a proportion of that £1.1 billion is coming from low income earners.

There is also another debit to be entered on the balance sheet—the increase in VAT. My hon. Friends who were present during the Chancellor of the Exchequer's first Budget Statement will remember what he said when he increased VAT: the increase I make must be sufficient to provide for substantial and worthwhile reductions in income tax."—[Official Report, 12 June 1979; Vol. 968, c. 250.] In other words, there was a linkage in the right hon. and learned Gentleman's mind between an increase in VAT and a reduction in income tax. That is why he asked the nation to pay an increase in VAT.

However, the facts submitted by the Treasury to the Treasury and Civil Service Select Committee show that most households—including households on average income, all households below average income and households on up to double average income—are now paying more in income tax than when the Government took office and are also paying an increase in VAT which was supposed to provide for a worthwhile reduction in income tax.

Therefore, on the balance sheet we have the 4 per cent. reduction in thresholds, plus the abolition of the reduced rate band and the doubling of the standard rate of VAT, all within two years. God help us over the next three years.

The Financial Secretary asked how we would pay for the reductions. If the right hon. Gentleman has any doubts about this, I shall make it clear to him again that we believe that, at a time of unparalleled recession and when industrial output has fallen by a larger amount than on any previous occasion since records of industrial output were kept, it is lunacy to seek to cut the PSBR in real terms. If the Government were not so bent on doing that, they could afford to uprate tax thresholds.

However, even if we accept the Government's Budget judgment—their conclusion that they cannot risk a penny more on the PSBR and that they desperately require this £2½ billion extra in income tax revenue—the honest and equitable way to proceed is plain. It is to put up the standard rate of income tax to where it was when they took office and to increase tax thresholds. That would ensure that the tax burden was shared equitably and that the poorest people did not have to provide the largest proportion of the new tax revenue—which is what will happen now. The 1¼ million taxpayers who will find themselves in the tax net as a result of the failure to uprate will have to provide the highest proportion of the £2½ billion extra revenue.

The Financial Secretary accused me of playing the old record of the class war. I did not refer to class. I contrasted the effects of the Government's fiscal policy on different income groups. The right hon. Gentleman attempted to defend the fact that the Government have reduced the rate of tax on the highest income earners on the basis that we had the highest rate of tax in the world on high income earners. I do not quarrel with that, and he will not quarrel with me over the fact that we also have the highest rate of income tax at the bottom of the tax league. Those who come across the threshold and start paying tax for the first time start paying it at a marginal rate higher than anywhere else in the world. His Government made that rate higher by abolishing the reduced rate band.

If the right hon. Gentleman founds his defence on what the Government have done with rates of tax, the contrast is even clearer than the contrast that I unfolded earlier. They reduced the rate of tax for the highest income earners paying the highest tax rates, but for the poorest taxpayers they have increased the marginal rate of tax. That is not a contrast of my invention. I am not dreaming up spectres of the class war. It is a contrast that the right hon. Gentleman created and continues to flaunt in defence of the Government's tax record.

I have never regarded myself as a Marxist, but the Communist manifesto states: The history of all hitherto existing society is the history of class struggles. Until the Government took office, I did not believe that, but the more that we see their policy unfold, and the more that they pile the penal burden of taxation on the lower-paid while continuing to exempt the high-paid, the more I begin to wonder whether there was more truth in the assertion than I had previously supposed.

It is high time that the House moved to a Division and made it plain that the Government's fiscal policy is not one that the Labour Party is prepared to sanction. If the Government wish to run a high-tax policy, they must at least provide protection for the poorest members of our community.

Question put, That the amendment be made:—

The House divided: Ayes 193, Noes 273.

Division No. 273]	[7.55 pm
AYES
Abse, Leo	Hardy, Peter
Adams, Allen	Harrison, Rt Hon Walter
Alton, David	Hart, Rt Hon Dame Judith
Anderson, Donald	Haynes, Frank
Archer, Rt Hon Peter	Heffer, Eric S.
Ashley, Rt Hon Jack	Hogg, N. (E Dunb't'nshire)
Beith, A. J.	Holland, S. (L'b'th, Vauxh'll)
Bennett, Andrew (St'kp't N)	Home Robertson, John
Booth, Rt Hon Albert	Homewood, William
Boothroyd, Miss Betty	Hooley, Frank
Bottomley, Rt Hon A. (M'b'ro)	Horam, John
Bray, Dr Jeremy	Howell, Rt Hon D.
Brown, Hugh D. (Provan)	Howells, Geraint
Brown, Ronald W. (H'ckn'y S)	Hughes, Robert (Aberdeen N)
Callaghan, Rt Hon J.	Janner, Hon Greville
Callaghan, Jim (Midd't'n & P)	Jay, Rt Hon Douglas
Campbell, Ian	John, Brynmor
Campbell-Savours, Dale	Johnson, James (Hull West)
Canavan, Dennis	Johnson, Walter (Derby S)
Cant, R. B.	Jones, Rt Hon Alec (Rh'dda)
Carter-Jones, Lewis	Jones, Barry (East Flint)
Clark, Dr David (S Shields)	Jones, Dan (Burnley)
Cocks, Rt Hon M. (B'stol S)	Kaufman, Rt Hon Gerald
Cohen, Stanley	Kerr, Russell
Coleman, Donald	Lambie, David
Concannon, Rt Hon J. D.	Leadbitter, Ted
Conlan, Bernard	Leighton, Ronald
Cook, Robin F.	Lestor, Miss Joan
Cowans, Harry	Lewis, Arthur (N'ham NW)
Cox, T. (W'dsw th, Toot'g)	Lewis, Ron (Carlisle)
Craigen, J. M.	Litherland, Robert
Crowther, J. S.	Lofthouse, Geoffrey
Cryer, Bob	McDonald, Dr Oonagh
Cunningham, G. (Islington S)	McElhone, Frank
Cunningham, Dr J. (W'h'n)	McKay, Allen (Penistone)
Davies, Rt Hon Denzil (L'lli)	McKelvey, William
Davies, Ifor (Gower)	McNally, Thomas
Davis, Clinton (Hackney C)	McNamara, Kevin
Davis, T. (B'ham, Stechf'd)	McTaggart, Robert
Deakins, Eric	McWilliam, John
Dean, Joseph (Leeds West)	Magee, Bryan
Dempsey, James	Marshall, D (G'gow S'ton)
Dewar, Donald	Marshall, Dr Edmund (Goole)
Dixon, Donald	Martin, M (G'gow S'burn)
Dobson, Frank	Mason, Rt Hon Roy
Dormand, Jack	Maxton, John
Douglas-Mann, Bruce	Meacher, Michael
Dubs, Alfred	Mellish, Rt Hon Robert
Duffy, A. E. P.	Millan, Rt Hon Bruce
Dunn, James A.	Miller, Dr M. S. (E Kilbride)
Dunwoody, Hon Mrs G.	Mitchell, Austin (Grimsby)
Eadie, Alex	Mitchell, R. C. (Soton Itchen)
Eastham, Ken	Morris, Rt Hon A. (W'shawe)
Edwards, R. (W'hampt'n S E)	Morris, Rt Hon J. (Aberavon)
Ellis, R. (NE D'bysh're)	Morton, George
English, Michael	Newens, Stanley
Ennals, Rt Hon David	Oakes, Rt Hon Gordon
Evans, loan (Aberdare)	Ogden, Eric
Field, Frank	O'Halloran, Michael
Fitch, Alan	O'Neill, Martin
Fletcher, Ted (Darlington)	Orme, Rt Hon Stanley
Ford, Ben	Palmer, Arthur
Forrester, John	Parker, John
Foster, Derek	Pavitt, Laurie
Foulkes, George	Pendry, Tom
Garrett, John (Norwich S)	Powell, Raymond (Ogmore)
George, Bruce	Rees, Rt Hon M (Leeds S)
Gilbert, Rt Hon Dr John	Roberts, Albert (Normanton)
Ginsburg, David	Roberts, Gwilym (Cannock)
Grant, George (Morpeth)	Robertson, George
Grant, John (Islington C)	Robinson, G. (Coventry NW)

Rooker, J. W.	Tilley, John
Roper, John	Tinn, James
Ross, Ernest (Dundee West)	Torney, Tom
Ross, Stephen (Isle of Wight)	Urwin, Rt Hon Tom
Rowlands, Ted	Varley, Rt Hon Eric G.
Ryman, John	Wainwright, E. (Dearne V)
Sandelson, Neville	Wainwright, R. (Colne V)
Sever, John	Walker, Rt Hon H. (D'caster)
Sheldon, Rt Hon R.	Watkins, David
Shore, Rt Hon Peter	Weetch, Ken
Short, Mrs Renée	Welsh, Michael
Silkin, Rt Hon J. (Deptford)	White, J. (G'gow Pollok)
Silkin, Rt Hon S. C. (Dulwich)	Whitehead, Phillip
Silverman, Julius	Whitlock, William
Skinner, Dennis	Willey, Rt Hon Frederick
Smith, Rt Hon J. (N Lanark)	Williams, Rt Hon A. (S'sea W)
Snape, Peter	Wilson, Gordon (Dundee E)
Soley, Clive	Wilson, William (C'try SE)
Spearing, Nigel	Winnick, David
Spriggs, Leslie	Woodall, Alec
Stallard, A. W.	Woolmer, Kenneth
Steel, Rt Hon David	Wright, Sheila
Stewart, Rt Hon D. (W Isles)	Young, David (Bolton E)
Stoddart, David
Summerskill, Hon Dr Shirley	Tellers for the Ayes:
Taylor, Mrs Ann (Bolton W)	Mr. James Hamilton and
Thomas, Jeffrey (Abertillery)	Mr. Frank White.
Thomas, Dr R. (Carmarthen)

NOES
Adley, Robert	Clegg, Sir Walter
Aitken, Jonathan	Cockeram, Eric
Alexander, Richard	Colvin, Michael
Alison, Michael	Cope, John
Ancram, Michael	Cormack, Patrick
Arnold, Tom	Corrie, John
Aspinwall, Jack	Cranborne, Viscount
Atkins, Robert (Preston N)	Critchley, Julian
Atkinson, David (B'm'th,E)	Dean, Paul (North Somerset)
Baker, Nicholas (N Dorset)	Dickens, Geoffrey
Banks, Robert	Douglas-Hamilton, Lord J.
Beaumont-Dark, Anthony	du Cann, Rt Hon Edward
Bendall, Vivian	Dunn, Robert (Dartford)
Benyon, W. (Buckingham)	Durant, Tony
Best, Keith	Dykes, Hugh
Bevan, David Gilroy	Eden, Rt Hon Sir John
Biffen, Rt Hon John	Edwards, Rt Hon N. (P'broke)
Biggs-Davison, John	Eggar, Tim
Blackburn, John	Emery, Peter
Blaker, Peter	Eyre, Reginald
Body, Richard	Fairbairn, Nicholas
Bonsor, Sir Nicholas	Fairgrieve, Russell
Boscawen, Hon Robert	Faith, Mrs Sheila
Bottomley, Peter (W'wich W)	Farr, John
Bowden, Andrew	Fell, Anthony
Boyson, Dr Rhodes	Fenner, Mrs Peggy
Braine, Sir Bernard	Fisher, Sir Nigel
Bright, Graham	Fletcher, A. (Ed'nb'gh N)
Brinton, Tim	Fletcher-Cooke, Sir Charles
Brittan, Leon	Fookes, Miss Janet
Brooke, Hon Peter	Forman, Nigel
Brotherton, Michael	Fowler, Rt Hon Norman
Brown, Michael (Brigg & Sc'n)	Fox, Marcus
Browne, John (Winchester)	Fraser, Rt Hon Sir Hugh
Bruce-Gardyne, John	Fraser, Peter (South Angus)
Buchanan-Smith, Alick	Gardiner, George (Reigate)
Buck, Antony	Gardner, Edward (S Fylde)
Bulmer, Esmond	Garel-Jones, Tristan
Butcher, John	Glyn, Dr Alan
Butler, Hon Adam	Goodhew, Victor
Cadbury, Jocelyn	Goodlad, Alastair
Carlisle, John (Luton West)	Gorst, John
Carlisle, Kenneth (Lincoln)	Gow, Ian
Carlisle, Rt Hon M. (R'c'n )	Gower, Sir Raymond
Chalker, Mrs. Lynda	Grant, Anthony (Harrow C)
Chapman, Sydney	Gray, Hamish
Churchill, W. S.	Greenway, Harry
Clark, Hon A. (Plym'th, S'n)	Grieve, Percy
Clark, Sir W. (Croydon S)	Griffiths, E. (B'ySt. Edm'ds)
Clarke, Kenneth (Rushcliffe)	Griffiths, Peter Portsm'th N)

Grist, Ian	Newton, Tony
Grylls, Michael	Normanton, Tom
Gummer, John Selwyn	Nott, Rt Hon John
Hamilton, Hon A.	Onslow, Cranley
Hamilton, Michael (Salisbury)	Oppenheim, Rt Hon Mrs S.
Hampson, Dr Keith	Osborn, John
Hannam,John	Page, John (Harrow, West)
Haselhurst, Alan	Page, Rt Hon Sir G. (Crosby)
Hastings, Stephen	Page, Richard (SW Herts)
Havers, Rt Hon Sir Michael	Parkinson, Cecil
Hawksley, Warren	Parris, Matthew
Hayhoe, Barney	Patten, Christopher (Bath)
Heddle, John	Pattie, Geoffrey
Henderson, Barry	Pawsey, James
Heseltine, Rt Hon Michael	Percival, Sir Ian
Hicks, Robert	Peyton, Rt Hon John
Higgins, Rt Hon Terence L.	Pollock, Alexander
Hogg, Hon Douglas (Gr'th'm)	Powell, Rt Hon J.E. (S Down)
Holland, Philip (Carlton)	Prentice, Rt Hon Reg
Hooson, Tom	Prior, Rt Hon James
Hunt, David (Wirral)	Proctor, K. Harvey
Hunt, John (Ravensbourne)	Pym, Rt Hon Francis
Irving, Charles (Cheltenham)	Raison, Timothy
Jessel, Toby	Rathbone, Tim
Johnson Smith, Geoffrey	Rees, Peter (Dover and Deal)
Jopling, Rt Hon Michael	Renton, Tim
Joseph, Rt Hon Sir Keith	Rhodes James, Robert
Kaberry, Sir Donald	Rhys Williams, Sir Brandon
Kellett-Bowman, Mrs Elaine	Ridley, Hon Nicholas
Kimball, Marcus	Ridsdale, Sir Julian
King, Rt Hon Tom	Rifkind, Malcolm
Knight, Mrs Jill	Roberts, M. (Cardiff NW)
Knox, David	Roberts, Wyn (Conway)
Lamont, Norman	Ross, Wm. (Londonderry)
Lang, Ian	Rossi, Hugh
Langford-Holt, Sir John	Rost, Peter
Latham, Michael	Sainsbury, Hon Timothy
Lawrence, Ivan	St. John-Stevas, Rt Hon N.
Lawson, Rt Hon Nigel	Scott, Nicholas
Lester, Jim (Beeston)	Shaw, Giles (Pudsey)
Lewis, Kenneth (Rutland)	Shelton, William (Streatham)
Lloyd, Ian (Havant & W'loo)	Shepherd, Colin (Hereford)
Lloyd, Peter (Fareham)	Shepherd, Richard
Loveridge, John	Silvester, Fred
Luce, Richard	Skeet, T. H. H.
Lyell, Nicholas	Speed, Keith
Macfarlane, Neil	Speller, Tony
MacKay, John (Argyll)	Spence, John
Macmillan, Rt Hon M.	Spicer, Jim (West Dorset)
McNair-Wilson, M. (N'bury)	Spicer, Michael (S Worcs)
McNair-Wilson, P. (New F'st)	Sproat, Iain
McQuarrie, Albert	Squire, Robin
Madel, David	Stainton, Keith
Major, John	Stanbrook, Ivor
Marland, Paul	Stanley, John
Marshall, Michael (Arundel)	Stevens, Martin
Marten, Neil (Banbury)	Stewart, Ian (Hitchin)
Maude, Rt Hon Sir Angus	Stewart, A. (E Renfrewshire)
Mawby, Ray	Stokes, John
Mawhinney, Dr Brian	Stradling Thomas, J.
Maxwell-Hyslop, Robin	Tapsell, Peter
Mayhew, Patrick	Taylor, Teddy (S'end E)
Mellor, David	Tebbit, Norman
Miller, Hal (B'grove)	Temple-Morris, Peter
Mills, Iain (Meriden)	Thomas, Rt Hon Peter
Mills, Peter (West Devon)	Thompson, Donald
Miscampbell, Norman	Thorne, Neil (Ilford South)
Mitchell, David (Basingstoke)	Thornton, Malcolm
Moate, Roger	Townend, John (Bridlington)
Molyneaux, James	Townsend, Cyril D, (B'heath)
Monro, Hector	Trippier, David
Morgan, Geraint	Trotter, Neville
Morris, M. (N'hampton S)	van Straubenzee, W. R.
Morrison, Hon C. (Devizes)	Vaughan, Dr Gerard
Morrison, Hon P. (Chester)	Viggers, Peter
Murphy, Christopher	Wakeham, John
Myles, David	Waldegrave, Hon William
Neale, Gerrard	Walker, B. (Perth)
Needham, Richard	Wall, Patrick
Neubert, Michael	Ward, John

Warren, Kenneth	Winterton, Nicholas
Watson, John	Wolfson, Mark
Wells, John (Maidstone)	Young, Sir George (Acton)
Wells, Bowen	Younger, Rt Hon George
Whitelaw, Rt Hon William
Whitney, Raymond	Tellers for the Noes:
Wickenden, Keith	Mr. Anthony Berry and
Wiggin, Jerry	Mr. Carol Mather.
Williams, D. (Montgomery)

Question accordingly negatived.

Amendment proposed: No. 24, in page 13, line 9, at end insert— '(1A) In subsection (1A) of section 8 of the Taxes Act (personal relief) there shall be inserted after "upwards" the words "or that she was at any time within the year of assessment of the age of sixty and in receipt of a Category A retirement pension under Subsection (1) of section 28 of the Social Security Act 1975.".'.—[Mr. Robert Sheldon.]

Question put, That the amendment be made:—

The House divided: Ayes 195, Noes 276.

Division No. 274]	[8.05 pm
AYES
Abse, Leo	Field, Frank
Adams, Allen	Fitch, Alan
Alton, David	Fletcher, Ted (Darlington)
Anderson, Donald	Ford, Ben
Archer, Rt Hon Peter	Forrester, John
Ashley, Rt Hon Jack	Foster, Derek
Beith, A. J.	Foulkes, George
Bennett, Andrew (St'kp't N)	Garrett, John (Norwich S)
Bidwell, Sydney	George, Bruce
Booth, Rt Hon Albert	Gilbert, Rt Hon Dr John
Boothroyd, Miss Betty	Ginsburg, David
Bottomley, Rt Hon k. (M'b'ro)	Golding, John
Bray, Dr Jeremy	Grant, George (Morpeth)
Brown, Hugh D. (Provan)	Grant, John (Islington C)
Brown, Ronald W. (H'ckn'y S)	Hamilton, James (Bothwell)
Callaghan, Rt Hon J.	Hardy, Peter
Callaghan, Jim (Midd't'n &P)	Harrison, Rt Hon Walter
Campbell, Ian	Hart, Rt Hon Dame Judith
Campbell-Savours, Dale	Haynes, Frank
Canavan, Dennis	Heffer, Eric S.
Cant, R. B.	Hogg, N. (E Dunb't'nshire)
Clark, Dr David (S Shields)	Holland, S. (L'b'th, Vauxh'll)
Cocks, Rt Hon M. (B'stol S)	Home Robertson, John
Cohen, Stanley	Homewood, William
Concannon, Rt Hon J. D.	Hooley, Frank
Conlan, Bernard	Horam, John
Cook, Robin F.	Howell, Rt Hon D.
Cowans, Harry	Howells, Geraint
Cox, T. (W'dsw'th, Toot'g)	Huckfield, Les
Craigen, J. M,	Hughes, Robert (Aberdeen N)
Crowther, J. S.	Janner, Hon Greville
Cryer, Bob	Jay, Rt Hon Douglas
Cunningham, G. (Islington S)	John, Brynmor
Cunningham, Dr J. (W'h'n)	Johnson, James (Hull West)
Davies, Rt Hon Denzil (L'lli)	Johnson, Walter (Derby S)
Davies, Ifor (Gower)	Jones, Rt Hon Alec (Rh'dda)
Davis, Clinton (Hackney C)	Jones, Barry (East Flint)
Davis, T. (B'ham, Stechf'd)	Jones, Dan (Burnley)
Deakins, Eric	Kaufman, Rt Hon Gerald
Dempsey, James	Kerr, Russell
Dewar, Donald	Lambie, David
Dixon, Donald	Leadbitter, Ted
Dobson, Frank	Leighton, Ronald
Dormand, Jack	Lestor, Miss Joan
Douglas-Mann, Bruce	Lewis, Arthur (N'ham NW)
Dubs, Alfred	Lewis, Ron (Carlisle)
Duffy, A. E. P.	Litherland, Robert
Dunn, James A.	Lofthouse, Geoffrey
Dunwoody, Hon Mrs G.	McDonald, Dr Oonagh
Eadie, Alex	McElhone, Frank
Eastham, Ken	McKay, Allen (Penistone)
Edwards, R. (W'hampt'n S E)	McKelvey, William
Ellis, R. (NE D'bysh're)	McNally, Thomas
Ennals, Rt Hon David	McNamara, Kevin
Evans, loan (Aberdare)	McTaggart, Robert

McWilliam, John	Silkin, Rt Hon S. C. (Dulwich)
Magee, Bryan	Silverman, Julius
Marshall, D (G'gow S'ton)	Skinner, Dennis
Marshall, Dr Edmund (Goole)	Smith, Rt Hon J. (N Lanark)
Martin, M (G'gow S'burn)	Snape, Peter
Mason, Rt Hon Roy	Soley, Clive
Maxton, John	Spearing, Nigel
Meacher, Michael	Spriggs, Leslie
Mellish, Rt Hon Robert	Stallard, A. W.
Millan, Rt Hon Bruce	Steel, Rt Hon David
Miller, Dr M. S. (E Kilbride)	Stewart, Rt Hon D. (W Isles)
Mitchell, Austin (Grimsby)	Stoddart, David
Mitchell, R. C. (Soton Itchen)	Summerskill, Hon Dr Shirley
Morris, Rt Hon A. (W'shawe)	Taylor, Mrs Ann (Bolton W)
Morris, Rt Hon J. (Aberavon)	Thomas, Jeffrey (Abertillery)
Morton, George	Thomas, Dr R. (Carmarthen)
Newens, Stanley	Tilley, John
Oakes, Rt Hon Gordon	Tinn, James
Ogden, Eric	Torney, Tom
O'Halloran, Michael	Urwin, Rt Hon Tom
O'Neill, Martin	Varley, Rt Hon Eric G.
Orme, Rt Hon Stanley	Wainwright, E. (Dearne V)
Palmer, Arthur	Wainwright, R. (Colne V)
Parker, John	Walker, Rt Hon H. (D'caster)
Pavitt, Laurie	Watkins, David
Pendry, Tom	Weetch, Ken
Penhaligon, David	Welsh, Michael
Powell, Raymond (Ogmore)	White, Frank R.
Rees, Rt Hon M (Leeds S)	White, J. (G'gow Pollok)
Roberts, Albert (Normanton)	Whitehead, Phillip
Roberts, Gwilym (Cannock)	Whitlock, William
Robertson, George	Willey, Rt Hon Frederick
Robinson, G. (Coventry NW)	Williams, Rt Hon A. (S'sea W)
Rooker, J. W.	Wilson, Gordon (Dundee E)
Roper, John	Wilson, William (C'try SE)
Ross, Ernest (Dundee West)	Winnick, David
Ross, Stephen (Isle of Wight)	Woodall, Alec
Rowlands, Ted	Woolmer, Kenneth
Sandelson, Neville	Wright, Sheila
Sever, John	Young, David (Bolton E)
Sheldon, Rt Hon R.
Shore, Rt Hon Peter	Tellers for the Ayes:
Short, Mrs Renée	Mr. Donald Coleman and
Silkin, Rt Hon J. (Deptford)	Mr. Joe Dean.

NOES
Adley, Robert	Browne, John (Winchester)
Aitken, Jonathan	Bruce-Gardyne, John
Alexander, Richard	Buchanan-Smith, Alick
Alison, Michael	Buck, Antony
Ancram, Michael	Bulmer, Esmond
Arnold, Tom	Butcher, John
Aspinwall, Jack	Butler, Hon Adam
Atkins, Rt Hon H. (S'thorne)	Cadbury, Jocelyn
Atkins, Robert (Preston N)	Carlisle, John (Luton West)
Atkinson, David (B'm'th,E)	Carlisle, Kenneth (Lincoln)
Baker, Nicholas (N Dorset)	Carlisle, Rt Hon M. (R'c'n)
Banks, Robert	Chalker, Mrs. Lynda
Beaumont-Dark, Anthony	Chapman, Sydney
Bendall, Vivian	Churchill, W. S.
Benyon, W. (Buckingham)	Clark, Hon A. (Plym'th, S'n)
Best, Keith	Clark, Sir W. (Croydon S)
Bevan, David Gilroy	Clarke, Kenneth (Rushcliffe)
Biffen, Rt Hon John	Clegg, Sir Walter
Biggs-Davison, John	Cockeram, Eric
Blackburn, John	Colvin, Michael
Blaker, Peter	Cope, John
Body, Richard	Cormack, Patrick
Bonsor, Sir Nicholas	Corrie, John
Bosocawen, Hon Robert	Cranborne, Viscount
Bottomley, Peter (W'wich W)	Critchley, Julian
Bowden, Andrew	Crouch, David
Boyson, Dr Rhodes	Dean, Paul (North Somerset)
Braine, Sir Bernard	Dickens, Geoffrey
Bright, Graham	Douglas-Hamilton, Lord J.
Brinton, Tim	du Cann, Rt Hon Edward
Brittan, Leon	Dunn, Robert (Dartford)
Brooke, Hon Peter	Durant, Tony
Brotherton, Michael	Dykes, Hugh
Brown, Michael (Brigg & Sc'n)	Eden, Rt Hon Sir John

Edwards, Rt Hon N. (P'broke)	Lyell, Nicholas
Eggar, Tim	Macfarlane, Neil
Emery, Peter	MacKay, John (Argyll)
Eyre, Reginald	Macmillan, Rt Hon M.
Fairbairn, Nicholas	McNair-Wilson, M. (N'bury)
Fairgrieve, Russell	McNalr-Wilson, P. (New F'st)
Faith, Mrs Sheila	McQuarrie, Albert
Farr, John	Madel, David
Fell, Anthony	Major, John
Fenner, Mrs Peggy	Marland, Paul
Fisher, Sir Nigel	Marshall, Michael (Arundel)
Fletcher, A. (Ed'nb'gh N)	Marten, Neil (Banbury)
Fletcher-Cooke, Sir Charles	Mates, Michael
Fookes, Miss Janet	Maude, Rt Hon Sir Angus
Forman, Nigel	Mawby, Ray
Fowler, Rt Hon Norman	Mawhinney, Dr Brian
Fox, Marcus	Maxwell-Hyslop, Robin
Fraser, Rt Hon Sir Hugh	Mayhew, Patrick
Fraser, Peter (South Angus)	Mellor, David
Gardiner, George (Reigate)	Miller, Hal (B'grove)
Gardner, Edward (S Fylde)	Mills, Iain (Meriden)
Garel-Jones, Tristan	Mills, Peter (West Devon)
Glyn, Dr Alan	Miscampbell, Norman
Goodhew, Victor	Mitchell, David (Basingstoke)
Goodlad, Alastair	Moate, Roger
Gorst, John	Molyneaux, James
Gow, Ian	Monro, Hector
Gower, Sir Raymond	Morgan, Geraint
Grant, Anthony (Harrow C)	Morris, M. (N'hampton S)
Gray, Hamish	Morrison, Hon P. (Chester)
Greenway, Harry	Murphy, Christopher
Grieve, Percy	Myles, David
Griffiths, B. (B'ySt. Edm'ds)	Neale, Gerrard
Griffiths, Peter Portsm'th N)	Needham, Richard
Grist, Ian	Neubert, Michael
Grylls, Michael	Newton, Tony
Gummer, John Selwyn	Normanton, Tom
Hamilton, Hon A.	Nott, Rt Hon John
Hamilton, Michael (Salisbury)	Onslow, Cranley
Hampson, Dr Keith	Oppenheim, Rt Hon Mrs S.
Hannam,John	Osborn, John
Haselhurst, Alan	Page, John (Harrow, West)
Hastings, Stephen	Page, Rt Hon Sir G. (Crosby)
Havers, Rt Hon Sir Michael	Page, Richard (SW Herts)
Hawksley, Warren	Parkinson, Cecil
Hayhoe, Barney	Parris, Matthew
Heddle, John	Patten, Christopher (Bath)
Henderson, Barry	Pattie, Geoffrey
Heseltine, Rt Hon Michael	Pawsey, James
Hicks, Robert	Percival, Sir Ian
Higgins, Rt Hon Terence L.	Peyton, Rt Hon John
Hogg, Hon Douglas (Gr'th'm)	Pollock, Alexander
Holland, Philip (Carlton)	Powell, Rt Hon J.E. (S Down)
Hooson, Tom	Prentice, Rt Hon Reg
Hunt, David (Wirral)	Prior, Rt Hon James
Hunt, John (Ravensbourne)	Proctor, K. Harvey
Irving, Charles (Cheltenham)	Pym, Rt Hon Francis
Jenkin, Rt Hon Patrick	Raison, Timothy
Jessel, Toby	Rathbone, Tim
Johnson Smith, Geoffrey	Rees, Peter (Dover and Deal)
Jopling, Rt Hon Michael	Rees-Davies, W. R.
Joseph, Rt Hon Sir Keith	Renton, Tim
Kaberry, Sir Donald	Rhodes James, Robert
Kellett-Bowman, Mrs Elaine	Rhys Williams, Sir Brandon
Kimball, Marcus	Ridley, Hon Nicholas
King, Rt Hon Tom	Ridsdale, Sir Julian
Knight, Mrs Jill	Rifkind, Malcolm
Knox, David	Roberts, M. (Cardiff NW)
Lamont, Norman	Roberts, Wyn (Conway)
Lang, Ian	Rossi, Hugh
Langford-Holt, Sir John	Rost, Peter
Latham, Michael	Royle, Sir Anthony
Lawrence, Ivan	Sainsbury, Hon Timothy
Lawson, Rt Hon Nigel	St. John-Stevas, Rt Hon N.
Lester, Jim (Beeston)	Scott, Nicholas
Lewis, Kenneth (Rutland)	Shaw, Giles (Pudsey)
Lloyd, Ian (Havant & W'loo)	Shelton, William (Streatham)
Lloyd, Peter (Fareham)	Shepherd, Colin (Hereford)
Loveridge, John	Shepherd, Richard
Luce, Richard	Silvester, Fred

Skeet, T. H. H.	Trotter, Neville
Speed, Keith	van Straubenzee, W. R.
Speller, Tony	Vaughan, Dr Gerard
Spence, John	Viggers, Peter
Spicer, Jim (West Dorset)	Wakeham, John
Spicer, Michael (S Worcs)	Waldegrave, Hon William
Sproat, Iain	Walker, B. (Perth)
Squire, Robin	Wall, Patrick
Stainton, Keith	Ward, John
Stanbrook, Ivor	Warren, Kenneth
Stanley, John	Watson, John
Stewart, Ian (Hitchin)	Wells, John (Maidstone)
Stewart, A. (E Renfrewshire)	Wells, Bowen
Stokes, John	Whitelaw, Rt Hon William
Stradling Thomas, J.	Whitney, Raymond
Tapsell, Peter	Wickenden, Keith
Taylor, Teddy (S'end E)	Wiggin, Jerry
Tebbit, Norman	Williams, D. (Montgomery)
Temple-Morris, Peter	Winterton, Nicholas
Thomas, Rt Hon Peter	Wolfson, Mark
Thompson, Donald	Young, Sir George (Acton)
Thorne, Neil (Ilford South)	Younger, Rt Hon George
Thornton, Malcolm
Townend, John (Bridlington)	Tellers for the Noes:
Townsend, Cyril D, (B'heath)	Mr. Anthony Berry and
Trippier, David	Mr. Carol Mather.