HC Deb 18 March 1982 vol 20 cc512-40 `The Secretary of State shall in preparing the increase in unemployment benefit in November 1982 include in it such sum as is necessary to make good the effect of section 1(1) and 1(2) (a) of the Social Security (No. 2) Act 1980 upon such benefit.'.—[Mr. John.]

Brought up, and read the First time.

Mr. John

I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker

As I have said, with this it will be convenient to discuss new clause 13—Unemployment benefit increases.

Mr. John

On this occasion I am on an easy wicket because I am given to understand, on no less an authority than the hon. Member for Braintree (Mr. Newton), the Under-Secretary of State for Health and Social Security, that provided I quote the words of the right hon. Member for Wanstead and Woodford (Mr. Jenkin), who is now Secretary of State for Industry but who was Secretary of State for Social Services, we shall all fall about in paroxysms of agreement.

The purpose of the new clause is to restore the 5 per cent. shortfall in unemployment benefit in lieu of taxation. The shortfall occurred because of the provisions in the Social Security (No. 2) Act 1980. There are two main reasons why restoration should take place. First, we should prevent two Secretaries of State from being open to the charge of having misled the House. In Committee on 30 March the right hon. Member for Wanstead and Woodford, who was the then Secretary of State for Health and Social Security, said: The hon. Gentleman asked specifically about abated unemployment benefit. That will make no difference, because as the unemployment benefit comes into tax so the rationale for the 5 per cent. abatement ends. It is an interim scheme in lieu of taxation. The one will give way to the other."—[Official Report, Standing Committee B; 30 March 1980, c. 526]

There is a proposal to tax the benefit in July, and the effect of the Budget was not to restore the abatement. Therefore, the decision has been made by the Government to give the direct lie to what the right hon. Gentleman said on that occasion. If that is so, the House has been misled.

In 1981, the following year, in the course of discussing the Finance Bill, the present Secretary of State for Energy, who was then Financial Secretary to the Treasury, said, with the ebullience for which he is famous, that it would be all right and that no firm decision had been taken. He had softened it up considerably by that time. He said that it would not matter because the House would have an opportunity of discussing the issue upon the report on public expenditure, which would be produced to the House and debated in the House long before April 1982 when the decision fell to be made.

Whatever else has happened prior to the Budget and following the Budget, that has certainly not happened. If that is not remedied by the restoration of the abatement. I believe that the Secretary of State for Energy has also misled the House.

The new clause will also prevent the Prime Minister from being embarrassed. In answering a question on 16 March she said: Final decisions on that matter have yet to be taken."—Official Report, 16 March 1982; Vol. 20, c. 194.] I do not know what more final decision one could have than a Budget that decides consciously not to restore the abatement. That is absolutely final and unless the House passes this new clause nothing can be done before the July date on which the matter comes before the House.

The Government will say that they will wait for the Finance Bill, but we all know what Governments and Finance Bills are about, and they will seize any opportunity tonight to wriggle out of an adverse vote in the hope that when the Finance Bill is being debated they can restore their shattered morale and cover up the speeches rather more successfully. But the Government, through the then Secretary of State for Social Service, are clearly and unambiguously on record as saying that when unemployment fell to be taxed that would mean the end of the reasoning for the abatement of 5 per cent. and it would be made good.

Mr. Douglas Hogg (Grantham)

The right hon. Gentleman made that statement in firm terms, but I take it that he has not overlooked the statement made by the then Secretary of State on Second Reading on 15 April 1980 when he said in clear terms that he could not "give a categorical assurance" that the abatement would be made good when these benefits were brought into taxation.

Mr. John

The hon. Gentleman can make his own judgment about this. I am talking about a specific statement that was made in Committee.

Mr. Chris Patten (Bath)

Will the hon. Gentleman remind my hon. Friend the Member for Grantham (Mr. Hogg) that the statement that he read out earlier from the former Secretary of State was made after the statement to which he has just referred? I should have thought that in legal and other senses the second statement took precedence.

Mr. John

There is a maxim that, where the equities are equal, the first in time prevails, but second thoughts on this subject are obviously to be taken as the last guide given to the House. It was in unambiguous terms. Therefore, the Government's word has been pledged on the matter, and I believe that Conservative Members accepted it in that sense.

The second reason for restoration of the 5 per cent. abatement is that it is right that it should be restored, and I hope that I take the hon. Member for Grantham (Mr. Hogg) with me on that. First, the public were led to expect that and, secondly, if it is not done there is an element of a double penalty. The unemployed will have had the 5 per cent. abatement and now will have the abated amount taxed, so that in a real sense they will have paid, not in lieu of taxation but in addition to taxation, 5 per cent. of their income.

Third, although I concede that there is a difference between the Conservative and Labour Parties as to whether the present level of unemployment is necessary, there can be no difference between us about the fact that it is not the fault of the unemployed that they are unemployed. Therefore, they should not be penalised for something that is outside their control and they should not be treated unfairly at a time that is bound to be a grievious and harrowing experience. Those are the arguments for.

The two arguments that I anticipate the Minister, if he can bring himself to be this unkind, will advance, are, first, that this is an unsuitable vehicle for this reform. However, if one needs to go to hospital, one does not complain of driving in a Ford Popular merely because it is not a Rolls-Royce. This is a vehicle by which the reform can be carried out and it is the best vehicle that we have. We must anticipate the July deadline because the review promised is not good enough and this is the only sensible legislative agreement.

The expense is the second argument. The right hon. Member for Blaby (Mr. Lawson) said that £50 million was a considerable sum, as has the present Secretary of State. I remind the House that the Government have said that the cost of restoring this abatement will be £20 million this year and £60 million in a full year. That has to be set against the background that the taxation of unemployment benefit is expected to yield £525 million in a full year. The abatement is peanuts compared to that.

I shall end by quoting to the House the words of that infallible gentleman, the right hon. Member for Wanstead and Woodford, when discussing the Social Security (No. 2) Bill on 1 May 1980, which is even later than the quotation that I last made, for the benefit of the hon. Member for Grantham. He said: However, the yield from proper taxation will be three times what will be saved by clause 1 … When the benefits come into tax, the revenue will be there."—[Official Report, Standing Committee B, 1 May 1980; c. 1104.] He was then making an argument that when taxation was imposed in full the Government would have the money to restore the abatement. The Minister of State should make good the Government's pledge and, if he does not, the House should impose it on the Government.

Mr. Douglas Hogg

As some hon. Members may have seen, I am one of those who have put their names to new clause 13. Therefore, I approach the debate with considerable sympathy for the Opposition's view and for the view of my hon. Friends the Members for Bath (Mr. Patten) and Chippenham (Mr. Needham).

Mr. Chris Patten

Why not name the rest?

Mr. Hogg

It would be far too complicated because there are many right hon. and hon. Members who take this view.

The arguments are very powerful. The hon. Member for Pontypridd (Mr. John) stressed that the position of the unemployed was not an enviable one and that their standards of living, whether measured in absolute, real or relative terms, had fallen over the past months. I agree; there is a powerful case to be made for uprating the value of the unemployment benefit.

If one were to do this, the obvious and logical way that the House would wish to do so would be by making good the 5 per cent. abatement. There is no doubt that many hon. Members, and many people outside the House, believed that when unemployment benefit was brought into taxation, as is now the case, the abatement would be made good. Therefore, one approaches this issue with considerable caution. At the same time, one is entitled to have a view and a regard to the Government's broad monetary and financial strategy. The question is whether the Government's attitude now is manifestly inconsistent with what they have said in the past.

If I were satisfied that my right hon. and hon. Friends speaking from the Front Bench had, in 1980 or any other time prior to today, given an unqualified statement to the effect that the abatement would be made good, I would have supported new clause 4.

Mr. Chris Patten

At this point of his argument could my hon. Friend define for the benefit of hon. Members, so that we can follow it more clearly, the words "interim" and "temporary"?

Mr. Hogg

I suspect that my hon. Friend the Member for Bath is referring to a question by a Labour Member and an answer by the Under-Secretary in reply to it. Clearly, the then Under-Secretary used the phrase "an interim measure". There is no doubt that during the Standing Committee procedure the then Secretary of State said that the abatement would be a temporary one. That was in reply to a very convoluted and complicated question proposed by the hon. Member for Birmingham, Perry Barr (Mr. Rooker) who now sits on the Opposition Front Bench. I do not think that that statement by the then Secretary of State has an unqualified meaning because it was a response to a particular question.

5.30 pm
Several Hon. Members


Mr. Hogg

I give way to the hon. Member for Perry Barr.

Mr. Rooker

I am grateful to the hon. Gentleman for giving way. I accept that there is some force in his argument. In cross-party debates in the Chamber and in Committee, when Ministers are under pressure, we should believe what we are told in reply to questions. However, it was not as simple and straightforward as the hon. Gentleman suggested. The Department of Health and Social Security press release dated 28 March 1980, the day the Social Security (No. 2) Bill was published, stated: and is an interim measure in lieu of taxation". That phrase became part of the terminology used by Ministers.

The hon. Gentleman said that an unqualified commitment by a Minister would have had some force. I give him date, time, place and Minister. On 9 February 1982 the Minister for Social Security said The abatement will be restored as soon as the benefits are brought into taxation. That undertaking is unqualified."—[Official Report, Standing Committee B; 9 February 1982, c. 422]

That was said in reply to my question about injury benefit, which was also covered by the 5 per cent. The Minister nods his head. He said that the abatement would be restored as soon as the benefits were brought into taxation. If that is good enough for injury benefit, why not for unemployment benefit?

Mr. Hogg

I am prepared to accept the point made by the hon. Gentleman, but the reply was confined to the specific question put to my hon. Friend.

Several Hon. Members


Mr. Hogg

I shall give way in a moment, I have never been so popular. I am delighted that this should be the case but before giving way I should like to develop my argument.

Mr. Peter Bottomley

Will my hon. Friend give way on this specific point?

Mr. Hogg

On this point, yes. I am a patient man.

Mr. Bottomley

I am grateful to my hon. Friend, as are many hon. Members. On 15 April my right hon. Friend, the then Secretary of State, said that there are the benefits that ought to be taxed but are not. We propose that pending the introduction of proper taxation it would be right to go for an interim scheme providing for a limited uprating … next November."—[Official Report, 15 April 1981; Vol. 982, c. 1034.]

That led many of my right hon. and hon. Friends to support the interim scheme. We knew that giving up a small amount of social security in lieu of a larger amount of taxation that would be put right when the position was reversed, and that a large amount of taxation would come in for a small amount of relief, putting back the 5 per cent.

Mr. Hogg

I am grateful for that intervention. There is no doubt—

Mr. Richard Needham (Chippenham)


Mr. Hogg

I have given way three times in three minutes. I shall give way in a moment.

There is no doubt that many hon. Members, and people outside the House, believed that the abatement would be made good when unemployment benefit was brought into taxation. There is also no doubt that Ministers, have made statements that gave colour to that belief. However, the House must refer to what was said on Second Reading. If one seeks to define the Government's intention one must refer to the Second Reading.

Mr. Needham


Mr. Hogg

I shall give way in a moment. I shall give way to as many hon. Members as I can, but I intend to make my point first.

In order to determine and identify the Government's intention one must refer to what was said in reply to carefully considered questions on Second Reading. [HON. MEMBERS: "Rubbish."' Hon. Members say "rubbish", but that is the purpose of a Second Reading debate.

Mr. Patrick Cormack (Staffordshire, South-West)


Mr. Hogg

Second Reading gives the Government, the Opposition, and even—

Mr. Cormack


Mr. Hogg

My hon. Friend will have to sit down because I do not intend to give way.

Second Reading enables the Government to state their policy. My right hon. Friend, the then Secretary of State, was asked whether he could give an unqualified assurance that the abatement would be made good. On two separate occasions during his Second Reading speech, in columns 1038 and 1041, he said in clear and unequivocal language that he could give no such assurance.

Mr. Needham

I can understand that the question that my right hon. Friend the then Secretary of State was asked by the hon. Member for Birmingham, Perry Barr (Mr. Rooker) may have been convoluted. That would not surprise me. The important issue is the answer that later came forward in Committee on 30 April when my right hon. Friend stated that as the unemployment benefit comes into tax so the rationale for the 5 per cent. abatement ends. It is an interim scheme in lieu of taxation. One will give way to the other."—[Official Report, Standing Committee B, 30 April 1980, c. 526.]

My hon. Friend cannot wriggle out of this any longer. He has done well. Is it not time that he now sat down and gave in?

Mr. Hogg

My hon. Friend does me an injustice if he thinks for a moment, that I had not taken account of that point. I was aware of what the then Secretary of State said. I turned therefore to the debates in the other place. I turned to 2 June 1980—later, of course, than the Standing Committee proceedings to which my hon. Friend has just drawn attention. On that occasion my right hon. and noble Friend Baroness Young made absolutely clear in column 1190 that no assurances could be given concerning the making good of the 5 per cent. abatement when the benefits were brought into tax.

I am extremely sorry that the Government are not responding to the request made by my right hon. and hon. Friends and by Opposition Members to restore the 5 per cent.—[HON. MEMBERS: "And by you."] And me. The question is whether my right hon. and hon. Friends should vote against their party on this issue. Opposition Members may laugh but my right hon. and hon. Friends should consider this question. If my right hon. and hon. Friends had been deceived by the Front Bench of our party, they would be entitled to vote against the Front Bench of our party. But any fair minded hon. Members will say, without qualification or hesitation, not to say deviation, that the Government did not mislead the House.

I approached the matter with great caution because I was afraid that the Government had misled the House. They had not. Any fair reading of the Second Reading debate makes that clear. That being so, I hope that my right hon. and hon. Friends who take a contrary view will not push their view to a Division.

Mr. Ennals

I do not think that any hon. Member, seeing the name of the hon. Member for Grantham (Mr. Hogg) attached to new clause 13, could have expected the sort of speech that we have just had to put up with. The hon. Gentleman began like an overgrown schoolboy. The theory that he enunciated was absolute nonsense. If he says that the only time that we are to take Ministers seriously is during Second Readings and not at any other time—when they make statements in the House or when they are directly questioned in Standing Committee and give the sort of absolute assurance that the Minister of State gave and does not deny that he gave—this turns our parliamentary proceedings into sheer nonsense. It means that we place no credence whatever on assurances that are given and recorded in Hansard. We have three clear examples of what was the intention, not only of the former Secretary of State, the right hon. Member for Wanstead and Woodford (Mr. Jenkin) but also of the Minister of State himself.

I believe that this reflects the attitude of mind of the Front Bench and many Conservative Members towards the unemployed. I exonerate the hon. Member for Beeston (Mr. Lester) and I congratulate those who have tabled new clause 13. I hope that every one of them, except the hon. and learned Member for Grantham who says that his greatest loyalty is not to what he believes in—[Interruption.] Is he not learned? He is trying to be learned. The rate he is going he never will be learned.

Mr. Hogg

I think that the right hon. Gentleman will be very pleased to know that I am not learned.

Mr. Ennals

I am relieved. [AN HON. MEMBER: "Not as relieved as the courts."' This is a serious issue that we are debating. Many Conservative Members have shown a great deal of courage in standing up for their convictions. I hope and believe that most of them will demonstrate their conviction when they go into the Lobby.

We are faced with a massive unemployment problem. We know from the Chancellor that the figure will go on increasing. The problem of unemployment seems to be relentless. It is enough for a man, or a woman, or a youngster to be unemployed, without forcing them lower and lower into poverty. We know perfectly well that for a person to be unemployed creates not only a great loss of personal dignity, but creates problems within the family and uncertainties about the whole future. It is a waste of skill and experience. On top of that, to push people deeper and deeper into poverty is intolerable. Of course, the situation might be worse had it not been for the pressure of Conservative Members. It might have been that the unemployed would have suffered a 7 per cent. increase instead of a 9 per cent. increase. We must be grateful for small mercies.

Short term benefits will come within the range of taxation in 14 weeks from now and it is sheer cruelty to unemployed people and their families not to restore the 5 per cent. cut made in the Social Security Act (No. 2) 1980. In addition, there is the squeeze on the child allowance that is paid to the unemployed. If we add that on to the fact that earnings-related supplement has ended—in itself a betrayal of an entitlement—when it was at an average rate of £8 per week for six months, an unemployed man with a wife and two children will get £52.75. If that had kept pace with inflation, the figure would have been £58.35. That means a loss of £5.60. Many people may say that £5.60 is not much, but it is a great deal if one is unemployed, with the rising costs of fuel prices and the certainty of rising food prices. It is creating great hardship, which every one of us must know about from our constituency advice bureaux. To be unemployed is a bitter blow indeed. However, to force those who suffer that blow to suffer a second blow of intolerable poverty is one that no Government who actually care for the welfare of this massive number of unemployed people could be expected to be forgiven for. The Government will not be forgiven, let alone forgotten, if the amendment is not carried or if it is not dealt with in the Finance Bill.

We know that the funds are available. There is no point in the Minister saying that he has not got the money. Those on the higher earnings list have had great benefit from the Budget. A small proportion of that benefit should be given to the unemployed. That is only fair in a system in which the unemployed are being pushed down and the rich are being pushed up. Surely, in the name of social justice, that action should be taken. I hope that the new clause will be carried. In addition, I welcome the initiative taken in new clause 13, which may be slightly different, but the principle is the same.

5.45 pm
Mr. Jim Lester (Beeston)

I shall speak briefly and seriously about a matter that is of great concern to most hon. Members. We approach the debate with a heavy heart. The fact that we have to debate this issue now is not of our making. However, given that it has arisen, we must express our views.

There is no denying the facts spelt out by the hon. Member for Pontypridd (Mr. John). Perhaps the only difference between us is the order of seriousness in which we consider them. The first and most important point is that all hon. Members, as well as the public, recognise that unemployment is the major issue bothering us all. It is the top of every poll and is a matter of grave concern in every area. Given that unemployment is still rising by 30, 000 per month, we are debating a key issue. The Government must be seen to be fair. That is a virtue and not a fault and no matter where it is being considered the Government must be seen to be transparently fair in the way that they treat the unemployed.

Many of us believe that in principle it is right to tax short-term benefits. We have campaigned for that, as it helps the poverty trap and the "Why work" syndrome. However, if it is introduced with any suggestion of sleight of hand and of bad faith, the issue will be clouded from the beginning. When we try to explain a completely new approach to short-term benefits to confused and puzzled constituents, it will be difficult to get the principle accepted if there is even a hint of cheating.

Although we may read Hansard and quote each others' words in Committee, what do the words mean? What does "temporary", "provisional", "in lieu", or "interim" mean? According to the Queen's English they mean that the measure was temporary, interim, provisional and not permanent.

Mr. Arthur Lewis (Newham, North-West)

Is the hon. Gentleman aware that I am the only hon. Member in the House now who was present when a Labour Government temporarily imposed health charges? That was in 1947. They have been "temporary" ever since.

Mr. Lester

I am grateful to the hon. Gentleman for those comments. I sat through the whole debate on the Social Security (No. 2) Bill. As much as any hon. Member, I understand what we meant, said and tried to put over. The one proviso was that we could not look two years ahead and that we would consider the matter at the time that taxation was introduced and in the light of available resources.

Many of my right hon. and hon. Friends judge those resources to be available. If they are not there and the Government intend to maintain the abatement, they should say so clearly. Failing that, they must tell us how they will achieve what they have said they will do. If the Minister says that the new clause is not the right vehicle and that he can come along with something better, which contains the commitment to do what the Government said they would do, I shall reconsider the way in which I shall vote. This is, personally, a matter of principle and of conscience. I deeply regret to say that if we do not receive a satisfactory assurance, I shall vote in favour of the new clause.

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

I shall not repeat what has been said before in this debate and on previous occasions. I simply say this. The Government face today not just another of the very difficult choices that they have to make in the course of forming a Budget, but a decision about which, if they are to be true to the integrity of Government, there is really no choice. They must stand by the impression that they created in full knowledge of what they were doing when the abatement was introduced.

The integrity and morality of Government is far more important and far-reaching than almost any of the considerations that have been mentioned today. There is no more widespread or corrosive belief among my more cynical constituents than that in any battle with the individual the Government will always win in the end, and that they will get the individual both ways. That is the impression that would be left if the abatement were not removed when taxation was introduced. The firm impression will be left in the minds of most people that the Inland Revenue, the Government and the taxation system know no morality—they are simply out to get the individual whenever they can, and twice over if possible. The harm that that will do not just to this Government but to all Governments, to the ability of those employed in the Inland Revenue to do their job properly and to the confidence of our citizens in the system of Government will be very far-reaching indeed. If I showed the reports of any of these exchanges to my constituents, I am sure that they would be entirely convinced that the Government are committed by what they said before, and they would almost certainly describe the speech of the hon. Member for Grantham (Mr. Hogg) as a clear attempt to wriggle out of a commitment.

Mr. Douglas Hogg

Will the hon. Gentleman give way?

Mr. Beith

No, I shall not give the hon. Gentleman any further opportunity to wriggle. He has made his capacity in that respect quite clear enough. He implied that a Member should vote against his own Government only if they have systematically and deliberately misled him. In my view, Conservative Members would be quite right to vote today, not against their party but for the integrity of Government, and to stand by the commitments that the Government made a year ago.

Mr. Kenneth Lewis (Rutland and Stamford)

I wish to comment first on the remarks of my close neighbour my hon. Friend the Member for Grantham (Mr. Hogg). If the idea that what the Minister said on Second Reading should be applied and anything that he said in Committee disregarded were adopted in court, litigants would save a great deal of money. I cannot imagine that my hon. Friend would accept for one moment that his first speech in court was all that mattered.

I have considered what was said in Committee. The whole idea of the Committee stage is to enable both sides of the House to persuade the Government to change their mind on various aspects of the Bill. Whatever reservation the previous Secretary of State announced on Second Reading was no doubt imposed upon him by the Treasury. He could not make a commitment, and that is understandable. Ministers do not make decisions of detail on Second Reading because there is time to do that later. He then moved from that position in Committee, and the present Secretary of State has now also come up against a Treasury veto.

The Budget has gone a long way in many regards to help the unemployed both through the general increase and the 2 per cent. concession, and we are grateful for that. There is time between now and later this year for my right hon. Friends to put right the little matter of the 5 per cent. This is important for the Government if on no other grounds then it is important to the Government on moral grounds, and it is certainly important to some Conservative Members on moral grounds. The 5 per cent. provision was made to assist the Government's plan to introduce taxation of unemployment benefit. Some Conservative Members might not have voted for that if they had been told that the 5 per cent. take-off was to be permanent and not just temporary, although I agree that taxation of unemployment benefit when other income is received during the year was an important step, and a right and proper step. I am not sure how much revenue it will bring in, but it will be quite considerable.

The Minister should tell the Treasury that the 5 per cent. should be put back because it will cost petty cash in terms of the total budget, and limited petty cash at that. It is not worth selling one's soul for a mess of potage. In moral terms, that is what the Government will do if they do not put this matter right.

I have no intention of voting with the Opposition. I shall abstain unless, as I hope, the Secretary of State and Treasury Ministers have regard to the pleas of Conservative Members. There is time to put the matter right in the Finance Bill. I hope that it will be put right. It will cost very little to do that, and the cost of not doing it would redound to the detriment of the Government and all of us.

Mr. Reg Race (Wood Green)

I never thought that I would have reason to quote the right hon. Member for Daventry (Mr. Prentice) in aid of an Opposition amendment to a social security Bill. If the hon. Member for Grantham (Mr. Hogg) wants any further indication of the Government's intention on the matter, I refer him to the Second Reading debate on 15 April 1980, when the right hon. Member for Daventry said: we have a rough and ready substitute to last until 1982, when we hope to bring in proper taxation."—[Official Report, 15 April 1980; Vol. 982, c. 1142.] That is an unequivocal statement, as was the Secretary of State's statement in Committee. When the Committee sat all night, he wriggled a great deal in defending the Government's policy of cutting social security benefits to the unemployed and strikers, removing earnings-related supplement and all the rest of it in that horrible legislation.

It is disgraceful that the Government have not come forward with a scheme to reinstate the 5 per cent. cut if only in response to the recent revelations of the Institute of Fiscal Studies that during the two and a half years of office of the present Government the unemployed have been the group in society that has lost out most in relative terms. The graph in The Sunday Times, the source of which was the figures of the Institute of Fiscal Studies, shows that the real standard of living of the unemployed has fallen sharply both in relation to that of other groups and in absolute terms.

The standard of living of the unemployed should be compared with the pay increases that have been awarded to those in higher income brackets, such as company directors. Those statistics were quoted by the IFS, not anyone else. The comparison between the two groups is shocking. I hope that Conservative Members will take note of that.

It is easy for Opposition Members to be critical about the way in which the Government are treating different sections of the population because the Government are treating the poor and the unemployed very badly. Now is the time for Conservative Members to do something about it. It is left once again to the Finance Bill, this may prove to be the last opportunity to do something about the problem as we do not know the composition of the Finance Bill Committee. The hon. Member for Rutland and Stamford (Mr. Lewis) has signalled his intentions so plainly that the Government Whips may not be too keen to put certain Conservative Members on the Committee.

Mr. John

Does my hon. Friend believe that it is technically possible for a Finance Bill concerned with taxation to deal with what is essentially a question of uprating? I do not believe that it is.

Mr. Race

My hon. Friend is a lawyer; I am not. I take his advice on these matters. I am sure that he is right.

There have been several threatened revolts during the past two and a half years from the so-called "wets" in the Conservative Party about social security benefits. None has materialised. If they do not come into the Lobby and vote for the new clause, that will be yet further evidence that they do not mean what they say and do not really want to change the Government's policy. I would regret that because we have a first class opportunity to defeat the Government on an essential matter for the unemployed. I hope that they will take the opportunity of voting with us.

6 pm

Mr. Cormack

The hon. Member for Wood Green (Mr. Race) did not do his case or our cause any justice. He is trying to make this a partisan matter, which it should not be. I sincerely hope that there will not be a Division. When my hon. Friend comes to the Dispatch Box, I hope that he will repeat the pledges that have been given before and that he will give an assurance that will enable new cluase 4 to be withdrawn. We know that new clause 13, which we put down, will not be called. The House could then proceed to the next part of the debate. That would be the logical, proper and honourable outcome to the debate.

If I have to vote, I shall vote for new clause 4. I shall be voting not for the the Labour Party or for the Oppositon, but for my constituents. I shall be voting to uphold a clear commitment that I believe the Government gave.

The hon. Member for Berwick-upon-Tweed (Mr. Beith) made a telling point. He said that an impression had been given. That was the most accurate way of describing it. An impression was clearly given, sedulously fostered and at no time denied. The clear and unequivocal impression that was given to me, to my hon. Friends who signed new clause 13 and to many others throughout the House and the country was that when the new system came into operation—a system in which many of us believe strongly—the abatement would come to an end. That is beyond doubt.

My hon. Friend the Member for Grantham (Mr. Hogg) made an extremely silly speech. It was a clever lawyer's speech. The Second Reading speech to which he referred was in itself unexceptional. On Second Reading, my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) said that at that stage he could not give an unequivocal undertaking—and nobody could quarrel with that—but from then onwards it has been clearly put about that when 1982 came things would be put right. The one good thing that the hon. Member for Wood Green did was to quote the speech of my right hon. Friend the Member for Daventry (Mr. Prentice). The matter should be put right and it should be done without the need for a Division.

The Government are not being fair if they put us in the position of having to vote against them. We do not wish to vote against them. We are grateful for the real and proper consideration given to many disadvantaged sections of the community in the Budget. To put us in the position of having to vote against our own Government, who have done so much that is good, merely because there is an abandonment of a clearly given undertaking, would be the most ridiculous and appalling thing for them to do. I beg of my hon. Friend to call the Division off. If he calls for a Division, he can rely on seeing me in the other lobby.

Mr. Andrew F. Bennett (Stockport, North)

It is clear that the debate is concerned with the integrity of the House of Commons. It is not a question of the specific words that were used by Ministers in the past; it is the clear impression that was created in the House of Commons, particularly in Committee.

There was a great deal of concern on the Social Security (No. 2) Bill in 1980 about the problems that were going to face the unemployed. We explored at considerable length the implications for the unemployed of the loss of earnings-related benefit. We went on to explore at considerable length the implications of the 5 per cent. cut in lieu of tax and to show how that was unfair to some people who, because they would be on benefit for most of the year, would not have had to pay tax on that income if it had been arrived at in other ways.

Because of the clear implications by Ministers in statements made both on the Floor of the House and in Committee we spent very little time on what would happen if the 5 per cent. cut and taxation were applied at the same time and on the double unfairness that would result. We were under the impression that when the proper taxation was implemented, the majority of people who would not have to pay tax on that level of income would be released from the 5 per cent. imposition and that certainly those who had the 5 per cent. cut imposed on them would not suffer because of taxation.

That was clear at that time. If hon. Members study the proceedings in Committee, they will see that we spent no time going into what would happen if both impositions were made, because hon. Members were clear that that was not the Government's intention at that time. Had we believed that that was not so, we would have spent time in Committee showing the unfairness of the double imposition of the 5 per cent. cut in lieu of taxation and taxation on top of that.

We have been told that the Government are to get a considerable amount of money as a result of taxing people who are unemployed for relatively short periods during the year and that there ought to be sufficient money to pay back those people who need the 5 per cent. In the first year the amount is estimated to be £20 million and in a full year £60 million. I am not sure whether that is net or gross. A considerable number of people who suffered the 5 per cent. cut had to have their unemployment benefit made up by supplementary benefit. Not only would the new clause give people justice; it would help to simplify the benefit system. We are trying to ensure that more people get unemployment benefit which is sufficient for them to survive without forcing them to claim extra from supplementary benefit.

There is a strong case to support the integrity of the House of Commons. Statements and promises made to the House should be fulfilled. There is also a question of simple justice. Finally, there is the administrative advantage of giving people unemployment benefit rather than insisting that they draw unemployment benefit from one office and have it topped up with supplementary benefit from another office.

I hope that the Government will accept the new clause or find some way of carrying out this policy by July.

Mr. Chris Patten

Like some of my hon. Friends, I was a little surprised by the speech of my hon. Friend the Member for Grantham (Mr. Hogg), particularly as he had put his name to new clause 13. However, I admired his professional qualities. If one had a really bad case—say, one had had too much to drink and had driven into the chief constable's wife's car—then my hon. Friend, even though he is not learned yet, would be a person to whom one would readily turn.

I deplore the suggestion that has been made, as political scientists say about the Cabinet, on the fringes of this debate, that those of us who take the view that we do are acting in a way to embarrass the Government and to make life politically difficult for them.

We have the assurance of my right hon. Friend the Member for Blaby (Mr. Lawson) in May 1981 that the decision, of course, will be made clear and announced publicly well before April 1982, when taxation of benefits under the clause comes into effect."—[Official Report, 11 May 1981; Vol. 4, c. 513.] I do not think 10 days or a fortnight, even in my right hon. Friend's case, could be described as "well before".

If there is any difficulty or embarrassment, it is of the Government's own making. It will also be because—although I hope it will prove not to be the case when my hon. Friend winds up the debate—they are considering breaking not only their word, but the word that I gave on their behalf in letters to my constituents. My right hon. Friends and some of my hon. Friends on the Government Front Bench may be prepared to break their word on this matter, but I am disinclined to break mine.

Few issues in politics are clear and simple. This issue falls into that minority which are crystal clear and childishly simple. We have discussed the matter at some length this evening. The unemployment benefit was cut by 5 per cent. in November 1980 in lieu—as the phrase goes, and it runs through the discussion like a thread—of taxation.

There is no shortage of quotations making that point. I have two pages of them, and I could read them all, working out how they were timed in relation to what was said on Second Reading. If the only pledges that mattered in politics were those made by Ministers on Second Reading, a number of expressions—such as "8.4 per cent." and the devaluation pledge—which have dominated political discussion in the past few years would not have had a place in the hustings. Therefore, I find that argument about the Second Reading pledge and the distinction between it and other political language rather curious.

To me, "interim" and "temporary" mean, as they do to my hon. Friend the Member for Beeston (Mr. Lester), interim and temporary. If words mean anything at all, we know exactly what should happen now. The hon. Member for Pontypridd (Mr. John) and others have quoted the remark of my right hon. Friend the former Secretary of State: as the unemployment benefit comes into tax so the rationale for the 5 per cent. abatement ends. It is an interim scheme in lieu of taxation. The one will give way to the other."—[Official Report, Standing Committee B; 30 March 1980, c. 526.] What we want to see now is one giving way to the other, because unemployment benefit comes into taxation in July.

I am not sure what are the arguments against keeping our word on this issue. It cannot be anything to do with work incentives. As I have argued before, the question "Why work?" is hardly appropriate when there are 3 million people out of work.

When talking of the extension of the long-term supplementary benefit rates to people who were unemployed, my hon. Friend the Minister for Social Security pointed out not long ago that the argument against that was one not of incentives but of cost. That argument presumably applies in this instance as well. Nor can the cost be relevant to the argument, since, as we know, it is one-seventh or one-eighth of the revenue that the Government will gain by taxing short-term benefits.

The arguments in favour of keeping our word are overwhelming. It is not only that one should keep one's word rather than break it. I take the point made by the hon. Member for Berwick-upon-Tweed (Mr. Beith). Even if we had not made those commitments, it is clear that we should restore the 5 per cent. abatement. When we made the 5 per cent. cut in unemployment benefit in 1980 my right hon. Friends on the Government Front Bench were not expecting—or, if they were, they were not telling us—that there would be 3 million unemployed. If it was right to talk about "in lieu of taxation" when there were many fewer than 3 million unemployed, how much more important it is to talk about restoring that 5 per cent. cut when there are as many unemployed as there are today.

Some of my hon. Friends take the view that there is little that the Government can do about unemployment. They believe that the unemployed are the innocent casualties of the fight to abate inflation and to make British industry more competitive—leaner and fitter. Anybody who takes that view should feel all the more strongly that we should do everything we can afford to do to safeguard the position of those innocent casualties—for example, by restoring the 5 per cent. cut. We should also be considering matters such as the extension of the long-term supplementary benefit rate to the unemployed.

Unemployment will, alas, be with us for many years to come. I do not believe that there is nothing the Government can do about that. I take issue with both the Labour Party and its quondam colleagues in the Social Democratic Party about our ability to deal with that in two years, two months, two weeks or whatever the latest time scale is.

As my hon. Friend the Member for Beeston said, unemployment is the most serious social, political and economic issue that the country faces, and it is not unrelated to some of the issues which are apparently causing some of my hon. Friends so much concern on the Home Office front. Those are exceptionally important issues related to unemployment.

We should act with at least the minimum of fairness towards the unemployed. The time to start doing that is tonight in the Lobby, if the Government oblige us to do so. I very much hope that they will not. I hope that they will make it clear this evening that they intend to keep their word and restore the 5 per cent. cut when unemployment benefit comes into tax.

6.15 pm
Mr. Field

I thought that many hon. Members were unfair to the hon. Member for Grantham (Mr. Hogg), who I thought made an effective speech. He played the role of devil's advocate for the Government's argument rather well. By the end of his speech he had shown that the Government did not have a great deal to advance in their own defence.

The longer the hon. Gentleman went on, the more it seemed to me as though we were being taken back in time, listening to a learned medieval theologian. Then there were debates in which the most learned in our society tried to convince people that the world was flat. They were clever, and for a long time they won the argument. Then when they started to lose it they said that those who thought that the world was round did not have proper knowledge, and the knowledge that they had should be destroyed. Tonight we heard that when the argument begins to unravel it is not proper knowledge—it was not given in a Second Reading speech.

I therefore congratulate the hon. Gentleman. I hope that he has played the role of devil's advocate. I hope that he has convinced others, as well as himself, that supporting the clause in the Division Lobby is a very important action on behalf of us all.

I should like to pick up the theme of the hon. Member for Beeston (Mr. Lester), who in a short time put the whole issue clearly before us, showing how important the matter of unemployment is and pointing out the change that we are making. Some of us have long argued, outside the House as well as inside, that if we are to make sense of our tax and social security system, if we are to create equity between one group and another, it is important that all forms of income come into tax. There may well be a debate between us on whether the starting point of tax is right now, but surely there is no dispute that all forms of income should be taxable. Only by bringing more income into tax shall we have the resources to raise the tax threshold, the starting point of tax.

If I had wanted to pursue a partisan point, which I do not, I should have gone on to say how inconsistent it was of the Government, when they were making the right step of bringing some benefit income into tax, also to start exempting income, such as the mobility allowance, from' tax. We should be in favour of exempting the poor from tax, of raising the tax threshold substantially, but we will have the resources to do so only if all income, from whatever source, is taxable.

I am sure that the hon. Member for Beeston is right when he says that we are making a very important change. It looks to many of us as though the Government are bringing certain income into tax by sleight of hand and of cutting the level of benefits to the unemployed. If that is so, we shall have a much more difficult task in selling this necessary reform—of making income taxable—which should be supported on both sides of the House.

My second point is about the standard of living of the unemployed. The Prime Minister has changed her position on this matter. I do not want to be unfair to her. It may he that as time has gone on she has thought more carefully about what she hopes to do with her economic policy. Now she talks as though it is necessary to increase the conscript army of the unemployed to fight inflation. Only by increasing the numbers out of work can one ever hope to bring down the rate of price increases. Therefore, even on her terms it is immensely important that we as a House of Commons consider regularly what standard of living we are offering to those who are bearing our unemployment.

I do not want to make a long statistical speech about living standards and how they have changed over 10 years or over two years. All I want to say is how it strikes me when I visit unemployed constituents: the embarrassment on their part, when it should be on my part, that they do not have a fire, and that inevitable apology "We don't put the fire on yet, sorry if you're cold"; the real generosity of tea and biscuits offered because that tea and those biscuits are meant for other members of the family. We are talking about people whose living standard is at the very bottom of our society.

If Governments want to cut the living standards of the conscript army that is fighting unemployment, then they ought to do so openly and honestly and not by sleight of hand. If they try to do that I do not think they will gain the support of the House of Commons.

For that reason and for the reason that the hon. Member for Beeston put forward—that we are putting forward tonight a very important change in our fiscal and social policies, the taxation of short-term benefits—we ought not to muddy the waters; we ought to be clear. I hope that a large number Tory Members will come into the Lobby in support of new clause 4, not to vote with the Labour Party or to have a kick at their own Government, but because they believe that that is the right thing to do for their constituents and for the country. I hope that when our positions are reversed that sort of message will go out to us and that we, on the other side of the Chamber will respond in a similar way.

Last but not least, I hope that the hon. Member for Grantham, who convinced me that the Government had no case for opposing new clause 4, will join us in the Lobby.

Mr. Needham

I have real sympathy for my right hon. and hon. Friends on the Front Bench this evening because they are in the position of two members of a new football team after the manager has decided to change the team around but, unfortunately, they are playing the old ball in front of the old crowd. Most of us here realise what has gone on in the past and are concerned about it. There are two points to make. One concerns the Government's credibility. They have been assisted in that tonight by the speech of the hon. Member for Grantham (Mr. Hogg). The other point concerns costs.

The hon. Member for Berwick-upon-Tweed (Mr. Beith) spoke about credibility and the way that ordinary members of the public look at the Government's actions and the way they behave. It was a perfectly valid point because the intention of what the Government said three years ago is absolutely clear. The Government's intention was the correct one, as the hon. Member for Bath (Mr. Patten) has said. Of course it was the right intention. Of course the word "interim" and all these other words that were used were the right words to use, because it was absolutely correct to bring benefit into taxation. Having done that, it was absolutely right to make sure that some of the money saved was then put back into benefit. That is what ordinary people up and down the country believed would happen, not in any great detail because most ordinary members of the public pay into the national insurance fund, and they do so in the belief, understandably, that they are paying into an insurance fund that will be of assistance to them if, unfortunately for them, disaster befalls them, very much in the same way as many people do through private insurance companies. One would expect that, when the Government tell them what they intend to do, in the same way as insurance companies make proposals, they would abide by their proposals. It would be a natural, normal thing for most people to believe.

Yet if the Government now go back on their original intention, and let us put it as mildly as that, it will undermine to a very large extent the trust and confidence that people have in them. That is behaviour that the people of this country lay at the feet of politicians remorselessly and endlessly. It is really not for us in Parliament to allow that to happen. Whatever the strength of reason that there may be for such behaviour, I believe that it is wrong.

Having tried to deal with the question of intention and credibility, let us just for a second consider the question of cost. The money that is paid in unemployment benefit comes out of the national insurance fund. The national insurance fund, as this House is bored with hearing me tell it, has for a variety of reasons risen considerably over the last few years. It now stands at about £5 billion. It may go down a little this year. Nevertheless, there is a large and substantial amount of money in the national insurance fund that is capable of being paid out to those who should rightly be able to claim unemployment benefit.

One Labour Member made a fair point when he said that if this benefit is reduced it will force many people who have sufficient to get by on with unemployment benefit to go on to short-term supplementary benefit rates. So, such assistance comes out of the Government's pocket in any case. The cost of this measure—there is some argument about it; it is extremely difficult to work out the figures—appears to be about £60 million from the national insurance fund, which is standing in surplus to the tune of £5 billion. The additional money—as we have already argued—that will come in in the form of taxation in a full year is £525 million. Is it really reasonable for those of us who believe in the concept of one nation, and helping people who cannot help themselves, not to make sure that the unemployed are protected in this way? It might be argued that if £525 million has been taken out of their pocket we are not being terribly fair by offering only to put £40 million back. Maybe we are not going far enough on this issue.

There are not that many people who make the cause of the unemployed their main cause in life. Most other people on supplementary benefits have strong pressure groups to represent them. But the long-term unemployed, the unemployed generally, do not have any great assistance.

It is worth commending to the Minister something that the Policy Studies Institute said recently: For the great majority of the unemployed, their weekly benefits are much lower than their previous earnings, and much lower than the earnings they might expect to get from a new job … Not surprisingly the main difficulties experienced by the unemployed are financial ones, and in a significant minority of cases these difficulties can lead to acute deprivation.

If people lose their work, and from an average wage of £145 a week gross they come down to £52—which is what they would get in unemployment benefit—they still have their mortgage, their hire purchase commitments, their objectives and ambitions in life. All of these have been crushed by the loss of their job. Is it really right to remove a further 5 per cent? I just cannot believe that my right hon. and hon. Friends really intend to do this. It amounts to one-tenth of 1 per cent. of the employee's contribution. I would submit that the money is there in the national insurance fund. The intention has been laid before Parliament by the Government. I ask my hon. Friend to say tonight that he will give us this commitment, for the sake not only of his Government but for the sake of the Tory Party, which needs to be able to show that it does care about such a problem. It needs to show that it is intent and determined to do something about it and will not just cast these people on to the scrapheap, where they do not deserve to be.

6.30 pm
Mr. Keith Best (Anglesey)

It is highly regrettable that we must have this debate tonight, because after a successful Budget which was drafted extremely cleverly politically—probably the first Budget since the Government came to office by which the unemployed did not have something taken away from them—we should not have to argue about a 5 per cent. shortfall.

It is also regrettable because of the money involved. My hon. Friend the Member for Chippenham (Mr. Needham) said that it would cost about £60 million. I am sure that my hon. Friend the Minister for Social Security when he replies will tell us the actual figure. I hope that he will refer to a written answer that I received on 9 March which said that the cost of making good a 2 per cent. shortfall is £15 million and the cost of making good a 7 per cent. shortfall, which includes the 2 per cent., is £60 million. Although I was not good at mathematics at school—I must confess that I failed my additional mathematics O-level—I calculate that it would require £45 million to make good the 5 per cent. shortfall.

Whenever one hears the gentle and persuasive tones of the hon. Member for Birkenhead (Mr. Field) coaxing us into the Opposition Lobby, it is tempting to respond until one hears the pontifications of the hon. Member for Wood Green (Mr. Race), who tries to turn debates into party political slanging matches and offends Conservative Members so much that he slams the door of his Lobby in our faces. The speech of my hon. Friend the Member for Grantham (Mr. Hogg) was much more persuasive in coaxing me into the Opposition Lobby tonight. When he started to speak I contemplated how regrettable it would be if I ever found myself representing a party in a court case against him. However, as his speech progressed, I came to the considered view that the one person that I would not wish to be in such a trial was the judge.

I know that the Minister will have taken note of the fact that no Conservative Member has spoken in favour of what the Government propose to do, or wishes my hon. Friend to make the commitment that the 5 per cent. shortfall will be made good. It is a little unfair for hon. Members to try to paint it as a sleight of hand by my right hon. Friend the former Secretary of State for Social Services. Although my hon. Friends have been extremely fair, I suspect that we shall hear a speech in a moment from a Labour Member which may paint it as a sleight of hand.

Mr. Chris Patten

If there is any sleight of hand—no one has yet made that point—it is on the part not of those who made the commitment but of those who do not carry out the commitment. We have not yet had the sleight of hand and we are all hoping that we do not get it. We assume that we need not vote in the Opposition Lobby because of what the Minister will say in reply.

Mr. Best

I am grateful to my hon. Friend for his clarification. May I also deal with the point that he directed at my hon. Friend the Member for Grantham, because he entered into an argument about which statement came first. Several hon. Members have quoted the statement made by my right hon. Friend the former Secretary of State in Committee as reported at column 526 of Hansard on 30 April 1980. I do not know at what time of the small hours of the morning that statement was made. I suspect that it has been bitterly regretted ever since. However, if one considers whether other statements came before or after that statement, in fairness one should refer to the Report stage of the Social Security (No. 2) Act 1980 on 21 May 1980, when my right hon. Friend the former Secretary of State said: We have given the undertaking, subject to availability of resources, to restore the invalidity benefit to the level which would have obtained without abatement". He also said: The Government are not in a position, in relation to other benefits covered by the clause, to give a comparable undertaking. I must make it clear that the decision will be faced at the time as to what would be the appropriate level of those benefits when they are brought into taxation. A little further on, he qualified that by saying: It is a matter for judgment at the time, in relation to available resources, the general level of earnings, what the country can afford, the borrowing requirement and all the other factors as to what is the appropriate level when these benefits come into taxation. I can add to the pledge that I gave about invalidity benefit."—[Official Report, 21 May 1980; Vol. 985, c. 555–56.] It is fair to consider what my right hon. Friend said on Report, which was after what he said in Committee on 30 April.

I sincerely hope that the Government will make good the 5 per cent. shortfall. If that statement on Report is taken literally, I do not believe that they are obliged to make it good tonight. It seems that some of my hon. Friends and some Labour Members have been determined to take certain statements absolutely literally. It means that the benefits must be considered when they come into tax.

The 5 per cent. shortfall must be made good, because there is a clear implication, if not an unequivocal statement, to the effect that when those benefits come into tax the 5 per cent. abatement will be made good. It is especially important, in the midst of the deepest recession since the 1930s and when we have more people unemployed than at any time since then, that we—the Government—should show that we are only too aware of the needs of those people who, through no fault of their own, cannot find employment. It must be a superlative duty of the House and the Government to ensure that the people in the greatest need are succoured.

Although I shall support the Government tonight, I hope that I do so in the knowledge that what has been said will come true—that the matter will be reviewed fully when the taxation of the benefits comes into effect. I hope also that we shall have a clear statement that the abatement will be made good.

Mr. Chris Patten

Why should we take one or two statements by Ministers as being operative but rather more statements by Ministers as being inoperative? I do not follow that.

Mr. Best

That is a slight injustice, because one must examine the totality of the case. It is unfair in certain circumstances to quote people out of context. On what I have just read out to the House, from the debate on Report, it would be wrong to accuse my hon. Friend now of not carrying out a commitment. Nevertheless, I urge it upon my hon. Friend the Minister that whatever commitment may or may not have been given, the clear implication was that the 5 per cent. shortfall would be made good. I hope that, certainly before the end of this Parliament, I shall see the Conservative Government make their position towards the unemployed unequivocally clear in a supportive role, and that they will ensure that the abatement is made good.

Mr. Hugh Dykes (Harrow, East)

I know that the House wishes to proceed to a decision, so I shall be brief. I apologise for not being in the Chamber at the beginning of the debate, but I was called out by visitors to the Central Lobby. I know that my hon. Friend the Minister wishes now to reply to the serious and fervent pleas that have been made and, we hope and assume from the strength of the arguments put forward in this brief debate, agree with what has been suggested.

This is one of the most important occasions that the House has faced for some time, even including the recent Budget. It behoves us all to do a number of things that resolve themselves into a central moral issue. I am not at all happy with the idea, even if it is not the Government's intention, continually to give the impression that we are giving the unemployed a hard and bad time. That is serious, particularly for the Government, but also for the Opposition.

We must always reflect on just how low unemployment benefit is and just what a nightmare it is for people to manage on those figures, even allowing for last week's increase. Governments must reassure the public that they keep their commitments and pledges. This is not a literal concession, in view of the nature of the pledge, but a concession in practical terms, which would be welcome and perfectly manageable in financial and economic terms. It is a very small amount of money—£40 million—bearing in mind that a gross amount of up to £3¾ billion was given in last week's Budget. Therefore, I hope that the Minister will listen seriously to the arguments put forward and give the pledge that we now want.

Mr. Rossi

The House has shown a deep concern for the position of unemployed and I have listened carefully to all representations made from both sides of the House. However, before dealing with those matters, I should deal with the considerable part of the debate taken up by the statement, oft quoted, of my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) in Standing Committee B on 30 April 1980. When quoting that, my hon. Friends made it clear that they regarded any change from what it stated as calling in question the Government integrity. I regard that as extremely serious and, therefore, shall spend a little time on it.

My hon. Friend the Member for Staffordshire, South-West (Mr. Cormack) said that the impression was clearly given, fostered and never denied. There was, he said a clearly given undertaking. My hon. Friend the Member for Bath (Mr. Patten) stated that he always had the clear understanding that the abatement was temporary and told his constituents that it would be restored. My hon. Friend the Member for Beeston (Mr. Lester) stated that the Government had to be seen to be fair and that this was a matter for conscience. My hon. Friend the Member for Chippenham (Mr. Needham) said that the Government's credibility was being called into question. These are all serious matters. I took it up with my right hon. Friend the Member for Wanstead and Woodford. Clearly, if he misinformed the House or a Committee, that matter must be taken into account.

Whatever may be said politically about my right hon. Friend the Member for Wanstead and Woodford, nobody would deny that he is a man of the utmost integrity and honour. My hon. Friend the Member for Bath would be one of the first to confirm that. 1 shall deal with the record in a moment, but I noted what my right hon. Friend said to me: Nobody who followed the whole debate could have any doubt as to what my line was. The quotation is taken out of context and, out of context, could bear the connotation placed upon it. But in the context of the debate as a whole, no one could have been misled. I anticipated, no matter what reputation my right hon. Friend had for honesty and integrity, that a statement of that sort would be met immediately by remarks from Members of the Opposition from sedentary positions to the effect that he was "wriggling". Therefore, because I was not present during that debate, I took the trouble to Look at the record to see the context of his remarks in the debate as a whole.

My hon. Friend the Member for Anglesey (Mr. Best) mentioned the time of evening that this matter may have been discussed. First, I draw the attention of the House to the proceedings in Standing Committee B, c. 393 when the question of abatement and its restoration was specifically before the Committee. The minds of all Members of the Committee were directed to that proposition, as was that of my right hon. Friend. It was certainly not directed at any other proposition. That is an important aspect.

I shall quote my right hon. Friend's remarks at length because of all that has passed this afternoon. He said: The hon. Gentleman also asked—as did the hon. Member for Birmingham, Perry Barr (Mr. Rooker)—a question related to taxation, namely 'When the benefits are brought into tax, what will be the commitment about restoring the value?' I referred briefly to that matter on the Floor of the House this afternoon. It may be helpful to the Committee if I put on the record a slightly fuller statement, because I know that it concerns many bodies outside the House which have been taking an interest in the Bill. I give the assurance that invalidity benefit, unlike the other benefits affected by clause 1 this November, is regarded by the Government as a long-term benefit. Let there be no mistake about that. It is not a short-term benefit. It is paid currently at the same rate as a retirement pension and for many people who are chronically sick it fulfils the same long-term role as that pension. The only difference is that it is not at present within the ambit of taxation. It is not treated as part of taxable income. Consequently, while we must still consider all the relevant factors at the time when each benefit comes into tax—and they may not all come into tax at the same time; I shall say something about that in a moment—I can give a particular, special assurance with regard to invalidity benefit. When it comes into tax, subject to the availability of resources—[HON. MEMBERS: "Oh."] One has to use those words. Every Government has to have that caveat. When it comes into tax, and subject to the availability of resources, we shall put back invalidity benefit to what it would have been if it had stayed in step with the retirement pension this November. For the other benefits affected, which are quite different, I cannot at this stage go beyond the more general assurances I have given that we shall consider what should be their gross rates in light of economic and other circumstances prevailing at the time that each of them comes into tax."—[Official Report, Standing Committee B, 30 April 1980, c. 393.]

6.45 pm

That was the definitive explanation given by my right hon. Friend in answer to a specific question put to him and, incidentally, that was at about 7 o'clock in the evening. At about 1.30 am there was a protracted discussion on how taxation of these benefits should be dealt with.

Mr. Needham

I accept my hon. Friend's point about the integrity of my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin). However, if it was not my right hon. Friend's intention to do this, why on earth was he cutting the 5 per cent. in the first place? Why did he do that?

Mr. Rossi

My right hon. Friend spelt that out on Second Reading. It was to make public expenditure savings. He spelt that out clearly. There were references to taxation and the interim, but my right hon. Friend made it perfectly clear that this was a public expenditure saving forced on the Government at that time.

I have already sought to outline the clear explanation given by my right hon. Friend about the timing and considerations that would be taken into account as and when unemployment benefit was brought into tax, or when these abatements would be restored. He made a complete distinction between the long-term benefits and the short-term benefits. When there was a debate later about the method of taxation, the incidence of taxation, and whether taxation would allow the income to fall below supplementary benefit level, my right hon. Friend made the statement that has been oft quoted today. Taken in the context of the debate as a whole, the quotation does not bear the connotation that is placed on it when it is taken out of context.

My hon. Friend the Member for Anglesey took the matter further. He looked at what was said on Report. One or two of my hon. Friends said that one relies on the later statement rather than the earlier statement. I think that my hon. Friend the Member for Bath said that when someone raised the question of a Second Reading statement. My hon. Friend said that a statement made in Committee should have precedence because it was made later.

Here is a third statement, and it was made even later. I shall read it in full, because it involves questions of integrity. My right hon. Friend said: No I cannot give way. I must finish and I know that the hon. Member for Birmingham, Perry Barr (Mr. Rooker) is waiting to speak. The benefits to which this section applies ought to be taxed and we cannot wait until 1982 or 1983 to secure the contribution from the social security budget towards the Government's overall spending objectives. I have been asked what I shall do when proper taxation applies. I have made it clear that, in relation to invalidity benefit to which hon. Members on both sides of the House—in particular my hon. Friend the Member for Exeter—addressed themselves, we have given the undertaking, subject to availability of resources, to restore the invalidity benefit to the level which would have obtained without abatement. That, since the benefit was introduced, has been equivalent to the retirement pension and I repeat that undertaking today. The reason why it is right to give that pledge on invalidity benefit is, as a number of my hon. Friends have made clear, that benefit is a long-term benefit. Since it was introduced more than 10 years ago invalidity benefit has, traditionally, maintained a parallel course with the level of the retirement pension. When it comes into taxation, subject to the availability of resources, we intend to restore that relationship. The Government are not in a position, in relation to the other benefits covered by the clause, to give a comparable undertaking. I must make it clear that the decision will be faced at the time as to what would be the appropriate level of those benefits when they are brought into taxation."—[Official Report, 21 May 1980; Vol. 985, c. 555–6.]

I suggest that that passage makes clear beyond peradventure the undertaking and pledge given by my right hon. Friend, both in Committee and on Report. It is not fair to question his integrity, or the integrity of other of my right hon. Friends, by taking the matter out of context.

Mr. Chris Patten

I want to make it clear, first, that no one is questioning the integrity of my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin). If we are talking about integrity, it is the Government's integrity that we are talking about. The Minister has not made clear why some statements are operative and others are inoperative. Secondly, in the statement that has been made several times today, it was made clear that when short-term benefits came into tax, the rationale for the 5 per cent. abatement ended. What is the rationale now?

Mr. Rossi

First, in answer to my hon. Friend's question about which statements should have precedence over others, I shall repeat what I have been trying to explain and what I had thought that I had succeeded in explaining. In the context of the debate as a whole in Committee, my right hon. Friend the Member for Wanstead and Woodford made his position perfectly clear, and he repeated it on Report. What is at variance is one statement that he made in the early hours of the morning, when he was dealing with another matter, when he used words without adding a qualifying condition that he was careful to use on all other occasions. My hon. Friends can make of that what they like, but in fairness to my right hon. Friend, I must say that he made his position perfectly clear.

Subsequently, the Government made their position clear. There have been a number of parliamentary questions. On 5 May 1981, and as recently as 22 December 1981, in answer to questions about the abatement, it was made quite clear that The restoration of the 5 per cent. abatement of the other short-term national insurance benefits—including sickness and unemployment benefits—will be considered when those benefits are brought into tax in the light of the economic and other circumstances at the time.—[Official Report, 22 December 1981; Vol. 15, c. 376.] So all the way through, apart from that one occasion, the position was made quite clear by the Government.

I come now to the merits of the argument, having—I hope—disposed of an important matter involving questions of integrity and credibility. Opposition Members have said that the Government will receive £500 million revenue from taxing unemployment benefit, and that some of that money could be spent on restoring the 5 per cent. abatement. The point was made also by some of my hon. Friends. As the House knows, taxation is never hypothecated for any particular item of expenditure.

Mr. George Cunningham (Islington, South and Finsbury)

The Minister switched it the other way.

Mr. Rossi

Restoring the abatement is something on which the money could be spent, just as the Exchequer meets the costs in my Department of the Health Service and other social security benefits. However, we must look at the matter in the context of the Budget as a whole. Over the next 12 months the Government will devote £32 billion to social security public expenditure. A substantial proportion—about 45 per cent.—of that expenditure, comes directly from the taxpayer, or from the supplement to the national insurance fund. Despite the size of that programme and the share that it absorbs of the public expenditure cake, we have been able to make some valuable improvements. I ask my hon. Friends to view this item within the context of the Budget as a whole and the social security programme as a whole.

On 10 March, my right hon. Friend made his statement on the social security uprating. The uprating, at November 1982, will cost about £3 billion in a full year. Of that, £1 billion will be met from the Consolidated Fund—that is, the taxpayer. Hon. Members will recall that, apart from basic price protection of benefits, we are making good the shortfall that appeared at the 1981 uprating for all benefits, giving for most people an 11 per cent. uprating. That means making good the shortfall, not only for retirement pensioners and other long-term beneficiaries, but for the unemployed and all those on supplementary benefit, as well as those receiving child benefits, mobility allowance, sickness benefit, injury benefit, and maternity allowance. This means an additional cost of £180 million in a full year.

Restoring the shortfall for all benefits will cost more than £500 million in a full year. Mobility allowance has not only received a substantial uprating at a cost of £22 million but has been brought out of tax. The improvements in that benefit make it easier for the disabled to lease cars through Motability and makes it easier for them to get about.

7 pm

We are increasing the heating additions generally. The therapeutic earnings limit has been raised. The earnings disregard for invalidity care allowance has been doubled. We have raised supplementary benefit capital disregards from £2, 000 to £2, 500. It is worth repeating that we have done a great deal. We have not been able to restore the abatement of unemployment benefit. Some might say that that is a small additional step but £60 million in a year is not a trivial amount to find. There are many improvements in social security that we would like to make that we have been unable to make. We have had to draw the line somewhere, and someone is always on the other side of it.

I have had given to me lists of items on which money could be spent—and most of them are very worthwhile. The Government have been pressed on the issue of the invalidity trap and we would like to sort that out. We would like to pay the long-term rate of supplementary benefit to the unemployed, which would cost about £200 million. We would like to abolish the household duties test and to raise pensions even higher. The Government would like to do all these things. However, the line has to be drawn somewhere, and this year it has been drawn at £3 billion.

We would like to help additional classes, including the unemployed. The unemployed are receiving an 11 per cent. uprating which has to be paid for by the work force. Labour Members are suggesting a 16 per cent. uprating at a time when employed people are having to settle for much lower wage increases and are having to bear the cost of the benefit out of their wages. That must be considered.

My right hon. Friends on the Front Bench have promised to keep this matter under review. We have said that the abatement will not be a permanent reduction. It is equally clear that the abatement cannot be made good now, but it will be made good. My right hon. Friends have the matter under review. At the right time it will be made good.

Mr. John

I am grateful to the Minister for the clarity, the starkness and the inhumanity with which he has put the case against the unemployed. Clearly the line has been drawn and the unemployed are outside it. We now know what to expect of the Government. That is why abstention is not good enough and why a positive vote to restore this iniquitous cut must be made.

Mr. Peter Bottomley

I intend to speak briefly and I shall take up only as much time as if I had spoken before my hon. Friend the Minister. I wanted to wait until he had spoken to hear what the Government were proposing.

The Government propose to delay. In the debate on the Social Security (No. 2) Bill two years ago, Conservative Members voted in the belief that, so long as economic circumstances permitted, the 5 per cent. would be restored. The qualifying words for invalidity benefit were "subject to available resources". The qualifying words for the short-term benefits were "economic and other circumstances". In effect, the words mean the same.

With £500 million coming in from those receiving short-term benefit, the 10 per cent.—which is the cost of restoring the 5 per cent.—should be restored. 'The issue must go to a vote. I wish to support the Government in every way that I can, but they should follow their supporters whom they led through the Lobby two years ago, and our job is to lead them this evening.

Question put, That the clause be read a Second time:—

The House divided: Ayes 218, Noes 248.

Division No. 96] [7.04 pm
Abse, Leo Fletcher, Ted (Darlington)
Adams, Allen Foot, Rt Hon Michael
Allaun, Frank Ford, Ben
Alton, David Forrester, John
Anderson, Donald Foster, Derek
Archer, Rt Hon Peter Foulkes, George
Ashley, Rt Hon Jack Fraser, J. (Lamb'th, N'w'd)
Ashton, Joe Freeson, Rt Hon Reginald
Atkinson, N. (H'gey, ) Garrett, John (Norwich S)
Bagier, Gordon A. T. George, Bruce
Barnett, Guy(Greerwich) Gilbert, Rt Hon Dr John
Barnett, Rt Hon Joel (H'wd) Gilmour, Rt Hon Sir lan
Beith, A.J. Ginsburg, David
Benn, Rt Hon Tony Golding, John
Bennett, Andrew(St'kp't N) Grant, George(Morpeth)
Bidwell, Sydney Grant, John (Islington C)
Booth, Rt Hon Albert Grimond, Rt Hon J.
Boothroyd, Miss Betty Hamilton, James(Bothwell)
Bottomley, Peter (W'wich W) Hamilton, W. W. (C'tral Fife)
Bradley, Tom Hardy, Peter
Bray, Dr Jeremy Harrison, Rt Hon Walter
Brown, Ronald W. (H'ckn'y S) Haselhurst, Alan
Brown, Ron (E'burgh, Leith) Hattersley, Rt Hon Roy
Buchan, Norman Healey, Rt Hon Denis
Callaghan, Jim (Midd't'n&P) Heffer, Eric S.
Campbell, Ian Hicks, Robert
Campbell-Savours, Dale Hogg, N. (EDunb't'nshire)
Canavan, Dennis Holland, S.(L'b'th, Vauxh'll)
Carmichael, Neil Home Robertson, John
Carter-Jones, Lewis Homewood, William
Cartwright, John Hooley, Frank
Cocks, Rt Hon M.(B'stol S) Howell, Rt Hon D.
Cohen, Stanley Howells, Geraint
Coleman, Donald Huckfield, Les
Concannon, Rt Hon J. D. Hughes, Mark(Durham)
Conlan, Bernard Hughes, Robert (Aberdeen N)
Cormack.Patrick Hughes, Roy (Newport)
Cowans, Harry Janner, Hon Greville
Cox, T. (W'dsw'th, Toot'g) Jay, Rt Hon Douglas
Craigen, J.M. (G'gow, M'hill) John, Brynmor
Crawshaw, Richard Johnson, James (Hull West)
Critchley, Julian Johnston, Russell(Inverness)
Cryer, Bob Jones, Rt Hon Alec (Rh'dda)
Cunliffe, Lawrence Jones, Barry (East Flint)
Cunningham, G.(Islington S) Kaufman, Rt Hon Gerald
Cunningham, Dr J.(W'h'n) Kerr, Russell
Dalyell, Tam Kilfedder, James A.
Davidson, Arthur Kilroy-Silk, Robert
Davies, Rt Hon Denzil (L'lli) Knox, David
Davies, Ifor (Gower) Lamond, James
Davis, Clinton (Hackney C) Leadbitter, Ted
Davis, Terry (B'ham, Stechf'd) Leighton, Ronald
Deakins, Eric Lester, Jim (Beeston)
Dean, Joseph (Leeds West) Lestor, Miss Joan
Dixon, Donald Lewis, Arthur (N'ham NW)
Dobson, Frank Lewis, Ron (Carlisle)
Dormand, Jack Litherland, Robert
Douglas, Dick Lofthouse, Geoffrey
Dubs, Alfred Lyon, Alexander(York)
Duffy, A. E. P. Lyons, Edward (Bradf'd W)
Dunn, James A. McDonald, Dr Oonagh
Dunnett, Jack MacKay, John (Argyll)
Dykes, Hugh McKelvey, William
Eadie, Alex McNamara, Kevin
Edwards, R. (W'hampt'n S E) McTaggart, Robert
Ellis, R. (NED'bysh're) McWilliam, John
Ellis, Tom (Wrexham) Marks, Kenneth
English, Michael Marshall, D(G'gow S'ton)
Ennals, Rt Hon David Marshall, Dr Edmund(Goole)
Evans, loan (Aberdare) Marshall, Jim (Leicester S)
Evans, John (Newton) Martin, M (G'gowS'burn)
Field, Frank Maynard, Miss Joan
Flannery, Martin Meacher, Michael
Meyer, Sir Anthony Silkin, Rt Hon S. C. (Dulwich)
Mikardo, lan Silverman, Julius
Millan, Rt Hon Bruce Skinner, Dennis
Mitchell, Austin(Grimsby) Smith, Rt Hon J. (N Lanark)
Morris, Rt Hon A. (W'shawe) Spearing, Nigel
Morris, Rt Hon C. (O'shaw) Squire, Robin
Morris, Rt Hon J. (Aberavon) Stallard, A. W.
Morton, George Steel, Rt Hon David
Moyle, Rt Hon Roland Stoddart, David
Mulley, Rt Hon Frederick Stott, Roger
Needham, Richard Straw, Jack
Newens, Stanley Taylor, Mrs Ann (Bolton W)
Oakes, Rt Hon Gordon Thomas, Dr R.(Carmarthen)
O'Halloran, Michael Thorne, Stan (Preston South)
Orme, Rt Hon Stanley Tilley, John
Park, George Tinn, James
Parker, John Torney, Tom
Parry, Robert Varley, Rt Hon Eric G.
Patten, Christopher(Bath) Wainwright, E. (Dearne V)
Pavitt, Laurie Walker, Rt Hon H.(D'caster)
Penhaligon, David Watkins, David
Powell, Raymond(Ogmore) Weetch, Ken
Prescott, John Welsh, Michael
Price, C. (Lewisham W) White, Frank R.
Race, Reg White, J. (G'gow Pollok)
Radice, Giles Whitlock, William
Rees, Rt Hon M (Leeds S) Williams, Rt Hon A.(S'sea W)
Richardson, Jo Wilson, Gordon (Dundee E)
Robinson, G. (Coventry NW) Wilson, William (C'try SE)
Rooker, J. W. Winnick, David
Roper, John Woodall, Alec
Ross, Ernest (Dundee West) Woolmer, Kenneth
Rowlands, Ted Wright, Sheila
Ryman, John Young, David (Bolton E)
Sever, John
Sheldon, Rt Hon R. Tellers for the Ayes:
Shore, Rt Hon Peter Mr. Frank Haynes and
Short, Mrs Renée Mr. Hugh McCartney.
Aitken, Jonathan Chalker, Mrs. Lynda
Alexander, Richard Channon, Rt. Hon.Paul
Alison, Rt Hon Michael Chapman, Sydney
Amery, Rt Hon Julian Churchill, W.S.
Aspinwall, Jack Clark, Hon A. (Plym'th, S'n)
Atkins, Robert(Preston N) Clark, Sir W.(Croydon S)
Atkinson, David(B'm'th, E) Clarke, Kennett(Rushcliffe)
Baker, Kenneth(St.M'bone) Clegg, Sir Walter
Baker, Nicholas (N Dorset) Cockeram, Eric
Banks, Robert Colvin, Michael
Bendall, Vivian Cope, John
Bennett, Sir Frederic(T'bay) Corrie, John
Benyon, Thomas(A'don) Costain, Sir Albert
Benyon, W. (Buckingham) Cranborne, Viscount
Berry, Hon Anthony Crouch, David
Best, Keith Dean, Paul (North Somerset)
Bevan, David Gilroy Dickens, Geoffrey
Biffen, Rt Hon John Douglas-Hamilton, Lord J.
Biggs-Davison, Sir John Dover, Denshore
Blaker, Peter Dunn, Robert(Dartford)
Body, Richard Durant, Tony
Boyson, Dr Rhodes Eden, Rt Hon Sir John
Braine, Sir Bernard Edwards, Rt Hon N. (P'broke)
Bright, Graham Eggar, Tim
Brinton, Tim Elliott, Sir William
Brittan, Rt. Hon. Leon Eyre, Reginald
Brown, Michael(Brigg&Sc'n, ) Faith, Mrs Sheila
Browne, John(Winchester) Farr, John
Bruce-Gardyne, John Fell, Sir Anthony
Bryan, Sir Paul Finsberg, Geoffrey
Buchanan-Smith, Rt. Hon. A. Fletcher-Cooke, Sir Charles
Buck, Antony Fookes, Miss Janet
Budgen, Nick Forman, Nigel
Bulmer, Esmond Fowler, Rt Hon Norman
Burden, Sir Frederick Fraser, Peter (South Angus)
Butcher, John Fry, Peter
Cadbury, Jocelyn Gardiner, George(Reigate)
Carlisle, John (Luton West) Gardner, Edward (S Fylde)
Carlisle, Kenneth(Lincoln) Gare Wones, Tristan
Carlisle, Rt Hon M.(R'c'n) Glyn, Dr Alan
Goodlad, Alastair Neale, Gerrard
Gorst, John Nelson, Anthony
Gow, Ian Neubert, Michael
Grant, Anthony (Harrow C) Newton, Tony
Gray, Hamish Normanton, Tom
Greenway, Harry Onslow, Cranley
Griffiths, E. (B 'y St. Edm 'ds) Oppenheim, Rt Hon Mrs S.
Griffiths, Peter Portsm'th N) Page, John (Harrow, West)
Grist, Ian Page, Richard (SW Herts)
Gummer, John Selwyn Parkinson, Rt Hon Cecil
Hamilton, Hon A. Parris, Matthew
Hamilton, Michael(Salisbury) Pawsey, James
Hampson, Dr Keith Percival, Sir Ian
Hannam, John Peyton, Rt Hon John
Hastings, Stephen Pink, R. Bonner
Havers, Rt Hon Sir Michael Porter, Barry
Hawksley, Warren Prentice, Rt Hon Reg
Hayhoe, Barney Price, Sir David (Eastleigh)
Heddle, John Prior, Rt Hon James
Heseltine, Rt Hon Michael Proctor, K. Harvey
Holland, Philip(Carlton) Pym, Rt Hon Francis
Hooson, Tom Raison, Rt Hon Timothy
Hordern, Peter Rees, Peter (Dover and Deal)
Howe, Rt Hon Sir Geoffrey Rees-Davies, W. R.
Howell, Rt Hon D. (G'ldf'd) Renton, Tim
Hunt, David (Wirral) Rhodes James, Robert
lrving, Charles(Cheltenham) Ridley, Hon Nicholas
Johnson Smith, Geoffrey Ridsdale, Sir Julian
Jopling, Rt Hon Michael Roberts, M. (Cardiff NW)
Joseph, Rt Hon Sir Keith Roberts, Wyn (Conway)
Kaberry, Sir Donald Rossi, Hugh
Kellett-Bowman, Mrs Elaine Rost, Peter
Kershaw, Sir Anthony Royle, Sir Anthony
Kimball, Sir Marcus Sainsbury, Hon Timothy
King, Rt Hon Tom Scott, Nicholas
Knight, Mrs Jill Shaw, Giles (Pudsey)
Lang, Ian Shaw, Michael (Scarborough)
Langford-Holt, Sir John Shelton, Willlam(Streatham)
Latham, Michael Shepherd, Colin(Hereford)
Lawrence, Ivan Silvester, Fred
Lawson, Rt Hon Nigel Sims, Roger
Lee, John Skeet, T. H. H.
Le Marchant, Spencer Smith, Dudley
Lennox-Boyd, Hon Mark Speed, Keith
Lloyd, Ian (Havant & W'loo) Speller, Tony
Lloyd, Peter (Fareham) Spicer, Jim (West Dorset)
Loverldge, John Spicer, Michael (SWorcs)
Luce, Richard Sproat, lain
Lyell, Nicholas Stainton, Keith
Macfarlane, Neil Stanbrook, lvor
MacGregor, John Stanley, John
McNair-Wilson, M.(N'bury) Steen, Anthony
McNair-Wilson, P. (New F'st) Stevens, Martin
McQuarrie, Albert Stewart, A. (ERenfrewshire)
Major, John Stewart, Ian (Hitchin)
Marland, Paul Stokes, John
Marlow, Antony Stradling Thomas, J.
Marshall, Michael(Arundel) Tapsell, Peter
Marten, Rt Hon Neil Taylor, Teddy (S'end E)
Mates, Michael Tebbit, Rt Hon Norman
Mather, Carol Temple-Morris, Peter
Maude, Rt Hon Sir Angus Thomas, Rt Hon Peter
Mawby, Ray Thompson, Donald
Maxwell-Hyslop, Robin Thorne, Neil (llford South)
Mayhew, Patrick Thornton, Malcolm
Mellor, David Townend, John(Bridlington)
Miller, Hal (B'grove) Townsend, Cyril D, (B'heath)
Mills, lain(Meriden) van Straubenzee, Sir W.
Mills, Peter (West Devon) Viggers, Peter
Miscampbell, Norman Waddington, David
Mitchell, David (Basingstoke) Wakeham, John
Moate, Roger Waldegrave, Hon William
Monro, Sir Hector Walker, Rt Hon P.(W'cester)
Montgomery, Fergus Walker, B. (Perth)
Moore, John Walker-Smith, Rt Hon Sir D.
Morgan, Geraint Wall, Sir Patrick
Morris, M. (N'hampton S) Waller, Gary
Morrison, Hon P. (Chester) Ward, John
Murphy, Christopher Warren, Kenneth
Myles, David Wells, John(Maidstone)
Wheeler, John Young, Sir George(Acton)
Whitelaw, Rt Hon William Younger, Rt Hon George
Wickenden, Keith
Williams, D.(Montgomery) Tellers for the Noes:
Winterton, Nicholas Mr. Peter Brooke and
Wolfson, Mark Mr. Robert Boscawen.

Question accordingly negatived.

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