WORKPLACE NURSERIES

HC Deb 09 July 1985 vol 82 cc913-61

(1) In section 62 of the Finance Act 1976 (exceptions from general charges on benefits) after subsection (8) there shall be inserted the following subsections:

1. "(9) Section 61 above does not apply to a benefit consisting in the provision by the employee's employer of day-care facilities in a registered nursery for a child or children of the employee where such facilities are provided for the children of staff generally.
2. (10) The provisions of subsection (9) above shall be deemed always to have had effect."

(2) In section 72 of the Finance Act 1976 (interpretation of the Chapter charging benefits) after subsection (12) there shall be inserted the following subsections:

1. "(13) For the purposes of this Chapter "a registered nursery" means a nursery registered with a local authority in accordance with the provisions of the Nurseries Act 1948 as amended.
2. (14) For the purposes of section 62 nursery facilities shall not be regarded as not provided for the children of staff generally when the employer is not able to offer a place in a registered nursery to the children of staff generally solely because of the limited availability of such registered nursery places at or near to the employer's work place or near to the employee's home.
3. (15) For the purposes of subsection 62(9) above "child" means such person in respect of whom the employee is entitled to relief under the provisions of section 14 to the Income and Corporation Taxes Act 1970 or would be so entitled but for the employee's being married."

and the present subsection (13) of section 72 shall accordingly become subsection (16).'.—[Mr. Terry Davis.]

Brought up, and read the First time.

Mr. Terry Davis

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

Mr. Deputy Speaker (Mr. Harold Walker)

With this it will be convenient to take new clause 4 — Exemptions from general charges on benefits (registered nursery)—

'1. In section 62 of the Finance Act 1976 (exemptions from general charges on benefits) after subsection (8) there shall be inserted the following subsections:

1. "(9) Section 61 above does not apply to a benefit connected with the provision by the employee's employer of day-care facilities consisting in a registered nursery for a child or children of the employer where such facilities are provided for the children of all staff generally.
2. (10) 'Provision' in subsection (9) above shall not be confined to the provision of facilities on the employer's premises but shall include payments made by the employer in respect of the provision of day care facilities made available by any other person.
3. (11) Payments made by any employer in relation to the provision of day care facilities in subsections (9) and (10) above, whether meeting a liability of the employer or of 914 an employee to whom those facilities are made available, shall not be assessable on the employee under schedule E."

2. In section 72 of the Finance Act 1976 (interpretation of the Chapter charging benefits) after subsection (12) there shall be inserted the following subsections:

1. "(13) For the purposes of this Chapter 'a registered nursery' means a nursery registered with a local authority in accordance with the provisions of the Nurseries Act 1948 as amended.
2. (14) For the purposes of subsection 62(9) above 'child' means such person in respect of whom the employee is entitled to relief under the provisions of section 14 to the Incomes and Corporation Taxes Act 1970 or would be so entitled but for the employee's being married, and who is below the statutory school entry age."

The present subsection (13) of section 72 shall accordingly become subsection (15).'.

Mr. Davis

The purpose of the new clause is to overrule the decision of the Inland Revenue and the Government to make people pay income tax on the contributions which are made by their employers towards the cost of providing workplace nurseries. As the name suggests, a workplace nursery is usually provided at the place of work—an office, factory or hospital—for the children of the people who work at that location.

Usually, the cost of the nursery is shared between the employee, or parent, and the employer. I emphasise that the parent pays. Almost always the parent makes a substantial contribution towards the cost of providing the workplace nursery, and pays from his or her income after tax.

I emphasise that many employers see the provision of nurseries as being in their interests, especially when their employees possess scarce skills. It is often in an employer's interests to encourage women to return to work after childbirth as quickly as possible. Some employers also recognise that it is in the interests of the community and society to provide genuinely equal opportunities for women, and that unless nursery places are provided for women with children, women cannot enjoy equal opportunities with men.

Trade unions and employers often recognise that it is in the interests of society to provide nurseries so that single parents can take up opportunities for employment. I am thinking of the widowed, the divorced and the separated. Single parents are usually women, but sometimes men, who have been widowed, divorced or left with the custody of children. Generally speaking, women are left with the responsibility of bringing up children after a marriage has ended through death or some other event.

It is therefore recognised that it is in the interests of those single parents to be able to take employment, and to do that they need the facility of a nursery. During the past 30 years, progressive employers, who recognise their social obligations, have increasingly provided workplace nurseries.

Mr. Eggar

I follow the hon. Gentleman's analysis, but if he uses those premises, why does his amendment not go further and, for example, cover the position where an employer may choose to provide not a workplace nursery, but a child minder to look after a child?

Mr. Davis

The clause does not cover that because we are dealing with a change in the practice of the Inland Revenue which concerns workplace nurseries. Money paid by an employer to an employee to employ a child minder has never been relieved of income tax, but for decades employers' contributions to workplace nurseries have been tax-exempt.

Mr. Tim Smith

They have not.

Mr. Davis

As is often the case, the hon. Member for Beaconsfield (Mr. Smith) chooses to intervene from a sedentary position. I hope that he will seek to catch your eye, Mr. Deputy Speaker, so that we can analyse his speech. It will be the first time that he has spoken in such a debate.

The Government should encourage the provision of workplace nurseries, which are especially important for single parents. It must be in the Government's interest to encourage single parents to support themselves and their families instead of forcing them to depend on social security. It is also in the community's interests for single parents to be given the opportunity to serve it. That is nowhere more true than in the National Health Service.

I would have expected the Government to support me, but 18 months ago a decision was taken to charge income tax on the contributions of an employer to the cost of providing a workplace nursery. I emphasise that the tax applies only to someone who is paid or receives a total of £8,500 a year, but in calculating that income the Inland Revenue takes into account the employer's contribution to the cost of providing a workplace nursery. Therefore, a person is taxed both on his wages and on the employer's contribution to the nursery.

It is common for a well-run nursery to cost £4,000 a year per child. [Interruption.] I realise that I am telling the hon. Member for Beaconsfield things that he does not know, but the Financial Secretary will endorse my figures.

Mr. Tim Smith

Will the hon. Gentleman confirm that he is advancing the cause of an elite minority? The number of taxpayers affected by the new clause is about 2,000.

Mr. Davis

We shall see whether the people involved are called an elite minority by my hon. Friends and, indeed, Conservative Members because I shall put that point to the hon. Gentleman later. If an employee pays £30 a week towards the cost of a nursery and the employer pays £50 a week, the Inland Revenue adds £2,600 to the employee's wages in calculating the liability to income tax on the employer's contribution to the nursery. If somebody is paid £120 a week, or £6,000 a year — a fairly low salary for a typist in central London — that person becomes liable to income tax on the employer's contribution towards the cost of providing a place for a child at a nursery.

It was the Government's view, and I believe it still is the Treasury's, that liability to tax has existed since 1948. I regard that as a half-truth. Perhaps the liability existed in theory, but it did not exist in practice. There is plenty of evidence to support my contention. It is well documented that the Equal Opportunities Commission was advised by the Inland Revenue in 1979 that there was no liability to income tax on an employer's contribution towards the cost of providing a workplace nursery. The Consumers Association was advised several times that there was no liability to tax. It was so advised from 1976 to 1982 and included that advice in the Which? magazine tax guide.

4.30 pm

I do not blame the Inland Revenue for giving such advice. Workplace canteens were exempt from liability to tax in 1948, as were car parks, social clubs and sports facilities. It can be argued that the benefit of such facilities is small, but that is not always so. It can be extremely expensive to provide a car park, expecially in central London. It can also be expensive to provide sporting facilities if they are used by a minority of employees.

It should be clear that the Opposition are not suggesting the imposition of tax on car parks, social clubs, sports facilities or even the office or factory canteen. However, we believe that workplace nurseries should be put on exactly the same basis. For several years, the Inland Revenue advised that workplace nurseries were in the same category as canteens and other benefits for which concessions are given on an extra-statutory basis. In a letter of July 1984, the Financial Secretary admitted to me that the advice was given by "mistake".

The Inland Revenue decided to levy tax when, in 1983, it received a specific inquiry about tax liability on workplace nurseries from an employer. I refer, of course, to the Kingsway children's centre. We went into detail about that centre in Committee and on Report one year ago. I shall not repeat the facts, but there is a mistaken belief that workplace nurseries are an issue only for people who live in London and that they are provided for employees of organisations such as London Weekend Television and trade unions such as the Nationl Association of Local Government Officers.

There is also a mistaken belief that workplace nurseries are provided only for single parents. Nurseries are provided throughout the country for people in many different types of employment who are as likely to be part of a two-parent family as a one-parent family.

I have discovered that such nurseries are often provided in the National Health Service. There is a workplace nursery at the All Saints hospital in Birmingham. I am not telling the Inland Revenue anything that it does not know — it is not my task to set it on the parents who are enjoying the benefit of a workplace nursery. There are 56 children at that nursery and there is a waiting list of 40. Parents who are able to send their children there pay £5 a day, or £1,250 a year.

Nobody knows how much the hospital contributes. It has never previously been thought necessary to spend time calculating the cost of the nursery. Everybody involved in running the NHS in the west midlands accepts that the nursery benefits the NHS and people working in it. Most of the parents who send their children to the nursery work at All Saints, at Dudley road hospital, or as community health visitors. A health visitor is paid about £6,000 a year. If the hospital can calculate its contribution, it is likely that those parents will be charged income tax.

Most of the parents are nurses, who are paid even less than health visitors. Some are student nurses or student doctors. Most parents are not one-parent families, and often have returned to the hospital to take a further course of training. The Government now insist that the hospital calculates the cost of running the nursery so that they can tax each parent on the benefit. If parents cannot afford to pay, the Government will drive them to use unqualified child minders.

The All Saints day nursery might be unique in Birmingham, but it is not unique in the west midlands. Parents pay similar sums of money for a nursery at Sandwell district hospital, and nobody knows the cost to the hospital. It benefits about 35 children. Such provision means that the children of doctors, nurses, health visitors, cleaners, domestics and a carpenter mingle. They stay open from 7 am until 6 pm, thus enabling the parents to work the unsocial hours often associated with hospitals.

At worst, the Government's decision to tax employers' contributions to workplace nurseries will drive single parents back on to social security. At best, it will create work for the NHS simply to tax nurses and others who work for it. Such people serve the community. In the person of the Secretary of State for Social Services, the Government have made life difficult enough for those people recently. The Financial Secretary is now adding to their difficulties by insisting on taking his cut from their wages.

Mr. Tony Baldry (Banbury)

The purpose of my new clause 4 is identical to that of new clause 1.

I wholeheartedly support the Government's desire to tackle tax perks. Pay perks are divisive and distortive. We must tackle wage inflation if we are to compete effectively with our overseas rivals, but it is pointless exhorting hourly paid employees to accept wage constraint if they can see middle managers and others enjoying pay perks.

The question, however, is whether employer help towards the provision of nursery places is a perk. I submit to the House that it is not and accordingly should not be taxed as if it were. Employer help towards the provision of nursery places is a means of enabling many to participate in the labour market who would otherwise he denied that opportunity.

Let me illustrate. If I am a middle manager, my employment is not dependent upon my having a car. I would doubtless in most instances get to work by train or by bus. The provision of a car is in part a perk. It is part of my remuneration package and thus should clearly be taxable. However, a single mother with a child or children below school age is in a different position. The mother's ability to participate in the world of work will be dependent on her finding someone to care for her child or children while she is at work. The provision of a nursery place is not part of her remuneration; rather it is a means whereby she can participate in work. Without it, she would not be able to work whereas without the company car the middle manager would still be able to work.

Mr. Neil Hamilton (Tatton)

I am a little perplexed at the distinction that my hon. Friend seeks to draw between those who are making use of workplace nurseries and those who choose to live in a place where public transport is non-existent and who have no transport of their own. In those circumstances, of their own volition they have placed themselves in a position where it is more difficult or impossible to put themselves in the labour market. I cannot see why my hon. Friend seeks to draw a distinction as to the taxable nature of the benefit in kind where it is provided by an employer on the basis that he describes.

Mr. Baldry

That was not, with respect, the distinction I was seeking to make. A middle manager with a company car would be able to work whether or not he possessed that car. There are many single mothers who, if they did not have access to nursery provision, would not be able to work. Therein, in my submission, lies the difference between a perk which should be taxed and a facility to employment such as the employer helping to provide nursery places — which, in my view, should not be taxed.

Put another way, creches should not be taxed because they are not benefits in the sense of conferring any actual advantage on the employee; rather they are facilities which remove an impediment to the employment prospects of some groups in the community.

My right hon. Friend the Prime Minister recently told the House: This country has the second highest proportion of women in the labour force in the European Community. The long-term trend is towards an increase in the number of women at work."—[Official Report, 27 June 1985; Vol. 81, c. 1076.] I know that my hon. Friends on the Treasury Benches wish to see the maximum possible flexibility in the labour market and to remove any conceivable barriers to the supply of labour. Much of the flexibility at present in the labour market is brought about by the participation of women, and an increasing number of women working part time. How then is it sensible to erect a barrier to such flexibility by a fiscal device involving, in budgetary terms, such a small return to the Treasury?

Further, as a member of the Select Committee on Employment and a secretary of the Conservative Back Bench Employment Committee, I am constantly exhorting employers to invest more in the training of their staff. However, in an era of new technology, it is often necessary for employers to invest sizeable sums of money in the training of personnel to operate expensive equipment. Employers are likely to be less than enthusiastic about adequate investment for training if women staff are unable to work because of children, and the employer's investment in that training is thus lost.

Let me give another example. As a community we spend a sizeable sum of money each year training nurses — a three-year training period — but how many trained nurses do we lose each year because, although they would like to continue at work even part-time, they are unable to do so for want of someone to look after their children? What is the cost to the National Health Service of the loss of such trained people? The point has been well made in a recent study of the Blackshaw day nursery at St. George's Hospital — a workplace nursery meeting the needs not of any élite group but of women shift workers in the National Health Service and enabling them to remain in work and, more importantly, the National Health Service to retain skilled employees. In my submission, it seems to make no sense to deny single mothers the opportunity of employment, so that they then become a liability on the state and in receipt of supplementary benefit, and thereby further frustrate flexibility in the labour market.

The amendment is a simple and, I hope, thoughtful and common-sense proposal to exempt workplace nurseries from tax where all employees can participate in the workplace nurseries. I emphasise to my hon. Friends particularly that the amendment has the support of many, including the Association of County Councils when it was under Conservative control, the Association of Metropolitan Counties and many of those particularly concerned with specialist interest employment matters. It has the support of those concerned to ensure the maximum training and the maximum flexibility within the labour market. That includes the Institute of Personnel Management and the Industrial Society. I hope that it is an amendment which will attract the support of the House.

4.45 pm

Ms. Harriet Harman (Peckham)

I support new clause 1. The question we should be asking ourselves is whether the Government should use the tax system to hinder the development or the existence of workplace nurseries. The answer, of course, is that they should not.

The facts are these. Most parents work or at least are looking for work. Most mothers work; many mothers with children under five also work. They work because they have to make ends meet and because they want to work. They have every right to work and we need their work. The economy and all the services in this country would collapse if women withdrew from the labour market tomorrow. We also know that the first five years of a child's life are vital for its mental, physical and social development. We know that they thrive on learning from and playing and mixing with other children, especially if they have plenty of space, trained staff and good equipment. It gives the child a head start in life to go to that sort of nursery. That is why parents who care about their children and who are responsible want the choice of decent nursery provision.

A Government survey showed that over 90 per cent. of parents — we are not speaking about a small rump of parents—wants some sort of nursery provision for three, four and five-year-olds. It also showed that nearly 50 per cent. want places for children under three. Instead, the situation is that the child of the working parent has to make do with a patchwork of arrangements. They may be looked after by a child minder who is usually not properly supported or supervised by the local authority, or by relatives or friends, but that is becoming increasingly difficult with the breakdown of old communities. The working mother tears her hair out; it is almost invariably the working mother who tears her hair out. Because of the deep division of labour that exists in the home, mothers still have the primary responsibility for looking after children. I hazard a guess that if child care were shared equally between men and women, the new clause would be accepted with no problem.

Despite the overwhelming demand for decent nursery provision, there is virtually none. Britain's children are Europe's poor relations when it comes to nursery provision. Many Tory-controlled local authorities offer no nursery classes or schools. Gloucester does not provide one nursery class or school for children under the age of five. That is not because there are no children under the age of five in Gloucester, but because the local authority will not meet their needs. There is only one social services day nursery place in Gloucester for every 1,000 children under the age of five.

Mr. Eggar

rose—

Ms. Harman

I shall give way when I have finished dealing with Bromley. Bromley has 188 nursery places. It is currently applying to the Secretary of State to close them all. It will join Gloucestershire at the bottom of the league. That is the background against which we must consider the new clause.

Mr. Eggar

No one denies that there is a need for people to look after the children of working mothers and fathers, but I have reservations about the fact that we are going out of our way to single out a group of people who are fortunate enough to have a nursery place at their place of work. I am also rather confused by the way in which the Opposition's amendment is drafted. The hon. Lady and I have children of about the same age. If we had a nursery in the House of Commons and wanted to bring our children in after the period of day care had ended, we should not benefit from such a concession because we have to be here in the evenings. Why have the Opposition drafted the clause so specifically?

Ms. Harman

The point to which I am addressing myself—the hon. Gentleman should recognise that it is of paramount importance — is whether the Government should use the tax system to hinder the existence and development of workplace nurseries. That is what the new clause aims to prevent.

We must increase parents' opportunity to choose decent nursery provision for their children under five. We must judge the aim to exempt employers' contributions from tax against that background. We should have a workplace nursery here to help all the women who work as secretaries, cleaners and canteen staff and keep this place going. There are plenty of rooms available.

Mr. Eggar

What about men?

Ms. Harman

I have already explained that unfortunately there is a deep division of labour within the home and that therefore the responsibility for rearing children almost entirely falls upon women. It would be good news if hon. Members would join me in a campaign to end male absenteeism in the home. I shall have to ask the hon. Gentleman's wife when I next see her whether he plays his full part. I bet that he does not.

The House should follow the GLC's example. It provides an excellent workplace nursery. The new clause would encourage those who are trying to increase a provision which meets the needs of children, which is good for them, and which meets the requirements of working parents. I hope that the House will support the new clause.

Sir William Clark

This is an interesting debate in which to take part. I hope that my hon. Friend the Member for Enfield, North (Mr. Eggar) was not serious when he suggested that we should have a nursery here.

Mr. Eggar

I did not make the suggestion.

Sir William Clark

Nevertheless, the suggestion was made. Many members of the public think that we already have a nursery — and a badly behaved one on some occasions.

I hope that my hon. Friend the Financial Secretary will resist the new clause. There are so-called perks — a company car or a payment to BUPA. Nearly every member of the Electrical, Electronic, Telecommunication and Plumbing Union has a BUPA subscription paid by his or her employer on which tax is paid. It is no good the hon. Member for Workington (Mr. Campbell-Savours) nodding his head. Of course they pay tax.

Mr. Campbell-Savours

I was not nodding; I was shaking my head.

Sir William Clark

The hon. Gentleman is wrong.

Mr. Stuart Randall (Kingston upon Hull, West)

Will the hon. Gentleman tell the House what percentage of the EETPU membership has signed up for BUPA? That policy is not being pursued by the union, of which I have been a member since 1953.

Sir William Clark

I am sure that the House is grateful for that information. In many cases BUPA contributions are paid by employers. In one of the wage negotiations with the EETPU, part of the deal was that BUPA contributions should be paid on behalf of employees.

For many years it has been the policy of successive Governments to tax any perk, in whatever guise it comes. We should be considering the exemption limit. That has nothing to do with nurseries; it covers the whole range of perks. I accept what the hon. Member for Birmingham, Hodge Hill (Mr. Davis) said about the amount having to be added to the salary. There is nothing unusual in that. If it is decided that a perk is part of one's salary, its value must be added to the cash that one receives. That may bring one over the £8,500 limit. That limit is out of date. It has not been changed since 1979. In 1979, the average industrial wage was just over £100 a week. Today it is nearly £200. If it was right to set the limit at £8,500 in 1979, it should now be uprated.

Taxation is supposed to be fair for every taxpayer. It is wrong to single out nurseries. The crucial point is that if a nursery is subsidised, it is a perk. Many nurseries are not subsidised. My information is that there are 75 to 80 subsidised nurseries. I believe that my hon. Friend the Member for Beaconsfield (Mr. Smith) said that they covered about 2,000 children. That is a minority. Of course we want women with children to be able to work. If one singles out those people who are fortunate enough to work for someone who provides a nursery, what shall we do for the mother who does not have that facility?

Mr. Austin Mitchell (Great Grimsby)

Increase child benefit.

Sir William Clark

The fact that the Labour party is expert at spending other people's money emerges in every debate. When it comes to spending its own money, it is a little more reasonable.

If we say that a workplace nursery is to be tax-free, what about the mother who does not have a nursery at work? What shall we do for her? What if the Inland Revenue were to say that there would be a child-minding allowance for those who keep their children near home when they are at work? What would that cost the Exchequer? I have tried to find out. It would increase public expenditure by over £2 billion if we were to make nursery places available for all children.

I understand that many of these nurseries are super and cost a great deal of money. In many cases the subsidy is about £2,000 or £2,500 per child. The subject of perks raises a different argument, but if we tax employees' perks, no perk should be excluded. I hope that my hon. Friend will resist the new clause. The fact that the cost is shared is immaterial. If an employer supplies to an employee something worth £80 and that employee pays £40 of the cost, he is enjoying a £40 perk.

Mr. Robert Sheldon (Ashton-under-Lyne)

It is pleasing to hear the hon. Member for Croydon, South (Sir W. Clark) supporting benefits in kind. I wish that he had supported them in 1976 when the Labour Government introduced legislation and he voted against many of the provisions. Is there a difference between the benefits in kind which were taxed then and this particular benefit? People may be taxed on the cost of travelling to work on the basis that they can or should move their abode closer to their place of work, but it is almost impossible for a person with a child to avoid incurring certain expenditure in relation to child care.

5 pm

Sir William Clark

Every working mother suffers that disadvantage, because if she goes to work she must find someone to look after her child. She may find a minder locally or a relative may help out or, if she is very fortunate, she can take the child to the works nursery. I assure the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) that I am not advocating perks. If perks are taxed, every perk should be taxed. There should be no exemptions.

One of the reasons why the perks industry has grown so alarmingly since the end of the war stems from the high rates of taxation that we have suffered under successive Governments. My right hon. Friend the Chancellor of the Exchequer intends to reduce taxation. If taxes were reduced to a reasonable rate — for instance, a starting rate of approximately 15p in the pound rising to no more than 40p to 45p in the pound — we could remove all perks, because people would have enough money to provide their own amenities. It is a retrograde step to single out nurseries, which are an emotive issue, and set one taxpayer against another—the working mother with a nursery against the working mother without a nursery. I hope that my right hon. and hon. Friends will resist that step.

Mr. Guy Barnett (Greenwich)

This is an important debate and I am grateful to my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis) for the way in which he opened it. I should like to criticise the use of the word "perk" by the hon. Member for Croydon, South (Sir W. Clark). It is wrong to regard the provision of workplace nurseries and its possible taxation as a benefit to those who take advantage of it as being on all fours with other forms of perk of which I am extremely critical. The argument for this tax relief—it is not a perk—is a social argument. Has the Treasury consulted the DHSS to ascertain that Department's view on the need to encourage workplace nurseries wherever possible?

My hon. Friend the Member for Peckham (Ms. Harman) said that at present this tax hinders the development of a socially desirable asset. From experience in my constituency I have felt very strongly about this for some time. With my hon. Friend the Member for Barking (Ms. Richardson) and my right hon. Friend the Member for Lewisham, Deptford (Mr. Silkin) I went to see the Under-Secretary of State for Employment. I was trying to persuade the Manpower Services Commission to provide a nursery at the local skillcentre in Deptford, but I had no success. Fortunately, however, we were able to get the assistance of the local councils in that endeavour.

I appreciate the importance of providing workplace nurseries because I have seen the conditions in which so many women live in my constituency and elsewhere. They are very often cooped up in high-rise flats, hardly able to get out and enjoying, if I may so describe it, lonely conditions which are hardly conducive to bringing up young children. I want such women to be able to earn their own living and to provide for themselves. The hon. Member for Croydon, South said that the Labour party wanted to spend other people's money, but the Government are spending our money providing supplementary benefit and other benefits for women who are prevented from working by the lack of workplace nursery provision. I want such women to have the opportunity to train at skillcentres to make themselves more employable and perhaps to find employment, but their prospects are not bright if the potential employer does not provide a workplace nursery.

One of the arguments in favour of the new clause is the desperate shortage of day nurseries. In many parts of the country they do not exist at all or are in short supply. There is an excellent day nursery in my constituency, the Vanbrugh day nursery. It is an excellent institution but there is a waiting list and it cannot meet the need. I am not sure of the figures for my own constituency, but in many London boroughs more than 30 per cent. of families are single-parent families. If we do not make proper provision for the under-fives there will be a major social problem.

The day nursery in my constituency is inadequate, nursery schools do not meet the needs of parents because of the hours when those schools take children and many people feel disturbed at the possibility of children being with unqualified child minders. The question is whether we want to encourage the development of workplace nurseries and to continue to make proper provision for those already using them.

There is a strong argument for workplace nurseries, whatever outside provision there may be, because it is important for children under the age of five to see as much of their mothers as possible. The mother should be within reach so that people in charge of the nursery can get the mother to comfort her child if it is upset. It is easier for the mother to take her child to work than to take it to a nursery first and then go to work. Workplace nurseries would also assist in family development. The cost of not providing workplace nurseries is incredible when one considers the waste of the skills, training and qualifications of women who are prevented from working because they have young families when they might otherwise be working in a private company or a public institution such as a hospital.

Just before the debate I received a letter from a constituent. I shall conclude by reading from that letter because I think my constituent's case is probably typical of the cases of many hundreds of people in my constituency and throughout London. Referring to her little boy, she said: I could not face leaving him with a childminder who I cannot help believing is an alternative mother and it would sap my confidence as a mother. It was hard to leave him at the nursery when he was eight months old; now 14 months later I could not take him from his friends and leave him with one strange woman. I would therefore have to give up work as a principal local government officer in Urban Renewal in one of the most deprived boroughs in the country. I will not be able to adjust. There is someone whose valuable services in a deprived inner London borough would be lost because she recognises, as I hope I do, too, the special value of workplace nurseries for the under-fives.

Therefore, I have no hesitation in giving my full support to the new clause.

Mr. Tim Smith

It is remarkable that the Opposition should have selected for a major debate on Report the taxation of the benefit in kind of the provision of workplace nurseries. A wide range of subjects could have been chosen. Unemployment is now over 3 million. At the time of the Budget, the Opposition criticised it for its lack of measures for dealing with the jobs problem, although there was a major extension of the youth training scheme and fundamental changes in national insurance contribution charges. Therefore, it is remarkable that on Report the Opposition should choose as a subject for major debate the provision of workplace nurseries.

Mr. Campbell-Savours

On a point of order, Mr. Deputy Speaker. This is an attack on the Chair and the selection of amendments. I should be grateful if you would bring the hon. Gentleman back in order.

Mr. Deputy Speaker

I have not heard the hon. Gentleman criticise the selection of amendments. I understood that he was discussing the priority that the House placed on the debate that is now taking place.

Mr. Smith

I am grateful to you, Mr. Deputy Speaker. You will have noticed from the Amendment Paper that the only new clause tabled by the Opposition relating to unemployment is new clause 7, which simply calls on the Chancellor to include in the Financial Statement and Budget Report—

Mr. Deputy Speaker

Order. It might help if we got back to the nurseries. We are discussing new clauses 1 and 4.

Mr. Smith

The point that I am trying to make is that at a time of major unemployment the Opposition have selected a new clause that affects the interests of just 2,000 taxpayers. The interests of 2,000 taxpayers are at stake. That is the best estimate. The number could be less because it relates to the provision of 2,000 places in workplace nurseries. Therefore, the number of taxpayers affected could be less.

Ms. Harman

The hon. Gentleman might be talking about 2,000 taxpayers at the moment, but what about the movement to try to expand workplace nurseries? Many hundreds of thousands of people might find themselves in that situation. Perhaps the hon. Gentleman will address himself to that very important principle.

Mr. Smith

I am doing that at the moment. I am discussing those whom the Opposition are seeking to help—those 2,000 taxpayers. Are they the people in greatest need? I believe that they are not. They are an elite minority. We have already heard that some of them are enjoying a benefit of £4,000 a year, which is twice what it costs to send a child to a public day school in London. It is a very substantial benefit.

If the new clause were accepted, a massive anomaly would arise. What would we then say to married women who are forced to go out to work and have to leave their child with a child minder or employ a nanny? They are the people who suffer hardship or are in real difficulty.

I believe that, as a matter of principle, all benefits in kind should be taxed, including the two that are currently excepted—the 15p luncheon voucher and miners' coal. No encouragement should be given by the system of taxation to employers to pay people in kind. Such benefits create distortions in the labour market and inhibit mobility. The tax base needs to be widened and tax rates reduced. The new clause would favour a privileged elite. I am astonished that the Opposition should even suggest that the House consider it.

5.15 pm

Mr. Andrew F. Bennett (Denton and Reddish)

I was surprised that the hon. Member for Beaconsfield (Mr. Smith) has not looked more carefully at the Standing Orders that govern our debates and does not appreciate some of the difficulties facing the Opposition in tabling amendments on the key issues in the Budget. If he had looked more carefully into those problems, he would appreciate that we do not have all that much choice of areas that we can debate.

I welcome the fact that my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis) has tabled the new clause on workplace nurseries, because it gives the House the opportunity to address itself to one of the central issues—the provision of nurseries—which is of fundamental importance to our economy. My hon. Friend suggested that workplace nurseries were a growing phenomenon. I suspect that he is wrong. In the north of England, one of the tragedies is that the number of workplace nurseries that have closed exceeds the number that have been opened. In the Lancashire textile mill towns, and, I suspect, in the Yorkshire mill towns, we have seen the demise of many traditional workplace nurseries. That has been unfortunate for people in those communities. Not only jobs but the benefit of the nurseries have been lost in those areas.

The House should recognise the importance of the nursery not just to the parents but to the children. The children can benefit from a well-run and well-supervised nursery. The tragedy is that nursery provision in this country lags badly behind all the other EEC countries. We should look at every possible way of expanding and improving nursery provision, whether it be workplace nurseries, nursery schools or day nurseries. The sad fact is that here little more than 22 per cent. of children get the opportunity to experience proper nursery education. In France and West Germany, by the time children are three, and certainly by the time they are four, the figure is almost 100 per cent.

Let us look at what has happened in this country in recent years. For the children, the provision of nurseries has improved marginally, in that many of the local authority nursery schools have gone over to part-time provision. However, that has an adverse effect for parents. Although it may allow more children part-time places so that they can experience learning through play in nurseries and learn to work with other children, it makes it harder for parents to take a job and take children to part-time places in a nursery. We should consider how to improve the facilities for parents and give them support in caring for their children.

Studies such as the "Head Start" studies in the United States and recent work at Bristol university make it clear that the child benefits from nursery provision—not just at the time or in the next few years in school, but throughout his lifetime. From those studies it was clear that people of 19 and 20 still appeared to have advantages over contemporaries who had not experienced nursery education. If we have any real belief at all in equal opportunities, we should make it absolutely clear that we consider the provision of nurseries essential to ensure that everybody has the same career prospects.

I recognise that there is considerable muddle about charges for nursery provision. It is worth noticing that most workplace nurseries make a charge, and there is some subsidy, although I suspect that often the subsidy is not particularly accurately calculated. It has more to do with wage negotiations. If the Inland Revenue tried to be fair, it would run into many problems. The on-costs of a nursery are sometimes loaded and sometimes offloaded.

We also have to recognise that for many parents the choice is between the workplace nursery or a local authority day nursery. Throughout the country there are fantastic variations. Some local authorities impose substantial means-tested charges for day nurseries and others provide the places free. Therefore, there would be anomalies between those who had to pay for places at a workplace nursery and those who were fortunate enough to get free day nursery places.

When children go to a state school, they receive free nursery education at the age of three. It is illogical for the Government to say that if one has a child of three, one can send him to a nursery school and there is no charge. It is considered to be not a perk, but a basic requirement. However, if one saves the state from having to make that provision and takes one's child to a workplace nursery, that is considered a tax perk. That is an odd anomaly. There is no merit in the Government's proposal for taxation. If there was any merit, it would be logical only for those from nought to three years old. But from the age of three onwards, for the fortunate children who live in the bigger, Labour-controlled cities, where nursery provision is available for about 60 to 70 per cent. of children, rather than in some of the Tory shires — such as Gloucestershire — where there is almost no nursery provision, there would certainly be some anomalies.

We must also recognise the considerable advantage—

Mr. Tim Smith

Does the hon. Gentleman advocate tax relief on the payment of fees to private nursery schools where there is no state provision?

Mr. Bennett

I thought that we were talking about private nursery schools provided by employers. In most cases, they are private institutions, although I realise that some are provided by the National Health Service and other such organisations.

We must recognise the benefit of workplace nurseries to children. Nothing is more demoralising for a child than to be trailed to a local authority nursery, which is often in the opposite direction from its mother's workplace, and involves the mother or the father having to leave home earlier to take the child to nursery and perhaps having problems picking him up at night. There are considerable advantages in the workplace nursery, to which the child can be taken with the minimum difficulty and which provides the parent with the opportunity to see the child during the day. Instead of removing what they call a concession, the Government should reaffirm their faith in nursery education and consider improving its provision. They should certainly not consider taxing it.

I should like to put some questions to the Minister about how the change will work in practice. What happens if a husband and wife, who have one child, are both at work and the wife decides to take the child to a nursery at her workplace? Will the amount of tax be decided according to her income and the cost of the nursery place, or will it be based on the combined incomes of both parents? The fact that, at present, it is more likely that the nursery will be provided at the wife's workplace will affect both parents' opportunity to earn money.

What will be the position of the people at the margin? Now that the limit is set at nearly £8,000, many more people will be at the margin. In the north of England, many people are employed in piecework, especially in the machining and textile industries. With piecework, there is always the incentive to try to earn a little more, but if earning more money means that one will be pushed over the threshold, it may be an expensive extra piece of work. Will the limit be decided on weekly earnings or on annual earnings?

I support the new clause. I suggest that the House should make it clear that it believes that all people should have equal rights to job opportunities. Careers should not have to suffer because of the problems of finding proper child care facilities.

The final point to remember is that nursery education is extremely beneficial to children. The Government should be offering incentives, not disincentives, for its provision.

Mr. John Watts (Slough)

My hon. Friend the Member for Banbury (Mr. Baldry) reminded the House that Britain has the second highest proportion of working women in Europe and a high proportion of working wives and mothers. One reason for that is the substantial tax advantages enjoyed by married couples when the wife works. Such a couple enjoy the higher married person's personal allowance and the wife's earned income allowance, which is the same as having an additional single person's allowance. The advantage is substantial when it is compared with the income of a family organised on more traditional lines, where the husband and father works to earn the money and the wife and mother works in the home and looks after the children. They have only the personal married allowance. I look forward with great interest to the Green Paper on reform of personal taxation foreshadowed in the Budget, and to the proposal, which I hope it will contain, to introduce greater equity into the taxation of the incomes of married couples.

In the context of such taxation there is no justification for enshrining a substantial additional tax advantage for working mothers, albeit the new clause relates only to a small and privileged minority. As my hon. Friend the Member for Croydon, South (Sir W. Clark) reminded us, the new clause will affect about 2,000 children and their parents. The hon. Member for Greenwich (Mr. Barnett) spoke of how important it is for young children to have their mothers close at hand and advocated the workplace nursery. I take what is possibly the unfashionable view, but not necessarily an unpopular one. I believe that it is preferable for pre-school age children to have their mothers close at hand, for the mothers of those children not to work and not to park them at workplace or local authority nurseries, but to care for them in the home.

Ms. Jo Richardson (Barking)

What does the hon. Member intend to do with the 1 million one-parent families?

Mr. Watts

This is my personal view. I accept that it is a matter of personal choice how each family organises its life. If a mother wishes to work, I would not wish to place any legislative barrier in her way. However, I do not believe that there should be any encouragement by granting an additional tax benefit, such as that contained in the new clause, to mothers of young children to work and not to care for their children in the home.

Mr. Randall

I had not intended to take part in the debate, but after hearing some of the comments from Conservative Members, I cannot refrain. My hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis) made a caring and compassionate introductory speech. Subsequent speeches seemed to be divided into two rough areas. My hon. Friend the Member for Greenwich (Mr. Barnett) said that the argument was a social one, but the Government have presented the argument in financial terms. No wonder the Conservative party is seen as hard and uncaring, with a philosophy based on greed and self-interest. I hope that the debate will be reported fully so that the public will realise that the Government are hard and uncaring and consider matters in purely money terms. That is very sad.

Hon. Members have discussed various schemes in Britain, but we are obviously doing much worse than other European countries. France, Denmark and Holland make educational provision for between 20 and 30 per cent. of their two-year-olds; we make no provision. Belgium, France and the Netherlands make educational provision for more than 95 per cent. of their four-year-olds. The comparable figures for West Germany and the United Kingdom are 75 per cent. and 56 per cent. respectively. Under this Government, the kids are being deprived.

The hon. Member for Beaconsfield (Mr. Smith) should have done his homework before coming to the Chamber. I know that sometimes we all make impetuous speeches when we are perhaps fired with enthusiasm.

Mr. Sedgemore

The impetuous speeches are all from the Government side.

5.30 pm

Mr. Randall

There are others as well.

The hon. Member for Beaconsfield should have made his arguments a little clearer. He said that the matter was not worth considering because it dealt with a mere 2,000 children. As a Socialist, I cannot think in those terms. If 2,000 young children can benefit and only a small amount of money is involved, why can we not just go ahead? Two and a half weeks ago in Committee the Government gave £50 million per annum to the land and property speculators through the abolition of the land development grant; yet they cannot afford to give money to the nurses and the less well-off. The bored children who should have proper care at workplace nurseries when their parents are working are deprived.

The hon. Member for Slough (Mr. Watts) sounded as though he was going back into the last century. He felt that there was no justification in taxation terms for going ahead with the scheme, so he would vote against the new clause. The hon. Gentleman thinks in terms of the taxation system and money. That is the Conservative party's graven image. I appeal to hon. Members to support the measure.

The hon. Member for Croydon, South (Sir W. Clark) complained that the Labour party was good at spending other people's money. That is a myth that the Conservative party used in the 1983 general election and that it tries to perpetuate while it continues with this immense drift of wealth from the less well-off to the rich. Although there is only a small number of workplace nurseries, it is part of the Conservative party's ethos not to help the people on low incomes but to transfer the money to the rich. The Conservative party has shown that it is not a thrifty party by the way in which it spends the revenue from North sea oil on unemployment. This is the essence of the new clause — opportunities should be provided for mothers and fathers, especially in single-parent families, to contribute to the economy. That is a laudable aim. The argument advanced by the hon. Member for Croydon, South does not stand up.

We are considering whether to provide nurseries in workplaces for which the employers and employees will pay. We are asking for tax relief on the contributions. The new clause is attractive in that it provides a genuine opportunity for women to do what they want to do. We talk about equal opportunities and freedom of the individual — this is what it is all about. It is not about the opportunity for one person to rip off someone else. That is the interpretation offered by the Government. Freedom of the individual involves economic freedom to do the job that one would like to do.

People with considerable skills live in Britain — for example, doctors and nurses. Partly because of cuts, some hospitals are short of nurses with particular skills. It takes a long time and considerable expense to train a nurse. In terms of economic arguments, it would seem wise to use those skills rather than have them constricted within the family framework because there are no opportunities to provide care for children while parents are at work.

Women will be the main beneficiaries of this scheme, although it applies also to some single-parent families. There has been a growth in jobs in certain sectors that predominantly employ women. That scope for job creation could be enhanced by providing the appropriate tax relief for these nurseries. Jobs are being created not only in the supermarkets and service industries but in the electronics industry. Too few women are employed in the high-tech industries. There is a dearth of women taking engineering degrees. To have a good high-tech industry it is important to provide opportunities for women.

The hon. Member for Slough said that we should keep the women in the home and that he did not care about all the problems about which the Labour party waffles on. He represents an area where, last year, house prices increased by 17 per cent. and where women are contributing to mortgage repayments. The hon. Gentleman says, "You cannot do that. You stay at home." This means that people have to live on faggots and peas and in a deprived way.

Mr. Watts

I am sure that when the hon. Gentleman checks the Official Report tomorrow, he will see that I said nothing about keeping women in the home. I said that it had to be a matter of personal choice. It is not a choice that should be influenced by an additional substantial tax benefit to working mothers.

Mr. Randall

Perhaps we should go to women who make big contributions to the household mortgage repayments by working but instinctively want to stay at how with their children because there are no workplace nurseries. I am sure that a substantial number of people in Slough feel that way. They are deprived.

Conservative Members have referred to car parks, social clubs and sports facilities. That is a fair point to raise if one wants to invoke the financial or economic arguments. However, I am not inclined to do that. I shall vote for the measure for purely social reasons, because that is the civilised thing to do. Why are the benefits of car parks, social clubs and sports facilities not taxed? The Government are hindering the development of workplace nurseries through their taxatarion system. Why are workplace nurseries treated differently from car parks, social clubs and sports facilities?

The present tax arrangements will have two consequences. First, they might lead to nurseries closing through lack of demand or because the employer decides that their penal nature makes the arrangement unattractive. Alternatively, the nurseries will be used only by the children of those on higher incomes. The Opposition believe in a more equitable and fairer society. Why do we not have an arrangement whereby those on lower incomes will or could benefit? In clause after clause there is a shift of wealth from the poor or the less well off to the very rich. The workplace nursery scheme, which has great potential, is being throttled before it has had time to blossom. I hope that hon. Members on both sides of the House will support the clause.

Mr. Lewis Stevens (Nuneaton)

The new clause asks for total exemption of nursery taxes. I do not want to go that far. My hon. Friend the Member for Wealden (Sir G. Johnson Smith) and I tabled a new clause which went, in a slightly different way, to equate the taxation of nursery provision more to the taxation of company cars Unfortunately, that was not selected. I shall try closely to confine myself to new clause 1.

It was only 18 months ago that the Treasury decided to tax workplace nurseries. The effect of that was a sudden blow to many who might have been paying £20 or £30 a week in contribution towards a workplace nursery. They found themselves having to pay £15 a week more at the top of the scale. That is a large amount of money to find. The qualifying earnings figure is £8,500 and the difference in take-home pay can determine whether it is worth carrying on with that job or not. We are seeing the return of punitive taxation. It has existed theoretically since 1948 but it is only now that the Treasury has decided to introduce it in practice.

Mr. Michael Shersby (Uxbridge)

Does my hon. Friend agree that the £8,500 limit is part of the problem? I believe that that limit was introduced by the Labour party when it was in power. I hope that the Government will pay urgent attention to dealing with the problem.

Mr. Stevens

I agree with my hon. Friend that the £8,500 is part of the problem. The Government's approach—it is one that I do not disagree with—is to try to cut out perks in general by making them subject to tax or providing that they be paid directly in cash. The effect of keeping the £8,500 limit since 1978 or 1979 is to bring more people into a tax bracket, but surely workplace nurseries are subject to different considerations. Why has the Treasury decided to tax now? Is there a suspicion that workplace nursery provision will expand and will be used by more than the present 2,000? I believe that the provision will expand unless taxation is introduced which prevents that.

There are problems with skills because we can have too many of one type and too few of another. The new technologies will be taught to comparatively few in the first place, but often to youngish people, both male and female. Companies that want to keep those people at work for the maximum time will look more and more towards provisions such as workplace nurseries to enable them to derive the maximum advantage from their skills. Companies will learn to provide nurseries on a wider basis to get the best return on the investment that they have made. It must be helpful overall for the country to ensure that the facility exists.

A top-end assessment of £4,000 in London has been suggested and that could apply. I suggest that that is an assessment of cost and not of worth. Cost and worth are different things. A person may be paying a contribution of about £30 a week but how much is that benefit really worth? It might cost about £80 a week to achieve the standards in workplace nurseries that are required by the Department of Health and Social Security but it could be worth less than that. The worth of the facility is no different when it has to be produced to a higher standard than in many factories. If people work in a better looking office than another one, how much is it worth to work there? It is an attraction, but it does not lead to a decision to move to it. The assessment that some would make of the value of the facility and the amount to be charged could be unfair. That is why my hon. Friend the Member for Wealden and I were seeking to impose a ceiling of £1,300.

5.45 pm

There is a definite advantage in having the facility of a workplace nursery but I believe that it should be a limited facility in terms of the assessment that should apply. That is what I would have preferred for this debate but unfortunately our amendment was not selected. The principle of being able to tax indefinitely on the provision of a workplace nursery will be detrimental to those who are using it now, to future users, to the development of that facility, to the retention of skills where they are wanted and perhaps to training if there will be doubts about how much it is worth to train to a higher level. Those are the disadvantages of this type of taxation. I hope that my hon. Friend the Minister will consider putting a ceiling on the taxation of workplace nurseries if he refuses the non-exemption. I have reservations about total exemption.

I want to draw the attention of the Minister to transitional arrangements. If the Bill is passed as it stands, those who took jobs with a company with a workplace nursery will be faced, over the next year and in the future, with a high taxation level. That taxation level will be one for which they did not bargain.

In many instances, when new forms of taxation are introduced, a transitional period is allowed. It will not be unfair to consider allowing a transitional period at least for those who have children in workplace nurseries now. I should be obliged if the Minister would make a statement on any thoughts he may have on a transitional period for those people.

I urge my hon. Friend to consider carefully the damaging effect that this type of taxation would have. No one likes, more than I do the idea of a stable background of a married couple with a family where the woman spends a fair amount of time at home looking after that family, as was suggested by my hon. Friend the Member for Slough (Mr. Watts). Both society and this House, in its legislation, have sought to introduce extensions and a choice. We have chosen to do that and we have a duty to take account of that and respect the problems and the developments of workplace nurseries and the needs of our industries in that area.

Ms. Richardson

I agree with many of the arguments advanced by the hon. Member for Nuneaton (Mr. Stevens). It seems that he does not wish to go as far as the Opposition's new clause, but is prepared to go a little further than his right hon. and hon. Friends. I agreed with him until he uttered his final remarks. He referred to the need for the mother to remain at home, wherever possible, during the early formative years of the child, but he emphasised that there should be a choice. The difference between us is that the Opposition believe that if it is a two-parent family, fathers should share in the care of their children. We would encourage both parents to have a caring and sharing role, wherever possible. Both the father and the mother should have the opportunity to work and to look after their children.

This is the second time that this debate has been held. My hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis) and perhaps other hon. Members will recall that a similar debate last took place in July 1984. It lasted from about 2 or 3 am until about 8 am. I am pleased that today it is taking place at a more reasonable time. Despite the almost empty Press Gallery, I hope that attention will be drawn to this matter in tomorrow's press. It is vital to many women, not only to those who use workplace nurseries but also to those who feel that they may want to use them and who may wish to encourage their employers to consider providing them.

In last year's debate, 99 per cent. of the speeches—all of which supported the principle — were made by Opposition Members. Only one Back-Bench Conservative Member spoke in that debate. Today we have heard the views of a few more Conservative Members. I do not like most of their views, but I am pleased that the view of at least two and perhaps three Conservative Members is the same as that of the Opposition on this important subject. Our debate in 1984 did not shift the Government. During the last 12 months, the anxieties of parents with children in workplace nurseries have not diminished.

I spoke only two weeks ago to a parent who visited me here. She has a child in a workplace nursery and she feels that a sword is hanging over her that might drop at any moment. If the Government do not consider sympathetically the Opposition's case for not taxing workplace nurseries, she believes that her life could fall apart. She is a nurse and she worked very hard to obtain her qualifications. She is a one-parent family. Her child is in a workplace nursery but it is an effort to meet the cost of the nursery care out of her pay.

If she had to pay extra tax on top of the charges already made, she would have to give up her job. She does not want to do so for a number of reasons. First, she believes that the National Health Service provides a service that should be supported and that she has a contribution to make to it. Secondly, she believes that she has a right to work. Thirdly—this, she told me, is the most important point of all — during the period that her little girl has been in the nursery she has benefited greatly. She knows that her mother is working nearby. As an only child, she is benefiting from being with other children and from growing up in those surroundings. She said that it would be a great pity — indeed, worse than that — if she was unable to afford to keep her child in the nursery.

The Government are cutting off their nose to spite their face by refusing to remove this tax and by refusing to recognise that its existence is a disincentive if people with children wish to go to work. The Government may indeed lose a small amount of revenue, but if parents have to give up working, the Government will lose even more in tax. Tax is paid by parents who are in work. They also make national insurance contributions. They are also valuable members of the work force.

The hon. Member for Banbury (Mr. Baldry) spoke to new clause 4. I commend to hon. Members who are so bitterly opposed to it a very interesting piece of research into the child care needs of NHS shift workers who use the Blackshaw nursery centre. It may provide them with an eye-opener in terms of good practice in the provision of child care nurseries. This centre was the first of its kind and was opened in January 1982. It is funded by the Department of the Environment and the London borough of Wandsworth through an urban aid grant. This purpose-built nursery is situated in the grounds of St. George's hospital, Wandsworth. It has a professional staff and it is managed by a voluntary management committee, consisting of members of the community health centre, the local workplace support group and other support groups. It is very well run. It was provided because of the child care demands of the people who work in and around the hospital. My hon. Friend the Member for Hodge Hill might care to note that the nursery is open from 7 am until 10 pm, a period that covers almost the whole of the hospital's work shifts.

Let us not run away with the idea that those who use these nurseries do not pay. They certainly do. Some Conservative Members think that this is a buckshee provision — that charity is being provided for these women. It is not a charity or a perk. I object to the word "perk". It should be regarded as the beginning of extended and better child care provision for children throughout the country in order to allow women to exercise their right to work, train and retrain. If we are to make it possible for women to work, we must not decide the fate of women and children on the narrow basis of how much money the Treasury might or might not lose. We should examine the problems of working parents, in particular working mothers.

I was privileged this morning to attend an exhibition that is being held in East Ham town hall by the engineer's and surveyor's department of the London borough of Newham. It has mounted an exhibition of the work it is doing to encourage women to train as scientists and engineers. I remind the Government that this is the International Year of Youth. As it has encouraged women to enter the engineer's and surveyor's department, it decided to mount an exhibition, and this morning it invited a large number of schoolgirls to visit the exhibition. It is considering having creche facilities, which is the right way to approach the matter. If we are to encourage employers to operate genuine equal opportunities, we must face up to the needs of working parents.

6 pm

Many groups have supported the workplace nursery campaign. But in addition to the women's groups, mixed groups, community health councils, community groups of all types, parents and other individuals, the campaign has had some unlikely allies, and I say that meaning no disrespect, for example, to the Institute of Personnel Management. Not only are employees protesting about the present situation, but in some instances managements are complaining about the approach of the Government. They, as employers, want to adopt good practices, but they are not being allowed to do so. The Institute of Personnel Management, in a paper dated 1 May referring to remarks made to a Select Committee, said: In the industrial revolution, it was employers who sent little boys up chimneys and it was governments who brought in legislation to stop them. Now, employers are seeking to provide welfare facilities and arrangements which enable people to work and to use their talent in the cause of increasing Britain's productivity and economic performance, and it is government that is trying to stop them. In other words, the view of the Institute of Personnel Management — not simply of a community health council or a group of women — is that the Government are wrong in their present policy. The Institute paper continued: The taxation of creches is socially, morally and economically wrong. They are not benefits in the hands of the recipients. They are welfare and employment facilities which remove impediments to the employment prospects of certain groups in the community. The most outrageous feminist could not have put it better. That is precisely what we want, in the public and private sector, but the Government are preventing that from happening. The institute ended by appealing to the Government in the interests of the use of talent, the mobility of labour and good employment practice … now to introduce an amendment to the Finance Bill. That body—if not Conservative, then normally cautious in matters of this type—is strongly in favour of the case we have made.

I shall not understand the Minister if, when he replies, he says that the private and public sectors do not want this type of nursery provision. It is clear that they do. If the Government are serious about providing employment possibilities with choice for everyone in the community, they will accept our amendment.

Mr. Neil Hamilton

The hon. Member for Barking (Ms. Richardson) reminded hon. Members that when I last entertained the House to my views on this matter it was about 5 o'clock in the morning. On that occasion she spoke a little before that. It is more comfortable to be addressing the topic in the afternoon.

In the intervening year, hon. Members will have been the recipients of a considerable quantity of misleading, biased and incorrect information from various campaigns—

Mr. Austin Mitchell

Such as the Treasury brief?

Mr. Hamilton

I never speak to a Treasury brief, as the hon. Gentleman should be aware.

Hon. Members have been the recipients of much misleading information, much of which has been reiterated by Opposition Members today, as it was when we debated the matter a year ago. It cannot be disguised that the potential beneficiaries of the change in the law that is being proposed by Opposition Members would be a small number of fortunate individuals. The number is estimated at present by the Inland Revenue at 2,000 people in respect of about 70 nurseries throughout the country. It is clear that the lowest paid employees, even under the present state of the law, are not subject to tax on a benefit provided by an employer where it constitutes a nursery facility of the type that we are now debating.

I found it grotesque that the hon. Member for Peckham (Ms. Harman)—who, alas, is no longer in her place—should say how important creche facilities would be, for example, for Members of Parliament. When one considers the income of hon. Members, it seems grotesque that many low-paid people should be called on to pay through their taxes for benefits for those who earn considerably more.

When we consider that one starts paying income tax in Britain at about one third of the average wage—a level which is far too low, in spite of what the Government have done to raise it over the years — it seems wrong, even on Socialist principles, to require people in those circumstances to pay for benefits which many can afford to pay for themselves.

There is also a point of principle involved here. It is an extremely inefficient way of targeting benefits on people who are on below average incomes to do it through the general tax system in the way that the new clause proposes. Similarly, it is a shame that we did not do something to cut down on child benefit in the recent social security reviews, because at least three quarters of what is paid out in child benefit goes to those who are in no serious need. Therefore, it would have been better had we used that money, for example, to raise income tax thresholds or to reduce rates so as to take out of the charge to tax many of those on low incomes to whom I have referred.

What is proposed in the new clause — and in the special pleading for the various, no doubt worthy, causes which are brought to our attention from time to time when tax concessions are sought — is a return to the truck system, so that the employer, instead of giving the employee the freedom, by being paid in cash, to choose what to buy with that cash, ties him to certain forms of expenditure that the employer, not the employee, decides is good for him. In the middle ages, the majority of the people of Britain were adscriptus glebae—bound to the land—and that would be the result of the new clause if it were extended into a more generalised principle.

We must debate this issue as a question of principle, because if the tax system is not based on some principles, it degenerates into a welter of special pleading and benefits. That has undermined our whole social security and tax system, and I am pleased that at last we have a Government who are determined to start tackling the accumulation of special advantages that are given to individuals on no special principle.

The hon. Member for Birmingham, Hodge Hill (Mr. Davis) said that there had been a change in the practice of the Revenue in relation to the taxation of employer-provided workplace nurseries. He seemed to imply that in the past such benefits in kind had been exempt from tax. That has not been the case. It is a course over which we cantered last year in considerable detail, when the Financial Secretary explained the position, and nobody has come forward to refute what he then said.

There are two types of benefit in kind for tax purposes, which are treated in different ways. First of all, there are those that can be converted into money. Benefits in kind that can be converted into money have always been taxed on the amount of the benefit in money terms. Secondly, there are those that are not convertible into money, and workplace nurseries would come into that category, along with, for example, board and lodging provided by an employer, or travel, meals, uniforms, education, and so on and so forth. These are personal benefits in some sense and cannot be exchanged for money.

Those non-convertible benefits in kind, on the general principles of income tax, have never been chargeable to tax but since 1948 a special regime has applied to company directors and those classed as higher paid employees. So, those who are not company directors or higher paid employees are still not within the charge to tax in respect of the employer-provided workplace nursery. It is interesting to point out that a Labour Government brought about the change to correct what I think was an imbalance whereby one form of remuneration was taxed on a different basis from cash. That is a fundamentally illogical principle and one which strikes at the whole basis of fairness in the tax system.

Mr. Sedgemore

It appears to be one of the hon. Gentleman's major points that this is not a new tax. I served on the Committee last year and took part in the debate when the Minister appeared to say the same thing. I gave evidence to the Committee that there were 98 workplace nurseries in Britain where tax was not being paid or collected. How does he square that with this not being a new tax?

Mr. Hamilton

If the benefit in kind is not drawn to the attention of the Revenue it can hardly be expected to tax it. I have no window into the mind of individual taxpayers and how they fill in their tax returns but in so far as it was generally assumed not to be a taxable emolument, taxpayers did not fill in returns. [Interruption.] If hon. Members will listen to what I am saying, I am quite prepared for them to intervene later in my speech if they disagree with me. In so far as the Revenue was unaware that this benefit in kind was being provided to particular individuals, it could not be taxed. In many other cases the value of the benefit received might have been too small to make it worth assessing. I do not know. Certainly a de minimise rule is very sensibly applied in other areas of the tax system as well.

Mr. Mark Fisher (Stoke-on-Trent, Central)

Could the hon. Gentleman give the House an example of where the tax was being collected?

Mr. Hamilton

No, I cannot.

Mr. Fisher

The hon. Gentleman cannot because such an example never existed.

Mr. Hamilton

Just because I cannot name an example does not mean that it did not exist. I am prepared to give the hon. Gentleman the benefit of the doubt and to say that in the past people have not been taxed on a benefit which was taxable. That can be for one of two reasons: first of all, that the Revenue did not know and, secondly, that it was not worth collecting. Either one or other of those reasons is the cause. One of the reasons why more people are now in receipt of a taxable benefit in relation to these nurseries is that as incomes have risen and the £8,500 definition of what is a higher paid employee has remained the same, so more people have come into the tax net. Probably the other reason why nobody has been assessed in the past is that a higher proportion of those in receipt of the benefit were not actually within the charge to tax because they were not higher paid employees for tax purposes.

6.15 pm

There is no justification for the hon. Member for Hodge Hill (Mr. Davis) to say that the tax position in law has changed or that the practice of the Revenue has changed. All the facts point to the situation being just the same today as it was in any other year since 1948. A great many red herrings have been put forward and hon. Members who support either of the new clauses have sought to draw some comparison with various other benefits, if they can be called benefits, which are provided for employees. We dealt with car parking spaces last year in some detail and once again the tax position is perfectly clear and is on the record. This would also apply to sports facilities and the other examples which have been given this afternoon. For company directors and those who are higher paid employees, such benefits are taxable even though they may not be taxed for the reasons I have just described in relation to workplace nurseries.

Lest he has forgotten, I should explain to the hon. Member for Hodge Hill, as I did last year, that such benefits are not in practice taxed in certain instances because the value of the benefit for tax purposes is so small as not to make it worthwhile collecting. In the case of a car parking space or any benefit where the value is calculated because it is land for tax purposes, section 531 (1) of the Income and Corporation Taxes Act 1970 provides: the annual value of land shall be taken to be the rent which might reasonably be expected to be obtained on a letting from year to year if the tenant undertook to pay all usual tenant's rates and taxes, and if the landlord undertook to bear the costs of the repairs and insurance, and other expenses, if any, necessary for maintaining the subject of the valuation in a state to command that rent. In the case of a car parking space it is quite obvious that the gross annual value for tax purposes of a piece of land 6 ft by 12 ft will be tiny and not worth the Revenue's trouble to collect.

Mr. Terry Davis

Are all car parks provided on open land? That is not the case in the City of London. He must have seen a report circulated by the London Amenity Transport Association about the effect of company cars. He must know it has been calculated that the cost of car parks in London can be as much as £500 a year per car.

Mr. Hamilton

In that case it is assessable. If the hon. Gentleman knows of any particular instances where tax is not being charged perhaps he would like to draw them to the attention of the Inland Revenue, which will no doubt be glad to receive the information. The law remains as I have explained it, and that is what we are talking about. The hon. Gentleman said the law has changed. I think I have explained that the law has not changed; neither has the practice. The example of the car parking space is no different, in the way that the Inland Revenue treats it, from the employer-provided workplace nursery.

Mr. Austin Mitchell

How would the hon. Member calculate the value of his own car parking space in the House garage? Can he say what return he makes to the Inland Revenue on that?

Mr. Hamilton

I am not responsible for that calculation. The Fees Office would, I am sure, be able to provide that interesting information. The point remains the same, that if it is taxable it is on the basis that I have described under section 531(1) of the Income and Corporation Taxes Act. As a matter of course the Revenue does not seek to assess individuals where the amount of money involved is very small. In an extraordinarily misleading round robin which was distributed by the workplace nurseries campaign in the last few days, a comparison is sought to be drawn with various other kinds of so-called benefits, which it believes are treated differently from workplace nurseries. It mentions, for example, pensions, which it says are exempt from income tax. I am sure that is a surprise to most pensioners who pay income tax on their pensions. It is a kind of deferred tax in as much as one does not pay tax at the time contributions are paid but ultimately tax is paid in the normal way on receipt of a pension.

Share options are also mentioned. The campaign round robin says, correctly, that they were exempted from income tax last year. What is not said is that share options are subject to capital gains tax, as and when they are exercised, on any capital gain made. That is perfectly proper. Shares are capital not income, so they are subject to the capital gains tax regime and not to the income tax regime. If shares are provided at an undervalue, the individual taxpayer is taxed on a benefit equivalent to an interest-free loan of the same amount as the market value of the shares. That is another example that falls flat on its face.

Much has been made of the system of taxation of company cars. The value of the benefit of a company car is assessed by the Inland Revenue on a scale, and the main reason why it is assessed on a scale basis rather than on an individual basis is the difficulty of apportioning the business and private uses of a vehicle. Obviously, where there is an arbitrary system, such as a scale in this instance, there will not be equality of treatment, but the administrative complications of trying to assess each individual on the basis of the exact proportion of private and business use of the car would be formidable. This is a means of reducing the administrative costs while maintaining equality of treatment.

To try to equate employer-provided workplace nurseries, where the benefit is obvious and easily measurable, with the benefits that derive from the provision of a motor car that can be used partly for business purposes and partly for private purposes is unsustainable. If we were to change the system of treatment of benefits in kind on that basis, we should be able to apply the same system to the whole of the benefits in kind that are provided by the employers. That would be grossly unjust to those who do not receive their remuneration by means of payment in kind but receive it through payment in cash.

In general, there are no exceptions to the rule that a benefit in kind is taxed on the same basis as a cash payment of equivalent amount. There are two exceptions. One is luncheon vouchers, but the exception is less valuable than it used to be because of the 15p a day limit on the value of the benefit, so that it is withering away. The other great benefit is concessionary coal provided the coal miners. I do not wish to intrude too much into the private griefs of the Labour party and dilate on that at any great length, but that concession is insupportable.

Mr. Douglas Hogg (Grantham)

I follow my hon. Friend's argument, which has a great deal of force. However, is there not another point that my hon. Friend should perhaps consider? Where one is dealing with a benefit in kind that forms part of remuneration, one is dealing essentially with remuneration, such as free coal, which can be brought within the Taxes Act. However, the provision of nurseries is not so much a benefit in kind as something that has to be provided to enable the employee to do the work. If one wanted to make a distinction, that distinction could be made.

Mr. Hamilton

That is what it is not. It is not a payment that is made to enable any person to do the job but one to enable a particular individual to do the job, and if everybody were entitled to have his tax based on the cost to him, because of his personal situation, of doing a particular job, there would be enormous opportunities for avoidance and the tax base would be substantially reduced. I am about to point out some of the difficulties that would arise if the analysis made by my hon. Friend the Member for Grantham (Mr. Hogg) were to be accepted.

My hon. Friend the Member for Banbury (Mr. Baldry) seemed to say that if an individual were to participate in the labour market, the costs of that participation should be borne by the rest of the country by means of a tax concession. I put to him, although he did not answer my point exactly, the case of somebody who lives in an isolated part of the country, say Brecon, where there is no public transport. Are the costs of his getting to work then to fall on the general taxpayer? I can see no distinction in principle between an employer giving him a grant for a car, for example, and an employer either giving a parent a grant to send a child to a nursery or providing nursery facilities.

Similarly, I am puzzled, as my hon. Friend the Member for Beaconsfield (Mr. Smith) was, by the limitations that the Opposition have placed upon themselves through the new clause. Why cannot one obtain a tax relief for child minders or nannies? I know that Mr. Peregrine Worsthorne thinks that the unemployment problem would be resolved if all domestic servants could be employed by means of tax relief. I am surprised to find that Labour Members are in the same camp as that distinguished journalist. That seems ultimately to be the road down which they are going.

What about those who are self-employed, for example, who might be in the same position as the one-parent families about whom the hon. Member for Barking talked? There is nobody to provide a nursery for them because by definition they are not employed. Why should they not get the relief? What about individuals with large families who find it difficult to undertake employment because they have children to care for all round the clock? Will they be able to claim for the cost of domestic servants against their tax bill? What about night shift workers? Will they obtain tax relief for an employee to look after children at night, and so on? What about childless families and those with children over five? Why should they be made to pay for what is, after all, a voluntary act — having a child? Neutrality of tax treatment and remuneration is a valuable and vital principle in our tax system and it would be a great pity if we were to allow this exception to undermine it.

The payments that one has to make to earn one's income are deductible for tax purposes, but here we are talking about a different point. The payments that are made, for example, to pay for a child to go to a nursery are not paid to undertake the job itself. The nexus is the personal position of the taxpayer and not the requirements of the job. If the basis of our tax system is altered to accommodate the change proposed by the Labour party, that would go a long way towards undermining what fairness there is in it.

6.30 pm

Mr. Peter Pike (Burnley)

The hon. Member for Tatton (Mr. Hamilton) said that Labour Members had raised a few red herrings. If anybody has drawn a red herring across the debate, it is the hon. Gentleman.

We are debating an important new clause that gives protection to existing workplace nurseries and would support the provision of future workplace nurseries. It is an important new clause that is worthy of support.

To call these nurseries a perk is not a correct description of them. They provide something that is essential to the parent, whether it is the mother or the father, to the employer and, ultimately, to the nation. My hon. Friend the Member for Barking (Ms. Richardson) made the important point that, while some revenue would be lost to the nation if the new clause were carried, if the parent had to give up work as a result of the loss of nursery provision, the nation would lose taxation and national insurance contributions as a result. This is not just a one-sided story.

The hon. Member for Tatton did not like the reference to car parks, but they are relevant. One cannot just dismiss the provision of car parking spaces for employees as being of no consequence. My hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis) forcefully made the point that parking spaces, particularly in the London area but also in many major cities, are a costly item, although a worthwhile provision for the employee. But we are not talking only about parking places. When I worked in industry we had subsidised public transport to get people to factories. In my case it was because the factory was in a difficult place to get to. Subsidised transport is fairly common and one could argue that the portion paid by the employer should be taxed. I am certainly not advocating that, but it is another example of something provided by an employer, as are workplace nurseries, for the benefit not just of the employee but of the employer.

There are other benefits for workers, such as staff sales, and one would find it difficult to determine whether they were perks and on what basis one would tax them if they were to come into the category to which the Government felt they should extend taxation. As many of my hon. Friends have said in this short debate, there is very little provision for nurseries. We compare very unfavourably with all the other nations of Europe. It is an area of care which we should develop, and the state through the local education authority should be providing more nursery facilities for children under the age of five.

I am fortunate in that I represent a borough in which there is more than average provision for nurseries. But even in Burnley, the provision of day nurseries for people going to work is inadequate. My hon. Friend the Member for Denton and Reddish (Mr. Bennett) said that in the north-west, in the textile industry, and in Yorkshire it used to be a common provision, but as industries changed their nature and had to make economies to compete in the world it was gradually cut out and there is much smaller provision of nursery facilities in those industries now than there was a few years ago.

This amendment is important to the working mother and the working father. It would supplement the provision which is available but which is at a woefully low level. However, there is some provision in the state system and our proposal would supplement and encourage it and ensure that the parent would not have to pay tax on it. The new clause is well worth while and I hope that many Conservative Members will support us when we vote in the Division.

Mr. Derek Fatchett (Leeds, Central)

Two major themes have been running through this debate and I should like to comment upon them. First, a number of Conservative Members who oppose the new clause have suggested that the reason for doing so is that they want perks to be taxed. I would take that argument with greater seriousness if they made two points in addition simply to saying they want perks to be taxed. I would take it with greater seriousness if they said that they wanted to see consistency in the taxing of perks.

It has emerged from this debate that there are differences in treatment for, say, canteens, car parks, social clubs and sports facilities and, of course, the case has been quoted many times of the greater benefit of a car provided by an employer. If the argument on perks is to be a strong one, there needs to be an argument in addition to that in relation to consistency. We have heard no arguments from Conservative Members about that.

Secondly, I would be much more convinced by Conservative Members if they showed a greater enthusiasm in their discovery of perks and their willingness to tax perks rather than simply using that enthusiasm in relation to workplace nurseries. Two or three weeks ago I went to watch half a day's play in the test match at Headingley. I should preface my remarks by saying that I paid for a public seat. As I walked round the ground, I noticed that one of the recent developments at the Yorkshire cricket club ground was the provision of private boxes or executive suites. I also noticed the amount of alcohol available. I heard some comments of a nature which in some cases I thought was disagreeable. I wondered how much of it was paid for indirectly through the Exchequer both in terms of tax allowances and untaxed perks. If we were to spend money in that way, I wondered whether it would be better spent on workplace nurseries rather than on entertaining business men at cricket grounds and at other sporting events.

If Conservative Members were consistent in their comments, they would be looking for broader taxation on perks.

Mr. Neil Hamilton

rose—

Mr. Fatchett

I will not give way to the hon. Gentleman because he inflicted upon the House the great benefit of his knowledge for some time, and it might be unfair to my hon. Friends who want to speak if I were to give way.

My first point concerned consistency in relation to perks. My second point relates to the argument that workplace nurseries should be seen as another perk and should he taxed. The hon. Member for Tatton (Mr. Hamilton) did not answer very effectively—because I do not think he can — an intervention made by the hon. Member for Grantham (Mr. Hogg). The crucial difference—this has been a core argument throughout — between workplace nurseries and other perks is that workplace nurseries are crucial in many cases to enable people to exercise their right to work. We are talking about women in the vast majority of cases.

I do not want to use the term "perk" any further in this debate. I see the right to a workplace nursery as an essential part of the right to work. If the hon. Gentleman were to say to us that he supported a campaign for local authority provision, we might not be having this argument. But the hon. Gentleman knows that in many parts of the country where his party is in control of local government the provision of nurseries and care for children under five is very limited indeed. What we are looking for in this new clause is not elitist support for a small number of people.

When the Financial Secretary replies, will he tell us how much implementation of the new clause would cost the Exchequer? I suspect we shall be talking about a small sum of money. It is not just a matter of providing for an elite number, which is the argument we have heard from the Conservative Benches; it is a matter of making it possible for more and more women, and in some cases men, to make use of workplace nurseries in order to exercise the right to work. I am making a fundamental argument. Many of us take it for granted that we should have the right to work and that we should have a workplace in which we can develop our talents. It is wrong for the Government and for this House to deny many people the right to exercise that opportunity.

This has been an important debate. What has emerged from it are the different perceptions of the role of women in the labour market held by Conservative Members and Labour Members. Throughout the debate Conservative Members have been saying that they prefer a marginalised role for women in the labour market. They prefer to see women in the home, and, with one or two exceptions, they are not keen to see women develop their talents as of right as they are to see men do so. That difference has been crucial.

The debate has highlighted genuine differences between the two sides of the House and the two major political forces in our society. Those differences will come across to the electorate, and it is not without significance that when we have debates that highlight fundamental differences the alliance is hardly represented in the Chamber and its limited representation is characterised by silence. Many people outside who are keen on workplace nurseries will note that Liberal and SDP Members have hardly bothered to attend and have not yet shown any interest in speaking in this important debate.

Mr. Douglas Hogg

Although the new clause is extremely attractive, it is not consistent with existing tax law. My hon. Friend the Member for Tatton (Mr. Hamilton) was right to say that the new clause goes beyond present tax laws. I was wrong when I intervened during his speech, because I do not believe that one can say that the provision of a nursery is wholly and necessarily for the purposes of employment, in the sense in which that phrase is meant in our tax laws.

The question is whether we need to make a special exemption in favour of nursery provision. Major problems arise. As my hon. Friend the Member for Tatton said, once we concede that nursery provision should be exempt from tax law, we have to ask what we should do about nannies. Are people who employ nannies entitled to set the cost against their income for tax purposes? Then we have to go even further and consider the costs of travelling to work.

The new clause is attractive, but it represents a departure from existing tax law, and I suspect that the ramifications are much wider than the House conceives them to be.

Mr. Tony Lloyd (Stretford)

I declare a retrospective interest. Not many years ago, my wife put our first child in a workplace nursery when she went back to work as a nurse at Manchester Royal infirmary, which runs the nursery to cater for the needs of nurses.

No one should believe that workplace nurseries have been provided only through the altruism of employers. Normally, nurseries have been seen by employers as necessary to encourage skilled personnel to return to work. My hon. Friend the Member for Barking (Ms. Richardson) referred to the tax and national insurance contributions that would be lost if we prevented such people from returning to work. We should also remember that we may be depriving the National Health Service of many skills if we bar employees from workplace nurseries.

The existence of nurseries in the NHS allows many women to return to work. I understand the logic of the arguments of the hon. Member for Grantham (Mr. Hogg), but I hope that he accepts that the major cause of the provision of workplace nurseries has been the fact that employers have had to provide them to attract employees. It is consistent to claim that the existence of those nurseries is part and parcel of the employment. For example, they are not comparable with company cars, which provide a personal benefit.

6.45 pm

There are no circumstances — if they exist, they are extremely marginal — in which an employee uses a workplace nursery to pursue other parts of his or her life or to gain extra leisure time. By definition, a workplace nursery provides a service during working hours. As my hon. Friend the Member for Leeds, Central (Mr. Fatchett) said, we are talking not about a perk, but about a service that is part and parcel of employment.

Many Conservative Members have a different concept from Labour Members about the role of women at work and of their right of access to most areas of employment. If the Financial Secretary tells us that the Government will start a massive building programme of nursery provision for children aged three to five, to bring us up even to the minimum standards of our European neighbours, that will be evidence of the Government's good faith and their attitude towards working women and we may not need the new clause. However, we do not expect to hear such an announcement. The Financial Secretary may delight us all, but it is not usual for him to delight the House.

Labour Members see the new clause as a way of increasing the independence of married women and increasing the opportunities of women with children to gain access to employment, which is desirable for the many reasons that have been mentioned, including the need and the desire or right to work.

I echo the sentiments of my hon. Friend the Member for Leeds, Central who pointed out that, throughout our debate, attendance on the alliance Benches has been poor. We have with us the Liberals' economic spokesman, the hon. Member for Colne Valley (Mr. Wainwright), and the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), who sat with us, on occasions, in Committee. It would be instructive to know where the Liberals stand on this issue. If the Brecon and Radnor by-election had been this Thursday instead of last Thursday, we would have seen a much greater response from Liberal Members trying to show their concern and compassion. We had a full attendance on the alliance Benches earlier, but when we get to serious matters affecting our constituents, particularly those in inner city areas where there is a high proportion of single parent families, no alliance voice is raised in their defence.

Mr. Fatchett

The SDP has not been here at all.

Mr. Lloyd

Perhaps that is because SDP Members have given up on the inner city areas. My constituency is split between two local authorities. One has a poor provision of state nursery places. Not unexpectedly, it is a Conservative authority. People in that part of my constituency need workplace nurseries if they are to have employment opportunities.

I should be happy for us to subsidise nurseries in the way that we subsidise our state schools. Nurseries are important in educational terms. Any parent who has had children at a nursery can see the difference that it makes. Nurseries are not a frivolous provision or a luxury for selfish parents. They are extremely valuable to children as well as being, in many cases, an economic necessity for the parents.

For that reason I congratulate my hon. Friend the Member for Hodge Hill on his new clause. I shall be more than interested to see how many Conservative Members support him in the Division Lobby. I suspect that while we hear plenty of talk from them, they will be noticeably absent from the Lobbies.

Mr. Archy Kirkwood (Roxburgh and Berwickshire)

Having been thrust into the breach, and as it has been said that although I was present, I had not spoken, I point out that it is right and proper that the House should have the benefit of the alliance's views. I shall recommend my right hon. and hon. Friends to support the new clause.

Dr. McDonald

How many of them?

Mr. Kirkwood

I assure the hon. Lady that my right hon. and hon. Friends will be present for the vote.

I entirely endorse the way in which the hon. Member for Birmingham, Hodge Hill (Mr. Davis) introduced the clause.

There are two issues facing the House. There is the overwhelming social case for workplace nurseries. It has been deployed, and I shall not repeat all the arguments. They centred round the need to develop the position of women in society, especially those with young children. Within that group the plight of single mothers is particularly desperate. I have had constituency experience of that, as other hon. Members will have had. That, combined with the education case, makes it impossible to oppose the new clause.

However, I have reservations about the clause when it is considered from the purely logical taxation point of view. I have listened carefully to the arguments, and to the difficulties to which Conservative Members have referred. I confess that I am worried about extending the principle involved into taxation law. However, if the Government allow some of the other anomalies and tax perks to exist, and if the Inland Revenue does not attack and pursue them vigorously, I do not see why workplace nurseries should be left out of the bag. Until the Government face up to the other worrying anomalies, we should not pass up this opportunity.

Mr. Douglas Hogg

Will the hon. Gentleman tell the House whether what he is enunciating is a matter of principle or of convenience? I understood him to say that, if the Government pursued other perks vigorously, the workplace provision places should be brought into the tax net.

Mr. Kirkwood

That is exactly what I am saying. [Interruption.] I have a clear idea on the subject. On the basis of the taxation principle — [Interruption.] The House asked me for my views, and while I am now giving those views, I am being criticised on all sides. I cannot win, but we in the alliance are used to being friendless.

The Government should look much more rigorously at some of the other tax perks. The former leader of the Liberal party, my noble Friend Lord Grimond, was keen on that, and made many suggestions about how a Government could eliminate such tax perks.

Mr. Richard Wainwright (Colne Valley)

Does my hon. Friend agree that it will be sheer humbug if the Financial Secretary tries to persuade the House that his Inland Revenue machine pursues perks rigorously and thoroughly wherever they are found and, therefore, it is important to tax this one, when everybody knows that the substantial use of secretaries, office equipment and so on for personal purposes—sometimes for good purposes—is never tracked down and successfully taxed? In those circumstances, why should the Financial Secretary single out this particular case?

Mr. Kirkwood

My hon. Friend makes the point for me, and much more succinctly.

There are other ways of stimulating and promoting the workplace nursery schemes and provisions, and we should seek to use them. There are probably more effective ways of putting substantial resources into that provision, and we could undoubtedly argue about them. I certainly support Opposition Members. Would the Financial Secretary consider studying the threshold limits, and double or index-link the £8,500 annual income at present laid down? That is only one vehicle that could be used.

On balance, taking a decision on the new clause, I shall recommend my right hon. and hon. Friends to support the new clause. That is a perfectly reasonable position to take.

Mr. John Maxton (Glasgow, Cathcart)

Will the hon. Gentleman assure us that he is also speaking for his colleagues in the Social Democratic party although most of us accept that the Liberal party has some last vestiges of a social conscience left, we are not so sure about SDP Members.

Mr. Kirkwood

I can do that. The view that we take when the Division bells ring is what matters. I rose only to clarify the position, and it may be that I have not done that. I have sought to explain where we stand on this matter, and we shall certainly support the amendment.

Mr. Austin Mitchell

It was good to see the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) formulate policy on the wing, not only for the grown-up section, but for the nursery section of the alliance, which has not been represented here today. The fact that he can do that almost by telepathy shows how wonderful policy formulation is in the alliance.

The main interest during the debate has come from watching the party of special pleading on the Conservative Benches. Night after night, this year and in all preceding years, Conservative Members have sat in Committee on the Finance Bill finding every loophole, anomaly and change where there is money to be made, yet they are not prepared to plead on behalf of the special section of society about whom we are concerned today. Only one Conservative Member has spoken as the voice of conscience, and all credit to him. All the others have read party briefs, although with a deterioration in style and grammar, because they are on the hard road that must be hoed to reach the dizzy heights of Parliamentary Private Secretary.

Mr. Tim Smith

What?

Mr. Mitchell

Perhaps I should say the hard fields that must be tilled to reach those dizzy heights. Those fields must also be shovelled, and I am sure that the hon. Member for Beaconsfield (Mr. Smith) is good at that. While he shovels, he should consider the small number of people who have come on to the bridge while the ship sinks. It was interesting to see how few people were prepared to join in that scramble.

We have heard no effective arguments against new clause 1, only a series of nit-picking quibbles. For example, one hon. Member suggested that the new clause be widened to include child minders — as if he would vote for it if it did—and another suggested that it should be widened to include nannies, which would guarantee tumultuous votes from Conservative Members. The hon. Member for Slough (Mr. Watts) said that women should not go out to work. Although the country might be better run if that were true—Derbyshire, South might be better represented—the general proposition is not acceptable to the Opposition. We also heard the quibble about what would happen to mothers who do not get the allowance. Such petty arguments were levelled against a simple and correct principle.

There is an element of special pleading in our argument. There should be universal public nursery provision for all those who want it. The United Kingdom is badly provided for. We lag behind most of the rest of the advanced world. We have already been told that in France and Denmark between 20 and 30 per cent. of two-year-olds get some form of nursery education, and that in Belgium, France and the Netherlands 95 per cent. of four-year-olds get such provision. Only 56 per cent. get it here.

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The Conservative party cannot have it both ways. Either there should be universal public provision, on which our record is bad, or we should provide incentives such as new clause 1 proposes. Between 15 and 20 per cent. of families are single-parent families. They have special difficulties taking jobs. Therefore, they must be helped by the provision of such workplace nurseries. The proportion of single-parent families in some London boroughs is as high as 30 per cent. What do the Tories want them to do? Depend on benefit? Is it not right that they should stand on their own feet and go out to work? Is it not right that employers should help them in that by providing workplace nurseries? The country needs their skills, and work is better for them socially, psychologically and in every other respect.

It has been argued that only a few people are affected, but inflation has meant that far more people are affected. Taxation now applies to somebody earning £6,000 a year if the costs of nursery education are added. Those costs are heavy, as workplace nurseries must have skilled staff and good premises — which are often in inner cities and therefore expensive—and be open long hours. The costs of the Kingsway nursery, which started the argument last year, are £345 a month. A person who uses nursery facilities is assessed on the costs as well as on the charge. If those costs are added to a salary of £6,000 it is obvious that many people are taken into tax. The people affected earn less than the average secretarial allowance in London—less than the salary that I hope Conservative Members pay their secretaries.

Provision of workplace nurseries is a matter of social responsibility as it is in line with other aspects of social provision which are not taxed, such as meals, car parks, which represent a substantial benefit in big cities, social and sports clubs and other facilities. Nursery provision differs from them only in so far as it relates to that section of the population which has the disadvantage of being parents, especially single parents. Enlightened employers will want to make nursery provision.

It is better that people should have access to workplace nurseries. They are probably more efficient for the parent than a neighbourhood nursery provided by the local authority, as no extra journeys are involved. Moreover, the parent is on hand in the rare event of problems, and therefore has greater peace of mind. It is not as though we are asking for some ancient provision to be changed. The change came last year with the decision by the Government and the Inland Revenue to make workplace nursery provision taxable. We argued last year where Which? got its information, as it said that for many years the benefit was not taxable. Irrespective of whether that magazine got its information from the Inland Revenue, as it is a popular guide to tax, benefits and allowances, the Revenue must have a responsibility to ensure that misleading information is corrected.

I have not come across a case of people being taxed in this respect before last year. It is Conservative Members who are voting for change. If they oppose new clause 1, they will impose taxation on those who benefit from workplace nurseries. They will be voting against nurseries, care for children and a small, but dependent, section of society which must be helped. They will be voting for male superiority. If new clause 1 is not carried, many nurseries will almost certainly close. People will not pay tax on the benefit because there will be no benefit.

I understand that tax was not collected until April this year and that people have not been coded accordingly until the Revenue finds out what the House decides. The Financial Secretary shakes his head. I shall be interested to hear his reply when he takes off the steel-rimmed glasses through which he has been glaring at us and puts on the mien of a reasonable man explaining reasonable facts to unreasonable people in order to defend an extremely unreasonable stance.

If Conservative Members vote down new clause 1, they will vote for the closure of a comparatively small number of workplace nurseries and unemployment for the people who work in them. If the nurseries remain open, Conservative Members will have voted for a substantial tax bill for those who benefit from them. All that retrograde voting will be in the interest of being loyal to the whim of a Chancellor who clearly, after the last by-election, is temporary.

Mr. Moore

We have had a relatively lengthy but most enjoyable debate because it has been held at a rational hour. I am sure that the hon. Member for Birmingham, Hodge Hill (Mr. Davis) and I and all hon. Members who have participated in the debate will have preferred the time at which the debate has been held this year, remembering that last year the debate was held as the dawn came up.

Let me first answer the question of the hon. Member for Leeds, Central (Mr. Fatchett). Last year I mentioned that the theoretical potential costs involved were about £1 million. Although it is not an insignificant sum to the people involved, it is relatively minor. That is not the point at issue, and I entirely accept the hon. Gentleman's point.

I think that few issues have been clouded with such legitimate argument by those who honourably argue for the benefit of those intelligent employers who seek to offer employee nurseries, and argue in favour of social provision and the relative role of women in society. I see that as a clear set of arguments. I suggest that they have confused that very legitimate set of social goals with the question of the taxability of benefit, which is a very different question.

We have now had for a year or more, to put it no more strongly, the somewhat immoderate comments not of hon. Members but of certain sections of the press which cannot always get the facts right. Facts and principle are important, and I shall try to put the facts and principle on the record.

I thank particularly my hon. Friends the Members for Croydon, South (Sir W. Clark), for Beaconsfield (Mr. Smith), for Slough (Mr. Watts), for Tatton (Mr. Hamilton) and for Grantham (Mr. Hogg). If I may do so without being rude, I distinguish the contribution of my hon. Friend the Member for Grantham. He said in two minutes what I am afraid I shall take considerably longer to say. Because I have some respect for and enjoy the company of the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) — I know that he is a reasonable, rational man — I hope that he will hold back a little before committing himself and the alliance to the way in which they will vote until he has had the benefit of hearing what I have to say. I am delighted to observe that the hon. Gentleman nods, so there is a chance that rational man will win over what I might call practical man.

It is essential in this issue to start by trying to get back to principle. I thought that there had been a degree of understanding across the Chamber over generations about the nature of employer abuse that occurred in previous centuries and into this century. My hon. Friend the Member for Tatton referred to the Truck Acts and to the way in which employers in the past had abused employees. I thought that there had been a historical debate which joined most responsible Members of Parliament. There was an attitude demonstrated by most hon. Members towards the nature of the principle by which choice should be given to individuals in the spending of their cash so that they were not trapped into the nature of the employment in a paternalistic fashion.

I respected the opening speech of the hon. Member for Hodge Hill, who argued the case reasonably. I shall try similarly to argue my case. I think that both sides of the House shared the distaste for what might be called concealed remuneration, especially when this could be controlled by directors. I thought that there had been a historical acceptance by all parties that pay was preferable and that therefore in equity any benefits paid must bear tax as remuneration. I use not the word "perk", but the phrase "overall remuneration". I accept the point made in that regard by the hon. Member for Leeds, Central.

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I should not be reminding the Opposition of some of the great figures of Labour history, but the problem before 1948—there have been constant references to the 1948 statute, which is the fount of much of this discussion—was that it was very difficult to codify in the statute the attempt to carry those principles into practice. I take the Budget speech of that late great Socialist, Sir Stafford Cripps. I use my first quote to explain why Sir Stafford Cripps argued as he did in the economic statement: Under the existing law, it falls upon the Inland Revenue authorities to prove that the payments are not necessary business expenses, and because of the difficulty of substantiating the case it often happens that these payments go untaxed. The majority opinion in industry condemns this practice". He was then proposing the introduction of the 1948 statute which concerned much that is being debated tonight. He continued: It is perfectly legitimate, of course, to deduct by way of expenses, a reasonable expenditure … but this right has been noticeably abused by extension to cover the ordinary living expenses of many persons, who are either directors or employees of the companies. This must be brought to an end. I shall give some more updated examples of the Socialist principle. He went on to say: there can be no doubt that many individuals are circumventing the law … I propose, therefore, with immediate effect, that all expenses allowances given to directors and others, and all disbursements for their benefit shall be assessed". —[Official Report, 6 April 1948; Vol. 449, c. 70.] It is important for us to understand the basis of the debate. In fact, there are two debates—a tax debate and a social debate. I have also all the references to Glenvil Hall, the then Financial Secretary, who seemed to carry much of the burden for Sir Stafford Cripps in Committee. Socialist adherence to these principles had not changed. The right hon. Member for Ashton-under-Lyne (Mr. Sheldon), a former Financial Secretary to the Treasury, who had to carry the burden of the 1976 issue, confirmed in Committee time and again essentially what I have to say. I accept that he was under pressure from the Conservatives at the time. He carried the principal arguments further forward. In discussions on the Finance Bill 1976, referring to some of my right hon. and hon. Friends, he said: ideally all benefits in kind should be taxable … in equity all benefits should be taxed together with income. No one had much of a good word for fringe benefits. Referring to the Conservative party, then in opposition, he continued: the Opposition dislike fringe benefits and are prepared to do nothing about them because of the obvious problems, but the Government face those problems and have introduced this legislation which it is my job to defend and explain. He said later: the incidence of fringe benefits has been increasing in Britain over the past 20 years, or perhaps more, and the time has clearly come when fringe benefits need to be taxed in the same way as other emoluments. I have many other similar quotes of what he said, correctly, in my judgment, as the Financial Secretary to the Treasury in those debates, which I have read with great admiration. He also said: We believe that benefits in kind are part of the emoluments of a person. The Opposition and the Government share that view; the difference is that we have decided to do something about it."—[Official Report, 17 May 1976: Vol. 911, c. 1100–5.] I am not in any way concealing the nature of the criticism that he was addressing to the Conservative party, which was then in opposition. However, he argued rightly about the principle.

Some may say and, indeed, have said — not necessarily tonight but in the past year — that it was never intended to cover this or that benefit. There was no universality about it. They were wrong then in their comments, they were wrong in relation to the debate in 1948 and they were wrong in 1976 with two exceptions on which I shall comment later. The definition was all-embracing then and continued to be confirmed in detailed debates in 1976.

On 15 July 1976 our late right hon. Friend Graham Page, a great man and a man of great courage and consistency of purpose, asked almost the questions we have been asking tonight of the right hon. Member for Ashton-under-Lyne. He referred to clause 56(2) of the Finance Bill which defined what was meant by benefits. He said: The benefits to which this section applies are living or other accommodation, entertainment, domestic or other services. He then said: Then follow the words 'and other benefits and facilities of whatsoever nature'. He then asked the right hon. Member for Ashton-under-Lyne: Perhaps the Financial Secretary will tell the House what benefits will be included in the wide phrase 'other benefits and facilities of whatsoever nature'. The right hon. Member for Ashton-under-Lyne said—I could not have said it better—in words that I am sure were given to him and that he no doubt supported: It is not possible to categorise all the various kinds of benefits. That is why the words were used in the 1948 Act. They seem, at least in the limited way that that legislation provided, to have given the possibility of taxing the use of these benefits. It is only right that we should use those same useful words in the current legislation". I am trying to take us back to the universality of the principle that was applied. Having reminded hon. Members of that, I can perhaps try to explain how the Revenue — it is relevant to this point, as all hon. Members who have had responsibility in office in the Treasury are aware — was to assess the value to the recipient of the non-cash emolument and why.

The basis for the taxable benefit was established in the Finance Act 1948 as the cost to the employer of providing them. That point was confirmed by the right hon. Member for Ashton-under-Lyne in the debate on 15 July 1976 when he said: The basis of the assessment of the benefit is the cost to the company." — [Official Report, 15 July 1976; Vol. 915, c 1016–30.] Why is that? Clearly, first, because the cost to the employer is equivalent to the extra cash remuneration the employer would otherwise pay. That ensures that payments in cash and kind are taxed equally. Secondly, it ensured that different benefits were taxed fairly in comparison with one another. Thirdly, to tax benefits at less than cost would mean treating payment in kind more favourably than payments in cash. Fourthly, taxing on employer cost provides an objective test of value, removing the need for subjective judgments in that difficult benefit area.

I have tried to cover the principle, the coverage and the base upon which the costs are assessed.

Mr. Douglas Hogg

Is not the problem in taking the cost to the employer that there could be two sets of circumstances — the provision of nursery places for a large number of employees and the provision of nursery places for a small number of employees? The cost to the employer might vary depending upon the number of employees and the degree of service but the value to the employee does not change.

Mr. Moore

I accept that there is no perfect solution. In the Finance Act 1948 the attempt to assess the benefit on the basis of employer cost is not perfect. Hon. Members have said that, and I shall return to the point later when I deal with car benefits. There is a difficulty, but the method that I have described at least removes the subjectivity of the relative benefit. We have heard a great deal during the debate about the practice of assessing benefit. The method of assessment has led to much of the misunderstanding about the comprehensive nature of benefit taxation. I shall cover briefly the only main statutory exceptions to which reference has been made to ensure that we get the point on the record. The exceptions are company canteens, luncheon vouchers and coal miners' coal and its cash equivalent.

Canteens were included in the Finance Act 1948. I think that we discussed in the early hours last year the reasons for that. They related to the food shortages at the time. The luncheon voucher concession flowed from that. That matter was decided in 1949 and published in 1954. The coal miners' coal concession was extended to cover the cash equivalent in 1944. I do not have to explain why at that time coal miners were persuaded not to take coal. It was extended as a published extra-statutory concession to the higher paid, especially, by the right hon. Member for Ashton-under-Lyne in 1975. I recognise that both exceptions are anomalies within the statute, but they have been continued by successive Governments.

I shall consider the practical applications of the 1948 statute which, after considering the matter for a year or more, I think confuse people into believing that there are many other exceptions, while any thorough analysis—I accept that it is difficult to make a thorough analysis of the issue — shows that the principles and the concept were clearly established in 1948. This has been a useful debate in that context.

Four matters have added to the confusion. The first is the effective working of the de minimis rule. As my hon. Friend the Member for Tatton said, the assessable value of the benefit is usually de minimis. Examples of the practical working of the de minimis rule are employer-subsidised sport facilities and social clubs. There is no question but that they are taxable. Where they are not de minimis — as with an easily identifiable sports facility benefit such as membership of a golf club—a tax charge is clearly sought. Car parking places also come into that category.

My hon. Friend the Member for Tatton, correctly, took some time to explain that the difficulty was not the concept of taxing; it was the identification of Gost. Special rules were therefore devised. Under those rules, the assessable value of a car parking space on the employer's land is taken to be its gross rateable value. Clearly that often turns out to be de minimis to the recipient, but it does not have to be. When a parking space is rented, the matter is straightforward, and the normal rules apply.

The second point — this issue has been raised only once tonight but was debated at considerable length last year — upon which some people confuse the problem of benefits is what I might call office facilities — paper, desks and even air conditioning. Those matters are excluded in so far as they are covered by section 62(3) of the Finance Act 1976, which exempts Accommodation, supplies or services used by the employees solely in performing the duties of employment. I do not have to go into the parallel that my hon. Friend the Member for Tatton drew between that and subsidised nurseries.

The third matter, which has created even more confusion—I think one or two of my hon. Friends may have fallen into a slight trap — is car flat rates. Those people who seek what they call a similar flat rate charge for employer-subsidised nurseries are confused. The problem, which was identified by the previous Labour Government, before 1977–78 was caused by the difficulty of charging for private usage by the then method of apportioning cost between business and private mileage, often on the basis of unverifiable mileage records. The Government sought to introduce scale charges. The concept of a full tax charge of 100 per cent. of the availability of the car for private usage is the aim. The Government decided to delay its introduction — I understand this fully — because of the problems of the car industry. However, the concept of scale charges was introduced to overcome the problem of identification. It was an intelligent and sensible administrative method.

The aim of the Labour Government was and of this Government is eventually to charge, in an administratively effective way, 100 per cent. of the private benefit. It would therefore seem pointless for my hon. Friends to seek to pursue that route for employer-subsidised nurseries, as it would merely achieve their present tax position.

The final practical feature of the charging mechanism for assessing the taxability of the benefit which has added to people's confusion is the £8,500 threshold. As a result of this limit many people have become liable to tax and this has caused anxiety to many hon. Members, especially my hon. Friend the Member for Croydon, South, who asked if that limit was out of date. I remind the House that the previous Financial Secretary to the Treasury, my right hon. Friend the present Secretary of State for Transport, clarified the Government's position on this in a parliamentary question in July 1983. He said: The earnings threshold has become an anomaly. The previous Chancellor considered abolishing it because the same and correct treatment of benefits in kind will apply to all taxpayers. That should be our long-term aim". — [Official Report, 7 July 1983; Vol. 45, c. 392.] It is clear that the threshold is an anomaly because some people who receive benefits are not taxed on them. Tax treatment should not depend on a person's remuneration, but it has been immeasurably difficult to abolish.

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It would seem that Governments have decided that sudden change is never right, but if we accept that it is anomaly, it is clearly right not to raise the threshold and thus perpetuate the anomaly. The practical implications of that decision become clear in debates of this kind when many people who were not affected by the 1948 and 1976 legislation now have to come to terms with it.

Before considering workplace nurseries, which are the essential issue in the debate, it is important to stress the principles involved. In the four areas that I have already mentioned — the working of the de minimis rules, the implications of the "solely for employment" rules, the use of the car flat rate scale and the practical impact of an unchanging threshold — the basic principles are unchanged. Those principles were well expressed by the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) who, as the Financial Secretary to the Treasury, said to a Committee of the whole House: We believe that benefits in kind are part of the emoluments of a person. The Opposition and the Government share that view".—[Official Report, 17 May 1976; Vol. 911, c. 1105.] I see no reason to change that fundamental acceptance of the principle that he enunciated so clearly.

I shall now deal with the taxability of the benefit of a workplace nursery in the context of that principle. I stress to the hon. Members for Barking (Ms. Richardson), for Greenwich (Mr. Barnett) and for Hodge Hill that I am not debating the value of a workplace nursery. All hon. Members are conscious of the need for employers who offer equal opportunities to provide those facilities. We are discussing the taxability of that benefit.

In giving a brief history of the issue I do not want to deal with it in the same detail as I did last year or to refute the comments already made. Suffice it to say that the benefits have been taxable since 1948, and the title of new clause 4 suggests that that is now accepted. However, there was considerable confusion. Some employers may have genuinely believed that the benefit was not taxable while others had paid tax on it. The Inland Revenue launched a special exercise in its tax offices to establish the facts. It was obvious that in many cases the benefit had not been reported to the Inland Revenue either by employers who provided it or by employees who received it. In the special circumstances, because of the confusion and because hardship would be caused by demanding payment for back years, the Inland Revenue decided not to collect tax for the period before 6 April 1985 and that tax already collected would be repaid. Indeed, I recorded that decision in a parliamentary answer earlier this year.

That is a brief history of the benefit as it affects the individuals involved, up to the beginning of this year. My explanations of the taxability of this benefit make it clear why we should not accept a new clause which seeks further to discriminate in favour of an already advantaged — I do not say privileged — minority in this area of employee benefits.

Mr. Shersby

Is there any difference in treatment for tax as between a woman who places her child in a local authority nursery and a woman who places her child in a workplace nursery?

Mr. Moore

There is no taxability on the benefits of a local authority nursery when places are extended to all members of the community. The taxability applies only where it is an employer-provided benefit.

I concur with my hon. Friend the Member for Croydon South that we should contrast the position of the people whom the new clause seeks to advantage with that of the majority of working mothers and mothers who may wish to work. I thought that the debate was supposed to be about mothers who wanted to work, but the new clause seeks to advantage the few who are already in work and whose employer, unusually, provides a workplace nursery. That involves about 2,000 mothers who, if they were taxed on the £2,500 theoretical value at a basic rate of 30 per cent., would be receiving an additional benefit of £1,750 after tax. The position of that tiny group, whom the new clause seeks to benefit, must be contrasted with that of the majority — the 2.2 million mothers with children under five, of whom 600,000 are working mothers. If the benefit were offered not just to the 2,000 who already have a modicum of advantage in their workplace activities but to all those who have the potential to seek work—the 2.2 million mothers — and if relief were given at child minder rates of £30 per week, rather than the full creche cost, the cost would be £1.3 billion.

Mr. Campbell-Savours

Stop exaggerating.

Mr. Moore

Reliefs and benefits should have significance for all, not just for the few, although it may be hard for inegalitarian Socialists to understand the truth of real opportunity for all. If the same relief were offered to the 600,000 mothers at work—[Interruption.] It is a compliment to my argument that the Opposition are trying to drown it with infantile barracking. If the 600,000 working mothers with children under five were offered the same benefit, the cost would be £300 million, and if one had any kind of social conscience one would have to make that offer. I know that the hon. Member for Leeds, Central, who was intelligent and rational in his argument, would want to make that contrast, because he would not want to isolate a particular group for relief.

Ignoring the inequity of not offering similar relief to those not fortunate enough to have a creche at their place of employment and the socially divisive nature of the proposal, proponents of the new clause argue that it is the tax charge that is inhibiting the development of employer-subsidised nurseries. But the key problem must still be the cost to the employer. We have heard that the cost may reach more than £4,000 per nursery place. Even at an average cost of £2,500 per place, it is not surprising that employers, however well-intentioned, find it a daunting prospect.

We are discussing not workplace nurseries and their role in our working environment, but the new assumption by the Opposition that we must use the tax system to encourage private provision for certain social needs. I find it fascinating that they should have turned their backs on their previous belief in the need for the state to provide. But more important, I wonder whether they have thought through the dilemma that they would open up if they went down that route, of which my hon. Friend the Member for Grantham started to remind us. Once they break fundamentally with the concept of the 1948 legislation, what other social provisions can be legitimately pressed via tax reliefs through the private sector? I know that many of my hon. Friends would be pressing quickly and legitimately for private medical insurance, private education and many other similar services.

Here we have a classic lesson for the Opposition. For what I know are the best of motives, they have a legitimate desire to support employers who provide nursery facilities, but they slipped into a position that can only be described as elitist. Having failed to think through the implications of their position on the issue, the Opposition, in their new clause, would, first, deny their past principled position on the issues surrounding perks and pay; secondly, they would argue for tax relief for the private provision of a benefit; and, thirdly, they would pursue the advantage of a tiny minority while ignoring the interests of the vast majority. The purpose of the clause is clear — to place the few in a position of further advantage through our taxation system at the cost, no matter how small, of the majority. I urge the House to reject that inegalitarian proposal.

Mr. Terry Davis

As the Financial Secretary said, we have had a most interesting debate, in which we have ranged from the practical aspects of the proposal to the more philosophical aspects of fiscal policy.

The hon. Member for Beaconsfield (Mr. Smith) delivered his usual pinprick when he complained that the Opposition had not chosen unemployment for a debate in prime time. I draw the hon. Gentleman's attention to the fact that we tabled a new clause that referred specifically to unemployment, and would have been a peg for a debate on that issue. However, it was not selected because it was not in order on the Finance Bill. A debate on workplace nurseries is in order. I must tell the hon. Gentleman that it is also a debate on unemployment.

As my hon. Friends and I have constantly reminded the House, we are discussing whether people, mainly women and particularly single parents, are encouraged to work or discouraged from working so that they go back to social security benefits. The hon. Member for Slough (Mr. Watts) echoed the views of the hon. Member for Beaconsfield. I found their attitude distasteful. They displayed a contempt for women and ignorance of the difficulties experienced by working women, and that was a revelation to Opposition Members. That attitude is totally different from that of the Financial Secretary. At least he made it clear that he thought that workplace nurseries should be encouraged. He was at pains to distance himself from the views of his Back Benchers.

My hon. Friends the Members for Stretford (Mr. Lloyd) and for Leeds, Central (Mr. Fatchett) put their fingers right on the point when they said that the debate has shown to a marked degree the difference in attitude between the Labour party and the Conservative party towards women and their role in society. But, to be fair, some Conservative Back Benchers expressed views similar to Opposition Members' views. The hon. Members for Banbury (Mr. Baldry) and for Nuneaton (Mr. Stevens) made it clear that they opposed the tax as much as did Labour Members.

The hon. Member for Nuneaton put it well when he said that workplace nurseries give women a choice of whether to work or not. Although I prefer the Labour party approach of exempting workplace nurseries from tax, we would have supported his new clause on the basis that a half loaf is better than nothing at all. I hope that he will support us in the Lobby, as his new clause was out of order. Conservatives who agree about the inequity of taxing workplace nurseries must choose between the Government's attitude and the Opposition's views.

The Financial Secretary wants to distinguish between encouraging a socially desirable provision and taxing the benefit. I make it absolutely clear that the Labour party would much prefer nurseries to be provided by local authorities. That is our ultimate aim. In the meantime we shall deal with the world as it is. We are not afraid to abolish the tax that has been introduced as a recent change in practice, in an attempt to encourage employers and to support women and parents who, in order to be able to work, need workplace nurseries for their children. The hon. Member for Grantham (Mr. Hogg)—

Mr. Eggar

Will the hon. Gentleman give way?

Mr. Shersby

Will the hon. Gentleman give way?

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Mr. Davis

Neither hon. Member has sat through the debate as I have done, so I shall not give way.

The hon. Member for Grantham said that it was not consistent with present tax law to exempt workplace nurseries, because the provision of those nurseries is not necessary to enable people to work. That was a fair point. However, it is a specific exemption in tax law to exempt workplace canteens, and they are not necessary to enable people to work. Many employers do not provide office or factory canteens, but those benefits are specifically exempt. We are seeking to add another exemption.

The Financial Secretary referred to the Truck Acts, saying that cash is a better form of remuneration than benefits or payment in kind. I agree with him on that principle. However, workplace nurseries are not a form of remuneration. They facilitate people obtaining remuneration because they enable many people to work who otherwise could not do so. They are also a cheaper way of providing that facility than paying everyone a larger sum to enable those who have children to pay child minders.

The Financial Secretary expressed the distaste of us all for the Truck Acts and such payments. His historical researches have extended back to 1948. I do not dissent from his quotation from the late Sir Stafford Cripps, nor do I dissent from the quotation from my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), but the hon. Gentleman might have had the courage to tell the House that, when my right hon. Friend expressed those views, the Conservative party voted against them. We know that it voted against them in 1976 because Conservative Members were arguing for tax-free perks for the well off. Workplace nurseries are not perks. They are not a fringe benefit any more than any other provision by an employer to enable an employee to work. We see a workplace nursery as being on all fours with a workplace canteen. We see it as an office facility in the way that it was defined by the Financial Secretary.

We believe that workplace nurseries are important for children, as my hon. Friends the Members for Greenwich (Mr. Barnett) and for Denton and Reddish (Mr. Bennett) told the House. They are as important for children as for mothers. When Conservative Members accuse us of setting one mother against another, they are really short of arguments. When they talk about employees who do not have access to workplace nurseries and similar facilities, and argue that there would need to be relief for child minding fees, let me remind them and the Financial Secretary that people who take their children to workplace nurseries are, as a general rule, and in every case that I have examined, paying for those facilities. It is not a free provision by the employer; people make a contribution to the costs of a workplace nursery. Out of their income, after tax, they are paying as much as others are paying for child minders.

The point is that a workplace nursery is a better provision than a child minder. The hon. Member for Tatton (Mr. Hamilton) said that there had been no change in practice, and referred to a speech by the Financial Secretary a year ago. He was less than specific about which passage in the Financial Secretary's speech dealt with that point. I must tell the hon. Gentleman that an assertion is not an argument. His argument was weakened by his statement that that tax has not been collected because it has not been drawn to the attention of the Inland Revenue. I remind him that the Inland Revenue is giving the advice that the provision of workplace nurseries is not a taxable benefit. The Financial Secretary said that there was confusion. It was the advice of the Inland Revenue that caused that confusion. As my hon. Friend the Member for Great Grimsby (Mr. Mitchell) said, the Government admitted that, by agreeing to cancel demands for back tax.

The hon. Member for Croydon, South (Sir W. Clark) said that it has been the policy of successive Governments to tax any perk. He was as wrong about that as about the details that he gave on the taxation of company cars.

It is not, and never has been, a policy of the Labour party to tax canteens. It will not be a policy of the Labour party to tax workplace nurseries. When the hon. Members for Uxbridge (Mr. Shersby) and for Croydon, South (Sir W. Clark) press the Financial Secretary to raise the threshold from £8,500, they are on a loser. The Financial Secretary made it clear tonight that the Government's policy is to abolish the threshold, not to raise it. That will mean that even more people on even lower wages will be taxed. Some Conservative Members say that the provision benefits a privileged elite who enjoy £4,000 a year benefit. The hon. Member for Beaconsfield (Mr. Smith) gave an example of sloppy accounting, because he had not listened to the fact that people who send their children to workplace nurseries make a contribution. The benefit is not £4,000, because their contribution must be deducted.

Mr. Tim Smith

Would the Labour party wish the £8,500 limit to increase or to wither on the vine?

Mr. Davis

We shall certainly examine that matter, but in the meantime we would leave it where it is. The limit was introduced by a Labour Government and we would certainly not raise the threshold. I cannot tell the House whether we would go as far as the Financial Secretary and abolish it, but it is a fair point and one which we shall discuss in next year's Finance Bill. However, I shall not be diverted from the point.

The Financial Secretary admits, unlike some of his hon. Friends, that the result of the Government's attitude is that parents with children at workplace nurseries are required to pay, on average, £750 a year to the Inland Revenue. They are asked to pay £15 a week out of their income after tax. Conservative Members call them an elite minority, but they are cleaners, domestic workers, secretaries, carpenters and labourers, as well as nurses and health visitors. Yet the Conservative party calls them an elite minority and the privileged few.

The introduction of the tax will mean that workplace nurseries will become a benefit enjoyed only by the elite because they will be the only people who could afford to pay the tax and keep their children at workplace nurseries.

Under pressure, the Financial Secretary told us that the new clause would cost only £1 million. He fairly described that as relatively minor. In Standing Committee, we were told that the Government had given away £5 million as a result of the abolition of stamp duty on gifts between living people. They described that as a low yield. When they introduced a clause which gave away £2 million to oil companies, they described that as a slight amount. When they increased the limit on business entertaining expenses, which would cost less than £1 million, they called it a modest step and a negligible amount.

The Labour party is asking tonight for a modest step and a negligible amount that will benefit 2,000 people. How many people will benefit from the abolition of development land tax, costing £50 million? I should be surprised if that benefited 2,000 people. Thanks to the efforts of my hon. Friend the Member for Stoke-on-Trent, Central (Mr. Fisher), we have a list of 209 extra concessions costing between £60 million and £100 million, which will benefit only a few people.

The Financial Secretary took some time to explain the philosophical reasoning behind his opposition to the new clause. The difference between us is that he is bound hand and foot by fiscal doctrine. Indeed, he elevates doctrine to the level of dogma. The Labour party is prepared to distinguish between the perks of the wealthy and benefits to those who have the greatest difficulty in making ends meet. This is not, as the Financial Secretary claims, a new clause which supports employers. It supports employees. I promise the Financial Secretary that, whatever happens in the Division Lobby tonight, this campaign will continue. We will continue until either the Government see sense or we replace them with a Government who care for parents and children.

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

The House divided: Ayes 188, Noes 251.

Division No. 265]	[7.54 pm
AYES
Abse, Leo	Clarke, Thomas
Alton, David	Clay, Robert
Ashdown, Paddy	Cocks, Rt Hon M. (Bristol S.)
Ashton, Joe	Cohen, Harry
Atkinson, N. (Tottenham)	Coleman, Donald
Bagier, Gordon A. T.	Concannon, Rt Hon J. D
Baldry, Tony	Cook, Frank (Stockton North)
Barnett, Guy	Cook, Robin F. (Livingston)
Barron, Kevin	Corbett, Robin
Beckett, Mrs Margaret	Corbyn, Jeremy
Beith, A. J.	Cowans, Harry
Bell, Stuart	Cox, Thomas (Tooting)
Benn, Tony	Craigen, J. M.
Bennett, A. (Dent'n & Red'sh)	Davis, Terry (B'ham, H'ge H'l)
Bermingham, Gerald	Deakins, Eric
Bidwell, Sydney	Dewar, Donald
Blair, Anthony	Dixon, Donald
Boothroyd, Miss Betty	Dobson, Frank
Boyes, Roland	Dormand, Jack
Bray, Dr Jeremy	Dubs, Alfred
Brown, Gordon (D'f'mline E)	Dunwoody, Hon Mrs G.
Brown, Hugh D. (Provan)	Eadie, Alex
Brown, N. (N'c'tle-u-Tyne E)	Eastham, Ken
Brown, R. (N'c'tle-u-Tyne N)	Edwards, Bob (W'h'mpt'n SE)
Brown, Ron (E'burgh, Leith)	Ellis, Raymond
Bruce, Malcolm	Evans, John (St. Helens N)
Buchan, Norman	Ewing, Harry
Caborn, Richard	Fatchett, Derek
Callaghan, Jim (Heyw'd & M)	Faulds, Andrew
Campbell-Savours, Dale	Field, Frank (Birkenhead)
Carlile, Alexander (Montg'y)	Fields, T. (L'pool Broad Gn)
Carter-Jones, Lewis	Fisher, Mark
Clark, Dr David (S Shields)	Flannery, Martin

Forrester, John	Mitchell, Austin (G't Grimsby)
Foster, Derek	Morris, Rt Hon J. (Aberavon)
Fraser, J. (Norwood)	Morris, M. (N'hampton, S)
Freeson, Rt Hon Reginald	Oakes, Rt Hon Gordon
Garrett, W. E.	O'Brien, William
George, Bruce	O'Neill, Martin
Gilbert, Rt Hon Dr John	Orme, Rt Hon Stanley
Godman, Dr Norman	Owen, Rt Hon Dr David
Golding, John	Park, George
Gould, Bryan	Parry, Robert
Gourlay, Harry	Patchett, Terry
Hamilton, James (M'well N)	Pavitt, Laurie
Hamilton, W. W. (Central Fife)	Pendry, Tom
Hancock, Mr. Michael	Penhaligon, David
Hardy, Peter	Pike, Peter
Harman, Ms Harriet	Powell, Rt Hon J. E. (S Down)
Harrison, Rt Hon Walter	Powell, Raymond (Ogmore)
Hart, Rt Hon Dame Judith	Prescott, John
Hattersley, Rt Hon Roy	Radice, Giles
Haynes, Frank	Randall, Stuart
Healey, Rt Hon Denis	Redmond, M.
Heffer, Eric S.	Rees, Rt Hon M. (Leeds S)
Hogg, N. (C'nauld & Kilsyth)	Richardson, Ms Jo
Holland, Stuart (Vauxhall)	Roberts, Allan (Bootle)
Home Robertson, John	Roberts, Ernest (Hackney N)
Howells, Geraint	Robertson, George
Hughes, Dr. Mark (Durham)	Robinson, G. (Coventry NW)
Hughes, Robert (Aberdeen N)	Rogers, Allan
Hughes, Roy (Newport East)	Rooker, J. W.
Janner, Hon Greville	Ross, Stephen (Isle of Wight)
John, Brynmor	Ross, Wm. (Londonderry)
Jones, Barry (Alyn & Deeside)	Sedgemore, Brian
Kaufman, Rt Hon Gerald	Sheerman, Barry
Kennedy, Charles	Sheldon, Rt Hon R.
Kilroy-Silk, Robert	Short, Ms Clare (Ladywood)
Kirkwood, Archy	Short, Mrs R.(W'hampt'n NE)
Lambie, David	Silkin, Rt Hon J.
Leighton, Ronald	Skinner, Dennis
Lewis, Ron (Carlisle)	Smith, C.(Isl'ton S & F'bury)
Lewis, Terence (Worsley)	Smyth, Rev W. M. (Belfast S)
Litherland, Robert	Snape, Peter
Lloyd, Tony (Stretford)	Soley, Clive
Lofthouse, Geoffrey	Stewart, Rt Hon D. (W Isles)
Livsey, Richard	Stott, Roger
McCartney, Hugh	Strang, Gavin
McDonald, Dr Oonagh	Straw, Jack
McKay, Allen (Penistone)	Thompson, J. (Wansbeck)
McKelvey, William	Thorne, Stan (Preston)
MacKenzie, Rt Hon Gregor	Tinn, James
Maclennan, Robert	Torney, Tom
McNamara, Kevin	Wainwright, R.
McTaggart, Robert	Wareing, Robert
McWilliam, John	Weetch, Ken
Madden, Max	White, James
Marek, Dr John	Wilson, Gordon
Marshall, David (Shettleston)	Winnick, David
Martin, Michael	Woodall, Alec
Mason, Rt Hon Roy	Wrigglesworth, Ian
Maxton, John	Young, David (Bolton SE)
Meacher, Michael
Meadowcroft, Michael	Tellers for the Ayes:
Michie, William	Mr. Lawrence Cunliffe and
Millan, Rt Hon Bruce	Mr. Sean Hughes.
NOES
Adley, Robert	Beaumont-Dark, Anthony
Aitken, Jonathan	Bellingham, Henry
Alexander, Richard	Bendall, Vivian
Amery, Rt Hon Julian	Bevan, David Gilroy
Amess, David	Biffen, Rt Hon John
Ancram, Michael	Biggs-Davison, Sir John
Ashby, David	Blaker, Rt Hon Sir Peter
Aspinwall, Jack	Body, Richard
Atkins, Robert (South Ribble)	Bonsor, Sir Nicholas
Atkinson, David (B'm'th E)	Boscawen, Hon Robert
Baker, Rt Hon K. (Mole Vall'y)	Bottomley, Peter
Baker, Nicholas (N Dorset)	Bottomley, Mrs Virginia
Banks, Robert (Harrogate)	Bowden, A. (Brighton K'to'n)
Batiste, Spencer	Bowden, Gerald (Dulwich)

Boyson, Dr Rhodes	Howell, Rt Hon D. (G'ldford)
Braine, Rt Hon Sir Bernard	Jenkin, Rt Hon Patrick
Brandon-Bravo, Martin	King, Roger (B'ham N'field)
Bright, Graham	Knight, Greg (Derby N)
Brinton, Tim	Knowles, Michael
Brown, M. (Brigg & Cl'thpes)	Lang, Ian
Browne, John	Latham, Michael
Bruinvels, Peter	Lawler, Geoffrey
Bryan, Sir Paul	Lawson, Rt Hon Nigel
Burt, Alistair	Lee, John (Pendle)
Butcher, John	Lennox-Boyd, Hon Mark
Butterfill, John	Lewis, Sir Kenneth (Stamf'd)
Carlisle, John (N Luton)	Lightbown, David
Carlisle, Kenneth (Lincoln)	Lilley, Peter
Carlisle, Rt Hon M. (W'ton S)	Lloyd, Ian (Havant)
Carttiss, Michael	Lord, Michael
Cash, William	Luce, Richard
Chalker, Mrs Lynda	Lyell, Nicholas
Chapman, Sydney	McCrindle, Robert
Churchill, W. S.	McCurley, Mrs Anna
Clark, Hon A. (Plym'th S'n)	Macfarlane, Neil
Clark, Dr Michael (Rochford)	MacKay, Andrew (Berkshire)
Clark, Sir W. (Croydon S)	MacKay, John (Argyll & Bute)
Clarke, Rt Hon K. (Rushcliffe)	Maclean, David John
Clegg, Sir Walter	McNair-Wilson, P. (New F'st)
Cockeram, Eric	McQuarrie, Albert
Colvin, Michael	Madel, David
Coombs, Simon	Major, John
Cope, John	Malins, Humfrey
Corrie, John	Malone, Gerald
Couchman, James	Maples, John
Cranborne, Viscount	Marland, Paul
Currie, Mrs Edwina	Marlow, Antony
Dickens, Geoffrey	Marshall, Michael (Arundel)
Dicks, Terry	Mates, Michael
Dorrell, Stephen	Mather, Carol
Douglas-Hamilton, Lord J.	Maude, Hon Francis
Dover, Den	Mawhinney, Dr Brian
du Cann, Rt Hon Sir Edward	Maxwell-Hyslop, Robin
Dunn, Robert	Mellor, David
Durant, Tony	Merchant, Piers
Dykes, Hugh	Miller, Hal (B'grove)
Eggar, Tim	Mills, Iain (Meriden)
Emery, Sir Peter	Mills, Sir Peter (West Devon)
Evennett, David	Miscampbell, Norman
Fallon, Michael	Moate, Roger
Farr, Sir John	Montgomery, Sir Fergus
Favell, Anthony	Moore, John
Finsberg, Sir Geoffrey	Moynihan, Hon C.
Fletcher, Alexander	Mudd, David
Forman, Nigel	Murphy, Christopher
Forsyth, Michael (Stirling)	Neale, Gerrard
Forth, Eric	Needham, Richard
Fowler, Rt Hon Norman	Nelson, Anthony
Fraser, Peter (Angus East)	Neubert, Michael
Fry, Peter	Newton, Tony
Gale, Roger	Nicholls, Patrick
Gilmour, Rt Hon Sir Ian	Osborn, Sir John
Gorst, John	Ottaway, Richard
Gow, Ian	Page, Sir John (Harrow W)
Gower, Sir Raymond	Page, Richard (Herts SW)
Grant, Sir Anthony	Parris, Matthew
Gregory, Conal	Patten, Christopher (Bath)
Griffiths, Sir Eldon	Patten, J. (Oxf W & Abdgn)
Grist, Ian	Pattie, Geoffrey
Gummer, John Selwyn	Pawsey, James
Hamilton, Neil (Tatton)	Percival, Rt Hon Sir Ian
Hampson, Dr Keith	Portillo, Michael
Hargreaves, Kenneth	Powell, William (Corby)
Harris, David	Powley, John
Hayhoe, Rt Hon Barney	Prentice, Rt Hon Reg
Heathcoat-Amory, David	Price, Sir David
Heddle, John	Raison, Rt Hon Timothy
Henderson, Barry	Rathbone, Tim
Higgins, Rt Hon Terence L.	Rees, Rt Hon Peter (Dover)
Hill, James	Rhodes James, Robert
Hind, Kenneth	Rhys Williams, Sir Brandon
Hirst, Michael	Ridley, Rt Hon Nicholas
Hogg, Hon Douglas (Gr'th'm)	Ridsdale, Sir Julian
Howard, Michael	Rifkind, Malcolm

Roberts, Wyn (Conwy)	Tapsell, Sir Peter
Robinson, Mark (N'port W)	Taylor, John (Solihull)
Roe, Mrs Marion	Taylor, Teddy (S'end E)
Rossi, Sir Hugh	Temple-Morris, Peter
Rost, Peter	Thompson, Donald (Calder V)
Rowe, Andrew	Thompson, Patrick (N'ich N)
Rumbold, Mrs Angela	Thorne, Neil (Ilford S)
Ryder, Richard	Thornton, Malcolm
Sackville, Hon Thomas	Thurnham, Peter
Sainsbury, Hon Timothy	Townend, John (Bridlington)
Sayeed, Jonathan	Tracey, Richard
Shaw, Giles (Pudsey)	Trotter, Neville
Shaw, Sir Michael (Scarb')	van Straubenzee, Sir W.
Shelton, William (Streatham)	Vaughan, Sir Gerard
Shepherd, Colin (Hereford)	Walden, George
Shepherd, Richard (Aldridge)	Walker, Bill (T'side N)
Shersby, Michael	Waller, Gary
Silvester, Fred	Walters, Dennis
Sims. Roger	Ward, John
Skeet, T. H. H.	Wardle, C. (Bexhill)
Smith, Tim (Beaconsfield)	Watson, John
Speed, Keith	Watts, John
Spencer, Derek	Wells, Sir John (Maidstone)
Spicer, Jim (W Dorset)	Wheeler, John
Squire, Robin	Wolfson, Mark
Stanbrook, Ivor	Wood, Timothy
Stanley, John	Yeo, Tim
Steen, Anthony	Young, Sir George (Acton)
Stern, Michael	Younger, Rt Hon George
Stewart, Allan (Eastwood)
Stewart, Andrew (Sherwood)	Tellers for the Noes:
Stewart, Ian (N Hertf'dshire)	Mr. Tristan Garel-Jones and
Stokes, John	Mr. Archie Hamilton.
Stradling Thomas, J.

Question accordingly negatived.