HC Deb 07 May 1986 vol 97 cc160-79

Question proposed, That the clause stand part of the Bill.

Dr. Oonagh McDonald (Thurrock)

I am glad that we are debating clause 80 first because, as has already been said in the earlier exchanges, this is a fundamental change in our tax system. That will be the burden of my argument.

Clause 80 removes tax from lifetime gifts and leaves only what is called the inheritance tax, which applies to bequests and lifetime gifts into discretionary trusts. This change was greeted immediately it was announced in the Budget by the press and the accountancy profession as a return to the former estate duty tax. That was a voluntary tax, which was once described as a tax paid only by the mean, the ignorant, the unsophisticated, the patriotic or the peculiarly unfortunate. I doubt whether the Government can expect much revenue from that source in future.

It was interesting to see that some of the press comment roundly condemned those changes. In an article in The Guardian on 1 April 1986, Victor Keegan said: One budget day estimate…reckoned that if the Duke of Westminster's estate was—probably conservatively—estimated at £2 billion then Mr. Lawson, at the stroke of a pen, has made him wealthier by at least £600 million. Obviously that won't happen immediately, but it is nevertheless real money, resources that could be used over time to build schools, houses and all the other things that are desperately needed. That is all part of the Government's policy, and the article describes the Government's main achievement as the most extensive redistribution of wealth from poorer to richer people…in living memory. Clause 80 is part of that pattern. That is why, unlike the Social Democratic party and the Liberals, we cannot regard it as an issue that concerns only a few. It is a fundamental change. It is an important step in the process on which the Government embarked in 1979, of redistributing wealth from the poorer to the richer.

Mr. Nicholas Baker (Dorset, North)

I am interested in what the hon. Lady has said, but it seems to me to be a question not so much of redistribution as of how the burden of taxation is felt. Does the hon. Lady think it fair that we should move towards a situation in which institutions and companies are in the same position as individuals, with regard to capital taxation?

Dr. McDonald

We must have a fairer distribution of the burden of taxation between individuals' earned income and the unearned income that may derive from investments through an institution or the individual's personal ownership of wealth. The Government have altered that distribution of the burden of taxation in favour of the better off, without any proper justification. That is what my argument is about.

The Chancellor suggested that CTT was an anti-enterprise tax. Few other countries view it in that way. Twenty countries out of the membership of the Organisation for Economic Co-operation and Development have both an inheritance tax and some sort of gift tax to supplement it. America has had a gift tax to supplement its estate duty since 1932, and nobody would describe America as running an anti-enterprise tax system.

The Government were utterly determined finally to kill off tax on lifetime gifts. That tax has been eroded throughout the lifetime of the Government, and now it is finally to be polished off altogether.

I talked earlier about the need to distribute better the burden of taxation between individuals' earned income and income deriving from the capital that people own. It is worth reminding ourselves how wealthy some people in our community are. The most wealthy 1 per cent.—that is, about 420,000 adults—own among them £150 billion, according to the 1983 estimate. I refer only to marketable wealth. That is enormous wealth, which is concentrated in very few hands.

Let us look at the next most wealthy group—4 per cent. of adults, about 1.7 million people, also own among them about £150 billion. That is an enormous concentration of wealth. It will not be redistributed in any way by removing the tax on lifetime gifts and leaving only an inheritance tax. That will do nothing to achieve that. It will do nothing for the economy as a whole. It has no economic or social justification whatsoever.

Tax on lifetime transfers has been reduced so much during the lifetime of the Tory Government, first in 1979 and then from 1983 onwards, that it already constitutes less than 1 per cent. of total Inland Revenue receipts. That is a very small proportion, yet the Government think that it is too much to place on the richest members of our community, so even it is to be abolished altogether, leaving only the inheritance tax, which has been described as a voluntary tax. No wonder the Chancellor's proposals are well described as a step back into the future.

Let us look at what has happened with the remaining inheritance tax. Accountants and other tax advisers have been quick to point out that it can be avoided altogether. One has to take a chance on it. One gives away one's assets, and one has to live another seven years after that gift has been made. The only strength in the Chancellor's proposals is that one has to give away one's assets altogether. One does not retain any interest in or control over them. At least that is something, although I doubt whether it will be enough to prevent the tax planning that is already going on.

The inheritance tax will fall on what some people describe as the middling rich—those with estates of up to £250,000, who probably do not wish to take the risk of parting with their assets during their own lifetime. The tax will not fall on the super-rich, because they will be able to make disposals of their assets during their own lifetime. They can afford to do so. Therefore, the tax is in no way directed towards the richest members of our community, who are more able to bear a greater burden of taxation. This is a tax which, at best, will fall on the not-so-rich members of our community, but even there the tax avoidance business is already under way.

I should like to refer to some of the suggestions that have been canvassed in the financial press. I shall take a selection of examples and then seek the Minister's assurances. My first example is the activities of the insurance industry, which the Government thought they had killed off in clause 80. It is at it again. According to the Financial Times of 26 April, Equitable Life, Britain's oldest mutual life assurance company, has issued four types of temporary protection contracts to enable people to avoid the inheritance tax. That is one proposal that is already under way.

In another article in the Financial Times of Saturday 22 March, Stuart Chapell of the accountancy firm Neville Russell suggests a further possibility: You could provide for the trust to be wound up"— one's children could be the beneficiaries of that trust— and the trust property handed back to you if some contingent event occurred. That means an event altering one's financial status.

Another suggestion is the possibility of setting up a particular sort of trust. Accountancy Age of 25 March 1986 says that the Finance Bill has not moved to attack interest-free loans, the heart of the old inheritance trusts. In the article, an expert is quoted as saying: The trusts could return on the basis of a specific settlor exclusion. And anyone who had a flexible trust set up before the Budget can still make large loans repayable over 15 or 20 years. That is another example of a possible form of evasion. There are a number of examples of work under way by accountancy firms and insurance companies to see how inheritance tax can be avoided, not necessarily by the super-rich — they will not necessarily be hit by inheritance tax—but by the middling rich.

4.30 pm

I want an assurance from the Minister that schedule 18 to the Bill will be carefully examined before its Committee stage. I hope that the Government will look at the work that is already under way by the tax planning industry and that they will ensure that amendments are tabled for consideration in Committee, to take effect during this financial year, to plug any loopholes. In Committee on the Finance Bill, it is usual to examine proposals to plug gaps in the legislation one year, or perhaps two years, later. I want the Minister's assurance that the proposals that were canvassed in the financial press barely a month after the Budget, to enable the better-off to avoid tax, wherever possible, will be looked at carefully.

Another implication of clause 80 relates to accumulation and maintenance trusts. Gifts into such trusts are completely free of tax. The Minister knows that such trusts benefit those under 25 years of age. In particular, they are designed to pay school fees. Peter Leach of Stoy Hayward was reported in The Times of 19 March 1986 as saying: The abolition of the tax introduces a whole new area of estate planning for family companies, and possibilities for the creation of trusts to assist in the payment of school fees. That report appeared the day after the Budget.

Work has gone ahead straight away to find out how clause 80 will advantage the better-off. Money can be paid free of tax by grandparents or parents to cover school fees. Those who are already privileged will pay for the education of their children at private schools free of tax. Wealthy people who set up trusts to pay for the private education of their children forgo tax at the expense of other taxpayers who cannot afford to send ther children to private or public schools. They have to send their children to state schools, a system of education that the Government persistently have undermined since 1979.

Although in previous years grandparents could pay only £3,000 a year into a trust fund—if they paid more it had to be deducated from the £67,000 inheritance tax exemption — the sum is not now to be limited. Any amount can be paid into trusts of this kind to provide privileged education for the children of the better-off, at the expense of other taxpayers. Expenditure on state education has fallen from 5.5 per cent. of gross domestic product in 1978–79 to a planned 4.6 per cent. of GDP in 1986–87. In other words, support money has been removed from the state system. A very important consequence of this clause is that the children of the better-off will be sent to private schools, at the taxpayers' expense. The clause is designed to reduce the burden of tax on the rich and the very rich in our society. It increases the burden of taxation on those with average and below average incomes, a process that has continued since 1979. As a proportion of income, if one adds together tax and national insurance insurance, their burden has increased.

As The Guardian rightly pointed out, the Government have jigged and rejigged the tax system so that the poor pay proportionately more and the rich pay proportionately less. At the same time, money is being taken from the public services upon which the great mass of the people depend: the National Health Service, education, and other services. In the most cynical and blatant way, the Government favour the better-off. That is why this is a fundamental issue for discussion. The Liberal and Social Democratic alliance are completely wrong to dismiss it. When a Labour Government are returned to power they will ensure a fairer distribution of the burden between those whose income is derived from capital and those who work day by day for every single penny that they earn. We reject entirely this clause and the whole philosophy behind it.

Mr. Nicholas Baker

I take this opportunity to declare my views about clause 80. They are directly contrary to those of the hon. Member for Thurrock (Dr. McDonald). The burden of capital taxation has constituted a major disincentive to those starting, creating and developing businesses. It has also been a disincentive to people to save for their families. I have had direct experience of working with people who are in both of these positions, and I can tell the hon. Lady that that is the case. Any reduction in this tax is therefore to be welcomed.

Dr. McDonald

The hon. Gentleman ought to come clean about the levels of capital transfer tax that were imposed upon small businesses. The maximum rate of tax, at death, was 60 per cent. Business assets relief of 50 per cent. was available. The true rate of tax was 30 per cent. which could be paid over 10 years, with no additional interest being charged. The true maximum liability was only 3 per cent. a year for 10 years. I do not believe that that can be regarded as a disincentive to small businesses. However, the Government's economic policies have served as a disincentive to small businesses. The hon. Gentleman knows perfectly well that that is why, throughout this Government's period of office, there has been a record number of liquidations and insolvencies.

Mr. Baker

The hon. Lady has a good grasp of the rates of taxation but she has a much less firm grasp of the real world. Business men want to be able to contemplate the sale of part of their businesses and to be in a position to create wealth before they retire, but the rates of capital taxation have been a considerable disincentive to them. Therefore, the hon. Lady has a considerable amount of homework to do.

The purpose of my intervention is to point out an anomaly in clause 80, which deals with lifetime transfers. The unstarred amendment that stands in my name would have put right that anomaly, although I understand why you were unable to select it for debate, Mr. Deputy Speaker. In one or two respects — the hon. Lady mentioned a few of them — clause 80 restores the position on lifetime gifts to what it used to be before the days of capital transfer tax, but it goes further than that.

As the clause stands, an outright gift attracts no inheritance tax, provided that the donor survives for seven years. If, therefore, I wanted to give you, Mr. Deputy Speaker, a section of my business or estate, if I had one, and I survived for seven years, there would be no capital taxation. On the other hand, if I had a life interest in the estate, or in a valuable property, and I gave it to you, Mr. Deputy Speaker, as the remainder man who was entitled to pick up the end of the trust when my life interest disappeared—an enchanting and encouraging prospect—there would be an immediate charge to tax under the clause. That is clearly anomalous. The two gifts are very much the same. There is a slight technical difference because one is a gift of settled property. I can see no reason in equity why these two gifts should be treated differently.

I understand that the Treasury's policy is to try to treat trusts differently from assets held absolutely—property that is not settled — but some trusts have been singled out for special treatment. The hon. Member for Thurrock referred to accumulation and maintenance trusts, but did not refer to the welcome special treatment of trusts for the disabled. I point that out to show my hon. Friend the Minister that there are ways in which he is going rather further than restoring the position to what it was before CTT. I hope that he will seriously consider putting these two gifts on the same level so that the position is not as anomalous as it is under clause 80.

Mr. Penhaligon

I used an opportunity made available during one of our previous debates on the Bill to show some fundamental opposition on principle to the idea that, henceforth, it is possible for someone to leave as much as £10 million to a son, daughter or whoever and not incur one farthing of tax. I stand by my judgment — I still believe that to be wrong. The decision is unjustified, and the Government are reflecting their political roots too much by trying to argue that it can be justified.

It is said by some much wiser than I that the Duke of Westminster is worth £2 billion. I do not question that —it may be plus or minus the odd £1 million, but let us take it as £2 billion and see how the Bill will affect such a sum. It would be possible for him to leave his son or daughter half that sum—that is £1 billion—tax-free. He would have to fulfil other clauses requiring his complete separation from the money that he has given away and the business of which it was part, which would still leave him with £1 billion.

I suspect that most hon. Members could live out their lives very satisfactorily with assets of £1 billion. A few of us, more accustomed to modest living standards than others, could probably reduce that figure by half or even 75 per cent. and still survive quite comfortably. In the case of the ultra-rich, substantial wealth can be transferred to another person, and the person giving the money will still have control of the remaining part of his wealth, which is capable of providing a living standard beyond the comprehension of most hon. Members, and certainly all our constituents.

Besides that, there is a whole industry based on trying to avoid taxation on the £1 billion that is left. I have no wish to go into details, but an industry has been built up around what is called estate management, which means avoiding tax. That is not outside the law.

That is background, and we come now to the details of the case. The best argument against the vicious imposition of capital transfer tax or death duties, call it whatever, is the effect that it can have on a moderate or small business—a farm, a shop or a small factory. There is no doubt that the imposition of substantial CTT on a business worth, let us say, a third of a million pounds can have a substantial effect on that enterprise.

My concern regarding this clause is partly that it exempts the ultra-rich from making a real transfer of wealth to the well-being of the state. It is also that I believe that the category for which I suspect the Government will claim that the measure will have the most benefit will, in an odd and peculiar way, not have such benefit in the final analysis.

My experience of small businesses has made me only too well aware that many a small business man looks prosperous and has a farm or a shop or whatever. However, the person involved has not one farthing of spare cash. If he wants to buy a car he has to borrow the money against the basis of wealth in his enterprise. However, the idea that many small businesses in our constituencies have enormous volumes of cash kicking around does not stand a great deal of examination.

4.45 pm

In particular, the farming community is notorious for not having cash. There are those who take the view that the farming community thinks that it is the duty of other small businesses in the community to provide them with cash flow to run their business. They are not poor—they are wealthy by the standards of many people—but they do not have easily liquefiable assets at their disposal. In future, although the owner will have the freedom to give the business to his son or daughter without incurring taxation, he can do so only if he can prove to the satisfaction of the inspector of taxes that not only did he give the business, but he separated all his interests from it.

I am aware that there are many cases where benefit would accrue if only the old man would retire, but in many small, self-employed businesses, the idea of retirement many days before the owner is taken away because the good Lord has decided to intervene, runs so counter to established practice that it seems unlikely that any part of the Finance Bill could incorporate it. The owner of the farm, shop or business could find that he could give to his son and incur no tax, but he has no right to any income from that enterprise. The lunatic position could conceivably arise whereby somebody of 70 or 80 with a family business in which there is no cash available could find himself drawing supplementary benefit if he gave away the business.

The sector in which to reduce CTT is the small business sector. There is sense in encouraging transfers while the new generation is of an age to use its enthusiasm, skill and entrepreneurial sense to the best advantage. There is a chance that the Bill, as compared to the law before it and taken as a whole, could discourage transfers at the time of retiring in small businesses. If that is so, the Government are making a deep and fundamental error.

The Bill could, on an interpretation of the advice given to me, exempt the ultra-wealthy — people who have billions of pounds at their disposal — from tax on wealth, while imposing it on the relatively small business man, farm owner or shop owner, who has not significantly suffered under previous tax ratings. That is lunatic.

The Liberal party and the alliance believe that one can justify, and we do so, a system of taxing the wealthy on death and on the transfer of gifts during a lifetime. We would justify that not by arguing that we should transfer wealth from the individual to the state, but on the basis of distributing wealth among the people. We would like a tax system that encouraged the person making the decision to give money to spread that wealth rather than to continue its concentration in the hands of one person. We call that idea an accessions tax.

If someone is fortunate enough to be able to give £1 million to an individual, we would so organise matters that if the person donating the money decided to give four different people £250,000 each rather than giving one person £1 million, the donating of the money to four separate people would incur less tax collectively than would the giving of £1 million in a lump sum. In that way we believe that wealth distribution would be encouraged among the people rather than a distribution of wealth from the people to the state.

Furthermore, if one of the individuals who was fortunate enough to receive £250,000 from that £1 million was to receive another £250,000 from someone else. that individual would pay more tax on the second £250,000 than he would have paid on the first.

That is a far more rational and sensible way of dealing with the problem. The statistics that are available which ignore pension rights—and I am always dubious about statistics that ignore pension rights — suggest that a quarter of the wealth in Britain lies in the hands of 1 per cent. of the people. That is an unacceptable concentration of wealth, and over the long term the state should use its powers to encourage the fortunate 1 per cent. to spread their wealth. The changes in the clause do not accomplish that. The Bill will encourage something that we have not seen for a long time, the concentration of real wealth in the hands of the ultra and super-rich. That may be Government policy, but it is not alliance policy.

We support private enterprise and an entrepreneurial system. However, we believe that one of the problems of capitalism which the state has a role to control, is that capitalism, if it is left unbridled, can lead to unacceptable concentrations of wealth and power. Although we believe that a capitalist system is more likely on the whole to give the British people the goods, services and articles that they desire, we believe that if it is left unbridled, it could lead to an unacceptable concentration of wealth.

The Minister has ample opportunity, on the schedule today, to reply to my comments in detail. I hope that the Minister will reflect on the different effects that the changes will have between the ultra-rich whom the Government seem to have exempted from effective taxation, and the small business within the definition that I gave of a business approaching two thirds of a million pounds. It is not inconceivable that in the reality of family life, as I understand, know and have experienced it, the tax load may be increased. I cannot believe that the Government want that, but some people with a greater knowledge and understanding of the details of tax affairs than I, reached the conclusion that that will be the main effect of the Bill.

Sir Brandon Rhys Williams (Kensington)

I had prepared some remarks which I had hoped to offer to the Committee at this point, but the hon. Member for Truro (Mr. Penhaligon) has covered those points in his usual inimitable and convincing style. I hope that the Minister will indeed respond to the hon. Gentleman's request to deal with his idea. The idea put forward by the hon. Gentleman is not new. I had the pleasure of discussing it with my hon. Friend the Minister of State's father some 25 years ago, and I believe that he was very much attracted by it then.

In the debate on clause 15, I said: the Government's objectives should be to give every individual the maximum possible incentive to create wealth and to simplify the tax system as much as possible."—[Official Report, 6 May 1986; Vol. 97. c. 121.] I might have added that the Government should seek as far as possible to remove the elements of uncertainty from the tax system. As a sequel to these recommendations, I suggest that the Government should abolish higher rates of tax altogether. I envisaged that income tax and national insurance contributions could be consolidated at 40 per cent., with appropriate changes to the system of allowances.

If such reforms were adopted, they would merely consolidate the present system and give greater scope to individuals to accumulate personal fortunes. By con-solidating the existing system, I mean the marginal rate of tax, which is the real rate of tax for the majority of people.

If the Government have the courage, as I recommend, to abolish the higher rate of tax altogether, the question will arise how to prevent very large resources being inherited and put to less than optimum use in idle or imcompetent hands. I am not convinced that the proposals in part V should he the Government's final word on the taxation of lifetime transfers and bequests.

The Chancellor's intention is laudable and well meant, but the proposals do not remove the element of uncertainty that is inherent in the present system. They lengthen the period of insecurity and make the incalculable element in taxation so much the worse. That is not a good factor for business, although I accept that the Chancellor means to be helpful.

Insecurity and unpredicability are inevitable inhibiting factors for business. They cannot be avoided altogether, but it is unfortunate if the tax system makes such factors worse. I believe that it is an unnecessary blunder to lengthen the time span of anxiety to seven years. I do not welcome the taxation of private capital, because I believe in a property-owning democracy. The Government are not helping the creation of wealth by withdrawing capital from individuals who know how to make good use of it.

Would it be possible to devise a tax on capital transfers and bequests which brought in the same yield—if that is necessary—but on the lines recommended by the hon. Member for Truro? That would not make for unnecessary uncertainty in long-term business and investment planning. At the same time, such a tax could serve to further the Government's object of increasing the number of private owners of wealth and property.

I suggest that the taxation of gifts and bequests should be based on the amount received by the recipient of the benefit above an exempt limit over his life span rather than on the size of the property dispersed by the donor. If a man was prepared to disperse his property sufficiently widely, he could escape the taxation of his estate altogether; but if he preferred to concentrate his estate on one or two people only, or to follow the practice of primogeniture, he would at least be able to calculate the liability for tax with reasonable certainty at the time that he took his decision.

I hope that my right hon. Friend the Minister will rehearse the arguments for and against the change in inheritance and bequest taxes and tell us whether the Government are prepared to consider favourably further reform of the type suggested in the clause and perhaps in a forthcoming Budget.

Mr. D. N. Campbell-Savours (Workington)

The simple proposition before us today is whether the House wishes to reduce the burden of taxation on those who transfer wealth from one generation to the next. I wish to support any measure that increases the liability to pay tax during the course of that transaction.

It may not have been clear at all exactly what the hon. Member for Dorset, North (Mr. Baker) was saying. He said that, even after the Budget is translated into legislation, people who effect gifts or bequests will still be paying too much tax. I believe that such people are paying too little tax.

I should like to move the debate into the real world. Those who examine our proceedings today will wonder how it is possible that the House of Commons is setting out to approve the principle of reducing taxes paid by the very wealthy in society when its Members must know of the conditions that exist outside.

5 pm

One month ago, following the Budget, an elderly constituent of mine came to my surgery to talk to me about poverty. During that discussion, I explained to him that I was well aware of what was going on in my constituency, that I circulated among people of all classes, with all kinds of problems, unemployed and employed, to discuss matters of mutual importance.

My constituent asked me to visit a particular estate in my constituency in the north of England. I visited a number of houses on that estate and saw something that I have seen before, but never in such a concentrated form, which can only be described as indescribable poverty. I went into houses—we must consider these matters in this debate today—where people simply cannot afford to live. They cannot afford to decorate their homes, to clothe their children, to eat meat once a day or to heat their homes; they cannot find work, they cannot afford to travel or go on holiday and they rarely visit their relatives. They live in what can only be described in 1986 as the most unreasonable of circumstances. They simply cannot understand why we in this House carry motions such as this, which will be carried today, to reduce taxes for the better-off in society. They do not understand how people who have millions should suddenly find, after a Division in the House, that they are the beneficiaries of hundreds of thousands of pounds by way of tax cuts.

It is monstrous for the Government to return year after year with these niggly little measures to reduce taxes in this way. This is not the first time that this has happened. Two of the three Labour spokesmen on the Front Bench today have repeatedly gone through proceedings on Finance Bills over the past few years arguing against reductions in capital transfer tax.

The debate in the House has become boring, but the debate outside the House is even more desperate. I say to the Government: please stop it. The people of this country believe that it is wrong, and it is not only Labour people who believe that what is happening is wrong. Many Conservatives outside also have a social conscience. When I knock on their doors and discuss such matters with them they equally object. They know that what is happening is wrong. They often feel that they have a social duty to pay the price of alleviating the suffering by which many are being subjugated. They do not understand the Conservatism which turns its back on those people. Nor do they understand the arguments about the need to reduce capital transfer tax as some part of the development of an incentive society and, in particular, the development of small businesses, because it is not true.

The problem with this House is that far too few people in it have been in business and understand what motivates business men. Their knowledge is academic. It is too often a lawyer's understanding of the brief. It is too often an inherited money man's understanding of how the wealth mechanisms in our society work. They do not work in that way. The only incentive that the business man needs to operate is a good market and a good product. He wants people to buy what he has. The fact that he will pay 3 per cent. per annum for 10 years in the settlement of an inheritance or capital transfer tax bill in 20 or 30 years' time is of no consequence at all. He is not interested.

Mr. Wrigglesworth

Rubbish.

Mr. Campbell-Savours

Why does not the hon. Gentleman get to his feet and tell us his experience of running a business and how it is that he believes that people suddenly lose the incentive to go out and create wealth? I can tell him that the entrepreneurs in my constituency are not interested in this debate. All they want is good regional assistance. All they want is—

Mr. Wrigglesworth

A good accountant.

Mr. Campbell-Savours

The hon. Gentleman is right. All they want is a good accountant. All they want is a decent market and a good product. With a combination of all those things, they will create all the wealth necessary to secure employment within my constituency and to secure their own futures. The hon. Gentleman does not understand that simple proposition.

For years, the Tories have tried somehow to justify reductions in capital transfer tax on the back of the argument that they are needed as part of the incentive society. Indeed, inheritance acts as a disincentive to initiative. Many people who can rely on inherited wealth do not make an effort. Often the most effective business people in our society have acquired nothing by way of birthright; they started off with nothing in the world and went out to make their fortunes. They had all the incentives before them. Inheritance destroys that very opportunity. It makes people lazy.

Looking around our society, too often I can identify people who, having not inherited wealth, may have made a far greater contribution, whether in the professions or elsewhere in society.

In reducing capital transfer tax and, indeed, switching to a new tax, the clause proposes something which the British public do not want. Parliament should reject it.

Mr. Wrigglesworth

I have considerable sympathy with the views of the hon. Member for Workington (Mr. Campbell-Savours). It has never ceased to amaze me—although I suppose that I should not be surprised—that the Conservative party spends so much time and effort on the Floor of the House and in Committee upstairs in Finance Bill after Finance Bill on issues of this sort.

Contrary to what the hon. Member for Birmingham, Hodge Hill (Mr. Davis) said, I spent many hours sitting upstairs when he was not a Member of the House on Finance Bills listening to hour after hour, day after day, of debate on capital gains tax and its finer points, on inheritance tax and capital transfer tax — on all the capital taxes. That affects a minute proportion of the British population and, indeed, a minute proportion of Conservative voters. The overwhelming majority of Conservative voters in my constituency will not be affected substantially by any of these changes. They affect a tiny minority of people.

But the foundation upon which the Chancellor has built his case for these changes, which was referred to earlier by one of his hon. Friends, is that they have to be made to relieve the burden on small businesses. It is argued that the tax regime has crippled small businesses, but I understand that that cannot be so. The Chancellor said in his Budget statement that capital transfer tax on lifetime gifts has been a thorn in the side of those owning and running family businesses, and as such has had a damaging effect on risk taking and enterprise within a particularly important sector of the economy."—[Official Report, 18 March 1986; Vol. 94, c. 175.] I agree with the hon. Member for Workington—such tax is irrelevant to most entrepreneurs. I do not believe that they calculate capital transfer tax or inheritance tax when establishing businesses. Other matters motivate them.

The existing tax liability on business assets is not a serious burden if proper steps are taken to minimise it. As the hon. Member for Workington said, most such people have very good accountants. Indeed, there is a whole business that ensures that small businesses take the proper steps. If business property which qualifies for 50 per cent. business asset relief is given away more than three years before death, the rate of tax chargeable cannot exceed 15 per cent., and that will generally be payable by annual instalments over 10 years.

Furthermore, business assets account for only a small proportion of capital transfer tax take. In 1983–84, CTT took some £601 million, but business relief was estimated to cost some £20 million. As most business property gets relief at 50 per cent., and some get relief at 30 per cent., only about £30 million is payable in CTT. In other words, 95 per cent. of the CTT take comes from non-business property. The tax is therefore not the great inhibitor of businesses, as Conservative Members claim. Even if exempting business property could be justified, exempting gifts of non-business property could not.

Mr. Nicholas Baker

Does the hon. Gentleman agree that the take of tax has nothing to do with whether someone is inhibited from developing a business because of a fear of it? The two are separate.

Mr. Wrigglesworth

The Chancellor built his case on the foundation of the £600 million tax take inhibiting businesses, and I have just explained that only 5 per cent. of the take comes from business property. What, then, is the reason for the exemption? The Government want to hand substantial amounts of money back to wealthy people. There should be no doubt about that.

Mr. Campbell-Savours

I bet that the hon. Member for Dorset, North (Mr. Baker) is a beneficiary. He shakes his pocket in shame.

Mr. Wrigglesworth

Many other Conservative Members will be doing the same.

5.15 pm
Mr. Nicholas Baker

On a point of order, Mr. Armstrong. I shall not sit here and listen to that thoroughly unpleasant and unparliamentary slur. I ask you to afford me the protection to which I believe I am entitled and to ask the hon. Member to withdraw.

The First Deputy Chairman

The hon. Member for Workington (Mr. Campbell-Savours) ought to withdraw those remarks if he made them.

Mr. Campbell-Savours

If the hon. Gentleman is not a beneficiary, I withdraw.

Mr. Baker

I am certainly not a beneficiary, but even if I was, the hon. Gentleman ought to withdraw, and I ask him to get up and have the decency to do so.

Mr. Campbell-Savours

As I have said, if the hon. Gentleman is not a beneficiary, I withdraw.

Mr. Wrigglesworth

Only a tiny minority of the population will benefit substantially from the tax changes. Year after year, their interests are represented on the Conservative Benches.

There is an overwhelming case for taxing lifetime gifts and we shall certainly do that if we are given an opportunity.

The Minister of State, Treasury (Mr. Peter Brooke)

This has been an admirable and wide-ranging debate. The hon. Member for Thurrock (Dr. McDonald) gave us a trailer of what she will argue in Committee when we debate clauses 79 to 86 and schedule 18. She led off with observations about the redistribution of wealth. The effect of these measures on the redistribution of wealth is negligible. Indeed, capital transfer tax, which the Labour party introduced in its last Administration as a once-per-generation tax, could never have been an effective engine of wealth distribution. At its height, it never yielded more than about 0.1 per cent. of personal marketable wealth per annum, and changes in asset values such as houses and share prices are far more important than CTT has been to the distribution of wealth.

I shall not repeat the notes on clauses but, if I did, I should draw the House's attention to the fact that the trust regime, which has prevailed under CTT, remains essentially' in place. That is somewhat at variance with what the hon. Lady said. Transfers that involve an interest in possession as well as discretionary trusts remain firmly part of the regime.

The hon. Lady dwelt on temporary protection contracts and insurance, and asked me various questions. The chronology of clauses 79 to 86 and schedule 18 means that they will be considered later in the Committee stage, so there will be plenty of time to pay attention to any aspects of them which require it, and I give the hon. Lady an assurance that we shall consider the representations that are made to us.

Mr. Campbell-Savours

Will the Minister tell us the cumulative value of MT concessions, including indexation, which the Government have made since 1979? Can we have the figures now? It is important that the House knows how much money has been given away before it makes a decision.

Mr. Brooke

My right hon. Friend the Financial Secretary' to the Treasury dealt with that on Second Reading.

Mr. Campbell-Savours

We are here to make a decision. There is about to be a Division. That being so, we are entitled to know how much money the Government have given away to a very small group of people since 1979. Furthermore, we ought to know how much has been given away in each year.

Mr. Brooke

If I need to modify my answer before I finish my speech, I shall certainly do so.

Mr. Campbell-Savours

On a point of order, Mr. Armstrong. The Minister is telling the House, in a most unparliamentay way, that he intends to guess and then allow a civil servant to correct him.

The First Deputy Chairman

The hon. Gentleman knows that is not a point of order for me. The Minister is responsible for his own speech.

Mr. Brooke

The figure to which my right hon. Friend the Financial Secretary alluded in the earlier part of the debate was £1.7 billion, which embraced capital gains tax, capital transfer tax and the investment income surcharge.

Mr. Campbell-Savours

I am sorry. We are asking about capital transfer tax.

The First Deputy Chairman

Order.

Mr. Brooke

If I may proceed—

Mr. Campbell-Savours

No. Let us have the figures from the Minister.

The First Deputy Chairman

Order. The hon. Gentleman must contain himself. If he wishes to intervene, he must stand and do it properly.

Mr. Campbell-Savours

On a point of order, Mr. Armstrong. We are debating capital transfer tax. We are entitled to hear from the Minister at the Dispatch Box today the specific figures. I have asked for a series of figures; they need not be part of an amalgam of other figures.

The First Deputy Chairman

Order. The Minister is responsible for his speech. The hon. Gentleman knows that it is all part of the debate. If he wishes to contribute, he must do so properly.

Mr. Brooke

An answer given to the hon. Member for Thurrock (Dr. McDonald) on 28 April explained that the yield of tax in respect of transfers in 1985–86 was estimated to be £70 million less that if the 1979–80 regime had been indexed.

Mr. Campbell-Savours

On a point of order, Mr. Armstrong. The Minister has come to the House to answer a debate on capital transfer tax, and he has not come armed with the figures. He knows that the Government have given—

The First Deputy Chairman

Order. As I have explained to the hon. Gentleman, that is not a matter for me. The Minister is responsible for his speech and for the information that he gives to the House. Hon. Members can then debate any figures that he gives or does not give.

Mr. Campbell-Savours

He has not done his homework.

Dr. McDonald

In the reply to which the Minister referred, he will note that specific changes in capital transfer tax between 1979 and now are listed and were estimated as costing £70 million, but the answer did not refer to indexation. Adding indexation makes a difference to the figure. Perhaps the Minister would add indexation in his reply.

Mr. Brooke

Quoting the answer to the hon. Lady, I said that the figure was lower than if the 1979–80 regime had been indexed. Of course, we shall return to the matter if clarification is required.

Mr. Campbell-Savours

We are about to divide the House. This is unreasonable. The Minister has not done his homework.

Mr. Brooke

I assure the hon. Member for Workington (Mr. Campbell-Savours) that, apart from anything else, I must respond to his speech, so it will be some time before we divide.

The hon. Member for Thurrock mentioned accumulation and maintenance trusts. Of course, it is true that, if someone makes transfers into accumulation and maintenance trusts and dies within seven years, he will be subject to the same regime. When the hon. Member for Workington interrupted me, I was dwelling on the temporary protection contracts. I must tell the hon. Lady—this applies to all citizens in the land — that it is perfectly legitimate to take out a term insurance policy to cover the possibility of inheritance tax becoming payable if the donor of a gift dies within seven years. However, if the policy is subject to a reservation for the donor, it will be subject to the new rules on gifts with reservations.

Mr. Campbell-Savours

Let us get on with the figures.

The First Deputy Chairman

Order. The hon. Gentleman made a speech and was heard in silence. He must listen to what the Minister has to say. The Minister has hardly got going yet.

Mr. Campbell-Savours

On a point of order, Mr. Armstrong. Every Minister who comes before the House knows at least one figure for the expenditure involved. This Minister, during this Finance Bill on this highly important matter, has come to the House without the figures that we need. On that basis, the sitting should be suspended—

The First Deputy Chairman

Order. The hon. Gentleman knows that that is a matter for debate. If he wishes to make his points, he is entitled to make them, but the Minister's speech is not a matter for the Chair.

Mr. Bob Clay (Sunderland, North)

Further to that point of order, Mr. Armstrong.

The First Deputy Chairman

The hon. Gentleman cannot raise a point of order further to a point of order that was not a point of order.

Mr. Clay

On a point of order, Mr. Armstrong. I seek your guidance. As I understand it, if any hon. Member were to mislead the House, it would be in order for the Chair or any other hon. Member immediately afterwards or on the following day to ask that hon. Member to correct the record. That has happened many times and, inexperienced though I am, I understand that it is proper parliamentary procedure.

In the exchange between my hon. Friend the Member for Workington (Mr. Campbell-Savours) and the Minister, my hon. Friend objected to the fact that the Minister said, "I will give some figures, but if they are wrong, I will put them right later." That is a circumvention of the tradition in the House that Ministers take responsibility, as we all do, for the facts that we put on the record. It is a serious break with tradition for Ministers to say, "I will give some figures, but if they are wrong, I will correct the record later."

The First Deputy Chairman

Order. The hon. Gentleman should know that the Minister's speech is a matter for the Minister. If there is doubt about figures or facts that are given, that is a matter for debate—

Mr. Campbell-Savours

Let us have the Chancellor, then.

The First Deputy Chairman

The hon. Gentleman will have to face the consequences if he is unwilling to behave properly. All that I wanted to say was that this is a matter for legitimate debate. It is certainly not a matter of order for the Chair.

Mr. Brooke

rose—

Mr. Campbell-Savours

Will the Minister give way?

Mr. Brooke

I shall come to the hon. Gentleman's speech in due course.

My hon. Friend the Member for Dorset, North (Mr. Baker) made a proposition in his speech, which was trailered in an amendment that we were unable to debate today. The purpose of the change to inheritance tax is to remove obstacles to unfettered lifetime giving while protecting the death charge. That requires the preservation as far as possible of the existing trust regime. The removal of the tax charge when an interest in possession is released to the remainder man would undermine the death charge. Property could be channelled to the intended beneficiary by way of a trust giving an interest in possession to a surviving spouse. The transfer to the trust for the spouse would be tax-free. It is right to impose a charge if the spouse subsequently surrenders the interest to the remainder man. Schedule 18 is relevant to my hon. Friend's proposition. We shall return to the matter in Committee.

The hon. Member for Truro (Mr. Penhaligon) concluded his speech with references to what has become known as the donee tax. In the context of the earlier part of his speech, I should say that the regime relating to gifts with reservations is essentially a stronger regime under this legislation than the regime that prevailed under capital transfer tax. The right hon. Member for Glasgow, Hillhead (Mr. Jenkins) acknowledged in the Budget debate—to be fair, the hon. Member for Truro did so, too—that there were genuinely difficult problems with the previous tax. It was not perfect and was capable of improvement. The hon. Gentleman's speech related primarily to the concept of the donee tax, which the Liberal party has espoused.

Mr. Penhaligon

Is the Minister assenting to my basic proposition that, for relatively small transfers of wealth, the clauses added together could be stronger than the previous legislation? If he accepts that, does he agree that the affect is much weaker for the ultra-wealthy transferring their wealth?

5.30 pm
Mr. Brooke

I would be the first to acknowledge that greater freedom is conferred by the legislation, and I shall return to that subject.

The hon. Member for Truro raised the subject of the donee tax, for which we also had a trailer on Second Reading of the Finance Bill. The hon. Member for Stockton, South (Mr. Wrigglesworth) was interrupted by the hon. Member for Come Valley (Mr. Wainwright) who asked: Does the hon. Gentleman agree that the wider distribution of shares would be greatly encouraged if the Chancellor, instead of virtually abolishing capital transfer tax in this Bill, had remodelled it in such a way as to encourage wealthy people to make a multitude of relatively small gifts of shares to large numbers of people rather than passing on their inheritance to only one or two members of the family? The hon. Member for Stockton, South replied: Yes. I hope that we can pursue that point in Committee because it is something that we would like to see."—[Official Report, 29 April 1986; Vol. 96, c. 843.] That scenario raises the interesting question whether those two parties rehearse their interventions in advance, or operate on a basis of blind faith. That is a particularly interesting notion, in the light of the response of the hon. Member for Stockton, South.

The SDP, in its working paper on tax reform published in July 1985, resiled from the question of a donee tax. The SDP always has a flavour of the ancien regime about it, but the Marie Antoinette principle of having one's cake and distributing it widely seems to be carried to an excessive degree. I do not want to intrude in any way on the private communications between the two parties, but, given the SDP's position on a donee tax, I, am not clear how the hon. Member for Stockton, South can intelligently represent the hon. Member for Truro.

That uncertainty about the principle of a donee tax echoes the Liberal party's difficulty last night in deciding whether to vote on the 1 per cent. deduction from income tax. We had perfectly good donee legislation under the legacy duty until a Liberal Chancellor of the Exchequer, Sir William Harcourt, transferred the principle to a donor principle in 1894. This is another classic instance of the Liberal party having second thoughts about legislative principles.

In 1972 the Conservative Government issued a Green Paper on a possible change from estate duty to this sort of inheritance tax. The consultative process resulted in a clear view against such a change. The main reasons were that the tax would be extremely expensive to administer, there would be an extra burden on executors in dealing with more beneficiaries and calculating the different amounts of tax due, there would be much work in re-arranging wills written on an estate duty basis, there would be other transitional problems, and the system would create more difficulties in dealing with trusts. The theoretical benefits of such legislation which were advanced by the hon. Member for Truro are not justified by the major legislative and administrative changes that would be involved.

My hon. Friend the Member for Kensington (Sir B. Rhys Williams) supported the hon. Member for Truro on the subject of donee taxation, dwelt on the issue of uncertainty, and wished that we could do more to avoid it. Uncertainty cannot be avoided altogether, as my hon. Friend conceded. Life is uncertain; I have no doubt that that phrase has been uttered in six different languages with much more elegance than I can manage. It is difficult for us to remove the uncertainty of life in planning the taxes of this land.

The hon. Member for Workington made an eloquent speech to which the House listened closely. As I have cause to know, the hon. Gentleman has run a small business, although he did not allude to it today. Therefore, his remarks are apposite to the debate, with its preoccupation with this area. I join the hon. Member in having had a similar experience in that I also know what is involved in running and building a business. But the difference between the hon. Gentleman and his side of the House and our side of the House is that we believe that we need to release the resources of growth to provide solutions to the genuine problems to which he was referring. The difference between the Labour party and the Conservative party—I speak as somebody engaged in business during the Labour Administration between 1974 and 1979—is that the Labour Government overloaded the system and prevented the private sector from generating the growth to provide the resources. During the past five years, this Government have been singularly successful in ensuring the release of those resources.

Mr. Campbell-Savours

If that is the case, will the Minister tell me how a concession of £600 million to one man in London will help my unemployed workers in Workington?

Mr. Brooke

Both the hon. Gentleman and the hon. Member for Stockton South have intervened on the same point. The hon. Gentleman is making assumptions about the pattern of taxation, and deriving conclusions from it, when it is much more logical to draw conclusions about this taxation from the distorted effects that occur because taxation directs people into areas where they might not otherwise go.

The hon. Gentleman's speech would have been worthy of my right hon. Friend the Secretary of State for Education and Science, and the preface to his book on Samuel Smiles, with a ringing tribute to the entrepreneur. I do not disagree in any way with the hon. Gentleman' s observations about entrepreneurs, but some businesses go wrong, perhaps also because entrepreneurs stay in control of a business too long, which is sometimes because the tax structure prevents them from handing over the responsibility for the business earlier.

The hon. Member for Stockton, South raised a legitimate point about the effects of the taxes on the business community as a whole. If he looks at the pattern of businesses in the United Kingdom which, for example, employ more than 1,000 people, he will see that twice the proportion of our employees in the national work force work in companies employing more than 1,000 people compared with our competitors who have the smallest proportion. One must ask how far that concentration of employees in larger companies, with all its implications, particularly bearing in mind that it is not mirrored by our competitors, has been impelled and driven by our tax regime.

Mr. Wrigglesworth

No one will disagree with the Minister's disappointment at the figures which he has just quoted, but whether the cause can be ascribed to the taxation regime is a different matter. Will the Minister confirm what I said earlier, which was that only 5 per cent. of the capital transfer tax take comes from business assets?

Mr. Brooke

One cannot draw conclusions from the tax which has been paid. The problem is the tax which has not been paid as a result of people distorting their normal pattern of behaviour because the tax exists.

To return to the question asked by the hon. Member for Thurrock in support of the hon. Member for Workington, the rates and thresholds have not been fully indexed in line with the retail price index since 1979–80. The yield in 1985–86 is higher. Obviously, if hon. Members wish to pursue other aspects of the statistics, we can do so in future.

I know that there are hon. Members who wish to speak about hydrocarbons before the night is much older, so let me come to a conclusion.

The last time that I had the chance of speaking in Committee on the Finance Bill was in 1978; as a kind of mirror image, it was, I think, the last occasion on which the hon. Member for Thurrock (Dr. McDonald) was unable to speak in Committee on the Finance Bill. I recall arguing in Committee against the legislation of the last Labour Government because it distorted the behaviour of business men and caused them to act, purely for tax reasons, in a way in which they would not otherwise have acted. The legislation which we are introducing and which is encompassed by clause 80 confers on business men and on every other member of our society the freedom to order their affairs in terms of their own best interests, rather than causing them to take decisions simply because of fiscal imperatives.

Question put, That the clause stand part of the Bill:—

The Committee divided: Ayes 206, Noes 114.

Division No. 171] [5.40 pm
AYES
Alexander, Richard Brittan, Rt Hon Leon
Alison, Rt Hon Michael Brooke, Hon Peter
Amess, David Brown, M. (Brigg & Cl'thpes)
Arnold, Tom Bryan, Sir Paul
Aspinwall, Jack Buck, Sir Antony
Atkins, Rt Hon Sir H. Budgen, Nick
Atkinson, David (B'm'th E) Bulmer, Esmond
Baker, Nicholas (Dorset N) Burt, Alistair
Baldry, Tony Butterfill, John
Beaumont-Dark, Anthony Carlisle, John (Luton N)
Bellingham, Henry Carlisle, Kenneth (Lincoln)
Benyon, William Cash, William
Bevan, David Gilroy Chapman, Sydney
Biggs-Davison, Sir John Chope, Christopher
Blackburn, John Churchill, W. S.
Blaker, Rt Hon Sir Peter Clark, Hon A. (Plym'th S'n)
Boscawen, Hon Robert Clark, Dr Michael (Rochford)
Bottomley, Peter Clark, Sir W. (Croydon S)
Bottomley, Mrs Virginia Clarke, Rt Hon K. (Rushcliffe)
Bowden, A. (Brighton K'to'n) Clegg, Sir Walter
Bowden, Gerald (Dulwich) Cockeram, Eric
Bright, Graham Colvin, Michael
Brinton, Tim Conway, Derek
Coombs, Simon Merchant, Piers
Cope, John Meyer, Sir Anthony
Corrie, John Mills, Iain (Meriden)
Couchman, James Miscampbell, Norman
Cranborne, Viscount Moore, Rt Hon John
Critchley, Julian Morris, M. (N'hampton S)
Crouch, David Morrison, Hon P. (Chester)
Dickens, Geoffrey Moynihan, Hon C.
Dunn, Robert Murphy, Christopher
Evennett, David Nelson, Anthony
Eyre, Sir Reginald Neubert, Michael
Fallon, Michael Newton, Tony
Favell, Anthony Osborn, Sir John
Finsberg, Sir Geoffrey Ottaway, Richard
Fookes, Miss Janet Page, Richard (Herts SW)
Forman, Nigel Patten, Christopher (Bath)
Forsyth, Michael (Stirling) Pawsey, James
Forth, Eric Peacock, Mrs Elizabeth
Fox, Marcus Portillo, Michael
Freeman, Roger Powell, William (Corby)
Fry, Peter Powley, John
Gale, Roger Prentice, Rt Hon Reg
Gardiner, George (Reigate) Price, Sir David
Gardner, Sir Edward (Fylde) Proctor, K. Harvey
Gilmour, Rt Hon Sir Ian Pym, Rt Hon Francis
Goodhart, Sir Philip Rhodes James, Robert
Gorst, John Rhys Williams, Sir Brandon
Gow, Ian Ridley, Rt Hon Nicholas
Gower, Sir Raymond Ridsdale, Sir Julian
Greenway, Harry Robinson, Mark (N'port W)
Gregory, Conal Roe, Mrs Marion
Griffiths, Sir Eldon Rowe, Andrew
Grist, Ian Sackville, Hon Thomas
Grylls, Michael Sainsbury, Hon Timothy
Hamilton, Hon A. (Epsom) Sayeed, Jonathan
Hampson, Dr Keith Shelton, William (Streatham)
Hanley, Jeremy Shepherd, Colin (Hereford)
Harris, David Sims, Roger
Haselhurst, Alan Skeet, Sir Trevor
Hawkins, Sir Paul (N'folk SW) Speed, Keith
Hayes, J. Speller, Tony
Hayward, Robert Spencer, Derek
Hickmet, Richard Spicer, Jim (Dorset W)
Hicks, Robert Stanbrook, Ivor
Higgins, Rt Hon Terence L. Stanley, Rt Hon John
Hogg, Hon Douglas (Gr'th'm) Steen, Anthony
Holland, Sir Philip (Gedling) Stern, Michael
Hordern, Sir Peter Stevens, Lewis (Nuneaton)
Howarth, Alan (Stratf'd-on-A) Stewart, Allan (Eastwood)
Howell, Ralph (Norfolk, N) Stewart, Andrew (Sherwood)
Irving, Charles Stradling Thomas, Sir John
Jessel, Toby Tapsell, Sir Peter
Johnson Smith, Sir Geoffrey Taylor, John (Solihull)
Jones, Robert (Herts W) Taylor, Teddy (S'end E)
Kellett-Bowman, Mrs Elaine Temple-Morris, Peter
Key, Robert Terlezki, Stefan
King, Roger (B'ham N'field) Thomas, Rt Hon Peter
Knowles, Michael Thompson, Donald (Calder V)
Latham, Michael Thompson, Patrick (N'ich N)
Lawrence, Ivan Thorne, Neil (Ilford S)
Leigh, Edward (Gainsbor'gh) Thurnham, Peter
Lennox-Boyd, Hon Mark Townend, John (Bridlington)
Lloyd, Peter (Fareham) Tracey, Richard
Lord, Michael Trotter, Neville
Lyell, Nicholas Twinn, Dr Ian
McCurley, Mrs Anna van Straubenzee, Sir W.
MacGregor, Rt Hon John Viggers, Peter
MacKay, Andrew (Berkshire) Waddington, David
Maclean, David John Ward, John
McNair-Wilson, M. (N'bury) Wardle, C. (Bexhill)
Madel, David Watson, John
Major, John Watts, John
Malone, Gerald Wells, Bowen (Hertford)
Maples, John Wells, Sir John (Maidstone)
Marland, Paul Wheeler, John
Marshall, Michael (Arundel) Wiggin, Jerry
Mather, Carol Winterton, Nicholas
Maxwell-Hyslop, Robin Wolfson, Mark
Mayhew, Sir Patrick Wood, Timothy
Yeo, Tim Tellers for the Ayes:
Young, Sir George (Acton) Mr. Tony Durant and Mr. Francis Maude.
NOES
Abse, Leo Kinnock, Rt Hon Neil
Anderson, Donald Leighton, Ronald
Archer, Rt Hon Peter Lewis, Ron (Carlisle)
Banks, Tony (Newham NW) McCartney, Hugh
Barnett, Guy McDonald, Dr Oonagh
Barron, Kevin McGuire, Michael
Beckett, Mrs Margaret Mallon, Seamus
Benn, Rt Hon Tony Marek, Dr John
Blair, Anthony Mason, Rt Hon Roy
Boyes, Roland Meacher, Michael
Bray, Dr Jeremy Mikardo, Ian
Brown, Gordon (D'f'mline E) Millan, Rt Hon Bruce
Buchan, Norman Mitchell, Austin (G't Grimsby)
Callaghan, Jim (Heyw'd & M) Morris, Rt Hon A. (W'shawe)
Campbell-Savours, Dale Morris, Rt Hon J. (Aberavon)
Canavan, Dennis Nellist, David
Clay, Robert Orme, Rt Hon Stanley
Clwyd, Mrs Ann Owen, Rt Hon Dr David
Cohen, Harry Park, George
Coleman, Donald Patchett, Terry
Cook, Frank (Stockton North) Pavitt, Laurie
Cook, Robin F. (Livingston) Penhaligon, David
Corbett, Robin Pike, Peter
Craigen, J. M. Powell, Raymond (Ogmore)
Crowther, Stan Prescott, John
Cunningham, Dr John Radice, Giles
Davis, Terry (B'ham, H'ge H'l) Randall, Stuart
Deakins, Eric Raynsford, Nick
Dixon, Donald Rees, Rt Hon M. (Leeds S)
Dormand, Jack Richardson, Ms Jo
Douglas, Dick Roberts, Allan (Bootle)
Dubs, Alfred Roberts, Ernest (Hackney N)
Dunwoody, Hon Mrs G. Rogers, Allan
Eastham, Ken Rowlands, Ted
Edwards, Bob (W'h'mpt'n SE) Sheldon, Rt Hon R.
Ewing, Harry Shore, Rt Hon Peter
Field, Frank (Birkenhead) Short, Mrs R.(W'hampt'n NE)
Fisher, Mark Silkin, Rt Hon J.
Foot, Rt Hon Michael Skinner, Dennis
Foster, Derek Snape, Peter
Freeson, Rt Hon Reginald Spearing, Nigel
Gilbert, Rt Hon Dr John Steel, Rt Hon David
Godman, Dr Norman Stewart, Rt Hon D. (W Isles)
Gould, Bryan Taylor, Rt Hon John David
Hamilton, W. W. (Fife Central) Thomas, Dafydd (Merioneth)
Hardy, Peter Thomas, Dr R. (Carmarthen)
Harrison, Rt Hon Walter Tinn, James
Healey, Rt Hon Denis Warden, Gareth (Gower)
Heffer, Eric S. Wareing, Robert
Hogg, N. (C'nauld & Kilsyth) Wigley, Dafydd
Holland, Stuart (Vauxhall) Williams, Rt Hon A.
Hoyle, Douglas Wilson, Gordon
Hughes, Robert (Aberdeen N) Winnick, David
Jenkins, Rt Hon Roy (Hillh'd) Wrigglesworth, Ian
John, Brynmor Young, David (Bolton SE)
Jones, Barry (Alyn & Deeside)
Kaufman, Rt Hon Gerald Tellers for the Noes:
Kennedy, Charles Mr. James Hamilton and Mr. Ron Davies.
Kilroy-Silk, Robert

Question accordingly agreed to.

Clause 80 ordered to stand part of the Bill.

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