HC Deb 13 July 1988 vol 137 cc434-54

`(1) Any person who conducts a business which includes the provision of taxation services shall be required to be registered with the Inland Revenue in accordance with Regulations to be drawn up by the Board.

(2)"Taxation services" includes advice and work done in connection with computational matters as well as advice and work in connection with tax mitigation and avoidance and includes the circulation of literature or the placing of advertisements which make any reference to tax savings or tax advantages to be gained from any product or service.

(3)The Regulations shall include the requirement to file with the Inland Revenue and the Library of the House of Commons any literature, brochure, advertisement or other communication of a general nature issued in the course of the conduct of such business.'.—[Dr. Marek]

Brought up, and read the First Time.

Dr. Marek

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

As a result of the Budget and the Finance Bill, the remaining stages of which we are debating, the top 1 per cent. of the population gained more in income tax than the bottom 70 per cent. That is astounding. Perhaps people in the country at large do not realise that that has happened. If they did, their perception of the Budget's effects, which are not very great, contrary to the Government's expectation in March, would be even lower than it is now.

On average, since 1979, the top I per cent. have gained £100,000 in tax cuts, and, as a result of the Budget and the Finance Bill, they will gain another £10,000 each. Yet the average pay and average tax paid by ordinary men and women in the street have risen, because tax, as a proportion of GDP, was lower in 1979 than it is now. It was about 34 per cent. in 1979, and it is now 38 per cent. The average person in the street has not benefited from Tory tax-cutting policies. The Tory party cannot be regarded as a tax-cutting party. It is a taxing party for 90 per cent. of the population, and it is neutral for the remaining 5 per cent. It is a tax-cutting party for the super-rich—the top tax payers and the top income earners.

Our new clause represents an attempt to limit the extra tax avoidance that the super-rich enjoy, on top of all the benefits that the Government have given them in the form of tax cuts and other incentives to avoid paying tax. It is an attempt to limit avoidance by giving the country more information and by making tax advisers register as tax advisers and deposit in the House of Commons Library and with the Inland Revenue all the schemes and advice that is given to extremely wealthy people—the super-rich —so that they can avoid paying tax. Opposition Members are quite sure that if there were knowledge of what goes on in the tax avoidance industry, the country would not put up with such practices, and the Government would be forced to bring in far more tax avoidance measures.

I do not suggest that the Government and the Financial Secretary are not interested in tax avoidance measures. They are. I criticise the Government and the Financial Secretary because their perception of what is and is not allowable is wrong. The line has been drawn too far to one side. We should like to draw it a long way further back towards the middle ground.

Mr. Christopher Gill (Ludlow)

Is the hon. Gentleman aware that the Budget has dealt a serious blow to the tax avoidance industry and that many people who were involved in that sector of the economy now find themselves almost out of work?

Dr. Marek

If the hon. Gentleman were close enough to me, he would see tears rolling down my cheeks. Perhaps he could give us a few more details about exactly what the Government have done and about what type of tax adviser, rich person or top income tax payer is now out of work. I do not believe that that is the effect of the Budget. If the hon. Gentleman knows something different—this is the Report stage, and we have plenty of time—I shall be delighted to give way to him again so that he may enlighten the House on precisely what he means.

I make it absolutely clear that the Budget has not benefited the super-rich only because of the income tax concessions. It has benefited them because of the capital gains tax concessions also. Only a few of the rich will benefit from the rebasing of the capital gains tax. It is fair to say that the capital gains tax has been increased to 40 per cent. for the small band of very wealthy income-receiving people.

I welcome that, and I am not afraid to say so. By and large, the Government have given real gifts in the form of capital gains tax, because of the rebasing provisions. It is obscene that the richest will benefit from the lowering of the inheritance tax rate from 60 per cent. to 40 per cent. The rate has gone up for those who paid inheritance tax at the rate of 30 per cent., but they are not super-rich, they are perhaps only moderately rich. The Government do not look after them; they look after the super-rich. I wonder whether the country knows exactly what is going on and what advice the tax advice industry is giving to such people.

Mr. Winnick

Is there anything strange in what has occurred? But the Tory party is in politics to look after the interests of the very rich. It always has done so and always will. Once it has a majority in the House of Commons, why should it not look after its friends?

Dr. Marek

One can certainly look after one's friends. We all should look after our friends. We are all on the same planet, and we are all human beings. But the Tory party looks after its friends at the expense of other people who should be its friends. That criticism can be levelled against the Tory party.

8.45 pm

I shall show that, in spite of all the tax cuts and changes in the inheritance tax bands and in capital gains tax, there are still tax avoidance schemes. They are still as plentiful as ever. Although they say that they try to do something about them, the Government still allow them to continue. Tax avoidance schemes provide even more benefits for the rich and the super-rich, on top of all the benefits that they received in the Budget.

Tax evasion—not avoidance—seems to be out of control. There seems to have been a seven fold increase since 1979, yet the Government are not prepared to appoint enough tax collectors and tax inspectors. If they were to do so, the money that they would expend on the training and appointment of such officers would be repaid by the lessening of tax evasion and the extra revenue that the Treasury would receive. The Government do not do that. That is inexplicable, except on the basis that they look after their own friends to the exclusion of everyone else.

The effect of our new clause would be to place tax advice on record in the Library of the House of Commons. It would make the job of the Inland Revenue a little easier. Of necessity, various tax advice institutions, companies and individuals would send all their literature and advice to the Inland Revenue. The public would have a greater awareness. As a result, the Government would be forced to act and bring forward more anti-tax avoidance schemes and measures than they have so far.

In the past nine years, many tax advisers and consultants have done well out of the Government. People have been appointed as consultants left, right and centre. I do not criticise that. There is probably something in it. The Government should know what the poacher is doing. I do not use the gamekeeper-poacher analogy in any disrespectful way. Institutions and people have benefited from the underwriting that has taken place as a result of the Government's privatisation measures. They have reason to thank the Government, but they should not thank the Government for not finding out what advice they give their clients about how to avoid paying taxes. It is the duty of every individual to pay his or her taxes—not more than they must pay, but they should pay a fair amount. If there are loopholes, boltholes and tax havens, the Government should know about them and do

I shall give the House some examples. The first is the business expansion scheme—a clear loophole. Clear abuse is made of that scheme. It represents about £85 million of lost revenue per year. It is used not to create wealth for industry but to plough money into hotels for the homeless. Is that what the scheme was invented for in the first place? If not, the Government should do something about it. The scheme is being used to fund private hospitals and, at the same time, run down the National Health Service. As a result, the National Health Service has become two-tiered.

The scheme is being used also to fund nursing homes and even private schools. A taxpayer with an income of £40,000 should at the top rate pay £16,000, but he can wipe out his liability by funnelling that money into an approved business expansion scheme. If the Government could show that those schemes contribute to industry, to manufacturing production, to wealth creation, or to increasing employment, I would not be saying what I am. However, we believe that those schemes are squalid, shabby tax boltholes that ought to be stopped by the Government at the first opportunity.

The second loophole exploited by the super-rich is enterprise zones. Pop stars, the idle rich and the very wealthy have all been able to set unlimited funds against their tax liabilities by leasing factory units and then renting them out. They are not factory units that they have inspected and which they feel will help to provide wealth in depressed areas or in regions of high unemployment. They have not even seen those factories, but by leasing and then renting out such units, they avoid their tax liabilities.

The resulting forgone tax revenue does not go to depressed areas or to enterprise zones either, because it is siphoned away by the super-rich for their own purposes. Probably, they do not even live in this country. Areas desperately needing investment do not receive it. It now costs about £30,000 to create one job, and the discontinued regional development grants created jobs for a lot less money than that. It is estimated that £60 million per annum is lost in that way.

Our new clause would compel all those who advise pop stars and the idle rich to commit their advice to paper, and then that information would be placed in the Library so that we could all read it. We could then communicate in turn to the public what is happening in the financial life of this country, and I believe that there would be public revulsion at some of the practices that the Government allow.

Executive share option schemes were introduced by the Government in the Finance Bill 1984. About £100 million per annum is lost through such schemes. Some schemes are available to all employees, but the majority of them are designed for executives. They benefit the 50,000 top-paid executives who are able to buy options if the market goes up, as it did. The market can also go down, but in the long term, it usually goes up. Those executives are able to take up their options after three years and then enjoy their capital gains.

Those gains are not achieved through hard work or because of any increased profits, but are the result of the perception of the City and of international capital as to what are the prospects of enjoying a good rate of return from this country in the near future. I do not refer to the long term, because there the time scale is too long. I am sure that you, Mr. Deputy Speaker, will rule me out of order if I dwell too long on that subject, although I may say that the long-term future for this country is not very sound.

Bed-and-breakfasting is another area of activity that the super-rich can use that is not open to the man in the street. The Financial Secretary to the Treasury nods his head—I suppose that the ordinary man in the street can benefit from it, but in practice it is something from which the rich really benefit. If the Government would go some way to meeting the new clause, it would be shown whether it is the ordinary man in the street who exploits bed-and-breakfasting in selling his British Airways shares, or whether it is the rich and the institutions who actually make use of that technique. If the Financial Secretary can tell me who does, I shall be delighted to know.

My final example is that given by my hon. Friend the Member for Dunfermline, East (Mr. Brown), the shadow Chief Secretary. His question to the Chancellor was answered by the Financial Secretary to the Treasury. My hon. Friend asked: if he will estimate the tax liability in respect of the tax year 1988 of a married man aged 51 with no dependent children who is in receipt for that year of a salary from his employer of £1 million"— there are a few such people around— assuming he has a mortgage of £30,000, a BES investment of £40,000, an investment of £810,000 in a new enterprise zone unit trust of which 94 per cent. is attributable to building costs and where 50 per cent. of the purchase price is borrowed in circumstances where guaranteed rent receivable equals the interest outgoing, and who makes a contribution to a retirement annuity scheme amounting to £195,000. That is some form of tax avoidance scheme.

Hon. Members may guess at the answer to the question and how much tax that wealthy person will pay. The Financial Secretary gave a holding answer on 12 April because clearly he had to consult his tax advisers. On 18 April he replied: Liability to income tax in 1988–89 would be nil."— [Official Report,18 May 1988; Vol. 133, c. 503–504] That is what our new clause is all about. Tax avoidance measures are being used not by ordinary men and women in the street but by the super-rich, who are so wealthy that the average person cannot dream what type of lives they have and what considerations shape their thoughts during the working day.

The country could do with knowing more about the tax avoidance industry. It is not one that creates wealth for the country but that creates wealth for the idle and the super-rich. Let us have no more headlines of the kind that appeared in the Evening Standard on 12 July— The great British tax haven"— as if that were the sum total and the whole aim of the present Conservative Administration—not a country creating wealth through productive industry, hut a tax haven. As to the vain hope that the idle rich will come to this country and pay their taxes here, time will tell who is right about that. Let us have no more headlines of the kind that appeared in The Sun on 16 March: Lotsa lovely lolly. Lawson cuts taxes for all. There is now a sour taste to that tax-cutting, given the 2.5 per cent. hike in interest rates and the fact that for the average person, any tax cut has now been taken away by the increased mortgages that are about to be imposed. Let us have no more headlines such as Burton boss"— I shall not read the next words— is £5,000 a week better off". That is immoral and obscene, and cannot be justified by any Government.

I have here a book that I should like to recommend to the Financial Secretary. It is called "The Rich and the Super-Rich", by Ferdinand Lundberg. I thought that the Financial Secretary would appreciate it. It has an excellent chapter on "The Great Tax Swindle", with sections headed "Tax-free Fortune Building", "How to Get Rich by Not Paying Taxes" and "The Baited Trap"—which explains how to set up the public for the big tax swindle"—

Mr. Winnick

If my hon. Friend goes on, all Tory Members will want a copy.

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Dr. Marek

The book is about 20 years old. Things have changed since then.

Another heading is "Valuable Wives". I need not remind the House that, with the disaggregation of income and capital taxation, wives will become valuable to the super-rich. The position has changed for the worse rather than for the better. Other sections are headed "Tax Support for Rich Children", "Other Ways of Income Splitting" and "Additional Tax Dodges", and there are six or seven more sub-headings in the chapter.

The book dwells more on the American than on the British experience, but the introduction is relevant to Britain. Perhaps we could dwell on this story another time. The Government take pride in saying that our present fiscal regime is more like America's than that of any other European country. The second paragraph on page 9 of the book reads as follows: Thus the picture is of a society where the rich, despite a well-publicized and apparently stringent tax regime, continue to pre-empt a very large share of society's resources in the United Kingdom, while the poor and the moderately well-off, though relieved of much of the pre-war burden of heavy unemployment"— times have moved on: we cannot say that any longer— and with their incomes boosted by the earnings of working wives, have in fact failed to capture any significantly larger share of life's good things for themselves. Certainly there are many more good things; but that is not quite the point. And for the really poor, particularly the old and lonely, the whole equality notion has a pretty sour ring. The new clause is a small crumb—a small step towards bringing morality back to the governance of our affairs —but I commend it to the House.

Mr. Hanley

Some of us who have been listening to the hon. Member for Wrexham (Dr. Marek) may feel that this is the first time that the new clause has been discussed properly. The hon. Gentleman's diatribe was more an argument against reducing rates of taxation than in explanation of the new clause.

I must declare my interest as the parliamentary adviser to the Institute of Chartered Accountants in England and Wales. I have been a chartered accountant for nearly 20 years, and I strongly disagree with the hon. Gentleman. What he is really saying is that it is wrong to be accurate, and wrong to seek advice on the law. The hon. Member for Walsall, North (Mr. Winnick), who is no longer in the Chamber, shouted from a sedentary position at many points in his hon. Friend's speech. Would he say that it is wrong to seek guidance on immigration law? How about those who give advice on social security benefits? Is it wrong for citizens advice bureaux to give advice? I think it entirely right for the United Kingdom Immigrants Advisory Service, of which the hon. Member for Walsall, North is chairman, to give proper advice on the law as it stands.

Dr. Marek

If the hon. Gentleman reads tomorrow what I said in my speech, he will see that I did not criticise the seeking of advice. But it is the duty of Government to stop tax avoidance when they feel that there are too many loopholes, or that the line has been drawn too far.

Mr. Hanley

If the hon. Gentleman had stayed on that tack throughout his speech, I would have welcomed it. He mentioned briefly that the advantages of forestry had been removed in the last Budget, and I am sure that the Government will remove any other so-called loopholes that are patently immoral. But he has not answered the question whether it is right to give advice on this branch of law. He cast all sorts of aspersions on those who give tax advice, as if to say that giving advice to a person who merely happens to be wealthy is wrong, but it is right to advise those who are not wealthy. That is a strange, twisted argument, which I am not prepared to support.

Every shopkeeper—how many shopkeepers can be genuinely classed as wealthy?—needs and should seek advice on the accuracy of their accounts, and therefore their taxation. All tax advisers —no, all good tax advisers—greatly help the Inland Revenue with the collection of data. If it were not for those who help individuals to calculate an accurate tax assessment, the Inland Revenue would have to spend millions, if not billions, of pounds calculating the correct amount of taxation. I am certain that the Inland Revenue would hate to see the demise of this industry which the hon. Gentleman seems to dislike so much.

I turn to another point about the new clause and to what the hon. Gentleman called his hideous threat to kill off the taxation industry. Let us analyse that threat. The hon. Gentleman suggests that every organisation giving tax advice must send one copy of any generally issued statement of advice to the Inland Revenue and to the Library of the House of Commons.

In my top left-hand pocket I always keep a little card, the same size as a credit card and encapsulated in plastic. It shows the rates of taxation and is issued by Peat Marwick McLintock. If that company is kind enough to send it to me, I think that I should admit its origin. It also states the national insurance contributions for the year, the VAT rates and exemption rates, the rates for corporation tax, for capital gains tax and for inheritance tax and the rates of taxation for company cars. I am sure that the hon. Gentleman will admit that those rates increased dramatically in the last Budget.

There is not one word of advice on that card apart from the truth. However, that is exactly the type of "wicked" document which according to the hon. Gentleman pays pounds into the hands of the super-rich and which would have to be filed in the Library of the House of Commons because it is an item which is "issued generally". And yet not one word of specific advice does the hon. Gentleman want to be placed in the Library or sent to the Inland Revenue.

Dr. Marek

rose

Mr. Hanley

I shall give way for the last time because I must be brief.

Dr. Marek

I am grateful to the hon. Gentleman for giving way but he must get his facts right. What about a person with a company car which happens to be a Rolls-Royce? Under the Budget changes, instead of paying £5.26 a week for the privilege, he will pay £6.01 per week. That is hardly a huge change.

Mr. Hanley

The hon. Gentleman is trying to wriggle out of his embarrassment because I am exposing the truth about the new clause. However, he failed to mention the substantive point that I am making. What he would have filed in the Library of the House of Commons and with the Inland Revenue are items of a general nature that are circulated to the clients of tax advisers, not specific advice. If, as he says those general items are issued in the normal course of business, probably 5,000, 10,000 or perhaps even 20,000 such documents are being circulated. It would not cost a firm of chartered accountants a jot or tittle extra to send an extra two to the Inland Revenue and the Library. That is not a reason for saying, Do not vote against the new clause. Instead, it is an argument for saying that it would not have the effect that the hon. Gentleman believes that it will have of cutting that "immoral industry" like a scythe.

My last point refers to something that the hon. Gentleman did not say about the new clause, perhaps because he has not yet read it. It states that tax advisers must be registered. Whom is the hon. Gentleman serving? If one registers a person calling himself a tax adviser, that person might have no qualifications whatsoever but might then gain credibility from being on the register, as it might be seen as a mark of competence. Plenty of people call themselves tax advisers but are totally unqualified and should not be on any register. The general public. should look at the professional qualifications of those who give tax advice.

The register would give those who are unqualified a status that they do not deserve. Those who are listed under section 389 of the Companies Act 1985 or by the Institute of Taxation are properly qualified in tax advice although others may be properly competent. To insist on registration would dupe thousands of people who would read the names on the register as if they were in "Yellow Pages" and turn to those people because the hon. Gentleman will have given them some credibility. The new clause is absolute nonsense. It will not have the effects that the hon. Member for Wrexham claims and it will have disastrous effects on the ordinary man in the street who should look to proper qualifications and not a mere registration.

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

New clause 10 is important in so far as it is about professionalism and transparency. I consider that it would have some effect on accountants who are often imprisoned behind duties of confidentiality to their employers about how they might operate.

I want to draw attention to the imprisonment of accountants. By imprisonment, I do not mean imprisonment in prisons, but imprisonment within that duty of confidentiality. Subsection (3) of the new clause states: The Regulations shall include the requirement to file with the Inland Revenue and the Library of the House of Commons any literature, brochure, advertisement or other communication of a general nature issued in the course of the conduct of such business. In so far as it deals with communications, in certain conditions it must include communications from accountants and other organisations within those organisations to their employers.

I wish to draw the attention of the House to a particular communication. I intend neither to state to whom the communication was addressed nor to identify from whom it was sent, but I can say that the document is marked "Private and Confidential". I read it to the House as an example of the problems that exist and which were dealt with by the particular correspondent.

Mr. Hanley

This was not issued generally.

Mr. Campbell-Savours

Actually, it was. It was generally issued in so far as it was made available to me and to others at a later stage. It states: Dear Mr. X, I understand that you will not be available at our meeting this afternoon. Since it was a fortnight since our last abortive meeting, I feel I must write to you on certain matters whilst there are a number of items outstanding, that is to say, VAT on racehorses, prospectus preparation and computerisation of accounts, the subject that concerns me the most has tax implications. Some of these practices have been discussed briefly at meetings between ourselves and Mr. Y, and refer to the following: the practice of paying round sum expense allowances that are fixed and have no relation to expenses incurred, and the practice of paying expenses to part-timers in lieu of pay to avoid the wages of the same exceeding national insurance contribution thresholds". This document is witnessed by a representative of the legal profession. A further letter states: I thought I had substantially covered points raised in my memo. The date is given, but I shall not reveal it. However, to reiterate, I have sent to you a draft memo dealing with the matter of expenses. I have provided details of those persons whose salaries are deemed to be paid by separate group companies. Further, I have indicated those whose workload is spread over different group companies, my advice was that wages and salaries should be aggregated for national insurance purposes. My advice on expenses in lieu of wages, the granting of non-repayable loans and the granting of tax free bonuses was that they be abolished. The only item on which I had to comment was the matter of introducing stand-by allowances in respect of weekend working. I have to advise you that these would be subject to tax. At our last meeting on the subject some two weeks ago, I asked that in case you did not agree with my advice and that of my colleagues you refer the matter to a suitable firm of accountants i.e. Deloittes for their judgment.

Mr. Hanley

Will the hon. Gentleman give way?

Mr. Campbell-Savours

No. I have no intention of giving way. The letter continues: The practice of yourself withdrawing money and having it debited to travel expenses, whilst I appreciate it is against proper business expense, the Inland Revenue may infer differently. The practice of having emoluments of certain personnel spread over different companies to avoid national insurance contributions, in spite of the fact that they have only one implied contract of employment, and the practice of paying tax free bonuses, and the practice of granting loans and the cancellation therefore without action as to the tax implication. One of the worrying features is the general talk in the office on this matter. Further I believe other people in accounts, and indeed, my predecessors, may have advised you on these matters. You said you would be seeing them within the next"— the period—is identified in the letter. Have you had the chance to see them? If not, perhaps I could see them with you. Perhaps it might be helpful if I explain why I have pursued this matter for nearly six weeks. Firstly, you proposed to go public. Whilst you and I might disagree about the time scale, I think it common ground that the necessary investigative accountants will turn over every stone in the organisation. They will, after all, not he responsible to the company but to the public who subscribe for shares. In my opinion, if they encounter a history of tax evasion, they will at least wish to raise provisions against outstanding liabilities. Secondly, the Inland Revenue have stepped up their emphasis on PAYE audit. The likelihood of such an audit of company Y has been increased by the recent television exposure on the Z affair. 9.15 pm

I am not prepared to identify that tonight. It is my opinion that in that eventuality the Inland Revenue would have a field day in the face of such blatant and naive tax evasion. The point here is that faced with such a history, it would be far preferable to be legitimate rather than still carrying on in the same vein. This is the point"— the person to whom the letter is sent is then identified— I worry about most. We will not, as I have said before, serve your interest best by adapting the existing system or trying to invent other dubious schemes. We must abolish the practices. To do otherwise might prove extremely costly. Thirdly, and lastly, you must appreciate my position. I am a chartered accountant and as such have certain responsibilities. Bluntly, I cannot and will not be party to any illegalities. Whilst in your employment it is my duty to you and to my profession to seek and pursue a return to legitimacy. Time has elapsed since our first conversation and I feel I must respectfully ask you at your earliest convenience for your agreement and proposals to remedy the situation. Any person who attaches a name to the sender or recipient of that letter may find himself the subject of a legal action. I advise people to be most careful in doing so. I draw this letter to the House's attention because I feel that correspondence of this nature should be brought before Parliament. It is in the public interest that we assess the implications of correspondence of that nature in so far as we have here what is believed to be a reputable company, allegedly, in the view of an accountant, involved in practices that infringe standards that the Inland Revenue and society as a whole expect.

The new clause moved by my hon. Friend the Member for Wrexham (Dr. Marek) would deal with matters of that nature. That correspondence might have found itself in the hands of the Inland Revenue at a stage earlier than it subsequently did.

Ms. Joyce Quin (Gateshead, East)

I would like to say a few words in support of the new clause and the issues raised by my hon. Friends. The new clause contains a useful measure and it is one that the Government could easily incorporate into the Bill. It would ensure that those giving advice in taxation matters did so in a responsible way and were not engaged merely in encouraging different forms of tax evasion and tax avoidance.

The hon. Member for Richmond and Barnes (Mr. Hanley) said it was not wrong to give advice. That is true, but the new clause, if accepted, would show us whether particular forms of tax break were being over-encouraged or over-used and would also allow the Government to work out whether the literature sent out was of an acceptable standard.

The hon. Member for Richmond and Barnes mentioned the forestry tax break. If the new clause had been in effect in previous years, the misuse of that forestry tax break would have been spotted much earlier. We would have been able to see how widespread was the advice given to people to go into forestry, thereby ruining large tracts of the countryside, and corrective action would have been taken much earlier.

Mr. Hanley

The Opposition must admit that many chartered accountants send copies of the information that they have issued generally to their clients to the Inland Revenue in support of their advice and of the applications and claims that their clients are making to the Revenue. Accountants are not at all secretive about the advice that they give generally. I disagree with the hon. Member for Gateshead, East (Ms. Quin) and her hon. Friends about the new clause because not a single word in the letter that the hon. Member for Workington (Mr. Campbell-Savours) has just read out would be placed in the Library of the House under the terms of the new clause, as the information in it was not issued generally. It was a specific letter and would not be required by the new clause to be lodged in the Library or with the Revenue.

Ms. Quin

I still believe that the new clause would be an extremely useful step. We do not say that it would cure everything, but the hon. Gentleman should consider it along with the other amendments tabled by the Opposition in Committee which, unfortunately, were not accepted by the Government. The Opposition tabled a range of amendments to deal with the problem of tax avoidance. We proposed an obligation for auditors to report tax fraud and that Britain should combine with other countries in the international campaign against tax fraud. Unfortunately, the Government did not accept those amendments. The new clause should be considered as one of a series of measures and not in isolation, although it has to be discussed in isolation on Report.

My hon. Friend the Member for Wrexham (Dr. Marek) pointed out that the problem of tax avoidance has increased during the Government's term of office. That has been shown by the overall amount of money that has been estimated to have been lost to the Exchequer and also in the number of cases that have been brought forward. It is true that the Government have recognised that tax avoidance and tax evasion are problems, but they seem to think that they were problems brought about by high and, as they called them, punitive tax rates. That seems to suggest that top taxpayers are especially dishonest in their rush to engage in tax avoidance schemes, yet although taxes have come down the problem of tax avoidance has not decreased.

We believe strongly that better safeguards and measures are necessary to tackle the problems. If information were given to the Government, to Parliament and to the general public, as the clause proposes, we should be in a better position to decide what further measures were necessary and perhaps a code of practice or new rules might be introduced to deal with the problem more effectively. It is true that that might result in an increase in Inland Revenue staff, but we would welcome that because we believe that staffing levels are hopelessly inadequate to deal with large-scale tax avoidance and tax evasion.

Our proposal might help the Government's image. Their nine years in office and, in particular, the Budget have led them to be seen as friends of the very rich and of tax avoiders. Money saved as a spin-off from such measures would leave more money for the worthwhile social purposes on which the Government have been so reluctant to spend money.

The Government have been generous, indeed wildly over-generous, to the richest, but they certainly have a duty to see that those taxes which are still imposed are properly and duly paid.

Ms. Hilary Armstrong

I support new clause 10, not because it would solve all the problems, but because it would signal to the country that the Government took tax avoidance as seriously as over-claiming benefit at the other end of the scale.

The Government frequently complain that we allege that they do not seem to care about people on benefit. I would make those arguments elsewhere. We can say that with such fervour and it is agreed with such fervour because of the great difference in their language and attitude towards people on benefit and those at the top who try to avoid paying tax.

It has often been said to me that in this debate Back Bench Members seem to refer to their parents. My father often used to say of these matters that so long as something is legal and one can get away with it, it is all right. I do not believe that. Some actions are legal but only because they are contrived to meet legal requirements. In every other sense they involve avoiding one's responsibility to meet commitments to the community by paying taxes which are due.

If an individual goes to his tax adviser and says, "I am not interested in avoiding tax; I wish to pay what I should pay and to ensure that my accounts are straight and that it is clear what I am doing," the adviser will reply, "You must be crazy. There are all sorts of ways in which I can push bits of money here and there so that you do not have to pay large sums in tax." My hon. Friend the Member for Wrexham (Dr. Marek) showed that it was still possible for a millionaire to avoid paying any tax by allocating money for particular purposes. Yes, it is strictly legal, but is it right? I do not believe that anyone would want to defend that as right.

The new clause addresses the Government's responsibility to demonstrate their even-handedness and their concern to discourage tax avoidance as much as claiming benefit to which one is not entitled. The Government have a moral problem which is also a political problem. We are not encouraging people to go outside the law. We are saying that it is not right that the law should allow people to avoid their responsibility of contributing to the public purse when they can afford to.

I accept that the new clause may not have the exact effect that we seek. That is because there are tax avoidance experts in this country who will wangle their way around almost any device that the House tries to fashion. The tragedy is that they can advertise in weekly papers with no comeback from the Government. We do not hear the Government saying that it is disgraceful that such people advise individuals and companies on how to get around the letter of the law. No such condemnation is heard.

Acceptance of the new clause, or a commitment by the Government to reword it so that it meets the general point, would be a signal to those companies and individuals that the Government were not prepared to support such skirting around and abuse of the thrust of the law. The Government and, more importantly, the House, should say that. If we are interested in demonstrating that we believe in one nation with equal opportunities for all, without some people seeming to celebrate getting out of their public responsibilities, the House should send a clear message that it does not tolerate and will work against the sort of tax avoidance schemes of which we have heard such good examples this evening.

I hope the Government will think about this seriously. It is a moral and a political issue that is concerned with what is right—not what can be got away with.

9.30 pm
Mr. Morgan

I want to make three brief points, one of which follows on from what my hon. Friend the Member for Durham, North-West (Ms. Armstrong) has said.

The new clause is not an attack on the chartered accountants' profession—anything but. It is a way of trying to ensure that income taxation, which the Government have thought of as a diminishing aspect of taxation—they much prefer value added and other expenditure taxes —should not be seen as a voluntary form of tax. It should be seen by everyone as a means of paying one's dues to society—paying for civilisation, for schools, playing fields and so on. Income tax cannot be voluntary; it must be part of the system in which everyone pays according to his need a proportion of his income, because that is how we finance public expenditure on defence, schools and other things.

In order for the tax not to be seen as a voluntary form of taxation that people can avoid paying, we must not create a society in which people start entertaining that sort of ambition. We must stop the notion that people are mugs to pay income tax. In the past nine years there has been an increasing emphasis on reducing income tax and top rates of tax, as though in some way they drove pop stars abroad and so were destructive of civilisation. The Government have started to create a climate in which taxation, particularly of income, will increasingly be seen as part of the past, with no role to play in the future. And tax advisers play a vital role in that.

When we discussed this subject in Committee, we made great play of the fact that tax advisers and chartered accountants should be happy to remember not only that they are being paid by their clients in a proper manner, but that they have duties to their profession. They have their charter because they are expected to behave in accordance with it, in the same way as doctors and dentists, who hang their framed diplomas in the corners of their waiting rooms, provide a professional skill that has been tested by an appropriate body.

Not all taxation advisers, as the hon. Member for Richmond and Barnes (Mr. Hanley) said, are qualified, but they have certain obligations, to society as well as to their clients, to ensure that there is fair play between the former and the latter, who do not want to pay more tax than they are due for but who should be advised on methods of paying less than their due. Therefore, we opted for a registration scheme.

In Committee we suggested that, when a case went to court, the Inland Revenue and the courts should be able to look at the working papers. We do not ask for that when a case does not go to court, because we do not want any breach of confidentiality. There were howls of outrage from Conservative Members who worked for professional bodies. They said that that would be completely impossible. Professions such as accountancy have chartered bodies because they are expected to provide a minimum professional standard and because they are part of society, which has given them charters and the status that goes with them. A royal charter shows that a profession is not a cowboy outfit.

We ask for equality of treatment in the way that the Government approach the problems of unemployment and other benefit fraud and of tax fraud. During the Whitsun recess, a major television spectacular about the Department of Health and Social Security showed the sweep that it had organised to catch people making fraudulent benefit claims. We are not in favour of fraudulent benefit claims by people who are working, but do we ever see similar treatment of tax fraud? There is no parity between the way that the Inland Revenue goes about its work of minimising tax evasion and the way that the DHSS officers catch people on building sites. Until there is parity, this will be a divided society. One solution would be the registration of taxation advisers, so that they can both work with the Inland Revenue, as watchdogs on professional clients, and insist that their clients pay their dues to society. Taxation advisers are not there simply to help clients avoid paying their dues to society.

Mr. Henderson

I am grateful for the opportunity to say a few words on the new clause. I thought that I would be saying a few more words, but time does not allow.

The point I want to make emerged more than once in Committee and in the House. The Opposition have challenged capitalism before, and may do so again, but that is not what we are about this evening. We are asking for a bit of honest capitalism. We have already had a debate about full information being made available to ordinary people looking for credit. We are asking here for full information to be made available to potential investors, so that they know where their money is going and the risks that they will be taking. Full information must also be made available to society so that it knows where the Government are providing incentives for investments. We hope that that will be in the interest of all of us. It is really about honesty.

That is borne out by enterprise zones. Those who take a keen interest in the City—I know that some Conservative Members are probably away from the House preparing for their activities in the City tomorrow rather than being with us this evening—will know about the developments in loan finance. Industrialists and corporate organisations no longer rely on direct finance from clearing banks. It is far more usual for them to go to some third or fourth stage removed financial intermediary, which is ultimately laundering money, much of which probably emanated from clearing banks. It is right that people who are giving funds to organisations or who are borrowing from them should know what is happening. That is why the organisations should be registered.

In relation to enterprise zones, I wonder how many people know about the Laser 1988 Trust which services clients of Johnson Fry. No doubt it is a reputable organisation, but most people would not know whether it was reputable or not because it is probably not registered. There have been many reports on enterprise zones. I am sure that the Government are disturbed at the cost of providing a job in an enterprise zone compared with the cost of other measures under section 7 expenditure.

If we want to see sufficient public expenditure, we know that tax subsidies for property investments in enterprise zones are a bad way of using public money and a high cost means of providing jobs. If companies like Laser 1988 Trust which are involved in attracting funds for this purpose had been registered, it might have emerged sooner than seven years after the establishment of enterprise zones that they were not the best way of developing areas that need to be developed or of creating jobs.

Not only investors but everyone would have known that these companies were offering 100 per cent. first-year tax allowances, large investments in London docklands in retail, office and restaurant developments, with a 25-year guarantee of income, regardless of the subletting position, and exciting potential for capital growth. A financial article says: Colegrave Johnson Fry Ltd consider that this is the most important opportunity that has been created in tax shelter for many years. Had that company been registered and had the information about it been made public, we would all have known that it is about tax avoidance schemes and tax shelter and has nothing much to do with the creation of jobs. With the proliferation of such companies, many of which are subsidiaries of investment trusts, we have a new development in the financial world. If we believe in honest and open capitalism, with the maximum information available to the participants, there is a need for new clause 10, which insists on the registration of companies which want to get involved in this business.

Mr. Norman Lamont

There is nothing like the subject of tax avoidance to make the Opposition look more cheerful. We have had subdued debates, with Opposition Members in a subdued mood, but suddenly the smiles have reappeared as we have devoted nearly a full hour to the subject of tax avoidance. The hon. Member for Wrexham (Dr. Marek) has been able to return to the subject of the super-rich. He has as big a romance with them as Scott Fitzgerald did, but he takes a less benign view of them. However, it enabled him to read from a book, suitably yellow, published 20 years ago, telling people how to avoid tax under the Labour Government who were then in office.

The new clause, if it is to be taken seriously, would serve little purpose. Opposition Members may have wanted simply to air the issue of tax avoidance, which I agree is a serious matter. I want to remind the House of some of the things which we have done to counter tax avoidance. I do not believe that the new clause would achieve anything. The idea that the registration of tax advisers would help the Revenue is wrong. Unfortunately, the Revenue spends much of its time answering telephone calls from tax advisers and knows exactly who they are. We have had to curtail some of the interchange between tax advisers and the Revenue precisely because it is not proper for the Revenue to be involved in discussions such as have taken place in the past, which have amounted virtually to clearance. There is no difficulty for the Revenue in knowing who tax advisers are.

The hon. Member for Cardiff, West (Mr. Morgan) is right to say that sometimes working papers can shed light on particular problems. He will recall that we have taken some new powers under the Keith committee proposals. In general, the problem is not the hidden nature of the devices used for tax avoidance. After all, unless people intend to behave illegally, they have to make a tax return and show precisely the device that they have used to minimise their tax liability.

9.45 pm

One must distinguish between avoidance, evasion and something in between, which some people call "avoision". Evasion is very much a matter for investigation and prosecution. Avoidance is, of course, legal. It involves exploiting reliefs passed by the House and it is a matter for the House to debate whether it wishes, for example, reliefs on forestry to continue. That will not be helped by registering tax advisers. Then there is the grey area of "avoision". That is a matter of balancing whether reliefs should remain available as a matter of Government policy and deciding whether some schemes are artificial. That sometimes means that the Inland Revenue has to take cases to court. We have had some notable victories. A recent case probably saved about £1 billion of revenue. That is a much more fruitful way of approaching the problem.

I cannot believe that Opposition Members think that the new clause serves any purpose. The Revenue has no difficulty in obtaining knowledge of those people who give tax advice and of their activities. Revenue officials have to deal with those people every day in correspondence over individuals' and companies' tax affairs. The proposals would also be a significant resource cost for the Revenue and would not add to its knowledge of the work involved. There is no difficulty for the Revenue in discovering such information.

The hon. Member for Workington (Mr. Campbell-Savours) read out a letter, which I shall study, although it would not be appropriate to comment on it here. If the hon. Gentleman believes that the law is being broken, he will no doubt reveal the names of the people involved in the matters discussed in the letter, and we shall certainly consider those. However, I am certain that the new clause would not catch the sort of activities—if that is a suitable word—described in that letter. The clause does not require people to deposit in this House or forward to the Inland Revenue working documents or letters to clients. It is a matter of general promotional literature, and that would not be covered by the clause.

I am a little surprised at the attitude taken by Opposition Members. Surely they do not believe that it is necessary to make tax advisers register with the Government to discover that the business expansion scheme, enterprise zones or forestry are being used to reduce tax liability. After all, that has been the Government's policy. The Government have deliberately passed those reliefs because they believe that they serve a purpose.

The hon. Member for Wrexham said that he does not approve of the business expansion scheme. I am sorry to hear that. A couple of years ago, the expansion of the scheme was welcomed by the Leader of the Opposition. It has contributed very much to finance for smaller businesses and has raised additional finance that would not otherwise have been raised.

Furthermore, in this Finance Bill we have targeted the business expansion scheme more specifically on smaller companies. But it is an example of a specific relief being used for a social purpose which we think is in the national interest. We do not need a register of tax advisers to tell us that some people are doing what we have given them a tax incentive to do.

Mr. Battle

Does the Minister agree that the difference in this Budget is that the business expansion scheme has been introduced into the housing market at precisely the time when the Housing Bill has been discussed in Committee without any reference to that fact at all? The Housing Bill seems to make life a lot easier for landlords to exploit tenants as result of the business expansion scheme at public expense and with a tax subsidy.

Mr. Lamont

We shall no doubt be debating the pros and cons of the business expansion scheme tomorrow. However, we do not need a register of financial advisers to discover that the business expansion scheme exists, because we have set it up in the House of Commons.

I note what Opposition Members have said about enterprise zones. They do not like them. The hon. Member for Dunfermline, East (Mr. Brown) has made his dislike clear. Without giving away any secrets of some of his colleagues, I can say that that is in sharp contrast to the views of some Opposition Members—they are not all present—who write and ask for enterprise zones to be established in their constituencies because they think that they serve a purpose. They know that employment has more than doubled in areas where enterprise zones have been established.

Mr. Campbell-Savours

The reason why some Opposition Members pressed for enterprise zones is simple. It is that we wanted the rate relief. The tax concession was never relevant.

Mr. Lamont

I did not know that the hon. Gentleman was one of those who pressed for an enterprise zone—I was not accusing him—but now we know.

If Opposition Members do not like these reliefs, it must be their policy to abolish them. I assume that they will abolish the business expansion scheme and enterprise zones, which have done some good for some derelict and rundown areas. I also assume from what the hon. Member for Wrexham said about the disaggregation of husband's and wife's incomes, which he seems to regard as avoidance of tax, that they are opposed to that and that the Labour party will end what we propose on disaggregation.

I agree with the hon. Member for Durham, North-West (Ms. Armstrong) that tax avoidance should be taken seriously. If she and other hon. Members had been fair, they would have recognised that the Government have done many things. We have implemented step by step the findings of the Keith committee and given the Inland Revenue greater powers to inquire into the circumstances of individual taxpayers. Moreover, the yield from Inland Revenue investigations has gone up sevenfold while the Government have been in office. The hon. Lady referred to us not putting enough resources into investigations, but she should compare what we have done with what the previous Labour Government did. Over 3,200 people are now carrying out investigations in the Inland Revenue, compared with 1,600 under the previous Labour Government. That is a considerable increase in resources and it has also been responsible for the increased yield.

Mr. Morgan

Does the Minister agree that, despite the increased staff that have been put to work on this matter, and despite the expectations that were announced to the House when successive cuts in top rate tax were made that there would no longer be any incentive for tax evasion, tax evasion has been very much on the increase during the past nine years?

Mr. Lamont

That is pure assertion and the hon. Gentleman has provided no evidence for it. The fact that we have put more civil servants to work and may raise more revenue through their investigations is evidence of nothing except that the investigation has been successful and that this is productive work.

Opposition Members have also ignored the Government's action in successive Budgets to block loopholes. In this Finance Bill we have aligned the rates of capital gains tax and income tax. We have ended the forestry loophole, which they criticised today but did nothing about when they were in office. In previous Budgets we introduced legislation against bond washing and offshore funds. In recent weeks, as new evidence has come to light on matters such as restrictive covenants, and people being paid in gilts, we have announced immediate action against those abuses

I believe that we have shown through our actions to block loopholes and through the resources that we have devoted to investigations in the Revenue that we take the business of countering tax avoidance very seriously. However, the amendment would do nothing to strengthen the Revenue in this area.

Dr. Marek

We have had a very good debate and I thank all my hon. Friends on the Back Benches for taking part and making a valuable contribution in bringing home to the House and the country the indignation that we feel about the Finance Bill resulting from the Budget and the way in which the money has been divided.

I also thank the hon. Member for Richmond and Barnes (Mr. Hanley). He declared his interest. I can reassure him that we have never said that reputable advisers are doing anything dishonest. If the hon. Gentleman reads the Official Report tomorrow morning, he will be reassured on that count. My hon. Friend the Member for Workington (Mr. Campbell-Savours) gave an example of a qualified adviser who had integrity and said so in the letter to which my hon. Friend referred.

I cannot go along with the Financial Secretary to the Treasury in placing all my trust in fighting cases in the courts hoping to recover money which has not been paid in tax, and hoping to win a few cases here and there. The Government should have watertight legislation to make avoidance impossible. It is not right that the Government should go to the courts for that purpose.

These matters are being considered afresh and no doubt the country's top minds are at work generating new tax avoidance schemes. Therefore, I am not claiming that the Government should not go to the courts on occasions, but they must consider alternatives and see what they can do to make the system as simple as possible. They must decide what is genuinely avoidable and what ought not be avoidable. Our argument with the Government is that we believe that they draw the line too far to one side of the argument.

We do not quarrel with the business expansion scheme or enterprise zones. However, we quarrel with their targeting. We do not believe that enterprise zones do the job that they were intended to do. The Department of the Environment has decided not to designate any more enterprise zones. Why is that? It can only be because they do not do the job. Many firms outside the zones have moved into the zones and the net effect is that they are used as a tax bolthole. We object to that.

The business expansion schemes are not being extended except in the property area. Why is that? I suggest that the Financial Secretary to the Treasury is somewhat too complacent in his views about tax evasion. Tax evasion has increased sevenfold over the past seven or eight years and tax avoidance schemes, tax boltholes and tax loopholes are running riot throughout the country. The Government have even said that there should not be more enterprise zones, but the Financial Secretary defended the system tonight. We cannot agree with that.

The new clause is small and will not change everything overnight. Nevertheless, communicating and imparting information can only help. For that reason, I commend the new clause to the House.

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

The House divided: Ayes 197, Noes 252.

Division No. 412] [9.59 pm
AYES
Abbott, Ms Diane Boateng, Paul
Adams, Allen (Paisley N) Boyes, Roland
Allen, Graham Bradley, Keith
Anderson, Donald Bray, Dr Jeremy
Archer, Rt Hon Peter Brown, Gordon (D'mline E)
Armstrong, Hilary Brown, Nicholas (Newcastle E)
Ashley, Rt Hon Jack Brown, Ron (Edinburgh Leith)
Banks, Tony (Newham NW) Buchan, Norman
Barnes, Harry (Derbyshire NE) Caborn, Richard
Barron, Kevin Callaghan, Jim
Battle, John Campbell, Menzies (Fife NE)
Beckett, Margaret Campbell, Ron (Blyth Valley)
Bell, Stuart Campbell-Savours, D. N.
Benn, Rt Hon Tony Canavan, Dennis
Bennett, A. F. (D'nt'n & R'dish) Carlile, Alex (Mont'g)
Bermingham, Gerald Clark, Dr David (S Shields)
Bidwell, Sydney Clarke, Tom (Monklands W)
Clay, Bob McAllion, John
Clelland, David McAvoy, Thomas
Clwyd, Mrs Ann McCartney, Ian
Coleman, Donald Macdonald, Calum A.
Cook, Frank (Stockton N) McKay, Allen (Barnsley West)
Cook, Robin (Livingston) McKelvey, William
Corbett, Robin McLeish, Henry
Corbyn, Jeremy McNamara, Kevin
Cox, Tom McTaggart, Bob
Cryer, Bob McWilliam, John
Cummings, John Madden, Max
Cunliffe, Lawrence Mahon, Mrs Alice
Dalyell, Tam Marek, Dr John
Darling, Alistair Marshall, Jim (Leicester S)
Davies, Ron (Caerphilly) Martin, Michael J. (Springburn)
Davis, Terry (B'ham Hodge H'l) Martlew, Eric
Dixon, Don Maxton, John
Dobson, Frank Meacher, Michael
Doran, Frank Meale, Alan
Duffy, A. E. P. Michie, Bill (Sheffield Heeley)
Dunnachie, Jimmy Millan, Rt Hon Bruce
Dunwoody, Hon Mrs Gwyneth Mitchell, Austin (G't Grimsby)
Eadie, Alexander Morgan, Rhodri
Eastham, Ken Morley, Elliott
Evans, John (St Helens N) Morris, Rt Hon A. (W'shawe)
Ewing, Harry (Falkirk E) Morris, Rt Hon J. (Aberavon)
Ewing, Mrs Margaret (Moray) Mowlam, Marjorie
Fatchett, Derek Mullin, Chris
Field, Frank (Birkenhead) Murphy, Paul
Fields, Terry (L'pool B G'n) Nellist, Dave
Flannery, Martin Oakes, Rt Hon Gordon
Flynn, Paul O'Brien, William
Foot, Rt Hon Michael O'Neill, Martin
Foster, Derek Orme, Rt Hon Stanley
Fyfe, Maria Parry, Robert
Galbraith, Sam Patchett, Terry
Garrett, John (Norwich South) Pike, Peter L.
Garrett, Ted (Wallsend) Powell, Ray (Ogmore)
Godman, Dr Norman A. Primarolo, Dawn
Gordon, Mildred Quin, Ms Joyce
Gould, Bryan Radice, Giles
Graham, Thomas Rees, Rt Hon Merlyn
Grant, Bernie (Tottenham) Reid, Dr John
Griffiths, Nigel (Edinburgh S) Richardson, Jo
Griffiths, Win (Bridgend) Robertson, George
Grocott, Bruce Robinson, Geoffrey
Hardy, Peter Rogers, Allan
Harman, Ms Harriet Rooker, Jeff
Haynes, Frank Ross, Ernie (Dundee W)
Healey, Rt Hon Denis Rowlands, Ted
Heffer, Eric S. Ruddock, Joan
Henderson, Doug Salmond, Alex
Hinchliffe, David Sedgemore, Brian
Hogg, N. (C'nauld & Kilsyth) Sheerman, Barry
Holland, Stuart Sheldon, Rt Hon Robert
Home Robertson, John Shore, Rt Hon Peter
Hood, Jimmy Short, Clare
Howarth, George (Knowsley N) Skinner, Dennis
Howell, Rt Hon D. (S'heath) Smith, Andrew (Oxford E)
Howells, Geraint Smith, C. (Isl'ton & F'bury)
Hughes, John (Coventry NE) Snape, Peter
Hughes, Roy (Newport E) Steinberg, Gerry
Hughes, Sean (Knowsley S) Stott, Roger
Illsley, Eric Strang, Gavin
Ingram, Adam Taylor, Matthew (Truro)
Janner, Greville Thompson, Jack (Wansbeck)
John, Brynmor Turner, Dennis
Jones, Ieuan (Ynys Môn) Vaz, Keith
Jones, Martyn (Clwyd S W) Wall, Pat
Kaufman, Rt Hon Gerald Wallace, James
Kirkwood, Archy Walley, Joan
Lambie, David Wardell, Gareth (Gower)
Leadbitter, Ted Wareing, Robert N.
Leighton, Ron Welsh, Andrew (Angus E)
Lewis, Terry Welsh, Michael (Doncaster N)
Litherland, Robert Wigley, Dafydd
Livsey, Richard Williams, Rt Hon Alan
Lloyd, Tony (Stretford) Williams, Alan W. (Carm'then)
Lofthouse, Geoffrey Wilson, Brian
Loyden, Eddie Winnick, David
Wise, Mrs Audrey Tellers for the Ayes:
Worthington, Tony Mrs. Llin Golding and Mr. Alun Michael.
Wray, Jimmy
NOES
Aitken, Jonathan Fenner, Dame Peggy
Alexander, Richard Fookes, Miss Janet
Alison, Rt Hon Michael Forman, Nigel
Allason, Rupert Forsyth, Michael (Stirling)
Amess, David Forth, Eric
Amos, Alan Fox, Sir Marcus
Arbuthnot, James Franks, Cecil
Arnold, Jacques (Gravesham) Freeman, Roger
Ashby, David French, Douglas
Atkins, Robert Gale, Roger
Atkinson, David Garel-Jones, Tristan
Baker, Nicholas (Dorset N) Gill, Christopher
Banks, Robert (Harrogate) Glyn, Dr Alan
Batiste, Spencer Goodhart, Sir Philip
Beaumont-Dark, Anthony Goodson-Wickes, Dr Charles
Bellingham, Henry Gow, Ian
Bendall, Vivian Gower, Sir Raymond
Bennett, Nicholas (Pembroke) Grant, Sir Anthony (CambsSW)
Benyon, W. Greenway, Harry (Ealing N)
Biffen, Rt Hon John Greenway, John (Ryedale)
Biggs-Davison, Sir John Gregory, Conal
Blackburn, Dr John G. Griffiths, Sir Eldon (Bury St E')
Blaker, Rt Hon Sir Peter Griffiths, Peter (Portsmouth N)
Body, Sir Richard Grist, Ian
Bonsor, Sir Nicholas Ground, Patrick
Boscawen, Hon Robert Grylls, Michael
Bowden, A (Brighton K'pto'n) Gummer, Rt Hon John Selwyn
Bowden, Gerald (Dulwich) Hanley, Jeremy
Bowis, John Hannam, John
Boyson, Rt Hon Dr Sir Rhodes Hargreaves, A. (B'ham H'll Gr')
Braine, Rt Hon Sir Bernard Hargreaves, Ken (Hyndburn)
Brandon-Bravo, Martin Harris, David
Brazier, Julian Haselhurst, Alan
Bright, Graham Hayhoe, Rt Hon Sir Barney
Brooke, Rt Hon Peter Heathcoat-Amory, David
Brown, Michael (Brigg & Cl't's) Heseltine, Rt Hon Michael
Browne, John (Winchester) Hicks, Mrs Maureen (Wolv' NE)
Buchanan-Smith, Rt Hon Alick Hicks, Robert (Cornwall SE)
Buck, Sir Antony Higgins, Rt Hon Terence L.
Burns, Simon Hill, James
Burt, Alistair Hogg, Hon Douglas (Gr'th'm)
Butcher, John Holt, Richard
Butler, Chris Hordern, Sir Peter
Butterfill, John Howell, Rt Hon David (G'dford)
Carlisle, John, (Luton N) Hughes, Robert G. (Harrow W)
Carlisle, Kenneth (Lincoln) Hunt, David (Wirral W)
Carttiss, Michael Hunter, Andrew
Cash, William Hurd, Rt Hon Douglas
Chapman, Sydney Irvine, Michael
Clark, Dr Michael (Rochford) Irving, Charles
Clark, Sir W. (Croydon S) Jack, Michael
Colvin, Michael Janman, Tim
Conway, Derek Johnson Smith, Sir Geoffrey
Coombs, Anthony (Wyre F'rest) Jones, Gwilym (Cardiff N)
Coombs, Simon (Swindon) Jones, Robert B (Herts W)
Cope, Rt Hon John Jopling, Rt Hon Michael
Couchman, James Kellett-Bowman, Dame Elaine
Cran, James Key, Robert
Currie, Mrs Edwina Kilfedder, James
Curry, David Knapman, Roger
Davies, Q. (Stamf'd & Spald'g) Knight, Dame Jill (Edgbaston)
Davis, David (Boothferry) Knox, David
Day, Stephen Lamont, Rt Hon Norman
Dickens, Geoffrey Lawrence, Ivan
Dorrell, Stephen Lawson, Rt Hon Nigel
Douglas-Hamilton, Lord James Lennox-Boyd, Hon Mark
Dover, Den Lester, Jim (Broxtowe)
Dunn, Bob Lilley, Peter
Durant, Tony Lloyd, Peter (Fareham)
Dykes, Hugh Lord, Michael
Evans, David (Welwyn Hatf'd) Maclean, David
Evennett, David McLoughlin, Patrick
Farr, Sir John Major, Rt Hon John
Favell, Tony Maude, Hon Francis
Maxwell-Hyslop, Robin Speed, Keith
Meyer, Sir Anthony Speller, Tony
Mills, Iain Squire, Robin
Miscampbell, Norman Stanbrook, Ivor
Moate, Roger Stanley, Rt Hon John
Monro, Sir Hector Steen, Anthony
Morrison, Sir Charles Stern, Michael
Moss, Malcolm Stevens, Lewis
Neale, Gerrard Stewart, Allan (Eastwood)
Needham, Richard Stewart, Andy (Sherwood)
Nelson, Anthony Stokes, Sir John
Neubert, Michael Stradling Thomas, Sir John
Nicholls, Patrick Sumberg, David
Nicholson, David (Taunton) Summerson, Hugo
Nicholson, Emma (Devon West) Taylor, John M (Solihull)
Oppenheim, Phillip Taylor, Teddy (S'end E)
Page, Richard Tebbit, Rt Hon Norman
Paice, James Temple-Morris, Peter
Patnick, Irvine Thompson, Patrick (Norwich N)
Patten, John (Oxford W) Thorne, Neil
Pawsey, James Thornton, Malcolm
Peacock, Mrs Elizabeth Thurnham, Peter
Porter, David (Waveney) Townsend, Cyril D. (B'heath)
Portillo, Michael Tracey, Richard
Powell, William (Corby) Trippier, David
Price, Sir David Trotter, Neville
Raffan, Keith Twinn, Dr Ian
Raison, Rt Hon Timothy Waddington, Rt Hon David
Rathbone, Tim Wakeham, Rt Hon John
Redwood, John Waldegrave, Hon William
Rhodes James, Robert Walden, George
Riddick, Graham Walker, Bill (T'side North)
Ridsdale, Sir Julian Waller, Gary
Roberts, Wyn (Conwy) Walters, Sir Dennis
Roe, Mrs Marion Ward, John
Rost, Peter Wardle, Charles (Bexhill)
Rowe, Andrew Watts, John
Rumbold, Mrs Angela Wells, Bowen
Ryder, Richard Wheeler, John
Sackville, Hon Tom Whitney, Ray
Sainsbury, Hon Tim Widdecombe, Ann
Sayeed, Jonathan Wiggin, Jerry
Shaw, David (Dover) Wilkinson, John
Shaw, Sir Giles (Pudsey) Wilshire, David
Shaw, Sir Michael (Scarb') Winterton, Mrs Ann
Shelton, William (Streatham) Winterton, Nicholas
Shephard, Mrs G. (Norfolk SW) Wood, Timothy
Shepherd, Colin (Hereford) Woodcock, Mike
Shepherd, Richard (Aldridge) Yeo, Tim
Shersby, Michael Young, Sir George (Acton)
Skeet, Sir Trevor
Smith, Sir Dudley (Warwick) Tellers for the Noes:
Smith, Tim (Beaconsfield) Mr. David Lightbown and Mr. Alan Howarth.
Soames, Hon Nicholas

Question accordingly negatived.

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