§ Mr. Richard Wainwright
I beg to move amendment No. 28, in page 57, line 31, after `(2)', insert`Subsection (2) of section 37 of the Finance Act 1975 shall be amended by the insertion after the word "transferor" of the words "to or for the benefit of a beneficiary where that beneficiary thereby becomes entitled to more than one-tenth of the value of all chargeable transfers made by that transferor". 5(3)'.'.The amendment is focused on the need for capital transfer tax to be payable by those who receive gifts, legacies or bequests. It is also focused on the need for the rate of tax that recipients and transferees pay to be based on the wealth of the recipient cumulatively for his lifetime. It would, therefore, radically alter the capital transfer tax that is now payable by the donor or by the executors of the deceased.
The Liberal Party's objection to capital transfer tax in the form that the Government want it to continue is that it does nothing to encourage the wealthy to distribute their property on a really wide scale. It may encourage some wealthy people to make some gifts during their lifetime, but they pay just as little or just as much if they make that gift to one recipient or to several hundred recipients.
That seems to us to be a waste of what I call the tax lever. I am sure that it is accepted on both sides of the Committee that taxation, if properly designed, can be a powerful lever. For instance, a provision that went through the House almost unnoticed in 1916 to relieve from tax occupational pension funds has ever since been the basis, the fount and the origin of the enormous pension funds industry and the beneficial pension funds system that has almost uniquely developed in this country. That was the operation of the tax lever. A comparatively humdrum sort of measure turned out, perhaps to the astonishment of those who introduced it, to be the lever that shifted wealth into pension funds.
We believe that capital taxation should not be regarded as a weapon of vengeance to satisfy the blood lust of some political enthusiasts. Nor should it be a means—this is the Liberal grievance against capital transfer tax—of transferring wealth simply from private hands to the Stale.
§ Mr. Foulkes
I find the hon. Gentleman's remarks interesting. I wonder whether he can clarify one matter. 801 He talked about the Liberal Party's view. He has used the word "we" on a number of occasions. Is he expressing simply the Liberal Party's view, or do his remarks represent the considered view of the alliance of which he is part?
§ Mr. Wainwright
I am competent to speak only for the Liberals. All I can say in response to the hon. Gentleman is that, so far as I am aware, the Social Democratic Party is not and cannot yet be possessed of a constitution that enables it to make full policy decisions. Members of the Social Democratic Party will speak for themselves in their own time.
I hope that a capital transfer tax transformed into an accessions tax will commend itself not only to the SDP, but to the more civilised segments of the Labour Opposition, to various nationalist parties and to members of the Conservative Party who, for all the distracted air of the Financial Secretary at the moment, cannot be expected to go on supporting a tax that simply transfers capital wealth from individuals to the State which promptly uses it for current purposes. It is a thoroughly non-Conservative concept that wealth should be centralised in this way and taken away from the private sector.
The amendment is illustrative. It is not within my power to draft and produce an amendment that could transform the capital transfer tax in the sense that I have indicated is desirable. So far as it goes, the amendment provides that if gifts are spread among more than 10 beneficiaries, those gifts will carry the lighter of the two capital transfer tax scales—the scale for lifetime gifts. The more punishing schedule of rates on death is reserved for gifts that are spread among fewer than 10 people. This carries out the principle that I have been trying to describe.
A tax paid by the recipient, and depending upon the recipient's total wealth accumulated over a lifetime, would involve a certain amount of extra administration. We hope that there would be far more recipients whose records would have to be taxed than there are donors. It would be the natural consequence of such a tax.
Only the records of donors have to be kept on a cumulative basis by the Inland Revenue at the moment. We expect that there would be a larger number of files and a greater amount of clerical work, but there would be no greater complication of administration. There would simply be a greater clerical load, which I hope would be computerised.
An important characteristic of the tax is that Liberals hope that, in the long run, it would be a poor revenue earner because, as I said at the outset, it is intended, in the form we want it to take, to be a powerful lever to push wealthy people into distributing their wealth as widely as possible—for instance, to their employees or to a whole class of people whom they regard as deserving of encouragement rather than simply passing it down to their own kith and kin and trying to keep it clotted into as large and powerful lumps as possible.
If the use of the tax bludgeon were successful in making wealthy people act on the advantages of spreading their wealth widely, it follows automatically that the tax yield to the State would eventually become quite small. In a perfect Liberal State—I am not ashamed of being a perfectionist so long as it does not come in my lifetime—there would be no yield from the tax, because 802 all wealthy people would behave with the utmost rationality. They would ask their professional advisers to help them to get rid of their wealth to the largest number of people as soon as possible so that they would not have any penalty to pay to the State.
That state of affairs would surely commend itself to those who follow some of the more enlightened Conservative traditions of British politics. For the tax to be a powerful lever to make people distribute their wealth, the tax rates should be tough. If the tax were properly based in the manner that I have tried to describe, it would be fair to toughen up the rates considerably to make the lever all the more powerful.
I hope that I have said enough to illustrate the principle on which Liberals want to see this tax rebased. It would then be more appropriately described as an accessions tax than as a capital transfer tax, although it would still be a tax on transfers.
It is always important to refer to the way other developed countries address themselves to tax problems. Within the OECD, that enormous range of countries, only New Zealand and the United States of America operate a similar and primitive estate-based tax. That should give the Committee pause for thought. In 1976, Eire changed to an inheritance tax, which is halfway to our proposal, after a great deal of deliberation in its properly elected Dail. Four countries—France, Greece, Ireland and Portugal—operate the principle that I have been enunciating of accumulating for tax purposes gifts received by each donee over the whole of his lifetime. In that they are way ahead of us. I have to agree that no other country has adopted an accessions tax in the full sense that I am advocating.
I hope that this matter will be debated increasingly and that the Government, if they are to live up to the radical image that some of their supporters try to cultivate, will give serious thought to it and set studies on foot within the Inland Revenue on how the capital transfer tax could be transformed into a useful tax lever for distributing wealth more widely.
§ Mr. Ridley
It is always a matter of congratulation to the hon. Member for Colne Valley (Mr. Wainwright) that he can secure such a large proportion of his party to hear him. I calculate that 25 per cent. are present. I confess that it would be lovely if we could say that there were 25 per cent. of the Labour Party, or even of my hon. Friends, present. I do not know whether the Labour Party has been able to muster even 1 per cent. at any point of our debates today, which are fundamental to it.
There were two important revelations from the hon. Gentleman. First, we had a glimpse of the perfect Liberal State. It seemed more like Eire than anything else. It is a frightening thought. I hope that we shall not see too much of that perfect Liberal State.
The other interesting observation was that the SDP is not allowed to make policy because of its constitution. I do not know whether the hon. Member for Gateshead, West (Mr. Horam) subscribes to that view. I do not know whether the observation was a way of inviting the SDP to deny what the hon. Member for Colne Valley said or whether it really is so. Perhaps it is an attempt to justify the known reluctance of the right hon. Member for 803 Glasgow, Hillhead (Mr. Jenkins) to say anything that could possibly be construed as policy. So we shall never know what the perfect SDP State is.
§ Mr. Ridley
I come to the amendment, which is very modest. It would allow a bequest—or gift within three years of death—whose value does not exceed one-tenth of that of the chargeable transfers made by the donor to be chargeable to capital transfer tax at the lower lifetime rates rather than at the death rates. It would probably benefit a few people a little.
There are some drafting difficulties, but I shall not dwell on them. It would be difficult to allocate the difference between lifetime rates and death rates as between different beneficiaries. Indeed, the allocation for the tax as a whole between those who qualified under this relief and others who qualified only under the will would give rise to endless difficulties and altercations as to how much tax should be attributed to whom. It would be complex, and it would be open to the defect which the hon. Gentleman identified in his speech on the subject last year when he said thatit is open to potential donors to get together and plan an operation in which each of them will give relatively modest gifts to a variety of persons."—[Official Report, 12 May 1981; Vol. 4, c. 670.]I do not want to dwell on those difficulties, because I recognise that the hon. Gentleman was canvassing a change from the present tax to an accession tax. In fact, the amendment is leading towards an inheritance tax. We gather from the hon. Gentleman that he wants not an inheritance tax but a cumulative accession tax. There would be many advantages in that system of taxation. If we were starting from scratch now, I would tend to agree with the hon. Gentleman.
One of the big factors is the resistance to violent change and structural surgery which taxpayers are beginning to develop. We know the arguments. One is that we have changed the rules and the basis of corporation tax more often than any other country in the Western world. Indeed, when the Conservative Party issued a Green Paper canvassing the possibilities of changing to a donee base tax or an accession tax and consulted widely on it in 1972, the proponderant and overwhelming advice of taxpayers and their advisers was that it should not do so because of the complication and the upheaval that it would cause.
However, the capital transfer tax that we were left by the Labour Party was so savage and punitive that we had to undertake some fairly drastic surgery, if only to draw its teeth. To have changed the form of it as well would have involved a major and unacceptable degree of change in a short time.
§ Mr. Ridley
We are now talking about capital transfer tax. Earlier I was talking about all capital taxes. The hon. Gentleman will find that the revenue from capital transfer tax has increased. Without having been indexed since its inception, the tax is yielding a great deal more in real terms—well, perhaps not in real terms. I shall have to check that.
§ Mr. Ridley
The upheaval that is proposed would lead to great difficulties. People have made dispositions according to the existing tax. They may be giving some of their capital to their families to take advantage of the lifetime transfer rates. It is necessary—this is true of all major tax reforms—to see whether the confusion and difficulties of major upheavals outweigh the advantages of moving to purer and more perfect forms of taxation.
When major structural changes are made in taxation, it is very soon evident that so many changes have to be made to meet this or that transitional problem that one often ends up with a tax that is no better in itself. We shall bear in mind what the hon. Gentleman has said. We do not share his view that change is possible, although we certainly do not resist his view that the sort of tax he envisages might well be desirable.
§ Mr. Richard Wainwright
I am sorry that the Financial Secretary did not take up my question whether the Government regard capital taxes mainly as a source of revenue or whether they have inherited the Labour Party's hope, when it introduced capital transfer tax, that it would be an engine for the redistribution of wealth. The Labour Party's policy is at least clear, although it is not one which I accept for a moment, but the Government's position in retaining this tax and nevertheless trying to amend it seems shoddy. That is because they cannot possibly share the Labour Party's view about the redistribution of wealth, yet they are manifestly failing to get much revenue out of it. It seems that the Financial Secretary has tried to dodge the position that the Government have adopted. Some of their supporters want more enlightenment. I do not know why the Government choose to sustain the tax and to take up our time by making alterations to it.
When the right hon. Member for Leeds, East (Mr. Healey) introduced capital transfer tax in 1974 he said that it was the intention of the Labour Government to make the rich howl with pain. The object was redistribution. The Labour Government sincerely believed that this new swingeing form of tax, which would remove the voluntary element from capital taxes, would usher in a period of redistribution.
It is time that the House of Commons recognised that such taxes have not proved to be the way of redistributing wealth. If CTT had worked, it would have concentrated more wealth in the State and would not have benefited the great generality of the people by giving them wealth of their own. However, it has not even concentrated more wealth in the State. It has not been a success as a revenue raiser.
Let the Labour Party face the fact head on that the new capital taxes, for all their modern shape, are now raising a far smaller percentage of total revenue than the old and much derided death duties. Those duties were a rocky lot and I would not have dreamt of defending them because of the large voluntary element within them. Individuals tended to pay them only if they were run over by a bus at an early age instead of dying in their bed or in hospital in their eighties. It is extraordinary that relatively new arid allegedly modern capital taxes are less efficient at raising revenue than the old death duties.
The Financial Secretary will not come clean about what he wants from the capital taxes. Does he want to sharpen them so that they become better revenue raisers, or has he 805 some vestigial Disraelian ideas of redistributing and splitting up large concentrations of wealth? The Government's attitude on capital taxes remains as obscure as ever.
The Financial Secretary quoted some alleged words of mine that implied that an accession tax would be easy to dodge by a form of conspiracy. He must have dug up a quotation of mine on a different tax. The words that he used suggested that donors could get together, form a conspiracy and give small gifts to the same recipient. Unless they were extremely small gifts, they would be more fully caught by an accession tax than by the present capital transfer tax. The Committee must be fed up with hearing me say that an accession tax is paid by the recipient on a cumulative basis. If a recipient is lucky enough to receive gifts over his lifetime from many people, he will pay a much higher rate of tax. I do not understand how the conspiracy theory that the Financial Secretary has dug up applies to the amendment.
I am extremely disappointed with the Financial Secretary's reply. However, I have recognised since putting pen to paper that the amendment is by no means a competent vehicle for bringing an accession tax into being. Now that the subject has ben ventilated, I beg to ask leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Question proposed, That the clause stand part of the Bill.
§ 10 pm
§ Mr. Cook
In previous debates the Financial Secretary has produced and flourished before the Committee his totalisator in which he keeps the running cumulative total of the cost of Opposition amendments. The basis for that totalisator is wholly specious, as has been patiently explained to the Financial Secretary by the hon. Member for Colne Valley (Mr. Wainwright) and by my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon). If he persists in that specious totalisator, we must insist that he at least makes a deduction in respect of the debate that we are about to have, and the division that will follow it. Surprising though it may seem to the Financial Secretary, on this occasion we seek to save the Inland Revenue money. We seek to prevent the Inland Revenue from giving away the £85 million which it proposes to hand over to the wealthy who are liable to capital transfer tax.
The Financial Secretary and I had a preliminary skirmish a moment ago concerning the yield from capital transfer tax. Before I turn to the gravamen of that dispute, may I say how much I applaud the Financial Secretary's stamina in conducting single-handed the proceedings of the Committee since it commenced at 4 o'clock. That is an achievement which should go down on the record, particularly as it occurs at a time when we have a record number of Treasury Ministers and when the Financial Secretary might reasonably be expected to be relieved of part of the onerous burden that he has accepted tonight.
Having accepted the burden of garrisoning the Dispatch Box for the past six hours, it is perhaps not surprising that the Financial Secretary should have been in error when he responded to me off the cuff in our earlier exchange on the yield of capital transfer tax. The figures that he gave for the declining revenue from capital taxation are just as true 806 for capital transfer tax and its predecessor estate duty as they are for the totality. Indeed, the taxes largely account for the decline in those figures. In 1948 estate duty provided 9 per cent. of total Government revenue and in 1973 it provided only 4 per cent. Now, capital transfer tax, and the dribble of estate duty that we still receive, provides barely 1 per cent. of total Government revenue. Nor is the decline a measure of the relative increase in income from income tax. The absolute value of the yield has also declined. The Financial Secretary is wrong to suggest that the yield in absolute or real figures has increased. In 1973–74, we received £412 million in estate duty. Last year we received only £470 million from capital transfer tax. Those are the raw cash figures. If we deflate that figure to give us the drop in real terms, we find that over that decade the yield from tax on capital transfers has declined by a staggering two-thirds to one-third of the level of only a decade ago.
In the financial year 1982–83 there will be a further fall in cash revenue as a result of the measure which we are currently debating. The expected revenue for this year is £465 million, which is almost precisely the same in cash terms—not real terms—as the figure for 10 years ago which was £459 million. Moreover, those figures, which measure the decline in yield from estate duty and capital transfer tax, coincide with a period in which personal wealth has increased. The result is that receipts have declined not just as a percentage of total revenue but as a percentage of personal wealth. The corollary of that is that the tax yield from income has had to increase to compensate for the declining yield from capital taxation.
A book was written some time ago entitled "The Treasury under the Tories" by an author who is well-connected with the present Treasury team. He wrote:Is it conceivable that if a new (tax) system were being designed for Britain that income would be taxed so heavily and effectively, and capital hardly at all?We may differ as to the cause of that decline in yield from capital taxation, but there can be no disagreement about that essential background to this evening's debate. We must consider the proposals by the present Treasury team for a further relaxation in the regime for capital taxation against an historic background of a long-term trend in the decline in both the incidence of that tax and the yield from that tax. Instead of seeking to reverse that trend, the Government have sought to accelerate it. They have done so on the basis of a prejudice that was staunchly defended by the Chancellor of the Exchequer in his Budget Statement, when he said:there is no case whatever for maintaining a system of capital taxes which, by holding back business success and penalising personal endeavour, does serious economic and social damage".—[Official Report, 9 March 1982; Vol. 19, c. 754.]That assertion has nothing but blind prejudice to sustain it. Research after research shows that the most significant factor in deciding who dies wealthy is who is born wealthy. When we reduce the tax on the transfer of wealth and capital we are not rewarding personal endeavour—as the Chancellor of the Exchequer would have us believe it—but are perpetuating inherited wealth. There is not a shred of evidence to show that inherited wealth contributes to economic success.
On the contrary, the greater the degree of inherited wealth in a nation, the more business decisions are taken by those who are chosen by the accident of birth rather than by their ability.
§ Mr. Cook
The hon. Gentleman cannot justify those who inherit the power to take decisions because they inherit the wealth that enables them to do so by a conscious and deliberate act of family planning on the part of their parents. The persipience of the parents in that family planning act does not confer on the heir the investment judgments to handle large sums that he may inherit by what I still maintain to be the accident of birth.
Therefore, there is no evidence to support the Chancellor of the Exchequer's prejudice. However, that has not prevented the right hon. and learned Gentleman and his colleagues from acting vigorously upon it. In the Government's first year of office they doubled the threshold for capital transfer tax. That removed from the scope of capital transfer tax no less than two-thirds of those liable to it. That is in striking contrast to the Government's record on income tax. For income tax, they have lowered the threshold in real terms and thereby increased the number of taxpayers. Last year, the Government slashed the rates on life-time transfers of capital. They also destroyed the cumulative principle and thus enabled those who pay the tax to start afresh after 10 years from scratch.
This year, the Government are completing their assault on capital transfer tax by carrying out a major uprating of the thresholds. The Government's consistent generosity to those who are liable to capital transfer tax has raised the eyebrows not only of Opposition Members but also of members of the public. The day after the Budget Statement, the Financial Times carried an illuminating article on capital transfer tax. It stated that the intentions of capital transfer tax had been steadily eroded since the tax was introduced in 1975. It added:when the likely reliefs are added to the reduction in standard tax rate bands, the real tax burden has been reduced since 1975 up to quite high asset totals.We can get a measure of just how generous that relief has been by considering one of the tables in the schedule. That table, and the table that it replaces, shows that the threshold for the 40 per cent. band is increased by 43 per cent., the threshold for the 50 per cent. band is increased by 50 per cent., and the threshold for the 60 per cent. band is increased by 56 per cent. These figures comfortably exceed the RPI movement since last year and in most case exceed the RPI movement since the Government took office. The Government are plainly intent on doing for capital taxation what they have been unable to afford to do for the income tax thresholds.
§ Mr. Cook
That is a pertinent question to which I shall address myself before I conclude. I hope that the Financial Secretary will be able to answer it.
However, I first refer to a helpful press release issued by the Inland Revenue at the time of the Budget Statement. I fear that the Inland Revenue may not be so helpful next year, following the use that we have been able to make of its press release this year. The Inland Revenue provided a table giving illustrations of the reduction in liability that will flow from the table in the schedule. The largest percentage reduction is concentrated at the lower end of wealth-holding. That is perfectly understandable, because that is where the largest revenue from this tax lies. Sixty 808 per cent. of the revenue from CTT, and a rather larger proportion of taxpayers who are liable to CTT, relate to estates of less than £250,000.
What is the reduction in the proportion of tax paid by those with estates of less than £250,000? The Inland Revenue tables show that an estate of £100,000 will have a reduction in liability of no less than 22.4 per cent. That is nearly double the increase in tax thresholds for income tax payers. An estate of £150,000 will have a reduction in tax liability of no less than 19.7 per cent. An estate worth £250,000 will have a reduction in tax liability of no less than 15.9 per cent.
Those are generous estates. Moreover, the reductions can apply to estates of double those values. One of the uniquely generous aspects of CTT is that transfers between spouses are exempt from tax. Thus, the reductions are available to estates that are twice as large by the simple device of dividing the estate between both spouses and then transferring two separate estates to the same heir. Thus, the reduction of 15.9 per cent. can be claimed by a joint estate up to £500,000.
Those are large sums of money. The hon. Member for Truro (Mr. Penhaligon) startled the Committee yesterday by saying that Members of Parliament are among the top 2 per cent. of PAYE payers. However, if the House as one body were to seize the advantage offered by the clause and schedule I doubt whether the majority of Members, well paid though we may be, could put together an estate of £100,000. I certainly doubt whether that could be achieved with the majority of Opposition Members. I am absolutely certain that it could not be achieved by the majority of our constituents. Anyone in my constituency who could achieve an estate of £100,000 to donate to his heir would be a freak case.
As we address ourselves to the generosity with which the few have been treated, the Committee is bound to remember that each of us, irrespective of which side of the Chamber we sit on, represent far more unemployed and far more pensioners than those liable to CTT, who will benefit from the proposed reductions.
The fact that a small number of people who by definition are among the most wealthy in our nation should receive such a generous reduction in their tax liability prompts two questions which I shall address to the Financial Secretary because he will have to answer them if he is to persuade the Committee that it would be proper to allow the clause to remain in the Bill.
First, why should this reduction in tax liability receive priority, given the steady decline in revenue from capital taxation as a percentage of personal wealth? Against the background of the declining yield and the declining incidence of capital taxation over the past 10 years, what possible justification can there be for a further reduction in the incidence of tax on capital transfer, especially as, by and large, the people caught by capital transfer tax who will therefore benefit from the clause and the schedule are the same people who in the past three years have benefited from the Government's uprating of the higher rate band threshold for investment surcharge?
Secondly, why should this reduction in tax liability be given priority when for so many less advantaged groups the tax burden has increased in the past three years? Treasury Ministers are fond of telling us how little the saving that could be made on a measure such as this would 809 contribute towards uprating the standard personal allowances. That may be so. Nevertheless, the cost of this measure in absolute terms is significant. It should not be underestimated. It is £85 million. There are things that can be done with such a sum.
Last Thursday, the hon. Member for Colone Valley proposed an amendment to extend the age allowance to women pensioners between the ages of 60 and 65. The Committee will know from that and from previous debates that such women are not at present eligible for the age allowance. Therefore, their State pension takes them over the tax threshold. Any additional income that they receive above the State pension then triggers an income tax liability at often ferocious marginal rates. I think that many hon. Members on both sides of the House recognise that that is unjust and irrational when the same people may claim supplementary pension.
The Minister of State told the hon. Member for Come Valley what the amendment would cost. By coincidence, the cost of relieving that group of pensioners of tax was £85 million, which the Minister of State described as a substantial sum. The Financial Secretary must now tell the Committee why that substantial sum can be found to reduce the tax on estates of £100,000 but not to assist the incomes of people who have to live on £40 per week.
There is another contrast. Yesterday, the Committee debated the 5 per cent. abatement of unemployment benefit. I shall not rehearse all the arguments for the restoration of that abatement. I merely point out that the cost of restoring the 5 per cent. to the unemployed would be £60 million in a full year—less than the sum conceded by the clause and the schedule to those with estates of more than £100,000.
Those are stark contrasts. They cast into bold relief the grotesque social priorities of the Treasury. Because of those contrasts, we believe that the clause has no place in the Bill and we shall vote to take it out.
§ Mr. Richard Wainwright
I wish to pursue briefly the analysis of the various rates helpfully embarked upon by the hon. Member for Edinburgh, Central (Mr. Cook), but from a rather different point of view.
As I said earlier, my party believes that all these taxes should be considered by the Committee on a basis that has been indexed for inflation. If the Committee in its wisdom then decides that the indexed result is not satisfactory, in no sense should we be slaves to indexation, but should proceed to make alterations. Nevertheless, we should start from a basis of considering the taxes in a form brought up to date by the application of the retail price index.
I have made that calculation, which is just simple arithmetic, on the rates and rate bands for capital transfer tax both at death and for life-time transfers, indexing them from the beginning of the operation of the tax in 1975. I found that in both cases, at any rate up to £500,000, the rates are still higher than would be justified by straightforward indexation. I do not know whether the Minister will respond to this when he replies to the debate, but it would be interesting to know the Government's ongoing thoughts about capital transfer tax rates. Are the reductions this year simply part of a process to try to bring them into line with the inflation-adjusted rates or do the 810 Government intend to stop at this point? What is the intention? It helps to know whether the Government have any idea where they are going.
The simple process of applying the RPI to the 1975 rate bands produces another aspect about which I should like to hear from the Government, because, taking briefly the rates for transfers arising from death, at £60,000 transferred the rate is 15 per cent. higher than is the figure produced by applying the RPI. In the range from £60,000 to £½ million, the tax rate is 10 percentage points higher. When we get to the range from £½ million to £6 million the rates proposed in the schedule to the Bill are only 5 per cent. higher than the index would have produced.
More interesting, and requiring more explanation, is the astonishing position on the life-time rates. Here again, on transfer of £60,000, the level proposed in the schedule is 15 per cent. higher than indexation on the RPI would have produced. When we get to only £220,000, the proposed rate in the Bill is 7½ per cent. higher than the indexed rate would have been. However, when we reach the level of £½ million and go up to £5million, the proposed rates are 7½ per cent. less than the indexed rate. When we reach £5 million, the rates proposed in the Bill are 20 per cent. less than indexed rates would have been.
Why are the Government changes—on the death rates to some extent, but on the life-time transfer rates to a remarkable extent—so heavily weighted in favour of large dispositions? It seems odd that, while the Government are prepared to maintain rates of tax higher than are justified by indexation, up to£½ million of life-time transfers, from that time onwards in their schedule and from that scale, the rate of tax is markedly less than indexation would have produced. It is clear and undeniable that it is a great shift only for large dispositions. It is on that aspect that I should welcome the comments of the Government before advising my right hon. and hon. Friends about the vote.
§ Mr. Foulkes
At the start, I must confess that I am afraid that I cannot match the grasp shown by my hon. Friend the Member for Edinburgh, Central (Mr. Cook) of the fiscal details that he deployed with such devastating effect against Conservative Members. They sat there, transfixed and somewhat shattered, by his attack on them. That is a great tribute to my hon. Friend the Member for Edinburgh, Central. It shows how deadly on the mark he was with his remarks. I hope that the Committee will excuse a rather more broad brush approach from me.
§ Mr. Foulkes
As the hon. Member for Grantham (Mr. Hogg) said, the Committee would not expect anything else.
However, I should like to amplify something which I raised earlier, and which was remarkable during the Committee stage of the Finance Bill last year, which many hon. Members who are here tonight sat through. We found that amendment after amendment was put forward and argued forcibly by Conservative Members who had pecuniary interests in, and who were making direct pecuniary gains out of, those amendments. We got the impression that they were spending hour after hour and night after night looking after their personal interests rather than the interests of their constituents whom they are paid to represent. Many of their constituents are the 811 unemployed, low wage earners, widows and retired people, and are not benefiting from amendments such as those that we have seen tonight.
It is about time that we said much more. Conservative Members should be challenged again and again on that matter. They should be reminded that they are here to represent the whole of their constituencies, particularly most of their constituents who are now unemployed, the poor, widows and the retired and who are in need of a great deal of help. They are not the people who will be helped by the clause.
The clause is headed "Reduction of Tax". That is an amazingly bland and misleading statement. The Government are not a Government of tax reduction. The ordinary person and wage earner has had a substantial increase in tax under this Government, who promised tax reduction. The people who are rich and who have more than enough money are receiving a reduction in taxation, which they do not need.
We are grateful to my hon. Friend the Member for Blackburn (Mr. Straw), who has been dragging those facts out of the Government to show that the ordinary worker's tax burden is much worse thanks to the Government, who promised a decrease in taxation. That person was duped and tricked by the Government, as were many others in the electorate by the blandishments and twisted advertising by Saatchi and Saatchi, which led them to believe things that have never been delivered.
I hope that in comparison with Conservative Members who are championing the rich in clause 75, Opposition Members will increasingly become the champions of the ordinary pay-as-you-earn taxpayer. That is the person whose tax is taken at source. I speak as one of them. Many Conservative Members have many more complicated involvements in tax affairs, but in the Opposition most of us have ordinary, simple tax matters. We should be the champions of the pay-as-you-earn taxpayer. Many of those taxpayers are paying more tax than they should. I hope that we are the people who will look after the interests of those people and make sure that the ones who will be helped through clause 75 are made to pay more tax.
I had to resort to publications such as the Financial Times so that the situation became clearer to me. My hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) helped me in explaining the effects. I am glad to say that he is not my tax adviser. I would be in greater difficulties if he was. However, he is my adviser on the right publications to read.
The Financial Times tells us that even before the Budget £200,000 could be transferred tax-free over an 11-year period and £300,000 could be transferred tax-free over a 21-year period. With the spouse being able to transfer a gift of £3,000 a year, that means an extra £66,000. Over 11 years £266,000 can be transferred tax-free.
In Patna, Dalmellington, Drongan and Rankinston not many people have £266,000 to transfer over an 11-year period. I shall go as far as to ay that there are not many people in Grantham, not since the grocer's daughter moved South to Finchley, who have that sort of money to transfer. Hon. Members such as the hon. Member for Grantham (Mr. Hogg) should be looking after the interests of widows, the retired and the elderly and not the interests of the people with £266,000 to transfer over 11 years.
§ Mr. Foulkes
The hon. Member for Croydon. South (Sir W. Clark) should look out, because these strange Social Democrats are creeping into Croydon.
The Financial Times goes on to say that the teal tax rates for capital transfer tax are lower in 1982 than they were in 1974. That astonished me, even though I realise how devastating the Government's policies have been. The rates are even lower for the favoured groups, the business men and farmers with assets in excess of £1 million.
Clause 75 is a millionaire's charter, which is not inappropriate from the present Cabinet which contains so many millionaires. According to the Financial Times, the reliefs for favoured taxpayers are now so large that, far from being progressive, as one would expect from this type of tax, capital transfer tax has reached the point where the tax rate declines as assets increase. Therefore, the wealthier one is, the less one is taxed. That is absurd.
In real terms, capital transfer tax does not exist as an effective tax.
After a detailed analysis of capital transfer tax, the article in the Financial Times states that there is scope for some future radical Chancellor.
Unfortunately, my right hon. Friend the Member for Stepney and Poplar (Mr. Shore) is not present, but I know that he has in mind the type of radical measures that are indicated in the article that are necessary if capital transfer tax is to become an effective tax again.
My hon. Friend the Member for Edinburgh, Central gave some telling examples of how £85 million could be spent more effectively. He said that it could be spent on dealing with 60 to 65-year-old women or on dealing with the tax level for the unemployed whom the Government have cast aside in favour of the millionaires.
Recently, I went to a meeting of the Cumnock branch of the National Association of Widows. That is a growing association which is rightly concerned with the tax position of widows in Britain. Those widows are working alongside married women, they are doing exactly the same job, and receiving exactly the same gross earnings, but because of the current tax position, they go home with less money at the end of the week than the married woman doing the same job who has a husband who is also probably earning a great deal. The Government could have done something about that, and £85 million would have been a great contribution towards it. The Government have cast aside the widows. Instead, they favour the millionaires.
My hon. Friend the Member for Cathcart said in an earlier intervention that there should be some indexation of public services. It is appropriate to see the hon. Member for Edinburgh, Pentlands (Mr. Rifkind) leaving the Chamber because, in his previous existence, he was one of the terrorisers of local government. There is no indexation from him or from his right hon. Friend the Secretary of State for the Environment. There is no indexation for the huge increases in fuel and other costs that local authorities must bear. That means that the services to the poor and the unemployed, who do not receive indexed benefits—the health and social work services upon which they depend—are being cut and their social wage is depressed. Again, those people have been cast aside in favour of the millionaires.
813 This is a millionaire's charter. Clause 75 is a millionaire's clause. This Government are a millionaire's Government. I hope that at the next election they get the votes of every millionaire but no others.
§ Mr. Maxton
As my hon. Friend the Member for South Ayrshire (Mr. Foulkes) said, Conservative Members spent a long time in Committee on the Finance Bill 1981 arguing for the very wealthy in our society. Yet the press concentrates on tax increases on cigarettes and income tax changes, and the matters that should have tremendous psychological effects in terms of what the world outside thinks about Conservative Members are hardly reported.
The House of Commons used to be called the most exclusive club in Britain. That is no longer true. The most exclusive club in Britain now comprises the payers of capital transfer tax. It is a remarkably small number of people. One must be a very stupid wealthy person to pay capital transfer tax after what the Chancellor did in last year's Budget. All fiscal studies state that if one pays capital transfer tax, first, one does not have much money, and, secondly, one has not been well advised on how to use that money.
A study of the Chancellor's changes, as shown in "Fiscal Studies" of November 1981, makes it clear that anyone with considerable wealth, say £1 million plus, is most unlikely to be a potential payer of this tax. The study states:It is easy to acquire access to the business relief, for instance by purchasing a sleeping partnership; or to become qualified for `working' farmer CCT relief by purchasing a farm, and employing a manager to do the farming.That comes close to giving advice that is very near the bone in terms of the tax that people should pay.
The article goes on to say that the Chancellor does not seem to realise the implications of what he has done, because if he did he would now be taking credit, certainly from Government Back Benchers, for the practical abolition of capital transfer tax. That is what almost happened last year. This year we are seeing the final nail driven into the coffin of capital transfer tax. Very few people pay it.
Another example given in the study is that all personally owned businesses will have low tax rates. Even the assets worth as much as £4 million the effective tax rate will be less than 12 per cent. once in a generation, which is about 0.4 per cent. a year. It is nonsense, but again it is the psychology of the Government of giving to the wealthy and taking from the poor in our society. We have said that time and time again on the Floor of the House. Those Labour Members who have been appointed to the Committee on the Finance Bill will continue to say that throughout the Committee stage as well. This is about inherited wealth. It is largely about millionaires' or multimillionaires' sons, who will continue to be multimillionaires.
As my hon. Friend the Member for Edinburgh, Central (Mr. Cook) said, it is not about giving a person the opportunity to accumulate wealth and then to use it. It is about handing on wealth to people who, essentially, have done nothing to earn it.
I shall end with a quotation on wealth:Money is like dung. If you leave it in a large heap it simply stinks. If you spread it over a large area of ground it brings forth fruit.814 The Government's policy on taxation is ensuring that money is heaped up higher and higher into ever bigger dung heaps. It stinks more and more.
§ Mr. Campbell-Savours
I shall be brief, as I spoke at length in the debate on capital gains tax. I suggest to the Financial Secretary that the level of capital transfer tax that he proposes, with the reduction of £80 million in tax receipts, does not command the support of the majority of his Back Benchers even though it may command a majority in the Lobbies. A number Conservative Members are deeply disturbed about the inequalities that he is sowing in society by pursuing his strategy. During the remaining stages of the Bill, I should like to take soundings of his Back Benchers.
The threshold that the Government are introducing this year is based on the highly ideological views of Treasury Ministers. They may not be representative of the views held by the more moderate and sensible elements—there must be some—in the Conservative Party.
On the history of capital gains tax, I am told that immediately before the First World War it provided 16 per cent. of total revenue.
§ Mr. Campbell-Savours
The hon. Gentleman is absolutely right.
I am also told that £465 million will be raised in the forthcoming year—approximately 1.2 per cent. of total revenue. That represents a substantial reduction. There must be a consensus in the country as to what should be the real level of tax gain from inherited wealth from lifetime transfers.
Casting aside the political arguments—we have had them all today I am trying in the spirit of late-night reasonableness to advance a sensible suggestion, There must be a consensus about a fairer distribution. Will the Financial Secretary consider taking soundings, even at this late stage, to establish the consensus in the country and then next year come back with a Budget strategy on capital transfer tax that more fairly represents the view of the British people?
What we are doing tonight is wrong. It is clearly unjust. We cannot in all equity propose that £85 million be given to the very few better-off privileged people in society when, in the same week, we have refused to concede the case of the unemployed and the under-privileged. Not even a Conservative Government can do that in fairness.
The Financial Secretary must realise that, putting aside traiditional arguments, there are Conservative Members who realise that what I say is true. He must give them the right to put their case. It is significant that tonight, once again, only the Financial Secretary on the Conservative Benches has defended the Government. If Conservative Members believed passionately that what is being done is right, they would also have defended the Government. There are few hon. Members present. No one will defend the position of the Minister. There must be consensus. I hope that the Minister will establish it for the Budget next year and so enable us to put an end to the nonsense that has developed over the last three years when large amounts of money have geen given to very few people. Everyone knows that it is wrong. We must stop it.
§ Mr. Ridley
The hon. Member for Edinburgh, Central (Mr. Cook) picked me up on figures that I gave him about 815 the yield of capital transfer tax. Admittedly, I was working from memory and not from any paper. I must make it clear that there has been decline in the yield from capital transfer tax in real terms but not in money terms. The hon. Gentleman was wrong on that point. After making his allegation, he recalled the yield from estate duty in 1973. We are not talking about estate duty. The Labour Party changed the tax to capital transfer tax. The question put to me related to capital transfer tax since its introduction. I shall give the figures.
In 1975–76 the combined yield of CTT and the remnants of estate duty was £330 million. For 1982–83 the forecast is £475 million. In money terms it has crept up from £330 million to £475 million. In real terms it has crept down, if I may use that expression, from £289 million in 1975–76 to £178 million at March 1975 prices. It is interesting to note that during the years of the Labour Government it crept down just as steadily as it has since then. It went down in real terms from £292 million to £266 million, and to £228 million in 1978–79. There has been a decline, almost steady in real terms, in the yield of this tax since it was introduced. Although the hon. Gentleman's Government made no change, or very little change, during that time the yield reduced.
§ Mr. Cook
Is the Financial Secretary saying, in retrospect, that had the Labour Government, in the Finance Bill of 1977 or 1978, brought forward proposals to increase the rates of CTT to remedy this decline, the Opposition, of which he was then a distinguished Member, would have supported it?
§ Mr. Ridley
This is a hypothetical case. I should most certainly not have supported it. It is, however, odd for a Government out of office to ask whether, if they had done something while in office, I should have supported it. It is, I think, anterior hypothecation.
The reason for the decline in the real yield has to be sought in factors outside the tax. Asset values have by no means kept value with inflation. Share prices are practically level. They have not remotely kept value with inflation. Wealth has been diminishing due to a decline in the real value of many people's capital assets. There has been a certain element of avoidance—I am not saying evasion. People have preferred to take their wealth with them overseas rather than pay this tax. A certain amount of emigration has taken place simply to avoid paying capital transfer tax. The Committee cannot be surprised, if it sets high rates of tax, if people try to take evasive action. Those are the sorts of reasons why the yield of capital transfer tax has fallen.
There is no connection between the yield of the tax and the severity of the rates. The rates have got progressively more severe. The thresholds and bands have not been indexed and they have not been altered in any substantial way until this Budget, except for the change in the lifetime rates which was made last year.
I should like to give the Committee some figures. The original value of the threshold was £15,000. The indexed equivalent of that today is £39,000 and we have put it up to £55,000. The 50 per cent. rate was payable on the band of £100,000 to £120,000 when the tax was brought in. The equivalent of that today is £260,000 to £315,000. The Budget proposal is for £165,000 to £200,000, almost £100,000 lower. The maximum tax level, 75 per cent., was payable on an estate of £2 million. That indexed is 816 now £5¼ million, yet the proposal in the Budget is only £2½ million. So the rates of tax and capital transfer tax bear much more heavily now than at the time since they were introduced by the right hon. Member for Leeds, East (Mr. Healey).
That is borne out by figures which I gave, and which I wish to correct, on Second Reading. I gave a figure which turned out to be wrong and I should like to set the record straight. I said that even after the Budget changes capital transfer tax would be heavier in real terms than it was both when the Government came into office and when the tax was first introduced. I also said that those with the largest estates would pay more in real terms than before, while those with the smaller estates would pay less.
Both points are absolutely valid. The first figure that I gave was correct. In real terms the yield of the tax following the Budget changes will be £5 million more. in a full year than it would have been on the rates of tax at the time of the election. However, the later figures have been checked again and have been found to be incorrect. On a similar basis, the additional yield, compared with that on the introduction of the tax, will be £60 million, made up of an additional £75 million from the larger estates, less a reduction of £15 million from the smaller estates. Those are the correct figures.
Labour Members who became indignant a short while ago because they thought the rates of capital transfer tax would mean a give-away of £85 million were wrong on all counts. First, the cost of these reforms is not £85 million this year, but £35 million. It will be £75 million next year and £85 million the year after. Secondly, even the rates En the Bill are far less onerous than those which their Government proposed. We have increased the tightness of capital transfer tax both since we came into office and since the tax was first introduced. I am not particularly pleased about that or proud of it, but we should get the facts right.
When the money is obtained simply by allowing the process of inflation to erode tax rates, it is absurd to say that to try, however imperfectly, to put that right is to give money to the rich. It is a ridiculous comparison and stands logic, fairness and honesty on their head to a degree that makes one suspect every word that the hon. Member for South Ayrshire (Mr. Foulkes) said.
§ Mr. Robert Sheldon
The hon. Gentleman has put on record the letter that he wrote to me explaining the errors that he made in his Second Reading speech on 6 April, but he has not referred to one point which he made in that speech and which I questioned at the time. He has just spoken of ridiculous comparisons. One of the comparisons which he made was with the yield of the tax in 1975. That was the year of the tax's introduction. It was not a full year. The following years are the proper basis of comparison, not the year when a tax is introduced.
§ Mr. Ridley
I can give the right hon. Gentleman the figures: 1975–76, £330 million; 1976–77, £383 million; 1977–78, £398 million. Those were the three years when the net real yield of the tax declined.
The hon. Member for Colne Valley (Mr. Wainwright) made a fair point. It is true that we have tried to reduce the burden on those who make life-time transfers. We have not had the resources to do other than to allow the burden on death transfers to increase.
Two organic changes have taken place in the structure of the tax and are carried further in the Budget. The first 817 is a change from relieving the smaller estates and putting a higher burden on the bigger ones. The second is relieving life-time transfers and putting a slightly heavier burden on transfers at the time of death.
My hon. Friend the Member for Croydon, South (Sir W. Clark) was going to move an amendment urging us to go further in the direction of aiding life-time transfers. For the sake of the Committee he kindly did not move it, but it is the direction in which I think it is right to go.
§ Mr. Richard Wainwright
Can the hon. Gentleman confirm that the schedule provides that for the largest dispositions under life-time transfers the real rate of tax is reduced compared with what it was in 1975?
§ Mr. Ridley
I cannot confirm or deny that. I shall check the figures and let the hon. Gentleman know.
The tax, alas, bears more heavily on taxpayers than it did when it was introduced and than it did when we came to power. We have tried to do what we can, within a tight economic situation, to make it fairer and more acceptable. To compare it with other aspects of fiscal and financial policy is to miss one vital matter—that if such taxes become unacceptable to the successful, they will not stay here. If there are any people who will help widows and the poor, they are those with the ability and the power to create wealth. To put burdens upon them beyond what they will bear without going away is deliberately to condemn the very people that I am trying to help—I sometimes wonder whether the hon. Gentleman is—to a worse position in future through his blind prejudice and stupidity.
§ Mr. Cook
I believe that the Committee is entitled to a response to the Financial Secretary's speech. He concluded by attempting to suggest that the tax on capital transfer was a tax on success. It appears that he was not listening when I opened the debate on the question whether the clause should stand part of the Bill. The great majority of the estates that come within the scope of CTT have been achieved by the accident of birth and not by success, business endeavour or hard work. Those who are born wealthy are those who die wealthy, and likewise those who die wealthy were born wealthy.
Over a period, Governments of both parties have reduced the yield from the tax on capital and there has therefore been an increase in the tax on income. By and large it is income that is the product of hard work. It is income that is obtained by success and by those who endeavour, and it is they who have to pay a higher rate of tax because those who were born with large amounts of capital pay less tax.
The Minister did not attempt to address himself to the questions asked by my right hon. and hon. Friends. In the clause we are being asked to give away £85 million to those who are liable to CTT. The Committee has asked properly and legitimately why we should be able to find £85 million for those with estates in excess of £100,000 when we cannot find £85 million for widows under 65 years and for those who are unemployed. We have had no answers to our questions because the questions are unanswerable. For that reason, we propose to divide the Committee and to seek to strike the clause from the Bill.
§ Question put, That the clause stand part of the Bill:—
§ The Committee divided: Ayes, 155, Noes 74.820
|Division No. 134]||[11.01 pm|
|Adley, Robert||Macfarlane, Neil|
|Alexander, Richard||MacGregor, John|
|Alison, RtHonMichael||MacKay, John (Argyll)|
|Alton, David||Maclennan, Robert|
|Ancram, Michael||McNair-Wilson, M.(N'bury)|
|Aspinwall, Jack||McQuarrie, Albert|
|Atkins, Rt Hon H. (S'thome)||Major, John|
|Banks, Robert||Marland, Paul|
|Beaumont-Dark, Anthony||Mather, Carol|
|Beith, A.J.||Maude, Rt Hon Sir Angus|
|Bendall, Vivian||Mawhinney, DrBrian|
|Benyon, Thomas(A'don)||Maxwell-Hyslop, Robin|
|Benyon, W. (Buckingham)||Mellor, David|
|Berry, HonAnthony||Meyer, Sir Anthony|
|Bevan, David Gilroy||Mills, Iain(Meriden)|
|Biffen, Rt Hon John||Mills, Peter (West Devon)|
|Blackbunr, John||Mitchell, David (Basingstoke)|
|Body, Richard||Morrison, HonC. (Devizes)|
|Boscawen, HonRobert||Murphy, Christopher|
|Brinton, Tim||Myles, David|
|Brooke, Hon Peter||Neale, Gerrard|
|Brown, Michael(Brigg&Sc'n)||Nelson, Anthony|
|Buchanan-Smith, Rt. Hon. A.||Neubert, Michael|
|Budgen, Nick||Newton, Tony|
|Cadbury, Jocelyn||Normanton, Tom|
|Carlisle,John (Luton West)||Onslow, Cranley|
|Carlisle, Rt Hon M. (R'c'n)||Page, Richard (SW Herts)|
|Chapman, Sydney||Parris, Matthew|
|Clarke, Kenneth (Rushcliffe)||Patten, Christopher(Bath)|
|Cockeram, Eric||Penhaligon, David|
|Cope, John||Pollock, Alexander|
|Crouch, David||Price, SirDavid (Eastleigh)|
|Dorrell, Stephen||Prior, Rt Hon James|
|Dover, Denshore||Renton, Tim|
|Dunn, Robert(Dartford)||Ridley, HonNicholas|
|Eggar, Tim||Ridsdale, SirJulian|
|Elliott, SirWilliam||Rifkind, Malcolm|
|Faith, MrsSheila||Roberts, Wyn (Conway)|
|Fenner, MrsPeggy||Roper, John|
|Fookes, Miss Janet||Rossi, Hugh|
|Gardiner, George(Reigaye)||Sainsbury, Hon Timothy|
|Goodhart, SirPhilip||Sandelson, Neville|
|Goodlad, Alastair||Shaw, Giles (Pudsey)|
|Gow, Ian||Shelton, William(Streatham)|
|Gray, Hamish||Shepherd, Colin(Hereford)|
|Greenway, Harry||Sims, Roger|
|Griffiths, E. (B'ySt.Edm 'ds)||Smith, Cyril(Rochadle)|
|Griffiths, Peter Portsm'thN)||Speed, Keith|
|Grimond, Rt Hon J.||Speller, Tony|
|Grylls, Michael||Spence, John|
|Hamilton, Hon A.||Sproat, Iain|
|Hamilton, Michael (Salisbury)||Stanbrookm, Ivor|
|Hawksley, Warren||Steen, Anthony|
|Heddle, John||Stevens, Martin|
|Hicks, Robert||Stewart, Ian (Hitchin)|
|Hogg, Hon Douglas(Gr'th'm)||Stradling Thomas, J.|
|Horam, John||Taylor, Teddy (S'end E)|
|Howells, Geraint||Temple-Morris, Peter|
|Hunt, David (Wirral)||Thomas, Rt Hon Peter|
|Hunt, John(Ravensbourne)||Thompson, Donald|
|Hurd, RtHonDouglas||Thorne, Neil (IlfordSouth)|
|Jenkin, Rt Hon Patrick||Thornton, Malcolm|
|Jopling, RtHonMichael||Townend, John(Bridlington)|
|Kaberry, SirDonald||Trippier, David|
|Kershaw, Sir Anthony||van Straubenzee, Sir W.|
|Lamont, Norman||Viggers, Peter|
|Lang, Ian||Waddington, David|
|Lawrence, Ivan||Wainwright, R. (ColneV)|
|Lennox-Boyd, HonMark||Waller, Gary|
|Lester,Jim (Beeston)||Ward, John|
|Lloyd, Peter (Fareham)||Watson,John|
|Lyons, Edward (Bradf'dW)||Wickenden, Keith|
|Wilkinson, John||Tellers for the Ayes:|
|Williams, D. (Montgomery)||Mr. Selwyn Gummer and|
|Wolfson, Mark||Mr. Tristan Garel-Jones|
|Allaun, Frank||Dean, Joseph (Leeds West)|
|Atkinson, N. (H'gey)||Dixon, Donald|
|Booth, Rt Hon Albert||Eadie, Alex|
|Bray, Dr Jeremy||Evans, Ioan (Aberdare)|
|Brown, Hugh D. (Provan)||Evans, John (Newton)|
|Buchan, Norman||Foot, RtHonMichael|
|Callaghan, Jim (Midd't'n&P)||Foster, Derek|
|Campbell-Savours, Dale||Foulkes, George|
|Clark, Dr David (S Shields)||George, Bruce|
|Cocks, Rt Hon M. (B'stol S)||Hamilton, James(Bothwell)|
|Concannon, Rt Hon J. D.||Hamilton, W. W. (C'tral Fife)|
|Cook, Robin F.||Harrison, Rt Hon Walter|
|Craigen, J. M. (G'gow, M'hill)||HomeRobertson, John|
|Cryer, Bob||Homewood, William|
|Cunliffe, Lawrence||Hooley, Frank|
|Dalyell, Tam||Hughes, Robert (Aberdeen N)|
|Davies, Ifor (Gower)||John, Brynmor|
|Davis, Terry (B 'ham, Stechf'd)||Jones, Rt Hon Alec (Rh 'dda)|
|Jones, Dan (Burnley)||Rooker, J. W.|
|Lamond, James||Rowlands, Ted|
|Leighton, Ronald||Sheerman, Barry|
|Lewis, Ron (Carlisle)||Sheldon, Rt Hon R.|
|Litherland, Robert||Shore, Rt Hon Peter|
|Lyon, Alexander (York)||Skinner, Dennis|
|Mc Donald, Dr Oonagh||Spearing, Nigel|
|McKay, Allen (Penistone)||Stoddart, David|
|Mc William, John||Stott, Roger|
|Marshall, D(G'gowS'ton)||Straw, Jack|
|Maxton, John||Thomas, Dafydd(Merioneth)|
|Maynard, Miss Joan||Thorne, Stan (PrestonSouth)|
|Millan, Rt Hon Bruce||Tinn, James|
|Mitchell,Austin(Grvmsby)||Walker, Rt Hon H.(D'caster)|
|Morris, Rt Hon C. (O'shaw)||Welsh, Michael|
|Morton, George||White, Frank R.|
|Newens, Stanley||Woolmer, Kenneth|
|Parry, Robert||Tellers for the Noes:|
|Price, C. (Lewisham W)||Mr. Frank Haynes and|
|Robinson, G. (Coventry NW)||Mr. Hugh McCartney.|
§ Question accordingly agreed to.
§ Clause 75 ordered to stand part of the Bill.