§ Question again proposed, That the amendment be made.
§ Mr. Bell
I had referred to the small builder and to the entrepreneurial spirit which the Conservative Government say they wish to inculcate, yet they are imposing 15 per cent. VAT on the alteration of buildings. We have heard a great deal in the debates, and no doubt shall hear more from the Minister of State, about how the Labour Government did little for the small business, as against what the Conservative Government have done. I refer to the work of the former Financial Secretary to the Treasury, Lord Lever, who, in my submission, did more for small businesses than this Government have ever done. The facts are there for all to see. The greatest number of bankruptcies ever to have occurred in the country in a single year took place last year. The small builder must groan when he sees what is likely to happen when he has to pay VAT at 15 per cent. on alterations.
We have also heard a great deal about the cowboy element in small firms. We believe that this new imposition of VAT will open the floodgates to the cowboys and to tax-dodging firms. We have observed how the Chancellor of the Exchequer has drawn into the net of this taxation work to be done under the Chronically Sick and Disabled Persons Act 1970. Moves will no doubt be made to have work under that Act suitably exempted.
Information has come from the Manufacturers Association of Radiators and Convectors that the new tax will put about £200 on to the cost of installing central heating. This sector has already been badly hit by imports, and it will be badly hit by this new imposition of VAT. It can only reduce further the demand for these products. Who will suffer from this? The small business that does the installation will suffer. The person who wishes to have central heating installed will find that the cost has increased, and a doubt will enter that person's mind whether to go ahead with the work.
Energy conservation and the effect of double glazing have been referred to in the debate. One hon. Member said that double glazing was not essential, but this depends on where one lives, and the reason for double glazing. Double glazing must be an essential for those who wish to cut their heating bills and to reduce their household expenses. That, too, will be hit by the measures.
One wonders whether the proposals, when first mooted by the Treasury, were properly understood by the Chancellor and by the Minister. The Minister of State will no doubt be able to advise the Committee whether he will take on board the various points made to him in the debate 102 and whether he will relent on the concept of taxation and on the more selective and limited amendments on the Amendment Paper.
There can be no doubt of the effect that the proposals have had on the Building Employers Confederation, whose president, Mr. Bruce Chivers, described this extra imposition of VAT as a
deplorable and . . . savage blow to the industry.He said that the move wouldjeopardise the jobs of thousands of building workers in an industry where unemployment is already at record levelsand that it would "penalise bona fide firms" and fuel the black economy by giving the advantage to "tax-dodging cowboys".
According to Mr. Shaun Leslie, an economist:
The Chancellor is relentlessly nibbling away at the construction industry".
Similar views have been expressed by the National Home Improvement Council, by the Federation of Master Builders and by the chairman of the Historic Buildings and Monuments Commission for England. Reference has already been made to Lord Montagu of Beaulieu, the chairman of that commission, who in a letter to The Times of 6 April 1984, said:
The VAT change would also threaten the operation of the building preservation trusts which, in the last ten years, have come to play a crucial role in saving historic buildings. Most of those trusts operate on very small margins and would not be able to obtain an extra 15 per cent. on the sale of properties they have restored. Already several important projects, including that for the Thermal Baths, Buxton, have been halted following the VAT announcement.Therefore, the Government's proposals go far wider than they imagined.
Work done under the Chronically Sick and Disabled Persons Act will also be caught by this provision. Indeed, I have a letter from a member of the public who wrote to me saying that it was a serious matter for her to have to pay this tax given that she had been waiting eight years to have work done on her house and that she was the parent of a handicapped child.
Therefore, the extension of VAT has serious consequences and we do not agree that it should apply to building alterations. I believe that the tax will be extended next year and the year after that, and that it will continue to be extended because, as the manufacturing sector continues to shrink, unemployment still has to be paid for, and as the Government seek to bring about income tax reductions, they can hope to balance the books only through VAT, North sea oil revenue and the sale of public sector assets. Those who oppose the extension of VAT but who have reluctantly decided to vote for it will he very sorry next year when it is extended still further and, indeed, is extended throughout the lifetime of this Parliament.
§ Mr. Richard Page (Hertfordshire, South-West)
I should like to start my speech by having the temerity to suggest that those in the building industry may have helped to bring this tax upon themselves. The whole House knows the rather broad and blurred line between repairs and alterations and in more cases than not, at the end of the day, the benefit has not accrued to the Revenue. That has not helped the industry's case.
I am slightly disappointed that there has been no reference today to the fact that this Budget is a package and is not just one sided. There are other sides to it. There is the removal of the national income surcharge and the 103 reduction of corporation tax, all of which will help the building industry and, in particular, the small business sector. However, the introduction of any tax is a delicate operation. I appreciate the extension of the date to 1 June to give people a chance to complete work contracted before that date. However, I have found that in some cases the time allowed has regrettably not been enough. There is, therefore, some form of retrospection, as other hon. Members have mentioned.
I do not intend to stray into the debate on amendment No. 21 tabled by my hon. Friend the Member for Rutland and Melton (Mr. Latham). It has been well trampled already. I do not wish to discuss proposals to give relief for properties built for the disabled. I have examples of both in my constituency. Major building operations are in progress which will not be finished by 1 June. In one case building works are costing in excess of £350,000. Although the builders are working flat out the work will not be finished by 1 June and the estimate is that about £30,000 extra will have to be raised. That will cause extreme difficulty and hardship.
My hon. Friend the Member for Leeds, North-West (Dr. Hampson) talked about renovation. People buying houses to convert into flats will be severely disadvantaged by the measure. Those in the middle of conversions will have to pay 15 per cent. more. The profit on such properties is not as high as 15 per cent. I hope that some consideration will be given to the plight of people making such conversions.
If exemptions are made my arguments will be unnecessary. If they are not, I ask my hon. Friend, not to accept the amendments, but to take the advice of my hon. Friend the Member for Croydon, South (Sir W. Clark) and to consider tonight's arguments and see whether he can remove the retrospective tax element and bring forward fresh ideas on Report.
§ Mr. Kevin Barron (Rother Valley)
Most comments have been about the imposition of VAT on building regulations. A few years ago most Government Members were waving the flag for the home-owners in our society. They encouraged the sale of public housing—some of which we now find to be substandard—which relied on Government grant. Not only have those grants been cut, but 15 per cent. extra is being imposed upon the renovation of such houses. I hope that the debate will be remembered because it lets down the people who want to improve houses which they have bought from public bodies.
I want to concentrate this evening not on the question of home improvement grants, but on the 15 per cent. VAT imposition upon energy conservation in the household. I refer in particular to central heating, double glazing and draught proofing on which a 15 per cent. VAT will be imposed from 1 June.
Central heating has never been subject to tax in Britain. It was not subject to purchase tax before VAT was introduced. There was good reason for that. Central heating is the most efficient form of domestic heating. Not only does it provide the warmth needed in a country such as Britain, but it can save Governments many millions of pounds once installed.
In 1982–83 the Exchequer paid £1,417 million towards the cost of heating bills in about 2.5 million households 104 that depended upon such benefits for heating. During that year, Government expenditure on home insulation was about £18 million. Although Government expenditure on insulation increased last year to about £40 million, there is still a shortfall in the cost to the Exchequer of keeping homes warm that suffer from fuel poverty. It is ludicrous, therefore, to put 15 per cent. VAT on the cost of forms of fighting fuel poverty.
It was estimated 18 months ago that 5 million homes had no insulation and approximately a further 4 million had inadequate insulation. To put 15 per cent. VAT on insulation begs the question as to what the Government expect will happen in those homes.
There is an increase in the so-called disease of fuel poverty while at the same time we are energy rich in fossil and many other fuels. By putting on 15 per cent. VAT the Government are lacking in common sense. They are bothered only about short-term gains to the Treasury and not the high levels of fuel poverty. Those short-term gains are to finance the Government's friends in business and have nothing to do with getting rid of fuel poverty. I do not mean the hundreds of small businesses that will be put under tremendous pressure and which will perhaps add to the 3 million in the dole queues.
On 13 March, to great cheers from the Conservative Benches, the Chancellor of the Exchequer said that he was going to abolish the national insurance surcharge. These VAT increases will make fuel poverty worse. It is a terrible indictment of the way in which the Government are tackling the problems of the poverty stricken. My right hon. Friend the Member for Halton (Mr. Oakes) said that it is well known that domestic energy usage has declined since 1979 directly in proportion to the increase in central heating systems. Therefore, why should we be considering putting 15 per cent. VAT on central heating systems?
This callous, or, perhaps it could be said, cold act, by the Government works against stopping fuel poverty. There is supposed to be a co-ordinated strategy among the Secretaries of State for Energy, Environment and Health and Social Services for dealing with fuel poverty and the millions of homes that suffer greatly from a lack of energy in an energy surplus economy? Will the Minister reconsider this proposal for VAT on aids to stop fuel poverty before Report?
§ Sir Hugh Rossi (Hornsey and Wood Green)
Some months ago I tabled a parliamentary question asking whether it was true that if one installed a washing machine and connected it to the existing plumbing one had to pay VAT, but that if one knocked a hole in an outside wall and put the waste pipe through that, one was exempt from VAT because an alteration had taken place to the structure of the house. The answer to both propositions was yes. I thought it absurd that we had to exist with distinctions of that kind—that 15 per cent. on the price of doing the work depended on whether one took a couple of bricks out of a wall. I had hoped that consideration of such matters would have led to the exemption of all building work from VAT. Instead, the Government have decided to take the other course.
I appreciate that the Government face pressures. I understand, for example, that there have been pressures from the European Community to bring all construction work, whether it be original work or alterations and 105 adaptations, within the VAT net. The course that is being taken may be a compromise in relation to the position that the Government might otherwise have to take.
Having said that, and regretting it greatly—because I feel, in common with hon. Members on both sides of the Committee, that this will be a difficulty for the construction industry at a low ebb in its fortunes—I hope that the Chancellor will make exemptions, for they would not drive a coach and horses through what the Government are trying to do. That view arises from constituency cases that have been put to me.
In one case, a constituent wished to demolish property and rebuild something entirely new. That operation would have been free of VAT. The local planning authority, because of a conservation area requirement, insisted that the existing facade be maintained and that everything be rebuilt round that. Under the intended legislation, that would mean that alterations would take place and therefore VAT would be attracted, against the desire of the developer because he would prefer, were it not for the insistence of the local authority, to have an entirely new building, in which case he would not have to pay VAT. Perhaps the Government will consider that situation. I do not believe that a variation of that kind would cause such difficulties as to make the Government's intention inoperable.
I do not wish to anticipate arguments that will be deployed on later amendments, which will concern other cases that have been put to me. Will the traditional exemption against the imposition of the new tax be given to charities? Many charities, housing associations and organisations looking after the disabled, in which I have an interest, carry out conversion work. They will now be obliged to pay VAT unless exemption is made in their favour. For historic buildings, where people must maintain for the public benefit buildings which are part of the natinal heritage, I hope that the Government will also make an exemption.
§ Mr. Austin Mitchell
There is much unemployment in the building industry. That industry could be used to stimulate the economy in ways that would improve the housing stock, the living conditions of our people and the social environment in which they live. All those factors show that there is a need to stimulate the industry further by removing VAT altogether. Instead, the Chancellor has opted for what he describes as a "tidying up" operation, which will depress building activity and stop or at least hold back, attempts to improve the environment.
It is worth while asking why the Chancellor is taking a course that seems so unnecessary at a time when a further stimulus to the building industry would be one way of keeping going that faltering impetus which he calls the British economic revival, and alleviating massive unemployment — it must be about 350,000 — in the building industry.
The answer to the question, "Why now?", seems to lie in the distinction between alterations and repairs. In other words, the pattern of legal decisions has not been in the Treasury's favour. That is described in a letter to the Grimsby District Builders Association by the Customs and Excise Administrative Directorate as follows:
the existing dividing line between repairs and alterations was becoming increasingly unworkable in practice.In other words, "We did not like the verdicts in the cases that went before the courts and the pattern of decision 106 making that was emerging, so we are seizing the opportunity to bring that pattern to an end." That must be the only motive for the change. It does not come from pressure from the EC, because in this instance the Government have discretion to decide whether they will conform with the other member states. They can decide whether to tidy up the VAT anomalies or maintain them for the benefit of the consumer.
It is curious that the Government, who vociferously say that they will not agree to any increase in own resources, are at the same time busily paving the way for such an increase by tidying up the VAT anomalies. They do not have to succumb to any pressure to do so. It is not necessary to tidy up VAT anomalies. By ending one anomaly, the Government are creating others. The easiest way to bring an end to the anomalies would be to end the imposition of VAT on repairs. The dividing line could be clarified in that simple and straightforward fashion.
Social justice is not a factor. What sort of social justice is it to favour someone who has the ability to raise a mortgage or cash on a sufficient scale to have a garage built on to his house during the original building—in those circumstances he will not pay VAT on the construction of the garage—and not to favour someone else who has to have his garage added later because he cannot afford to have the garage constructed initially? If the Government's proposals are put into effect, the person who has a garage added to his house subsequent to the initial building will pay VAT on the improvement.
The Government wish to line up the law because judgments have been going against them. It is worth emphasising that they are striking yet another blow against small businesses. Builders estimate that the work load for the industry will be reduced by about £450 million and that that will lead to the loss of 34,000 jobs. I hope that the Minister will tell us whether he agrees with those estimates. Has the Treasury studied the possible loss of jobs that will accrue from this measure? If they propose to tax spending on improvements, because they argue that it is discretionary, the imposition of 15 per cent. VAT on that spending will mean that there will be less of it. There will therefore be less work. I hope that we shall be told the Treasury's estimates of the decline in activity and the loss of jobs that will accrue.
§ Mr. Bermingham
Does my hon. Friend agree that we must add to his figures the loss of jobs in the supply industries which handle the raw materials that the building industry requires? There are many examples, such as brick-making, joinery, glazing, metal work and foundry work. All these processes involve the basic commodities that builders use.
§ Mr. Mitchell
I am grateful to my hon. Friend for mentioning the losses in the supply and ancillary industries. The estimate is based on the loss of jobs in the building industry. Does the Minister accept the figure of 34,000? What is the additional figure for the trades and industries that supply the building industry? What is the estimated increased activity in the so-called black economy which, inevitably, will operate because of the imposition of the 15 per cent.? Work will be done off the barrow. Incentives are already implicit in the industry's structure. The small builder, who is now squeezed by the big boys higher up in the hierarchy, will be squeezed by 107 the barrow jobs lower down the hierarchy. Life will be increasingly difficult for the small builder, who has had to bear many of the sacrifices of the depression that the Government, with their policies of high interest rates and monetarism, have produced.
This measure is a severe blow to home ownership, which the Government tell us they are dedicated to encouraging. A central part of home ownership—the wish to own one's home—is the desire to make the home better by adding double glazing, central heating and other available improvements. That desire will be penalised by the imposition of the 15 per cent. tax. At times, it appears that the spirit of initiative and enterprise has gone into the improvement of housing stock rather than the development of manufacturing industry. An enormous amount of ingenuity, effort and initiative has been lavished on homes in a desire to make improvements. It is wrong to penalise people in this fashion.
Presumably, the Government base their decisions on realistic estimates of the economic effects of their policies. What is the Government's estimate of the impact on home improvement that will occur as a result of these measures?
One point that has not been mentioned in the debate is the effect of the measures on village halls—not just in rural areas but in the suburbs and other housing areas of towns such as Grimsby. In 1981, the Government, as part of their policy of cutting central Government expenditure and forcing burdens on local government, withdrew the idea of making capital grants for community building projects, and the burden was thrown on local authorities. Local authorities responded differently — some generously, others with stinginess.
Because the onus has been placed on local authorities, the village halls which received grants are faced with an unpredictable—the Chancellor's decisions are unpredictable because of the nature of his job and his intellectual approach to these matters—increase in costs which the local authorities will have great difficulty in avoiding. They will not have budgeted for those increases. In many cases, the effect will be so crippling that work will be held up.
Many of those halls were built in the early part of this century. Many of them are former Army huts and similar premises. They need drastic improvements and rebuilding. It will be expensive to make improvements. Local authorities, without sufficient money, will be unable to add the extra 15 per cent. necessary to carry out the work. That work is important to small local communities. It provides a focus in many of the surburbs in the towns. What compensation will there be for the funds now provided for the improvement cf village halls in that way?
I cannot emphasise too strongly that a healthy, expanding building industry is a major dynamic of our economy which should be unleashed and encouraged, not penalised with 15 per cent. VAT. It will be most disappointing if Conservative Members, who have the power to stop this proposal and most of whom have spoken against it, are meek and supine enough to accept it, or at least not to vote against it. The power to stop this iniquitous proposal, which harms builders and damages the objectives that the Government themselves proclaim, lies in the hands of Conservative Members today.
§ Mr. Campbell-Savours
I rise for the second time to speak on the Finance Bill today. On the first occasion, I was able to speak at some length on the issue involved. I should have liked to join my hon. Friends in doing the same on this occasion, but I can speak for only a minute. The reason is simple. I am one of those affected retrospectively by the legislation, which I deplore. This derives from the fact that I am improving a home. The result is that I can neither vote in the Division—I could do so, but it would be wrong—nor speak at length. The Government are to be condemned for having placed Members of Parliament in the invidious position of being unable to speak in the debate because to do so would offend what they believe to be the correct way to pursue their public duties as Members of Parliament.
§ The Minister of State, Treasury (Mr. Barney Hayhoe)
In moving amendment No. 3, the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) was extremely frank about his motives and intentions. He made it perfectly clear that he sought to negate the Chancellor's entire plan to broaden the VAT base by including building alterations. In other words, the right hon. Gentleman was concerned to wreck this part of my right hon. Friend's strategy.
I shall deal first with amendments Nos. 3 and 20, which have the effect that I have described and would cost about £250 million this year and £450 million in a full year. Next I shall deal with amendments Nos. 4, 5 and 6, which would postpone the effective date from 1 June until later in the year. I shall then go on to amendments Nos. 7 and 8, which I believe are designed to exclude pre-budget contracts.
As I have said, the extension of the VAT base in this way is an essential element in my right hon. Friend's Budget strategy of switching from taxes on earnings to taxes on spending. He thus had the choice of increasing the standard rate of VAT or seeking to extend its base. The building alterations area was a fairly obvious candidate, first because repairs and maintenance are already taxed and, secondly, as I believe has been acknowledged in the debate, because alterations, extensions and improvements are far more discretionary in nature, involving far more of a choice as to whether the work should be carried out, than the decision to carry out repairs and maintenance work which is by definition essential.
Thirdly, the yield of such an extension of the VAT base was very substantial. The existing borderline between repairs and alterations is extremely complicated. No one who has spoken in the debate has denied that. There may well be argument about whether the new borderline is less complicated. Indeed, the right hon. Member for Sparkbrook was at pains to show that the new borderline would have just as many anomalies associated with it as the present borderline between repairs and maintenance on the one side and alterations, extensions and improvements on the other.
I believe that the borderline will be less complicated. I have dealt with these matters for some months, and there is little doubt in my mind that the changes will produce a less complicated borderline. I would not argue that all the anomalies will be eliminated. The ghost of Gerald Nabarro will find plenty of ground to walk on in any area of VAT. Many curious anomalies are bound to be thrown up wherever the borderline is drawn, and I have no doubt that they will be brought to our attention.
109 I should like to deal with some of the major arguments that have been deployed. First, there is the argument about the general state of the building industry. The right hon. Gentleman spoke in gloomy and pessimistic terms about prospects for the building and construction industry. He painted far too black a picture. We recognise that the construction industry has suffered badly in the recession, but the figures for 1983 show that a recovery is under way, and the latest forecast from the Economic Development Committee for 1984 looks pretty good. There is an added incentive to bring forward construction work to qualify for the capital allowances while they last. For the commercial sector, with no industrial building allowances to lose, the progressive reduction to 35 per cent. of the rate of corporation tax should bring much new business to the construction industry. The reduction of the rate of corporation tax to 35 per cent. should be good for the labour-intensive construction industry. The same goes for the abolition of the national insurance surcharge. The cut in stamp duty will be good for house building, and the post-Budget reduction in building society mortgage interest rates will also help.
This measure must be seen in the context of the overall prospects for the industry flowing from the Budget as a whole. One must also remember that for over three-quarters of the construction industry's output, either it will be zero-rated or the VAT will be deductible by the purchaser and therefore not a real charge at all.
The advice of my hon. Friend the Member for Hertfordshire, South-West (Mr. Page) was sound. One can judge the measures only by considering the Budget as a whole. The view of the Government is that the overall effect of the VAT measures will not be damaging to jobs in the industry.
§ Mr. Bermingham
Would not the Minister concede that if by means of capital allowance grants one induces people to bring forward their construction programmes, and if by means of the imposition of VAT one induces people to bring forward the completion of their projects, in six to nine months' time there will be a lull in the building industry because projects will have been brought forward and new projects will not be on stream? There will be a gap.
If I pull a piece of molten metal towards me, I will amass it in front of me but I will create a gap further back.
§ Mr. Hayhoe
There may be some element of truth in what the hon. Gentleman says, but his timescales are wrong. Especially in firms involved in industrial building, the timescales for decisions are very much longer than the hon. Gentleman has suggested.
The black economy and cowboys is another major issue that hon. Members on both sides of the Committee have raised. I know that the building industry is anxious that the changes might encourage householders to employ so-called cowboys or moonlighters rather than legitimate building contractors. I entirely accept the clear call of my hon. Friend the Member for Rutland and Melton (Mr. Latham) for urgent action to deal with them.
§ Mr. Hayhoe
The hon. Gentleman must quote me correctly. He is normally punctilious, but he should go 110 away and study the report as he will find that I did not say what he said that I said. I normally expect more fairness from him.
Most of the jobs that will now be taxed are done by reputable firms. Such jobs tend to involve greater expenditure on equipment and materials than repair and maintenance, which is the area in which cowboys and moonlighters have had greater scope for activity. There is, therefore, less incentive to have alterations done by a person who is not registered for VAT and therefore cannot reclaim it for materials. While the increased tax burden will mean that there is a greater incentive for fraud by the VAT-registered trader or traders who ought to be registered for VAT, the greater clarity and simplicity of the structure will make Customs' job in combating evasion easier. There is no complacency about the need to limit VAT evasion and fraud in the construction industry and elsewhere and, even before the Budget, the Board of Customs and Excise had decided to strengthen the control effort in local VAT offices. Those plans are now being implemented.
With regard to special cases for home extensions, I am glad that some hon. Members have recognised that such activity represents the type of discretionary expenditure which the change was designed to bring into tax. It would defeat the simplification aspect of the change if we attempted to relieve some extensions for which a change might be argued on social policy grounds — as, for example, for granny flats — while taxing others. It should not be forgotten that essential repairs and maintenance are already taxed. Much of the debate seemed to be based on an assumption that no VAT was charged on building work whereas those who know the situation recognise that VAT has been charged on repairs and this proposal extends that to alterations.
Several hon. Members referred to energy saving and central heating. Amendment No. 24 deals with that matter so I shall save my remarks until we discuss it. My hon. Friend the Member for Leeds., North-West (Dr. Hampson) referred to the problem of rehabilitation, renovation and refurbishment. For such work, which is largely funded by grant, to be relieved from VAT would mean the Government assisting one activity by a different route. The old VAT structure which taxed repairs and sensitive restorations of older properties while relieving alterations was not designed to and did not promote rehabilitation. To the extent that it is public policy to assist renovation, I join my hon. Friend in believing that it is more economic and efficient to use grants that are tailored to the project in question, subject to the reservation that I must make—the over-riding proviso of what the Government can afford. My hon. Friend also referred to the refurbishment of local authority housing. As he said, local authorities can recover all of the VAT that they incur.
So long as the builders carrying out the work do not take legal title to the houses or flats, they will be providing building or selling agency services to the local authority and the tax charge will be recoverable by the authority under the normal arrangements.
§ Dr. Hampson
I regret to have to say that that is not good enough, because it misses my central point. As a Government, we are in the business of encouraging private developers to take over derelict properties from local 111 authorities. We are not in the business of allowing local authorities to do them up and retain ownership of them if they could easily pass them to the private sector.
§ Mr. Hayhoe
I accept that there is that problem. There is no doubt that the extension of VAT to building alterations throws up several difficult problems, as the debate has demonstrated, one of which concerns housing associations. However, the amendments will not tackle those problems, nor can they be wholly tackled by changing the form of the tax and giving specific relief. I repeat that the best and most economic way of tackling many of those problems is through grants. However, that must take into account—with my right hon. and learned Friend the Chief Secretary sitting beside me, how can I say otherwise — the overriding proviso to keep public expenditure within limits that the nation can afford.
Amendments Nos. 4, 5 and 6 seek to delay the date on which the tax becomes effective from 1 June to 1 September, 1 October or 1 January 1985. The cost of the amendment proposed by my hon. Friend the Member for Rutland and Melton would be about £100 million. A postponement to 1 October would cost about £140 million, and a postponement to 1 January would cost more than £200 million. Substantial sums are involved, and the arbitrariness of the date chosen would still lead to criticism from those who fell on the wrong side of the new line that we had drawn. It would also be unfair to those who have already adjusted their plans as a result of the announced changes. They would not be helped by the deferment, and might think that they have been made to suffer for having take prudent action, especially since others who are only now planning work for July and August would get an unexpected bonus.
§ Mr. Hayhoe
I shall return to my hon. Friend's point in a moment, which relates to contracts entered into before the Budget, where the work is continuing but will not be completed before 1 June.
Several of my hon. Friends made powerful speeches about the problem of listed buildings—
§ Mr. Hattersley
The Minister said that, if the operative date were postponed, a number of people would suffer. Who would those people be, and how would they suffer?
§ Mr. Hayhoe
The point that I was seeking to make was that, although many people will fall on the wrong side of 1 June because their work will not be completed by then, the creation of a new date line of 1 September, 1 October or 1 January would produce a new set of people who felt sore about being on the wrong side of those lines. If the cost of allowing such a postponement is between £100 million and £200 million, it is perfectly clear that a significant number of people will be extremely pleased by such postponement.
§ Mr. Hattersley
I assure the Minister that he said that a number of people who had already made prudent adjustments to their arrangements would suffer if there 112 were a following postponement. I am perfectly prepared to agree that that was a mistake, but if it was not, what did he mean?
§ Mr. Hayhoe
I was saying that people who have already made prudent arrangments in respect of future work, on the basis of what has been announced in the Budget, will now feel disadvantaged by the fact that had they not taken such prudent action they would have gained. The right hon. Gentleman should reflect on this. Given his ministerial experience he will know that as soon as one begins to play around with dividing lines of this sort, and as one satisfies one group of people who feel that they have gained, another group will feel themselves to be particularly disadvantaged.
§ Sir William Clark
I am intrigued with this argument, but I cannot understand what prudent arrangements anyone could take. The only one which a builder could take is to complete the job before 1 June. If that builder or developer has taken that action, I cannot see how extending the date from 1 June to 1 September or whenever will affect him.
§ Mr. Hayhoe
My hon. Friend may be confused by thinking of people who have contractual arrangements. I am talking not about those but about people who were perhaps considering entering into contractual arrangements and on the basis of the 1 June date decided not to proceed or even changed their arrangements. If they now found that the date will be 1 January, they would say, "If only I had know that, I could have done something"—[Laughter.] I appreciate that at 10.55 pm it is sometimes difficult for these slightly more complicated concepts to be fully taken on board.
I come back to my point about listed buildings. Many hon. Members referred to particular problems with regard to alterations to such buildings. Indeed, my hon. Friend the Member for Rutland and Melton took the hon. Member for Berwick-upon-Tweed (Mr. Beith) to task for seeking to move amendment No. 21. If we reach that amendment later this evening, I hope to be able to say something about the Government's attitude toward structural alterations to listed buildings which will go some way to meeting many of the points that have been made in this debate.
A number of my hon. Friends asked about contracts that had been struck before Budget day. The cost of a concession to exclude pre-Budget day contracts from the VAT changes would be considerable. The first-year revenue lost, if there were to be a blanket exclusion, would almost certainly have to be made up in some other way.
As my hon. Friend the Member for Chipping Barnet (Mr. Chapman) made perfectly clear, such a concession would not help people who before Budget day spent time and money planning work and perhaps entered into other commitments on the basis of the work that they would be contracting for at a later date. As he said, merely to have a relief that dealt with contracts entered into before Budget day would still leave people feeling very aggrieved.
On the grounds of cost, and the more general grounds associated with the whole approach of VAT as tax, I am bound to resist the amendments. I shall, however, respond to what my hon. Friends the Members for Croydon, South (Sir W. Clark) and for Hampstead and Highgate (Sir G. Finsberg) have said. They have asked that Treasury Ministers should consider what they have said in the debate today about retrospection and their suggestions about how this could be tackled. I gladly give that 113 undertaking. My right hon. Friends and other members of the Treasury team will consider what has been said. However, I want to make it clear that—as I am sure that they will understand—in saying that, I am giving no undertaking nor making any commitment as to the action that will follow on these reliefs. One shall give careful consideration to what my hon. Friends have said.
§ 11 pm
§ Sir William Clark
I am sure that my hon. Friend will agree that my hon. Friends on the Back Benches will look with great interest to Report, to see what consideration is brought forward. If we are going on the criterion of cost, because if contracts entered into before 13 March are excluded from the increase of 15 per cent. that will cost the Exchequer money, what is the logic of deferring the composite rate for banks, which if it came in on 13 March would give a higher revenue to the Exchequer?
§ Mr. Hayhoe
As my hon. Friend knows, because, like me, he was here for most of the debate, a number of important points were made and comparisons were made with other actions being taken in other parts of the Budget. I said, responding to specific points made by my hon. Friends, that we should give careful consideration to what they have said. They, too, will understand that I am not entering into any commitment or giving any undertaking that reliefs or changes will be made to take account of particular points. I am saying that careful consideration will he given to my hon. Friends' points.
§ Sir Geoffrey Finsberg
I understand from that that, in accordance with normal conventions, the House will have an opportunity on Report to think again about this, and to take a vote if it thinks it necessary.
§ Mr. Hayhoe
That will be a matter not for me but for the Chair, which will decide what matters will be debated. I do not want there to be any misunderstanding from my hon. Friends. They will have heard my clear words that these matters will be considered without commitment as to change being made.
§ Sir William Clark
I am sure that the House agrees with my hon. Friend and recognises difficulty. All that my hon. Friend the Member for Hampstead and Highgate (Sir G. Finsberg) asked was whether we should have an opportunity to discuss this on Report. Quite rightly, my hon. Friend the Minister said that this is a matter for the Chair. I ask my hon. Friend this straight question—would he welcome and encourage a debate on Report?
§ Mr. Hayhoe
I am neutral towards such a suggestion. If the House wishes to discuss these matters then, they will be debated. I do not want to give any sign, which perhaps my hon. Friend is seeking to draw from me, that there is some commitment. If we understand each other, that is helpful.
§ Mr. Hawkins
What is the logic behind the fact that on page 154 of schedule 12 to the Finance (No. 2) Bill it says that the changes in capital allowances will not apply to any contracts made on or before 13 March, Budget day? All we are asking is for that same clause to apply to the change in VAT on building extensions.
§ Mr. Hayhoe
That point was made earlier in the debate and will be taken into account. The VAT extensions that have been under discussion yield a significant amount of money. They are essential to the Budget strategy of my right hon. Friend the Chancellor and I hope that the House will reject the amendment of the right hon. Member for Sparkbrook.
§ Mr. Hattersley
I hope that I am not being unduly uncharitable when I say to the Minister of State, Treasury, that one or two hon. Memnbers will feel that he did not adequately answer every point during the discussion. Indeed, those who could hear what he said above the laughter which accompanied the last 10 minutes of his speech will have noticed one overwhelming point. He said to his hon. Friends rather more often than he said to my hon. Friends, "Do not bother me about equity. Do not confuse me with arguments about justice. We are interested in the tax-raising capacities of the various measures." When the Minister's hon. Friends ask him why he treats the VAT proposal on alterations in a different way and on a different date from capital allowances and the composite rate for the banks, the answer is clear. One is a revenue raising measure and the others do not have the same attraction to the Treasury. When revenue raising is involved little arguments, such as retrospective taxation, are brushed aside. The revenue argument transcends all other considerations such as equity and the usual practices of good taxation.
If it is any consolation to the Minister, despite the way in which he told his hon. Friends that he had nothing whatever to offer them—he could not have rubbed it in more severely—and although he would think about it, he would not think about it in any way that brought about any alteration, I am sure that they will troop into the Lobby with him. They are like the building industry. The Conservative party can do it damage and cause embarrassment, but it will still keep producing the votes and producing the money.
The Labour party notices that the Minister has not made any attempt to answer the four or five basic criticisms of this tax and the way that it is being imposed.
The Minister blandly said that we are over-gloomy about the prospects of the building industry. He said not a word about those prospects being the result not of my judgment but of the judgment of the building industry itself. It is the judgment not of the Union of Construction, Allied Trades and Technicians but the Federation of Master Builders and all those other employer organisations which give the Minister so much support at election time. They are now saying that what the Government have done will reduce employment and output and increase bankruptcies. It is the building industry which says those things, and it is the building industry which the Minister so blandly sweeps aside.
The Minister, with a disingenuity which I thought even beyond him, speaking to his hon. Friend the Member for Rutland and Melton (Mr. Latham), said, "Of course we are against the black economy; of course we are against the 115 moonlighters." I hope that the Minister will concentrate, because I want to remind him of what he said about the black economy and moonlighters in February. He chided my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) for misquoting his previous views on the black economy. Therefore, in order that there shall be no confusion, and certainly no misinterpretation of the Minister's attitude to such matters, I shall read what he said in February:
It is fallacious to assume that the black economy is all bad. It certainly contributes to growth within our society".—[Official Report, 9 February 1984; Vol. 53, c. 1013.]
There follows a supplementary question from one of my hon. Friends. Reading on reveals that I read every word of the hon. Gentleman's answer. If he will allow me to do so, I give him high marks for consistency in the period February to May.
What he now advocates is a justification of his position. He is enhancing the prospects of the black economy; he is encouraging the black economy; he is giving the black economy opportunities that it never had before. He ought to know — his hon. Friends know, and have said so throughout the debate — that what he proposes and defends now means that the black economy will flourish as it has never previously flourished in the building industry. I do not chide the Minister. I congratulate him on the consistency of his support for that sector of our national life.
It is absurd for the Minister to think he convinced the Opposition or his hon. Friends simply by saying that the Government know there are anomalies, but that it would be a good tax indeed that did not involve anomalies of any kind. When the Chancellor told the House of this new tax, on Budget day, he said that the object of introducing it into the sector to which it now applies was to avoid anomalies. His hon. Friends have pointed out time and again that the anomalies have been increased and enhanced.
§ Mr. Hattersley
The Chancellor says "Nonsense." The right hon. Gentleman was not present when many hon. Members gave examples, and some hon. Members are now nodding in agreement. I take the garage example to which the Minister of State should have turned his mind. He should have told us how he justifies the position that a garage built when a house is built is not taxed, while an identical garage built a fortnight after the house is completed is taxed. He should have turned his mind to the question posed by his own Back Benchers as to whether a house purchaser can announce that the transaction is not complete because he has in mind to build a garage in the following year or the year after that.
The Minister never attempted to deal with any of those questions. The reason why he did not attempt to deal with them I can describe in two sentences. He did not attempt to deal with them because he knew that the case against the tax was overwhelming. The only justification for it was the hope—not the certainty—of £450 million extra for the Revenue. But not even that is certain, because most people assume that so much work will be postponed or will go to the black economy that the Treasury will make nothing from the additional tax. The entire operation is an absurdity. The Minister of State had the short straw tonight. We will divide the House to demonstrate that we, at least, are prepared to tell the truth about this nonsense.
§ Question put, That the amendment be made:—
§ The House divided: Ayes 139, Noes 235.117
|Division No. 257]||[11.12 pm|
|Anderson, Donald||Leighton, Ronald|
|Ashley, Rt Hon Jack||Lewis, Ron (Carlisle)|
|Ashton, Joe||Lofthouse, Geoffrey|
|Atkinson, N. (Tottenham)||McCartney, Hugh|
|Bagier, Gordon A. T.||McDonald, Dr Oonagh|
|Barron, Kevin||McGuire, Michael|
|Beckett, Mrs Margaret||McKay, Allen (Penistone)|
|Beggs, Roy||McKelvey, William|
|Beith, A. J.||McNamara, Kevin|
|Bell, Stuart||McTaggart, Robert|
|Bermingham, Gerald||McWilliam, John|
|Bidwell, Sydney||Madden, Max|
|Blair, Anthony||Marshall, David (Shettleston)|
|Boyes, Roland||Maxton, John|
|Bray, Dr Jeremy||Meacher, Michael|
|Brown, R. (N'c'tle-u-Tyne N)||Meadowcroft, Michael|
|Brown, Ron (E'burgh, Leith)||Michie, William|
|Caborn, Richard||Mikardo, Ian|
|Callaghan, Jim (Heyw'd & M)||Milian, Rt Hon Bruce|
|Carter-Jones, Lewis||Miller, Dr M. S. (E Kilbride)|
|Clark, Dr David (S Shields)||Molyneaux, Rt Hon James|
|Clay, Robert||Morris, Rt Hon A. (W'shawe)|
|Cocks, Rt Hon M. (Bristol S.)||Nicholson, J.|
|Cohen, Harry||Oakes, Rt Hon Gordon|
|Coleman, Donald||O'Brien, William|
|Conlan, Bernard||Owen, Rt Hon Dr David|
|Cook, Frank (Stockton North)||Park, George|
|Corbyn, Jeremy||Parry, Robert|
|Cowans, Harry||Patchett, Terry|
|Craigen, J. M.||Penhaligon, David|
|Crowther, Stan||Pike, Peter|
|Cunliffe, Lawrence||Powell, Rt Hon J. E. (S Down)|
|Davies, Rt Hon Denzil (L'lli)||Prescott, John|
|Dixon, Donald||Randall, Stuart|
|Dormand, Jack||Redmond, M.|
|Dubs, Alfred||Rees, Rt Hon M. (Leeds S)|
|Duffy, A. E. P.||Richardson, Ms Jo|
|Eadie, Alex||Robinson, G. (Coventry NW)|
|Eastham, Ken||Rogers, Allan|
|Fatchett, Derek||Rooker, J. W.|
|Faulds, Andrew||Ross, Ernest (Dundee W)|
|Field, Frank (Birkenhead)||Ross, Stephen (Isle of Wight)|
|Fisher, Mark||Ross, Wm. (Londonderry)|
|Flannery, Martin||Ryman, John|
|Foot, Rt Hon Michael||Sedgemore, Brian|
|Foster, Derek||Sheldon, Rt Hon R.|
|Fraser, J. (Norwood)||Silkin, Rt Hon J.|
|George, Bruce||Skinner, Dennis|
|Gould, Bryan||Smith, C.(Isl'ton S & F'bury)|
|Gourlay, Harry||Smyth, Rev W. M. (Belfast S)|
|Hamilton, James (M'well N)||Soley, Clive|
|Hamilton, W. W. (Central Fife)||Spearing, Nigel|
|Harman, Ms Harriet||Stewart, Rt Hon D. (W Isles)|
|Hart, Rt Hon Dame Judith||Stott, Roger|
|Hattersley, Rt Hon Roy||Thomas, Dr R. (Carmarthen)|
|Hawkins, C. (High Peak)||Thorne, Stan (Preston)|
|Hogg, N. (C'nauld Kilsyth)||Tinn, James|
|Holland, Stuart (Vauxhall)||Walker, Cecil (Belfast N)|
|Howells, Geraint||Wallace, James|
|Hoyle, Douglas||Wardell, Gareth (Gower)|
|Hughes, Dr. Mark (Durham)||Wareing, Robert|
|Hughes, Robert (Aberdeen N)||Weetch, Ken|
|Hughes, Roy (Newport East)||Welsh, Michael|
|Hughes, Sean (Knowsley S)||Williams, Rt Hon A.|
|Janner, Hon Greville||Wilson, Gordon|
|Jones, Barry (Alyn & Deeside)||Woodall, Alec|
|Kaufman, Rt Hon Gerald||Young, David (Bolton SE)|
|Kilroy-Silk, Robert||Tellers for the Ayes:|
|Kirkwood, Archibald||Mr. Frank Haynes and|
|Lamond, James||Mr. Austin Mitchell.|
|Adley, Robert||Goodhart, Sir Philip|
|Aitken, Jonathan||Goodlad, Alastair|
|Alexander, Richard||Gorst, John|
|Alison, Rt Hon Michael||Gow, Ian|
|Amess, David||Greenway, Harry|
|Arnold, Tom||Gregory, Conal|
|Ashby, David||Griffiths, E. (B'y St Edm'ds)|
|Aspinwall, Jack||Griffiths, Peter (Portsm'th N)|
|Atkins, Rt Hon Sir H.||Grist, Ian|
|Baldry, Anthony||Ground, Patrick|
|Batiste, Spencer||Grylls, Michael|
|Bellingham, Henry||Hamilton, Neil (Tatton)|
|Bendall, Vivian||Hampson, Dr Keith|
|Berry, Sir Anthony||Hanley, Jeremy|
|Biggs-Davison, Sir John||Hannam, John|
|Bonsor, Sir Nicholas||Hargreaves, Kenneth|
|Boscawen, Hon Robert||Harris, David|
|Bowden, A. (Brighton K'to'n)||Haselhurst, Alan|
|Bowden, Gerald (Dulwich)||Havers, Rt Hon Sir Michael|
|Boyson, Dr Rhodes||Hawkins, Sir Paul (SW N'folk)|
|Braine, Sir Bernard||Hawksley, Warren|
|Brandon-Bravo, Martin||Hayes, J.|
|Bright, Graham||Hayhoe, Barney|
|Brinton, Tim||Hayward, Robert|
|Brittan, Rt Hon Leon||Heathcoat-Amory, David|
|Brooke, Hon Peter||Henderson, Barry|
|Brown, M. (Brigg & CI'thpes)||Hickmet, Richard|
|Browne, John||Higgins, Rt Hon Terence L.|
|Bruinvels, Peter||Hirst, Michael|
|Bryan, Sir Paul||Hogg, Hon Douglas (Gr'th'm)|
|Buchanan-Smith, Rt Hon A.||Holland, Sir Philip (Gedling)|
|Buck, Sir Antony||Hooson, Tom|
|Budgen, Nick||Howard, Michael|
|Bulmer, Esmond||Howarth, Gerald (Cannock)|
|Burt, Alistair||Howell, Rt Hon D. (G'ldford)|
|Butcher, John||Howell, Ralph (N Norfolk)|
|Butterfill, John||Hubbard-Miles, Peter|
|Carlisle, John (N Luton)||Hunter, Andrew|
|Carlisle, Kenneth (Lincoln)||Hurd, Rt Hon Douglas|
|Carttiss, Michael||Jenkin, Rt Hon Patrick|
|Chalker, Mrs Lynda||Jessel, Toby|
|Chope, Christopher||Johnson-Smith, Sir Geoffrey|
|Clark, Dr Michael (Rochford)||Jones, Gwilym (Cardiff N)|
|Clark, Sir W. (Croydon S)||Jones, Robert (W Herts)|
|Clarke, Rt Hon K. (Rushcliffe)||Jopling, Rt Hon Michael|
|Clegg, Sir Walter||Kellett-Bowman, Mrs Elaine|
|Cockeram, Eric||Key, Robert|
|Colvin, Michael||King, Roger (B'ham N'field)|
|Coombs, Simon||Knight, Mrs Jill (Edgbaston)|
|Cope, John||Knowles, Michael|
|Corrie, John||Knox, David|
|Couchman, James||Latham, Michael|
|Cranborne, Viscount||Lawler, Geoffrey|
|Currie, Mrs Edwina||Lawrence, Ivan|
|Dorrell, Stephen||Lawson, Rt Hon Nigel|
|Douglas-Hamilton, Lord J.||Lee, John (Pendle)|
|Dover, Den||Leigh, Edward (Gainsbor'gh)|
|du Cann, Rt Hon Edward||Lennox-Boyd, Hon Mark|
|Dunn, Robert||Lester, Jim|
|Dykes, Hugh||Lewis, Sir Kenneth (Stamf'd)|
|Edwards, Rt Hon N. (P'broke)||Lilley, Peter|
|Eggar, Tim||Lloyd, Ian (Havant)|
|Emery, Sir Peter||Lloyd, Peter, (Fareham)|
|Fallon, Michael||McCrindle, Robert|
|Fenner, Mrs Peggy||Macfarlane, Neil|
|Finsberg, Sir Geoffrey||MacKay, Andrew (Berkshire)|
|Fletcher, Alexander||MacKay, John (Argyll & Bute)|
|Forman, Nigel||McNair-Wilson, P. (New F'st)|
|Forth, Eric||Major, John|
|Fowler, Rt Hon Norman||Malins, Humfrey|
|Fox, Marcus||Malone, Gerald|
|Freeman, Roger||Maples, John|
|Fry, Peter||Marland, Paul|
|Gale, Roger||Marlow, Antony|
|Galley, Roy||Mather, Carol|
|Gardiner, George (Reigate)||Maude, Hon Francis|
|Gardner, Sir Edward (Fylde)||Mawhinney, Dr Brian|
|Garel-Jones, Tristan||Maxwell-Hyslop, Robin|
|Glyn, Dr Alan||Mayhew, Sir Patrick|
|Mellor, David||Ridley, Rt Hon Nicholas|
|Merchant, Piers||Ridsdale, Sir Julian|
|Meyer, Sir Anthony||Roberts, Wyn (Conwy)|
|Miller, Hal (B'grove)||Rossi, Sir Hugh|
|Mills, Iain (Meriden)||Rost, Peter|
|Mills, Sir Peter (West Devon)||Ryder, Richard|
|Miscampbell, Norman||Sainsbury, Hon Timothy|
|Mitchell, David (NW Hants)||Shaw, Giles (Pudsey)|
|Moate, Roger||Shelton, William (Streatham)|
|Moore, John||Sims, Roger|
|Morris, M. (N'hampton, S)||Skeet, T. H. H.|
|Morrison, Hon C. (Devizes)||Soames, Hon Nicholas|
|Morrison, Hon P. (Chester)||Speller, Tony|
|Moynihan, Hon C.||Stanbrook, Ivor|
|Mudd, David||Steen, Anthony|
|Murphy, Christopher||Stewart, Allan (Eastwood)|
|Neale, Gerrard||Stewart, Ian (N Hertf'dshire)|
|Needham, Richard||Stradling Thomas, J.|
|Nicholls, Patrick||Sumberg, David|
|Normanton, Tom||Taylor, John (Solihull)|
|Norris, Steven||Thompson, Donald (Calder V)|
|Onslow, Cranley||Townend, John (Bridlington)|
|Oppenheim, Philip||Vaughan, Sir Gerard|
|Osborn, Sir John||Viggers, Peter|
|Ottaway, Richard||Wakeham, Rt Hon John|
|Page, Richard (Herts SW)||Waldegrave, Hon William|
|Parris, Matthew||Walker, Bill (T'side N)|
|Patten, Christopher (Bath)||Wardle, C. (Bexhill)|
|Pawsey, James||Wareing, Robert|
|Peacock, Mrs Elizabeth||Warren, Kenneth|
|Percival, Rt Hon Sir Ian||Watts, John|
|Pollock, Alexander||Wells, Bowen (Hertford)|
|Porter, Barry||Welsh, Michael|
|Powell, William (Corby)||Whitney, Raymond|
|Powley, John||Wiggin, Jerry|
|Prentice, Rt Hon Reg||Williams, Rt Hon A.|
|Price, Sir David||Wilson, Gordon|
|Proctor, K. Harvey||Wolfson, Mark|
|Rathbone, Tim||Yeo, Tim|
|Rees, Rt Hon Peter (Dover)||Young, Sir George (Acton)|
|Rhodes James, Robert|
§ Question accordingly negatived.
§ Question put, That the clause stand part of the Bill:—
§ The Committee divided: Ayes 233, Noes 136.121
|Division No. 258]||[11.24 pm|
|Adley, Robert||Bryan, Sir Paul|
|Aitken, Jonathan||Buchanan-Smith, Rt Hon A|
|Alexander, Richard||Buck, Sir Antony|
|Alison, Rt Hon Michael||Budgen, Nick|
|Amess, David||Bulmer, Esmond|
|Arnold, Tom||Burt, Alistair|
|Ashby, David||Butcher, John|
|Aspinwall, Jack||Butterfill, John|
|Atkins, Rt Hon Sir H.||Carlisle, John (N Luton)|
|Baldry, Anthony||Carlisle, Kenneth (Lincoln)|
|Batiste, Spencer||Carttiss, Michael|
|Bellingham, Henry||Chalker, Mrs Lynda|
|Bendall, Vivian||Chope, Christopher|
|Berry, Sir Anthony||Clark, Dr Michael (Rochford)|
|Biggs-Davison, Sir John||Clark, Sir W. (Croydon S)|
|Blaker, Rt Hon Sir Peter||Clarke, Rt Hon K. (Rushclif'e)|
|Bonsor, Sir Nicholas||Clegg, Sir Walter|
|Boscawen, Hon Robert||Cockeram, Eric|
|Bowden, A. (Brighton K'to'n)||Colvin, Michael|
|Bowden, Gerald (Dulwich)||Coombs, Simon|
|Boyson, Dr Rhodes||Cope, John|
|Braine, Sir Bernard||Corrie, John|
|Brandon-Bravo, Martin||Couchman, James|
|Bright, Graham||Cranborne, Viscount|
|Brinton, Tim||Currie, Mrs Edwina|
|Brittan, Rt Hon Leon||Dorrell, Stephen|
|Brooke, Hon Peter||Douglas-Hamilton, Lord J.|
|Brown, M. (Brigg & CI'thpes)||Dover, Den|
|Browne, John||du Cann, Rt Hon Edward|
|Bruinvels, Peter||Dunn, Robert|
|Dykes, Hugh||McCrindle, Robert|
|Edwards, Rt Hon N. (P'broke)||Macfarlane, Neil|
|Egger, Tim||MacKay, Andrew (Berkshire)|
|Emery, Sir Peter||MacKay, John (Argyll & Bute)|
|Fallon, Michael||McNair-Wilson, P. (New F'st)|
|Fenner, Mrs Peggy||Major, John|
|Finsberg, Sir Geoffrey||Malins, Humfrey|
|Forman, Nigel||Malone, Gerald|
|Forth, Eric||Maples, John|
|Fowler, Rt Hon Norman||Marland, Paul|
|Freeman, Roger||Marlow, Antony|
|Fry, Peter||Mather, Carol|
|Gale, Roger||Maude, Hon Francis|
|Galley, Roy||Mawhinney, Dr Brian|
|Gardiner, George (Reigate)||Maxwell-Hyslop, Robin|
|Gardner, Sir Edward (Fylde)||Mayhew, Sir Patrick|
|Glyn, Dr Alan||Mellor, David|
|Goodhart, Sir Philip||Merchant, Piers|
|Goodlad, Alastair||Meyer, Sir Anthony|
|Gorst, John||Miller, Hal (B'grove)|
|Gow, Ian||Mills, lain (Meriden)|
|Greenway, Harry||Mills, Sir Peter (West Devon)|
|Gregory, Conal||Miscampbell, Norman|
|Griffiths, E. (By St Edm'ds)||Mitchell, David (NW Hants)|
|Griffiths, Peter (Portsm'th N)||Moate, Roger|
|Grist, Ian||Moore, John|
|Ground, Patrick||Morris, M. (N'hampton, S)|
|Grylls, Michael||Morrison, Hon C. (Devizes)|
|Hamilton, Hon A. (Epsom)||Morrison, Hon P. (Chester)|
|Hamilton, Neil (Tatton)||Moynihan, Hon C.|
|Hampson, Dr Keith||Mudd, David|
|Hanley, Jeremy||Murphy, Christopher|
|Hannam, John||Neale, Gerrard|
|Hargreaves, Kenneth||Needham, Richard|
|Haselhurst, Alan||Nicholls, Patrick|
|Havers, Rt Hon Sir Michael||Normanton, Tom|
|Hawkins, Sir Paul (SW N'folk)||Norris, Steven|
|Hawksley, Warren||Onslow, Cranley|
|Hayes, J.||Oppenheim, Philip|
|Hayhoe, Barney||Osborn, Sir John|
|Hayward, Robert||Ottaway, Richard|
|Heathcoat-Amory, David||Page, Richard (Herts SW)|
|Henderson, Barry||Parris, Matthew|
|Hickmet, Richard||Patten, Christopher (Bath)|
|Higgins, Rt Hon Terence L.||Pawsey, James|
|Hirst, Michael||Peacock, Mrs Elizabeth|
|Holland, Sir Philip (Gedling)||Percival, Rt Hon Sir Ian|
|Hooson, Tom||Pollock, Alexander|
|Howard, Michael||Powell, William (Corby)|
|Howarth, Gerald (Cannock)||Powley, John|
|Howell, Rt Hon D. (G'Idford)||Prentice, Rt Hon Reg|
|Howell, Ralph (N Norfolk)||Price, Sir David|
|Hubbard-Miles, Peter||Proctor, K. Harvey|
|Hunt, David (Wirral)||Rathbone, Tim|
|Hunter, Andrew||Rees, Rt Hon Peter (Dover)|
|Hurd, Rt Hon Douglas||Rhodes James, Robert|
|Jenkin, Rt Hon Patrick||Rhys Williams, Sir Brandon|
|Jessel, Toby||Ridley, Rt Hon Nicholas|
|Johnson-Smith, Sir Geoffrey||Ridsdale, Sir Julian|
|Jones, Gwilym (Cardiff N)||Roberts, Wyn (Conwy)|
|Jones, Robert (W Herts)||Rossi, Sir Hugh|
|Jopling, Rt Hon Michael||Rost, Peter|
|Kellett-Bowman, Mrs Elaine||Ryder, Richard|
|Key, Robert||Sainsbury, Hon Timothy|
|King, Roger (B'ham N'field)||Shaw, Giles (Pudsey)|
|Knight, Mrs Jill (Edgbaston)||Shelton, William (Streatham)|
|Knowles, Michael||Sims, Roger|
|Knox, David||Skeet, T. H. H.|
|Latham, Michael||Soames, Hon Nicholas|
|Lawler, Geoffrey||Speller, Tony|
|Lawrence, Ivan||Stanbrook, Ivor|
|Lawson, Rt Hon Nigel||Steen, Anthony|
|Lee, John (Pendle)||Stewart, Allan (Eastwood)|
|Leigh, Edward (Gainsbor'gh)||Stewart, Ian (N Hertf'dshire)|
|Lennox-Boyd, Hon Mark||Stradling Thomas, J.|
|Lester, Jim||Sumberg, David|
|Lewis, Sir Kenneth (Stamf'd)||Taylor, John (Solihull)|
|Lilley, Peter||Thompson, Donald (Calder V)|
|Lloyd, Ian (Havant)||Townend, John (Bridlington)|
|Lloyd, Peter, (Fareham)||Vaughan, Sir Gerard|
|Viggers, Peter||Wiggin, Jerry|
|Wakeham, Rt Hon John||Wolfson, Mark|
|Waldegrave, Hon William||Yeo, Tim|
|Walker, Bill (T'side N)||Young, Sir George (Acton)|
|Wardle, C. (Bexhill)|
|Warren, Kenneth||Tellers for the Ayes:|
|Watts, John||Mr. Tristan Garel-Jones and|
|Wells, Bowen (Hertford)||Mr. Douglas Hogg.|
|Anderson, Donald||Kaufman, Rt Hon Gerald|
|Ashley, Rt Hon Jack||Kennedy, Charles|
|Ashton, Joe||Kilroy-Silk, Robert|
|Atkinson, N. (Tottenham)||Kirkwood, Archibald|
|Bagier, Gordon A. T.||Lamond, James|
|Barron, Kevin||Leadbitter, Ted|
|Beckett, Mrs Margaret||Leighton, Ronald|
|Beggs, Roy||Lewis, Ron (Carlisle)|
|Beith, A. J.||Lofthouse, Geoffrey|
|Bell, Stuart||McCartney, Hugh|
|Bermingham, Gerald||McDonald, Dr Oonagh|
|Bidwell, Sydney||McGuire, Michael|
|Blair, Anthony||McKelvey, William|
|Boyes, Roland||McNamara, Kevin|
|Bray, Dr Jeremy||McTaggart, Robert|
|Brown, R. (N'c'tle-u-Tyne N)||McWilliam, John|
|Brown, Ron (E'burgh, Leith)||Madden, Max|
|Caborn, Richard||Marshall, David (Shettleston)|
|Callaghan, Jim (Heyw'd & M)||Maxton, John|
|Carter-Jones, Lewis||Meacher, Michael|
|Clark, Dr David (S Shields)||Meadowcroft, Michael|
|Clay, Robert||Michie, William|
|Cocks, Rt Hon M. (Bristol S.)||Mikardo, Ian|
|Cohen, Harry||Milian, Rt Hon Bruce|
|Coleman, Donald||Miller, Dr M. S. (E Kilbride)|
|Conlan, Bernard||Molyneaux, Rt Hon James|
|Cook, Frank (Stockton North)||Morris, Rt Hon A. (W'shawe)|
|Corbyn, Jeremy||Nicholson, J.|
|Cowans, Harry||Oakes, Rt Hon Gordon|
|Craigen, J. M.||O'Brien, William|
|Crowther, Stan||Owen, Rt Hon Dr David|
|Cunliffe, Lawrence||Park, George|
|Davies, Rt Hon Denzil (L'lli)||Parry, Robert|
|Dixon, Donald||Patchett, Terry|
|Dobson, Frank||Penhaligon, David|
|Dormand, Jack||Pike, Peter|
|Dubs, Alfred||Powell, Rt Hon J. E. (S Down)|
|Duffy, A. E. P.||Prescott, John|
|Eadie, Alex||Randall, Stuart|
|Eastham, Ken||Redmond, M.|
|Fatchett, Derek||Rees, Rt Hon M. (Leeds S)|
|Faulds, Andrew||Richardson, Ms Jo|
|Field, Frank (Birkenhead)||Robinson, G. (Coventry NW)|
|Fisher, Mark||Rogers, Allan|
|Flannery, Martin||Rooker, J. W.|
|Foster, Derek||Ross, Ernest (Dundee W)|
|Fraser, J. (Norwood)||Ross, Stephen (Isle of Wight)|
|Freeson, Rt Hon Reginald||Ross, Wm. (Londonderry)|
|George, Bruce||Ryman, John|
|Gould, Bryan||Sedgemore, Brian|
|Gourlay, Harry||Sheldon, Rt Hon R.|
|Hamilton, James (M'well N)||Skinner, Dennis|
|Hamilton, W. W. (Central Fife)||Smith, C.(Isl'ton S & F'bury)|
|Harman, Ms Harriet||Smyth, Rev W. M. (Belfast S)|
|Hart, Rt Hon Dame Judith||Soley, Clive|
|Hattersley, Rt Hon Roy||Spearing, Nigel|
|Hawkins, C. (High Peak)||Stott, Roger|
|Haynes, Frank||Thomas, Dr R. (Carmarthen)|
|Hogg, N. (C'nauld & Kilsyth)||Thorne, Stan (Preston)|
|Holland, Stuart (Vauxhall)||Tinn, James|
|Howells, Geraint||Walker, Cecil (Belfast N)|
|Hoyle, Douglas||Wallace, James|
|Hughes, Dr. Mark (Durham)||Wardell, Gareth (Gower)|
|Hughes, Roy (Newport East)||Wareing, Robert|
|Hughes, Sean (Knowsley S)||Welsh, Michael|
|Janner, Hon Greville||Williams, Rt Hon A.|
|Jones, Barry (Alyn & Deeside)||Wilson, Gordon|
|Woodall, Alec||Tellers for the Noes:|
|Young, David (Bolton SE)||Mr. Allen McKay and|
|Mr. Austin Mitchell.|
§ Question accordingly agreed to.
§ Clause 10 ordered to stand part of the Bill.