§ Mr. WrigglesworthI beg to move amendment No. 1, in page 2, line 19, leave out '"£0.1938" and "£0.1639"' and insert '"£0.1896" and "£0.1601"'.
The amendment seeks to reduce the increase in duty on light oil and heavy oil to the amount that would be justified 180 by indexation. This would reduce the increase in duty to 5.7 per cent., compared with the 8 per cent. imposed by the Chancellor in the Budget. It would increase the rate of duty to 18.96p and 16.01p, compared with 19.38p and 16.39p, and would reduce the price of petrol by about 2p per gallon.
In the Budget the Chancellor continued the process, which has gone on under the Government, of over-indexing taxes on petrol. Under this Government the total tax take, including VAT, has risen from 38p to £1.10. At current prices the rise has been from 74p to £1.10—roughly half as much again in real terms. Part of the increase in tax take is due to higher petrol prices and the imposition of VAT on petrol, but a substantial proportion is accounted for by an increase in duty alone, from £4.8 billion at today's prices in 1978–79 to £7.3 billion in 1986–87.
Most important, duty as a proportion of the price has risen from just under half to 67 per cent., or just over two thirds. That is a substantial increase in the duty that customers pay at the pumps for every gallon of petrol. By contrast, the Government have kept the level of vehicle excise duty constant in real terms by increasing it from £50 to £100. They have closed the gap between duty on petrol and duty on derv, quite rightly, so that the latter is lower than the duty on petrol.
The Chancellor's strategy is not clear. We do not know whether he is moving towards the phasing out of vehicle excise duty. It would be helpful to the House f the Minister could explain exactly what the Government's intention is on vehicle excise duty and petroleum duty. If the Chancellor's intention is not to phase out vehicle excise duty, there seems to be a much weaker case far using petrol duty simply to recoup revenue lost because of falling oil prices. That benefit should be passed on entirely to industry and to the consumer.
The Chancellor was right to resist the siren voices which argued that he should finance the substantial tax handouts for those in work by over-indexing the duty on petrol and other goods. However, motorists, particularly in rural areas, who suffered last year from increases in the price of petrol to over £2 per gallon, should get the full benefit of falling oil prices. Of course, not only motorists in rural and urban areas but industry, too, should benefit, because increases in duty bear most heavily on it.
Industry in countries which are not as rich in energy as we are pays much less for petrol and derv than does industry in this country. The Confederation of British Industry has made it clear that it would be of considerable assistance if the price burden of petrol and derv on industry could be reduced.
§ Mr. Jonathan Sayeed (Bristol, East)Does the hon. Gentleman believe that higher prices encourage people to be more efficient in their use of energy?
§ Mr. WrigglesworthYes, but we have had that with a vengeance recently. It has happened because of increases in oil prices generally, but, as I pointed out earlier, the Government have increased the duty take on petrol from some 50 per cent. to over two thirds. I do not think that one can easily justify that. That is why we tabled the amendment. It is right to increase the duty by the amount of price indexation, as the Government have done on some occasions, but on many other occasions they have 181 increased the duty by more than the rate of inflation. As a result, the proportion of duty has gone up as I have described.
At a time when the Government are reducing revenue support for public transport, estimated in the 1985–86 public spending White Paper to be 10.6 per cent. below the previous year's level in real terms, together with the deregulation of local bus services outside London, they are reducing the options for those in rural communities even further. Many people in rural areas are being forced into almost total dependence on car transport. While petrol tax should not be held down artificially as an instrument of transport policy, if it is raised excessively it will result in an increasing distortion of choice between modes of transport. The amendment would provide modest help for all motorists, and crucially for industry, by reducing transport costs and helping companies to stay competitive.
If the Government's philosophy is to let the economy reap the full benefit of lower costs from falling oil prices, they should not have increased duty by the amounts set out in the Bill. The Chancellor may claim that freezing vehicle excise duty means that the overall burden for industry remains unchanged, but the opportunity has been missed to pass on a greater direct benefit to car and lorry users by helping to stimulate economic activity directly by keeping prices lower.
I hope that we will get a clear statement from the Minister on the Government's view of the balance between vehicle excise duty and petrol tax. We can then make a clear judgment on the direction in which the Government are going. I hope that the pleas of industry, and particularly of motorists in rural areas, will not fall on deaf ears and that we shall have the support of Conservative Members for the proposition that I have put forward.
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§ Mr. Gordon Wilson (Dundee, East)I support the amendment. It is important that the Government try to justify what has happened. When the Chancellor of the Exchequer announced his intention to increase petrol duty, he said that he hoped that the increase would be absorbed by the oil companies and that they would pass on to the consumer the fall in the value of petrol on the world market. There has been a slight adjustment downwards in the price of petrol, but certainly not in response to the Chancellor's request. My impression is that the oil companies, on receiving advice from the Chancellor that they should sacrifice some of their profits in exchange for increased tax revenue for the Government, hardened their attitude and deliberately kept up petrol prices at the pumps to show that they were not at the beck and call of any Chancellor of the Exchequer.
Whether that is true or not, the differential in petrol prices in the United Kingdom has remained. The companies have made no attempt to take account of the Chancellor's advice to try to pass on to certain areas of the United Kingdom some of the advantages which should have gone to the consumer following the drop in oil prices.
I am advised that the cost of petrol per gallon in Stornoway is £1.89. That is far in excess of prices prevailing in other parts of the United Kingdom. The difference is as much as 30p a gallon. Outside Stornoway the price might be even higher, and a differential of 20p per gallon is common in different parts of the mainland.
182 On a recent election visit to Grangemouth, I spoke to a refinery worker who complained that the price of petrol in Grangemouth was very high and that none of the benefits of the lower oil prices was being passed on in the locality.
There can be no argument about the cost of transport. BP's petrol pumps are just several hundred yards from the refinery, but they have the full central belt mark-up. BP is obviously benefiting at the expense of local residents and its work force.
Scottish Television conducted an inquiry into the price of four-star petrol on 31 March. Petrol prices have now come down in response to lower oil prices, but Scottish Television said that the average price per gallon of four star petrol in Scotland was £1.79.6 whereas in England it was £1.73.7 — a difference of 5.9p per gallon. The lowest price of petrol in Scotland was 1.72 per gallon and the highest, on the mainland near Wick, was £1.95, so my right hon. Friend the Member for Western Isles (Mr. Stewart) can buy cheaper petrol than the unfortunate citizens of Wick.
§ Mr. Donald Stewart (Western Isles)Unlike mainland constituencies, my constituency has no railway track, so all goods have to be moved by transport requiring petrol.
§ Mr. WilsonI accept that. I was about to make a further contrast which might be beneficial to Lewis but horrendous for the Isle of Tiree, because a gallon of petrol there costs £2.09—the highest price in Great Britain.
That is a consequence of the way that the Government charge petrol duty as a flat rate and of discounting, or lack of discounting, by the oil companies. In various places a discount or subsidy applies to the price of petrol available to retailers with independent forecourts. If there are no independent forecourts, or when there are only a few, there is a quasi-monopoly and the price of petrol is correspondingly higher. The price of petrol is sometimes kept up artificially, as if there were a cartel in operation, but the Government do nothing about it. They have not asked the Director General of Fair Trading or the Monopolies and Mergers Commission to inquire into retail costs, distribution and charging for petrol in different areas. The Government have not sought through fiscal means to vary the petrol duty rate so that remote areas benefit.
The throughput of petrol in remote areas is usually small. The petrol station proprietor probably does not have a large turnover, so he acquires for himself high profits. In some circumstances he might have to pay transport costs if his petrol is sold in island areas.
Many arguments and complaints have come from Scotland about what has happened. Scotland is the fifth largest oil producer in the world, but it does not seem to derive benefit from that. The market, although volatile in places, does not seem to have reacted to our benefit. I have taken the matter up with the Director General of Fair Trading. I am not convinced that either at his or at Government level there is sufficient appreciation of the hardship caused in some areas by high petrol prices.
The areas with highest prices rely on cars or vans which use petrol rather than derv to transport goods. That means that overall costs are higher in relation to the cost of living. There is a direct relationship between petrol costs and the cost of living in remote areas.
The Government should do something about petrol prices. Each year the Chancellor puts up petrol prices, if 183 only to keep in line with inflation, and then he takes his rake-off for the Treasury's coffers instead of trying to work out a formula which bears some relation to equity and fairness. I hope that the Minister will take on board the representations that have been made. Throughout the length and breadth of Scotland people feel frustrated, because Scotland always seems to be the tail-end Charlie. It is time that the Government considered the interests of the people of Scotland for a change.
§ Mr. KennedyI support the amendment. The price of petrol is fundamental to my part of the country—the Highlands and Islands of Scotland. I am not stating the obvious when I say that having a motor vehicle is no luxury there. A vehicle is a human and social necessity so the price of petrol, and of fuel generally, has a major effect on the way of life, the infrastructure and the economy. For reasons of inescapable geography, the people of the Highlands and Islands will always suffer from being distanced from the available markets and the added costs that that puts on indigenous goods sent elsewhere and on materials brought in, so petrol and fuel prices are of fundamental importance.
I echo the broad sentiments expressed by the hon. Member for Dundee, East (Mr. Wilson). I draw the attention of the Minister and the Committee to the 1984 and 1985 reports "Rural Scotland: Price Survey" by MacKay, consultants of Inverness. Both reports make the point that, in addition to the difficulties caused by high fuel costs, there is the related problem of the availability of petrol. There is no evidence that the position is improving. Both reports state:
an increasing problem in Rural Scotland is in relation to the availability of petrol. The number of garages and filling stations is falling steadily and some recent closures have left large areas without a source of supply.This is a problem which that firm has mentioned in the past, but which it says continues to worsen in the absence of any action by the relevant public authorities.I appreciate that the problem is complex. The amendment seeks to reduce the increase proposed in the Budget to a more acceptable level, and if accepted by the Government would be very much welcomed. Those speaking in support of the amendment hope that it will commend itself to the Treasury.
The same company carries out occasional surveys into the level of incomes in the Highlands and Islands. I understand that discussions are taking place between officials of the Department of Trade and Industry and that company about the last survey, which showed lower average earnings, coupled with a higher cost of living in the Highlands and Islands. The economics of that is clear—it is extremely tight for both families and businesses to survive and succeed. Anything that eases the burden would be welcome, and we believe that the amendment would do that.
I hope that the Government will take this small but significant step towards reducing the burden on business, enterprise and the individual domestic consumer in the north of Scotland and the Highlands and Islands, and which is to the detriment of that part of the economy. It could also be argued that such burdens thwart many aspects of the Government's economic policy.
I hope that the Government will respond positively to the amendment.
§ Mr. PenhaligonI regard the amendment as modest. A case could be made for a more substantial reduction, but I want to promote policies which are possible rather than simply to vent anger.
I use the words "vent anger" because of the increase from 30p to 88.1p in the duty on a gallon of petrol since the Government took office in 1979. I do not know the precise rate of inflation since 1979, but it is certainly not of that scale. In addition, VAT is charged at 15 per cent., which is above the 1979 level.
I unashamedly stand before the Committee to plead the case for the remoter parts of Britain. It is interesting to note that hon. Members who have spoken for the amendment represent those remoter parts of Britain, and so are more than aware of the impact of fuel prices on the life, economy and development of our society.
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It is not so long since petrol was a great deal cheaper than it is today. During the early large increases in oil prices it was generally believed that the use of petrol would decline because of price hikes. I accept that one benefit of the increases has been the trend towards more economical cars, which is a desirable objective. However, as I suspected at the time, the use of petrol in the remoter areas has remained constant. Despite what is thought in the metropolitan areas, in remote parts a car is by no means a luxury. Those living 10 miles from the nearest town either go by car or stay at home, because there is little public transport. Those wanting to sell goods to the major metropolitan areas have to transport them. The distance from my front door to the House of Commons car park is about 300 miles. That might not be the most common of business routes, but it is a fair guide. It is a far greater distance than most people realise. The produce of farms, mines and industry must be carried over that distance.
I do not believe it to be any coincidence that the levels of unemployment in Britain are proportional to the distance from London. The right hon. Member for Western Isles (Mr. Stewart) represents the remotest area in Britain, and his constituency suffers from very high unemployment levels—as, of course, does my area.
I wish to record my protest about the gradual increase in taxation on petrol in real terms. There is no justification for it. Such increases have a significant economic effect on areas such as mine. There is no justifiable case for endlessly looking to petrol to produce a larger and larger proportion of the nation's revenue.
On 8 April 1986 the hon. Member for Stirling (Mr. Forsyth) asked the Chancellor to set out in tabular form for 1979–80, 1985–86 and 1986–87 to date the proportion of the cost of certain articles that was accounted for by tax. The answer revealed that in 1979–80, 48 per cent. of the price of a gallon of four-star petrol went to the state in taxation—almost half the cost. That is a fairly generous contribution by car users to the state's financial requirements. However, by 1985–86, the tax had risen to 60 per cent. I suspect that if the figures were worked out today the percentage would be even higher. There is no logical reason for taxation to rise by that amount.
The amendment is modest. It proposes only that the indexation of petrol tax this year should be in accordance with inflation, which is entirely reasonable. Recent Budgets have accepted that indexation can be justified. We are arguing for no more, although I assure the Minister that my constituents would like me to do so. We are not 185 arguing for anything irrational, unreasonable or desperately Poujadist for the remoter parts of Britain. We are simply drawing the attention of the Committee to a major fact of economic life in rural parts.
A motor car is a part of life. It is accepted that at the age of 17 one learns to drive a car. In most families, learning to drive a motor car is not an option. It is not discussed as something that one might do at some future time. Families earning incredibly small incomes in areas such as mine succeed in running motor cars. It is a reflection of the ingenuity of local garages that they manage to get the motor cars going to pass the MOT test. The hon. Member for Dorset, North (Mr. Baker) has seen the condition of such vehicles. Sometimes, I think that our approach to MOT testers in remote areas is a little too flexible, though I know that the vehicles are kept going, that they pass the MOT test and that they are safe.
The tax will have a major impact on those who live in remote areas. Although the impact is of a personal and individual nature, it affects the economy. The total impost of tax on transport has increased substantially in recent years, and this has affected the ability of remote areas to trade and exchange ideas and goods with the more populous parts of Britain. I see no reason to welcome or accept the increase.
I recognise that the amendment is relatively modest. I remember when the Financial Secretary to the Treasury accepted an Opposition amendment of petrol tax. There was some excitement in the House at that time. I hope that tonight the Minister will likewise be impressed by the arguments, although I fear that the parliamentary numbers are not as impressive as they were then.
It is worth remembering that the petrol tax was reduced on the previous occasion because the Conservative party, which was in opposition, supported the initiatives of the Liberal and Nationalist parties. I pay due credit to those hon. Members who are present in the Chamber for their support on that occasion. Hon. Members agreed that the imposition of that tax was unfair and collectively we changed the mind of the then Labour Government.
I look forward to hearing the Minister explain what is significantly different about our present position compared with the position that faced us on the earlier, peculiar occasion. I hope the Minister recognises that he has made a mistake. I hope also that he welcomes the initiative of the hon. Member for Dorset, North, who tabled the amendment, and will accept it. One lives in hope. I have been a Member of Parliament for 12 years and, on the whole, hope has not been one of the most reasonable of objects. I reminisce about such enthusiasm. I look forward to the Minister accepting the amendment.
The ability of a remote area to trade, meet, and exchange ideas with some of the more metropolitan parts of the nation is greatly affected by the level of taxation on fuel. I have no doubt that such taxation is causing great damage to the economy — in my part of the world at least—as the costs prove to be the straw that breaks the camel's back.
§ Mr. Terry DavisI welcome you to the Chair, Mr. Knox. I had hoped to catch your eye at a later stage in the debate on clause stand part, but the debate has been so wide-ranging that perhaps it will suit the convenience of 186 the Committee and the Government if I explain the Labour party's view not only of the amendment but of the clause itself.
Last night I described clause 15 as the centrepiece of the Finance Bill, and I think it would be fair to describe clause 2 as epitomising the approach of the Chancellor of the Exchequer to taxation. It is an excellent example of what his own colleagues described as his "ingenuity".
In the Budget statement the Chancellor announced an increase of 8 per cent. in the tax on petrol and derv—7½p a gallon on petrol and 6½p a gallon on derv. The 8 per cent. increase compared with a 5.7 per cent. increase in the retail prices index. In effect, the Chancellor increased the tax on petrol by 2p more than it should have been increased on the basis of indexation, and he increased the tax on derv by a similar amount in excess of indexation. Last year the Labour party criticised an increase which was in line with indexation. We criticised that increase because it was made by the Chancellor of the Exchequer automatically and without thought, and we criticised it on two specific grounds.
First, the Labour party criticised an increase based on indexation as inflationary, at a time of falling inflation. That point is as valid today as it was a year ago. An increase in the price of petrol is inflationary. The Government would argue that the price of petrol has come down. The price of petrol has not come down by as much as it would have come down if the Government had not increased the tax.
The Labour party's second ground for criticising the Chancellor's approach to that indirect tax was that the Chancellor did not have any regard for people for whom a car is a necessity rather than a luxury. This year, in his Budget statement, the Chancellor said that the overall burden on the motorist would be "unchanged in real terms". The Chief Secretary to the Treasury repeated that statement in a later debate. I must disagree with the views of the Chancellor and the Chief Secretary. It is not correct to say that the overall burden on motorists will be unchanged. The overall burden on motorists will be unchanged, but there will be a change in the effect of the tax on the individual motorist because there are differences between motorists. The imposition of such a tax on petrol will have a selective impact. If the Government increase the tax on petrol and keep vehicle excise duty at the same level, some people win and others lose.
There are three groups of winners and losers. The first group who will gain comprises those with smaller rather than larger motor car engines. The losers are those with cars with big engines. I have some sympathy with that as a basis for an approach to taxation. By and large, the people who drive small cars have low incomes and people who drive cars with big engines have large incomes. I do not object to a tax which places a greater burden on those with high incomes and the greatest wealth.
The second group affected by the tax are those with cars with newer engines. They will pay slightly less than those with cars with older engines. Every motorist knows that the consumption of petrol is worse in a car with an old engine. People with low incomes tend to drive secondhand or even third-hand cars, with old engines. The increase in tax will therefore impose an unfair burden on those with low incomes who drive older cars.
The third group of winners and losers is made up of those who have low and high mileage. An increase in the tax on petrol, as distinct from an increase in vehicle excise 187 duty, puts a higher burden on those with higher mileage. I have some attraction to that approach, because it means that the tax — the contribution to the Government's revenue—is related to the use of the roads, the motoring system and the support services. It is expensive. It is a question not only of the cost of roads but of providing the police, ambulance and other support services. An increase in petrol tax means that more is paid by someone who uses a car a lot and less is paid by someone who uses a car a little.
However, serious problems exist in rural areas. The problems concern not only those who live, as the hon. Member for Truro (Mr. Penhaligon) described them, in remote parts of the United Kingdom. It is expensive for everyone who lives some distance from where he works. It is a great mistake to think that all the people who live outside towns and cities work on farms — that they simply roll out of bed and end up down the lane at a local farm. Many people living in rural areas work in rural factories, and they have to drive many miles to work. A burden will be placed on those people.
The previous Chancellor of the Exchequer, the right hon. and learned Member for Surrey, East (Sir G. Howe) described a tax on petrol as a selective tax which was
deliberately biased against those living in rural areasanddeliberately biased against those who had no option about the method by which they travel to work."—[Official Report, 9 May 1977; Vol. 931. c. 937.]It is not only people in rural areas who may have no option about the method by which they travel to work. Because of the Government's policies on the bus industry, more and more people who live in urban and suburban areas will have no choice in the method by which they travel to work.6.30 pm
The Government say that competition has forced the price of petrol down. On Second Reading the Chief Secretary to the Treasury based his defence of the Government's tax increase on that ground alone. Yes, competition has forced the price of petrol down, but it cannot force that price below the level of tax. Petrol is 2p a gallon higher than the indexed level because of the Budget, and the total increase is, of course, even greater. Petrol costs 7½p a gallon more than it would have cost without the Budget. If the Government expected the oil companies to absorb the increase or were concerned about the profits of oil companies because they had failed to reduce their prices in line with the price of oil, they could have tackled the problem differently. As my right hon. Friend the Leader of the Opposition put it, the Government could have introduced a special tax on the excessive profits of oil companies—one that could be compared with the tax that the Government imposed a few years ago on the banks' excessive windfall profits. But the Government have turned their face against that alternative. They prefer to tax the motorist instead of the oil companies.
§ Mr. PenhaligonIs it not true to say that the main reason why petrol prices took a while to come down was the imposition of the 90-day rule regarding fuel stocks?
§ Mr. DavisThere are many reasons why petrol prices fell more slowly, following the fall in oil prices, than they should have done. I suspect that an element of market forces was at work. In recent weeks, we have seen the effect of competition in forcing down the price of petrol; in some cases, I suspect, at the expense of the margins of 188 the retailers who sell the petrol. However, I shall not enter into discussion on the economics of the oil industry, in which I once worked.
The point is that the Government's policies are imposing a tax on the motorist, not on the people who make profits from extracting, refining and distributing petrol. The result is that the tax as a proportion of a typical post-Budget price has increased from 48 per cent. in 1979–80 to 60 per cent. following this Budget. That answer was given a month ago in Hansard. I suspect that, following the subsequent fall in the price of a gallon of petrol, the percentage has increased; so an even larger percentage of the price of a gallon of petrol can be attributed to tax. Competition cannot force down the price of petrol as far as it would otherwise go if the Government increase the tax on a gallon of petrol.
Last year we argued—I repeat the argument tonight — that in such a situation the Government should undertake a wide-ranging and thorough review of the balance between vehicle excise duty and petrol tax. We are still waiting for that review. Our arguments were rejected last year. At that time, we opposed and voted against an increase in line with indexation. This year, we oppose even more and we shall vote against an increase in excess of indexation.
There is no holy writ on indexation. There is nothing in the finance legislation that says that the Government must increase the price of petrol in line with the increase in the retail prices index. That is a political decision. The alliance may wish to increase the price of petrol in line with inflation during the past 12 months. We do not think that that is or should be an automatic policy, and we reject that approach.
Equally, we reject the Government's approach in failing to outline any policy. The Government have no philosophy or logic in their approach to the tax on motoring and motorists. We are waiting for a wide-ranging study of the type recently made of personal tax allowances with particular reference to tax arrangements for married couples. Failing that, we do not agree with the approach of the Government or of the alliance. This tax, which this year is presented as a switch from vehicle excise duty to petrol tax—the Government have not increased vehicle excise duty on cars and light vans — is simply opportunist. The Chancellor saw an opportunity to increase the tax on petrol without people realising—or so he thought—that he had increased it because the price was falling at the time. We regard the Chancellor's decision as a trick, and we will vote against it.
At the appropriate time, we will therefore vote against the motion, That the clause stand part of the Bill.
§ Mr. MooreAs you kindly said, Mr. Knox, it might be useful if, like the hon. Member for Birmingham, Hodge Hill (Mr. Davis), I look first at the amendment and then, because the debate goes wider than the amendment, go to the substance of the clause.
One cannot look at clause 2 in isolation. Essentially, what the Government have sought to do relates, in combination, to clauses 2 and 3. We have sought to revalorise overall duties for the motorist so that, as a result of the impact of the combination of VED and petrol duty, the motorist is no better or no worse off in real terms. I think that hon. Members have recognised that.
The Government's changes seek to alter in a modest way — I accept that it is modest — the essential 189 relationship in the burden which existed before between petrol duty and VED. The Government's changes do not change the total; they simply change the relationship. In total, VED decreases relative to its role in taxation, and petrol duty increases.
The hon. Member for Stockton, South (Mr. Wrigglesworth) legitimately asked me to make the Government's position clear. I should have thought that, to alter somewhat the balance in VED's favour, following a substantial decrease in petrol prices, would be seen as a perfectly reasonable position. As the hon. Member for Hodge Hill legitimately said, it is extremely difficult to be absolutely certain about the alliance's policies. However, I detected in the speech of the hon. Member for Stockton, South what was essentially support for the thrust of the Government's policy. The amendment relates specifically to petrol duty. I understand that, because we are dealing only with clause 2.
It would be helpful if the Committee could understand the bizarre nature of the alliance's amendment as seen in isolation. I try to spend my time, as do other Committee Members, reading the alliance's literature published outside the House as well as what its Members say in the House. [Interruption.] I do not know whether that will be in the Official Report. The charming references by the hon. Member for Truro (Mr. Penhaligon), which we enjoy, show that it might be a mistake for me to try to read the literature published outside the House by alliance Members, but that is what I do, because that is my duty. Occasionally the electorate thinks that certain statements might have some relevance to the alliance's aspirations to office.
I thought that the "policy"—I put a question mark over that word because it is difficult to establish what the policy is—of the official Liberal party on the relativity between VED and petrol tax was published on 22 April in the Liberal document "An Environment for the Future". It was clear and interesting. It essentially argued that VED should be reduced to a level to cover only the administration costs of registration.
I am sure that the hon. Member for Hodge Hill remembers that last October we discussed across the Floor the annual report of the Public Accounts Committee. We had the benefit of the statements of the current official economic spokesman for the alliance, the charming hon. Member for Truro. He made his policy clear. We assumed in our innocence that that was the policy of the Liberal party and the alliance. On 24 October, in the debate on the report, the hon. Gentleman argued for the retention of VED because he saw the problems of a 38p addition to the price of petrol. I am at a terrible loss.
§ Mr. MooreI shall just conclude this point.
I had assumed that this amendment was in line with the alliance policy on vehicle excise duty, but presumably it is not. Presumably its policy has reverted to that set out by the hon. Member for Truro. If the alliance does not wish to add 38p to the price of a gallon of petrol, it would be helpful if there were a useful intervention at this point so that we can know precisely what it wishes to do. The Government's position is absolutely clear from the way in 190 which the Chancellor maintained the burden on the motorist as it was in real terms. It was the relativities that he changed.
§ Mr. PenhaligonI suspect that the Financial Secretary had this point drawn to his attention, rather than having read the document. If he would read the document he would notice that it says:
This booklet is published for consultation and comment: criticisms and suggestions from within the Party and from outside will be welcome.My party's environmental panel is not used to the Financial Secretary giving advice. However, he has given advice, and I appreciate that. I agree with what he said, and I hope that between us we can remove that proposal from that otherwise rather good document.
§ Mr. MooreCharming as the hon. Member for Truro is, he cannot get away with the illusion of telling the outside world that this is simply a policy document in which we should have no interest when it comes to the real issue. I could repeat the question, and it might be interesting to get an answer, because the question relates to the view of the alliance parties—both the alliance's economic spokesmen are present—on the relativity of duty as between VED and petrol. What is it? We know the alliance's view on the supposedly vote-winning attempt to revalorise petrol duty. If an alliance Member would like to intervene, I should be delighted to give way.
§ Mr. BerminghamDoes the Financial Secretary agree that the views of the alliance are not a question of a north-south policy, but of where the next by-election is, whether it is a rural or an urban seat? Its policies seem to vary according to where the next by-election is.
§ Mr. MooreThe hon. Gentleman expressed that much better than I was trying to do.
The hon. Member for Hodge Hill went on to discuss the major part of the clause. I was disturbed by the way in which the Opposition essentially argued that the Chancellor had got it all wrong in the Budget. They seemed to suggest that there was no possibility of a free market existing after the Chancellor's budgetary decisions, and they essentially argued that prices will not go down. The arguments have changed somewhat suddenly in the past week or two as a consequence of prices actually going down. They have switched the argument vaguely in the past few weeks, and again tonight, as between the theoretically oligopolistic roles of the oil companies and the way in which we were told we were naive. My right hon. Friend the Chancellor was told that by the leader of the Opposition and by the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), and I remember participating in the radio programme "Any Questions" with the representative of the alliance, Polly Toynbee, and the hon. Member for Coventry, North-West (Mr. Robinson), who represented the Opposition.
We have not acted in a naive way. As I said, the Government's position is absolutely clear. In the Finance Bill, in the face of declining oil prices, we have sought to protect the revenue. This is not an unimportant factor, because there is £140 million of theoretical loss attached to the alliance amendment. The gross revenues in terms of the revalorisation of VED and petrol duty are about £485 million. This is not an insignificant sum in budgetary judgments. We have sought to ensure that the burden for 191 the motorist is unchanged and the revenue protected. At best, if our arguments are satisfactory, the motorist may be slightly better off, rather than the reverse.
6.45 pm
Hon. Members have rightly drawn attention to the difficulties in different parts of the country. I should like to remind the Committee of the facts of what has actually happened. There has been some rather bizarre debate in the press and, dare I say it, in the House, about that. I shall look at what has happened nationally, internationally and regionally.
Nationally, we do not often look at the nature of the crude price content of a gallon at the pump. People have rightly discussed the varying pattern of tax as a percentage of a gallon over the past 16 or so years. Let me draw to the attention of the Committee what has happened nationally to crude prices since last October and November, because I think that this is germane. According to the best statistics and data that I can obtain from the Revenue and the Department of Energy, the average crude content of a £1.95 gallon in November 1985 varied between 35 and 40 per cent. There are many variables involved. Each company has different relationships with its refinery capacities, downstream activities and the nature of its business. However, that would have given a crude price content at 35 per cent. of 68p. We have seen roughly a halving in crude prices. All other things being equal — they never are, because margins change and companies' actions change but I do not want to bore the Committee with that — a halving of the crude price might have seen a reduction of 34p, half of the 68p crude content in November 1985. That would have brought the pump price—I accept that there are variations—to £1.61 now. That may not be acceptable to the hon. Member for Dundee, East (Mr. Wilson) and parts of Scotland but it is not dissimilar from what we are seeing in many parts of the country today.
I shall now look at the relative comparisons internationally. We do not live in an isolated world. It is interesting to look at the falls in the average pump price of four-star petrol between 25 November 1985 and 21 April, excluding duty and tax. They are almost universally similar throughout the Community. The average is 30 per cent. For the United Kingdom it is 29 per cent. I could go through all the detailed statistics, but I do not want to bore the Committee. Essentially, the figures are all around 28 to 31 per cent., with one or two exceptions.
I should mention the relative price at the pump today in international terms. We are probably a little below average within the Community, at about £1.65. I can give the hon. Member for Truro the pump prices for France or Germany. For France it is £1.98, and for Germany it is £2.43.
§ Mr. Penhaligonrose—
§ Mr. MooreI shall be moving later to the relative percentage of tax in the pump price if that is the point that the hon. Member for Truro is trying to make.
§ Mr. PenhaligonI was hoping that the Minister would compare like with like. It is not relevant to compare ourselves with the rest of the European Community. The comparison should be made between ourselves and other countries which have an oil production surplus, such as the United States or Saudi Arabia and the other oil-producing 192 nations. Those figures would be more relevant to the debate. If we were to use those figures the Minister's arguments would not stand up so well to examination.
§ Mr. MooreI shall go into much greater length at some other time about the way in which some countries seek to charge a lower price relative to the market price and the tax price.
The regional point was raised by many hon. Members, and it is relevant to the debate. I asked the Department of Energy to give me a survey of the regional figures. The hon. Member for Dundee, East was right to say that there are regional variations. We have debated that at length in the House at other times. I would draw to the hon. Gentleman's attention the fact that before the Budget, and before the fuel duty increase, the price in Stornoway, although £1.89 now, was then £1.95. I accept that that is outside the national average, but that is another debate. However, there has been a reduction.
It is fascinating to look at the relative prices throughout the country. Last week, on Second Reading, we heard that there was a bias towards the strange thing called the south-east. However, the main area of low-price is still south Wales. The hon. Member for Dundee, East might be interested to know that the greatest differential in prices is between London and south Wales, with south Wales benefiting in the comparison. South Wales, Manchester, the Bury-Bradford region, Oxford, Abingdon and Portsmouth are being mentioned as low-price areas.
For the record, I must say that there was a rather loud interruption during the speech of my right hon. Friend the Chief Secretary on Second Reading about the way in which those prices did not seem to impact upon the Workington area. The hon. Member for Workington (Mr. Campbell-Savours) is an assiduous attender, and I thought that he would be with us at this stage. I asked my officials to check prices in the north-west so that we could see the comparison. They did so on 1 May. I am advised that there is strong competition in and around Manchester and Bradford, where prices are among the lowest in the country, at about £1.55 per gallon for four-star.
§ Mr. Merlyn Rees (Morley and Leeds, South)indicated assent.
§ Mr. MooreI see that the right hon. Gentleman recognises that.
The Department of Energy has had no report of especially high prices in the Workington area, but, as I wanted to be thorough, I thought it wise to check. My officials checked yesterday, and I am advised that four-star petrol sold at the Greenrow service station at Silloth, in Workington, is £1.65 a gallon. I accept that that does not totally answer some of the points made by the hon. Member for Dundee, East, but I am trying to say that the variations in prices across the regions are not dissimilar.
The essential point made in the debate by the hon. Members for Stockton, South and for Birmingham, Hodge Hill was about the Government's policies. They are embodied in clauses 2 and 3. I ask them to consider some other points in relation to the totality of taxation.
§ Mr. WilsonThe Minister was generous enough to say that he was not sure whether some of his arguments related to the points that I put forward. In that respect, I probably agree with him. I should like to bring to his attention a 193 letter from the Scottish Motor Trade Association, dated 9 April, which was sent to all Scottish Members of Parliament. It said:
We have been made aware … that the differentials between areas in England and Wales, and Scotland can be in excess of 20p per gallon. As the margin to the retailer is 7½p give or take a penny, it is fairly obvious that the price to the retailer is abnormally high in Scotland, as opposed to England.The Minister will fully realise that, as Scotland is the oil-producing area of the United Kingdom, and has the highest prices on average, we feel bitter about that. How does he propose to use fiscal methods to try to even out the heavy weighting on consumers in Scotland, even at the expense of the Treasury? Alternatively, would he rather get his friends in another Department to put pressure on the oil companies to find a fairer system of zoning?
§ Mr. MooreI have known the hon. Gentleman for a long time and have enjoyed debates and discussions on that issue, but the debate on clause 2, and in particular on this amendment, is not the occasion to debate whether to use fiscal methods. However, it is a legitimate area of discussion. I would not argue for using fiscal methods in relation to the price differentials.
§ Mr. Terry DavisI think that we shall return to this subject when we discuss clause 3 in Committee upstairs. The Minister said that clauses 2 and 3 embodied the Government's policy. I assume that a policy is followed for more than one Budget—indeed, for several Budgets. Over the past six or seven years the percentage increase in the price of petrol has been greater than that of vehicle excise duty. Is it the Government's policy to transfer the motoring tax burden from VED to the price of petrol, as happened dramatically this year? That has tended to happen in previous years, too, and that is important. The Financial Secretary rightly says that to abolish VED would put up the price of petrol by 38p. I am not accusing the Government of trying to do that, but it seems to be the Government's policy that in future petrol increases will be disproportionately large.
§ Mr. MooreI thought that I had made the position clear. I was paraphrasing the remarks of my right hon. Friend the Chancellor in the Budget debate. With the substantial decline in petrol prices, it seemed reasonable to alter the balance in a modest way between VED and petrol. We have seen radical shifts in the price of that product in the past 16 years.
This matter was raised two or three times in the early part of the debate. It might be useful to remind the Committee of the changes. The amount of duty and tax as a percentage of price is now over 60 per cent. The figure was in the high 40s when the Government came to office. The House forgets where it was in 1969 and 1970. In 1969 it was 70 per cent., and in 1970 it was 69 per cent. I am not suggesting that it is the Government's policy to reach that point, but I am saying that there has been a radical shift.
I should like to remind the Committee of two further points. Compared with our competitors in Europe, the relative percentage of tax taken from a gallon at the pump is in the low 60s in the United Kingdom, 64 per cent. in Belgium, and 65 per cent. in Denmark—
§ Mr. PenhaligonThe Minister is not comparing like with like.
§ Mr. MooreI am making a comparison with our continental competitors, which I thought was occasionally attractive to the alliance. The figure is 72 per cent. in France, 64 per cent. in Germany, 67 per cent. in Ireland, 76 per cent. in Italy and 66 per cent. in Holland.
The opposition parties believe that there should be a radical reduction. That is what I gather from the remarks of the hon. Member for Hodge Hill. That is what they want, as opposed to a modest continuation of the pattern of revalorisation. Where does the alliance think that the £140 million net revenue loss will be made up from? I accept that it is a massive burden on the motorist. In 1986–87 petrol is expected to produce £5.7 billion for the Exchequer. VED will produce £2.4 billion. It behoves those who seek to adjust and change where the taxation is levied to suggest where it will come from.
The amendment is a relative irrelevance because it ignors the way in which the Government have sought to maintain in real terms, successfully, the relatively modest burden on the motorist. I ask the Committee to reject the amendment. I imagine that we shall now no longer need to have a substantive debate on the Question, That the clause stand part of the Bill.
§ Mr. BerminghamAs we shall not have a substantive debate on clause stand part, I should like to make a few remarks about the amendment and its application to clause 2. The Government seem to miss an important central point, which is that, in order to move a human being, goods or any other product from A to B in the United Kingdom, one uses motorised vehicles. The bulk of freight transport goes by motorised vehicles. The bulk of agricultural machinery is driven by diesel-powered vehicles. With regard to public transport, in rural areas people use cars because there are no buses left and in urban areas people use cars because the bus services are decreasing. But the bulk of public transport is moved by diesel fuel or petrol.
All that is reflected in our cost of living. If the Government want our cost of living to go down, and if they want industry to pick up, they should take into the equation the cost of getting to work, of transporting materials and of transporting the products produced by manufacturing industry. It is easy to say that if we reduced petrol or diesel oil prices, we would have to find all that extra taxation, but if we reduced the cost of our manufactured products and our transport costs, we would make ourselves more competitive, sell more goods, generate more wealth and therefore generate more tax-bearing income, and the equation would level out.
It is nonsense to compare the United Kingdom with non-oil-producing countries such as France and Germany. Why not equate the United Kingdom with other oil-producing countries such as Norway or America, and find out their percentages? If we managed to strike at the heart of the exorbitant fuel costs that we bear in this country, we might make ourselves more competitive and wealthier.
Clause 3, to which I shall return in Committee, relates to the whole concept that the motorist must pay, that, no matter what happens to the cost of oil, each year the Government will impose more vehicle excise duty and more petrol duty; regardless of what happens, in real terms, to the price of crude oil, everything becomes progressively more expensive. That is not good enough. The fall in the price of oil gave us an opportunity to make ourselves enormously competitive. All that was needed 195 was to get the Government to realise that they did not need so great a slice of the cake. Perhaps the Government will accept just for once that if manufacturing industry were to be given the chance of cheap fuel, England might be given the chance to create jobs by making goods that are competitive in world markets.
§ 7 pm
§ Mr. WrigglesworthI wish to reply to some of the points that have been made during the debate, in particular those made by the Minister, whose reply was disappointing. The Government's view has been made no clearer. The Minister said that this year the Government have taken advantage of the reduction in the price of oil to make a small switch from vehicle excise duty to increasing the duty on petrol. However, when he was pressed by the hon. Member for Birmingham, Hodge Hill (Mr. Davis) about whether that meant that the Government wished to move in that direction, he said that it might not happen next year. Therefore, we are not clear about the Government's intentions.
The Minister rightly drew attention to the Liberal party's discussion document, which advocates a move in the direction of reducing vehicle excise duty and increasing the duty on petrol. The position of the two parties was made clear by my hon. Friend the Member for Ross, Cromarty and Skye (Mr. Kennedy) on the occasion to which the Minister referred. That remains the position. If the Minister had had time to read the document from cover to cover, instead of only looking at it, he would have seen that it was a green paper for internal discussion within the party and, indeed, for discussion by those outside the party.
As my hon. Friend said, we welcome the Minister's comments, which will be taken into account during the further discussion of these matters. The Social Democratic and Liberal parties produce green papers for discussion within our ranks and we have distributed many of them widely to outside bodies in order to obtain their comments before finalising our views on difficult and complicated matters of this kind. Our view remains that there should be a switch in the balance between vehicle excise duty and the duty on petrol. That is why we have tabled this amendment.
The alliance and the Scottish National party have made clear their view about car owners in rural areas being forced into even greater use of their cars because of the change in the public transport system imposed upon them by the Government. We are also aware that the increase in the price of petrol imposes an additional burden on users of motor cars in urban areas. My constituency covers both rural and urban areas. I should not like it to be thought that the alliance and the other Opposition parties are not equally anxious about the position of the motor car user in urban areas.
§ Mr. WilsonWill the hon. Gentleman accept that I, too, represent a city constituency? In my area the average price of petrol is higher than in many other areas. That cost has to be borne in a constituency where the unemployment rate is 17.5 per cent.
§ Mr. WrigglesworthI sympathise entirely with the hon. Gentleman's point. That applies to other right hon. and hon. Members with constituencies in the north of Scotland whose constituents have to bear exactly the same 196 burden. There are refineries on Teesside where ICI petrol is produced, and as it is sold in the area we do not understand why petrol prices are not very much lower. My constituents have an advantage over those in the constituency of the hon. Member for Dundee, East (Mr. Wilson), but, even though we enjoy the enormous benefit of petrol being refined on our doorstep, we do not enjoy lower petrol prices. Indeed, petrol prices are lower in other parts of the country where there are no refineries The result is that companies and industries on Teesside, and also people in the rural part of my constituency, express strong feelings to me because the price of petrol imposes a substantial burden.
I am sorry that the Government were tempted by the reduction in the price of oil to increase the duty beyond the level of indexation. That is why my colleagues and I decided to table this modest amendment, which would reduce it to the level of indexation. I hope that the Committee will realise how modest a proposal this is and will support it in the Lobby.
§ Question put, That the amendment be made:—
§ The Committee divided: Ayes 9, Noes 183.
197| Division No. 172] | [7.05 pm |
| AYES | |
| Hughes, Simon (Southwark) | Wigley, Dafydd |
| Jenkins, Rt Hon Roy (Hillh'd) | Wilson, Gordon |
| Kennedy, Charles | |
| Owen, Rt Hon Dr David | Tellers for the Ayes: |
| Steel, Rt Hon David | Mr. David Penhaligon and Mr. Ian Wrigglesworth. |
| Stewart, Rt Hon D. (W Isles) | |
| Thomas, Dafydd (Merioneth) |
| NOES | |
| Alexander, Richard | Cope, John |
| Amess, David | Corrie, John |
| Ashby, David | Couchman, James |
| Aspinwall, Jack | Cranborne, Viscount |
| Atkins, Rt Hon Sir H. | Critchley, Julian |
| Atkins, Robert (South Ribble) | Crouch, David |
| Atkinson, David (B'm'th E) | Evennett, David |
| Baker, Nicholas (Dorset N) | Eyre, Sir Reginald |
| Beaumont-Dark, Anthony | Fairbairn, Nicholas |
| Bellingham, Henry | Fallon, Michael |
| Bendall, Vivian | Favell, Anthony |
| Benyon, William | Fookes, Miss Janet |
| Bevan, David Gilroy | Fox, Marcus |
| Blackburn, John | Franks, Cecil |
| Blaker, Rt Hon Sir Peter | Freeman, Roger |
| Boscawen, Hon Robert | Gale, Roger |
| Bottomley, Peter | Gardner, Sir Edward (Fylde) |
| Bottomley, Mrs Virginia | Gorst, John |
| Bowden, A. (Brighton K'to'n) | Gower, Sir Raymond |
| Bright, Graham | Gregory, Conal |
| Brinton, Tim | Griffiths, Sir Eldon |
| Brooke, Hon Peter | Grist, Ian |
| Brown, M. (Brigg & Cl'thpes) | Grylls, Michael |
| Bryan, Sir Paul | Hamilton, Hon A. (Epsom) |
| Buck, Sir Antony | Hampson, Dr Keith |
| Budgen, Nick | Harris, David |
| Bulmer, Esmond | Harvey, Robert |
| Burt, Alistair | Hawkins, Sir Paul (N'folk SW) |
| Carlisle, John (Luton N) | Hayes, J. |
| Carlisle, Kenneth (Lincoln) | Hayward, Robert |
| Chapman, Sydney | Hickmet, Richard |
| Chope, Christopher | Hicks, Robert |
| Clark, Hon A. (Plym'th S'n) | Higgins, Rt Hon Terence L |
| Clark, Dr Michael (Rochford) | Hogg, Hon Douglas (Gr'th'm) |
| Clark, Sir W. (Croydon S) | Holland, Sir Philip (Gedling) |
| Clarke, Rt Hon K. (Rushcliffe) | Hordern, Sir Peter |
| Clegg, Sir Walter | Howarth, Alan (Stratf'd-on-A) |
| Cockeram, Eric | Howell, Ralph (Norfolk, N) |
| Colvin, Michael | Jackson, Robert |
| Conway, Derek | Jessel, Toby |
| Coombs, Simon | Jones, Robert (Herts W) |
| Key, Robert | Sainsbury, Hon Timothy |
| King, Roger (B'ham N'field) | Sayeed, Jonathan |
| Knowles, Michael | Shelton, William (Streatham) |
| Lang, Ian | Shepherd, Colin (Hereford) |
| Lawrence, Ivan | Sims, Roger |
| Lennox-Boyd, Hon Mark | Skeet, Sir Trevor |
| Lilley, Peter | Speed, Keith |
| Lord, Michael | Spencer, Derek |
| McCurley, Mrs Anna | Spicer, Jim (Dorset W) |
| MacGregor, Rt Hon John | Stanbrook, Ivor |
| Maclean, David John | Stanley, Rt Hon John |
| McNair-Wilson, M. (N'bury) | Steen, Anthony |
| Madel, David | Stern, Michael |
| Major, John | Stevens, Lewis (Nuneaton) |
| Malone, Gerald | Stewart, Allan (Eastwood) |
| Maples, John | Stewart, Andrew (Sherwood) |
| Marland, Paul | Stradling Thomas, Sir John |
| Marlow, Antony | Tapsell, Sir Peter |
| Marshall, Michael (Arundel) | Taylor, John (Solihull) |
| Maude, Hon Francis | Taylor, Teddy (S'end E) |
| Maxwell-Hyslop, Robin | Temple-Morris, Peter |
| Mayhew, Sir Patrick | Terlezki, Stefan |
| Merchant, Piers | Thomas, Rt Hon Peter |
| Mills, Iain (Meriden) | Thompson, Donald (Calder V) |
| Moate, Roger | Thompson, Patrick (N'ich N) |
| Moore, Rt Hon John | Thorne, Neil (Ilford S) |
| Morris, M. (N'hampton S) | Thurnham, Peter |
| Morrison, Hon P. (Chester) | Tracey, Richard |
| Moynihan, Hon C. | Trotter, Neville |
| Murphy, Christopher | Twinn, Dr Ian |
| Nelson, Anthony | van Straubenzee, Sir W. |
| Newton, Tony | Viggers, Peter |
| Nicholls, Patrick | Waddington, David |
| Osborn, Sir John | Wakeham, Rt Hon John |
| Ottaway, Richard | Ward, John |
| Page, Richard (Herts SW) | Wardle, C. (Bexhill) |
| Parkinson, Rt Hon Cecil | Warren, Kenneth |
| Patten, Christopher (Bath) | Watts, John |
| Pawsey, James | Wells, Sir John (Maidstone) |
| Peacock, Mrs Elizabeth | Wheeler, John |
| Portillo, Michael | Whitfield, John |
| Powell, William (Corby) | Whitney, Raymond |
| Powley, John | Wilkinson, John |
| Prentice, Rt Hon Reg | Winterton, Nicholas |
| Price, Sir David | Wolfson, Mark |
| Proctor, K. Harvey | Wood, Timothy |
| Rhodes James, Robert | Yeo, Tim |
| Ridsdale, Sir Julian | Young, Sir George (Acton) |
| Rippon, Rt Hon Geoffrey | |
| Robinson, Mark (N'port W) | Tellers for the Noes: |
| Roe, Mrs Marion | Mr. Michael Neubert and Mr. Peter Lloyd. |
| Rowe, Andrew | |
| Sackville, Hon Thomas |
§ Question accordingly negatived
§ The Temporary Chairman (Mr. David Knox)We come now to amendments Nos. 2 and 3.
§ Mr. K. Harvey Proctor (Billericay)It may be for the convenience of the Committee if I do not move these amendments now, but wait until Report.
§ Question put, That the clause stand part of the Bill:—
§ The Committee divided: Ayes 171, Noes 83.
199| Division No. 173] | [7.20 pm |
| AYES | |
| Alexander, Richard | Bellingham, Henry |
| Alison, Rt Hon Michael | Bendall, Vivian |
| Amess, David | Benyon, William |
| Ashby, David | Bevan, David Gilroy |
| Aspinwall, Jack | Blackburn, John |
| Atkins, Rt Hon Sir H. | Blaker, Rt Hon Sir Peter |
| Atkins, Robert (South Ribble) | Boscawen, Hon Robert |
| Atkinson, David (B'm'th E) | Bottomley, Mrs Virginia |
| Baker, Nicholas (Dorset N) | Bowden, A. (Brighton K'to'n) |
| Beaumont-Dark, Anthony | Bright, Graham |
| Brinton, Tim | Mills, Iain (Meriden) |
| Brooke, Hon Peter | Moate, Roger |
| Brown, M. (Brigg & Cl'thpes) | Moore, Rt Hon John |
| Bryan, Sir Paul | Morris, M. (N'hampton S) |
| Buck, Sir Antony | Morrison, Hon P. (Chester) |
| Budgen, Nick | Moynihan, Hon C. |
| Bulmer, Esmond | Murphy, Christopher |
| Burt, Alistair | Nelson, Anthony |
| Carlisle, John (Luton N) | Neubert, Michael |
| Carlisle, Kenneth (Lincoln) | Newton, Tony |
| Carttiss, Michael | Nicholls, Patrick |
| Chapman, Sydney | Osborn, Sir John |
| Chope, Christopher | Page, Richard (Herts SW) |
| Clark, Hon A. (Plym'th S'n) | Parkinson, Rt Hon Cecil |
| Clark, Dr Michael (Rochford) | Patten, Christopher (Bath) |
| Clark, Sir W. (Croydon S) | Pawsey, James |
| Clarke, Rt Hon K. (Rushcliffe) | Peacock, Mrs Elizabeth |
| Clegg, Sir Walter | Powell, William (Corby) |
| Cockeram, Eric | Powley, John |
| Colvin, Michael | Prentice, Rt Hon Reg |
| Conway, Derek | Price, Sir David |
| Cope, John | Proctor, K. Harvey |
| Corrie, John | Rhodes James, Robert |
| Couchman, James | Ridsdale, Sir Julian |
| Cranborne, Viscount | Rippon, Rt Hon Geoffrey |
| Crouch, David | Robinson, Mark (N'port W) |
| Durant, Tony | Roe, Mrs Marion |
| Evennett, David | Rowe, Andrew |
| Eyre, Sir Reginald | Sackville, Hon Thomas |
| Fairbairn, Nicholas | Sainsbury, Hon Timothy |
| Favell, Anthony | Sayeed, Jonathan |
| Fookes, Miss Janet | Shelton, William (Streatham) |
| Forth, Eric | Shepherd, Colin (Hereford) |
| Freeman, Roger | Silvester, Fred |
| Gale, Roger | Sims, Roger |
| Gardner, Sir Edward (Fylde) | Skeet, Sir Trevor |
| Gorst, John | Speed, Keith |
| Gower, Sir Raymond | Spencer, Derek |
| Gregory, Conal | Stanbrook, Ivor |
| Griffiths, Sir Eldon | Stanley, Rt Hon John |
| Grist, Ian | Steen, Anthony |
| Hamilton, Hon A. (Epsom) | Stern, Michael |
| Harris, David | Stevens, Lewis (Nuneaton) |
| Hawkins, Sir Paul (N'folk SW) | Stewart, Allan (Eastwood) |
| Hayes, J. | Stewart, Andrew (Sherwood) |
| Hayward, Robert | Stradling Thomas, Sir John |
| Hickmet, Richard | Taylor, Teddy (S'end E) |
| Hicks, Robert | Temple-Morris, Peter |
| Higgins, Rt Hon Terence L. | Terlezki, Stefan |
| Hogg, Hon Douglas (Gr'th'm) | Thomas, Rt Hon Peter |
| Holland, Sir Philip (Gedling) | Thompson, Donald (Calder V) |
| Hordern, Sir Peter | Thompson, Patrick (N'ich N) |
| Howarth, Alan (Stratf'd-on-A) | Thorne, Neil (Ilford S) |
| Howell, Ralph (Norfolk, N) | Thurnham, Peter |
| Jackson, Robert | Tracey, Richard |
| Jessel, Toby | Trotter, Neville |
| Johnson Smith, Sir Geoffrey | Twinn, Dr Ian |
| Jones, Robert (Herts W) | Viggers, Peter |
| Key, Robert | Waddington, David |
| King, Roger (B'ham N'field) | Wakeham, Rt Hon John |
| Lawrence, Ivan | Ward, John |
| Lennox-Boyd, Hon Mark | Wardle, C. (Bexhill) |
| Lilley, Peter | Warren, Kenneth |
| Lord, Michael | Watts, John |
| McCurley, Mrs Anna | Wells, Sir John (Maidstone) |
| MacGregor, Rt Hon John | Wheeler, John |
| MacKay, Andrew (Berkshire) | Whitfield, John |
| Maclean, David John | Wilkinson, John |
| McNair-Wilson, M. (N'bury) | Winterton, Mrs Ann |
| Major, John | Winterton, Nicholas |
| Malone, Gerald | Wolfson, Mark |
| Maples, John | Wood, Timothy |
| Marland, Paul | Yeo, Tim |
| Marlow, Antony | |
| Marshall, Michael (Arundel) | Tellers for the Ayes: |
| Maxwell-Hyslop, Robin | Mr. Francis Maude and Mr. Peter Lloyd. |
| Mayhew, Sir Patrick | |
| Meyer, Sir Anthony |
| NOES | |
| Archer, Rt Hon Peter | Kaufman, Rt Hon Gerald |
| Atkinson, N. (Tottenham) | Kennedy, Charles |
| Barnett, Guy | Leighton, Ronald |
| Barron, Kevin | McCartney, Hugh |
| Beckett, Mrs Margaret | McDonald, Dr Oonagh |
| Bennett, A. (Dent'n & Red'sh) | McGuire, Michael |
| Bermingham, Gerald | Marek, Dr John |
| Blair, Anthony | Mason, Rt Hon Roy |
| Brown, Gordon (D'f'mline E) | Meacher, Michael |
| Buchan, Norman | Mikardo, Ian |
| Callaghan, Jim (Heyw'd & M) | Millan, Rt Hon Bruce |
| Campbell-Savours, Dale | Morris, Rt Hon A. (W'shawe) |
| Clay, Robert | Morris, Rt Hon J. (Aberavon) |
| Coleman, Donald | Nellist, David |
| Cook, Frank (Stockton North) | Orme, Rt Hon Stanley |
| Corbett, Robin | Owen, Rt Hon Dr David |
| Davies, Ronald (Caerphilly) | Park, George |
| Davis, Terry (B'ham, H'ge H'l) | Pavitt, Laurie |
| Deakins, Eric | Penhaligon, David |
| Dixon, Donald | Pike, Peter |
| Dormand, Jack | Raynsford, Nick |
| Dubs, Alfred | Rees, Rt Hon M. (Leeds S) |
| Dunwoody, Hon Mrs G. | Richardson, Ms Jo |
| Eastham, Ken | Rogers, Allan |
| Edwards, Bob (Wh'mpt'n SE) | Short, Mrs R (W'hampt'n NE) |
| Ewing, Harry | Silkin, Rt Hon J. |
| Field, Frank (Birkenhead) | Skinner, Dennis |
| Fisher, Mark | Snape, Peter |
| Foot, Rt Hon Michael | Steel, Rt Hon David |
| Foster, Derek | Stewart, Rt Hon D. (W Isles) |
| Freeson, Rt Hon Reginald | Thomas, Dafydd (Merioneth) |
| Godman, Dr Norman | Thomas, Dr R. (Carmarthen) |
| Golding, John | Tinn, James |
| Gould, Bryan | Wareing, Robert |
| Hamilton, W. W. (Fife Central) | Wigley, Dafydd |
| Hardy, Peter | Wilson, Gordon |
| Heffer, Eric S. | Winnick, David |
| Hogg, N. (C'nauld & Kilsyth) | Wrigglesworth, Ian |
| Hoyle, Douglas | Young, David (Bolton SE) |
| Hughes, Dr Mark (Durham) | |
| Hughes, Robert (Aberdeen N) | Tellers for the Noes: |
| Hughes, Simon (Southwark) | Mr. Ray Powell and Mr. James Hamilton. |
| Jenkins, Rt Hon Roy (Hillh'd) | |
| John, Brynmor |
§ Question accordingly agreed to.
§ Clause 2 ordered to stand part of the Bill.
§ Bill (Clauses 2, 15, 26 and 80), reported, without amendment; to lie upon the Table.