SPIRITS, BEER AND CIDER: RATES

HC Deb 23 January 1995 vol 253 cc63-97

1. '.—(1) In section 5 of the Alcoholic Liquor Duties Act 1979 (spirits) for "£19.81" there shall be substituted "£20.60".
2. (2) In section 36(1) of that Act (beer) for "£10.45" there shall be substituted "£10.82".
3. (3) In section 62(1) of that Act (cider) for "£22.82" there shall be substituted "£23.78".
4. (4) This section shall be deemed to have come into force on 1st January 1995.'.—[Mr. Heathcoat-Amory.]

Brought up, and read the First time.

Mr. Heathcoat-Amory

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

Mr. Deputy Speaker

With this, it will be convenient to discuss also the following: Amendment (a) to the proposed new clause, in subsection (1), leave out '"£20.60"' and insert '"£17.83"'.

Clause 2 stand part.

Government amendments Nos. 1 to 6.

Amendment No. 26, in schedule 1, page 156, line 25, leave out '£19.81' and insert `£17.83'.

Mr. Heathcoat-Amory

Clause 2, together with schedule 1, replaces the present five-band duty structure for low-strength wine and man-made wine with a two-band structure. It is a sensible, simplifying measure. The broad effect is fiscally neutral, but British producers will generally benefit from the change, as they produce proportionately more product at the higher end of the range. I am sure that the Committee will welcome that modest reform.

The schedule also envisaged a duty standstill on wine, as on beer and spirits. That is now to be amended; I shall say why and how in a moment. The duty on fortified and sparkling wines was also reduced. In the case of fortified wine, that takes into account the third stage of the agreement with Spain, to reduce the differential between fortified wine and table wine, and to allow the name "British sherry" to be used until 1996.

The reduction acts to correct an anomaly whereby sparkling wines are taxed more heavily than stronger fortified wines. More than half of all sparkling wine is not champagne, and there is also a successful British production of sparkling wine, which will modestly benefit from that change.

In his statement on 8 December 1994, my right hon. and learned Friend the Chancellor said that he had hoped to spare the alcohol industries any duty increase. However, the loss of revenue, as a result of the VAT on fuel decision, meant that he, regretfully, had to revisit those excise duties.

Amendments Nos. 1 to 6 give effect to an increase of about 4 per cent. in each wine category. Similarly, new clause 2 raises the duty on spirits, beer and cider by about 4 per cent. They were the subject of resolutions passed by the House on 13 December 1994.

Those increases are not as we originally wished. However, even with those increases, the duty on spirits, beer and wine has decreased in real terms since 1985 by 16.1 per cent., 7.7 per cent. and 2.2 per cent. respectively.

Ms Dawn Primarolo (Bristol, South)

We will vote against new clause 2, which seeks to increase duty on beer, wine and spirits. A 4 per cent. increase in alcohol duties is contained in that new clause, imposed on the industry following the Chancellor's acknowledgment in his Budget speech of the problem confronted by the beer and pub industry in relation to the increase in legitimate cross-border shopping and illegal smuggling.

The Chancellor said: one of the most widely publicised other effects of the single market has been the increase in legitimate cross-border shopping in alcohol and tobacco, and in smuggling. Both of these have inevitably meant some loss of duty to the Exchequer, pressures on the British drinks industry and some damage to British business. No Chancellor can remain unmoved in the face of this".—[Official Report, 29 November 1994; Vol. 250, c. 1095–96.] We did not realise that he meant that no Chancellor could be moved for more than seven working days, faced with that problem. Despite the assurances that he gave the House in trying to persuade us that he understood the problems of the industry, he chose to increase alcohol duties about nine days later. Moreover, in the Budget itself, the Chancellor reduced duties on sparkling wine and champagne by 27p a bottle. Even with those changes, there is a reduction of 20p on champagne, making it cheaper than it was before the Budget in 1994.

The Labour party believes that the Government should act urgently in several respects. In opposing the new clause, I shall describe how the Government could have reacted differently.

I note with some interest, reading Licensee and Pub Food Monthly, that the Paymaster General's uncle, Derek Heathcoat-Amory, was Chancellor in 1959, and he understood then the need to control duty on beer to prevent damage to the British industry. He reduced the duty on beer—a step that the hon. Gentleman did not feel able to take this year.

Beer smuggling is an enormous threat to the industry. It is a relatively new trade, if I may call it that, and we cannot estimate the extent to which the gradual build-up in the past 18 months has led to the undermining of the industry. The problems that are visible now are a fraction of the problems that will confront us in a few years' time if action is not taken.

The Government, in deciding their panic measures—having lost the VAT vote—sought only to plug holes in the short term, rather than to consider changes in taxation to preserve the industry for the medium and long term. We are witnessing the emergence of a whole new subculture—a black market sub-culture, whereby smuggled drink, and indeed tobacco, is easily obtainable. It would be putting it politely to say that it is remiss of the Chancellor to take little notice of that danger—that undermining of the tax base and the industry. I am not speaking about legitimate cross-border shopping; I am speaking about the very expensive occupation of smuggling, and the damage that that does to the industry.

Mr. Nigel Forman (Carshalton and Wallington)

Do I take it that the hon. Lady will base all her arguments on illegal cross-border imports of alcohol, or will she take account of the point of view that I think that I remember her expressing when she was shadow spokesman on health—that there are sound grounds for increasing the price of alcohol, in all its various categories, to discourage people from the problems associated with alcoholism?

Ms Primarolo

The hon. Gentleman is mistaken in his memory of what I may have said about reducing the consumption of alcohol, although I obviously agree that the balance of people's consumption of alcohol is an important health consideration. We are talking not about encouraging a greater consumption of alcohol but about arranging a tax system that does not create the opportunity for smuggling, which undermines the legitimate market. The difference between taxation here and taxation in France is so great that it provides that opportunity. The illegal entry of alcohol cannot be regulated by our health policies or controlled by our legitimate methods of dealing with alcohol consumption. That means that the Government's health policy on alcohol consumption is undermined by a tax policy that cannot deliver controls on that consumption.

6.30 pm

Mr. John Carlisle (Luton, North)

The hon. Lady mentioned that she took basically the same attitude to the cross-border smuggling of alcohol as she did to the smuggling of tobacco. Does that mean that she will oppose new clause 4, which introduces an increase in taxation, using the same argument? I assume that the Opposition will vote against new clause 4, just as they will vote against new clause 2.

Ms Primarolo

I shall deal with that point when we discuss new clause 4. The point about the balance between taxation and the control of a product is important, as is the question of how the Government could not only prevent illegal imports which undermine our industries but provide for an increased consumption of, for example, cigarettes which clearly we do not want.

Mr. Michael Stern (Bristol, North-West)

I take the hon. Lady back to what she was saying before the intervention by my hon. Friend the Member for Luton, North (Mr. Carlisle). She rightly drew attention to the substantial difference between duties in France and duties in this country. When the matter was discussed during the Finance Bill Committee last year, one Front-Bench Labour Member drew from that the conclusion that the British Government's policy should be substantially to reduce duty to levels much closer to the French levels. Is that now Labour party policy?

Ms Primarolo

On the question of duty levels and the ability to prevent smuggling, the Danish example gives us a good idea of how duties need to be balanced to secure income for the Treasury and to ensure that there is no loss through smuggling. The point is— [Interruption.] Does the hon. Member for Bristol, North-West (Mr. Stern) want to hear the answer to his question or shall I move on to my next point?

The differences between excise duties in France and those in Britain are so great that to ignore them undermines the industry. The problem is how income to the Treasury would be replaced. The Government have not come forward with any suggestion or plan to deal with that gap. In fact, they have done the opposite. In their desperation to raise taxation, they have exacerbated the problem. When the Chancellor made his comments about freezing duty in his original Budget, he was acknowledging those problems and the need to correct them. If that policy was good enough on 29 November, it is certainly good enough now.

The importation and sale of undutied alcohol are criminal activities. At the lower end of the market, there are enormous opportunities for people to engage in that enterprise. On one trip, a large van carrying 25 cases can deliver profits of more than £700. Once a sales network has been established, smuggling can become a regular "business"—not a legitimate business. With a network of friends and friends of friends, the "business" is developed and the Government's whole strategy is undermined. The Government tell us that they are engaged in a thorough assessment of how to secure money for the Treasury. The truth is that they are saying that they can raise some taxes and lose some taxes and that, in the short term, they simply have to raise them.

I give two examples. One individual was making three trips a week and clearing a profit of more than £2,000 a week, which was not taxed. Another gang was doing seven to 10 runs a week. About 15 people were involved and they had been carrying out that work for 11 months or more; they were making £10,000 a week of untaxed profit. In the beginning, opportunists were involved. Organised professionals are beginning to enter the "business". Yet again, the Government's free market ideology provides an opportunity for criminal activity.

The Government originally told us that they would take the cheap option in dealing with the problem of excise duties. They said that they would go for controls on trade as the likeliest means of getting a grip on this illegal activity. Against the background of there being only 200 excise verification officers, the results achieved are good. The Government, however, have now announced that they will cut the number of Customs and Excise officers, the front-line officers who investigate those illegal activities. The Government need to explain why they are doing that—why they are going back on promises made to the House.

How can only 200 excise verification officers deal with the problems of bootlegging? In the Leeds collection area, only 10 staff cover York, Leeds, Bradford, Halifax and Hull. In the south-west of England—I draw the attention of the hon. Member for Bristol, North-West to this—eight staff cover the area from Bristol to Land's End, which is a lot of coastline. In the Birmingham collection area, 12 staff cover the entire west midlands. The Government intend to reduce those figures through further cuts in Customs and Excise.

The cuts in the number of Customs and Excise staff break a promise, given in the House on 2 February 1993 by the then Paymaster General, the right hon. Member for Northavon (Sir J. Cope), to my hon. Friend the Member for Oxford, East (Mr. Smith), that there would be no reduction in the number of Customs and Excise officers. The Paymaster General went on to say: I can readily undertake to keep matters under close review, particularly in the early stages of the single market—indeed, we are already doing so. As I have told the House before, we are determined to ensure that smuggling, bootlegging and the resale of goods brought back without UK duty having been paid are pursued with the utmost vigour of the law by all the customs officers that it requires. After being challenged by my hon. Friend, the Paymaster General said: Yes. The customs and the Government must determine how we define necessary … and see what we determine to be necessary in order to police such matters firmly."—[Official Report, 2 February 1993; Vol. 218, c. 287–88.] He said that the Government would keep the position under review and that there would be no cuts in the number of Customs and Excise officers. In the same Budget in which the Government have increased the excise duty on alcohol and declared a "prevention" strategy—with the option of increasing the number of customs officers to tackle smuggling—they have announced a 16 per cent. cut in the number of customs officers. Those cuts have immense implications for preventing the illegal importation of alcohol. Furthermore, the brewing industry has said that the future growth of the market in illegal alcohol products will lead to job losses in pubs, off-licences, supermarkets and cash-and-carry stores.

The Government explained that they were cutting the number of customs officers in order to increase surveillance and ensure greater flexibility by deploying officers in vans. Officers will no longer need to perform routine inspections and front-line work; yet it is those routine inspections and spot checks of off-licences and cash-and-carrys that ensure that illegally imported alcohol does not find a retail outlet.

The Government must implement a clear policy which respects the rights of individuals to engage in legal cross-channel shopping but which uses Customs and Excise to control the ports and ensure that alcohol does not enter the country illegally. The Government must also develop a clear strategy to deal with the problems caused by our European partners' differing levels of alcohol duty.

The Government must strengthen Customs and Excise; tackle the illicit sale of contraband, including drugs and tobacco as well as alcohol; ensure that the negotiations in Europe bring about a reasonable and acceptable package of solutions to protect our industry; and urgently undertake a comprehensive review and present to the House ways in which taxation and Customs and Excise can work together to reduce smuggling and ensure the protection of British industry.

A taxation system must work in the short, medium and long term. It must deliver revenue to the Government without creating unemployment or undermining their position in certain areas by allowing smuggling to continue. The Government have picked on duty on beer and spirits as a soft target which will provide a "quick fix". They are undermining our industry. We are opposed to all the increases in duty—unlike the Scottish National party, which is opposed only to the increase in duty on whisky. We will vote against the increases in duty on whisky, beer and cider.

Sir Ivan Lawrence (Burton)

As the representative of the brewing centre of England and the universe, I am angry on my constituents' behalf at the proposed increase in the duty on beer. It shows that the Government have paid scant attention to my last two speeches which called for a reduction in excise duty on beer because of the inevitable consequences for the brewing industry and my constituency. Nobody is convinced that the taxation measures might not ultimately prove far worse for the industry, for the reasons given by the hon. Member for Bristol, South (Ms Primarolo). The Government will suffer if bootlegging and smuggling continue to leach revenue from the tax take, and I am not convinced that they have taken that factor accurately into account when doing their sums.

I understand, of course, that there are very important reasons for increasing the duty on alcohol: it is the only way in which the deficiency in the value added tax take can be remedied. I am angered by the attitude of Labour Members. They are responsible for the increase in the cost of beer, and we must ensure that the finger is pointed at them. If, as the hon. Lady said, the increase in the excise duty on beer is a "quick fix", it is the Opposition who have forced the Government to come up with that remedy. They have forced the Government to extract VAT in this way. I do not think we need listen to any lectures on the subject from Labour Members, who have certainly not offered any alternatives.

6.45 pm

Dr. Marek

Will the hon. and learned Gentleman give way?

Sir Ivan Lawrence

I shall give way in a moment. We must look to the future and to reducing the excise duty yield from the brewing industry, so that it can flourish without that heavy taxation burden imposed by this or any other Government. However, it is difficult to see how we can achieve that aim. My right hon. and learned Friend the Chancellor has talked about getting our European partners to come into line with us. If it were a matter of a few pence difference in excise duty, it would be easy to see how that might be achieved. But the gap is enormous—the excise duty on a pint of beer is about 4p in France and 32p in Britain. It is difficult to see how my right hon. and learned Friend can be optimistic about getting our European partners to come into line with us, and he has not explained how that can be done.

Do we not make achieving that aim still more difficult by setting the appalling example of increasing the duty on beer to boost the VAT take? With this measure, it is even more difficult for my right hon. and learned Friend the Chancellor to advance his argument with our European partners.

The persistent hon. Member for Wrexham (Dr. Marek) has something to contribute to the debate.

Dr. Marek

I am grateful to the hon. and learned Gentleman for giving way. In the last debate I said that, if the rise in value added tax were forgone, the Government would be faced with raising an extra £500 million; but that sum could have been recouped by not withdrawing the duty on share transactions. The Government could have easily gained £1 billion from that measure. The hon. and learned Gentleman would not suggest that because it does not affect his friends; he is seeking to make political capital from this issue. Will he persuade the Minister to accept that the Government should aim for long-term harmonisation of duties? If the Minister accepts that, we can make some progress.

Sir Ivan Lawrence

My right hon. and learned Friend has already suggested that harmonisation is his aim—it must be, if we are to stay part of the European Community. If the share transfer tax that the hon. Gentleman mentioned were as easy to impose as he suggests, I am sure that it would have been adopted. The fact remains that it has not and cannot be done. The imposition of duty on alcohol is the simplest way, but it has dealt another blow to jobs and to the success of a great industry that is at the root of so much of our social life, never mind our industrial, economic or any other kind of life. We know as a party how the industry feels when we open the newspapers and learn how much of the industry's former support is ebbing away, which I deplore.

My right hon. and learned Friend the Chancellor and my hon. Friend the Paymaster General should seriously address constructive ways of reducing this appalling duty burden. I look forward to hearing what my hon. Friend the Paymaster General will say to reassure not just the Committee but the people who send us here—a high proportion of whom drink in our pubs, clubs and restaurants, and many of whom are employed in the brewing industry. My hon. Friend the Paymaster General should make no mistake about it. I shall, of course, support him in the Lobby tonight, because the blame for all this lies on the other side of the Chamber, but that does not mean that I am any the less angry or will not continue my fight against the Government to bring down this inequitable, iniquitous and harsh measure against the industry that is the heart of the constituency that I represent.

Mrs. Ewing

Amendments (a) and (b) would reduce by 10 per cent. the duty levied on all British spirits, but I wish to speak particularly of the Scottish whisky industry. I remind the Committee that this is the Burns season, when a fair amount of uisqe beatha will be consumed not only in Scotland but throughout the world. Last night, I attended a Burns supper in my constituency hosted by a major distillery organisation and attended by representatives of independent distilleries and other interests. When I replied on behalf of the lasses, I received the biggest cheer when I said that I was introducing these amendments, because those present appreciated the industry's significance to not only my constituency but the whole economy.

The present boundaries of Moray contain more than 40 distilleries. They do not provide a huge number of jobs in direct employment but provide employment in farms, maltsters, warehouses, cooperages, transportation companies and tourism. Anyone who knows my constituency will be aware that it is a great pleasure to follow the whisky trail. All right hon. and hon. Members would receive a warm welcome in my constituency and learn a great deal about the industry. That is true even of the Chancellor, although I would not advise him to show his face too soon in the light of his December statement.

Right hon. and hon. Members often regard speeches about the whisky industry as frivolous, but in the areas in question, it is as significant as mining or shipbuilding to other parts of the country, and equally symbolic. If there is a depression in the whisky industry, there is a depression in our communities. That has nothing to do with consumption but has to do with the local as well as the national economy.

The industry is a huge earner, particularly in exports, raising more than £2 billion last year. Ministers may argue that the 26p per bottle increase in duty will not be imposed abroad—but at a time when the industry is arguing to break down international tariff barriers and arguing for a level playing field in the European Union with other alcoholic drinks such as wines and beers, the Government have sent a signal that they do not care. Why should the industry try to persuade the Japanese to treat it with more respect and to get rid of the internal discrimination that exists in many far eastern countries?

Mr. John McFall (Dumbarton)

Does the hon. Lady agree that the most pressing aspect is tax harmonisation in Europe? The Chancellor's action, in a moment of petulance, of imposing 26p on a bottle of whisky means that harmonisation is further away than ever. Seventy thousand jobs in Scotland depend on the whisky industry, and many will be jeopardised as a result of the Chancellor's decision. The need for harmonisation in Europe is, more than anything, the message that should be put across to the Government.

Mrs. Ewing

I much agree with the hon. Gentleman. I know that he has a substantial interest in the subject because Allied Distillers has its headquarters in his area and provides a great deal of employment. He appreciates, as I do, the importance of harmonisation, for which we have argued for some time. We thought that the Government had begun to listen and to accept the need for cuts in the duty levied on whisky.

On 20 November 1994, The Sunday Times in Scotland published a substantial article on the arguments made by the Scotch Whisky Association and the all-party group for a 10 per cent. reduction in duty. It stated: Ministerial colleagues are convinced that Kenneth Clarke, the chancellor, is set to deliver a long-awaited boost to the scotch whisky industry. It was said that he had closely scrutinised the issues and was "particularly impressed" by the argument in favour of countering the anomaly that the UK taxes home product scotch at almost twice the rate of imported wine …Ministerial sources said that the full 10% cut is 'expecting too much at one stroke' but they also pointed to a treasury briefing document published at the last budget which said: 'The UK duty on spirits …is already relatively high and seriously out of line with the rates of duty elsewhere in the single market'. That showed that the Treasury was listening. The Chancellor's action in quickly attacking the industry could only have been a fit of pique resulting from the vote on an increase in VAT on domestic fuel. The duty on alcohol already brings substantial amounts into the Treasury's coffers every year. The last time UK duty on whisky was increased, there was a net reduction in Treasury income, so the Treasury cut off its nose to spite its face, rather than boost an industry that generates so much money for the Government and provides thousands of jobs in Scotland and many other parts of the United Kingdom.

The Treasury should have shown more respect and devised something simpler—such as the tax suggested by the hon. Member for Wrexham (Dr. Marek). If it had examined the public sector borrowing requirement, it would have realised that an increase in VAT on domestic fuel was unnecessary in the first place.

I cannot emphasise enough how angry is the Scotch whisky industry at what has become known as the mini-bar Budget. The industry is furious because it is working hard to promote its products. I know people who fly from my constituency every week to far-off parts of the world to promote Scotch whisky. That is sometimes difficult, but the industry was making progress. Now it sees that the Government do not care about its wonderful product.

Mr. Forman

In what sense does an increase in duty on a bottle of scotch damage the industry's export prospects?

Mrs. Ewing

The domestic market is damaged—sales have fallen—but it is the message sent out that really matters. It shows our attitude to a unique industry, the quality of whose product is unrivalled in the world. The industry brings in money to the Treasury directly and it attracts as many international tourists a year as a great many other attractions put together.

Recently, Macallan whisky chairman Allan Shiach met Clint Eastwood's production company on the day Kenneth Clarke did his Dirty Harry act on the Scotch industry. It did not make his day. 'If the government shoots itself in the foot, I am not sure why everybody else has to limp'". The Government have wounded the Scotch whisky industry and the whole UK spirit industry. I trust that hon. Members will seriously consider supporting our amendments; we shall certainly vote with the official Opposition on the new clause.

7 pm

Mr. James Couchman (Gillingham)

It may be for the convenience of the House to know that although I ran public houses until the beginning of last November, and had been doing so in London for 25 years, I have now disposed of those interests, although I briefly remain a non-executive director of the company in question.

I have listened carefully to the speeches so far, in which several hon. Members have mentioned the fact that bootlegging has been on the increase since the barriers went down on 1 January 1993. I should be interested to hear from the Minister whether expectations of the duty to be collected have been met or, if they have not been met, what the shortfall in the year to April 1994 was. What was the shortfall, if any, for the first three quarters of this year? I believe that the House needs that information, because the mini-Budget has proved to be profoundly unhelpful to an industry that has suffered greatly in the past three years.

The public house in London is under threat, not just from bootleggers—although they are undoubtedly a factor—but from the fact that people's drinking habits are dramatically changing. Bootlegging is one thing; people's consciousness of health is another. In London and the south-east there has been a dramatic decline in trade over the past three years, and the industry shows no sign of recovering from the recession.

It would have been far better if my right hon. and learned Friend had listened to the case put to him by the Brewers and Licensed Retailers Association in the middle of last year, when it suggested that progressive harmonisation with rates of duty on the continent would lead to increased employment in this important industry—in production, and in wholesale and retail. That should have been done instead of putting a relatively small additional burden on top of the duty already charged.

There were expectations that the first Budget might have taken a modest step in the right direction by reducing duty. That was not to be, and the trade was duly disappointed. But it was horrified by the mini-Budget, which put a 4 per cent. increase on duties and which sent out the wrong messages. So trade will continue to be depressed and many jobs will be lost, as will many drink outlets in the retail, wholesale and off-licence sectors.

I look forward to the day when my right hon. and learned Friend will be able to tell us that we are about to move towards the duty levels that prevail on the continent.

Mr. Alan Meale (Mansfield)

I, too, oppose the increased levies on beer. I declare an interest, as chairman of the all-party parliamentary beer club—an unpaid post, I might add.

It was not just pique but cheek on the part of the Government to introduce such an increase. They are trying to keep wage increases down to 1 or 2 per cent. at the same time as inflicting the increase on the beer trade, which is so important to the Treasury. I understand that the industry, directly and indirectly, supplies the Treasury with about £12 billion a year. An increase of 4 per cent. will inevitably be passed on to the customer. Furthermore, jobs linked directly and indirectly to the industry will be lost.

The beer trade has already lost about 70,000 jobs—including jobs in other sectors related to the industry—in the past six years. That important industry generates about 750,000 jobs in Britain. My constituency is the location for both the Mansfield brewery and the Tom Cobleigh retail outlet. The constituency has suffered 6,000 job losses because of mine closures; if we now lose the brewery and Tom Cobleigh, the situation will be serious indeed.

Dividing up the 750,000 jobs in the industry among the 650 seats in the House gives a figure that shows that the industry is just as important to most other hon. Members. A 4 per cent. increase in duty would lead to another 10,000 jobs, direct and indirect, being lost to the industry. The Opposition Front-Bench spokesperson described the scale of the problem facing the beer industry in Britain due to a lack of action. Cross-border imports are flooding in from Europe at a rate of about a million pints a day because of the huge duty differential, which the Government have done nothing to remedy it. That represents 3.5 per cent. of all United Kingdom beer sales and 15 per cent. of all UK take-home sales. It also amounts to the same as the sales from every single pub in Kent, the west midlands and west Yorkshire, and the output of 18 regional brewers.

Many hon. Members have been on official day trips by bus to the continent— [Interruption.] They are not jollies; I do not know anyone who wants to go to Calais for a day just for a jolly. Be that as it may, heavy advertising by cross-channel ferry companies has led to people going across with their vans—to such an extent that our beer club discovered, in November 1993, that there were no vans for hire in Kent until the following February. They had all been booked by people who hired them to make two or three trips a day to the continent, to make thousands of pounds a week.

The lack of Government action to close the differential has rendered the situation extremely serious. In France I can buy a small bottle of beer for 11p, a price that includes the tax and duty. In Britain, we would pay 15p or 16p in duty and excise alone for the same bottle. We cannot compete on those terms.

The Government increase taxes and duties on beer while cutting the number of staff at Customs and Excise, whose unions have been told by the Government that they intend to cut 4,000 jobs in the Department. That represents 16 per cent. of the entire Customs and Excise operation. How can that be reconciled with helping the beer industry to make progress or with retaining those 750,000 jobs? We cannot stand up in Europe for our beer industry unless we start to tackle some of those problems.

The Chancellor admitted in his Budget speech that no Chancellor could remain unmoved in the face of the evidence that had been presented. If we are not willing to recognise what he said and do not start to take on board the seriousness of the problem, the British pub will be lost for ever.

Mrs. Jacqui Lait (Hastings and Rye)

I am sure that the hon. Gentleman will want to correct the wrong impression that he is certainly giving me, which is that every person who goes abroad and returns with cheap drink is evading duty. Most of that activity is completely legal trade and part of being in the European Union, which I understand his party supports.

Mr. Meale

The hon. Lady is right. Much of the activity that we are talking about is legal trade. In a way, that is the problem. Unfortunately, there is an ever-growing trade in smuggling. If she has any doubts, she might like to talk to those of her hon. Friends who have visited France and seen queues of vehicles stretching for half a mile. I am talking of not only vans but half-empty or empty lorries, which are being loaded with pallets of beer. Those vehicles will return to the United Kingdom across the channel. Perhaps she will choose to talk to those of her hon. Friends who have visited pubs and clubs, or to those who have talked to brewers in Scotland, the north-east, the north-west, the midlands, the east and west and London. Over the past 18 months, 12,000 pubs have been lost, mainly in the south and south-east. The direct cause has been the beer and spirits that have come into the country from across the channel.

Mrs. Lait

I have made three speeches making precisely those points. It is clear that the hon. Gentleman has not been following proceedings during debates on the Budget and the Second Reading of the Finance Bill.

Mr. Meale

I feel sorry that I allowed the hon. Lady to intervene. She made an irrelevant point.

If the hon. Lady believes in what she said when discussing the Finance Bill on Second Reading and if she believes in the arguments that are being advanced to explain why an increase in duty is wrong for the beer industry—I have in mind those who depend upon the industry for their employment and an industry that is paying such a great deal of money to the Chancellor year after year—she will vote in the Opposition Lobby.

If we do not change the price differentials between buying beer in this country and abroad, we shall lose the British pub. That will have serious consequences for all communities.

Mrs. Lait

I am grateful to have the opportunity to take up the remarks of the hon. Member for Mansfield (Mr. Meale) and to repeat some of the arguments that I have advanced in other debates. I apologise to my right hon. and hon. Friends on the Government Front Bench because this is the fourth time that I have spoken on this subject since the Budget statement. I find no comfort in hearing Opposition Members make precisely the points that I have already made. I suppose that I can comfort myself by thinking that at least they are learning something.

The increase in excise duty that we are facing on alcohol and tobacco will result in job losses. It will have an effect on the nation's health and will quite significantly undermine the rule of law. There are various options. My hon. Friend the Paymaster General has assured me on many occasions that the Government are planning to approximate our rates of duty with those of our European partners. My hon. and learned Friend the Member for Burton (Sir I. Lawrence) drew attention to the huge differentials between the United Kingdom and our European partners.

I understand that my hon. Friend the Paymaster General is pressing for changes, and I would like to know what progress he expects to make. I would like also to know that he is encouraging other members of the Government, such as my right hon. Friend the Secretary of State for Health, to press her opposite numbers in the EU so that they, too, are putting pressure on their Chancellors to increase duties because of the damage to health that is happening in countries such as France, Germany, Italy, Spain, Portugal and Greece.

I re-emphasise that while I make no criticism of our excise officers, who do a good job, it must be recognised that prevention is not paying. We are already spending more on preventing the smuggling of beer, wine and tobacco than on the products that are being recovered. History re-emphasises that argument. I wish very much that the Treasury would do its sums and work out the excessive cost of prevention over the cure, which is approximation of duties. The Treasury should stop regarding excise as the milch cow of first resort—when in trouble, first increase excise duties.

Mr. Salmond

While the hon. Lady is waiting for other European countries to change their policies to get the Government off the hook, and given that this is the fourth time that she has made her points to the Government Front Bench— those on the Government Front Bench seem not to be taking much notice of her— is she proposing any stronger action such as voting against the actions of which she disapproves?

Mrs. Lait

I see no point in voting against an increase in duties that has had to be put in place because of the irresponsible behaviour of Opposition Members.

I hope that my hon. Friend the Paymaster General will give me an assurance that the Treasury will think more strategically about the use of excise duty and stop regarding it as the milch cow that will solve any problem when we need to raise revenue quickly. I hope that that is the direction in which the Treasury is planning to move.

7.15 pm

Mrs. Helen Liddell (Monklands, East)

I do not have the same constituency interest as the hon. Member for Moray (Mrs. Ewing) or my hon. Friend the Member for Dumbarton (Mr. McFall). However, like many Scots Members, I have whisky interests within my constituency.

We are faced with an issue that spans the United Kingdom. The action of the Chancellor of the Exchequer in imposing increased duty on alcohol has an impact on major manufacturing industry. During the lifetime of the Government we have seen repeated attacks on manufacturing industry, and the Scotch whisky industry is a major part of the manufacturing sector. It is of great strategic importance to the United Kingdom because it draws heavily on indigenous suppliers. Its United Kingdom valued added is estimated to be about 70 per cent. It is sold in 190 overseas markets. It is very much a standard bearer for quality goods from the United Kingdom.

It is appalling that United Kingdom tax treatment limits the ability of the industry to have the same impact in Britain as it has in other countries. It is ironic that in his first Budget statement the Chancellor of the Exchequer took measures to ensure that the price of a bottle of champagne was reduced by 27p. Even after his second go at presenting the Budget, a bottle of champagne will be 20p cheaper. It is appalling that we do not recognise the impact on our industries and manufacturing businesses of moves that were made by the Chancellor following the shambles of his initial Budget statement on 29 November.

There can be no case for increasing tax discrimination by fiscally hitting spirits in general more harshly than tobacco in the mini-Budget. The Chancellor excluded hand-rolling tobacco from the mini-Budget specifically because of the European dimension. Why could he not extend that commonsense attitude to the spirits industry?

I have no hope that we shall hear any common sense from the Treasury Bench tonight. When the Government last increased duty on whisky—there was a 25p increase in the price of a bottle of whisky—the net impact was an £80 million decrease in the revenue available to the Exchequer following the slump in the industry as a result of that increased taxation. It is appalling to think that a critical and strategic industry should be treated in that way.

Scotch whisky is one of the United Kingdom's top five export-earning industries and shares top billing with cars, aircraft, North sea oil and its derivatives, and high-tech products. As the hon. Member for Moray pointed out, in 1993 its export earnings topped £2 billion for the first time, and 40 per cent. of whisky sales are in the European Union. Our other spirits contributed another £175 million to the United Kingdom's export earnings.

My hon. Friend the Member for Dumbarton pointed out that, directly and indirectly, the whisky industry employs 70,000 people—four times more than the 15,000 who are directly employed. The industry generates more than £ 1 billion of business with suppliers, yet the tax levied on Scotch whisky and other spirits is virtually twice the rate per unit of alcohol applied to wine and beer. I recognise the arguments that my hon. Friend the Member for Mansfield (Mr. Meale) employed on behalf of beer brewing, however, which is also important to the economy of many communities.

The two Budgets of 1993 set no increase in the excise duty on Scotch whisky, yet when the Chancellor was backed into a corner by his own lack of foresight and by the shambles that the Government created in his first Budget, the first people he chose to attack were workers in a valuable manufacturing industry who play a key part in our economy.

What are the growth prospects for the Scotch whisky industry? After a slump following the previous tax increase, great marketing efforts gave the industry an increased profile—especially in its bicentenary—in the United States, Japan and throughout the European Union. A British industry has the option to grow, but the Government are directly attacking that option. They are so shortsighted that they do not realise the opportunities for a crucial industry.

Scotch whisky is price-sensitive. There is no doubt that the increase of 26p on a bottle of Scotch whisky will affect the fragile recovery in the industry. Many people in the whisky communities suffered directly as a consequence of the previous attacks on the industry. Jobs and distilleries were lost as a result. We are throwing away the heritage of large communities in Scotland and the associated industries involved in the distribution and marketing of Scotch whisky, throughout the United Kingdom.

We must narrow the tax discrimination against Scotch whisky throughout the Community. We were led to believe that the Chancellor would be vociferous in his support for the industry and for tax harmonisation. I have heard nothing from the Treasury Bench today to convince me that that promise will be kept. I am worried that there will be a negative impact on the United Kingdom economy and that the Government are being short-sighted.

I am not merely concerned about the impact on the Scotch whisky industry. Whisky blenders in my constituency also manufacture gin. The gin manufacturers association just celebrated its 50th anniversary and it, too, is worried about the impact of the increase in duty on such a crucial manufacturing industry.

Mr. Nigel Evans (Ribble Valley)

I have spoken on this topic on several occasions and I thought it important not to let this opportunity pass without saying a few words.

Last year, I and several other members of the Standing Committee on the Deregulation and Contracting Bill—including my hon. Friend the Member for Surrey, East (Mr. Ainsworth), who cannot speak in today's debate—tried to save the great British pint of beer, including its head. Today we want to save the great British pub, which is vitally important, as we heard from the hon. Member for Mansfield (Mr. Neale).

How many pubs have closed partly as a result of the massive differentials in duty on British and French beer? It is estimated that a million pints a day are being brought into this country. Something has to be done to stem that massive tide, and the problem is growing.

One can travel very cheaply across the channel to Calais because of the many special offers. The channel tunnel has opened since I last visited the town, so the problem will get worse. It is estimated that beer from Calais accounts for 15 per cent. of United Kingdom take-home sales. My hon. Friend the Member for Hastings and Rye (Mrs. Lait) mentioned the illegal trade, but much of it is legal. Many people want to travel to Calais and try different beers, and I do not condemn them for that.

Last year I went to Dover to see at first hand the problem faced by Customs and Excise officers due to the amount of beer being imported into this country illegally. On the morning of my visit, two transit vans were stopped. One was packed to the roof with beer that had been brought in with some sort of documentation to show that it was for a party to celebrate winning a contract, which was illegal as it was a business deal. Someone else had brought in a transit van full of alcohol supposedly for personal consumption, but the owner had a list of addresses in the United Kingdom where the alcohol was to be sold.

I was very impressed with the work of Customs and Excise officers in Dover. I informed my hon. Friend the Member for Dover (Mr. Shaw) that I was visiting the port, as he also has done, because of the problem. The problem is indeed massive, and it can only get worse.

I also visited Calais, with the hon. Member for Mansfield, as a member of the all-party beer group. We saw at first hand the problems that the British brewing industry is experiencing. It is not just a matter of people bringing in a few extra cans in their cars. We saw heavy goods vehicles loading pallets of beer at the cash and carry stores which entice such trade. Judging by the tarpaulins, the vehicles came from all parts of Britain. People think that illegal imports are a problem only in the south-east of England, but that is not so: beer is being transported throughout the United Kingdom and the massive tax differentials make this worth while.

The alcohol is being distributed in many ways. It is not merely a matter of Arthur Daley characters shoving one or two cases here and there. It has become a trade for many people and the alcohol is distributed through all kinds of outlets, including car boot sales, and so forth. Indeed, I have raised in an Adjournment debate the problem of car boot sales and the amount of beer coming into this country.

I am concerned because I have brewing interests in my constituency—Thwaites, Whitbread and Samlesbury are on the edge of it and are all vital for job creation, as well as being particularly good beers— and because brewing is important throughout the United Kingdom. All the breweries, both small and large play a vital part in the United Kingdom brewing industry and I do not want them to suffer any more damage.

The British pub has become a social centre—a place where the local villagers can gather and talk—and I do not want the great British pub to be damaged. Pubs are one of the first places that many tourists want to visit when they come here because they are famous throughout the world. Many, however, have closed. The hon. Member for Mansfield mentioned the figure of 2,000. One can only estimate how many jobs were involved. If the differential is allowed to continue and if the amount of beer that one is allowed to bring back into this country is not changed, that problem will only worsen. More pubs will close, more breweries will be damaged and more jobs will be lost.

During my visit to Calais, I noticed that Sainsbuiy's had opened its own off-licence in one of the hypermarkets to sell alcohol to British customers because it thought that it knew British customers best. That off-licence is part of a much larger hypermarket where the sale of British and continental beers is going on apace and where the marketing is directed towards the British consumer. The signs are not just in French but in English, the prices not just in francs but in pounds, and the signs show how much cheaper it is to buy beer there to bring back into this country.

One can only imagine how cost-effective it is for people, especially those living towards the south of England, to make regular trips across the channel. The number of people going over to France and buying large amounts of beer, which they would normally buy in British off-licences or in British pubs, was a considerable problem over the Christmas period.

With the hon. Member for Mansfield, I was part of a delegation to the Paymaster General about the problems. We thought that we had won the battle before the initial Budget statement. At least we had taken a step in the right direction. This new clause, however, is a step in the wrong direction. A penny extra tax is neither here nor there, of course: the problem is much bigger than that, and my right hon. and learned Friend the Chancellor has said that he is looking at the greater problem of the differential.

7.30 pm

As a matter of urgency, we should try to approximate tax on beer on the continent with that in the United Kingdom. In the mean time, since that may take a number of years and we cannot afford to wait that long for the problem to be rectified, will the Treasury team assure us that the number of Customs and Excise officers operating at ports of entry is built up to ensure that the chances of people being stopped when trying to bring back beer are greater and that the chances of prosecuting them are also greater? Can we ensure that the excise verification officers operating in the United Kingdom, who look around shops and car boot sales, also look at the amount of beer brought through customs and that more prosecutions are brought? If we stand back and do nothing, the problem will only worsen. We need to take action, and we need to take it now.

Mr. Malcolm Bruce

There are two basic arguments that the Government seemed to have ignored. The first is about smuggling, which the Chancellor of the Exchequer said in his Budget speech was a major reason for not widening the duty. A week later, he promptly widened the duty. The second is that brewing and especially distilling are major British industries in terms of employment and exports. The Government do not seem to have addressed the importance of those industries at all.

The hon. Member for Moray (Mrs. Ewing) made the point that the Chancellor of the Exchequer, up to the second Budget, had given a clear indication that he had understood the argument, taken it on board and was going to do something about it. That is why I maintain that he took the decision in the mini-Budget simply out of political pique. He had been beaten on the first vote, so he wanted to be vindictive on the second. There was no intellectual credibility to his decision.

The most effective authority to put against the Chancellor's decision is the Chancellor himself. He can be quoted his own record of saying that widening the duty would not work and that it would damage the home industry, increase the problems of smuggling and probably damage Exchequer revenues. Yet the Government are going ahead with the decision to widen the duty.

Yet again, the Opposition parties together are trying to save the Government from themselves. Conservative Members have made speech after speech agreeing with the arguments put forward by Opposition Members but then saying that they intended to vote with the Government. We are told that that is because they hope and believe that the Government will address the problem, but in the meantime the problem will become worse.

The Government are in a ridiculous situation. It is indefensible and shows a total lack of understanding of the fact that our industries require a tax regime which gives them the confidence from which they can build up an export market. The hon. Member for Carshalton and Wallington (Mr. Forman) knows perfectly well that a strong home market is an essential precondition of a successful export market. It is not that firms cannot export when there is a declining home market, but that the home market provides the base and the profit to finance the export drive.

When I was newly elected to the House, because I was the hon. Member for Gordon and because I spoke about the spirits industry, I was described by one columnist as "the hon. Member for Gordon, the home of malt gin." I remind the Committee that the gin industry is a significant producer as well—we are not just pleading for the scotch whisky industry, but for the whole home-produced spirits industry.

It is odd that the Government seem to have regarded the wine industry as deserving a fairer tax deal than the beer, whisky and gin industries, although this country produces relatively little wine. We make some wine, and some of it is quite good, but it is not a significant national industry. In contrast, we make an enormous amount of gin and whisky and we export it. We also make an enormous amount of beer. Yet the Government tax it more heavily than wine.

If we were not in a single market scenario, I would suggest that the Government considered putting up the duty on wine and reducing the duty on spirits. There is a very good argument for that, not least because the alcohol content per unit in relation to the tax is such that whisky and gin are taxed at double the rate of wine, which is an unfair and distorted mix. Raising duty on wine and reducing duty on spirits would appeal to everyone because it would ensure that we protected our own industry and taxed imports. The trouble is that the single market does not make that a viable, long-term and sustainable proposition.

If the Government are serious about taking the argument of the major brewing and distilling industries on board, they should abandon the new clause and at least freeze the duties. If they are to try to restore the industry's confidence, which has been seriously damaged by the Budget, they should quickly tell the House, the country and the industry exactly how they intend to resolve the matter and narrow the differentials. In reality, that can be done only by recognising that duties in the United Kingdom will have to go down; no matter what agreement we may secure with our partners in the European Union about raising their duties to narrow the differential, there is no chance whatever of their coming anywhere near our rates.

The health factor was raised by one hon. Member, but there is not a fair comparison between alcohol and tobacco. All the evidence is clear that tobacco is fundamentally harmful to all users. It is a health hazard and a health risk. That is a justifiable reason for increasing the duties on tobacco, even though I acknowledge the smuggling problem. With alcohol, there is not such an absolute health factor to consider. The abuse of alcohol, not its existence, is a problem. It can be argued that alcohol used in moderation is positively good for us. Indeed, a slogan used to tell us that Guinness was good for us and many a doctor will tell patients that a nip of whisky before bed will enhance their sleep and prolong their life. Not enough people are taking that nip, and the Chancellor has made it that little bit more difficult and expensive.

For all those reasons, my colleagues and I will vote against new clause 2 and we look to the Government to indicate how and when they intend to do something not to make the problem worse, but to tackle it and narrow the differential.

Mr. Stern

I wish to make a few brief comments. First, I should emphasise my continuing interest in these debates over the years. I represent part of the city of Bristol, which contains the Courage brewery, a considerable number of substantial wine importers and a major centre for the manufacture of cider. As a result, it is rightly twinned with Bordeaux, which itself is not unknown for its wine.

Before considering the broad argument which has been rehearsed by many hon. Members today, I want to follow up a point that was raised in last year's debate. When my hon. Friend the Paymaster General replies to the debate, I hope that he will be able to take this point on board. There has been much doom and gloom today about the low level of seizures of smuggled alcohol. However, the level of seizures is increasing substantially and is now a real deterrent in certain parts of the country.

Nothing has been said today about what should happen to the very valuable product being seized. It irks me, and I believe that it irks many people, that the beer, wine and spirits seized as a result of smuggling are simply poured into a hole in the ground. From the point of view of sheer waste, that is not acceptable. In Committee last year, I raised with my right hon. Friend the Chief Secretary, who replied to that debate, the question of whether the seized wines, spirits and beer could be re-exported so that they would not affect the home market. In reply, the Chief Secretary said that the Government were considering vinegarising or denaturing the seized alcohol and recycling the glass and metal involved. Although there is provision in later clauses for a new tax regime for denatured and vinegarised alcohol, there is no provision for taking the matter forward. Our job of selling the public the idea of a continuing tough regime on imports will be much more difficult if the Government are engaged in a vast waste of the products that they are seizing.

I want now to consider the more general argument. Although the Opposition may be heartened by some of my remarks, I must begin by totally dismissing the comments from official and unofficial Opposition spokesmen today. As the hon. Member for Barnsley, Central (Mr. Illsley) made clear in last year's debate, their only solution to the problem is to throw substantial sums of money at it. They cannot think of anything else to do about it. I totally reject the absence of policy from the Opposition: simply saying, "We must do something about this", is not a solution.

The Government have a policy which they had to breach in part this year because of the irresponsible vote by the Opposition on VAT on domestic fuel. I am not entirely happy with the Government's position. It is all very well to say, as my hon. and learned Friend the Member for Burton (Sir I. Lawrence) said, that the long-term solution is harmonisation of duties, but if we consider the level of harmonisation required and the time scale involved, one is clearly looking at 50 years of cloud cuckoo land.

We must understand that we are asking our European allies and partners to disadvantage their own home producers in favour of our producers and to decrease their market share in favour of ours. It is increasingly unlikely that we shall make any substantial progress on harmonisation. It just will not happen. If that is the Government's only alternative policy for a long-term solution to the problem of the skewing of the single market against our producers because of the existing pattern of duty, I must tell my hon. Friend the Paymaster General that that is not good enough, so please go away and think again. Simply to rely on our European allies to disadvantage themselves for our benefit is unlikely to prove to be a successful policy in the long term.

We need to think again about the problem. Clearly the Chancellor cannot forgo the kind of revenue that we are talking about this year, or in the long term, by a consistent and steady reduction down to something approximating European levels of excise duty. But if substantial duty reduction is not available to us, what is?

Mr. Thomas Graham (Renfrew, West and Inverclyde)

I remember the Chancellor of the Exchequer standing at the Dispatch Box not that long ago lambasting Scottish Members who had voted against the imposition of VAT on fuel. He said that we were to blame for the increase in duty on whisky. That was lamentable. It was not a wee grouse; it was a big grouse, and that big grouse could cost thousands of jobs in the whisky industry.

7.45 pm

The Chancellor was being punitive. He did not realise what damage he was going to inflict on the whole of Britain. He had not considered the earnings that the whisky industry generates and the more than £1 billion that is involved in supplying the industry to ensure that it survives.

I have already said that 15,000 people are employed directly in the industry and that nearly 70,000 folk are employed indirectly. As a former engineer, I recall working in the industry. I did not produce whisky, but I did produce engineering machinery for the industry. Thousands of folk produce machinery for the whisky industry.

Some of those engineering companies are involved in other aspects of manufacturing, for which they require the support of the whisky industry. For example, the chemical industry benefits from engineering companies involved in the whisky industry. Some pipe-fitting companies in the whisky industry supply other industries in Britain. If the whisky industry is affected, those companies will be punished.

The brewing industry is very much like the whisky industry; it relies on the same engineering skills and development. I am not separating my support between the beer industry or the whisky industry, which are an important part of life in Great Britain and which play an important role in attracting much-needed revenue to this country.

I recognise the terrible problem caused by the illegal importation of drink from the continent. As a Scotsman, I do not benefit too much from that. We are told that there are supposed to be convoys of vans travelling to Glasgow. I am a car boot lover; I like to go to car boot sales. The hon. Member for Ribble Valley (Mr. Evans) said that people can buy whisky and spirits at car boot sales. I have never seen them for sale at car boot sales. However, I must confess that I have seen cigarettes and cigars for sale.

The Chancellor has not thought this out, but that is typical of the Government. They have thought nothing out in relation to taxation. If they had, we would not be in the trouble that we are in now. The 17.5 per cent. VAT charge on domestic fuel was incredible. I am glad to say that the combined power of the House destroyed that rise, but we have now been hit by this tax increase.

Hundreds of people in my constituency work directly in the whisky industry. They work in the Chivas Regal factory and in the Johnny Walker bottling plant, which is in the constituency of my hon. Friend the Member for Paisley, North (Mrs. Adams). They rely on the industry to provide them with their daily bread and to ensure that at the end of the week they get their wages and, at the end of the month, they get their salaries. It is very important to have dignity and to be paid.

The Government will deny those people through their punitive tax system and possibly their anti-Scottish feeling. They will impose an additional 20 per cent. duty on whisky, yet they have reduced duty on champagne. Hon. Members should think about that; it is absolutely mind-boggling. I have mentioned before that the Chancellor supports champagne Charlie. He is making it easier for folk who are stinking rich to buy their champagne cheaper. Ordinary men and women who love a wee tipple, a pint of beer or a wee hauf of whisky must pay through the nose because the Chancellor could not run a bus to Saltcoats, which is not very far from where I live.

I hope that this is the Chancellor's last Budget. I hope that it is a case of that famous saying of Bell's, 'afore ye go. I am happy for the Chancellor to have his last whisky 'afore ye go. I hope that he pours a further wee double and drinks to a new whisky, SS Politician. We all know how that went—down the hole—but it created great work for Scottish folk.

The Government have an opportunity to save the scotch whisky industry and the brewing industry from further redundancies by turning from the disastrous route of increasing duty on our daily tipple. They should look for more sensible ways to raise taxation without creating further redundancies and unemployment in our country.

Mr. Nigel Forman (Carshalton and Wallington)

I enjoy a wee dram as much as I enjoyed the speech of the hon. Member for Renfrew, West and Inverclyde (Mr. Graham), and I pay tribute to the robust way in which he represents his constituents' interests.

There has been a bit of Scottish and, indeed, English hyperbole, and I should like to pour a little cold water on some arguments—I shall be a bit of a spoil-sport, in fact.

When members of the Treasury and Civil Service Select Committee recently considered differential duties, we were not completely convinced by the arguments that were put to us by licensed retailers of alcohol or by publicans. We listened carefully to what they said, but we concluded that the arguments were somewhat overstated.

Opposition Members in particular have stressed what they allege to be the damaging and, indeed, almost terminal effects of a fairly small duty increase in the Budget, but, bearing in mind changes in the drinks industry and in many other manufacturing industries, one is bound to conclude that in recent times new, changing technology and improved productivity have been at least as important, and probably much more so, than any marginal changes in duty.

Hon. Members have made great play of the problems facing many pubs. I know from experience that pubs in London and in the south-east have had a hard time, but the reasons for that go far wider than the subject of this rather narrow debate. Changing social habits, the growth of off-licences, the tendency of supermarkets to sell large quantities of alcohol to people to drink at home with friends and the drink-driving laws have had a major influence on pubs, not to speak of the temptation of some large breweries to kit out their pubs in a standard manner that makes them look more like building societies than pubs and has detracted from the character and individuality of many traditional British pubs.

There are other factors, such as the longer-run arguments about alcohol consumption and points that I have tried to raise with the hon. Member for Bristol, South (Ms Primarolo). There is no doubt from the figures that the average industrial worker now has to work significantly fewer hours to be able to afford a bottle of scotch or a pint of beer than 20, 30 or 40 years ago. The real price of alcohol has fallen, with some adverse consequences for medical and health problems, which is the point that I raised with the hon. Lady.

It is rather surprising that the hon. Member for Bristol, South has made such a swift, easy transition from her shadow health duties to the shadow Treasury portfolio. She has clearly forgotten many of her party's arguments about the desirable health effects of discouraging excessive alcohol consumption by raising the real price of alcohol.

Ms Primarolo

That is exactly the point. Large amounts of alcohol are being smuggled into the country. The Treasury statistics on how much is coming in illegally and how much duty is lost are disputed. If alcohol is coming in unregulated, children and young people have greater access to it. Therefore, health problems are increased, not decreased.

Mr. Forman

The hon. Lady has a small point. According to the best estimates of Customs and Excise, the amount of alcohol that is imported illegally is not significant—less than a fifth—compared with the total volume of alcohol consumed.

Mr. Malcolm Bruce

I understand the hon. Gentleman's point, but, leaving aside the smuggling issue, does he accept that the price of drinks over the bar is a relevant calculation because in every other European country drink is cheaper than it is at home, which encourages more British holidaymakers to go abroad rather than to stay at home and discourages others from coming here? That fact should be taken into account.

Mr. Forman

That might be a factor for keen drinkers, particularly those who enjoy continental wine, for example, but I doubt whether it is a determining factor when most families decide whether to go abroad or to stay at home, or perhaps not to go on holiday at all.

Opposition Members have been remarkably coy in stating where the revenue would come from if their amendment was successful. There is no doubt that my right hon. and learned Friend the Chancellor needed to find the extra revenue in fairly short order. I have heard no suggestion of how Opposition Members would make up the shortfall. Would they simply allow it to be added to the public sector borrowing requirement, with all the unforeseen consequences that that could have for interest rates?

Sir Ivan Lawrence

The hon. Member for Renfrew, West and Inverclyde (Mr. Graham) suggested that perhaps the evil was that the Government have not taxed champagne enough. Perhaps Opposition Members propose to tax champagne socialists more.

Mr. Forman

That might be so. Perhaps certain future gatherings in Brussels will prove less attractive if that policy is followed.

I wish to end my speech on a fairly serious and contained point, on which I would appreciate a comment by my hon. Friend the Minister. Has he heard from the Opposition how they would make up the revenue shortfall?

Mr. George Stevenson (Stoke-on-Trent, South)

I am a sponsored member of the Transport and General Workers Union, and I represent many people employed in the brewing industry. As a result of the proposed tax, many of them are likely to lose their jobs in the near future.

Just before 29 November, I met representatives of the Midlands Brewery Society in my constituency. They were at pains to say once more to me, as they had said to many other hon. Members, that, if there was no movement in the duty on beer, they would face a serious and disastrous situation. I asked them to clarify what they would experience if there was an increase. They said that, after detailed consideration—they did not pluck the figure out of the air—10,000 jobs in the industry would be lost, either directly or indirectly. I have heard no Conservative Member challenge that figure.

8 pm

Every speech that I have heard this evening has suggested that the duty will cost jobs in the whisky and beer industries and elsewhere. It is a tax on jobs. The Government continually tell my hon. Friends that the Opposition's taxation policies will cost jobs, so it is ironic that tonight the same Government— with the support of their Back Benchers— will vote for a tax that will certainly cost jobs.

I was fascinated and intrigued by Conservative Members who suggested that they were seriously concerned about the tax. The hon. and learned Member for Burton (Sir I. Lawrence) and the hon. Member for Hastings and Rye (Mrs. Lait) made that suggestion, but then scurried into their bolthole and camouflaged their concerns by blaming the Labour party for the tax. We are proud that we were able to play a significant role in thwarting the imposition of 17.5 per cent. VAT on fuel, which the country supported. Conservative Members who say that it is the Labour party's fault that taxation has been put up to levels that we have never experienced in modern peacetime, when it is a result of the incompetence of the Chancellor and of the Government, are pushing credibility to the extreme.

I asked my constituents what they thought about the Chancellor of the Exchequer not putting any duty on beer in his original Budget statement. They did not believe it—they were incredulous about it. They did not believe that the Government meant anything that they said about taxation. They thought, too, that the Government were trying to discourage them from drinking beer and to encourage them to drink champagne. The Government failed on the latter aim, and within nine days they had failed my constituents on the former one.

Hon. Members have stated that the Government should urgently seek dialogue with other European Union member states to try to equalise the taxation regime so that we can make progress on what is undoubtedly a serious problem— the massive difference between tax regimes. The problem has been described by many hon. Members on both sides, and I have no wish to repeat their comments.

The Government cannot be serious about any such moves. In a previous life, I was a Member of the European Parliament and I clearly remember the Commission making proposals to harmonise excise duties on alcohol and tobacco. I remember that the first Government to reject any such moves was the British Government. I do not think that the assurances that the Government have apparently given can be serious.

Let us speculate on the negotiating position of the Government if they told other member states that they wanted to debate harmonising excise duties on alcohol and tobacco. They would be asked why they wanted to do so, and they would reply, "We have just increased ours and we expect you to do the same." I must challenge that negotiating position, as it is absolutely incredible.

I can well imagine the Prime Minister or the Chancellor saying from the Dispatch Box that such moves were to be made. The independent Tory party— those hon. Members who described themselves at the weekend as the real Tory party— would not stand for that. Given the Government's current policy on the European Union, there is no possibility that any move will be made on the crucial issue of harmonising taxation, even if it were the right thing to do.

Given that scenario and the concerns expressed by hon. Members about the Government's panic measure, two things should be done. The first is that the House should vote against new clause 2; the second is that the Government should urgently propose measures that would enhance Customs' ability to stop the illegal trade. Instead, they are making cuts in Customs and Excise. If we can do those two things, the House will be able to face the arguments that are being put outside with some credibility.

The Paymaster General

The Opposition have announced their opposition to the measures before the House. At other times, the Labour party certainly has supported higher taxes on alcohol and tobacco on health grounds. That is an interesting reversal of a long-standing policy. [Interruption.] I am responding to a point made by the hon. Member for Bristol, South (Ms Primarolo), who quoted with approval the example of Denmark. The Danish Government cut alcohol duty in response to large-scale cross-border shopping across its land border with Germany. They made a cut of 48 per cent. in beer and wine duty, yet consumption rose only slightly. The Danish Government then had to find compensatory tax increases elsewhere. If the hon. Lady is suggesting that we emulate Denmark, she must propose alternative sources of revenue.

That brings me to the point of costs. We would forgo £155 million if we were to accept what has been urged on us by the Labour party, which would create a large hole in Government revenue. If the Labour party wants to pose as a party of financial responsibility, it must tell us what new taxes it would replace the duty with, or what public expenditure cuts it would make.

The hon. Member for Gordon (Mr. Bruce) is quoted in today's newspapers rightly castigating and criticising the Labour party for constantly making expenditure promises without saying how they would be paid for. Yet the hon. Gentleman and his party support a reduction in revenue of £155 million a year— a spectacular example of the pot calling the kettle black.

Another point made by the Labour party, and echoed partly by some of my hon. Friends, concerned the efforts made by Customs and Excise to counter the smuggling of alcohol products. The hon. Member for Bristol, South got into a muddle about the Inland Revenue and Customs and Excise staff who are supposed to be deployed in anti-smuggling efforts. She said that there were to be cuts in staff. I can confirm that the number of excise verification officers deployed in anti-smuggling duties will not be cut.

Mr. David Shaw (Dover)

Will my hon. Friend confirm that the Government intend to maintain the levels of prosecutions and of Customs officers at Dover port who check on smuggling? Will he further confirm that the Government will do everything possible to fight smugglers and to stop smuggling?

Mr. Heathcoat-Amory

I can confirm that, and inform my hon. Friend— if he does not know already—that an extra 12 excise verification officers have been deployed to Dover in response to concerns expressed by industry and representations made by my hon. Friend.

My hon. Friend the Member for Bristol, North-West (Mr. Stern) asked what is to happen to the increasing quantity of seized goods. We are considering a policy of sale without undermining the legitimate trade that we are seeking to protect.

The general point that I should like to make to my hon. Friend and in particular to my hon. and learned Friend the Member for Burton (Sir I. Lawrence) and my hon. Friend for Hastings and Rye (Mrs. Lait), both of whom have persistently raised it with me, is that we are concerned to protect the legitimate trade and will pursue harmonisation through the European Union, although we would not want to lose our essential fiscal sovereignty over our excise duties.

We have ensured that the biennial review, the first report of which was due by the end of last year but which was delayed, includes, at our insistence, a clause that requires the council to take into account the proper functioning of the internal market and competition between the various categories of alcoholic drinks.

Sir Ivan Lawrence

Will my hon. Friend give way?

Mr. Heathcoat-Amory

Will my hon. and learned Friend forgive me if I do not do so? I know that the House wishes to come to a resolution, but I want to respond to a point made by the hon. Member for Moray (Mrs. Ewing).

I assure the hon. Lady that we have the interest of the spirits industries firmly in mind. That is why we froze excise duty on spirits in the past three Budgets and, if we had had our way, we would have done so in this Budget too. But because of the House's decision to reject the 17.5 per cent. VAT rate on fuel, we needed to look elsewhere to restore revenue. The Government do not have the luxury of seeing revenues reduced without the obligation to replace them, but I remind her and the House that the duty on spirits will have reduced in real terms by more than 16 per cent. since 1985, even with the increase proposed in the new clauses.

The Chairman of Ways and Means (Mr. Michael Morris)

For clarification, I should say to the Committee that I shall put a minimum of five Questions: first, That the new clause be read a Second time; secondly, the amendment; thirdly, That the new clause be added to the Bill; fourthly, That new clause 2 stand part of the Bill; and, fifthly, the amendments.

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

The Committee divided: Ayes 290, Noes 251.

Division No. 44]	[8.11 pm
AYES
Ainsworth, Peter (East Surrey)	Baldry, Tony
Aitken, Rt Hon Jonathan	Banks, Matthew (Southport)
Alexander, Richard	Banks, Robert (Harrogate)
Alison, Rt Hon Michael (Selby)	Bates, Michael
Allason, Rupert (Torbay)	Batiste, Spencer
Amess, David	Bellingham, Henry
Ancram, Michael	Bendall, Vivian
Arbuthnot, James	Beresford, Sir Paul
Arnold, Jacques (Gravesham)	Biffen, Rt Hon John
Arnold, Sir Thomas (Hazel Grv)	Bonsor, Sir Nicholas
Ashby, David	Booth, Hartley
Aspinwall, Jack	Boswell, Tim
Atkins, Robert	Bottomley, Peter (Eltham)
Baker, Nicholas (North Dorset)	Bottomley, Rt Hon Virginia

Bowis,John	Gorst, Sir John
Boyson, Rt Hon Sir Rhodes	Grant,Sir A (SW Cambs)
Brandreth, Gyles	Greenway, Harry (Ealing N)
Brazier, Julian	Greenway, John (Ryedale)
Bright, Sir Graham	Griffiths, Peter (Portsmouth, N)
Brooke, Rt Hon Peter	Grylls, Sir Michael
Brown, M (Brigg & Cl'thorpes)	Gummer, Rt Hon John Selwyn
Browning, Mrs Angela	Hague, William
Bruce, Ian (Dorset)	Hamilton, Neil (Tatton)
Budgen, Nicholas	Hamilton, Rt Hon Sir Archibald
Burns, Simon	Hampson, Dr Keith
Burt,Alistair	Hannam, Sir John
Butler, Peter	Hargreaves, Andrew
Butterfill, John	Harris, David
Carlisle, John (Luton North)	Haselhurst Alan
Carlisle, Sir Kenneth (Lincoln)	Hawkins, Nick
Carrington, Matthew	Hawksley, Warren
Carttiss, Michael	Hayes, Jerry
Cash.William	Heald, Oliver
Channon, Rt Hon Paul	Heath, Rt Hon Sir Edward
Churchill.Mr	Heathcoat-Amory, David
Clappison, James	Hendry, Charles
Clark, Dr Michael (Rochford)	Heseltine, Rt Hon Michael
Clarke, Rt Hon Kenneth (Ru'clif)	Hicks, Robert
Clifton-Brown, Geoffrey	Higgins, Rt Hon Sir Terence
Coe, Sebastian	Hill, James (Southampton Test)
Colvin, Michael	Hogg, Rt Hon Douglas (G'tham)
Congdon, David	Horam, John
Conway, Derek	Hordem, Rt Hon Sir Peter
Coombs, Anthony (Wyre For'st)	Howarth, Alan (Strat'rd-on-A)
Coombs, Simon (Swindon)	Howell, Rt Hon David (G'dford)
Cope, Rt Hon Sir John	Howell, Sir Ralph (N Norfolk)
Cormack, Sir Patrick	Hughes, Robert G (Harrow W)
Couchman, James	Hunt, Rt Hon David (Wirral W)
Currie, Mrs Edwina (S D'by'ire)	Hunt, Sir John (Ravensbourme)
Curry, David (Skipton & Ripon)	Jack, Michael
Davies, Quentin (Stamford)	Jackson, Robert (Wantage)
Day, Stephen	Jenkin, Bernard
Deva, Nirj Joseph	Jessel, Toby
Dicks, Terry	Johnson Smith, Sir Geoffrey
Douglas-Hamilton, Lord James	Jones, Gwilym (Cardiff N)
Dover, Den	Jones, Robert B (W Hertfdshr)
Duncan Smith, Iain	Jopling, Rt Hon Michael
Duncan, Alan	Kellett-Bowman, Dame Elaine
Dunn, Bob	Key, Robert
Durant. Sir Anthony	King, Rt Hon Tom
Dykes, Hugh	Kirkhope, Timothy
Eggar, Rt Hon Tim	Knapman, Roger
Elletson, Harold	Knight, Mrs Angela (Erewash)
Emery, Rt Hon Sir Peter	Knight, Greg (Derby N)
Evans, David (Welwyn Hatfield)	Knight, Dame Jill (Bir'm E'st'n)
Evans, Jonathan (Brecon)	Knox, Sir David
Evans, Nigel (Ribble Valley)	Kynoch, George (Kincardine)
Evans, Roger (Monmouth)	Lait, Mrs Jacqui
Evennett, David	Lamont, Rt Hon Norman
Faber, David	Lang, Rt Hon Ian
Fabricant, Michael	Lawrence, Sir Ivan
Fenner, Dame Peggy	Legg, Barry
Field, Barry (Isle of Wight)	Leigh, Edward
Fishburn, Dudley	Lennox-Boyd, Sr Mark
Forman, Nigel	Lester, Jim (Broxtowe)
Forsyth, Rt Hon Michael (Stirling)	Lidington, David
Forth, Eric	Lightbown, David
Fowler, Rt Hon Sir Norman	Lilley, Rt Hon Peter
Fox, Sir Marcus (Shipley)	Lloyd, Rt Hon Sir Peter (Fareham)
Freeman, Rt Hon Roger	Lord, Michael
French, Douglas	Luff, Peter
Fry, Sir Peter	Lyell Rt Hon Sir Nicholas
Gale, Roger	MacGregor, Rt Hon John
Gardiner, Sir George	MacKay, Andrew
Garel-Jones, Rt Hon Tristan	Maclean, David
Garnier, Edward	McLoughlin, Patrick
Gillan, Cheryl	McNair-Wilson, Sir Patrick
Goodlad, Rt Hon Alastair	Madel, Sir David
Goodson-Wickes, Dr Charles	Maitland, Lady Olga
Gorman, Mrs Teresa	Mans, Keith

Marlow, Tony	Shersby, Michael
Marshall, John (Hendon S)	Sims, Roger
Marshal, Sir Michael (Arundel)	Skeet Sir Trevor
Martin, David (Portsmouth S)	Smith, Sir Dudley (Warwick)
Mawhinney, Rt Hon Dr Brian	Soames, Nicholas
Mayhew, RtHon Sir Patrick	Speed, Sir Keith
Merchant, Piers	Spencer, Sir Derek
Mills, Iain	Spicer, Sir James (W Dorset)
Mitchell, Andrew (Gedling)	Spicer, Michael (S Worcs)
Mitchell, Sir David (NW Hants)	Spink, Dr Robert
Moate, Sir Roger	Spring, Richard
Monro, Sir Hector	Stanley, RtHon Sir John
Montgomery, Sir Fergus	Steen, Anthony
Moss, Malcolm	Stephen, Michael
Needham, Rt Hon Richard	Stem, Michael
Nelson, Anthony	Stewart, Allan
Neubert, Sir Michael	Streeter, Gary
Newton, Rt Hon Tony	Sumberg, David
Nicholls, Patrick	Sykes, John
Nicholson, David (Taunton)	Tapsell, Sir Peter
Nicholson, Emma (Devon West)	Taylor, Ian (Esher)
Norris, Steve	Taylor, John M (Solihull)
Onslow, Rt Hon Sir Cranley	Taylor, Sir Teddy (Southend, E)
Oppenheim, Phillip	Temple-Morris, Peter
Ottaway, Richard	Thomason, Roy
Page, Richard	Thompson, Sir Donald (C'er V)
Paice, James	Thompson, Patrick (Norwich N)
Patrick, Sir Irvine	Thurnham, Peter
Patten, Rt Hon John	Townsend, Cyril D (Bexl'yh'th)
Pawsey, James	Tracey, Richard
Peacock, Mrs Elizbeth	Tredinnick, David
Pickles, Eric	Trend, Michael
Porter, Barry (Wirral S)	Trotter, Neville
Porter, David (Waveney)	Twinn, Dr Ian
Portillo, Rt Hon Michael	Vaughan, Sir Gerard
Powell, William (Corby)	Viggers, Peter
Rathbone, Tim	Walden, George
Redwood, RtHon John	Walker, Bill (N Tayside)
Renton, Rt Hon Tim	Waller, Gary
Richards, Rod	Ward, John
Riddick, Graham	Wardle, Charles (Bexhill)
Rifkind, Rt Hon Malcolm	Waterson, Nigel
Robathan, Andrew	Watts, John
Roberts, Rt Hon Sir Wyn	Wells, Bowen
Robertson, Raymond (Ab'd'n S)	Wheeler, RtHon Sir John
Robinson, Mark (Somerton)	Whitney, Ray
Roe, Mrs Marion (Broxbourne)	Whittingdale, John
Rumbold, Rt Hon Dame Angela	Widdecombe, Ann
Ryder, Rt Hon Richard	Willetts, Sir Jerry
Sackville, Tom	Willetts, David
Sainsbury, Rt Hon Sir Timothy	Wolfson, Mark
Scott, Rt Hon Sir Nicholas	Wood, Timothy
Shaw, David (Dover)	Yeo, Tim
Shaw, Sir Giles (Pudsey)	Young, Rt Hon Sir George
Shephard, Rt Hon Gillian	Tellers for the Ayes:
Shepherd, Colin (Hereford)	Mr. Sydney Chapman, and
Shepherd, Richard (Aidridge)	Dr. Liam Fox
NOES
Abbott, Ms Diane	Benn, Rt Hon Tony
Adams, Mrs Irene	Bennett, Andrew F
Ainger.Nick	Benton, Joe
Ainsworth, Robert (Cov'try NE)	Bermingham, Gerald
Allen, Graham	Berry, Roger
Alton, David	Betts, Clive
Anderson, Donald (Swansea E)	Blair, Rt Hon Tony
Anderson, Ms Janet (Ros'dale)	Blunkett David
Armstrong, Hilary	Boateng, Paul
Ashdown, Rt Hon Paddy	Boyes, Roland
Ashton, Joe	Bradley, Keith
Barnes, Harry	Bray, Dr Jeremy
Barron, Kevin	Brown, Gordon (Dunfermline E)
Battle, John	Brown, N (N'c'tle upon Tyne E)
Bayley.Hugh	Bruce, Malcolm (Gordon)
Beckett, Rt Hon Margaret	Burden, Richard

Byers, Stephen	Heppell, John
Caborn, Richard	Hill, Keith (Streatham)
Callaghan, Jim	Hinchliffe, David
Campbell, Mrs Anne (C'bridge)	Hodge, Margaret
Campbell, Ronnie (Blyth V)	Hoey, Kate
Campbell-Savours, D N	Home Robertson, John
Canavan, Dennis	Hood, Jimmy
Cann, Jamie	Hoon, Geoffrey
Carlile, Alexander (Montgomery)	Howarth, George (Knowsley North)
Chidgey, David	Howells, Dr. Kim (Pontypridd)
Chisholm, Malcolm	Hoyle, Doug
Church, Judith	Hughes, Kevin (Doncaster N)
Clapham, Michael	Hughes, Robert (Aberdeen N)
Clarke, Eric (Midothian)	Hughes, Roy (Newport E)
Clarke, Tom (Monklands W)	Hutton, John
Clelland, David	Illsley, Eric
Coffey, Ann	Ingram, Adam
Cohen, Harry	Jackson, Glenda (H'stead)
Connarty, Michael	Jackson, Helen (Shef'ld, H)
Cook, Frank (Stockton N)	Jamieson, David
Cook, Robin (Livingston)	Janner, Greville
Corbett, Robin	Jones, Lynne (B'ham S O)
Corbyn, Jeremy	Jones, Martyn (Clwyd, SW)
Corston, Jean	Jones, Nigel (Cheltenham)
Cousins, Jim	Jowell, Tessa
Cunliffe, Lawrence	Kaufman, Rt Hon Gerald
Cunningham, Jim (Covy SE)	Keen, Alan
Cunningham, Rt Hon Dr John	Kennedy, Jane (Lpool Brdgn)
Dalyell, Tam	Khabra, Piara S
Darling, Alistair	Kilfoyle, Peter
Davidson, Ian	Kirkwood, Archy
Davies, Bryan (Oldham C'tral)	Lestor, Joan (Eccles)
Davies, Rt Hon Denzil (Llanelli)	Lewis, Terry
Denham, John	Liddell, Mrs Helen
Dewar, Donald	Litherland, Robert
Dixon, Don	Livingstone, Ken
Dobson, Frank	Llwyd, Elfyn
Donohoe, Brian H	McAllian, John
Dowd, Jim	McCartney, Ian
Dunnachie, Jimmy	Macdonald, Calum
Dunwoody, Mrs Gwyneth	McFall, John
Eagle, Ms Angela	MacKinlay, Andrew
Eastham, Ken	Maclennan, Robert
Enright, Derek	McMaster, Gordon
Etherington, Bill	McNamara, Kevin
Evans, John (St Helens N)	MacShane, Denis
Ewing, Mrs Margaret	McWilliam, John
Fatchett Derek	Madden, Max
Field, Frank (Birkenhead)	Maddock, Diana
Flynn, Paul	Mahon, Alice
Foster, Rt Hon Derek	Mandelson, Peter
Foster, Don (Bath)	Marek, Dr John
Fraser, John	Marshall, Jim (Leicester, S)
Fyfe, Maria	Martin, Michael J (Springburn)
Galbraith, Sam	Martlew, Eric
Galloway, George	Maxton, John
Gapes, Mike	Meacher, Michael
George, Bruce	Meale.Alan
Gerrard.Neil	Michael, Alun
Gilbert, RtHon Dr John	Michael, Bill (Sheffield Heeley)
Godman, Dr Norman A	Michie, Mrs Ray (Argyll & Bute)
Godsiff, Roger	Milburn, Alan
Gordon, Mrs Llin	Miller, Andrew
Gordon, Mildred	Mitchell, Austin (Gt Grimsby)
Graham, Thomas	Moonie, Dr Lewis
Grant Bemie (Tottenham)	Morgan, Rhodri
Griffiths, Nigel (Edinburgh S)	Morley, Elliot
Griffiths, Win (Bridgend)	Morris, Rt Hon Alfred (Wy'nshawe)
Grocott, Bruce	Morris, Estelle (B'ham Yardley)
Gunnell, John	Morris, Rt Hon John (Aberavon)
Hain, Peter	Mudie, George
Hal, Mike	Oakes, Rt Hon Gordon
Hanson, David	O'Brien, Mike (N W'shire)
Hardy, Peter	O'Brien, William (Normanton)
Harvey, Nick	O'Hara, Edward
Henderson, Doug	Olner, Bill

O'Neill, Martin	Spearing, Nigel
Orme, Rt Hon Stanley	Spellar, John
Pearson, Ian	Squire, Rachel (Dunfermline W)
Pickthall, Colin	Steinberg, Gerry
Pike, Peter L	Stevenson, George
Pope, Greg	Stott Roger
Powell, Ray (Ogmore)	Strang, Dr. Gavin
Prentice, Bridget (Lew'm E)	Straw, Jack
Prentice, Gordon (Pendle)	Sutcliffe, Gerry
Primarolo, Dawn	Taylor, Mrs Ann (Dewsbury)
Purchase, Ken	Taylor, Matthew (Truro)
Radice, Giles	Thompson, Jack (Wansbeck)
Randall, Stuart	Timms, Stephen
Raynsford, Nick	Tipping, Paddy
Redmond, Martin	Turner, Dennis
Reid, Dr John	Tyler, Paul
Rendel, David	Vaz, Keith
Robertson, George (Hamilton)	Walker, Rt Hon Sir Harold
Robinson, Geoffrey (Co'try NW)	Walley, Joan
Roche, Mrs Barbara	Wareing, Robert N
Rooker.Jeff	Watson, Mike
Rooney, Terry	Wicks, Malcolm
Ross, Ernie (Dundee W)	Wigley, Dafydd
Ruddock, Joan	Williams, Rt Hon Alan (SW'n W)
Salmond, Alex	Williams, Alan W (Carmarthen)
Sedgemore, Brian	Wilson, Brian
Sheerman, Barry	Winnick, David
Sheldon, Rt Hon Robert	Wise, Audrey
Shore, Rt Hon Peter	Worthington, Tony
Short, Clare	Wray, Jimmy
Simpson, Alan	Wright, Dr Tony
Skinner, Dennis	Young, David (Bolton SE)
Smith, Andrew (Oxford E)	Tellers for the Noes:
Smith, Liew (Blaenau Gwent)	Mr. Jon Owen Jones and
Snape, Peter	Mr. John Cummings

Question accordingly agreed to.

Clause read a Second time.

Amendment proposed to the proposed new clause: (a), in subsection (1), leave out '"£20.60"' and insert '"—£17.83"'—.—[Mrs. Ewing.]

Question put, That the amendment be made:—

The Committee divided: Ayes 3, Noes 288.

Division No. 45]	[8.25 pm
AYES
Ewing, Mrs Margaret	Tellers for the Ayes:
Skinner, Dennis	Mr. Elfyn Llwyd and
Wigley, Dafydd	Mr. Alex Salmond
NOES
Ainsworth, Peter (East Surrey)	Batiste, Spencer
Aitken, Rt Hon Jonathan	Bellingham, Henry
Alexander, Richard	Bendall, Vivian
Alison, Rt Hon Michael (Seby)	Beresford, Sir Paul
Allason, Rupert (Torbay)	Biffen, Rt Hon John
Amess, David	Bonsor, Sir Nicholas
Ancram, Michael	Booth, Hartley
Arbuthnot, James	Boswell, Tim
Arnold, Jacques (Gravesham)	Bottomley, Peter (Eltham)
Arnold, Sir Thomas (Hazel Grv)	Bottomley, Rt Hon Virginia
Ashby, David	Bowis, John
Aspinwall, Jack	Boyson, Rt Hon Sir Rhodes
Atkins, Robert	Brandreth, Gyles
Baker, Nicholas (North Dorset)	Brazier, Julian
Baldry, Tony	Bright Sir Graham
Banks, Matthew (Southport)	Brooke, Rt Hon Peter
Banks, Robert (Harrogate)	Brown, M (Brigg & Cl'thorpes)
Bates, Michael	Browning, Mrs Angela

Bruce, Ian (Dorset)	Hampson, Dr Keith
Budgen, Nicholas	Hannam, Sir John
Burt, Alistair	Hargreaves, Andrew
Butler, Peter	Harris, David
Butterfill, John	Haselhurst, Alan
Carlisle, John (Luton North)	Hawkins, Nick
Carlisle, Sir Kenneth (Lincoln)	Hawksley, Warren
Carrington, Matthew	Hayes, Jerry
Carttiss, Michael	Heald, Oliver
Cash,William	Heath, Rt Hon Sir Edward
Channon, Rt Hon Paul	Heathcoat-Amory, David
Churchill,Mr	Hendry, Charles
Clappison, James	Heseltine, Rt Hon Michael
Clark, Dr Michael (Rochford)	Hicks, Robert
Clifton-Brown, Geoffrey	Higgins, Rt Hon Sir Terence
Coe, Sebastian	Hill, James (Southampton Test)
Colvin, Michael	Hogg, Rt Hon Douglas (G'tham)
Congdon, David	Horam, John
Conway, Derek	Hordem, Rt Hon Sir Peter
Coombs, Anthony (Wyre Forest)	Howarth, Alan (Strat'rd-on-A)
Coombs, Simon (Swindon)	Howell, Rt Hon David (G'dford)
Cope, Rt Hon Sir John	Howell, Sir Ralph (N Norfolk)
Cormack, Sir Patrick	Hughes, Robert G (Harrow W)
Couchman, James	Hunt, Rt Hon David (Wirral W)
Currie, Mrs Edwina (S D'by'ire)	Hunt, Sir John (Ravensbourne)
Curry, David (Skipton & Ripon)	Jack, Michael
Davies, Quentin (Stamford)	Jackson, Robert (Wantage)
Day, Stephen	Jenkin, Bernard
Deva, Nirj Joseph	Jessel, Toby
Dicks, Terry	Johnson Smith, Sir Geoffrey
Douglas-Hamilton, Lord James	Jones, Gwilym (Cardiff N)
Dover, Den	Jones, Robert B (W Hertfdshr)
Duncan, Alan	Jopling, Rt Hon Michael
Duncan Smith, Iain	Kellett-Bowman, Dame Elaine
Dunn, Bob	Key, Robert
Durant, Sir Anthony	King, Rt Hon Tom
Dykes, Hugh	Kirkhope, Timothy
Eggar, Rt Hon Tim	Knapman, Roger
Elletson, Harold	Knight Mrs Angela (Erewash)
Emery, Rt Hon Sir Peter	Knight, Greg (Derby N)
Evans, David (Welwyn Hatfield)	Knight Dame Jill (Bir'm E'st'n)
Evans, Jonathan (Brecon)	Knox, Sir David
Evans, Nigel (Ribble Valley)	Kynoch, George (Kincardine)
Evans, Roger (Monmouth)	Lait, Mrs Jacqui
Evennett, David	Lamont Rt Hon Norman
Faber, David	Lang, Rt Hon Ian
Fabricant, Michael	Lawrence, Sir lvan
Fenner, Dame Peggy	Legg, Barry
Field, Barry (Isle of Wight)	Leigh, Edward
Fishbum, Dudley	Lennox-Boyd, Sir Mark
Forman, Nigel	Lester, Jim (Broxtowe)
Forsyth, Rt Hon Michael (Stirling)	Lidington, David
Forth, Eric	Lightbown, David
Fowler, Rt Hon Sir Norman	Lilley, Rt Hon Peter
Fox, Dr Liam (Woodspring)	Lloyd, Rt Hon Sir Peter (Fareham)
Fox, Sir Marcus (Shipley)	Lord, Michael
Freeman, Rt Hon Roger	Luff, Peter
French, Douglas	Lyell, Rt Hon Sir Nicholas
Fry, Sir Peter	MacGregor, Rt Hon John
Gale, Roger	MacKay, Andrew
Gardiner, Sir George	Maclean, David
Garel-Jones, Rt Hon Tristan	McLoughlin, Patrick
Garnier, Edward	McNair-Wilson, Sir Patrick
Gillan, Cheryl	Madel, Sir David
Goodlad, Rt Hon Alastair	Maitland, Lady Olga
Goodson-Wickes, Dr Charles	Mans, Keith
Gorman, Mrs Teresa	Marshall, John (Hendon S)
Gorst, Sir John	Marshall, Sir Michael (Arundel)
Grant, Sir A (SW Cambs)	Martin, David (Portsmouth S)
Greenway, Harry (Ealing N)	Mawhinney, Rt Hon Dr Brian
Greenway, John (Ryedale)	Mayhew, Rt Hon Sir Patrick
Griffiths, Peter (Portsmouth, N)	Merchant Piers
Grylls, Sir Michael	Mills, Iain
Gummer, Rt Hon John Selwyn	Mitchell, Andrew (Gedling)
Hague, William	Mitchell, Sir David (NW Hants)
Hamilton, Neil (Tatton)	Moate, Sir Roger

Monro, Sir Hector	Spicer, Sir James (W Dorset)
Montgomery, Sir Fergus	Spicer, Michael (S Worcs)
Moss, Malcolm	Spink, Dr Robert
Needham, Rt Hon Richard	Spring, Richard
Nelson, Anthony	Squire, Robin (Hornchurch)
Neubert, Sir Michael	Stanley, Rt Hon Sir John
Newton, Rt Hon Tony	Steen, Anthony
Nicholls, Patrick	Stephen, Michael
Nichholson, David (Taunton)	Stem, Michael
Nicholson, Emma (Devon West)	Stewart, Allan
Norris, Steve	Streeter, Gary
Oppenheim, Phillip	Sumberg, David
Ottaway, Richard	Sykes, John
Page, Richard	Tapsell, Sir Peter
Paice, James	Taylor, Ian (Esher)
Patrick, Sir Irvine	Taylor, John M (Solihull)
Patten, Rt Hon John	Taylor, Sir Teddy (Southend, E)
Pawsey, James	Temple-Morris, Peter
Peacock, Mrs Elizabeth	Thomason, Roy
Pickles, Eric	Thompson, Sir Donald (C'er V)
Porter, Barry (Wirral S)	Thompson, Patrick (Norwich N)
Porter, David (Waveney)	Thurnham, Peter
Portillo, Rt Hon Michael	Townsend, Cyril D (Bexl'yh'th)
Powell, William (Corby)	Tracey, Richard
Rathbone, Tim	Tredinnck, David
Redwood, Rt Hon John	Trend, Michael
Renton, Rt Hon Tim	Trotter, Neville
Richards, Rod	Twinn, Dr Ian
Riddick, Graham	Vaughan, Sir Gerard
Rifkind, Rt Hon Malcolm	Viggers, Peter
Robathan, Andrew	Walden, George
Roberts, Rt Hon Sir Wyn	Walker, Bill (N Tayside)
Robertson, Raymond (Ab'd'n S)	Waller, Gary
Robinson, Mark (Somerton)	Ward, John
Roe, Mrs Marion (Broxbourne)	Wardle, Charles (Bexhill)
Rumbold, Rt Hon Dame Angela	Waterson, Nigel
Ryder, Rt Hon Richard	Watts, John
Sackville, Tom	Wells, Bowen
Sainsbury, Rt Hon Sir Timothy	Wheeler, Rt Hon Sir John
Scott, Rt Hon Sir Nicholas	Whitney, Ray
Shaw, David (Dover)	Whittingdale, John
Shaw, Sir Giles (Pudsey)	Widdecombe, Ann
Shepherd, Rt Hon Gillian	Wiggin, Sir Jerry
Shepherd, Colin (Hereford)	Willetts, David
Shepherd, Richard (Aldridge)	Wolfson, Mark
Shersby, Michael	Wood, Timothy
Sims, Roger	Yeo,Tim
Skeet, Sir Trevor	Young, Rt Hon Sir George
Smith, Sir Dudley (Warwick)
Soames, Nicholas	Tellers for the Noes:
Speed, Sir Keith	Mr. Sydney Chapman and
Spencer, Sir Derek	Mr. Simon Burns

Question accordingly negatived.

Motion made, and Question put, That the clause be added to the Bill:—

The Committee divided: Ayes 289, Noes 248.

Divison No. 46]	[8.36 pm
AYES
Ainsworth, Peter (East Surrey)	Atkins, Robert
Aitken, Rt Hon Jonathan	Baker, Nicholas (North Dorset)
Alexander, Richard	Baldry, Tony
Alison, Rt Hon Michael (Selby)	Banks, Matthew (Southport)
Allason, Rupert (Torbay)	Banks, Robert (Harrogate)
Amess, David	Bates, Michael
Ancram, Michael	Batiste, Spencer
Arbuthnot, James	Bellingham, Henry
Arnold, Jacques (Gravesham)	Bendall, Vivian
Arnold, Sir Thomas (Hazel Grv)	Beresford, Sir Paul
Ashby, David	Biffen, Rt Hon John
Aspinwall, Jack	Bonsor, Sir Nicholas

Booth, Hartley	Gillan, Cheryl
Boswell, Tim	Goodlad, Rt Hon Alastair
Bottomley, Peter (Eltham)	Goodson-Wickes, Dr Charles
Bottomley, Rt Hon Virginia	Gorman, Mrs Teresa
Bowis, John	Gorst, Sir John
Boyson, Rt Hon Sir Rhodes	Grant, Sir A (SW Cambs)
Brandreth, Gyles	Greenway, Harry (Ealing N)
Brazier, Julian	Greenway, John (Ryedale)
Bright, Sir Graham	Griffiths, Peter (Portsmouth, N)
Brooke, Rt Hon Peter	Grylls, Sir Michael
Brown, M (Brigg & Cl'thorpes)	Gummer, Rt Hon John Selwyn
Browning, Mrs Angela	Hague, William
Bruce, Ian (Dorset)	Hamilton, Rt Hon Sir Archibald
Budgen, Nicholas	Hamilton, Neil (Tatton)
Burt Alistair	Hampson, Dr Keith
Butler, Peter	Hannam, Sir John
Butterfill, John	Hargreaves, Andrew
Carlisle, John (Luton North)	Harris, David
Carlisle, Sir Kenneth (Lincoln)	Haselhurst, Alan
Carrington, Matthew	Hawkins, Nick
Carttiss, Michael	Hawksley, Warren
Cash, William	Hayes, Jerry
Channon, Rt Hon Paul	Heald, Oliver
Chapman, Sydney	Heath, Rt Hon Sir Edward
Churchill, Mr	Heathcoat-Amory, David
Clappison, James	Hendry, Charles
Clark, Dr Michael (Rochford)	Heseltine, Rt Hon Michael
Clifton-Brown, Geoffrey	Hicks, Robert
Coe, Sebastian	Higgins, Rt Hon Sir Terence
Colvin, Michael	Hill, James (Southampton Test)
Congdon, David	Hogg, Rt Hon Douglas (G'tham)
Conway, Derek	Horam, John
Coombs, Anthony (Wyre For'st)	Hordem, Rt Hon Sir Peter
Coombs, Simon (Swindon)	Howarth, Alan (Strat'rd-on-A)
Cope, Rt Hon Sir John	Howell, Rt Hon David (G'dford)
Cormack, Sir Patrick	Howell, Sir Ralph (N Norfolk)
Couchman, James	Hughes, Robert G (Harrow W)
Currie, Mrs Edwina (SD'by'ire)	Hunt, Rt Hon David (Wirral W)
Curry, David (Skipton & Ripon)	Hunt, Sir John (Ravensbourne)
Davies, Quentin (Stamford)	Jack, Michael
Day, Stephen	Jackson, Robert (Wantage)
Deva, Nirj Joseph	Jenkin, Bemard
Dicks, Terry	Jessel, Toby
Douglas-Hamilton, Lord James	Johnson Smith, Sir Geoffrey
Dover, Den	Jones, Gwilym (Cardiff N)
Duncan, Alan	Jones, Robert B (W Hertfdshr)
Duncan Smith, Iain	Jopling, Rt Hon Michael
Dunn, Bob	Kellett-Bowman, Dame Elaine
Durant, Sir Anthony	Key, Robert
Dykes, Hugh	King, Rt Hon Tom
Eggar, Rt Hon Tim	Kirkhope, Timothy
Elletson, Harold	Knapman, Roger
Emery, Rt Hon Sir Peter	Knight, Mrs Angela (Erewash)
Evans, David (Welwyn Hatfield)	Knight, Greg (Derby N)
Evans, Jonathan (Brecon)	Knight, Dame Jill (Bir'm E'st'n)
Evans, Nigel (Ribble Valley)	Knox, Sir David
Evans, Roger (Monmouth)	Kynoch, George (Kincardine)
Evennett, David	Lait, Mrs Jacqui
Faber, David	Lamont, Rt Hon Norman
Fabricant, Michael	Lang, Rt Hon Ian
Fenner, Dame Peggy	Lawrence, Sir Ivan
Field, Barry (Isle of Wight)	Legg, Barry
Fishbum, Dudley	Leigh, Edward
Forman, Nigel	Lennox-Boyd, Sir Mark
Forsyth, Rt Hon Michael (Stirling)	Lester, Jim (Broxtowe)
Forth, Eric	Lidington, David
Fowler, Rt Hon Sir Norman	Lidington, David
Fox, Dr Liam (Woodspring)	Lilley, Rt Hon Peter
Fox, Sir Marcus (Shipley)	Lloyd, Rt Hon Sir Peter (Fareham)
Freeman, Rt Hon Roger	Lord, Michael
French, Douglas	Luff, Peter
Fry, Sir Peter	Lyell, Rt Hon Sir Nicholas
Gale, Roger	MacGregor, Rt Hon John
Gardiner, Sir George	MacKay, Andrew
Garel-Jones, Rt Hon Tristan	Maclean, David
Garnier, Edward	McLoughlin, Patrick

McNair-Wilson, Sir Patrick	Shersby, Michael
Madel, Sir David	Sims, Roger
Maitland, Lady Olga	Skeet Sir Trevor
Mans, Keith	Smith, Sir Dudey (Warwick)
Marshall, John (Hendon S)	Soames, Nicholas
Marshall, Sir Michael (Arunrdel)	Speed, Sir Keith
Martin, David (Portsmouth S)	Spencer, Sir Derek
Mawhinney, Rt Hon Dr Brian	Spicer, Sir James (W Dorset)
Mayhew, Rt Hon Sir Patrick	Spicer, Michael (S Worcs)
Merchant Piers	Spink, Dr Robert
Mills, Iain	Spring, Richard
Mitchell, Sir David (NW Hants)	Squire, Robin (Hornchurch)
Moate, Sir Roger	Stanley, Rt Hon Sir John
Monro, Sir Hector	Steen, Anthony
Montgomery, Sir Fergus	Stephen, Michael
Moss, Malcolm	Stephen, Michael
Needham, Rt Hon Richard	Stewart, Allan
Nelson, Anthony	Streeter, Gary
Neubert, Sir Michael	Sumberg, David
Newton, Rt Hon Tony	Sykes, John
Nicholls, Patrick	Tapsell, Sir Peter
Nicholson, David (Taunton)	Taylor, Ian (Esher)
Nicholson, Emma (Devon West)	Taylor, John M (Solihull)
Norris, Steve	Taylor, Sir Teddy (Southend, E)
Onslow, Rt Hon Sir Cranley	Temple-Morris, Peter
Oppenheim, Phillip	Thomason, Roy
Ottaway, Richard	Thompson, Sir Donald (C'er V)
Page, Richard	Thompson, Patrick (Norwich N)
paice, James	Thumham, Peter
Patrick, Sir Irvine	Townsend, Cyril D (Bexf'yh'th)
Patten, Rt Hon John	Tracey, Richard
Pawsey, James	Tredinnick, David
Peacock, Mrs Elizabeth	Trend, Michael
Pickles, Eric	Trotter, Neville
Porter, Barry (Wirral S)	Twinn, Dr Ian
Porter, David (Waveney)	Vaughan, Sir Gerard
Portillo, Rt Hon Michael	Viggers, Peter
Powell, William (Corby)	Walden, George
Rathbone, Tim	Walker, Bill (N Tayaside)
Redwood, Rt Hon John	Waller, Gary
Renton, Rt Hon Tim	Ward, John
Richards, Rod	Wardle, Charles (Bexhill)
Riddick, Graham	Waterson, Nigel
Robathan, Andrew	Watts, John
Roberts, Rt Hon Sir Wyn	Wells, Bowen
Robertson, Raymond (Ab'd'n S)	Wheeler, Rt Hon Sir John
Robinson, Mark (Somerton)	Whitney, Ray
Roe, Mrs Marion (Broxbourne)	Whittingdale, John
Rumbold, Rt Hon Dame Angela	Widdecombe, Ann
Ryder, Rt Hon Richard	Wiggin, Sir Jerry
Sackville, Tom	Willetts, David
Sainsbury, Rt Hon Sir Timothy	Wolfson, Mark
Scott, Rt Hon Sir Nicholas	Wood, Timothy
Shaw, David (Dover)	Yeo,Tim
Shaw, Sir Giles (Pudsey)	Young, Rt Hon Sir George
Shephard, Rt Hon Gillian	Tellers for the Ayes:
Shepherd, Colin (Hereford))	Mr. Simon Burns, and
Shepherd, Richard (Aldridge)	Mr. Andrew Mitchell,
NOES
Abbott, Ms Diane	Bennett, Andrew F
Adams, Mrs Irene	Benton, Joe
Ainger, Nick	Bermingham, Gerald
Ainsworth, Robert (Cov'try NE)	Berry, Roger
Allen, Graham	Betts, Clive
Alton, David	Blunkett David
Anderson, Donald (Swansea E)	Boateng, Paul
Anderson, Ms Janet (Ros'dale)	Boyes, Roland
Armstrong, Hilary	Bradley, Keith
Barnes, Harry	Bray, Dr Jeremy
Barron, Kevin	Brown, Gordon (Dunfermline E)
Battle, John	Brown, N (N'c'tle upon Tyne E)
Bayley, Hugh	Bruce, Malcolm (Gordon)
Beckett, Rt Hon Margaret	Burden, Richard
Benn, Rt Hon Tony	Byers, Stephen

Caborn, Richard	Heppell, John
Callaghan.Jim	Hill, Keith (Streatham)
Campbell, Mrs Anne (C'bridge)	Hinchiffe, David
Campbell, Menzies (Fif NE)	Hodge, Margaret
Campbel, Ronnie (Btyth V)	Hoey, Kate
Campbel-Savours, D N	Home Robertson, John
Canavan, Dennis	Hood, Jimmy
Cann, Jamie	Hoon, Geoffrey
Carlile, Alexander (Montgomery)	Howarth, George (Knowsley North)
Chidgey, David	Howells, Dr. Kim (Pontypridd)
Chisholm, Malcolm	Hoyle, Doug
Church, Judith	Hughes, Kevin (Doncaster N)
Clapham, Michael	Hughes, Robert (Aberdeen N)
Clarke, Eric (Midlothian)	Hughes, Roy (Newport E)
Clarke, Tom (Monklands W)	Hughes, Simon (Southwark)
Clelland, David	Hutton, John
Coffey, Ann	Illsley, Eric
Cohen, Harry	Ingram, Adam
Connarty, Michael	Jackson, Glenda (H'stead)
Cook, Frank (Stockton N)	Jackson, Helen (Shef'ld, H)
Cook, Robin (Livingston)	Jamieson, David
Corbett, Robin	Janner, Greville
Corbyn, Jeremy	Jones, Lynne (B'ham S O)
Corston, Jean	Jones, Nigel (Cheltenham)
Cousins, Jim	Jowell, Tessa
Cunliffe, Lawrence	Kaufman, Rt Hon Gerald
Cunningham, Jim (Covy SE)	Keen, Alan
Cunningham, Rt Hon Dr John	Kennedy, Jane (Lpool Brdgn)
Dalyell, Tam	Khabra, Piara S
Darling, Alistair	Kilfoyle, Peter
Davidson, Ian	Kirkwood, Archy
Davies, Bryan (Oldham C'tral)	Lestor, Joan (Eccles)
Davies, Rt Hon Denzil (Llanelli)	Lewis, Terry
Denham, John	Liddell, Mrs Helen
Dewar, Donald	Litherland, Robert
Dixon, Don	Livingstone, Ken
Dobson, Frank	Llwyd, Elfyn
Donohoe, Brian H	McAllion, John
Dowd, Jim	McCartney, Ian
Dunnachie, Jimmy	Macdonald, Calum
Dunwoody, Mrs Gwyneth	McFall, John
Eagle, Ms Angela	Mackinlay, Andrew
Eastham, Ken	Maclennan, Robert
Enright, Derek	McMaster, Gordon
Etherington, Bill	McNamara, Kevin
Evans, John (St Helens N)	MacShane, Denis
Ewing, Mrs Margaret	McWilliam, John
Fatchett, Derek	Madden, Max
Field, Frank (Birkenhead)	Maddock, Diana
Flynn, Paul	Mahon, Alice
Foster, Rt Hon Derek	Mandelson, Peter
Foster, Don (Bath)	Marek, Dr. John
Fraser, John	Marshall, Jim
Fyfe, Maria	Martin, Michael
Gallbraith, Sam	Martlew, Eric
Galloway, George	Martlew, Eric
Gapes, Mike	Maxton, John
George, Bruce	Meacher, Michael
Gerrard, Neil	Meale, Alan
Gillbert, Rt Hon Dr John	Michael, Alun
Godman, Dr Norman A	Michael, Bill (Sheffield Heeley)
Godsiff, Roger	Michie, Mrs Ray (Argyll & Bute)
Golding, Mrs Llin	Milburn, Alan
Gordon, Mildred	Miller, Andrew
Graham, Thomas	Mitchell, Austin (Gt Grimsby)
Grant, Bemie (Tottenham)	Moonie, Dr Lewis
Griffiths, Nigel (Edinburgh S)	Morgan, Rhodri
Griffiths, Win (Bridgend)	Morley, Elliot
Grocott, Bruce	Morris, Rt Hon Alfred (Wy'nshawe)
Gunnell, John	Morris, Estelle (B'ham Yardley)
Hain, Peter	Morris, Rt Hon John (Aberavon)
Hall, Mike	Mudie, George
Hanson, David	Oakes, Rt Hon Gordon
Hardy, Peter	O'Brien, Mike (N W'kshire)
Harvey, Nick	O'Brien, William (Normanton)
Henderson, Doug	O'Hara, Edward

Olner.Bill	Spearing, Nigel
O'Neill, Martin	Spellar.John
Orme, Rt Hon Stanley	Squire, Rachel (Dunfermline W)
Pearson, Ian	Steinberg, Gerry
Pickthall, Colin	Stevenson, George
Pike, Peter L	Stott, Roger
Powell, Ray (Ogmore)	Strang, Dr Gavin
Prentice, Bridget (Lew'm E)	Straw, Jack
Prentice, Gordon (Pendle)	Sutcliffe, Gerry
Primarolo, Dawn	Taylor, Mrs Ann (Dewsbury)
Purchase, Ken	Taylor, Matthew (Truro)
Radice, Giles	Thompson, Jack (Wansbeck)
Randall, Stuart	Timms, Stephen
Raynsford, Nick	Tipping, Paddy
Redmond, Martin	Turner, Dennis
Reid, Dr John	Tyler, Paul
Rendel, David	Vaz, Keith
Robertson, George (Hamilton)	Walker.Rt Hon Sir Harold
Robinson, Geoffrey (Co'try NW)	Walley.Joan
Roche, Mrs Barbara	Wareing, Robert N
Rooker, Jeff	Watson, Mike
Rooney, Terry	Wicks, Malcolm
Ross, Emie (Dundee W)	Wigley, Dafydd
Ruddock, Joan	Williams, Rt Hon Alan (Sw'n W)
Salmond, Alex	Williams, Alan W (Carmarthen)
Sedgemore, Brian	Wilson, Brian
Sheerman, Barry	Winnick, David
Sheldon, Rt Hon Robert	Wise, Audrey
Shore, Rt Hon Peter	Worthington, Tony
Short, Clare	Wray, Jimmy
Simpson, Alan	Wright, Dr Tony
Skinner, Dennis	Young, David (Bolton SE)
Smith, Andrew (Oxford East)	Tellers for the Noes:
Smith, Llew (Blaenau Gwent)	Mr. Jon Owen Jones and
Snape, Peter	Mr. John Cummings

Question accordingly agreed to.

Clause added to the Bill.

Clause 2 ordered to stand part of the Bill.