RESTRICTION OF MCA TO THOSE REACHING 65 BEFORE 2000–01

HC Deb 28 April 1999 vol 330 cc349-403 3.47 pm

Mr. David Heathcoat-Amory (Wells)

I beg to move amendment No. 1, in page 14, leave out lines 21 and 22.

The Chairman of Ways and Means (Sir Alan Haselhurst)

With this, it will be convenient to discuss amendment No. 2, in page 14, leave out lines 25 to 27.

Mr. Heathcoat-Amory

I ask the Committee to consider these amendments, which make changes to the Government's provisions regarding the married couples allowance. As I think the Committee knows, the Finance Bill will abolish the married couples allowance and replace it in due course with a children's tax credit.

When the Chancellor announced that change in his Budget speech, he rather typically failed to make it clear that the children's tax credit will not come into effect until April 2001. So the Government have the use of about £2 billion in public money for that year. In addition, the children's tax credit will cost the Government about £650 million less than the married couples allowance, which they are abolishing. The Government are removing an allowance that is familiar and upon which many people rely and replacing it a year later with a cheaper allowance.

Moreover, the Treasury Select Committee report describes the new arrangement as "complex". Much of the evidence that the Committee received about this section of the Bill points to problems in administering the children's tax credit, the fact that it will create a high marginal tax rate as it is withdrawn up the income scale, and that it generally represents a further complication in an already over-burdened tax system.

We shall undoubtedly debate the tax credit in greater detail at another time, but it is relevant to discuss it now because of the Government's switch. They are abolishing an allowance that has been a familiar and valued part of the tax system and upon which many people have relied and are replacing it with an untried, complex arrangement that will be less generous and will go to different people.

Mr. John Healey (Wentworth)

Will the right hon. Gentleman comment on the observations of Mr. David Brodie, the director of the charity TaxAid, who, after the Budget, said: The children's tax credit is a generous arrangement, reducing most taxpayers' liabilities by £416 a year or £8 a week, which is double the value of the married couple's allowance"?

Mr. Heathcoat-Amory

If the hon. Gentleman had told us a little more about what the charity sector is saying, he could have referred to its critical remarks about the withdrawal of dividend tax credits, something that will hit charities extremely hard when the transitional arrangements end.

Although people may welcome additional money for children and families, that does not excuse this measure, whereby the Government are taking away money from childless couples and, as I shall now outline, hitting particularly hard people who are coming up to retirement age. That is the subject of the amendments.

In his Budget speech, the Chancellor asserted: Today's pensioner couples will retain the married couples allowance."—[Official Report, 9 March 1999; Vol. 327, c. 183.] He hoped to convey the impression that, although married couples allowance is being abolished for most taxpayers, it is being retained for pensioner couples, but that is not the case. If people become 65 after 5 April next year, they will not receive the married couples allowance. That date is entirely arbitrary. If people were born on 5 April 1935, they will receive the allowance in old age; if they were born a day later, on 6 April 1935, they will not receive the allowance. Being born a day later makes a difference of £500.

The Red Book, which fleshes out the details of the Budget, contains a section on pensioners and an entire chapter called, "Building a Fairer Society". Nowhere does it explain the unfairness and say why pensioners will not receive the married couples allowance if they reach retirement age after next April. It does not explain also why a one-day difference in birth dates can determine whether one receives a £500 tax credit. That measure is not fair or equitable; it is a good illustration of stealth taxation. The apparent extension of married couples allowance to pensioners will, in fact, apply to a smaller and smaller number of people as they die off or get divorced.

Mr. Geoffrey Clifton-Brown (Cotswold)

Does my right hon. Friend agree that people in their late 50s and early 60s, especially those on low incomes, who were born after that magical date, are being particularly discriminated against because there is virtually no likelihood that they will be able to have children if they have not already got them, so they will not be eligible for the child tax allowance, and nor will they be eligible for the older married couples allowance?

Mr. Heathcoat-Amory

My hon. Friend makes a good point. Many of those people who are coming up to retirement will have looked forward to relying on the married couples allowance. Almost by definition, they cannot now alter their working arrangements, work overtime or get a different job to make up for the income that they will lose. That is the extent of their vulnerability, and yet, out of the blue, comes a Budget that will remove an important and valued tax allowance which they were looking forward to, when it is already too late for them to make alternative arrangements.

Mr. Geraint Davies (Croydon, Central)

Will the right hon. Gentleman give way?

Mr. Heathcoat-Amory

I will when I have completed the point. That blow is the latest in a series of blows that the pensioner and saving communities have suffered at the hands of the Government. In the Government's first Budget, there was a £5 billion a year raid on pension funds as a result of the withdrawal of dividend tax credits. Therefore, the same people who are now coming up to retirement have already seen the value of those pension funds reduced.

Does the hon. Gentleman still wish to intervene?

Mr. Geraint Davies

My simple argument is that every change in tax interferes with people's tax planning and confounds their plans. That aspect is not limited to the change that the right hon. Gentleman was criticising, or to people over 65. Anyone, such as myself, who might have benefited from the married couples allowance now cannot plan towards that, but that is the nature of changing tax.

Mr. Heathcoat-Amory

The point that I was making was that pensioners are especially vulnerable. If the hon. Gentleman were to have his tax allowances removed suddenly, he might be able to get a different day job to make up that reduction, but that option is not open to the people who are hit by clause 28.

As I was in the middle of saying, this is not the first blow that those people have suffered. Not only is the withdrawal of dividend tax credits from their pension funds draining £5 billion a year into the Treasury, but many of those people made regular savings into personal equity plans, and all that was stopped from April 1999. PEPs have been replaced by individual savings accounts, which are more expensive, more complicated and less advantageous. Therefore, a series of hammer blows has landed on the very people who are hit by the clause.

Everywhere, the Government have hit pensions and savings, and the next generation of pensioners will now have their personal allowances reduced or abolished as well.

Mr. Christopher Leslie (Shipley)

If the right hon. Gentleman is so concerned about future planning, will he explain the rationale behind his Administration's halving of the value of the married couples allowance over the period when he was a Minister?

Mr. Heathcoat-Amory

It is one thing to reduce an allowance and quite another to abolish it. Moreover, it is a clearly different thing to reduce an allowance in the context of a tax-reducing strategy. We brought the level of personal and direct taxation down in successive Budgets. Against that background, it is fully justified to reduce some allowances and increase others. However, the Government are relentlessly increasing the burden of direct taxes on, and reducing the allowances of, the most vulnerable people in the tax-paying community.

The Paymaster General (Dawn Primarolo)

Will the right hon. Gentleman tell the Committee the value to that same pensioner group of the cut in the married couples allowance made by the Conservative Government, and will he explain why he thinks that that was worth less?

Mr. Heathcoat-Amory

We have a proud record of reducing personal and direct allowances and, by the end of our term of office, all sections of the tax-paying population were better off. We are now witnessing an assault, not only on the general tax-paying public, but especially on people who are less able to order their affairs to compensate for what the Government are doing. There is no better illustration of that than clause 28.

Dawn Primarolo

Will the right hon. Gentleman give way?

4 pm

Mr. Heathcoat-Amory

No. I have given the hon. Lady her chance. She may well have an opportunity to make a speech if she catches your eye, Sir Alan.

It is not only the married couples allowance that is being abolished. There is also the widows bereavement allowance. The Committee may need reminding that, attached to the married couples allowance, is the separate but linked widows bereavement allowance, which is paid to widows for up to two years after suffering that bereavement. A Government press release on Budget day made the following erroneous claim: Widows will be more than compensated for the loss of this allowance by the proposed Bereavement Payment in the Welfare Reform and Pensions Bill. The Chancellor has now admitted that that was incorrect. There is an opportunity for the Government to apologise to the House of Commons through the Committee rather than relying on a letter that was written to the Select Committee on the Treasury, in which it was admitted that the press release was incorrect.

The Government made quite a seriously misleading statement. It is now clear that widows in retirement will be suffering from more than the withdrawal of the married couples allowance, because they will not be in receipt of either the widows bereavement allowance or the replacement bereavement payment. I quote from the relevant section in the Select Committee's report, which states: The Chancellor agreed to write to us, and in their note the Treasury stated that the bereavement payment 'will not generally be available to people over pension age'. That contradicts the statement that was made on Budget day. I hope that the Minister has made a note of that. It would be at least a courtesy if she could correct the misleading and untruthful statement that was made on 9 March.

Mr. Edward Davey (Kingston and Surbiton)

Talking of correcting misleading statements, I am not sure whether the right hon. Gentleman made a slip of the tongue, a Freudian slip or a confession. He said a few minutes ago that the Conservatives had a proud record of reducing allowances. That is certainly what they did, and many people are worse off because of that.

Mr. Heathcoat-Amory

If I made that slip, I can correct it. We reduced the burden of taxation by reducing rates and preserving, and in some cases increasing, allowances. The effective burden of taxation borne by the groups that we are discussing was reduced during our period in office. I am grateful to the hon. Gentleman for giving me the opportunity to clarify that point.

The widows bereavement allowance is an important issue. It was not mentioned anywhere in either the Chancellor's statement or in the section in the Budget report to which I have referred. Again, we have an example of stealth taxation. With this Government, we have always to peal away the obfuscation, and, in this instance, the downright untruth, to get at the reality of what is happening to taxpayers.

On the very date that I have been talking about, 6 April 2000, the value of state earnings-related pensions will be halved for spouses. That is to say that a widow, for example, will be able to inherit only 50 per cent. of the SERPS entitlement built up by her husband. That is a pre-existing decision; it was taken many years ago. However, I am grateful for an early-day motion, which has been signed by a number of Labour Members, which points out that the Government, until this year, were sending out, again, misleading information to those making inquiries about the value of the SERPS entitlement for spouses. It is yet another blow that, on the very day that a widow's SERPS entitlement is halved, the Government are removing the entitlement to the widows bereavement allowance. That will be the subject of other amendments when the Bill reaches another Committee. Those amendments will ensure that pensioner couples continue to receive married couples allowance, as I believe that they are entitled to do. Many of them rely on it, and Conservative Members believe that they should have it.

Mr. Julian Brazier (Canterbury)

Clause 28 is the worst clause in the Bill and I am delighted to speak to this pair of Opposition amendments relating to future pensioners. I must say, Sir Alan—if you will forgive me this anecdote—that I remember clause 28 of another Bill from some years ago causing huge demonstrations and attracting a vast amount of media attention for those who claimed to be defending an alternative life style. This clause 28 has attracted little media attention. There is little public interest, and certainly no demonstration to defend the interests of many millions of married people who will lose a benefit that has existed, in one form or another, since the end of the first world war.

Nobody in the Chamber could have failed to notice the certain amount of mischievous reporting, which has been filling some of the media, on an alleged debate in my party on the question of welfare and the balance between the free market and the state. The debate on these amendments offers me a particularly good opportunity to state my position, which is that welfare should never lie principally with either the state or the free market. By far the most important element of welfare is the family—historically and even today.

I look forward to the next debate, in which we shall discuss how the clause relates to people who are rearing children. I do not want to make the same points twice—you would rightly call me to order, Sir Alan—but the statistics I shall offer then concern the stability of the relationships of married and unmarried people. They point strongly to the efficacy of marriage as an institution in terms of keeping a man and a woman together.

Kali Mountford (Colne Valley)

Will the hon. Gentleman give way?

Mr. Brazier

In a moment.

There are a range of reasons for believing in the importance of marriage. In the context of a Finance Bill, the state, as well as the people concerned, has an interest in that stability.

Before the hon. Member for Colne Valley (Kali Mountford) makes the point that was bound to be made—someone always leaps up to make it—I am obviously not suggesting that people will rush off to get divorced because of a change in legislation. However, before I reply to the point that I suspect she is about to make, we should hear her make it.

Kali Mountford

I thank the hon. Gentleman for giving way. I had not thought of making a point about divorce, so I thank him for raising the issue in the Committee. I was going to ask him what evidence the Conservative Government gathered during their period in office that family stability had been affected by tax decisions. Are not there all sorts of demands on families? People do not base decisions about family stability on tax allowances.

Mr. Brazier

I suggested that the hon. Lady might make exactly that point, and she has done so.

Unlike my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) on the front row—[HON. MEMBERS: "He was the hooker."] My right hon. Friend was a sportsman, but I will not make a point about that. I do not defend the cuts that we made in the married couples allowance, but the evidence on stability falls into two halves. For the second half, the hon. Lady will have to wait for a couple of hours because I shall deal with it under the next amendment as it relates to couples with children. It is very detailed and comes from statistics provided to me by the House of Commons Library.

Overwhelming evidence shows that marriage is the critical factor in stability of relationships between men and women. The second half of the hon. Lady's question lies—

The Chairman

Order. I have allowed the hon. Gentleman to preface the introduction to his remarks, and he has done so in a fairly wide-ranging manner. I am duty bound to the Committee to nudge him back into the narrow area covered by the amendment, which deals with the age-related married couples allowance. We cannot have a general debate about the married couples allowance.

Mr. Brazier

I well understand that, Sir Alan. I was responding to the generalised question that the hon. Member for Colne Valley asked me, which was what evidence I had that the tax system influences people's behaviour. I must reply briefly to that, if I may—

The Chairman

Order. As a result of my generosity in the first place, the hon. Gentleman made remarks which attracted the attention of the hon. Member for Colne Valley (Kali Mountford). He must not go further down that track. I have now decided that he has gone far enough, so I suggest that he returns to the narrow terms of the amendment.

Mr. Brazier

In that case, the hon. Lady will have to wait for the next debate.

Is it fair that a married couple who are only four or five years from retirement, who have gone through their working lives without drawing benefits, having never been out of work, should be told that they are to lose the married couples allowance? They may both have contributed all the way through, or the husband may have done so while the wife had a gap for child rearing—or the other way round, as is increasingly common. That benefit is worth several hundred pounds a year and the couple may have been relying on it as part of their retirement income.

At the risk of arousing your ire again, Sir Alan, may I say that, as my right hon. Friend the Member for Wells said, that comes as part of the framework of changes in provision for those approaching retirement—a framework that has challenged the contributory principle. Why should those approaching retirement not think that, having paid into the system all throughout their working lives, it is only fair that the Government should not move the goal posts, as clause 28 would do? Why should they not say, "We have paid our taxes. We are approaching retirement. Why should only those who are already retired on the date shown in the clause benefit from the allowance?"

Mr. Steve Webb (Northavon)

The hon. Gentleman and I share a belief in the institution of marriage. However, he makes a point about the stability of marriage in a debate on a group of amendments which deals specifically with allowances for pensioners. Is there any evidence to suggest that there is instability in pensioners' marriages?

Mr. Brazier

The hon. Gentleman allows me a second bite at the question. I congratulate him on his clever phrasing, which I think, Sir Alan, allows me to reply. The short answer is that I have seen no clear statistical evidence of that. Most of us come to this House because we believe that the signals that Members of Parliament send matter. It seems extraordinary that we should tear up a signal which, since 1918, successive Chancellors of the Exchequer — two were from the Liberal party and others were from the Labour and Conservative parties —have believed to be very important. That signal is that the House believes that marriage matters and that, in this context, people approaching retirement deserve some recognition through the tax system of the fact that they are married.

4.15 pm

Dawn Primarolo

Will the hon. Gentleman explain to the Committee why the right hon. and learned Member for Rushcliffe (Mr. Clarke), when he was Chancellor of the Exchequer and announced a further reduction under the Conservative Government of the married couples allowance, described it as an anomaly in the system that we did not need?

Mr. Brazier

Bluntly, I do not agree with my right hon. and learned Friend.

Mr. Edward Davey

The hon. Gentleman voted for it.

Mr. Brazier

The hon. Gentleman is right to remind me that I voted for it. At the time, I was in the middle of a rebellion on another family issue, as some hon. Members may remember. The married couples allowance is not an anomaly. I believe that that was the wrong decision, and a wrong justification for the reduction. The allowance has existed since 1918, and I am delighted that the Conservative party as a whole—Conservative Members on the Front Bench and on the Back Benches—will shortly be able to vote against this measure. I hope that the Liberal Democrats will join us in the Lobby.

This issue is not just about signals or the importance of marriage: there is a practical point. I said at the beginning of my speech that the most effective form of welfare is that provided within the family. We all know of couples—many of us have examples in our own families—one of whom looks after the other. It is more often the wife who looks after the husband, but sometimes it is the other way round.

The Chairman

Order. I am not sure that the hon. Gentleman is taking on board my signals. The debate is about the age-related married couples allowance. He is making a speech that would fit more naturally into the clause stand part debate. I ask him for the final time to keep within the terms of the amendment.

Mr. Brazier

I was about to mention nursing care for the elderly. The key point is that if the husband looks after the wife or the wife looks after the husband, the little bit of extra income that is currently provided by the married couples allowance may assist in ensuring that that unpaid, unrecognised, undervalued carer feels able to go on. Any reasonable person would accept that several hundred pounds a year might, at the margin, make the difference, and enable a wife or a husband, who, for a number of years has looked after an elderly or less fit spouse, to go on.

Mr. John Hayes (South Holland and The Deepings)

Specifically within the terms of the amendment, does my hon. Friend acknowledge that the majority of registered disabled people are over retirement age? The Government want to drive them into work as part of their reforms, but that is neither here nor there. Many of the people to whom my hon. Friend refers have severe disabilities and will be particularly hard hit by this measure.

Mr. Brazier

Yes, indeed. My hon. Friend will remember the touching testimony of the shadow Secretary of State for Social Security, our hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith). For many years, his mother nursed his elderly father, who was suffering partly as a result of the wounds he acquired during the war. She was unpaid and unrecognised by the benefit system, but she nursed him through it. Such couples will lose the married couples allowance.

It is extraordinary that, after all these years, we should remove this cover. It is particularly sad and arbitrary for the Government to say that people who have already retired are different from those who are about to retire. The aim of my right hon. Friend's excellent amendment is to ensure that married couples who retire in the future get the same benefit as people who are currently retired, the value of which the Government have recognised by leaving it in place for people who reach 65 before 2000–01.

Mr. Geraint Davies

We should consider the financial impact of what I consider to be an unfortunate wrecking amendment. The Government propose to scrap an allowance that has already been discredited by the Opposition, who have continually reduced it and who accept that it should go. The question is, what is the best strategy for phasing it out? The Government propose to retain the allowance for those who are currently pensioners, but if the amendment were passed, it would never be phased out: all new pensioners would continue to enjoy the benefit. Given that Britain has an ageing population, the Exchequer would be spending money that could otherwise be spent on families, and on children in particular. The point of the clause is to transfer expenditure to families in need.

Mr. Nick Gibb (Bognor Regis and Littlehampton)

Did not the hon. Gentleman stand for election on the platform that his party was committed to not raising taxes? During the general election campaign, the leader of his party said that there would be no tax rises at all. Is not the abolition of the married couples allowance, particularly for pensioners, simply an increase in income tax? How does the hon. Gentleman justify that?

Mr. Davies

The hon. Gentleman refers to a myth that is being peddled continually. The commitment was for income tax not to be increased. I was not going to mention this, but we have reduced income tax rates to 23p and l0p, which is a remarkable achievement.

Mr. Gibb

How can the hon. Gentleman say that his Government have reduced income tax? The abolition of the married couples allowance will mean that an ordinary married couple will pay an extra £197 in income tax. How does the hon. Gentleman square the two statements?

Mr. Davies

The commitment was to reduce the rate of income tax, and that is what we have done—as well as reducing the rate of corporation tax, and other taxes. It would be bizarre for any Government to say that they would never increase any taxes. Apart from anything else, what would they ever do? It is unbelievable that any sensible person could interpret anything that the Prime Minister has ever said as meaning that we, as a new Government, would never raise taxes. That is a farcical idea.

I have been distracted. Let me return to the narrow arena of the amendment. We have spent about £2 billion a year on the married couples allowance, an increasing proportion of which is used by people over 65 as they grow older. The question is whether that should continue—as it would if the amendment were passed—or whether the money should be targeted on families who are in greater need, as our general strategy suggests. I hope that the Opposition will answer this question at some point today: where would they find the money to fund that increasing share of the £2 billion? Would they take it from impoverished families with children, or would they tax it? Do they entirely dismiss the Government's overall strategy of directing money towards families to enable them to work and to care for their children?

The hon. Member for Canterbury (Mr. Brazier) mentioned family values. He also referred to "child rearing", as though he was talking about chicken farming. The Government's strategy is intended to help families: that is the whole point of it. As for "signals", does the hon. Gentleman not agree that the signal that the Opposition are sending the community in the amendment is "Do not get married until you are 65"? The amendment poses the danger of a sudden surge of people marrying at 65.

Mr. Brazier

rose—

Mr. Howard Flight (Arundel and South Downs)

rose—

Mr. Davies

Here they come! They are surging ahead! They are surging everywhere!

Mr. Flight

Surely, according to the hon. Gentleman's logic, the tax incentive that the Government have given to 65-year-olds will lead them to contract serial marriages and start families again.

Mr. Davies

That is obviously the signal that the hon. Gentleman has received. No doubt he intends to go off and do that, but I do not think that such a move would be rational. I think that he should reconsider his personal position.

Mr. Edward Davey

I shall not try now to enter into subject matter that will be dealt with in later debates, on amendment No. 8, on clause 28 stand part, and on the principle behind the married couples allowance, except to say that the comment of the hon. Member for Canterbury (Mr. Brazier)—that one must support the married couples allowance if one is in favour of the family and marriage—simply does not stand up. The idea that the tax system must support marriage and the family is a complete fallacy. There are 101 other policies that would be more effective in supporting marriage and the family, and I shall describe some of them in our later debates. However, I felt that I should make those preliminary remarks, so that my subsequent remarks flow logically.

As my hon. Friend the Member for Northavon (Mr. Webb) said, in his intervention in the speech of the hon. Member for Canterbury, there is no evidence that the married couples allowance has increased the stability of marriage among elderly people. I have figures, which the hon. Member for Canterbury did not have with him, from "Social Trends 1999", suggesting that, over the years—as the previous Conservative Government phased out the married couples allowance—the stability of marriage among elderly groups has, if anything, increased. In 1971, the divorce rate among those who had been married for 30 years or more was 9 per cent. In 1996, the percentage had gone down to 5 per cent.

Therefore, if anything, the stability of marriage among the elderly has increased.

Mr. Hayes

Although I know that this may test the hon. Gentleman's intellectual capacity, is not the logic of his statement—given the figures that he presumably has at his disposal, showing an increasing number of marriage break-ups among people in their 20s and 30s—that reducing the allowance encourages marriage break-ups among younger and middle-aged people?

Mr. Davey

I was going to deal with exactly that point, and to say that, because of that very point, one has to interpret the figures with some care. I therefore take on board the hon. Gentleman's first point. However, the figures do not support the second point that he was trying to make—that reduction and phasing-out of the married couples allowance has increased the divorce rate.

Mr. Gibb

Is it not the case that, although the value of the married couples allowance under the previous Government was reduced for people under 65, its value was maintained throughout that period—as it was in the current Government's first year—for people over 65? Do the figures therefore prove the case one way or the other?

Mr. Davey

I had planned to deal with the relevant point behind the hon. Gentleman's remarks—the need to ensure that we protect that group of elderly pensioners. We have to ensure that people in that group have some offsetting allowances, to ensure that they are not hit by the proposed measure. It is an important point, and the most germane argument in relation to this group of amendments.

There is a case for keeping the married couples allowance for new pensioners, to protect them from taxation increases. However, if we can protect that group within the Government's overall package, it would be satisfactory to phase out the married couples allowance for everyone, so that the tax system might be simplified. So far, although the Government have probably not gone far enough to compensate pensioners, they have included in the Finance Bill the right types of measures, on which we should hope to build in Committee.

The children's tax credit does not apply to this group of amendments—although, judging from his comments, the hon. Member for Canterbury might like them to.

Mr. Brazier

What does the hon. Gentleman mean by that?

Mr. Davey

The hon. Gentleman seemed to be suggesting that people would try to exploit the children's tax credit by having large families, and that the Government were trying to create such an incentive.

Mr. Brazier

You have the wrong Member.

Mr. Davey

I apologise; I was referring to the hon. Member for Arundel and South Downs (Mr. Flight).

I want to highlight the Bill's measures that will protect that group of pensioners. Clause 21 provides an over-indexation of personal allowances for the elderly. It does not completely compensate them; it is a partial offset, but it is the right measure.

4.30 pm

The Liberal Democrat alternative Budget, which was produced before the Chancellor's statement, proposed a simpler tax system that got rid of allowances such as the married couples allowance and increased the basic personal allowances. So, in this regard, the Government are taking our ideas on board, or at least sharing the same ground and acknowledging that we need higher personal allowances that protect pensioners and other low-income groups from a higher tax burden.

Mr. Geraint Davies

Is it not the case that raising allowances as prescribed in the Liberal Democrat manifesto would cost some £15 billion? Can the hon. Gentleman say briefly where the money would come from? Would he raise income tax or what?

Mr. Davey

I shall not try your patience too much, Sir Alan, but the document that we published prior to the Budget set out all the details and costings. Those costings included the abolition of the married couples allowance.

Our position today is totally consistent with what we said before the Budget. We shall vote against the amendments and support the Government tonight because they are going in our direction and increasing personal allowances to protect vulnerable groups. They could go further, and I am sure that we shall debate that later.

For example, clause 19 could have provided even more protection for elderly people. The Government introduced a lop starting rate of income tax, but they have not applied it to savings. Is that not introducing an anomaly? They could have taken the opportunity to provide further protection for current and future pensioners who will be hit by parts of clause 28.

We call on the Government to ensure that pensioners are not only protected from the abolition of the married couples allowance, but targeted as a group that need more resources. In previous Finance Bills, the Government penalised pensioners through, for example, the abolition of dividend tax credit. I hope that the Committee will return to that point as we certainly intend to put the Government on the spot. More than 300,000 pensioners have lost an average of £75 a year as a result of that policy.

The Government could go further. In previous debates, my hon. Friend the Member for Northavon spoke about our policy to increase the basic state pension by £3 a week for those aged over 75 and by £5 a week for those aged over 80. That would target resources on those most in need, as poverty among elderly people is highly correlated with age. It would ensure that those groups were protected from the abolition of the married couples allowance, and more than compensated. They would be far better off with that package of policies.

We shall table amendments to the Welfare Reform and Pensions Bill when it is considered on Report, proposing that policy package. I believe that we already have the support of the right hon. Member for Birkenhead (Mr. Field), a former Social Security Minister. I shall be interested to see whether Conservative Members sign up to those amendments and vote with us on welfare policy. If they really are interested in protecting pensioners, they will back our policy, which is the best way of using taxpayers' money to alleviate poverty among the elderly. We look forward to them supporting us as that would be in line with their arguments this afternoon.

The Liberal Democrats reject the amendments because they would prevent an overdue reform of the tax system. They would prevent a reform that would simplify the tax system and free up resources that could be used elsewhere properly to promote the family, targeting resources on children, and giving the Chancellor the resources to tackle pensioner poverty.

Mr. Flight

I listened carefully to the Chancellor's presentation of his Budget. He did not say that the married couples allowance would be retained for current pensioners, but abolished for future pensioners. He used the general word "pensioner". As was reported in the media at the time, he gave the distinct impression that the intention was to retain the married couples allowance as a tax measure to help support pensioners in their retirement.

I spoke at a large meeting in my constituency the week after the Budget, at which I made clear the reality of the Chancellor's proposals. Not surprisingly, there was considerable annoyance in my audience at the Chancellor's Orwellian use of language to secure misleading headlines. I call on the Government to make their intentions and proposals clear, if nothing else. The Budget speech is too important for half truths.

The Chancellor also argued that there was a trade-off. He said that, although it was a good thing to abolish the married couples allowance—because it had got so untidy when it came to deciding who qualified for it, with many contorted questions about whether people were married or divorced, and so on—the trade-off was to be the new child credit.

More Orwellian language was used when it was stated that the proposal was all about the Government's pro-family policy. However, the word "family" does not now mean mother, father and children, as it used to. It now refers to children with perhaps one parent: if there are two parents, it does not matter whether they live together.

It is axiomatic that retired people do not have families. What I said in my intervention in the contribution from the hon. Member for Croydon, Central (Mr. Davies) was mainly in jest, but I was trying to illustrate the very real point that an argument can be made for changing the married couples allowance tax benefit to the new child credit. Such a change would have a redistributive element—the less well-off would be better off and the better off less well-off—but, overall, the benefit to families would be about the same.

There is a fairness to that argument that echoes the Chancellor's favourite phrase about fair tax policies, but there is no fairness in simply removing a substantial tax benefit for elderly people that is not to be made up elsewhere. The figures show that, for people over 75, the married couples allowance is worth more than £5,000. That is quite substantial, and the value of the allowance after tax is quite significant.

I want to expand on the point that has been made already about planning. People plan for their old age. Perhaps many hon. Members have not yet reached the age when they start such planning, but I certainly have. People work out their pensions and savings in building societies so that they can plan their financial arrangements for old age. With the introduction of stakeholder arrangements, the Government are exhorting more and more people to make such provision, but it is too late for people aged 65 to make changes, to begin new careers and take out new insurance policies, and so on.

I submit that a change such as is proposed requires much longer notice than a year. People retiring in the next 10 years, say, will not be able to make up for the tax loss that this change will inflict.

The reduction in the SERPS widows benefit has already been cited. That was announced some 13 years ago, but hon. Members will be aware that hardly anyone knew about it. The Department of Social Security often gives incorrect advice, but the real problem is that people were not aware, even after 13 years, of the changes to that benefit.

A principle of the tax system is that it should not change all the time. The Government made no mention in their election manifesto that they were going to abolish the married couples allowance for retired people. That abolition is part of a considerable and growing attack on the great rump of pensioners in the middle of society. When I listened to the hon. Member for Croydon, Central, I could not help feeling that he was saying that ageism is now politically correct among Labour Members. He seemed to feel that there was something virtuous in deriving pleasure from taxing older people more. Their pension funds are being taxed. They are being stopped from having tax credit on dividends if they pay no tax. The Government are removing tax benefits on insurance policies. Is all that some sadistic attack on elderly people? It seems to be thought that it is politically proper.

My main criticism is that the provision is devious and misleading. It was not made clear, and pensioners are not being compensated for it. The top-up to pensions guarantee applies only to people who have minimal savings or none. The measures will simply make the great mass of older people less well off in their retirement.

Pensioners are not stupid. In New Zealand, Ministers are frightened even to address public meetings because pensioners have been physically assaulting them. The Government seem to think that pensioners are soft prey and that the media are not interested. However, in my experience, the senior part of British society has rumbled the sum total of the fiscal attacks that the Government are mounting. The matters covered by the two amendments are, in the Chancellor's language, unfair and unjust, and the way in which they were announced was downright misleading.

Kali Mountford

My hon. Friend the Member for Croydon, Central (Mr. Davies) was quite right to say that the amendment is a wrecking amendment. If the official Opposition were serious about amending the clause, they would have suggested some reasonable future date. If they disagree with our date, why not suggest another proper date two or three years hence? The Tories are simply opposed to the resolution. They simply do not like the abolition of the married couples allowance. Rather than be straightforward, they have produced a wrecking amendment without talking about the age group that would be affected by it.

Mr. John Bercow (Buckingham)

Will the hon. Lady give way?

Kali Mountford

No, I shall make my point.

A couple who had had no married couples allowance would suddenly receive it on their retirement date. That makes no logical sense. In his considered speech, the hon. Member for Kingston and Surbiton (Mr. Davey) rightly noted that, if we are to find resources to fund measures that I think are the right ones, money must be found sensibly and logically in a way that fits with the Government's overall strategy. The age group is critical in that sense.

If we are to support children, we must be consistent. Opposition Members really want to talk about families, but they must consider the effects of their nonsensical amendment. It makes no sense to encourage marriage in retirement, but not the rest of the time. Tory Members will surely vote against the clause at the stand part stage. So why spend the Committee's time on discussing this amendment? I find it all very confusing.

Mr. Hayes

rose—

Mr. Brazier

rose—

Mr. Alan Johnson (Hull, West and Hessle)

Give way to the good-looking one.

Kali Mountford

My hon. Friend must not try to guide me. The hon. Member for South Holland and The Deepings (Mr. Hayes) asked first.

Mr. Hayes

The hon. Lady is very kind and I am extremely flattered.

I do not support the abolition of the married couples allowance for anyone, but does the hon. Lady acknowledge that the nub of the amendment is that younger married people will at least be able to make alternative provision in their many years together? Elderly married people simply do not have that opportunity. Someone of 61 or 62 who is looking forward to retirement simply does not have enough years left to make the kind of alternative private provision that will make up for what the Government are taking away. That is the salient point.

4.45 pm

Kali Mountford

The logic of what the hon. Gentleman says is the same as that behind what I have been saying. If he believes that people need an adjustment time in which to make their financial arrangements, why does he support the amendment? It would not achieve that end; it would simply wipe out our attempts to get rid of the married couples allowance. I do not believe in a married couples allowance.

Mr. Hayes

I do.

Kali Mountford

People get married—and divorced—for all sorts of reasons, but not for tax incentives. That argument is irrelevant.

Mr. Bercow

Will the hon. Lady give way?

Kali Mountford

I think that the hon. Member for Canterbury (Mr. Brazier) asked me first, but I wanted to complete my point first.

Mr. Brazier

indicated dissent.

Kali Mountford

In that case, I give way to the hon. Member for Buckingham (Mr. Bercow).

Mr. Bercow

Will the hon. Lady tell the Committee when and where she informed the voters in her constituency that she opposed the married couples allowance, and would take every opportunity to try to get rid of it?

Kali Mountford

The hon. Gentleman knows that the proposal was made clear in the Chancellor's fine speech.

We also had a green Budget, which Conservative Governments never even tried to achieve. Under Conservative Administrations, people were never given a six-month opportunity to consider the direction that the Government should take. That argument is nonsense. [Interruption.] I cannot believe that the hon. Member for Buckingham did not read the green Budget.

I have always made it clear that we should support children, but the amendment goes down the wrong line. It would affect pensioners. It was right for the Government not to remove allowances from people who have already had the allowance and made their retirement arrangements on that basis. To remove their allowances would have been harsh and wrong, this year, when people have not had a chance to consider their arrangements.

If Opposition Members were serious about what they say that they are trying to achieve, they would have specified a date in the future—but their amendment is nonsense, and I cannot possibly agree with it.

A few other spurious measures have been discussed in the debate. The one that horrified me most was the idea of a 14-year timetable for the changes in the state earnings-related pension scheme. Why did not the Conservative Government make proper arrangements when they made the changes in 1986? It is a disgrace that they did not do so, and people could not make proper arrangements for their retirement.

It is a bit rich for Opposition Members to complain to the Committee today about SERPS, and to say that people need time to make proper, considered arrangements for their retirement. People were never given any information in the first place, and now the Labour Government are having to pick up the pieces and put things right.

The issue was debated at length in the Standing Committee on the Welfare Reform and Pensions Bill, and the arguments remain the same. The Opposition Members on the Committee at least had the decency to apologise for their Government's mistake in not administering the change in SERPS properly.

Mr. Brazier

The hon. Lady and I served together on that Committee. Will she follow her logic through and think for a moment? She is berating us for publicising something insufficiently 14 years ago, yet the interval until the change comes through is less than the interval associated with the clause. Even if the changes were published to the heavens, it is far too late for people to make provision.

Kali Mountford

The hon. Gentleman's comments might make sense if his party had ever done anything about the change in the first place. In some cases, we now have only a matter of months in which to deal with the change that people are facing. We are having to go back and think about ways of compensating people who made decisions based on the SERPS arrangement in 1986, and were not made aware of the change. Given that they left us with such a fiasco, it is a bit rich for the Tories to start arguing about proper time being allowed for changes in people's tax arrangements so that they can make proper provision for the future.

Surely, as we have made the decision, it is better to be clear about it. We are being clear about it today, and people can make their decisions for the future. The hon. Member for Kingston and Surbiton made some valid points about how to deal with compensation for people's changed arrangements and ensuring that they can make proper arrangements for the future. We can debate at length later in the Bill's passage how to make such provisions but this amendment would not achieve any of them. Conservative Members are being disingenuous in their remarks.

Mr. Clifton-Brown

Sir Alan, I assume that we will not get a clause stand part debate and that you will therefore allow us to range a little wider than normal on the amendment.

The Chairman

I hope that I am always generous in allowing Members to speak to amendments, but I cannot be over-generous. We must not go outside the rules of order. This is about age-related married couples allowance. I hope that the hon. Gentleman will not provoke me too much. I cannot say whether there will be a later debate.

Mr. Clifton-Brown

Thank you for that advice, Sir Alan.

Clause 28 abolishes the non-age-related married couples allowance from April 2000. Unfortunately, the Chancellor has seen fit to compensate some people by a child tax allowance to be introduced one year later. People who would have been eligible for married couples allowance, whether elderly pensioners or not, will have to suffer for a whole year without any form of compensation. That enables the Chancellor to retain about £1 billion that he would otherwise have had to pay out in allowances.

In his Budget speech, the Chancellor deliberately duped the public when he set out his reasons for abolishing married couples allowance. He claimed: It is in fact a tax credit paid at the same flat rate to married couples, single parents and unmarried parents living together."— [Official Report, 9 March 1999; Vol. 327, c. 182.] We know that that is not true because it is the additional personal allowance that is available to unmarried and single people, and that is being abolished as well.

As my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) said, not only is the additional personal allowance being abolished, but the reliefs that go with it. Widows bereavement allowance and relief for maintenance payments, which are both available to elderly pensioners and others, are being abolished. It is an especially mean abolition because widows should particularly be helped a little by the tax system.

The elderly married couples allowance will still be available for people aged over 65 until 5 April 2000, but there is an anomaly in that provision. The Government's Welfare Reform and Pensions Bill, and all their other social security legislation, provides that women can retire at 60. If they wish to retain the married couples allowance for retired people why should not the allowance be retained at least for women aged over 60? Will the Paymaster General consider amending the Finance Bill so that women aged over 60 can claim the additional allowance? I am pleased to see her nodding assent.

Dawn Primarolo

indicated dissent.

Mr. Clifton-Brown

If the Minister is not nodding assent, she is going against the tenor of all the social security legislation.

Dawn Primarolo

The hon. Gentleman should check the qualification criteria for the married couples allowance. He will find that the statement that he has just made to the Committee is incorrect. I strongly advise him not to pursue that line of argument because he has made an error about who qualifies for it.

Mr. Clifton-Brown

I am grateful for that clarification, but I have here the Bill, as published, and refer the Paymaster General to clause 28(2), which states: Subsection (1) (reduction where neither spouse is aged 65 or over)—shall cease to have effect. Subsection (3) of the clause continues: In subsection (2) (reduction where either spouse is aged 65 or over)— Paragraph (a) in that subsection states: for 'is at any time within that year of the age of 65 or upwards' there shall be substituted 'was born before 6th April 1935'. According to my calculations, that applies only to people aged over 65, but I am willing to have the matter clarified.

The Chairman

Order. I hope that the hon. Gentleman will focus on the two lines in between that he did not quote; they are the ones that are relevant to the amendment.

Mr. Clifton-Brown

I hesitate to disagree with you, Sir Alan, but, as I understand it, the amendment applies to lines 21 and 22—I am reading from the amendment. The lines that I quoted are lines 21 and 22 of clause 28(3)(a), which state: for 'is at any time within that year of the age of 65 or upwards' there shall be substituted 'was born before 6th April 1935'.

The Chairman

I do not want to enter into a dispute with the hon. Gentleman, but as I heard it, he read out clause 28(2) and then went on to refer to subsection (4). I do not dispute that what he has just read is the text of subsection (3)—that is the subsection that we are discussing.

Mr. Clifton-Brown

Thank you, Sir Alan. I do not want to dwell on the matter and I thank you for your advice. It seems to me that the wording of the Bill is clear, but, if I am wrong, no doubt the Paymaster General will correct me when she winds up the debate.

Kali Mountford

Is the hon. Gentleman now advocating same-sex marriage? I understood that it took two people—a man and a woman. Given that fact, what he has said seems nonsensical. Is he not simply saying that we will move the whole date forward by five years for everyone?

Mr. Clifton-Brown

As the entire social security system—and every other similar system in this country— is predicated on the basis that women can retire at the age of 60 and men can retire at the age of 65, if one wants to deal with retired people by giving them a special, additional married persons allowance, it would make eminently good sense to allow women who retire at 60 to be able to claim that allowance. Obviously, the hon. Lady and I have different opinions on that matter and we shall not agree.

Mr. Bercow

I am grateful to my hon. Friend for trying to negotiate the details of the issue with Labour Members, but does not the absence of any logical basis in the Government's treatment of the issue prove what we know? The issue is not about consistency with other Government policies, or about ethics; it is simply a grubby bid to save a little bit of money for the Exchequer. That is the rationale. Why does not the Paymaster General give up the unequal struggle and admit it?

Mr. Clifton-Brown

My hon. Friend is too generous to the Government. The measure is not merely a grubby deal to save some money; at the same time, it claims to benefit pensioners—something that could be done much more effectively.

There is no doubt that elderly people approaching retirement have been severely disadvantaged by the measure; they will have no time whatever to build up their finances to compensate for the loss of the allowance. That is so typical of the Labour Government; they tend to hit people at the bottom of the income scale. We have seen that time and again. It is grossly unfair because those people—of all members of society—do not have the time to work overtime to make up their pensions to provide for themselves when they eventually reach retirement age. It now seems that women will be encouraged to work an additional five years—from the age of 60 to 65—because they will be denied the allowance and that, too, is grossly unfair.

Others among my colleagues have said that the measure is anti-family. Indeed it is. The married couples allowance was introduced in the first place to compensate for the fact that married couples could not claim the additional single persons allowance. Under these provisions, we are saying, in effect, that it is fine for people to live together because they will be able to claim the additional single persons allowance, but a married couple—who are not both earning—will not be entitled to claim those two personal allowances.

Mr. Geraint Davies

Does the hon. Gentleman accept that, if the Committee accepted the amendment, it would be unfair to two friends or colleagues, one of whom was married and the other not, approaching the age of 65, because the unmarried person would point to the married one and say, "My friend has the allowance and I haven't—what have I done wrong?"? Would that not be grossly unfair?

5 pm

Mr. Clifton-Brown

The hon. Gentleman has conclusively proved that Labour Members have not understood the reason for giving married couples an allowance, which is precisely to benefit people who are married. We all want people being married to be the normal state, because they cost the state less, live more happily and derive all sorts of other benefits from being married. However, it is quite clear that the Government have absolutely no regard for that.

Mr. Davies

Is not the history of the allowance that it was designed to help married people with the costs of marriage and of children? It would be absurd to reward someone who is 65 simply because that person is married or because he or she opportunistically gets married aged 65 so as to get the allowance.

Mr. Clifton-Brown

With that second intervention, the hon. Gentleman gets himself into even deeper water. The married couples allowance is not given only to those who have children. There are thousands of married couples in this country who, for many different reasons, choose not to have or do not have children. Why should they not be given a little help by the tax system?

Mr. Bercow

I am sorry to trouble my hon. Friend again, but I cannot resist the temptation to point out yet another inconsistency between the views of Labour Members. Does he not think it extraordinary that, on the one hand, the hon. Member for Colne Valley (Kali Mountford) says that it is absurd to suppose that people get married to attract the allowance, whereas on the other hand, and only a matter of metres away from her, the hon. Member for Croydon, Central (Mr. Davies) pillories older people, impugns their motives and implies that, at an advanced age, they would rush to the altar simply to get the allowance? Government Members should get the line right.

Mr. Clifton-Brown

My hon. Friend is exactly right—no one would rush to the altar to get the married couples allowance. Successive Governments of both colours have decided that it is right to encourage the state of marriage and that there should be an additional allowance to compensate for that.

Mr. Healey

Will the hon. Gentleman give way?

Dawn Primarolo

Will the hon. Gentleman give way?

Mr. Clifton-Brown

I give way.

The Chairman

Order. When more than one hon. Member has risen, the hon. Member for Cotswold (Mr. Clifton-Brown) should state to whom he is giving way.

Mr. Clifton-Brown

I give way to the hon. Member for Wentworth (Mr. Healey).

Mr. Healey

Is not the hon. Gentleman overlooking the fact that other parts of the tax system benefit married couples? MIRAS—mortgage interest relief at source—can be claimed by both partners if they are married, but not if they are unmarried—[Interruption.] Transfers between married couples are exempt from capital gains tax, whereas transfers between unmarried couples are not.

Mr. Clifton-Brown

I am delighted by that intervention. It is the Labour Government who are abolishing MIRAS, which is another allowance that is transferable between husband and wife. I am all in favour of allowances that are transferable between husband and wife and I strongly supported independent taxation. I urge the hon. Gentleman to make vigorous representations to Treasury Ministers that capital gains tax allowances should remain transferable between husband and wife, because it seems to me that that might well be next on their list for abolition.

The measure is a mean one, and the Government are mean to take a whole year before implementing the replacement allowance in respect of children. It is anti-family, anti-women and ageist. I urge the Government to consider allowing women to claim the allowance when they are 60 and not make them wait until they are 65. Why should women have to work all that extra time to make up their pension so that it provides them with a reasonable living in their retirement?

Mr. Barry Gardiner (Brent, North)

In so far as the institution of marriage is under threat, few people outside this Chamber and with no political axe to grind would claim that that is due to the Government's decision to abolish the married couples allowance.

Clause 28 deals specifically with couples over the ages of 65 and 75. The hon. Member for Arundel and South Downs (Mr. Flight) said that the allowance could be worth £5,000 a year for couples over the age of 75. I am more concerned about those pensioners over the ages of 65 and 75 who come to my surgeries to thank the Government for providing the minimum pension guarantee, which guarantees approximately £4,000 a year.

Mr. Gibb

I do not know what the hon. Gentleman finds in his surgeries, but 40 per cent. of the population in my constituency are retired and people come to my surgeries and ask, "What is this minimum income guarantee? I thought it applied to all pensioners, but I now find that it applies only to those on income support." Is that not a betrayal on the part of the Government? Pensioners are led to believe one thing, but the reality is quite different.

Mr. Gardiner

This Government have introduced the minimum income guarantee for pensioners. In 1983, the previous Conservative Government abolished the link between pensions and earnings, but this Government have restored at least for the minimum guarantee.

My point—which is germane to the discussion of these amendments—is that Opposition Members here are not exercised by a guaranteed income of £5,000. That is a tax relief for those pensioners whose income is so large that they can take advantage of that £5,000 allowance. The question is clear: where do those Members' priorities lie? The priorities of this Budget, as expressed in this clause, are quite clear: we seek to benefit pensioners not through this measure but through other measures set out in the Budget.

Mr. Clifton-Brown

Will the hon. Gentleman clarify his remarks? I am sure he will agree that the odd £100 or £200 is worth considerably more to someone on a very low rate of tax than the odd £1,000 or £2,000 is worth to someone who claims the older married couples allowance at the full rate of tax. I cannot square the hon. Gentleman's remarks that the Opposition are interested only in those couples on high incomes. In fact, we are much more interested in the meanness of this change as it affects those on very low incomes.

Mr. Gardiner

I am sorry that the hon. Gentleman did not understand me; I shall try to explain my point more fully. It is very simple. We are talking about tax allowances for pensioners whose savings are so substantial that they have steady incomes. They can take advantage of the tax allowances on the income that they generate up to £5,000. But, by abolishing the married couples allowance, the Government have introduced a £1 billion package for poorer pensioners.

The hon. Member for Cotswold (Mr. Clifton-Brown) spent considerable time talking about widows.

Mr. Clifton-Brown

The hon. Gentleman misheard me. I was talking about married women who have reached the age of 60, rather than 65, and are officially able to retire and claim the state pension, but who, under these provisions, would be unable to claim the older person's married couples allowance. That seems wrong.

Mr. Gardiner

The hon. Gentleman did talk about that, but he also talked about widows. When he was referring to whether women between 60 and 65 can claim the married couples allowance, Labour Members tried to make the point that women cannot claim that allowance because it is men who claim. If the hon. Gentleman had the courtesy to listen to my response to his intervention, he might be enlightened as to that fact, but clearly he is oblivious because he is engaged in conversation on the Back Benches, so he is unable to take advantage of that information.

The hon. Gentleman also said that nobody is about to rush to the altar to get the married couples allowance, and many of my hon. Friends and I entirely agree with him. However, in the very same breath, he said that the Government should give the married couples allowance to encourage marriage. If he accepts that no one gets married on account of the allowance, how can it be deemed to be responsible for more marriages taking place than would otherwise occur, or for maintaining marriages that would otherwise break up? The hon. Gentleman supplied no evidence that the allowance causes or maintains marriages, because there is none whatsoever.

The hon. Member for Arundel and South Downs spoke of the family, and his commitment to that institution is well known in the Committee and elsewhere. What sort of family is he committed to? I grew up in a single parent family because my father died when I was eight. I was later part of a family of siblings because my mother died shortly thereafter. Is the hon. Gentleman saying that families should receive state benefits only if they happen to have the good fortune of having two parents who are still alive to maintain the unit?

Mr. Brazier

If the hon. Gentleman had sat through the weeks of debate in Committee considering the Welfare Reform and Pensions Bill with the hon. Member for Colne Valley (Kali Mountford) and myself, he would have heard what many of us have to say about the position of widows.

Mr. Gardiner

With the greatest respect, that does not answer my question. The tenor of the hon. Gentleman's speech was to ask, "Why does marriage matter?" Presumably, we share a consensus that marriage does matter, and the institution of the family matters, because it is the vehicle for raising children. We believe that it is good for two parents to raise children, but we should not penalise families simply because they do not have two parents to raise children. That would be absolutely abhorrent. If we accept that marriage is so important because it is the vehicle for raising children, it is absolutely ridiculous to think that we would take away the allowance on the basis of a partner being widowed.

I am grateful, Sir Alan, for the latitude that you have given me to respond to the points that have been made in the debate.

5.15 pm

Mr. Brazier

On a point of order, Sir Alan. The hon. Gentleman has alluded to me on a matter relating to the next debate. Can I, through you, say to the hon. Gentleman that I shall respond to his point in the next debate?

The Chairman

The hon. Gentleman knows that that is not a point of order, but I am sure that the hon. Member for Brent, North (Mr. Gardiner) heard what he said.

Mr. Gardiner

The Government seek to ensure, through the changes made in the Budget, that adequate resources go to the poorest pensioners. That policy includes abolishing the married couples allowance for future pensioners, while maintaining it for those who have reached 65 or 75 by the dates specified in the Bill. If that means that Government money is being targeted and better used through the package of £1 billion for pensioners—and particularly, when we consider the married couples allowance, for the children's tax credit—I, for one, wholeheartedly welcome the measures.

Dawn Primarolo

Sir Alan, you told the Committee that you would prefer the wider debate on the changes to the married couples allowance and the creation of the children's tax credit to be dealt with in the debate on the next amendment, so I shall respond then to some of the issues that have been raised in this debate.

My hon. Friend the Member for Brent, North (Mr. Gardiner) made an excellent contribution about the importance of supporting families with children and of understanding that, when so many millions of children live in poverty in this country, that must be the Government's priority. We can, if hon. Members wish, return to that subject in more detail in the next debate.

I look forward to hearing, later in the year, the right hon. Member for Hitchin and Harpenden (Mr. Lilley) apologising at a dinner somewhere for his party's opposition to the abolition of the married couples allowance and the creation of the children's tax credit. The remarks made by the Leader of the Opposition in the Daily Mail on 29 January 1998 sum up precisely the Government's intentions, which were supported by the remarks of the hon. Member for Kingston and Surbiton (Mr. Davey). The Leader of the Opposition said Previous conservative governments made a mistake in phasing out the married couple's allowance. We wanted to stop well off couples without children getting a tax allowance they did not need. But in doing so we hit families raising children on tight budgets. It is those fami8lies that need our help most. That is precisely what we propose in the Bill.

The Leader of the Opposition, in his response to the Budget, generously went on to support the Government's proposal to introduce the children's tax credit.

The right hon. Member for Wells (Mr. Heathcoat-Amory), who has apologised to me for the fact that he is unable to be present for my response—he probably mentioned that fact to you as well, Sir Alan—referred to the previous Government's commitment. He made a mistake when he said that they were proud of their record of cutting personal allowances. When pressed by the hon. Member for Kingston and Surbiton, he did not get his answer right, but we look forward to hearing a correction. However, he failed to explain why, in his Budget speech in 1992, the then Chancellor, Norman Lamont—now Lord Lamont—described the married man's allowance, the predecessor of this allowance, as "the male chauvinist allowance", and why the right hon. and learned Member for Rushcliffe (Mr. Clarke) described it as an anomaly in the tax system. That was the previous Government's justification for reducing married couples allowance substantially—leaving us a chaotic system surrounding it—while they presided over a massive growth in child poverty.

The right hon. Member for Wells and several Conservative Members sought to confuse the debate—some of them obviously do not understand the current qualifications for claiming married couples allowance—by making it sound as though the Government are attacking pensioners and have broken their promises. If the right hon. Gentleman takes an unclouded look at the Bill, he will see that clause 28 protects pensioners who are currently receiving the married couples allowance. It is quite right that we should protect those senior members of our community—senior citizens who are already in receipt of the married couples allowance—by maintaining their position.

Mr. Brazier

Will the Paymaster General explain the difference between those people and people who are only a year or two from retirement? What possible changes does she think that people coming up to retirement can make to their retirement provision at that late stage?

Dawn Primarolo

First, I remind the hon. Gentleman that the overall Budget package provided £ 1 billion to pensioners through the minimum income guarantee, the £100 heating allowance and by ensuring that we keep the married couples allowance for those who are already retired. Moreover, as the hon. Member for Kingston and Surbiton said—I hope that I am not embarrassing him by drawing too much on his speech—an earlier clause of the Bill provides protection in terms of indexation and allowances.

I know that the hon. Member for Canterbury (Mr. Brazier) feels strongly about the issues surrounding marriage, which we shall discuss when we debate amendment No. 8, but it is cruel for Conservative Members to frighten those who are already retired by making it sound as though something is being taken from them when it is not.

I believe that, when the hon. Gentleman reads the record, he will realise that it is bizarre for the Conservative party to table an amendment that accepts abolition of the married couples allowance for under-65s but provides that the couple may claim it when they reach the age of 65. The hon. Gentleman spoke about signals sent from the Committee. If the amendment were passed, the signals that it would send would create misunderstandings on an unimaginable scale.

Despite the hon. Gentleman's very strong views on marriage—which I respect, although I disagree with them—when the Conservative party was in government, he voted year on year for a policy that reduced the importance of the married couples allowance and the contribution that it made.

I remind the Committee that the married couples allowance has its origins in 1918, when men received an allowance because their wives did not work, in recognition of the extra costs in such cases. Seventy per cent. of married women now work. As my right hon. Friend the Chancellor has pointed out, since then, a chaotic system has developed, in which a two-earner family with children is better off than a one-earner family with children. That cannot be right, even on the basis of what the hon. Member for Canterbury believes.

Mr. Flight

Will the hon. Lady give way?

Dawn Primarolo

I am happy to give way to the hon. Gentleman, because I want to deal with his point about whether men over 65 will now marry younger women in order to claim both allowances. I do not know what his life is like, but I have not come across any constituents who have those bizarre determinations.

Mr. Flight

The Paymaster General said that we had the bizarre position—of which she implied that she disapproved—where a two-earner couple enjoyed a much better tax position than did a couple with a single earner. If that is the case, why on earth have the Government framed the new child tax credits in such a way as to be extremely harsh on the single-earner couple and generous to the double-earner couple, who can still qualify for those credits although their combined income may be nearly twice that of a single earner couple?

Dawn Primarolo

When we debate those clauses, I shall be happy to explain to the hon. Gentleman why his proposition is incorrect. However, if he studies the Bill—especially clause 28—he will find that, in the extremely unlikely event that a man over 65, entitled to claim the married couples allowance, is married to a younger woman with children, who is therefore entitled to receive the children's tax credit, the Bill requires them to choose which one of the allowances they receive.

One point that came up repeatedly needs answering now. Conservative Members argued that there was a entitlement gap—that we took away the married couples allowance and that no one benefited as a result. I remind them again that, from October, the working families tax credit payments will be increased to compensate particularly the low-paid, especially families that are under pressure because their budgets are so low; that the child premium in income support has been increased this year, also specifically targeted on helping those families in most difficulty, with low budgets; and that the child benefit increases—those announced for this April and the additional one for next April—will help families with children, especially families under pressure.

Clause 28 abolishes married couples allowance for couples under 65 but preserves it for couples where the husband or wife has reached the age of 65 before the year 2000-01. That is quite clear in the Bill, and it is just. The hon. Member for Arundel and South Downs (Mr. Flight) misquoted the Chancellor. The Opposition are trying to build up a bandwagon, saying that the Government, or the Chancellor, said things that they did not say. If the hon. Gentleman looks at the record, he will see that the Chancellor rightly said that today's pensioner couples would keep their married couples allowance. That is very clear and I cannot understand why the hon. Gentleman is having difficulty in understanding that sentence or which word is giving him particular problems.

5.30 pm

Abolishing the under-65s allowance for married couples means that we must have a new way of defining the basic married couples allowance so that we can use it for those who are over 65. Clause 28 provides for that minimum level and guarantees that there will be no effect on anyone's tax liability who is now in receipt of the allowance.

It would be a great error if the Opposition insisted on putting into our legislation an amendment that rewarded marriage from the age of 65 onwards but did not address the real stresses and strains in families with children and how families are forced apart because of the poverty that they experience.

When the hon. Member for Buckingham (Mr. Bercow) reads the record of our proceedings, he will realise that the confusion that he was so agitated about, believing that it existed on the Labour Benches, arose from Conservative Members. It was the hon. Member for Arundel and South Downs who suggested that men over 65 would make new arrangements in their life so as to have two allowances. Other Conservative Members suggested that our proposal is a tax on pensioners, when it is not.

I look forward to the next amendments and the next debate, when we can discuss—

Mr. Clifton-Brown

Will the Minister answer my question?

Dawn Primarolo

—in detail the children's tax credit and why the married couples allowance should be abolished. I urge the Committee to reject the amendments.

Mr. Clifton-Brown

Will the Minister give way?

Dawn Primarolo

The point that the hon. Gentleman wishes to raise is one for the next debate. I shall be happy to deal with it then.

Mr. Gibb

The debate has highlighted one of the worst stealth tax increases in the Finance Bill. The abolition of the married couples allowance will cost about 10 million married couples an extra £197 a year in income tax. When that is combined with the reduction in its value to 10 per cent. in the Government's previous Budget, the cost will be an extra £285 a year in income tax. That is from a Government who covenanted solemnly with the British people that they had no plans to raise taxes, particularly income tax. The measure that we are discussing is a straightforward hike that will affect 10 million couples. Increased income tax bills are being introduced by stealth. This hike will raise £1.6 billion next year and £2 billion the year after that.

The sleight of hand is worse. In his Budget speech, the Chancellor of the Exchequer implied that pensioners would be protected from these measures. [Interruption.] I will quote the right hon. Gentleman. He said: Today's pensioner couples will retain the married couple's allowance."—[Official Report, 9 March 1999; Vol. 327, c. 183.] The hon. Lady the Paymaster General quoted "would" and skipped over the word "Today's", implying that the measure would apply to all pensioners. The key word is today, as the hon. Lady said. Tomorrow's pensioners will not retain the married couples allowance despite having made their financial arrangements on the basis that the allowance would remain. Throughout all the reductions in the value of the married couples allowance under the Conservative Government and under the present Government until now, its value had always been retained for pensioners. That is no longer the position. Its value has not been retained for new pensioners. [Interruption.]

Labour Members should read what Age Concern has said. It states: We are already receiving complaints"—

Dawn Primarolo

Will the hon. Gentleman give way?

Mr. Gibb

I shall finish this point first. Age Concern states: We are already receiving complaints from people who will reach 65 just after that date. That is 5 April 2000. Age Concern continues: From April 2000 there will be the anomalous situation whereby people will miss out on an allowance currently worth some £500, simply because their birthday is just after the specified date.

Dawn Primarolo

The hon. Gentleman does himself a disservice when he seeks constantly to mislead the House of Commons and peddles his misrepresentations. My right hon. Friend the Chancellor spoke of "Today's" pensioners, people who are pensioners now, and that is our position. If the hon. Gentleman is so concerned, perhaps he could—

The Second Deputy Chairman of Ways and Means (Mr. Michael Lord)

Order. The hon. Lady must not accuse other hon. Members of misleading the House of Commons. She must choose her words very carefully.

Dawn Primarolo

I am happy to withdraw my statement about misleading the House of Commons. I am sure that the hon. Gentleman was doing it unintentionally. He just manages to do it in every debate, using the same words. He should now acknowledge that my right hon. Friend the Chancellor said "Today's" pensioners.

Mr. Gibb

That is not what the hon. Lady said.

Dawn Primarolo

The record will show that that is what I said. That means what it says and there has been no betrayal, as the hon. Gentleman has suggested.

Mr. Gibb

All that is rich from a party in government that is introducing stealth tax after stealth tax. The impression is given—[Interruption.] The hon. Lady should read her correspondence. Instead of getting her civil servants to write and sign her letters, she should read some of it, including the correspondence that she receives. She should read what Age Concern is saying.

Dawn Primarolo

The hon. Gentleman knows full well that I sign my correspondence, and he should withdraw that remark. I sign my ministerial correspondence that goes out in answer to points raised by hon. Members. The hon. Gentleman should withdraw his remark.

Mr. Gibb

I have letters in my file from the hon. Lady which she has not signed. Many Members received letters from her when she was the Financial Secretary which she had not signed. If I am wrong, I shall withdraw my remarks. [Interruption.] I withdraw. I accept her comments but I know very well that there are letters that Members have received, and constituents, that have not been signed by the hon. Lady.

After April next year, married people turning 65 will have to pay an extra £500 a year in income tax. There will be no compensatory children's tax credit for the vast majority. In addition, 300,000 pensioners will lose £75 in dividend tax refunds. Almost 1 million pensioners will find themselves paying higher income tax on their savings income than their marginal rate of income tax. All that the Paymaster General can say in return is that there is a £100 winter fuel allowance. The Government take £500 with one hand and give £100 with the other. The message is clear: do not grow old under this new Labour Government.

My hon. Friend the Member for Cotswold (Mr. Clifton-Brown) was right when he said that a married couple approaching retirement will suffer doubly. First, they will have little chance of qualifying for children's tax credit, although last weekend I found that I had a retired constituent over 65 who had a young child from a second marriage. Secondly, the married couple will have no entitlement to the higher rate of the married couples allowance to which they thought they would be entitled.

Other hon. Members have made some valuable points. They include my hon. Friend the Member for Arundel and South Downs (Mr. Flight), who said that people make careful plans for their retirement. He is right. The Government should not give just one year's notice for the reduction in value of the allowance. It is right also that the elderly population have—

Mr. Gardiner

Will the hon. Gentleman give way?

Mr. Gibb

No, I will not give way. There is no time to do so.

My hon. Friend the Member for Arundel and South Downs was also right to say that the elderly population has rumbled the Government. It has done so on the minimum income guarantee and on the dividend tax credit. It is rumbling the Government on the savings tax and it will rumble them on the abolition of the married couples allowance for pensioners.

The Government's decision to abolish the married couples allowance has gone down badly with the public. It is yet another Labour stealth tax, and it is being seen as such. Their decision has also gone down especially badly with those approaching retirement. The Chancellor has no doubt received, as the Paymaster General is also receiving, no doubt, many letters of complaint. I shall quote just one from Mr. J. R. Brett of Bromley, who writes: As I shall be 65 on 9th May next year this will mean that for the rest of my life, on today's figures, I shall, in retirement, pay £512.50 more in tax than other pensioners of equal age albeit five weeks older. This is not social justice … It is one thing to juggle with Allowances for those in work, but quite another to penalise pensioners who are unable to make any provision for the loss of such a large part of their income in retirement. The clause creates social injustice and I urge the Committee to mitigate that injustice by voting for the amendment.

Question put, That the amendment be made:—

The Committee divided: Ayes 127, Noes 306.

Division No. 153]	[5.39 pm
AYES
Ainsworth, Peter (E Surrey)	Heald, Oliver
Amess, David	Heathcoat-Amory, Rt Hon David
Ancram, Rt Hon Michael	Hogg, Rt Hon Douglas
Arbuthnot, Rt Hon James	Horam, John
Atkinson, Peter (Hexham)	Howard, Rt Hon Michael
Bercow, John	Howarth, Gerald (Aldershot)
Beresford, Sir Paul	Jack, Rt Hon Michael
Boswell, Tim	Jackson, Robert (Wantage)
Bottomley, Rt Hon Mrs Virginia	Jenkin, Bernard
Brady, Graham	Johnson Smith,
Brazier, Julian	Rt Hon Sir Geoffrey
Brooke, Rt Hon Peter	Key, Robert
Browning, Mrs Angela	King, Rt Hon Tom (Bridgwater)
Bruce, Ian (S Dorset)	Kirkbride, Miss Julie
Burns, Simon	Laing, Mrs Eleanor
Cash, William	Lait, Mrs Jacqui
Chope, Christopher	Lansley, Andrew
Clappison, James	Leigh, Edward
Clark, Rt Hon Alan (Kensington)	Letwin, Oliver
Clark, Dr Michael (Rayleigh)	Lewis, Dr Julian (New Forest E)
Clifton-Brown, Geoffrey	Lidington, David
Collins, Tim	Lilley, Rt Hon Peter
Cran, James	Lloyd, Rt Hon Sir Peter (Fareham)
Davies, Quentin (Grantham)	Lyell, Rt Hon Sir Nicholas
Davis, Rt Hon David (Haltemprice	MacGregor, Rt Hon John
& Howden)	MacKay, Rt Hon Andrew
Donaldson, Jeffrey	McLoughlin, Patrick
Duncan, Alan	Madel, Sir David
Duncan Smith, Iain	Major, Rt Hon John
Emery, Rt Hon Sir Peter	Maples, John
Fabricant, Michael	Mates, Michael
Fallon, Michael	Maude, Rt Hon Francis
Flight, Howard	Mawhinney, Rt Hon Sir Brian
Forsythe, Clifford	May, Mrs Theresa
Forth, Rt Hon Eric	Moss, Malcolm
Fowler, Rt Hon Sir Norman	Norman, Archie
Fox, Dr Liam	Ottaway, Richard
Fraser, Christopher	Paice, James
Gale, Roger	Paterson, Owen
Garnier, Edward	Pickles, Eric
Gibb, Nick	Prior, David
Gill, Christopher	Randall, John
Gillan, Mrs Cheryl	Redwood, Rt Hon John
Gorman, Mrs Teresa	Robertson, Laurence (Tewk'b'ry)
Gray, James	Roe, Mrs Marion (Broxbourne)
Green, Damian	Ross, William (E Lond'y)
Greenway, John	Ruffley, David
Grieve, Dominic	St Aubyn, Nick
Hague, Rt Hon William	Sayeed, Jonathan
Hammond, Philip	Shephard, Rt Hon Mrs Gillian
Hawkins, Nick	Shepherd, Richard
Hayes, John	Simpson, Keith (Mid-Norfolk)

Smyth, Rev Martin (Belfast S)	Waterson, Nigel
Spicer, Sir Michael	Whitney, Sir Raymond
Spring, Richard	Whittingdale, John
Stanley, Rt Hon Sir John	Widdecombe, Rt Hon Miss Ann
Streeter, Gary	Wilkinson, John
Swayne, Desmond	Willetts, David
Syms, Robert	Winterton, Mrs Ann (Congleton)
Tapsell, Sir Peter	Winterton, Nicholas (Macclesfield)
Taylor, John M (Solihull)	Woodward, Shaun
Taylor, Sir Teddy	Yeo, Tim
Trend, Michael	Young, Rt Hon Sir George
Viggers, Peter	Tellers for the Ayes:
Walter, Robert	Mr. Stephen Day and
Wardle, Charles	Mrs. Caroline Spelman.

NOES
Adams, Mrs Irene (Paisley N)	Clarke, Tony (Northampton S)
Ainsworth, Robert (Cov'try NE)	Clelland, David
Allan, Richard	Cohen, Harry
Allen, Graham	Coleman, Iain
Anderson, Donald (Swansea E)	Connarty, Michael
Anderson, Janet (Rossendale)	Cooper, Yvette
Armstrong, Rt Hon Ms Hilary	Corbett, Robin
Ashdown, Rt Hon Paddy	Corston, Ms Jean
Ashton, Joe	Cotter, Brian
Atkins, Charlotte	Cousins, Jim
Austin, John	Crausby, David
Ballard, Jackie	Cryer, John (Hornchurch)
Barnes, Harry	Cunningham, Rt Hon Dr Jack
Battle, John	(Copeland)
Beard, Nigel	Cunningham, Jim (Cov'try S)
Beckett, Rt Hon Mrs Margaret	Curtis-Thomas, Mrs Claire
Begg, Miss Anne	Dalyell, Tam
Bell, Stuart (Middlesbrough)	Darvill, Keith
Benn, Rt Hon Tony	Davey, Edward (Kingston)
Bennett, Andrew F	Davey, Valerie (Bristol W)
Benton, Joe	Davidson, Ian
Bermingham, Gerald	Davies, Rt Hon Denzil (Llanelli)
Best, Harold	Davies, Geraint (Croydon C)
Betts, Clive	Dawson, Hilton
Blackman, Liz	Dean, Mrs Janet
Blears, Ms Hazel	Denham, John
Blizzard, Bob	Dismore, Andrew
Borrow, David	Dobbin, Jim
Bradley, Keith (Withington)	Dobson, Rt Hon Frank
Bradley, Peter (The Wrekin)	Donohoe, Brian H
Bradshaw, Ben	Doran, Frank
Brake, Tom	Dowd, Jim
Breed, Colin	Drown, Ms Julia
Brinton, Mrs Helen	Dunwoody, Mrs Gwyneth
Buck, Ms Karen	Eagle, Angela (Wallasey)
Burgon, Colin	Eagle, Maria (L pool Garston)
Burnett, John	Edwards, Huw
Butler, Mrs Christine	Efford, Clive
Cable, Dr Vincent	Ennis, Jeff
Caborn, Rt Hon Richard	Fearn, Ronnie
Campbell, Alan (Tynemouth)	Fitzsimons, Lorna
Campbell, Mrs Anne (C'bridge)	Foster, Rt Hon Derek
Campbell, Rt Hon Menzies	Foster, Don (Bath)
(NE Fife)	Foster, Michael Jabez (Hastings)
Campbell, Ronnie (Blyth V)	Foulkes, George
Campbell-Savours, Dale	Galloway, George
Cann, Jamie	Gapes, Mike
Caplin, Ivor	Gardiner, Barry
Casale, Roger	George, Bruce (Walsall S)
Caton, Martin	Gerrard, Neil
Cawsey, Ian	Gibson, Dr Ian
Chapman, Ben (Wirral S)	Gilroy, Mrs Linda
Chaytor, David	Godsiff, Roger
Chidgey, David	Goggins, Paul
Clapham, Michael	Golding, Mrs Llin
Clark, Rt Hon Dr David (S Shields)	Gordon, Mrs Eileen
Clark, Paul (Gillingham)	Griffiths, Nigel (Edinburgh S)
Clarke, Eric (Midlothian)	Griffiths, Win (Bridgend)
Clarke, Rt Hon Tom (Coatbridge)	Grocott, Bruce

Gunnell, John	McNulty, Tony
Hall, Patrick (Bedford)	MacShane, Denis
Harris, Dr Evan	Mactaggart, Fiona
Heal, Mrs Sylvia	McWalter, Tony
Healey, John	Mahon, Mrs Alice
Heath, David (Somerton & Frome)	Mallaber, Judy
Henderson, Doug (Newcastle N)	Mandelson, Rt Hon Peter
Henderson, Ivan (Harwich)	Marsden, Gordon (Blackpool S)
Hepburn, Stephen	Marsden, Paul (Shrewsbury)
Heppell, John	Marshall, David (Shettleston)
Hesford, Stephen	Marshall-Andrews, Robert
Hewitt, Ms Patricia	Martlew, Eric
Hill, Keith	Maxton, John
Hinchliffe, David	Meacher, Rt Hon Michael
Hodge, Ms Margaret	Meale, Alan
Hoey, Kate	Merron, Gillian
Hood, Jimmy	Michie, Bill (Shef'ld Heeley)
Hoon, Geoffrey	Miller, Andrew
Hopkins, Kelvin	Moffatt, Laura
Howarth, George (Knowsley N)	Moonie, Dr Lewis
Howells, Dr Kim	Moran, Ms Margaret
Hoyle, Lindsay	Morris, Ms Estelle (B'ham Yardley)
Hughes, Ms Beverley (Stretford)	Mountford, Kali
Hughes, Kevin (Doncaster N)	Mowlam, Rt Hon Marjorie
Humble, Mrs Joan	Mudie, George
Hurst, Alan	Mullin, Chris
Hutton, John	Murphy, Denis (Wansbeck)
Iddon, Dr Brian	Murphy, Rt Hon Paul (Torfaen)
Illsley, Eric	Naysmith, Dr Doug
Ingram, Rt Hon Adam	Oaten, Mark
Jackson, Ms Glenda (Hampstead)	O'Brien, Bill (Normanton)
Jackson, Helen (Hillsborough)	O'Brien, Mike (N Warks)
Jamieson, David	O'Neill, Martin
Jenkins, Brian	Öpik, Lembit
Johnson, Alan (Hull W & Hessle)	Palmer, Dr Nick
Johnson, Miss Melanie	Pearson, Ian
(Welwyn Hatfield)	Pendry, Tom
Jones, Barry (Alyn & Deeside)	Perham, Ms Linda
Jones, Helen (Warrington N)	Pickthall, Colin
Jones, Jon Owen (Cardiff C)	Pike, Peter L
Jones, Dr Lynne (Selly Oak)	Plaskitt, James
Jones, Martyn (Clwyd S)	Pollard, Kerry
Jowell, Rt Hon Ms Tessa	Pope, Greg
Kaufman, Rt Hon Gerald	Pound, Stephen
Keeble, Ms Sally	Prentice, Ms Bridget (Lewisham E)
Keen, Alan (Feltham & Heston)	Prentice, Gordon (Pendle)
Keen, Ann (Brentford & Isleworth)	Prescott, Rt Hon John
Keetch, Paul	Primarolo, Dawn
Kelly, Ms Ruth	purchase, Ken
Kemp, Fraser	Quin, Rt Hon Ms Joyce
Kidney, David	Quinn, Lawrie
Kilfoyle, Peter	Raynsford, Nick
King, Andy (Rugby & Kenilworth)	Reed, Andrew (Loughborough)
King, Ms Oona (Bethnal Green)	Reid, Rt Hon Dr John (Hamilton N)
Kirkwood, Archy	Rendel, David
Kumar, Dr Ashok	Robertson, Rt Hon George
Ladyman, Dr Stephen	(Hamilton S)
Lawrence, Ms Jackie	Roche, Mrs Barbara
Laxton, Bob	Ross, Ernie (Dundee W)
Lepper, David	Rowlands, Ted
Leslie, Christopher	Roy, Frank
Lewis, Ivan (Bury S)	Ruddock, Joan
Lewis, Terry (Worsley)	Russell, Bob (Colchester)
Liddell, Rt Hon Mrs Helen	Ryan, Ms Joan
Linton, Martin	Salter, Martin
Livingstone, Ken	Sarwar, Mohammad
Lloyd, Tony (Manchester C)	Savidge, Malcolm
Llwyd, Elfyn	Sedgemore, Brian
Lock, David	Shaw, Jonathan
McAvoy, Thomas	Sheldon, Rt Hon Robert
McDonagh, Siobhain	Shipley, Ms Debra
McDonnell, John	Simpson, Alan (Nottingham S)
McFall, John	Singh, Marsha
McIsaac, Shona	Smith, Rt Hon Andrew (Oxford E)
McKenna, Mrs Rosemary	Smith, Angela (Basildon)
Mackinlay, Andrew	Smith, Jacqui (Redditch)

Soley, Clive	Twigg, Stephen (Enfield)
Spellar, John	Tyler, Paul
Steinberg, Gerry	Vaz, Keith
Stevenson, George	Walley, Ms Joan
Stott, Roger	Ward, Ms Claire
Stringer, Graham	Wareing, Robert N
Stuart, Ms Gisela	Webb, Steve
Stunell, Andrew	Whitehead, Dr Alan
Sutcliffe, Gerry	Wicks, Malcolm
Taylor, Rt Hon Mrs Ann	Williams, Rt Hon Alan
(Dewsbury)	(Swansea W)
Taylor, Ms Dari (Stockton S)	Williams, Alan W (E Carmarthen)
Temple-Morris, Peter	Williams, Mrs Betty (Conwy)
Thomas, Gareth (Clwyd W)	Willis, Phil
Thomas, Gareth R (Harrow W)	Wills, Michael
Timms, Stephen	Winnick, David
Tipping, Paddy	Wise, Audrey
Tonge, Dr Jenny	Wood, Mike
Trickett, Jon	Wright, Anthony D (Gt Yarmouth)
Turner, Dennis (Wolverh'ton SE)
Turner, Dr Desmond (Kemptown)	Tellers for the Noes:
Turner, Dr George (NW Norfolk)	Mr. Mike Hall and
Twigg, Derek (Halton)	Jane Kennedy.

Question accordingly negatived.

Mr. Edward Leigh (Gainsborough)

I beg to move amendment No. 8, page 15, line 20, leave out '2000–01' and insert '2001–02'.

The amendment enables us to have what I trust will be an interesting debate on the married couples allowance, what it seeks to do, how it is to be phased out and the timing of that phasing out. I hope that it will also give us an opportunity to discuss whether the tax system should be neutral in determining people's behaviour. That view is commonly held on both sides of the House, but it is not my view. I believe that the tax system has a real role to play in determining people's behaviour and encouraging behaviour and a way of life that is useful to society. That is not to cast a judgment on other sorts of behaviour but to say that, generally, as every research study shows, marriage is a good thing. Apparently, the whole House believes that.

Whether we should take the next step and say that, having determined that marriage is a good thing, we should use the tax system to encourage it is a different question. It happens to be a question to which I would answer a strong yes, because I believe that the tax system has a useful role to play. It can be used in many other areas to encourage share ownership, private health insurance or pensions provision. That happens to be my personal view. I hope that we can discuss that matter in the context of the amendment, because it is very important.

I welcome the belated recognition by the Treasury that, over the years, the tax system has moved against families in favour of single people without dependants, and that move needs to be reversed. I also welcome the attack that the Treasury seeks to lead on child poverty. However, we should use this debate to question the Government more closely on the figures in the Red Book. Abolishing the married couples allowance in the year that is proposed sends out the wrong message. It seems to devalue marriage, and to take money away from families and give it to other taxpayers. In certain circumstances, the effect of all those complex changes appears to take money away from families who are poorer and give it to families who are better off.

The Second Deputy Chairman

Order. I appreciate that the hon. Gentleman is only just starting his remarks, but I remind him and the Committee that the amendment is specifically about the date of implementation, not the wider issues.

Mr. Leigh

I can deal in a moment with the introduction of the children's tax credit because that is particularly relevant to this amendment. The married couples allowance will be repealed in April 2000 and the children's tax credit will be introduced a year later. In the previous debate, the Minister made it clear that she was hoping to use this debate to discuss the children's tax credit. Let us see how much effect the children's tax credit will have. I do not believe that much will be achieved by having a year's delay between the repeal of the married couples allowance and the introduction of the children's tax credit.

The children's tax credit is a recognition, for the first time since the mid-1970s, of the lower taxable capacity of taxpayers with families. That is a welcome step. However, if we look at it in greater detail, we see not only that it is being introduced a year too late but that it does not solve all the problems that the Treasury would have us believe that it will solve. The children's tax credit will give families £416 a year, which, I agree, compares favourably with the cash value of the married couples allowance. In 1999–2000, the married couples allowance will be £197, but if one looks back to what the value of the married couples allowance was when it was introduced in 1990, one can calculate that it would be worth, in today's money, about £522.

Mr. Geraint Davies

It is not £522 because the previous Conservative Government cut it. It is ridiculous to make those suggestions when the Conservative party made the cuts that bring us to the position that we are in now.

Mr. Leigh

First, we are entitled to look at what is being proposed. Secondly, there is a great deal of difference between cutting something and abolishing it entirely. That is what we are faced with today. It does not help us, when we are dealing with serious matters, if hon. Members trade petty party political points across the Chamber. We are entitled to debate the married couples allowance and to advocate it as a benefit that helps married couples. We should not get too fixed on who reduced it when. Had the hon. Gentleman listened to my remarks, he would have known that I was trying to be fair to the Government. I was not attacking them from the word go, but was congratulating them on what they were trying to achieve by the introduction of the children's tax credit. We do not advance our arguments much by dwelling on the past.

Mr. Brazier

Was not that intervention characteristic of attacks made by Labour Members? Is it not possible that some of the people who voted for them, including traditional Conservative voters, might have wished to see changes in this matter because they were disappointed that the previous Conservative Government did not speak up for marriage?

Mr. Leigh

Exactly. Hon. Members are entitled to put their point of view. We all know that, in the real world in which we operate, there are party disciplines and sometimes one has to vote not necessarily according to one's conscience, but that still allows one to speak up for what one believes in the Chamber. If we cannot speak up in this Chamber, where else can we do so?

I was pursuing the question of the children's tax credit, which is vital to this debate because of the year's delay in its introduction. Many families will not get the credit because it will be gradually withdrawn where one parent is a higher-rate taxpayer. That will not be done in a fair way and, in practice, the proposals will discriminate against married couples. As the proposals stand—the Minister can correct me when she winds up the debate if I am wrong—the CTC will be withdrawn from some families, whereas other families on much larger incomes will get the credit in full. For example, if one spouse is a higher rate taxpayer with an income of £33,000 and the other has nil income, the children's tax credit will be cut. It will be removed completely once the income has reached £38,000. A family with two incomes totalling £64,000—so neither of them is a higher rate taxpayer—may receive the CTC in full. That is profoundly unfair.

6 pm

The Minister must explain the delay between the abolition of one tax benefit and the introduction of another. I hope that she will not regale the Committee with comments about how marvellous the CTC is without explaining that fundamental unfairness. The proposal is grossly unfair and shows no regard for the needs of children. It will also discriminate against marriage, as couples who are co-habiting in a loose arrangement could, through ignorance, misunderstanding or fraud, fail to recognise when liability arises.

In the Budget, the Chancellor is not only ignoring marriage, but is structuring his proposals in a way that disadvantages married couples, especially those who sacrifice income to care for their children or elderly dependants. For the reasons that I have given, I believe that the proposals will encourage fraud. Surely a fairer solution would be to provide for the credit to go to the caring spouse or to allow married couples to pool their allowances and reliefs. This measure does not permit that.

Why is this issue important? The Chancellor of the Exchequer said: The tax system sends critical signals about … activities that a society wishes to promote or deter."—[Official Report, 2 July 1997; Vol.297,c.311.] As the Chancellor has said that, the Government must explain to the Committee why there is a year's delay. I can conclude only that, by their decision to end the married couples allowance in the year that it is being ended, the Government are sending a clear signal that there is no value in marriage—certainly in the tax system—for children or for anyone else. That is completely contrary to what other people in the Government are saying.

The Home Secretary's consultation document "Supporting Families" recognises that marriage is still the surest foundation for raising children. In the Budget, the Chancellor highlighted the fact that £4 billion of new money was being made available to families. Much of that new money is tied up in the children's tax credit and the working families tax credit, which no doubt the Minister will make a great deal of when she replies to the debate. I do not pretend to know what is in her briefing documents, but I am sure that that will be the nature of her defence against this attack.

Dawn Primarolo

The hon. Gentleman will know that the creation of the children's tax credit is dealt with in clause 27, which we are not discussing. We are discussing the abolition of the married couples allowance. Although I shall do my best to respond to the hon. Gentleman, I am sure that Mr. Lord will keep me in order. I plead with the hon. Gentleman not to give me an impossible task. If he stays in order, I can deal with everything.

Mr. Leigh

I assure the hon. Lady that I certainly do not want to place so courteous a Minister in an impossible situation.

Whatever is said in defence of the figures in the Budget, the reality is that families, particularly married couples, will receive much less than we were led to believe on 9 March. The Red Book reveals that there is only £400 million of new money for families in 1999–2000, and that there will be a cut of £125 million in 2000–01 and £940 million in 2001–02. That is why the date when the married couples allowance is to be phased out is important.

The Government are shuffling money around. They are taking more from some families and giving it to others. The Government will say that they are taking money from better-off families and giving it to poorer families. That is the nature of their defence. However, research has shown that many families who will lose out as a result of these Budget measures will be worse off than families who will benefit. It is difficult to make one's way through the complexities of the proposals to phase out the married couples allowance and to introduce the children's tax credit and the working families tax credit, but that will be the result.

We were told that the saving in a full year from the withdrawal of the married couples allowances would be sufficient to fund a children's tax credit of £10 a week—not £8 a week as proposed in the Red Book. So families lose out again. Where is that missing £2, and what is being done with it?

The Chancellor and the Paymaster General are claiming that, as a result of the Budget policies, including the scrapping of the married couples allowance, all families will have a minimum income of £200 a week, and that no net income tax will be paid until earnings exceed £235 a week. In his Budget speech, the Chancellor said: Every working family will be guaranteed a minimum income. It will be introduced in October … at £200 a week—more than £10,000 a year. No income tax will be paid until earnings reach £235 a week."—[Official Report, 9 March 1999; Vol.327,c.187.] That statement was repeated in the Red Book, which said that no family earning less than £235 a week (over £12,000 a year) will pay any income tax from October 1999. It was also repeated in the Treasury's Budget press release on Budget day, which spoke about

a minimum income guarantee of £200 a week for every family with a full-time earner. It was repeated by the Paymaster General in her speech on Third Reading of the Tax Credits Bill.

Although those statements are correct for the majority of families, they are not correct for all families. The Government must deal with that point. They assume that the family will get the working families tax credit. Families do not receive any working families tax credit if they have savings—for instance, following redundancy—of £8,000. Why are we discriminating against families who happen to have modest savings?

I agree with the Government that it is right for the tax benefits system to look after lone parents. Many of them are lone parents through no fault of their own, and there is no reason why the tax system should not look after them, but the Chancellor is doing so at the expense of couples. That is the point that we are making, and that is what is unfair. In particular, it is at the expense of married couples who provide greater security for children. That is not an attack on lone parents. If we want to help lone parents, the right way is not to discriminate against married couples.

In the Budget, married couples are disadvantaged at every turn. That is not a fair way of proceeding. Although the Chancellor claims to be introducing a fair tax system, it is one that takes no account of the costs of a second adult. The Government defend their proposals by saying that they can afford to get rid of married couples allowance on that date because of the new and improved working families tax credit. That takes no account of the additional costs of the second adult.

Mr. Hayes

My hon. Friend will have received the same complaints in his Lincolnshire constituency as I have had in my Lincolnshire constituency from married couples who are childless but poor. The problem is exacerbated for elderly or disabled married couples. For those people, there is not simply a gap, but a gulf.

Mr. Leigh

Yes, for people on good incomes there is a gap, but for poorer families there may be a devastating gulf that can put them in real poverty. The other point that we are trying to put across in this debate is that, if one works one's way through the complexity of these proposals, one finds that insufficient account is taken of the costs of children.

The main point that we want to make is that single earner couples are particularly disadvantaged. One partner sacrifices his or her prospects—it is usually her prospects—to stay at home to look after children. Those people will continue to be singularly disadvantaged. The national child care strategy is designed to give parents a genuine choice but, in practice, all the resources will go towards supporting professional child care, and none will be explicitly directed towards carers at home. That is what worries us.

Dawn Primarolo

This Government have substantially increased child benefit, something that the hon. Gentleman's Government failed to do. We have been responsible for the largest increases since the introduction of the benefit. Moreover, the benefit goes directly to the carer, regardless of his or her employment status.

Mr. Leigh

Of course I welcome the increase in child benefit—indeed, I would have to declare an interest if I did not—but the Paymaster General's intervention does not address the point that we are making. It is a red herring, because child benefit goes to families of all kinds. My point, with which the hon. Lady will probably find it difficult to deal, is that the Budget proposals are directed entirely towards families on relatively low incomes, in which one parent—normally the mother—stays at home. It is not a question of the Budget's being tax neutral, although in my view that is bad enough.

The Second Deputy Chairman

Order. The hon. Gentleman must tell the Committee why the date of implementation is important.

Mr. Leigh

You will be pleased to hear, Mr. Lord, that, having explained the broad philosophy on which my view is based, I am about to deal with the specific question of why the date is important. It is important because the Government have deliberately structured all their proposed changes to ensure that they are introduced—dare I say it—by stealth. [HON. MEMBERS: "No."] It is true. The Government know that the phasing out of the married couples allowance is deeply unpopular, and are trying to convince the nation, and the Committee, that we need not be over-concerned about it because of the increase in child benefit—which will be introduced in 2000—and the introduction of children's tax credit. Children's tax credit, however, will not be introduced until a year after the abolition of the married couples allowance.

I want to know the reason for that gap year. No doubt the Paymaster General will be able to deal with my question very easily. What argument can possibly be adduced to justify a gap that could make things very difficult for couples?

The children's tax credit will disadvantage single-earner couples. The fairness that the Chancellor seeks will not be conferred by a system that withdraws credit from single-earner couples with an income of £38,000. That point, surely, is unanswerable.

The Government face an important task. Those who look at the figures will end up with the unalterable conviction that married couples are being attacked, and that married couples in which one partner stays at home are being attacked particularly viciously. Why are the Government, in order to save a little money—

Mr. Flight

rose—

Mr. Leigh

I am about to finish my speech, but I will give way to my hon. Friend.

Mr. Flight

In the case of a married couple with six children, the wife may well stay at home to look after those children. It is not just married couples who are likely to suffer; married couples with large families are likely to suffer, and it is they who need support most.

Mr. Leigh

I do not know why my hon. Friend gives the example of a married couple with six children, but that is a situation that I know quite intimately. Therefore, I can only agree with my hon. Friend.

I hope that the Paymaster General will give us some information about the gap year. I also hope that—subject to your strictures, Mr. Lord—she will explain why the married couples allowance, which has figured so prominently in our public life for the best part of the century, should now be abolished.

6.15 pm

Mr. Geraint Davies

What is a "stealth tax"? Is it a stealth tax to abolish a tax, as we intend to do, or is it a stealth tax to eat away gradually at an allowance, as the Tories did? That was stealth. We are being very open about what we are doing: the allowance is being abolished. Let us get that out of the way, and go straight to the nuts and bolts of the amendment rather than meandering. Let us analyse the amendment, and what its impact would be.

The amendment assumes that the introduction of children's tax credit represents a direct substitution for the married couples allowance. That is a false assumption. I do not know whether it is based on mischief, or has been cobbled together on the basis of misunderstanding and ignorance.

Mr. Gibb

rose—

Mr. Davies

I want to know from the hon. Gentleman whether it was ignorance or mischief.

Mr. Gibb

It was the hon. Gentleman's Chancellor of the Exchequer who said in his Budget statement that he would replace the married couples allowance with the children's tax credit.

Mr. Davies

The hon. Gentleman clearly did not listen carefully enough. It seems that it is a mixture of ignorance and mischief. In fact, the children's tax credit is not a direct substitute for the married couples allowance, and was never intended to be. As the Chancellor said himself, this is a broader strategy, in which we abolish the married couples allowance as part of a policy to support families.

As important as the children's tax credit is the working families tax credit, which kicks in in October 1999. It is part of the same strategy. What about that—and what about the fact that child benefit has already risen by £2.50? Any fool can see that those are not simultaneous, equal substitutions. By virtue of the working families tax credit, the children's tax credit starts in October 1999.

Mr. Hayes

The hon. Gentleman says that those developments are unrelated, but is not the net effect less money for families, including needy families, and more for the Chancellor? Presumably the hon. Gentleman believes in the redistribution of wealth; this, surely, does not represent that in any sense.

Mr. Davies

Families will receive much more money. In the case of the hon. Gentleman, it is ignorance; in the case of the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb), it is mischief.

As part of our strategy, we are introducing the biggest-ever increase in child benefit. The working families tax credit kicks in in October 1999, and, a year or so later, there will be even more good news for families in the form of the children's tax credit. The hon. Member for Gainsborough (Mr. Leigh), who moved the amendment, asked why we had delayed. That suggests that the amendment was, in fact, prompted by ignorance. If they think about it, hon. Members will realise that the working families tax credit is quite a complicated system. Do we really want to introduce the children's tax credit at the same time, in view of the practicalities of its administration by the Inland Revenue, and families' ability to understand it enough to claim it? The answer, of course, is no. That is why we are introducing the working families tax credit before the children's tax credit. It makes a great deal of sense.

The amendment implies that a substitution is involved, and accordingly makes assumptions about costs and values. In fact, as has already been said, the children's tax credit is much more valuable than the married couples allowance in the case of married couples with children, and the Government are targeting their resources accordingly. The married couples allowance is worth £197; the children's tax credit will be worth a massive £416. We are giving benefits where they are needed. There have been no substitutions or replacements. Therefore, amendment No. 8 is entirely fallacious.

Delaying abolition by one year would cost the Exchequer £2 billion. Once again, I ask the Opposition from where they would find that money—from stealth taxes, or by cuts to family benefits? The hon. Member for Bognor Regis and Littlehampton—"the Rumbler", as he is now known—will have to explain which it will be. Moreover, if we add that £2 billion to the long-term costs—the discounted value of providing the married couples allowance to all future pensioners—that would have been created by passing amendment No. 1, we should have to know what other stealth taxes and cuts the Opposition are considering.

Thank goodness—for the taxpayer and for families—that the Government are moving ahead with our agenda.

Mr. Brazier

I support amendment No. 8, which is an excellent amendment, for two reasons. The first—my hon. Friend the Member for Gainsborough (Mr. Leigh) has already very strongly made this case—is that the Government plan a one-year gap between abolishing the married couples allowance and introducing the children's tax credit.

The second is that deferring abolition of the married couples allowance for one year would allow a proper period in which to reconsider the tax system's role in properly recognising marriage. Such a period would also allow time for examination of some of the technical arguments made by Labour Members, and for consideration of some of the imaginative ideas of Opposition Members on how the system might better recognise marriage.

My hon. Friend the Member for Gainsborough, in describing the one-year gap between abolition of the married couples allowance and introduction of the children's tax credit, not only touched on an argument made in the previous debate, but anticipated the Minister's argument that the working families tax credit, for example, will provide extra money for families.

Liz Blackman (Erewash)

When the previous Government significantly reduced the married couples allowance, was not their "gap" strategy to freeze child benefit?

Mr. Brazier

As 1 made clear in an earlier debate, I shall not defend the previous Government's record on the matter. As someone who has written much stating that the issue lost us a lot of support, I tell the hon. Lady that if she or any other Labour Member went to the polls saying that developing that strand of Conservative policy was the best way forward, full marks to her—but I should like to see the evidence.

Mr. Dale Campbell-Savours (Workington)

What does that mean?

Mr. Brazier

It means that cutting the married couples allowance was a mistaken policy, and that it would be an even greater mistake to abolish it.

Mr. Andrew Love (Edmonton)

Will the hon. Gentleman give way?

Mr. Brazier

No, I shall not. I have only just started my speech, and I should like to develop my point.

One year after abolition of the married couples allowance, the children's tax credit will be introduced. The CTC and the working families tax credit—which will already be in place—are both means-tested benefits. I know that you, Mr. Lord, would stop me if I were to develop that point at length. However, Labour Members addressed the issue in the previous debate, and I should like to make the point that we are debating not only the issue of putting money into people's pockets, but the signals that we are sending in doing so.

The WFTC will cause vast numbers of families to face huge marginal tax rates and benefits withdrawal. The married couples allowance is a universal measure, and it creates no such traps. Moreover, as has already been said, the married couples allowance benefits most those who are the lowest paid. The wealthy do not notice an extra pound or two. Those who most notice that money are those who are close—but not quite close enough—to the benefits entitlement level.

Mr. Gardiner

If it is true that those who do need the allowance appreciate it, and that the wealthy do not notice it, should not the Government be targeting resources on those who need the allowance and will appreciate it, and not continuing to provide it to those who—in the hon. Gentleman's own words—do not notice it?

Mr. Brazier

I do not think that the hon. Gentleman heard an earlier point that I made—which I shall repeat briefly. By practising such targeting, one causes the exact problem identified by many hon. Members—including the right hon. Member for Birkenhead (Mr. Field), and, famously, the late Sir Brandon Rhys Williams, a distinguished Conservative colleague—and recognised by a huge spectrum of opinion outside the House: tapers that cause all the problems that I mentioned earlier. However, I must now speak to the narrow terms of the amendment.

The one-year gap is the first reason that I oppose the measure. Those who will most keenly feel the gap's effect are not those on income support or those at the very bottom of the benefits eligibility scale, but those who are a little above eligibility. They will lose a universal benefit, but, for a full year, will not receive CTC. Consequently, they will be less well off. Although I accept that we have to consider the overall cocktail, the working families tax credit will not make up for the problem of tax changes and benefits withdrawal, especially—as I said in the earlier debate—for couples receiving housing benefit. The one-year gap is of the Government' own making, although, as my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibbs) said, the Chancellor was less than clear in describing it in his Budget speech.

As I said, my second reason for supporting the amendment is to give the Government a year to think again about the structure of any type of marriage allowance. Incidentally, the rather patronisingly termed "married man's allowance" was only comparatively recently renamed the married couples allowance.

Some Labour Members expressed technical objections to the current structure of the married couples allowance, and I have absolutely no doubt that we shall revisit those objections when the Minister replies to the debate. Labour Members described how some non-married people benefit from the allowance. Some Opposition Members, including the Leader of the Opposition, have made the point that the allowance would be better if it were transferable.

If we deferred the measure's implementation for a year, we could consider how we might better arrange structures for marriage support. It would be totally wrong for the House to send the signal that it does not think that marriage should be recognised in the tax system.

It is worth reiterating the point made by the Home Secretary, who is strongly committed to addressing the issues of family breakdown and its effect on young people. He said: marriage is still the surest foundation for raising children. If the Home Secretary believes that, why, oh why, do the Government want to abolish the married couples allowance? Why not allow an extra year to think about a better structure for recognising marriage?

Mr. Gerald Howarth (Aldershot)

I apologise to my hon. Friend, as I shall shortly have to leave the Chamber to attend a meeting with our right hon. Friend the Leader of the Opposition. The Red Book mentions only "families". There is an aversion among Labour Members, and particularly in the Prime Minister's own mind, to mentioning the M-word—marriage. The Red Book makes no reference to marriage. The Government's measures are directed at children, but specifically avoid trying to promote marriage—although the Home Secretary says the Government are intent upon doing so.

6.30 pm

Mr. Brazier

I am most grateful to my hon. Friend for anticipating my point. I should like to make two observations, the first of which stems clearly and directly from his words. He is absolutely right to say that it is extraordinary, especially given that the Home Secretary has bravely spoken of the importance of marriage to the system, that we should phase out the married couples allowance instead of delaying at least for a year and trying to replace it with a better structure.

Let me share with the Committee a single statistic, which can be presented in two interesting ways, which illustrate just how critical marriage is to child raising and why it would be worth taking an extra year to reconsider abolishing the married couples allowance.

The hon. Member for Kingston and Surbiton (Mr. Davey) quoted from "Social Trends 1999". My information comes from the Library's analysis of two documents, one of which is "Social Trends 1999". I asked the following question: if a child was born 10 years ago to a married couple and if a child was born 10 years ago to an unmarried couple living in an allegedly stable relationship, what chance would there be that the parents would still be together today? The answer was 81 per cent. in respect of the former case, and a mere 15 per cent. in the latter case, unless the couple had got married during that 10 years.

If one turns the statistic the other way round—[Interruption.]

The Second Deputy Chairman

Order. We cannot have casual conversations across the Chamber. I remind the hon. Gentleman that we are discussing specific dates and I would be grateful if he returned to the amendment.

Mr. Brazier

I would be grateful for one extra sentence on this, Mr. Lord.

If one turns the statistics around, they reveal that there is a 91 per cent. chance that the unmarried parents will either get married or split up within 10 years. That is why we need an extra year to think about the proposal.

Mr. Love

Will the hon. Gentleman give way?

Mr. Brazier

In a moment.

The statistics were provided to me by the Library—

Mr. Gardiner

Will the hon. Gentleman give way?

Mr. Brazier

I should be grateful if the hon. Gentleman would let me finish my point. I said that I would give way to the hon. Member for Edmonton (Mr. Love). I have been generous in giving way and have already given way three times in seven or eight minutes.

As I said, the second case for delaying for a year is that it would provide breathing space to allow the House to consider again whether or not it wants to cast aside the best method of raising children.

Mr. Love

I thank the hon. Gentleman for giving way. I have some difficulty in understanding the relevance of his argument to the married couples allowance. Can he give the Committee any evidence of the role of the married couples allowance in maintaining marriages in this country?

Mr. Brazier

If I reply to that point, I shall risk being out of order. It has been a feature of both of this afternoon's debates that Conservative Members trying to make the case for particular amendments have been challenged by interventions from Labour Members that go well beyond the amendments, so that we are bound to go beyond the amendment in replying to them. However, I shall answer the hon. Gentleman. Given the overwhelming evidence that there is more likely to be a stable family when parents are married and that married parents are much more likely to stay together, it is at least a desirable objective that we should encourage marriage.

I would turn the hon. Gentleman's point around and ask him the following question: does he or any other hon. Member present in the Chamber really believe that the measures in a Budget have no effect at all on behaviour? If he does, I am not sure why we bother to provide tax reliefs of one sort or another if we do not think that they affect behaviour. I am certain that many of my constituents, not all of whom support the Conservative party, see the decision to abolish the married couples allowance that is embodied in the clause—and which the amendment would defer for a year—as a severe blow against the single most important institution in the country.

Mr. Healey

The hon. Member for Gainsborough (Mr. Leigh) has tabled a narrow amendment, but introduced a rather broader debate. To that extent, he has done the House and this Committee a service.

Ultimately, one's assessment of the married couples allowance and the amendment proposing a year's delay before it is abolished depends on the view one takes of the fiscal and social purposes of the tax system in general and the married couples allowance in particular. It raises two questions. The first is whether one agrees with using the tax system to pursue particular policy aims, and the second is whether a particular tax break or allowance meets those objectives.

I believe that the tax system should support family life and not just marriage and that our first concern in providing that support must be the children, particularly the 4 million children who are growing up in poverty. The abolition of the married couples allowance, the introduction of the children's tax credit, the working families tax credit and a range of other measures have precisely that aim.

Of course, the married couples allowance is a tax credit and the same flat rate linked allowances are also payable to married couples, single parents and unmarried parents living together. In particular, as the married couples allowance can be paid out at twice the rate, individually, to separating or divorcing couples during the year of their separation, it cannot be said that it encourages or reinforces marriage. This afternoon, hon. Members on both sides of the Committee have recognised that people marry for reasons other than tax. Therefore, delaying the proposal is not the answer.

The abolition of the married couples allowance is overdue and should not he delayed as amendment No. 8 proposes. The original rationale for its predecessor, the married man's allowance, was that, in 1918, when it was introduced, marriage imposed additional burdens that needed to be recognised by the tax system. In those days, when two people got married, they became dependent on one salary. Women almost invariably gave up work when they married. That is no longer the case, as the Paymaster General pointed out during our debate on amendments Nos.1 and 2—70 per cent. of married women now work. Therefore, marriage no longer results in a fall in couples' joint income or an increase in costs or financial penalties. Indeed, one could argue that married couples without children are often better off than when they lived separately.

However, marriage has a bearing on the tax system when it has a bearing on earnings capacity. Very often—although not exclusively—marriage results in children, and women often take a career break to have, and care for, their children. At that point, there is greater dependency and increased costs and there is a case for more support from the tax system. It is precisely where my right hon. Friend the Chancellor has stepped up support and proposes to do so further with large increases in child benefit and the introduction of the children's tax credit and the working families tax credit.

The clause, if it remains unamended, will implement the decision to end the basic married couples allowance. It also specifies the relevant dates for that implementation. Essentially, it takes to their logical conclusion the changes to the MCA introduced by successive Tory Chancellors, who, by progressively reducing the allowance from 40 per cent. to 15 per cent., were well on the way to the step proposed in the Bill.

Amendment No. 8 would simply delay the logical action that the Government propose, which is based on the November 1993 observation by the right hon. and learned Member for Rushcliffe (Mr. Clarke), who was then Chancellor of the Exchequer and who said, quite candidly and characteristically, that the married couples tax allowance was a "bit of an anomaly". The amendment would frustrate the Government's intention with clause 28, which is part of a wider move to redefine the nature and purposes of tax breaks for families and to redirect resources better to support those families and children who have extra costs and real needs.

The Government's plans are clear. There is no case for delaying the date of implementation, and I urge the Committee to oppose amendment No. 8.

Mr. Edward Davey

I agree with many of the arguments advanced by the hon. Member for Wentworth (Mr. Healey) against the amendment and against delay. He is right to say that the married couples allowance is now outdated, and he was right to recall that the former Chancellor, the right hon. and learned Member for Rushcliffe (Mr. Clarke), termed it an anomaly. The money currently paid out in the married couples allowance is compounded by the tax revenue that the Exchequer thereby forgoes. The Government's proposals go some way towards using that money more effectively to support families and their children.

The faults in the stance of Conservative Members on this matter were exposed when the hon. Member for Gainsborough (Mr. Leigh) compared the tax incentive for marriage—which is what he considers the married couples allowance to be—with the tax incentives given for taking out pensions, or for employee share ownership. I suggest that marriage is not a financial undertaking. It happens for many reasons, the least of which is financial rationale.

It is sensible to have financial incentives for financial transactions such as pensions or share ownership, but not for something that is completely different. That is why the abolition of the married couples allowance should not be delayed.

Mr. Leigh

That is a fair point, but I am sure that the hon. Gentleman will agree that the tax system has been used to encourage home ownership for years. That is much more than just a financial transaction: it is the most important element in people's lives, after their personal family life. The tax system can be used to encourage behaviour that society considers useful, as society considered it useful to encourage home ownership.

Mr. Davey

I am afraid that the hon. Gentleman only emphasises my point. The problem with mortgage tax relief is that it hurts people on low incomes. Such people often cannot get the benefit of it, and it has distorted the housing market so that social and rented housing has been less affordable. Therefore, the relief ran counter to the aim of helping families on low incomes.

One of my key arguments in this debate is that the married couples allowance did not assist marriage or families. Like the hon. Member for Gainsborough, I believe that we need a set of policies to promote marriage and to keep families together, but we should not look to the tax system to achieve them.

In this debate, Conservative Members have put forward four fallacies about family policy. First, they are considering only one aspect of public policy and ignoring a range of matters that are much more germane to the promotion of the family. For example, they have forgotten the benefits system—family credit, child benefit and housing benefit, and so on. Many of those aspects of public policy are far more relevant to the aim of sustaining families and the institution of marriage.

6.45 pm

Other elements that seem to have been ignored include education policies governing school hours, the national curriculum and our attitude to sex education. Also important are employment policies with respect to child care, parental leave and working hours. Those areas of public policy would be far more fruitful for the promotion of the family. Often, families are torn apart because their members rarely meet, with parents hardly ever seeing their children or each other because they work such long hours outside the home.

The Second Deputy Chairman

Order. I wonder whether the hon. Gentleman can now relate his remarks to the date of implementation.

Mr. Davey

I take your direction in this matter, Mr. Lord, but I make these points because I believe that the married couples allowance is outdated and should be got rid of as soon as possible. We should pursue other policies to promote the family and marriage. The sooner that the MCA is abolished—and the sooner that the resources spent on it are used elsewhere—the better. I know that my initial remarks were some way off the topic, Mr. Lord, but they were germane.

Far more important than the retention of the married couples allowance is the support that the Government give to relationship counselling, especially to Relate, the former Marriage Guidance Council. Government support for such counselling would go much further towards achieving the objectives of the hon. Member for Gainsborough.

The second fallacy trotted out in the debate is that people marry for tax reasons. If that were true, the divorce rate would not have risen and people would not marry increasingly later in life. As the section on household and families in "Social Trends 1999" states: Between 1971 and 1996 the average age in Great Britain at first marriage rose from 25 years to 29 years for men and from 23 years to 27 years for women. If the married couples allowance had given people an incentive to get married, and thus supported the institution of marriage, the trend would have been in the opposite direction.

Mr. Brazier

The married couples allowance fell in that period, so if the direct linkage that the hon. Gentleman seeks does in fact exist, the argument is exactly the other way around.

Mr. Davey

For most of that period, the allowance did not fall, and in some Budgets it was increased above indexation. I am afraid that the hon. Gentleman's point is therefore not valid.

Mr. Brazier

Except for one year, at no time did the allowance go up by more than the combined rate of prices and economic growth. As a proportion of income, it did not rise, and in several of the years it fell. If anything, the argument is slightly against the hon. Gentleman, whose point could stand only if the married couples allowance had risen consistently in each year of the period that he has quoted. For my sins, I used to be a professional statistician and I urge the hon. Gentleman to think about what he is suggesting.

Mr. Davey

We could bandy about our recollections of when Budgets put the married couples allowance above indexation and when they did not, but the truth is that, in the period to which I referred, the average age at marriage rose. The supposed tax incentive in the allowance had no contrary effect.

It is symptomatic of many of the attitudes to social policy among Conservative Members that they are very atomistic in their approach. Conservative Members look at such matters in the same way as they look at balance sheet calculations. People's lives are not like that. People do not take decisions in that narrow, financially driven way. Decisions are taken for many other reasons.

The third fallacy, and another reason why married couples allowance should be abolished this year, is the apparent belief of the Conservatives that it has been a good way to support marriage and the family. The record does not show that to be so. Indeed, Conservative Chancellors did not think so. It is a mystery why Conservative Members are not more shamefaced about all this. When their Chancellors reduced the value of the married couples allowance, they did not often redeploy the saved resources into family friendly policies such as increased child benefit or child care support.

Mr. Brazier

indicated assent.

Mr. Davey

I am pleased that the hon. Gentleman has the honesty to nod in affirmation. The Conservatives must at least admit that the Government are putting resources into support for children and families.

The hon. Gentleman said that one reason for Conservative opposition to the delay was that the children's tax credit was not being introduced until next year. However, the Conservatives seem conveniently to have forgotten that child benefit has been increased, and will be increased further. The working families tax credit is also coming in, as is the child care tax credit. A back-of-an-envelope calculation would show that families with children are far better off as a result of that package of measures than they would be if we had simply retained the married couples allowance.

That is not to say that the Liberal Democrats have no criticism of the Government's family policy and the collection of tax benefits that they are giving to families with children. As I said on Second Reading, they are producing a complex system of support for families with children, including child benefit, the children's tax credit, working families tax credit and the child care tax credit. People are confused about this complex system of support. However, the Government are giving support, and we welcome the changes to that extent.

The Liberal Democrats will vote against amendment No. 8 because the Government are following the logic of their predecessors by saying, as Conservative Chancellors admitted, that the married couples allowance does not achieve the ends that people seek. There are far better ways to support marriage and the family. I hope that the Committee will reject the amendment.

Mr. Gibb

I support the amendment and congratulate my hon. Friend the Member for Gainsborough (Mr. Leigh) on his excellent introductory speech. One of the most glaring sleights of hand, pocketing £1.4 billion for the Chancellor, was the putting into effect of the children's tax credit a full year after abolition of the married couples allowance. It is sheer hypocrisy for the Chancellor to claim, as he did in his Budget speech, that the married couples allowance is being replaced by the children's tax credit.

The amendment brings the dates together. The abolition of married couples allowance is just another stealth tax that will increase income tax bills. The delay of a year before introduction of the children's tax credit is a further revenue-raising ruse that will be widely recognised for what it is.

Dawn Primarolo

The hon. Member for Gainsborough (Mr. Leigh) made several suggestions about resources being provided for families. My right hon. Friend the Chancellor made it clear in his Budget speech that family life is the foundation of our society. Our first principle is support for the family, and the interests of children must be paramount.

Many points made in both debates this evening have been about the married couples allowance. It was originally provided for married men, from 1918, in recognition of the fact that their wives were not in paid employment after marriage. That lasted until just before the second world war when the Government of the day advanced tax policy to encourage married women to stay in the labour market or return to it.

After years of amendment and change, the present Government inherited a married couples allowance that is, in fact, restricted neither to marriage nor to couples. Nor, indeed, is it strictly an allowance, as it is a tax credit paid at the same flat rate to married couples, single parents and unmarried parents who live together. Far from recognising marriage, as the hon. Member for Gainsborough suggested, the allowance is so confused that it can even be paid twice—at the full rate to both partners in the year of separation or divorce. A married couples allowance that can pay more for separation or divorce surely cannot be said to uphold the institution of marriage.

Mr. Brazier

The point made several times by Conservative Members is that anomalies of that sort could be ruled out by having a year's delay. There is a serious underlying issue to the amendment, not just a technical objection.

Dawn Primarolo

I shall come shortly to the points made by the hon. Members for Bognor Regis and Littlehampton (Mr. Gibb)—whose incorrect understanding of the Budget we heard, once again, from the Dispatch Box—for Canterbury (Mr. Brazier) and for Gainsborough. The hon. Member for Kingston and Surbiton (Mr. Davey) was quite correct in what he said about what is being provided to families.

First, however, I shall outline some facts. Child poverty has increased dramatically since 1979. The bottom 10 to 20 per cent. of children have lower real incomes now than in 1979. The United Kingdom has one of the highest rates of child poverty in the industrialised world. The Chancellor is seeking specifically to help families with children whose budgets are under enormous pressure. Many of them are trapped in poverty.

The hon. Member for Gainsborough said that the proposals for the children's tax credit were less generous than the married couples allowance would have been if it was indexed. He mentioned £552, but he did not say that the base year for that was 1990. He was referring to the value of the married couples allowance before the Conservative Government made substantial cuts—what we would now, I think, call a stealth tax.

Had the hon. Gentleman made his comparison with the value of married couples allowance inherited by the Labour Government, he would have been talking about something like £274.50 a year. The children's tax credit provides £416 a year, and one need not be a mathematical genius to work out that that is far more generous.

The second Opposition proposition was that there was a gap year—that we were taking £197 a year away from the families with children upon whom Conservative Members have concentrated, and made no other policy changes. The hon. Gentleman said that, as a parent, he was in receipt of child benefit, so I remind him that child benefit was increased by £2.95 this month, and that next April there will be another increase, with the premium for the second child also going up. For families with more than one child, those increases in child benefit alone are worth more than the loss of the married couples allowance—and the Government have done more than that.

The idea that the hon. Member for Bognor Regis and Littlehampton advanced—that there is a gap year, and that we are stealing funds from families—ignores the fact that the working families tax credit will be increased by £4.70 a week from October, before the married couples allowance is taken away. There is no gap year. Resources greater than the married couples allowance, which has yet to be taken away, are being given to families with children. The additions will be paid before the allowance disappears, and they will also receive the children's tax credit.

After all the discussion about marriage, and all the importance that Conservative Members have attributed to the married couples allowance, what is their proposition? They suggest not that the allowance should be saved, but that its abolition should be delayed for a year—that we should allow the present chaos surrounding the allowance to continue.

7 pm

Presumably, the Conservatives want to vote against the increase in child benefit and the working families tax credit, and the increase in the income support premium, which have all been provided for this year, before the married couples allowance is abolished. That fact does not fit in with their simplistic argument that the Chancellor is taking money away and hiding it in the Treasury rather than paying it out.

It is clear from the information in the Red Book, and from what I have said this evening, that families with children in the greatest need will receive payments from the Government to help them. The best way to help married couples and families is to ensure that they and their children can be lifted out of poverty. What drives families apart is a lack of resources and the grind of poverty, and that is where the Government are trying to help. I urge the Committee to reject the amendment.

Question put, That the amendment be made:—

The Committee divided: Ayes 131, Noes 296.

Division No. 154]	[7.3 pm
AYES
Ainsworth, Peter (E Surrey)	Gill, Christopher
Amess, David	Gorman, Mrs Teresa
Ancram, Rt Hon Michael	Gray, James
Arbuthnot, Rt Hon James	Green, Damian
Atkinson, Peter (Hexham)	Greenway, John
Baldry, Tony	Grieve, Dominic
Beggs, Roy	Gummer, Rt Hon John
Beresford, Sir Paul	Hamilton, Rt Hon Sir Archie
Boswell, Tim	Hammond, Philip
Bottomley, Rt Hon Mrs Virginia	Hawkins, Nick
Brady, Graham	Hayes, John
Brazier, Julian	Heald, Oliver
Brooke, Rt Hon Peter	Heathcoat-Amory, Rt Hon David
Browning, Mrs Angela	Hogg, Rt Hon Douglas
Bruce, Ian (S Dorset)	Horam, John
Burns, Simon	Howard, Rt Hon Michael
Cash, William	Howarth, Gerald (Aldershot)
Clappison, James	Jack, Rt Hon Michael
Clark, Rt Hon Alan (Kensington)	Jackson, Robert (Wantage)
Clark, Dr Michael (Rayleigh)	Jenkin, Bernard
Clifton-Brown, Geoffrey	Johnson Smith,
Collins, Tim	Rt Hon Sir Geoffrey
Cormack, Sir Patrick	Key, Robert
Cran, James	King, Rt Hon Tom (Bridgwater)
Davies, Quentin (Grantham)	Kirkbride, Miss Julie
Davis, Rt Hon David (Haltemprice)	Laing, Mrs Eleanor
& Howden)	Lait, Mrs Jacqui
Day, Stephen	Lansley, Andrew
Donaldson, Jeffrey	Leigh, Edward
Duncan, Alan	Letwin, Oliver
Duncan Smith, Iain	Lewis, Dr Julian (New Forest E)
Emery, Rt Hon Sir Peter	Lilley, Rt Hon Peter
Fabricant, Michael	Lloyd, Rt Hon Sir Peter (Fareham)
Fallon, Michael	Lyell, Rt Hon Sir Nicholas
Flight, Howard	MacGregor, Rt Hon John
Forsythe, Clifford	McIntosh, Miss Anne
Forth, Rt Hon Eric	MacKay, Rt Hon Andrew
Fox, Dr Liam	Maclean, Rt Hon David
Fraser, Christopher	McLoughlin, Patrick
Gale, Roger	Major, Rt Hon John
Garnier, Edward	Mates, Michael
Gibb, Nick	Maude, Rt Hon Francis

Mawhinney, Rt Hon Sir Brian	Streeter, Gary
May, Mrs Theresa	Swayne, Desmond
Moss, Malcolm	Syms, Robert
Nicholls, Patrick	Tapsell, Sir Peter
Norman, Archie	Taylor, John M (Solihull)
Ottaway, Richard	Taylor, Sir Teddy
Paice, James	Thompson, William
Paterson, Owen	Tredinnick, David
Pickles, Eric	Trend, Michael
Prior, David	Trimble, Rt Hon David
Randall, John	Viggers, Peter
Redwood, Rt Hon John	Walter, Robert
Robertson, Laurence (Tewk'b'ry)	Wardle, Charles
Roe, Mrs Marion (Broxbourne)	Waterson, Nigel
Ross, William (E Lond'y)	Whitney, Sir Raymond
Ruffley, David	Whittingdale, John
St Aubyn, Nick	Widdecombe, Rt Hon Miss Ann
Sayeed, Jonathan	Willetts, David
Shephard, Rt Hon Mrs Gillian	Winterton, Mrs Ann (Congleton)
Shepherd, Richard	Winterton, Nicholas (Macclesfield)
Simpson, Keith (Mid-Norfolk)	Woodward, Shaun
Smyth, Rev Martin (Belfast S)	Yeo, Tim
Soames, Nicholas	Young, Rt Hon Sir George
Spicer, Sir Michael	Tellers for the Ayes:
Spring, Richard	Sir David Madel and
Stanley, Rt Hon Sir John	Mrs. Caroline Spelman.

NOES
Adams, Mrs Irene (Paisley N)	Chapman, Ben (Wirral S)
Ainsworth, Robert (Cov'try NE)	Chaytor, David
Allan, Richard	Chidgey, David
Allen, Graham	Clapham, Michael
Anderson, Donald (Swansea E)	Clark, Rt Hon Dr David (S Shields)
Armstrong, Rt Hon Ms Hilary	Clark, Paul (Gillingham)
Ashdown, Rt Hon Paddy	Clarke, Eric (Midlothian)
Ashton, Joe	Clarke, Rt Hon Tom (Coatbridge)
Atkins, Charlotte	Clarke, Tony (Northampton S)
Austin, John	Clelland, David
Ballard, Jackie	Cohen, Harry
Barnes, Harry	Coleman, Iain
Beard, Nigel	Connarty, Michael
Begg, Miss Anne	Cooper, Yvette
Bell, Stuart (Middlesbrough)	Corbett, Robin
Bennett, Andrew F	Corbyn, Jeremy
Benton, Joe	Corston, Ms Jean
Bermingham, Gerald	Cotter, Brian
Best, Harold	Cousins, Jim
Betts, Clive	Crausby, David
Blackman, Liz	Cryer, John (Hornchurch)
Blears, Ms Hazel	Cummings, John
Blizzard, Bob	Cunningham, Jim (Cov'try S)
Boateng, Paul	Curtis-Thomas, Mrs Claire
Borrow, David	Dalyell, Tam
Bradley, Keith (Withington)	Darvill, Keith
Bradley, Peter (The Wrekin)	Davey, Edward (Kingston)
Bradshaw, Ben	Davey, Valerie (Bristol W)
Breed, Colin	Davidson, Ian
Brinton, Mrs Helen	Davies, Rt Hon Denzil (Llanelli)
Buck, Ms Karen	Davies, Geraint (Croydon C)
Burgon, Colin	Dawson, Hilton
Burnett, John	Dean, Mrs Janet
Butler, Mrs Christine	Dismore, Andrew
Cable, Dr Vincent	Dobbin, Jim
Caborn, Rt Hon Richard	Dobson, Rt Hon Frank
Campbell, Alan (Tynemouth)	Donohoe, Brian H
Campbell, Mrs Anne (C'bridge)	Doran, Frank
Campbell, Rt Hon Menzies	Dowd, Jim
(NE Fife)	Drown, Ms Julia
Campbell, Ronnie (Blyth V)	Dunwoody, Mrs Gwyneth
Campbell-Savours, Dale	Eagle, Angela (Wallasey)
Cann, Jamie	Eagle, Maria (L'pool Garston)
Caplin, Ivor	Edwards, Huw
Casale, Roger	Efford, Clive
Caton, Martin	Ennis, Jeff
Cawsey, Ian	Fearn, Ronnie

Fitzsimons, Lorna	Levitt, Tom
Foster, Rt Hon Derek	Lewis, Ivan (Bury S)
Foster, Michael Jabez (Hastings)	Lewis, Terry (Worsley)
Foulkes, George	Linton, Martin
Galloway, George	Livingstone, Ken
Gapes, Mike	Llwyd, Elfyn
Gardiner, Barry	Lock, David
George, Bruce (Walsall S)	Love, Andrew
Gerrard, Neil	McAvoy, Thomas
Gibson, Dr Ian	McDonagh, Siobhain
Gilroy, Mrs Linda	McDonnell, John
Godsiff, Roger	McFall, John
Goggins, Paul	McIsaac, Shona
Golding, Mrs Llin	McKenna, Mrs Rosemary
Gordon, Mrs Eileen	Mackinlay, Andrew
Griffiths, Nigel (Edinburgh S)	MacShane, Denis
Griffiths, Win (Bridgend)	Mactaggart, Fiona
Grocott, Bruce	McWalter, Tony
Gunnell, John	Mahon, Mrs Alice
Hall, Mike (Weaver Vale)	Mallaber, Judy
Hall, Patrick (Bedford)	Mandelson, Rt Hon Peter
Harris, Dr Evan	Marsden, Gordon (Blackpool S)
Harvey, Nick	Marsden, Paul (Shrewsbury)
Heal, Mrs Sylvia	Marshall, David (Shettleston)
Healey, John	Marshall-Andrews, Robert
Heath, David (Somerton & Frome)	Martlew, Eric
Henderson, Doug (Newcastle N)	Maxton, John
Henderson, Ivan (Harwich)	Meacher, Rt Hon Michael
Hepburn, Stephen	Meale, Alan
Heppell, John	Merron, Gillian
Hesford, Stephen	Michie, Bill (Shef'ld Heeley)
Hewitt, Ms Patricia	Milburn, Rt Hon Alan
Hill, Keith	Miller, Andrew
Hinchliffe, David	Moffatt, Laura
Hodge, Ms Margaret	Moonie, Dr Lewis
Hood, Jimmy	Moran, Ms Margaret
Hoon, Geoffrey	Morris, Ms Estelle (B'ham Yardley)
Hope, Phil	Mountford, Kali
Hopkins, Kelvin	Mowlam, Rt Hon Marjorie
Howarth, George (Knowsley N)	Mudie, George
Howells, Dr Kim	Mullin, Chris
Hoyle, Lindsay	Murphy, Denis (Wansbeck)
Hughes, Kevin (Doncaster N)	Murphy, Rt Hon Paul (Torfaen)
Humble, Mrs Joan	Naysmith, Dr Doug
Hurst, Alan	Oaten, Mark
Hutton, John	O'Brien, Bill (Normanton)
Iddon, Dr Brian	O'Brien, Mike (N Warks)
Illsley, Eric	O'Neill, Martin
Ingram, Rt Hon Adam	Öpik, Lembit
Jackson, Ms Glenda (Hampstead)	Palmer, Dr Nick
Jackson, Helen (Hillsborough)	Pearson, Ian
Jenkins, Brian	Pendry, Tom
Johnson, Alan (Hull W & Hessle)	Perham, Ms Linda
Johnson, Miss Melanie	Pickthall, Colin
(Welwyn Hatfield)	Pike, Peter L
Jones, Barry (Alyn & Deeside)	Plaskitt, James
Jones, Helen (Warrington N)	Pollard, Kerry
Jones, Dr Lynne (Selly Oak)	Pound, Stephen
Jones, Martyn (Clwyd S)	Powell, Sir Raymond
Keen, Alan (Feltham & Heston)	Prentice, Ms Bridget (Lewisham E)
Keen, Ann (Brentford & Isleworth)	Prentice, Gordon (Pendle)
Keetch, Paul	Prescott, Rt Hon John
Kelly, Ms Ruth	Primarolo, Dawn
Kemp, Fraser	Purchase, Ken
Kennedy, Jane (Wavertree)	Quinn, Lawrie
Kidney, David	Radice, Giles
Kilfoyle, Peter	Reed, Andrew (Loughborough)
King, Andy (Rugby & Kenilworth)	Reid, Rt Hon Dr John (Hamilton N)
King, Ms Oona (Bethnal Green)	Rendel, David
Kirkwood, Archy	Roche, Mrs Barbara
Kumar, Dr Ashok	Ross, Ernie (Dundee W)
Ladyman, Dr Stephen	Rowlands, Ted
Lawrence, Ms Jackie	Roy, Frank
Laxton, Bob	Ruddock, Joan
Lepper, David	Russell, Bob (Colchester)
Leslie, Christopher	Ryan, Ms Joan

Salter, Martin	Tonge, Dr Jenny
Sarwar, Mohammad	Trickett, Jon
Savidge, Malcolm	Turner, Dennis (Wolverh'ton SE)
Sedgemore, Brian	Turner, Dr Desmond (Kemptown)
Shaw, Jonathan	Turner, Dr George (NW Norfolk)
Shipley, Ms Debra	Twigg, Derek (Halton)
Simpson, Alan (Nottingham S)	Twigg, Stephen (Enfield)
Singh, Marsha	Tyler, Paul
Smith, Rt Hon Andrew (Oxford E)	Vaz, Keith
Smith, Angela (Basildon)	Walley, Ms Joan
Smith, Jacqui (Redditch)	Ward, Ms Claire
Soley, Clive	Wareing, Robert N
Spellar, John	Webb, Steve
Squire, Ms Rachel	Whitehead, Dr Alan
Steinberg, Gerry	Wicks, Malcolm
Stevenson, George	Williams, Rt Hon Alan
Stott, Roger	(Swansea W)
Stringer, Graham	Williams, Alan W (E Carmarthen)
Stuart, Ms Gisela	Williams, Mrs Betty (Conwy)
Stunell, Andrew	Willis, Phil
Sutcliffe, Gerry	Wills, Michael
Taylor, Rt Hon Mrs Ann	Winnick, David
(Dewsbury)	Wise, Audrey
Taylor, Ms Dan (Stockton S)	Wood, Mike
Taylor, Matthew (Truro)	Wright, Anthony D (Gt Yarmouth)
Temple-Morris, Peter
Thomas, Gareth (Clwyd W)	Tellers for the Noes:
Thomas, Gareth R (Harrow W)	Mr. Greg Pope and
Tipping, Paddy	Mr. David Jamieson.

Question accordingly negatived.

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

The Committee divided: Ayes 300, Noes 132.

Division No. 155]	[7.18 pm
AYES
Adams, Mrs Irene (Paisley N)	Cable, Dr Vincent
Ainsworth, Robert (Cov'try NE)	Caborn, Rt Hon Richard
Allan, Richard	Campbell, Alan (Tynemouth)
Allen, Graham	Campbell, Mrs Anne (C'bridge)
Anderson, Donald (Swansea E)	Campbell, Rt Hon Menzies
Armstrong, Rt Hon Ms Hilary	(NE Fife)
Ashdown, Rt Hon Paddy	Campbell, Ronnie (Blyth V)
Ashton, Joe	Campbell-Savours, Dale
Atkins, Charlotte	Cann, Jamie
Austin, John	Caplin, Ivor
Ballard, Jackie	Casale, Roger
Barnes, Harry	Caton, Martin
Battle, John	Cawsey, Ian
Beard, Nigel	Chapman, Ben (Wirral S)
Begg, Miss Anne	Chaytor, David
Bell, Stuart (Middlesbrough)	Chidgey, David
Benn, Rt Hon Tony	Clapham, Michael
Bennett, Andrew F	Clark, Rt Hon Dr David (S Shields)
Benton, Joe	Clark, Paul (Gillingham)
Bermingham, Gerald	Clarke, Eric (Midlothian)
Best, Harold	Clarke, Rt Hon Tom (Coatbridge)
Betts, Clive	Clarke, Tony (Northampton S)
Blackman, Liz	Clelland, David
Blears, Ms Hazel	Cohen, Harry
Blizzard, Bob	Coleman, Iain
Boateng, Paul	Connarty, Michael
Borrow, David	Cooper, Yvette
Bradley, Keith (Withington)	Corbett, Robin
Bradley, Peter (The Wrekin)	Corbyn, Jeremy
Bradshaw, Ben	Corston, Ms Jean
Breed, Colin	Cotter, Brian
Brinton, Mrs Helen	Cousins, Jim
Buck, Ms Karen	Crausby, David
Burgon, Colin	Cryer, John (Hornchurch)
Burnett, John	Cummings, John
Butler, Mrs Christine	Cunningham, Jim (Cov'try S)

Curtis-Thomas, Mrs Claire	Johnson, Alan (Hull W & Hessle)
Dalyell, Tam	Johnson, Miss Melanie
Darvill, Keith	(Welwyn Hatfield)
Davey, Edward (Kingston)	Jones, Barry (Alyn & Deeside)
Davey, Valerie (Bristol W)	Jones, Helen (Warrington N)
Davidson, Ian	Jones, Dr Lynne (Selly Oak)
Davies, Rt Hon Denzil (Llanelli)	Jones, Martyn (Clwyd S)
Davies, Geraint (Croydon C)	Keen, Alan (Feltham & Heston)
Dawson, Hilton	Keen, Ann (Brentford & Isleworth)
Dean, Mrs Janet	Keetch, Paul
Dismore, Andrew	Kelly, Ms Ruth
Dobbin, Jim	Kemp, Fraser
Dobson, Rt Hon Frank	Kennedy, Jane (Wavertree)
Donohoe, Brian H	Kidney, David
Doran, Frank	Kilfoyle, Peter
Dowd, Jim	King, Andy (Rugby & Kenilworth)
Drown, Ms Julia	King, Ms Oona (Bethnal Green)
Dunwoody, Mrs Gwyneth	Kirkwood, Archy
Eagle, Angela (Wallasey)	Kumar, Dr Ashok
Eagle, Maria (L'pool Garston)	Ladyman, Dr Stephen
Edwards, Huw	Lawrence, Ms Jackie
Efford, Clive	Laxton, Bob
Ennis, Jeff	Lepper, David
Fearn, Ronnie	Leslie, Christopher
Fitzsimons, Lorna	Levitt, Tom
Foster, Rt Hon Derek	Lewis, Ivan (Bury S)
Foster, Michael Jabez (Hastings)	Lewis, Terry (Worsley)
Foulkes, George	Linton, Martin
Galloway, George	Livingstone, Ken
Gapes, Mike	Lloyd, Tony (Manchester C)
Gardiner, Barry	Llwyd, Elfyn
George, Bruce (Walsall S)	Lock, David
Gerrard, Neil	Love, Andrew
Gibson, Dr Ian	McAvoy, Thomas
Gilroy, Mrs Linda	McDonagh, Siobhain
Godsiff, Roger	McDonnell, John
Goggins, Paul	McFall, John
Golding, Mrs Llin	McIsaac, Shona
Gordon, Mrs Eileen	McKenna, Mrs Rosemary
Griffiths, Nigel (Edinburgh S)	Mackinlay, Andrew
Griffiths, Win (Bridgend)	MacShane, Denis
Grocott, Bruce	Mactaggart, Fiona
Gunnell, John	McWalter, Tony
Hall, Mike (Weaver Vale)	Mahon, Mrs Alice
Hall, Patrick (Bedford)	Mallaber, Judy
Harris, Dr Evan	Mandelson, Rt Hon Peter
Harvey, Nick	Marsden, Gordon (Blackpool S)
Heal, Mrs Sylvia	Marsden, Paul (Shrewsbury)
Healey, John	Marshall, David (Shettleston)
Heath, David (Somerton & Frome)	Marshall-Andrews, Robert
Henderson, Doug (Newcastle N)	Martlew, Eric
Henderson, Ivan (Harwich)	Maxton, John
Hepburn, Stephen	Meacher, Rt Hon Michael
Heppell, John	Meale, Alan
Hesford, Stephen	Merron, Gillian
Hewitt, Ms Patricia	Michie, Bill (Shef'ld Heeley)
Hill, Keith	Milburn, Rt Hon Alan
Hinchliffe, David	Miller, Andrew
Hodge, Ms Margaret	Moffatt, Laura
Hood, Jimmy	Moonie, Dr Lewis
Hoon, Geoffrey	Moran, Ms Margaret
Hope, Phil	Morris, Ms Estelle (B'ham Yardley)
Hopkins, Kelvin	Mountford, Kali
Howarth, George (Knowsley N)	Mowlam, Rt Hon Marjorie
Howells, Dr Kim	Mudie, George
Hoyle, Lindsay	Mullin, Chris
Hughes, Kevin (Doncaster N)	Murphy, Denis (Wansbeck)
Humble, Mrs Joan	Murphy, Rt Hon Paul (Torfaen)
Hurst, Alan	Naysmith, Dr Doug
Hutton, John	Oaten, Mark
Iddon, Dr Brian	O'Brien, Bill (Normanton)
Illsley, Eric	O'Brien, Mike (N Warks)
Ingram, Rt Hon Adam	O'Neill, Martin
Jackson, Ms Glenda (Hampstead)	Öpik, Lembit
Jackson, Helen (Hillsborough)	Palmer, Dr Nick
Jenkins, Brian	Pearson, Ian

Pendry, Tom	Stott, Roger
Perham, Ms Linda	Stringer, Graham
Pickthall, Colin	Stuart, Ms Gisela
Pike, Peter L	Stunell, Andrew
Plaskitt, James	Sutcliffe, Gerry
Pollard, Kerry	Taylor, Rt Hon Mrs Ann
Pound, Stephen	(Dewsbury)
Powell, Sir Raymond	Taylor, Ms Dari (Stockton S)
Prentice, Ms Bridget (Lewisham E)	Taylor, Matthew (Truro)
Prentice, Gordon (Pendle)	Temple-Morris, Peter
Prescott, Rt Hon John	Thomas, Gareth (Clwyd W)
Primarolo, Dawn	Thomas, Gareth R (Harrow W)
Purchase, Ken	Tipping, Paddy
Quinn, Lawrie	Tonge, Dr Jenny
Radice, Giles	Trickett, Jon
Reed, Andrew (Loughborough)	Turner, Dennis (Wolverh'ton SE)
Reid, Rt Hon Dr John (Hamilton N)	Turner, Dr Desmond (Kemptown)
Rendel, David	Turner, Dr George (NW Norfolk)
Roche, Mrs Barbara	Twigg, Derek (Halton)
Ross, Ernie (Dundee W)	Twigg, Stephen (Enfield)
Rowlands, Ted	Tyler, Paul
Roy, Frank	Vaz, Keith
Ruddock, Joan	Walley, Ms Joan
Russell, Bob (Colchester)	Ward, Ms Claire
Ryan, Ms Joan	Wareing, Robert N
Salter, Martin	Webb, Steve
Sarwar, Mohammad	Whitehead, Dr Alan
Savidge, Malcolm	Wicks, Malcolm
Sedgemore, Brian	Williams, Rt Hon Alan
Shaw, Jonathan	(Swansea W)
Sheldon, Rt Hon Robert	Williams, Alan W (E Carmarthen)
Shipley, Ms Debra	Williams, Mrs Betty (Conwy)
Simpson, Alan (Nottingham S)	Willis, Phil
Singh, Marsha	Wills, Michael
Smith, Rt Hon Andrew (Oxford E)	Winnick, David
Smith, Angela (Basildon)	Wise, Audrey
Smith, Jacqui (Redditch)	Wood, Mike
Soley, Clive	Wright, Anthony D (Gt Yarmouth)
Spellar, John
Squire, Ms Rachel	Tellers for the Ayes:
Steinberg, Gerry	Mr. Greg Pope and
Stevenson, George	Mr. David Jamieson.

NOES
Ainsworth, Peter (E Surrey)	Emery, Rt Hon Sir Peter
Amess, David	Fabricant, Michael
Ancram, Rt Hon Michael	Fallon, Michael
Arbuthnot, Rt Hon James	Flight, Howard
Atkinson, Peter (Hexham)	Forsythe, Clifford
Baldry, Tony	Forth, Rt Hon Eric
Beggs, Roy	Fox, Dr Liam
Bercow, John	Fraser, Christopher
Beresford, Sir Paul	Gale, Roger
Boswell, Tim	Garnier, Edward
Bottomley, Rt Hon Mrs Virginia	Gibb, Nick
Brady, Graham	Gill, Christopher
Brazier, Julian	Gorman, Mrs Teresa
Brooke, Rt Hon Peter	Gray, James
Browning, Mrs Angela	Green, Damian
Bruce, Ian (S Dorset)	Greenway, John
Burns, Simon	Grieve, Dominic
Cash, William	Gummer, Rt Hon John
Clappison, James	Hamilton, Rt Hon Sir Archie
Clark, Rt Hon Alan (Kensington)	Hammond, Philip
Clark, Dr Michael (Rayleigh)	Hawkins, Nick
Clifton-Brown, Geoffrey	Hayes, John
Collins, Tim	Heald, Oliver
Cormack, Sir Patrick	Heathcoat-Amory, Rt Hon David
Cran, James	Hogg, Rt Hon Douglas
Davies, Quentin (Grantham)	Horam, John
Davis, Rt Hon David (Haltemprice	Howard, Rt Hon Michael
& Howden)	Howarth, Gerald (Aldershot)
Day, Stephen	Jack, Rt Hon Michael
Donaldson, Jeffrey	Jackson, Robert (Wantage)
Duncan, Alan
Duncan Smith, Iain

Jenkin, Bernard	Ruffley, David
Johnson Smith,	St Aubyn, Nick
Rt Hon Sir Geoffrey	Sayeed, Jonathan
Key, Robert	Shephard, Rt Hon Mrs Gillian
King, Rt Hon Tom (Bridgwater)	Shepherd, Richard
Kirkbride, Miss Julie	Simpson, Keith (Mid-Norfolk)
Laing, Mrs Eleanor	Smyth, Rev Martin (Belfast S)
Lait, Mrs Jacqui	Soames, Nicholas
Lansley, Andrew	Spicer, Sir Michael
Leigh, Edward	Spring, Richard
Letwin, Oliver	Stanley, Rt Hon Sir John
Lewis, Dr Julian (New Forest E)	Streeter, Gary
Lilley, Rt Hon Peter	Swayne, Desmond
Lloyd, Rt Hon Sir Peter (Fareham)	Syms, Robert
Lyell, Rt Hon Sir Nicholas	Tapsell, Sir Peter
MacGregor, Rt Hon John	Taylor, John M (Solihull)
McIntosh, Miss Anne	Taylor, Sir Teddy
MacKay, Rt Hon Andrew	Thompson, William
Maclean, Rt Hon David	Tredinnick, David
McLoughlin, Patrick	Trend, Michael
Major, Rt Hon John	Trimble, Rt Hon David
Mates, Michael	Viggers, Peter
Maude, Rt Hon Francis	Walter, Robert
Mawhinney, Rt Hon Sir Brian	Wardle, Charles
May, Mrs Theresa	Waterson, Nigel
Moss, Malcolm	Whitney, Sir Raymond
Nicholls, Patrick	Whittingdale, John
Norman, Archie	Widdecombe, Rt Hon Miss Ann
Ottaway, Richard	Willetts, David
Paice, James	Winterton, Mrs Ann (Congleton)
Paterson, Owen	Winterton, Nicholas (Macclesfield)
Pickles, Eric	Woodward, Shaun
Prior, David	Yeo, Tim
Randall, John	Young, Rt Hon Sir George
Redwood, Rt Hon John
Robertson, Laurence (Tewk'b'ry)	Tellers for the Noes:
Roe, Mrs Marion (Broxbourne)	Sir David Madel and
Ross, William (E Lond'y)	Mrs. Caroline Spelman.

Question accordingly agreed to.

Clause 28 ordered to stand part of the Bill.