HC Deb 27 April 1998 vol 311 cc99-119
Mr. David Heathcoat-Amory (Wells)

I beg to move amendment No. 10, in page 136, line 32, at end insert—

'(4A) This section shall not apply to properties which are subject to uniform business rate.'. I shall give my reasons for moving the amendment in the context of a wider comment about the Bill, which is that it is a tax-raising measure. That is the general nature of the Bill, and the clause is very much part of that strategy.

We had a good deal of waffle in the Budget statement about the Budget being for investment and enterprise. However, wherever we look in the Bill we find an increased tax burden, often on the precise sectors of the economy that are asked to produce additional jobs and more investment.

The Chancellor of the Exchequer said in his statement that stamp duty would rise from 1.5 to 2 per cent.—a 25 per cent. increase for the transfer of properties above £250,000 in value. For properties valued at more than £500,000, there would be a 50 per cent. increase in stamp duty from 2 to 3 per cent.

I have a commercial interest to declare as I am a director of a property company that is duly registered in the Register of Members' Interests. Perhaps right hon. and hon. Members may be affected in their private lives by having to pay increased stamp duty on house transactions. I do not think that many Members will be affected in that way, however, because the burden of the tax does not fall primarily on the house owner, contrary to what the Chancellor tried to put over in his Budget speech.

The right hon. Gentleman, having described the tax increase, said that it was

a change which leaves 98 per cent. of house transactions unaffected."—[Official Report, 17 March 1998; Vol. 308, c. 1110.] He was therefore suggesting that the tax would be felt only by richer householders. The truth is that the burden falls on the commercial sector, not on the private householder. The Chancellor adopted a disingenuous way of describing the increase because three quarters of the tax is paid by commerce.

The burdens are considerable. In the current year, the extra burden of the tax will be £390 million, rising in the next financial year to £470 million. In the year 2000-01, the yield will be £520 million, so the yield from this tax will be more than half a billion pounds a year. The burden will fall on the sector of the economy that is asked in the welfare-to-work project to produce extra jobs.

In the Budget statement, we had an appeal for more investment. In the Red Book, which was subsequently published, we find that, although business investment has been rising strongly in recent years—it is recorded as rising at 7.75 per cent. last year—there is a projected stabilisation and then a small decline.

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The reason lies in the clauses that are before the Committee this evening. Quite simply—it is not a startling observation—if we tax business and reduce profits, the result is fewer jobs and less investment. More than that, such an approach inhibits mobility, flexibility and inward investment—those are all the things which the Government say that they are seeking to encourage. It is not surprising that the Association of British Insurers said that the measure was a disincentive to productive business investment and efficiency. The increased tax will be paid primarily perhaps by those selling commercial property. However, indirectly it will be paid by a much wider spectrum of businesses. Commercial tenants will pay because their landlords will seek to recover the additional cost of stamp duty through increased rents. The increased tax will provide a perverse incentive for those who are investing in property. For example, there will be an advantage in investing in property overseas in those countries that have lower property transfer taxes, especially those outside the European Union.

In the time available, I have undertaken a little research in the context of the European Union. There is a confused position because there is not even attempted harmonisation or standardisation in the description of taxes, let alone the rates and incidence of the taxes. Sometimes, they are described as property transfer taxes and at others as conveyancing taxes. Sometimes, the taxes are described, like our own, as stamp duty. Some taxes are collected at municipal level, some at regional level and others at national level.

Generally, most member states have higher equivalent taxes than we do. It seems that the French conveyancing tax is levied at an ordinary rate between 13.4 and 15.4 per cent. In Belgium, the standard rate for a similar tax is 12.5 per cent. The rate in the Netherlands is lower. It seems that 6 per cent. is normal for property transactions there. Ireland has a conveyancing duty on a sliding scale between 1 and 6 per cent. In Portugal, the tax is collected by the municipalities. The Library produced a figure of 10 per cent., that being normal on transfers of urban buildings or building land. There is a sliding scale for domestic properties. Germany seems to have a lower rate of 2 per cent. which is collected by the Lander government, so the picture on the continent is very mixed.

I mention that because one of our advantages up to now was that our stamp duty was comparatively low, and that at least contributed to our being an attractive haven for inward business investment, but the Government appear set on eroding that. Indeed, if we go on increasing stamp duty as we are going, we shall lose a very valuable competitive advantage. This could be connected with the fact that, a few months ago, the Government signed up to a code of conduct on business taxes to counter what the European Union is pleased to call harmful tax competition. One of my questions for the Paymaster General is whether the code of conduct on business taxation has implications for stamp duty and whether the Government are seeking to increase stamp duty under the guise of harmonisation, as there is undoubtedly pressure from that part of the European Commission that sees low taxes as unfair.

Another point worth dwelling on for a moment is which companies will primarily pay the increased stamp duty. It is well known in accountancy circles—I have to confess to being a chartered accountant, so I used to earn a living by doing such things—that large companies can on occasion avoid stamp duty by using various avoidance devices. The simplest concept is that a property to be transferred is owned by a subsidiary company, and it is the company rather than the property that is sold. If that is done offshore, in another tax jurisdiction, stamp duty can sometimes be avoided completely.

Of course, there are various anti-avoidance devices; nevertheless, it remains true that the sophisticated company which is well advised can often find ways around stamp duty. In a free trading world and a global environment in which many multinational companies have their headquarters in Britain, it is increasingly the case that, where avoidance can be secured, great time and effort go into securing it. It tends to be the smaller or medium-sized company, which is less sophisticated and less well advised, that pays the increased taxes upfront.

If the Paymaster General is intent on increasing stamp duty, is this not an opportunity to move to a slice rather than a slab system? Putting it as simply as I can, under the slab system if the value of a property moves even £1 above the threshold of, say, £250,000, the higher rate of stamp duty is applied to the entire value rather than just to the extra slice. That can lead to a mysterious grouping of valuations just below the threshold, for obvious reasons, and people can attempt to divide up properties or sell the furniture and fittings separately in order to keep under the relevant value. However, it is inequitable that the extra charge should apply to the entire value of the property. Was this not an opportunity to move to a slice system, whereby the higher rate applied only to the top slice? I put that forward not as an amendment but as a genuine question to the Paymaster General. The higher the rates become, the more inequitable the system of assessment.

Our best solution is to remove clause 147 altogether and put things back to the way they were before Budget day. If that is not possible, our second-best option is to confine the proposal entirely to householders. If the Government really are anxious to tax people with large and expensive houses, amendment No. 10 does exactly that by exempting properties that are subject to the uniform business rate, so stamp duty would not be a tax on the commercial sector.

I commend the amendment to the Committee.

Mr. Hammond

I welcome the opportunity to speak in support of the amendment. I shall declare an interest over and above the interest that all hon. Members have as owners or aspiring owners of houses, in that I have an interest in a small house building company, and the house building sector is certainly more interested than most in the proposals.

As my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) said, we are opposed to the measure in its totality, and would prefer it to have been excluded from the Bill. Since coming to office less than a year ago, the Government have now had two bites at the cherry of stamp duty. As my right hon. Friend suggested, one must have serious concerns about where this will lead us. I shall say a little more about that in a moment.

The spin put on the stamp duty announcement during the Chancellor's Budget speech and in most of the press reporting immediately after the Budget was to relate it entirely to houses. Indeed, as my right hon. Friend pointed out, the Chancellor said that the change would leave

98 per cent. of house transactions unaffected".—[Official Report, 17 March 1998; Vol. 308, c. 1110.] That takes us back to the politics of envy of some 20 years ago—"It's all right, because it will affect only those who have houses worth more than £250,000," the implication being that we should not be too concerned about such people. I draw the Committee's attention to the fact that any arbitrary cut-off level of that nature in relation to house prices already discriminates severely against certain parts of the country.

In my constituency, for example, someone owning a house worth £250,000 is likely to be the kind of industrious manager in a small business whom the Paymaster General is anxious to encourage in his endeavours. I accept that in other parts of the country, someone owning a £250,000 house might genuinely be considered to be a rich and unusual member of the community, but that is not so in the more affluent parts of the south-east.

Since I May 1997, the Government have effectively tripled the stamp duty payable on the transmission of properties worth more than £500,000 and doubled it on properties valued at more than £250,000. If we look further down the house price scale, it is not true to say that the measure will not affect 98 per cent. of houses, because houses have to be built on land. When builders and developers buy land to build even the most modestly priced houses, they will typically buy it in parcels worth more than £500,000. In those circumstances, the Government's action will contribute to house price inflation at the bottom as well as the top end of the scale. Typically, land accounts for a third of the value of a new house, and very much more than that in the south-east. The amendment would specifically exclude business premises from the scope of the stamp duty increase. It is a second-best option if the increase cannot be rescinded altogether. My right hon. Friend the Member for Wells made a persuasive case for, as he put it, the slice system as opposed to the slab system.

Until last year's Budget, most of us regarded stamp duty at 1 per cent. as more of an irritant than a meaningful consideration in a transaction. Now that it is becoming a meaningful consideration, one of our concerns must be the extraordinarily high marginal rates at the change points of £250,000 and £500,000.

The Chancellor recognised quite rightly in his Budget speech, when addressing matters of welfare reform, that high marginal rates have a disastrously distorting effect in the marketplace, sending people all the wrong signals and inspiring inappropriate behaviour. He was referring to marginal rates of withdrawal of 80 or 100 per cent. In respect of a property priced at £499,999, we are discussing a marginal rate of tax of 500,000 per cent. if the sale price increased by £1. The Paymaster General will recognise that, in general terms, that would lead inevitably to distortions in the market, discrete steps and a discontinuity in the curve of the marketplace. My right hon. Friend the Member for Wells has made a sensible and valuable proposal which I hope the Government will consider.

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The measure will have two effects specifically in respect of business property. The first relates to property as a tool or as a piece of working capital in the operation of a business. The Bill will place an additional tax burden on all businesses using property, including factories, shops, offices and warehouses. Estimates show that 75 per cent. of the yield of the increase in stamp duty will come from business—raising £350 million in 1999-2000. That represents a significant additional burden on business. In cash flow terms, the burden will fall on a business purchasing a new property, expanding or building a new factory—just when its cash flow is strained most, as it seeks to expand and to answer the Government's exhortation to invest and create jobs.

The second effect of the measure will be on property as an investment. Property is already by far the most illiquid of the assets held by investment funds, and the Bill will dramatically decrease the liquidity of property. If a fund owns a building that would be expected to sell for £100 million, it must consider that any buyer will have to pay 3 per cent. tax on that transaction—a not insignificant sum. The measure, if passed, must have an effect on the value of existing property assets held in funds, including pension funds that have already been hit by the Government's change in the treatment of ACT credits last year.

As my right hon. Friend the Member for Wells suggested, there are a number of ways in which more sophisticated operators can seek to avoid the impact of the increase in stamp duty. They include the use of the single-asset property company as a vehicle for the transmission of a property—or perhaps multiple transmissions—avoiding the payment of significant stamp duty on each occasion. The Paymaster General would probably agree that, in general terms, it is undesirable for the tax tail to wag the investment or business decision dog. We are in danger of a multiplicity of methods being employed to avoid the full impact of the measure on business properties, including an increase in the use of single-asset companies and the development of different funding methods for property development to avoid the transmission of ownership and, therefore, a charge to stamp duty.

Any measure that fragments the market into different qualities of assets because of different tax status attaching to them must be negative, as it will damage liquidity in the market and create distortions, adding to the distortions that will already be created by the arbitrary cut-off points at £250,000 and £500,000. The cut-off points are particularly important. They are far too low to affect the behaviour of large property investors and sophisticated developers building in the City of London, but they will affect and determine the behaviour of smaller companies building investment properties, and public authorities building starter industrial units up and down the country.

The Government should not object to the Opposition amendment if their real purpose is to introduce a new regulator into the housing market, as the Chancellor suggested. However, I have my own concerns about the possibility that stamp duty is being ratcheted up from a nominal 1 per cent. to become a significant tax. My concerns lie not so much with the issue of harmonisation of business taxes in Europe, but with the Government's projected preparations for our possible entry into the single currency.

The United Kingdom has a distinctive housing market which is different from that of many of our European Union partner countries. When my right hon. Friend read out a list of countries in the European Union with high rates of property transfer tax, although he was dealing specifically with business property, it occurred to me that there may be a correlation between the high rates of property transfer tax and the relatively low percentage of home ownership in many countries. We would not wish to discourage home ownership in the United Kingdom.

As the Government look towards preparing the United Kingdom for possible entry into a single European currency, the Treasury must be concerned about the peculiar nature of our housing market and the absence in a single currency union of any distinctively British regulator of housing market activity. The Government would not control interest rates. They could find themselves facing a housing market boom in the United Kingdom while overall economic conditions in the European Union indicated relatively lax monetary conditions. In those circumstances, the British Government would find it extremely difficult to control the housing market in the United Kingdom and certainly would not be able to use the conventional means that have been employed in the past.

I wonder whether the Government are looking at stamp duty as the future method to regulate house price inflation. If so, the British people should be told. We should understand now that the Government propose to increase stamp duty, perhaps to 6 or 7 per cent. as applies in other European Union countries, as their preferred method of regulating the housing market as the United Kingdom prepares for entry into the single currency. If that is the case, the British people should be told.

Mr. St. Aubyn

I share the concern of my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) that there is a hidden agenda in the rise in stamp duty imposed by the Government. It is absolutely right that, in considering the amendment, we ask ourselves whether it goes far enough. Should it not also include an exemption for the housing sector?

At this point, I declare an interest as someone who is affected by both clause 147 and the amendment.

The problem with stamp duty is that, as a regulator of economic activity, it is for any Government what one might term counter-intuitive. Often when a recession looms, the Government's borrowing requirement goes up and it is intuitive and in their interest to cut interest rates. That is easy. But if in such a situation they consider a cut in stamp duty as part of regulating the economy, there will be howls of anguish from some members of any Cabinet. They will ask, "Why are we giving money back to this relatively affluent sector?" and to be told that it is part of the Government's long-term plan to regulate the housing market will not wash with them.

Stamp duty is a one-way street for this Government. They will happily raise it in the good times that they inherited from the previous Conservative Government. However, it will go against all their instincts to contemplate reducing it again if and when—I fear that under this Government, it will be when—a recession hits not only manufacturing, as is happening now, but the property and housing sectors.

The trouble with a tax that is aimed at what we are told is 2 per cent. of residential housing purchases is that it sounds as if it hits only the rich. But in the London economy and, indeed, in the wider economy, there are many businesses and craftsmen who work for those rich clients. A business in which I am much involved often works for clients who own substantial properties. If those properties are hit by a higher rate of stamp duty, not only will their rich owners have less money to spend, but they will be less inclined to move. If they do move, they will probably decide to economise on some of the costs of moving, which would include the more craft-based, refined products that they would otherwise purchase. The Government's policy—their stated policy and their hidden agenda—will hit a specific sector of craftsmen.

We are considering an amendment which would change only the rate on commercial property. As my hon. Friend the Member for Runnymede and Weybridge said, the liquidity of the property market is almost certainly at risk as a result of the proposal. Over the years, there have been attempts to develop a derivative market in commercial property. The threat of the higher rate of stamp duty may act as a spur to such a market. I hope that the Paymaster General will at least assure us tonight that if such a derivative market in commercial property were to develop, he would regard it not as a tax avoidance device, but rather as a healthy development for efficient investment in this country. If we have taxes that distort investment, we shall have a less efficient economy.

I know that the Paymaster General's own investments relate more to intellectual than to commercial property. Nevertheless, he should recognise that old-fashioned bricks and mortar have their role to play in the running of businesses.

Another aspect of the issue is brown-field sites. We have heard much back-treading by the Government on brown-field sites. Initially, they set modest, unsatisfactory targets for the number of brown-field sites to be developed for residential use. They now want to achieve a target of 60 per cent. That is not enough for an area in Surrey such as I represent, but it is a welcome improvement on their earlier target. Have the Government considered how the rise in stamp duty will affect the attractiveness of brown-field site development? Following the logic of the argument of my hon. Friend the Member for Runnymede and Weybridge, for some businesses, it will be a marginal decision whether they give up their inner-city brown-field site for a residential housing proposal and then have to buy a new commercial site in another part of the town. They may be discouraged by higher stamp duty.

That brings me to the crux of the matter: 3 per cent. stamp duty—an increase of 1 per cent.—may change the positive environment for property investment, although it may be just about bearable. In agreeing the full price, buyers and sellers may agree to suffer the rise between them. If, however, the Government intend to raise stamp duty to continental levels, as my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) mentioned, the quantity of land available for brown-field site development to meet the country's housing needs will certainly be adversely affected.

Sources suggest that the rate of stamp duty in other countries is much higher. I have heard that in Italy it is 8 per cent., and that in Ireland it reaches up to 9 per cent. Stamp duty at 9 per cent. on brown-field sites in this country would almost certainly be enough to kill any prospect of change in use. That has long-term consequences. It is a good example of how stamp duty can distort the economy.

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Part of the hidden agenda is the fact that the Government took one swipe at pension funds and enjoyed it so much that they want to take another. They took that swipe through changes to corporation tax. By not allowing a tax credit, they in effect introduced a pensions tax. It must alarm some in the Treasury that pension funds can redirect investment into commercial property and thereby increase income and get round part of the problem. The Government told us that they did away with the investment tax credit to encourage companies to keep money in the company rather than give it out in dividends. The hidden agenda behind the increase in stamp duty suggests far more. It is just old-fashioned Labour, seeing a pot of gold and trying to find as many different angles as possible from which it can get its greedy mitts on it.

Even if there is not a derivative market in commercial property, fees for lawyers' advice and accountancy schemes will be paid. That will result in long-term major pension fund investors avoiding the consequences of stamp duty. If the increase is part of a progressive increase in stamp duty, it is fair to say that the Government will find that the amount of revenue attracted will steadily diminish. A law of diminishing returns will apply rapidly to stamp duty. If there are to be high levels of stamp duty, a pension fund will have to think hard before it can justify switching from one commercial property to another in the course of balancing its portfolio.

As my hon. Friend the Member for Runnymede and Weybridge mentioned, the final part of the Government's hidden agenda is convergence in Europe—not just in tax rates and regulation of the economy, but in the very nature of the economy. We have a property-owning democracy, not just for the very rich, but for all levels of society. Many people who have started their own businesses have as their pension fund their company's commercial premises. In order to sell their business, they may intend to retain control of the company's main asset in some form or other and to rent it out. That is a classic way in which businesses change hands. Businesses changing hands is all part of the way in which the economy develops, grows and thrives.

The increase in stamp duty is yet another Labour spanner in the works. It is another way in which attempts to ease the flow of business will be upset by the scale of duty that the Government are imposing—in many ways quite arbitrarily—on those who own commercial property with a value of more than £250,000. It is arbitrary because, in other parts of the Finance Bill, we see a general claim—which we shall examine in more detail later in Committee—that there is an attempt to mitigate the capital taxation of long-term investments. Yet here we have a clear case of the Government imposing a swingeing tax on a long-term capital investment. It shows how far new Labour's actions are divorced from its warm words.

Mr. Gibb

I support the amendment, which seeks to remove from these draconian provisions properties that are subject to the uniform business rate—commercial properties. One of the points that the Chancellor of the Exchequer skated over when announcing the swingeing increase in the rate of stamp duty on high-value properties was that stamp duty also applies to the transfer of commercial property; not just real property, but all assets in a business that are transferred by document. That greatly affects businesses. The notes on clauses make clear that 75 per cent. of the revenue raised will be from sales of businesses and commercial property.

Mr. Hammond

Would I be right in thinking that the measure applies also to transfers of intellectual property, which might be of direct interest to the Paymaster General?

Mr. Gibb

My hon. Friend is right. It applies to all assets of a business, including intellectual property. It can also apply to one's debtors. If a company has any assets transferred by document—cash, even—the stamp duty is applied to the value of those assets

As my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) said, a large company that takes legal advice from leading solicitors and accountants can avoid paying duty. If it is made clear in the agreement to sell or buy a business that certain assets—for example, plant and machinery and tools—will be transferred not by document but by delivery, the stamp duty is avoided. That requires a company to take legal advice on the sale of a business, but most small and medium businesses will not have the resources to take advice on stamp duty; they will probably be caught more than large companies. A measure designed to raise revenue for the Government will hit the very businesses they purport to want to encourage.

The Institute of Directors has made clear that it opposes this draconian measure, saying:

We deplore the increases in stamp duty on high-value properties. While very few house purchases will be affected, a higher proportion of purchases of business premises (and of goodwill and patents) will be affected. The Institute of Chartered Accountants deplores the measures; the tax faculty has said that the

further increases in stamp duty for asset transfers as against share transfers may distort business decisions and inhibit sales of assets as against companies. Here, again, we have a measure designed to hurt medium and small businesses, as against large ones. It will not affect businesses that simply sell shares from one owner to another; they will be subject to a different rate of stamp duty—the rate applying to the transfer of shares—but someone trying to sell a small business because of retirement, for example, will have to pay the very high rates of stamp duty on all the assets transferred.

The IOD makes the valid point that insurance companies, pension funds and property unit trusts will bear the brunt of the direct impact of the increases in stamp duty because most commercial properties are owned by such investors and then leased. Millions of people who invest in insurance, pension funds or unit trusts will suffer.

Mr. Hammond

Will not the measure cause a further distortion—a bias in favour of renting or leasing smaller business premises rather than purchasing them outright and paying the attendant stamp duty?

Mr. Gibb

My hon. Friend is absolutely right. It is wrong that Government measures should have such distortionary effects—the Government should carefully consider the effects of taxes on the market. The distortion of usual commercial transactions is distressing, but it will happen in a variety of areas as a result of the Bill.

The Institute of Directors is concerned that the measure will reduce the value of the investments of millions of innocent investors. That demonstrates a wider point—taxes levied on big business or business generally are always eventually borne by individuals. That has been widely acknowledged, as the Treasury Committee noted. Gavyn Davies said that the brunt of the advance corporation tax credit would be borne by the household sector. Similarly, the brunt of the effects of clause 147 will be borne ultimately by individuals, either as tenants or as purchasers of houses on small estates where the land was bought as a parcel—as my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) rightly pointed out, the 3 per cent. stamp duty would be passed on to the purchaser of the newly built house.

Like my hon. Friends, the Institute of Directors is concerned that nothing has been done to remove the distortions caused by the slab scale. The matter was the subject of an amendment to the Finance Bill in the summer; the Government opposed that amendment, too. As they are doing everything possible to remove distortions in areas such as national insurance, it is odd that they are exacerbating distortions in stamp duty by increasing the rates.

I urge the Government to accept the amendment, which would prevent business from having to face these draconian measures. In his Budget statement, the Chancellor implied that the provisions would apply only to residential property; he made no reference to their effects on commerce and business transactions. For once, let us see legislation living up to the spin and presentation.

Mr. Geoffrey Robinson

Opposition Members have advanced reasoned arguments on the amendment, but I think that they are really saying that they do not like the clause. It would have been much more simple if we had debated the clause as a whole.

The hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) mentioned draft regulations. We have checked what happened—they were placed in Derby Gate, in the House of Commons Library and in the House of Lords Library. We are not sure why they were not there when he looked for them—

Mr. Gibb


Mr. Robinson

I do not doubt that they were not available to him, but I reassure him that we have arranged for additional copies to be deposited—no doubt he will be able to collect them after the Division.

Mr. Gibb

I am grateful for that reassurance, but why were the draft regulations not referred to in the regulations list, in the book that lists all the documents that the Government have presented to the Library, or in today's Order Paper under the list of documents that were placed in the Library on Friday?

Mr. Robinson

I have explained to the hon. Gentleman that the draft regulations were deposited in the Library, although we do not know why they were not available to him. I have assured him that we have made additional copies available. I cannot do more, and I ask him to accept what I have said.

The increased levels of stamp duty will apply to intellectual property, but the amounts will be very small—some tens of millions in the total. I do not think that the matter is significant to our consideration of the amendment—in fact, the amendment would not affect it.

I am sure that the whole House has considerable respect for the professionalism of the hon. Member for Bognor Regis and Littlehampton, but he must find other reference points than the Institute of Directors and Gavyn Davies, much as we respect the latter and much as our relations with the former are improving. I am sure that he can do better than that, even if he has to make frequent reference to his former boss.

We heard about the slice system as against the slab system and the cliff edge. My right hon. Friend the Chief Secretary conceded in the debate on 28 July last year, when we divided on an amendment, that there were certain deficiencies in the present system, but it is funny that the Conservatives did nothing about it when they were in government.

I hasten to add that rates were lower then, so the problem was slighter, but Conservative Members have made the point today that there was already a bunching. We are prepared to consider the issue, but only in the context of there being no reduction in revenue, so presumably the rates would be spread over a banded system and the results might not be to everyone's liking.

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The Opposition's talk of a hidden agenda is a lot of nonsense. I suppose that they have nothing better to say, but we could have predicted that the right hon. Member for Wells (Mr. Heathcoat-Amory), along with the hon. Members for Guildford (Mr. St. Aubyn) and for Runnymede and Weybridge (Mr. Hammond) and others, would mention the European situation.

In anticipation, I took the trouble of getting some figures on Europe, which I am sure will interest or even intrigue the right hon. Member for Wells. He was pretty right on Belgium; wrong on France and on Germany; and right on the Netherlands. I have the figures here, and I will make them available to him afterwards. Overall, stamp duty and its equivalents in the Community stand at between 6 and 10 per cent. on average, which still puts us at a considerable advantage.

I believe that I am correct in saying that there is no intention that the business properties taxation should bring us in line with the code of conduct of business taxation. We have looked at the market—

Mr. St. Aubyn


Mr. Robinson

If the hon. Gentleman can contain himself for a moment, I am dealing with a coherent point raised by other Conservative Members in the debate. I agree with the Budget judgment that we have a level of taxation that even he would accept is assimilable in the present market and does not pose a problem.

Mr. St. Aubyn

In the light of the Paymaster General's assertion that to refer to a hidden agenda is nonsense, and of the comments that he has just made, can he confirm that the Government have no intention of raising stamp duty yet further?

Mr. Robinson

The question of a hidden agenda was raised in relation to Europe and to some harmonisation proposals concerning a code of conduct for business taxation. I repeat that that is nonsense. There is no hidden agenda in that respect.

Mr. Hammond

The point was also raised in respect of how the housing market would be regulated under a single currency and of comments made by the Chancellor himself suggesting that a prime motive for the move was a further damping of the housing market.

Mr. Robinson

The hon. Gentleman says that the Chancellor made that remark, and I look forward to receiving a copy of it, if he can produce it.

The issue is not whether the United Kingdom's housing market is out of phase with the European Union's, although that could well happen; the issue is whether there is genuine convergence between our economy and the European economies. That is why the policy that we cannot contemplate entry to the single currency until there is established convergence is so right. Convergence means a general harmonisation of the economies in terms of inflation, growth and other factors, one of which, but only one, is the housing market. We cannot pick out housing and try to deal with it as a separate issue; nor would we attempt to do so.

All the amendments have been odd, as if the Opposition had trouble getting them down or making up their minds what they wanted to do. The odd thing about this amendment is that it would give relief for businesses of over £250,000, but nothing for those under that figure. I do not resent Opposition Members speaking to the amendment. For the most part, their concern seems to have been the effect on the housing market, but the amendment would do nothing about the problems that they consider the increase in stamp duty might pose for that market and we do not accept that it will pose a problem.

The hon. Members for Runnymede and Weybridge and for Guildford are concerned about the housing market and the possible effects of the tax on house building, house prices and land prices, but surely they must have learnt from the 1980s, the Lawson boom and the mishandling of the economy by the Conservative Government that the one thing the property market does not want is the politics of boom and bust. The politics of envy has nothing to do with it—it is the politics of boom and bust. That is what brought the housing market to its knees and what plunged millions into negative equity from which, as I heard today from someone who works in the Treasury, people are still not escaping, in spite of the improvement in the economy.

The whole point about everything that the Government are doing, as I explained during the debate on clause 75, is that stability and long-termism have to be the name of the game. There is no point in going back to boom and bust or trying to regulate one aspect to distort another. We have to have a coherent set of policies that keep the economy on a steady course. That is what the Budget is about and the increase in stamp duty is one part of it.

Mr. St. Aubyn

I am afraid that the hon. Gentleman condemns himself with his own words. On the one hand, he tells us that there is no hidden agenda and that raising stamp duty is not part of regulating the economy, but, on the other, he talks about preventing boom and bust. In the context of house building, surely he realises that it is the transaction costs that are the concern. Increasing transaction costs will deter the development and provision of brown-field sites for residential development.

Mr. Robinson

The hon. Gentleman may continue to make that point, but we believe that we have taken a balanced view. Indeed, a Conservative Member agreed—I cannot remember whether it was the hon. Member for Bognor Regis and Littlehampton or the hon. Member for Runnymede and Weybridge—that, at the present level, the increase will not markedly affect the market. We agree with that judgment and it is the one which we have taken. The point that I was trying to make about stability, which the hon. Member for Guildford seems to be too dense to understand, is that we are trying to achieve it not through one measure alone, but through a set of measures. The one thing that will kill the housing market again is to get away from stability and go for boom and bust. We must not do that. That is why the whole of the Budget fits together as a coherent set of measures to keep the economy on a steady course, with steady growth, to the benefit of all sectors.

I hope that the right hon. Member for Wells is reassured about the European fund. He also mentioned welfare to work and its having some effect on those companies that we will be looking to to provide considerable effort in that respect. I am pleased to be able to tell him that my right hon. Friend the Chancellor and I met representatives of some big companies in the hotel industry—this is not unrelated to commercial property values—and, while they could give us a tremendous commitment to welfare to work and the developments that they have in hand are extremely encouraging, none of them raised the increases in stamp duty with us. They were committed to welfare to work and very committed to the Government's policy of stability and long-termism.

We are in the right ball park as far as the increase is concerned. Indeed, that is confirmed in the monthly index of Richard Ellis, which shows that the impact is pretty marginal, if there is any at all, and that we are not greatly affecting the market. It also seems that Richard Ellis reviews its Budget judgment as well.

Mr. Hammond

I listened carefully to what the Paymaster General said about long-term stability. Can he explain how two separate stamp duty increases in less than 12 months convey an impression of stability? Either we have to assume that there will be a steady progress and further increases, or those are discrete and disruptive movements.

Mr. Robinson

There has been nothing of significance in the market and no boom such as that which the Conservative party managed to contrive. There is every indication that the economy is on a steady course. We believe that our Budget judgment was right and everything we have done was committed to stability. We shall stick with our policies.

There is no merit in the amendment, which would do nothing to improve the housing market in a way that would have any effect on commercial property. We believe that our judgment is correct and we will make decisions as and when it is proper to do so in the context of the Budget.

If a fit of misguided "Oppositionism" leads the Conservatives to force the amendment to a vote, we shall resist it.

Mr. Heathcoat-Amory

I do not think that the Paymaster General has done justice to the many excellent points raised by my hon. Friends the Members for Bognor Regis and Littlehampton (Mr. Gibb), for Runnymede and Weybridge (Mr. Hammond) and for Guildford (Mr. St. Aubyn), all of whom spoke with considerable theoretical or practical knowledge. The Minister has once or twice completely overlooked their questions.

The Paymaster General did pass the comment that our amendments were confused and asserted that we had had trouble in getting them down. I do not know what he means by that, or how on earth he can know the circumstances in which our amendments were tabled. In fact, we had no difficulty. Our only problem was to try to restrain ourselves from flooding the amendment paper with necessary amendments and to try to concentrate on those that would be constructive and would improve the Bill.

The amendment is crystal clear. We tabled it to try to take out commercial property because we thought that the Government intended that.

Mr. John Swinney (North Tayside)

I take it from what the right hon. Gentleman has said that the Opposition amendments will be the pinnacle of their contribution to the debate and that we can expect no better from the other amendments that we will debate over the next two days.

Mr. Heathcoat-Amory

I do not know whether the hon. Gentleman is trying to be witty or to ask a genuine question. If he sticks around for the next two days, he will hear more of our amendments, which I hope he will support because we have in mind not only the United Kingdom, but improvements to the economy of Scotland, which is dear to the hon. Gentleman's heart.

The amendment was tabled, at least partly, because we judged, following the Chancellor's Budget statement, that it could well meet his intention. The Chancellor referred only to increasing stamp duty on householders and we know from last year's Finance Bill that the Government—or, at least, those on the Treasury Bench—did not always understand their legislation. The fiasco of the withdrawal of dividend tax credits made it clear that they certainly did not understand their own Bill. Those of my hon. Friends who served on the Standing Committee will remember that Ministers simply did not understand foreign income dividends. Eventually, rather than withdrawing the relevant clause, they said that it was inoperative and that they would return to it later.

It is possible that, in the rush of preparing a Budget, the Chancellor genuinely thought that stamp duty did not apply to commercial properties. No one had gone into the point in great detail and the Chancellor himself has no commercial background. Perhaps that was a mistake, and we have sought to help him by giving effect to what may have been his intention; otherwise, the Bill will have a very damaging effect on commercial properties. We hope that there will be time for a short debate on clause stand part so that we can make a few more general points about the clause's wider effect on the economy.

I must complain that the Paymaster General was dismissive of my innocent inquiry about whether this might not be the opportunity to move from what I called a slab system to a slice system. I think it was my hon. Friend the Member for Runnymede and Weybridge who picked that up as an important potential reform. All the Paymaster General said was that we should have done it. My point was that it is not so important to have such reforms when the rates are low, but, when the upper rate of stamp duty is increased by 50 per cent., as is proposed, it becomes important to try to avoid such gross distortions.

9.45 pm

There is also the code of conduct for business taxation. Again, the Paymaster General was dismissive and said that, as far as he knew, there was no connection; that is his opinion, but the Government appear to have an agenda to harmonise—upwards, of course—business taxation to fit a European pattern. He challenged my figures on the effective rates of stamp duty in other member states. I defer to his greater knowledge, or at least to his easier access to specialist advice. I had to refer to the Library at short notice and it did a very good job for me, but I may not have got its figures right. However, it is clear, and he confirmed this, that the average rate of property transaction taxes is between 6 and 10 per cent. He confirms my point that we have a comparative advantage. That is one of the reasons why firms transfer to Britain and why we act as a magnet for overseas investment. That is much criticised by members of the European Commission, who regard that as terribly unfair. They are itching to harmonise it all upwards to the higher continental rates. It was not right for the Paymaster General to be so dismissive of my point.

The Paymaster General ignored my question about which sorts of businesses would be hit by the increased stamp duty. I noted—again, this was echoed by several of my hon. Friends—that large, well-advised companies can and do avoid stamp duty by various means. The Paymaster General did not mention that. He knows a great deal about tax avoidance and how to counter it. The Committee would have expected some reference to how he will ensure that the burden of the higher rate of stamp duty is spread evenly through the commercial world rather than, as often happens, being loaded on to the weaker shoulders of small companies that cannot afford professional advice on the scale necessary.

The Paymaster General's responses were inadequate. We may seek answers to some wider questions in the debate that will shortly follow on clause stand part, if it is allowed.

Amendment negatived.

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

Mr. Heathcoat-Amory

The transfer of property is not a luxury but a sign of a dynamic and successful economy, so any tax that inhibits it strikes at the root of productive investment and business activity. In an earlier speech, the Paymaster General suggested that the tax was to bring stability—that it would somehow even out the ebbs and flows of the property market and ensure that we do not have a boom followed by a bust. I do not think that it has anything at all to do with that.

I should believe the hon. Gentleman more if there were some indication that he would lower the rates of stamp duty at another stage in the economic cycle, but, as has been said, it is a ratchet—the direction is ever upward, with no chance whatsoever of the £500 million impost on the commercial sector ever being reversed.

The truth is that the measure is not about stability, but about extra taxation. That sits oddly with the Government's professed desire for a dynamic economy—presumably one in which both foreign and domestic businesses locate, relocate and start up in or transfer to the United Kingdom. The vigour of the property market is a healthy sign, so to tax property transfers is a retrograde step. What is the reason for the clause? Why are the Government increasing taxes on property and, therefore, on commerce at this time?

Mr. Geraint Davies

Does the right hon. Gentleman accept that, given that the rate of increase in commercial sector property prices is more than twice the rate of inflation, any simple understanding of market systems brings one to the conclusion that there is excess demand in the market and that the rate of increase is far in excess of the marginal increase in tax, which will surely be absorbed in containing the rate of increase in prices? There is no way that the increase will harm the economy—far from it. It will have a stabilising impact.

Mr. Heathcoat-Amory

There are two responses to that interesting intervention. The first is that the increased prices in the commercial sector mean that, even at existing rates of stamp duty, the yield is extremely buoyant. It will increase precisely because of the higher taxes; therefore, the Chancellor did not need to increase the rate in order to increase the yield. The second point follows on from my remarks a few minutes ago, which is that I would only accept such an argument if there were any evidence that the Government would cut the rate again if the commercial property market turned down.

That logically follows on from the hon. Gentleman's point. If the hon. Gentleman indicates that that is indeed his policy in the debate we are about to have—however short it may be—I shall regard his interventions with considerable respect in future. Incidentally, I hope that he is on the Standing Committee on this Bill. He was happily on the Committee on last year's Finance Bill and, having finally got the hang of the different between you and they—the first person and the third person—he was an excellent member of that Committee.

Before that intervention, I was asking the Paymaster General about the reason for the tax. There is no environmental reason; as my hon. Friend the Member for Guildford emphasised, it has nothing to do with the difference between building on green-field or on brown-field sites. There is no apparent reason from a European perspective—the Paymaster General has denied that there is a hidden convergence agenda. Finally, the Government do not need the money, because we are in surplus. A budget surplus was nearly achieved in the financial year just ended and there will be a substantial surplus in the financial year on which we have just embarked. Given that there is already to be a £20 billion tax burden on the commercial sector in the lifetime of this Parliament, why is the Chancellor adding to that unnecessarily by increasing rates of stamp duty that disproportionately hit the business sector?

I conclude with those few questions and comments, hoping to allow one or two of my hon. Friends to make a contribution in time for an early end to the debate.

Mr. St. Aubyn

I begin by applauding the Paymaster General's altruism in proposing the clause. We are near neighbours in Surrey, where he is my constituent. Whereas I occupy a humble labourer's cottage, he occupies the mansion of the village—very nice it is, too—and I know that, in this case, the tax rate will hurt him a great deal more than it will hurt me. Nevertheless, one is bound to ask, in what spirit is that altruism being proposed?

The Paymaster General says that he is anxious to prevent boom and bust. Well, we do have a boom. In the past two years, the stock market has increased by about 50 per cent., as measured by the increase in the FTSE index. To help us understand the Government's long-term policy, will the Paymaster General clarify why his Government are happy to preside over a boom in financial assets as represented by shares, but have an engrained hostility to any increase in the value of bricks and mortar in so far as they, too—especially on the commercial property side—represent a financial asset?

We need to know the answer to that question, when the Paymaster General has told us that he believes that 3 per cent. is about right, and has pretty well implied tonight that stamp duty should not go higher than that, and yet he stops short of giving the House any reassurance that he and the Government recognise that if they try to push this boat out any further, the harmful effects—which we have identified this evening—on the property market, especially the commercial property market, will become very marked.

The property-owning democracy is a decent society—there is nothing to be ashamed of in it—but I believe that we have isolated all the possible motives that the Government have for introducing clause 147, and in the end we must conclude that the motivation for the clause comes back to old Labour. It comes back to an old-fashioned attack on property. That is what will drive Labour Members through the Aye Lobby tonight.

Mr. Geoffrey Robinson

My reply will be brief. In your absence, Mr. Lord, and that of your iron discipline, we had a fairly wide debate on amendment No. 10. A debate on an amendment relating to commercial property was turned into one on the housing market, and Opposition Members expressed much anxiety.

It remains only for me to say, as we near the end of the first day's debate in Committee of the whole House, that there is no hidden agenda regarding the increase in stamp duty, and that no European convergence idea underlies it. The obsession of the right hon. Member for Wells (Mr. Heathcoat-Amory) with anything that might smack of Europe is well known to the House and he is respected by many for it, but he must not let that obsession overreach itself by imagining things where, obviously, none exist.

I assure the hon. Member for Guildford (Mr. St. Aubyn) that I am not—sadly or happily—his constituent; that we have no hostility to financial assets; that we are pleased by the sustained confidence shown by the markets in the Labour Government; that we are sure that that will continue; and that we are delighted that property-owning democracy is also continuing, as polls show, to support this Labour Government.

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

The Committee divided: Ayes 285, Noes 119.

Division No. 257] [9.58 pm
Abbott, Ms Diane Dobbin, Jim
Adams, Mrs Irene (Paisley N) Donohoe, Brian H
Ainger, Nick Doran, Frank
Ainsworth, Robert (Cov'try NE) Dowd, Jim
Alexander, Douglas Drew, David
Allan, Richard Drown, Ms Julia
Allen, Graham Eagle, Angela (Wallasey)
Anderson, Janet (Rossendale) Eagle, Maria (L'pool Garston)
Armstrong, Ms Hilary Edwards, Huw
Ashton, Joe Ellman, Mrs Louise
Atkins, Charlotte Ennis, Jeff
Ballard, Mrs Jackie Etherington, Bill
Bayley, Hugh Ewing, Mrs Margaret
Begg, Miss Anne Fatchett, Derek
Bell, Stuart (Middlesbrough) Fearn, Ronnie
Benn, Rt Hon Tony Fisher, Mark
Bennett, Andrew F Flynn, Paul
Benton, Joe Foster, Rt Hon Derek
Best, Harold Foster, Michael Jabez (Hastings)
Blackman, Liz Foster, Michael J (Worcester)
Blizzard, Bob Foulkes, George
Borrow, David Fyfe, Maria
Bradley, Peter (The Wrekin) Galloway, George
Bradshaw, Ben Gardiner, Barry
Brinton, Mrs Helen George, Bruce (Walsall S)
Brown, Rt Hon Nick (Newcastle E) Gerrard, Neil
Brown, Russell (Dumfries) Gibson, Dr lan
Bruce, Malcolm (Gordon) Godman, Dr Norman A
Burden, Richard Godsiff, Roger
Burgon, Colin Golding, Mrs Llin
Butler, Mrs Christine Gorrie, Donald
Byers, Stephen Griffiths, Jane (Readings E)
Campbell, Alan (Tynemouth) Griffiths, Nigel (Edinburgh S)
Campbell, Mrs Anne (C'bridge) Hall, Mike (Weaver Vale)
Campbell, Menzies (NE Fife) Hall, Patrick (Bedford)
Campbell, Ronnie (Blyth V) Hanson, David
Campbell—Savours, Dale Harris, Dr Evan
Canavan, Dennis Heal, Mrs Sylvia
Cann, Jamie Health, David (Somerton & Frome)
Casale, Roger Henderson, Ivan (Harwich)
Caton, Martin Hepburn, Stephen
Chapman, Ben (Wirral S) Heppell John
Chisholm, Malcolm Hoey, Kate
Clark, Rt Hon Dr David (S Shields) Home Robertson, John
Clark, Dr Lynda (Edinburgh Pentlands) Hood, Jimmy
Hoon, Geoffrey
Clark, Paul (Gillingham) Hopkins, Kelvin
Clarke, Charles (Norwich S) Howarth, Alan (Newport E)
Clarke, Eric (Midlothian) Howells, Dr Kim
Clelland, David Hoyle, Lindsay
Clwyd, Ann Humble, Mrs Joan
Cohen, Harry Hurst, Alan
Coleman, lain Hutton, John
Connarty, Michael Iddon, Dr Brian
Cook, Frank (Stockton N) Illsley, Eric
Corbyn, Jeremy Jackson, ms Glenda (Hampstead)
Cotter, Brian Jackson, Helen (Hillsborough)
Cousins, Jim Jenkins, Brian
Crausby, David Johnson, Alan (Hull W & Hessle)
Cryer, Mrs Ann (Keighley) Johnson, Miss Melanie (Welwyn Hatfield)
Cummings, John
Cunliffe, Lawrence Jones, Barry (Alyn & Deeside)
Cunningham, Jim (Cov'try S) Jones, Ieuan Wyn (Ynys Môn)
Dalyell, Tam Jones, Ms Jenny
Darling, Rt Hon Alistair (Wolverh'ton SW)
Darvill, Keith Jones, Jon Owen (Cardiff C)
Davidson, lan Jones, Martyn (Clwyd S)
Davies, Rt Hon Denzil (Llanelli) Kaufman, Rt Hon Gerald
Davies, Geraint (Croydon C) keeble, Ms Sally
Davis, Terry (B'ham Hodge H) keen, Ann (Brentford & Isleworth)
Dean, Mrs Janet Kennedy, Jane (Wavertree)
Denham, John Kidney, David
Dewar, Rt Hon Donald Kilfoyle, Peter
King, Andy (Rugby & Kenilworth) Raynsford, Nick
Kingham, Ms Tess Reed, Andrew (Loughborough)
Kirkwood, Archy Reid, Dr John (Hamilton N)
Kumar, Dr Ashok Rendel, David
Ladyman, Dr Stephen Robertson, Rt Hon George (Hamilton S)
Lawrence, Ms Jackie
Laxton, Bob Robinson, Geoffrey (Cov'try NW)
Lepper, David Roche, Mrs Barbara
Leslie, Christopher Rogers, Allan
Levitt, Tom Rooker, Jeff
Livingstone, Ken Roy, Frank
Llwyd, Elfyn Ruane, Chris
Lock, David Ruddock, Ms Joan
Love, Andrew Russell, Bob (Colchester)
McAllion, John Sanders, Adrian
McAvoy, Thomas Sarwar, Mohammad
McCabe, Steve Savidge, Malcolm
McCafferty, Ms Chris Sawford, Phil
McCartney, lan (Makerfield) Sedgemore, Brian
McDonnell, John Sheerman, Barry
McFall, John Sheldon, Rt Hon Robert
McGuire, Mrs Anne Simpson, Alan (Nottingham S)
McIsaac, Shona Skinner, Dennis
McKenna, Mrs Rosemary Smith, Rt Hon Andrew (Oxford E)
Mackinlay, Andrew Smith, Angela (Basildon)
McNamara, Kevin Smith, Miss Geraldine
McWilliam, John (Morecarnbe & Lunesdale)
Mallaber, Judy Smith, John (Glamorgan)
Marsden, Gordon (Blackpool S) Smith, Sir Robert (W Ab'd'ns)
Marshall, David (Shettleston) Spellar, John
Marshall—Andrews, Robert Squire, Ms Rachel
Maxton, John Starkey, Dr Phyllis
Meacher, Rt Hon Michael Steinberg, Gerry
Merron, Gillian Stevenson, George
Michael, Alun Stewart, David (Inverness E)
Michie, Bill (Shef'ld Heeley) Stewart, lan (Eccles)
Michie, Mrs Ray (Argyll & Bute) Stinchcombe, Paul
Milburn, Alan Stott, Roger
Mitchell, Austin Strang, Rt Hon Dr Gavin
Moffatt, Laura Straw, Rt Hon Jack
Moonie, Dr Lewis Stringer, Graham
Moran, Ms Margaret Stuart, Ms Gisela
Morgan, Ms Julie (Cardiff N) Stunell, Andrew
Morgan, Rhodri (Cardiff W) Swinney, John
Morris, Ms Estelle (B'ham Yardley) Taylor, Rt Hon Mrs Ann (Dewsbury)
Morris, Rt Hon John (Aberavon)
Mudie, George Taylor, Ms Dari (Stockton S)
Murphy, Denis (Wansbeck) Thomas, Gareth (Clwyd W)
Murphy, Jim (Eastwood) Thomas, Gareth R (Harrow W)
Murphy, Paul (Torfaen) Timms, Stephen
O'Brien, Bill (Normanton) Tipping, Paddy
O'Brien, Mike (N Warks) Touhig, Don
Olner, Bill Trickett, Jon
O'Neill, Martin Truswell, Paul
Organ, Mrs Diana Turner, Dennis (Wolverh'ton SE)
Osborne, Ms Sandra Turner, Dr Desmond (Kemptown)
Palmer, Dr Nick Turner, Dr George (NW Norfolk)
Pearson, lan Twigg, Derek (Halton)
Perham, Ms Linda Tyler, Paul
Pickthall, Colin Vaz, Keith
Pike, Peter L Walley, Ms Joan
Plaskitt, James Welsh, Andrew
Pope, Greg White, Brian
Pound, Stephen Williams, Rt Hon Alan
Powell, Sir Raymond (Swansea W)
Prentice, Ms Bridget (Lewisham E) Williams, Alan W (E Carmarthen)
Prentice, Gordon (Pendle) Williams, Mrs Betty (Conwy)
Primarolo, Dawn Willis, Phil
Prosser, Gwyn Wise, Audrey
Purchase, Ken Wood, Mike
Quin, Ms Joyce Wright, Anthony D (Gt Yarmouth)
Quinn, Lawrie
Radice, Giles Tellers for the Ayes:
Rammell, Bill Mr. Clive Betts and
Rapson, Syd Mr. David Jamieson.
Ainsworth, Peter (E Surrey) Lait, Mrs Jacqui
Arbuthnot, James Lansley, Andrew
Atkinson, David (Bour'mth E) Leigh, Edward
Atkinson, Peter (Hexham) Letwin, Oliver
Baldry, Tony Lidington, David
Bercow, John Lilley, Rt Hon Peter
Beresford, Sir Paul Lloyd, Rt Hon Sir Peter (Fareham)
Boswell, Tim Loughton, Tim
Brazier, Julian Lyell, Rt Hon Sir Nicholas
Browning, Mrs Angela MacGregor, Rt Hon John
Bruce, lan (S Dorset) McIntosh, Miss Anne
Cash, William MacKay, Andrew
Chapman, Sir Sydney (Chipping Barnet) Maclean, Rt Hon David
McLoughlin, Patrick
Chope, Christopher Madel, Sir David
Clappison, James Malins, Humfrey
Clark, Rt Hon Alan (Kensington) Maples, John
Clarke, Rt Hon Kenneth (Rushcliffe) Maude, Rt Hon Francis
Mawhinney, Rt Hon Sir Brian
Clifton—Brown, Geoffrey May, Mrs Theresa
Collins, Tim Moss, Malcolm
Colvin, Michael Nicholls, Patrick
Cormack, Sir Patrick Ottaway, Richard
Gran, James Page, Richard
Curry, Rt Hon David Paice, James
Davies, Quentin (Grantham) Paterson, Owen
Davis, Rt Hon David (Haltemprice) Pickles, Eric
Day, Stephen Prior, David
Dorrell, Rt Hon Stephen Randall, John
Duncan, Alan Redwood, Rt Hon John
Duncan Smith, lain Robathan, Andrew
Emery, Rt Hon Sir Peter Robertson, Laurence (Tewk'b'ry)
Evans, Nigel St Aubyn, Nick
Faber, David Sayeed, Jonathan
Fabricant, Michael Shephard, Rt Hon Mrs Gillian
Fallon, Michael Simpson, Keith (Mid—Norfolk)
Forth, Rt Hon Eric Smyth, Rev Martin (Belfast S)
Fraser, Christopher Soames, Nicholas
Gale, Roger Spelman, Mrs Caroline
Garnier, Edward Spring, Richard
Gibb, Nick Steen, Anthony
Gill, Christopher Swayne, Desmond
Gillan, Mrs Cheryl Syms, Robert
Gorman, Mrs Teresa Tapsell, Sir Peter
Gray, James Taylor, lan (Esher & Walton)
Green, Damian Taylor, John M (Solihull)
Greenway, John Taylor, Sir Teddy
Grieve, Dominic Townend, John
Hamilton, Rt Hon Sir Archie Tredinnick, David
Hammond, Philip Viggers, Peter
Heald, Oliver Wardle, Charles
Heathcoat—Amory, Rt Hon David Widdecombe, Rt Hon Miss Ann
Hogg, Rt Hon Douglas Wilkinson, John
Horam, John Wilshire, David
Hunter, Andrew Winterton, Mrs Ann (Congleton)
Jack, Rt Hon Michael Winterton, Nicholas (Macclesfield)
Jackson, Robert (Wantage) Woodward, Shaun
Johnson Smith, Yeo, Tim
Rt Hon Sir Geoffrey Young, Rt Hon Sir George
Key, Robert
King, Rt Hon Tom (Bridgwater) Tellers for the Noes:
Kirkbride, Miss Julie Mr. John Whittingdale and
Laing, Mrs Eleanor Mr. Nigel Waterson.

Question accordingly agreed to.

Clause 147 ordered to stand part of the Bill.

To report progress and ask leave to sit again.—

[Mr. McFall.]

Committee report progress; to sit again tomorrow.

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