§ It being Ten o'clock, the debate stood adjourned.
§ Motion made, and Question put forthwith, pursuant to Standing Order No. 15 (Exempted business),
§ That, at this day's sitting, the Welfare Reform and Pensions Bill may be proceeded with, though opposed, until any hour.—[Mr. Clelland.]
§ Question agreed to.
§ As amended, in the Standing Committee, again considered.
§ Question again proposed, That the clause be read a Second time.
§ Mr. ForthIt is insulting to the House of Commons that we should have this proposal set out in such arrogant and upsetting detail without any explanation. The Minister did not attempt to give any explanation of the rationale behind this astonishingly wide-ranging power. The wording is provocative—one would have thought that the Minister might have tried to tone it down—with the use of terms such as
it appears to the Treasury to be expedient to modify any of the preceding provisions of this section".There is no attempt to limit or qualify what can be done. Use of such terms leaves the matter wide open, and it is at the discretion of the Treasury as to what can be done with the powers.The supremacy of the Treasury is here for all to see. There is no attempt to conceal it, and the Minister does not see why he should. That lays bare the motivation behind the measure—it is Treasury-driven regulation, designed solely for the purpose of making sure that the revenue take by the Government is maximised. This is a stealth tax if ever I saw one. It is dressed up as part of the Welfare Reform and Pensions Bill, but it is, in essence, a Treasury-driven measure that may or may not get the concurrence of the Secretary of State.
I have cut my remarks to the bone to allow progress to be made, and there is a lot more that I could have said. I am trying to contain my anger about all of this. I have probably short-changed my constituent by sharing with the House only a little of what he said. I hope that he will be satisfied. He will judge the Minister by the nature of his reply to the debate—and so will we.
This matter will be judged by those outside the House by the quality of replies that we get to this and other debates. I will not be remotely satisfied unless the Minister gives us some full, frank and much more satisfactory answers than we have had hitherto.
§ Dr. Vincent Cable (Twickenham)I agree with many of the remarks made by the hon. Member for Beckenham (Mrs. Lait) and the right hon. Member for Bromley and Chislehurst (Mr. Forth). If anything, the right hon. Gentleman is, unusually, understating his case.
Whatever the merits of the clause—and they are few—it has been appallingly presented on two levels: first, the way in which we were confronted on Friday with a major legislative change affecting large segments of the British economy, with little opportunity for consideration and amendments; and, more generally, the way in which the consultation process has, or has not, happened ever since Inland Revenue 35 was issued on 9 March.
There has been an attempt at consultation to deal with many of the legitimate issues that have been raised. The hon. Member for Ellesmere Port and Neston (Mr. Miller) raised some of the perfectly genuine concerns that the Inland Revenue has about avoidance, but these are being dealt with through consultation. He mentioned disguised employment, whereby people work as employees and then become a company on the Monday of the following week. Independent computer contractors who have dealt with the problem have made specific suggestions as to how the matter can be dealt with. It is suggested that a six-month break be created between retirement from paid employment and the taking up of a new corporate identity as a way of dealing with the problem without undermining the whole basis of freelancing, on which so much of the modern UK economy depends.
I fear that underlying the problem is a failure to understand how large parts of the modern British economy function. There are powerful trends driven by international business, not by the desire to avoid taxes. Large parts of big business operate by outsourcing. That may in some cases arise from a wish to avoid tax or not to treat workers properly, but in large part it is sensible business logic. Companies concentrate on doing what they do best and buy in specialised skills from freelance workers, often through agents.
Project work is extremely important. Much of the provision concerns project-based industries such as information technology and offshore oil, about which my hon. Friend the Member for West Aberdeenshire and Kincardine (Sir R. Smith) will speak later. The essence of project work is that it must be undertaken in a specific period. People may well undertake several entirely distinct projects in a year and they may work on several simultaneously for different employers. The requirement that they become employees and cease operating in a flexible way completely undermines the basis of their operation.
The hon. Member for Ellesmere Port and Neston made a point that is often made in defence of the changes: that the Government are acting in defence of not only the Revenue, but exploited lump labour workers. That is an extraordinarily patronising view of the way in which many of our constituents operate.
Many highly educated people have a sense of empowerment and want to live a different life style that is quite remunerative, but not as stable and secure as that of salaried workers such as those in the Inland Revenue. They do not pay national insurance contributions but, equally, they do not derive contributory benefits. There is a quid pro quo, as they are not entitled to sickness or unemployment benefit. They may also sacrifice many of 748 the rights and entitlements associated with employment law, including redundancy payments. They accept that as the nature of the profession in which they operate.
I do not want to follow the example of the right hon. Member for Bromley and Chislehurst and quote constituents' letters at great length, but letters can add to the human flavour of our discussion. Only yesterday, a constituent explained to me in a letter the motivation of people such as those to whom I have referred. The letter says:
I have been working in the IT industry for twelve years and in 1994 I decided to become freelance. This necessitated the setting up of a company as that was the only way that agencies and clients would contemplate using my services, not as a tax avoiding measure … I became freelance because I have other interests beside information technology … spending several months in Guatemala as a human rights monitor and a lot of voluntary work with Amnesty International.I would have thought that the Government would be in favour of people trying to live a flexible life style in the high-technology industries.
§ Mr. John Hayes (South Holland and The Deepings)The hon. Gentleman makes an interesting point. It would be bad enough if the economy was at a standstill and set in aspic, but the trend towards independent facilities and project management of the type that his constituent describes is growing, so the provision will be less and less relevant as time goes on. My experience in the IT industry was very much as the letter describes.
§ Dr. CableI do not need to augment that helpful intervention.
The Government are justifying their action on the grounds of revenue saving. As the Minister said, large sums are involved. I believe that the Government's estimate of the total is £475 million a year; but that is the gross figure and we should consider whether the Government will really save that much. I have asked parliamentary questions to try to establish how many Government contracts in the IT industry are bought from people providing services in the way that has been described. Those people's costs will rise, eliminating many of the savings.
One of the other consequences of forcing freelance workers to become employees is that they could become temporary workers. Then they would not only cease to pay dividends and value added tax, but would be entitled to benefits, leading to a substantial reduction in Government gain. Some of the work would be driven offshore and more revenue would be lost in that way. The Minister quoted a suspiciously small sum for compliance costs, but the total compliance costs for payroll taxation amount to some £1.3 billion. This provision would be a significant addition to that already significant sum.
The figure of £475 million greatly overstates the net benefit to the Exchequer from the changes, which would also have significant damaging effects on the British economy. That has to be faced. Key growth industries would be affected in many ways. They would face increased costs, which would be important in an internationally competitive market.
Other European countries are currently offering special deals to attract our information technology industry, because they are jealous of it. They are offering 35 per cent. income without taxation as an inducement to 749 IT workers to operate from continental Europe. Countries such as India are, to their great credit, becoming major players in the IT contracting business. They are low-cost and very good operators, and much of the industry would migrate to such countries.
The problem would be not only the employment loss, but the way in which entrepreneurship would be stifled. Important British companies—Logica is a good example—started with five or so freelance contractors working together as a team and grew into highly successful corporations. That is the nature of the industry in question.
§ Mr. BercowThe hon. Gentleman is developing an interesting case. Is he aware that on the Cabinet Office's website, under the heading of "The tests of good regulation", are listed the need for a regulation to have broad public support and also for it to be easy to understand? Does he agree that we cannot know whether the Government's proposal has broad public support, because it has been rushed forward with no test of public opinion? Does he also agree that, given the examples adumbrated by my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth), it is painfully obvious that the regulation is not easy to understand?
§ Dr. CableThe hon. Gentleman is right. The proposal does not meet many of the Cabinet Office's tests for regulations. There are 10, and it fails most of them.
I wish to suggest how the Government might proceed. The first step is to withdraw the proposal so as to enable proper consultation. It is not urgent that it should be implemented immediately. Even if it were implemented immediately, what need is there for it to be introduced in the next financial year? Many of the contracts it would affect would have to be unwound over a couple of years. The Government should allow more time for consultation and a longer period for implementation. They should also address the intervention by the hon. Member for Buckingham (Mr. Bercow) and produce a proper regulatory impact assessment of the change. It would be far reaching and involve major costs which should be spelt out explicitly.
§ Mr. ChopeFor the avoidance of doubt, I wish to declare an interest as a director of a small company, although because the new clause is so vague, it is impossible for me to tell the House whether it would affect me. This debate takes me back to 1976, when we were at the height of the previous Labour Government's assault on the self-employed, those in business on their own account and those employed in small businesses. At the time, I founded an association in Wandsworth for self-employed people.
I have been disappointed this evening by the Minister's recognition that he did not understand the new clause, when he responded to my intervention, and by the speech by the hon. Member for Ellesmere Port and Neston (Mr. Miller), who is not in his place at the moment. I know that he has been in contact with the Public Contractors Association, but he seems to take a much more relaxed approach to the issue than the association does. The association regards the new clause as outrageous, and is incensed and horrified by it. The hon. Gentleman rather made light of it, and referred to such irrelevancies as lump labour. This new clause is not about 750 lump labour; it is about the future of a thriving part of the United Kingdom economy—small businesses, and especially the IT sector.
10.15 pm
I agree with much of what the hon. Member for Twickenham (Dr. Cable) said. He called on the Government to withdraw the new clause. It is clear from what he and my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) said that there is nothing in the new clause that could not be included in next year's Finance Bill. Indeed, the Government have said that the second prong of the attack on what they regard as a problem will be a selection of clauses in next year's Finance Bill.
As the new clause recognises that the Treasury is in the lead on the issue, there is no reason why the whole of the new clause could not have been included in next year's Finance Bill. By then, consultation would have been complete, and the Government might have had second thoughts. I should be grateful if the Minister would explain why it is not possible to include these provisions in the Finance Bill next year—which was what the Chancellor's statement and Inland Revenue press release No. 35 had led people to believe would happen.
New clauses 15 and 16 are extremely sinister. The specious justification is that they will counter
avoidance in the provision of personal servicesby securing the tax base. That is what is set out in table 1.11 in the Red Book, and it is said that the measure will build a fairer society. However, this is effectively another new tax on small companies and those in business. It is another example of new Labour's new business dictionary, where the word "buttress" means "undermine". Inland Revenue press release No. 35 says:These changes buttress the new measures to support small and medium sized companies.The reverse is true—they will severely undermine such companies. The press release continues:Without the changes it would be very difficult to target support at genuine entrepreneurial activity".What a load of humbug; this is actually an attack on entrepreneurial activity.The Inland Revenue press release says that those workers who are employees and directors of service companies
often have to pay a price in terms of loss of protection under employment law.Therefore, I asked the Minister whether those people would receive a compensating benefit in return for the fact that class 1 national insurance contributions would be made payable by the so-called employer. In the end, after receiving information from officials, he told me—contrary to what he had originally said—that there would be no compensating benefit for those employers who were paying national insurance contributions for the first time as a result of these arrangements. That shows that the Government are all about imposing new burdens without any benefits whatever. When they talk about the Inland Revenue press release, they show mock concern for the interests of these small businesses.The Inland Revenue press release also says:
The proposed changes are aimed only at engagements with essential characteristics of employment",751 but the essence of a company that employs a director and employees is that that is the employment relationship. If a separate client wishes to engage that company, the contract is with that company, and the liabilities flow from that contractual relationship. With new clause 15, the Government seem to be totally undermining privity of contract and the essence of company law in this country.If the Government want to lift the veil of corporate responsibility, they should introduce a separate major Bill that redefines the role of companies. The Government have set up a major inquiry into the future of company law, but they are pre-empting it by picking out a few companies—a relatively small proportion of the total number in the United Kingdom, but far more than the 50,000 mentioned by the Minister—and penalising them with a burden of £0.5 billion.
Many ex-employees of large companies who become consultants, setting up their own information technology or other businesses, use the company format to develop their businesses. Many of the most successful businesses in the UK started off with one or two people, perhaps with the benefit of a redundancy payment, setting up a consultancy company and using their income to develop the business until it could employ others and grow. In Southampton, for example, a company started by someone made redundant by a television company is now a major public company worth hundreds of millions of pounds.
§ Sir Robert SmithAn added benefit of working as a company is that people can protect the intellectual property rights of any innovations that they make.
§ Mr. ChopeThat is another important point. People set up companies with open minds. They take advice and they decide to take the benefits and burdens of setting up. The Government say that they are trying to reduce burdens on small companies, but that is totally inconsistent with a new clause that will impose major new burdens, perhaps driving small companies out of business and certainly depriving them of vital working capital. The £450 million that the Exchequer says it will take from the business sector is £450 million that could be invested in wealth production.
New clauses 15 and 16 are an affront to democracy. They were tabled with minimum notice, giving minimal opportunity to discuss them. If they had been included in the Finance Bill, there would have been at least two weekends in which to discuss them and assess their implications. Instead, they were published on Friday. Fortunately, a group of people were suspicious of the Government's intentions, and they communicated the new clauses to our constituents. We have received several e-mails as a result, but that all happened by chance. The Government propose major changes to company law and contract law as well as national insurance and tax laws. To introduce such a change in such a way is absolutely outrageous. It makes a mockery of the Government's consultation.
If the new clause passes through this House, I hope that the Henry VIII clause will be struck out in the other place, which has already shown its intolerance of a similar clause in another Bill. That Bill has been held up and is being given detailed scrutiny by a Committee of the other
752 House. The Government have had to retreat, realising that their Henry VIII clause was constitutionally unconscionable, yet they are trying on the same thing in this House tonight. If they use their majority to force it through, I hope that the other place will remove subsection (9) of new clause 15.
These issues are of grave importance. There is no mention of a regulatory impact assessment. The Government have not thought the subject through. If they had, the Minister would have been able to answer straight away my question about whether the new employers would pay sickness benefit under this arrangement. That is just another example of how the measure is being rushed through.
Perhaps because the Government have difficulties in respect of invalidity and incapacity benefit with their own Back Benchers, they thought that they would be able to push this measure through without much publicity. I can assure the House that tens of thousands of companies and businesses are on the warpath. They realise that they have been gravely misled and let down by the Government and they will get their revenge.
§ Sir Robert SmithYou ruled that the timing of the new clause and the way in which the Government tabled it is in order, Madam Speaker. Unfortunately, they tabled it on a Thursday evening, when the next day's business is finished before the working day of other people. I had a chance to fax a copy of the new clause to the Institute of Chartered Accountants of Scotland. Even though it is an expert in the subject, it did not have time to come up with constructive amendments in the few hours that the Government had given us. Clearly, it was not in order to table unthought-out amendments at such short notice to a Government new clause. Therefore, I hope that the Government will withdraw the new clause.
As my hon. Friend the Member for Twickenham (Dr. Cable) said, the urgency is not necessarily there, but the potential to do damage is. It would seem to make more sense for the Government to tread carefully in this area and to listen to concerns expressed on both sides of the House in different ways and with different levels of vehemence. They should take on board the serious concern of many of our constituents about the fact that a way of working is about to be seriously disrupted. The Government should recognise that, for many people that way of working is not a result of consultation with accountants to minimise tax bills, but a natural progression in the way in which many industries have evolved.
The offshore oil industry in my area has evolved much project working. It has had to become a flexible industry to compete in the world market at a time when prices have fallen drastically. Therefore, contract working has developed naturally in that industry. The Government have failed to take on board the fact that if they want to change that whole culture, they should not do so at too short notice, too quickly.
§ Mr. John Swinney (North Tayside)Like the hon. Gentleman, I have received many representations from people involved in the North sea oil and gas industry. In the process of making those representations to the Government, along with many other hon. Members, I have been faced with the new clause. Does the hon.
753 Gentleman believe that it is important, if we are to keep the faith of our constituents in the work of this Parliament, that the consultation process should be allowed to take its course on other issues? The Government should withdraw the new clause to guarantee a more reasoned debate on this important subject, which would not prejudice or make Parliament lose faith with our constituents.
§ Sir Robert SmithYes, that statement is accurate and it follows on from what I said in an earlier intervention. When the Government have produced other legislation with regulatory powers, they have from time to time produced the draft regulations that they hoped that the powers would give them the chance to introduce. That way, one has a chance to gauge whether one wants to give the Government so much power. This time around, they are saying, "Give us the power. Trust us to undertake the consultation. Then we'll produce the regulations." As we all know, regulations are difficult, if not impossible to amend unless the Government decide to take them away to do so. It would be far better not to give Governments powers until they have shown that they are willing to handle them safely and carefully and to avoid doing damage.
We are talking not merely about individuals, but about a whole industry. At such short notice, it has been impossible to get back to constituents to clarify whether I could name them when dealing with figures that relate to them. One constituent is contracted to a company that has 125 people in its engineering design department, of whom only 12 per cent. are staff employees—between 15 and 20 per cent. are contract PAYE employees and the remaining 60 to 70 per cent. are employed through company contracts. The measure will mean immense extra costs for that company, if the Government change the whole regime overnight at the end of this financial year.
The Government have shown with previous oil industry taxes that they do not understood how competitive the world market is. They took about 18 months to recognise that in respect of the industry's fiscal regime. In taxing people working overseas, they did not recognise that many did not earn vast fortunes. A constituent tells me that he was clobbered when he found that his tax regime was changed halfway through a contract when he could not renegotiate it. Now the Government are attacking a whole way of working without notice or completing the consultation.
I reiterate what my hon. Friend the Member for Twickenham said: withdraw the clause and get this the right way round. The Revenue should carry out proper, two-way consultation. I understand from some of the Revenue documents that it will accept input but not comment on it or enter into a dialogue. To be effective, consultation requires dialogue. New clause 15 may be the wrong route to solve the problem. The Government will have taken the wrong power and not be able to tackle the problem appropriately.
The Government have not explained why new clause 15 had to be so last-minute. The Bill has been in Committee. Many of the points raised tonight would have been better addressed by informal dialogue with Ministers in Committee. The Minister did not answer them one at a time because he is waiting to sum up. Committee is a more effective way to deal with the nuts and bolts. I urge the Government to think again, and listen to constituents'
754 concerns and the effective points that have been made. The measure is premature and overbearing and should be withdrawn. They should return after consultation with a considered Bill.
§ Miss McIntoshI wish to elaborate on my earlier intervention by referring to my irate, outraged constituent from Staveley. He is operating as an IT company, but assures me that he pays—I am sure that his accountant would confirm it—his tax and national insurance by regular contributions. He is outraged by the Government's suggestion that he does not make such contributions regularly and further insulted by the fact that the consultation period has been negated by the late tabling of new clause 15.
Budget heading 28 in table 1.11 refers to
Countering avoidance in the provision of personal services".Inland Revenue press release 35 refers to the details. I repeat my request to the Minister to explain whether my constituents should regard it as standard practice that they learned about the implications of fundamental changes to the advantages of operating as a limited company by reading about them in an Inland Revenue press release.Conservative Members accept that outsourcing under contracting out and privatisation has meant that IT services in particular have blossomed. There is some nonsense in Inland Revenue press release 35, which states:
The Chancellor announced today that changes are to be introduced to counter avoidance in the area of personal service provision.Can the Minister explain why my constituent in Staveley is receiving notification that he will come under the new regime when he is already paying his tax and national insurance contributions?Perhaps the best line is in the notes for editors, which state:
Without the changes it would be very difficult to target support at genuine entrepreneurial activity—making such measures less effective and more costly.The Government's proposals will hamper the genuine entrepreneurial activity that we sought to encourage when we were in Government.I ask the Minister to respond to a further allegation that is made about the outcome of the new regulations. The Government want to close a loophole, so the Revenue has proposed a system whereby each engagement is tested to ascertain whether it is akin to employment. If the answer is yes and, in the Minister's words, there is a contract, it will be treated as such, with national insurance paid on the total salary. It is my understanding that at that stage there would be no opportunity to claim expenses and the reason for using the limited company would disappear. Is that the intention behind the new clause?
Inland Revenue press release 35 explains contractors'
loss of benefits when they move away from full-time PAYE positions, but it fails to reflect accurately the current set-up for the majority of contractors.As a result of privatisation and outsourcing, they have been encouraged to set up in a certain format. Many contractors, such as my irate constituent in Staveley, are firmly in the PAYE system and paying their national insurance and tax contributions.755 I end with the words of an IT contractor who, under the new provisions, would be affected negatively. He says:
Are we to see the current Government once again introducing a measure that will reduce the effectiveness of our IT industry, possibly putting up costs and resulting in an exodus of our most skilled consultants to the rest of the world where they are still seen as an invaluable commodity?If the Government insist on pushing the new clause to a vote, I urge the House to reject it.
§ Mr. BurnettI think that we all believe that individuals should pay their fair share of tax and that tax loopholes should be closed. Nevertheless, the new clause will bring about massive and far-reaching change, and it is not clear to me that the Government understand the repercussions of the clause. I have a number of questions arising out of the clause and I shall be grateful if the Minister would answer them.
First, how and what tests will be adopted to determine the tax and national insurance status of the companies and the individuals associated with them? Will the existing tests—the so-called badges of trade—continue to be used? In other words, is the only change envisaged by these regulations the assumption that the limited company does not exist and that it is the individual shareholders and employees who are deemed to be contracting with what I believe the regulations define as "the client"?
Secondly, will the Minister confirm that income tax treatment will always follow treatment for national insurance contributions and vice versa? Subsection (9) seems to cater for that, but I would be interested to know whether that will always happen.
Thirdly, we have heard much this evening about the absence of consultation. There has been virtually no consultation. What future consultations are proposed? As so many hon. Members have said this evening, should not the regulations come before the House under the affirmative resolution procedure? The power to draft and introduce the regulations lies only with the Treasury and the Secretary of State, and that is not good enough.
§ Mr. BercowDoes the hon. Gentleman think that it is extraordinary in these circumstances that the Government appear not to have undertaken any consultation, in the light of their stated commitment to the contrary as long ago as Budget day on 9 March? The hon. Gentleman will be aware that paragraph 4 on page 2 of the Government's press release on 9 March reads:
To this end"—that is to make an effective job of it—
the Inland Revenue will over the next few months be working with representative bodies on aspects of the practical application of the new rules and on the production guidance.Does he not think that it should be explained why, two and a quarter months later, that process has not been started?
§ Mr. BurnettIt is, of course, extremely worrying that consultations have not taken place. As I said earlier, the regulations are far reaching. It is not good enough, as I was saying before that intervention, that the new clause will be introduced at the whim and say-so of the Treasury 756 and the Secretary of State. The regulations are important and the House should have the opportunity to debate them, after significant consultation.
My fourth point is that most contracts will, rightly, have been negotiated and priced on the basis of the existing rules. There should be a transitional phase to allow a reasonable period for existing contracts to expire and new contracts to be negotiated.
Fifthly, what will happen if the service company retains all or part of the cash that it earns in a year? Will all the cash be deemed to be salary and distributed, and therefore be subject to PAYE and national insurance contributions? Is there to be any allowance for the costs and expenses of running the company, and the many other costs and expenses that the company may incur? It seems that we will return to the dark ages of shortfalls and apportionment of net relevant earnings by the back door.
Sixthly, is the Minister aware how many companies will be affected by the change? The regulations appear wide enough to catch most companies in this country. I sure that all hon. Members believe that it is right to close tax loopholes, but many individuals incorporate for very good reasons, not least limited liability and because, as we have heard this evening, incorporation is a condition precedent to being able to contract in the first place.
New clause 15 is uncertain, complex and far reaching. It will have a significant impact on British industry and the service sector. Both parties to contracts will end up paying substantial sums in national insurance contributions. I look forward to hearing the Minister's replies to my questions. I hope that, after lengthy and detailed consultation and amendment, the regulations will be brought before the House.
§ Mr. TimmsWe have had a lively and interesting debate on the measures. The proposals were announced by the Chancellor in the Budget a full year before they will take effect. A regulatory impact assessment will be issued in due course, once the details of the practical application of the new rules have been finalised. It will be based on input from business and other interested parties. The aim is to structure the rules so that any regulatory impact is minimised, and so that there need be no additional charge with respect to genuine entrepreneurial endeavour.
The right hon. Member for Bromley and Chislehurst (Mr. Forth), who is not in his place, raised some concerns on behalf of a constituent. The Inland Revenue is consulting at meetings—[Interruption.] I am glad to see that the right hon. Gentleman has rejoined us. The Inland Revenue is consulting at meetings on the details of how the scheme will work. That process is under way.
The letter from Elaine Carey to which the right hon. Gentleman referred set out the proposed approach, and I hope that his constituent will take the opportunity to pass his or her views on to Elaine Carey.
The measure represents a flexible approach that is helpful to business and deals with a serious problem.
§ Sir Robert SmithAs the impact assessment is still to be carried out, why does the Minister need the powers now?
§ Mr. TimmsI shall come to that. There are only a limited number of opportunities for those powers to be taken.
757 Service companies are an important part of the UK economy. We are seeking to stop their use for the purpose of disguising what is, in reality, employment. Our proposal is not a threat to flexibility. There is no bar to contracting. Instead, we are focusing on the need to ensure that national insurance and tax are not avoided.
My hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller) also raised points about consultation and drew attention to the welcome for our proposals from a number of quarters. The problem at the moment is that there is an uneven playing field, which is disadvantageous to major organisations, but I can assure him that we will consult fully with all relevant bodies. The Inland Revenue will work with representative bodies to ensure that the proposed new rules will work well in practice and that any administrative burden will be minimised.
The right hon. Member for Bromley and Chislehurst several times used the term "extracting money from business". We are requiring people to pay the tax and national insurance that is due from them. That is not an onerous burden at all; it will simply ensure that the opportunities for avoidance are reduced. That has been welcomed, and is seen as reasonable, across the House.
§ Mr. ForthSurely the point is that, to the extent to which the Minister's proposals are successful, businesses will have less money than they have now. That is almost bound to have an employment impact. What assessment has he made of the impact of him removing from businesses money that they have now, but will not have in future?
§ Mr. TimmsPeople will be paying the tax and national insurance that the House has determined is due from them. I do not accept that an adverse employment effect will result from that. The right hon. Gentleman also asked how many individuals would be involved and pressed me to give a figure. We estimate that up to 100,000 individuals could be involved.
§ Mr. BurnettThis is not only a one-way ticket, and incorporation has some significant fiscal disadvantage—for example, a double charge to capital gains tax. It has always been six of one and half a dozen of the other, so why introduce this particular penalty now?
§ Mr. TimmsBecause there are significant tax and national insurance advantages from proceeding in such a way. Some service companies are used as a device for disguising what is, in reality, employment. We want the regulations to address that.
The hon. Member for West Aberdeenshire and Kincardine (Sir R. Smith) raised some interesting points, asking how we could be certain that the power will be sufficiently flexible to make regulations following the outcome of consultation. He thought that we ought to have published some draft regulations already. The Inland Revenue will circulate draft regulations to interested associations—those which have expressed concern about what we are doing—and will listen to the feedback that is received from that consultation. Regulations are constantly reviewed and can be amended with relative ease, if it is discovered that amendment is necessary.
758 The hon. Gentleman also raised some interesting points about the oil sector. I explained at the outset the way that the proposed test would work and, as with any sector, a worker who has been engaged to carry out a project in the way that the hon. Gentleman described—he would control the manner and method of working—would be outside the provision. That is the way in which the test will apply.
§ Sir Robert SmithThere is a concern about the way in which many projects work. When carrying out parts of a project, a person would be working for a larger team and responsible to someone higher up in the organisation, but would still be working specifically for that project. A sledgehammer may be cracking a nut here, which will drive work in that sector abroad and damage the competitiveness of an industry that is in serous trouble and looking to have a world export market for its future.
§ Mr. TimmsI can assure the hon. Gentleman that we will be acutely sensitive to issues of competitiveness—in that sector and in others—when we draw up the regulations.
§ Mr. TimmsI want to move on to the points made by the hon. Member for Twickenham (Dr. Cable) in an interesting speech. As I have said to the hon. Member for West Aberdeenshire and Kincardine, nothing here affects people commissioned to carry out projects as consultants; neither, of course, do any of the changes affect self-employment. The hon. Member for Twickenham asked about cost and queried the figures that I gave. I gave the direct public sector costs to the Inland Revenue; I was not attempting to set out a full regulatory compliance assessment, which will be published in due course.
It is wrong that people should be able to avoid national insurance by means of the device that is being addressed in this measure. Many companies that offer those services pay proper tax and national insurance on their employees. The hon. Gentleman mentioned Logica. I worked for Logica for eight years and I assure him that at no time did that company prosper by avoiding national insurance.
Genuine entrepreneurial endeavours will not be penalised by this measure. The Government seek to support entrepreneurs. The trouble is that some people are not genuine entrepreneurs, but are employees, in all but name, through a service company. The problem that too often arises is that those people pay themselves disproportionately large dividends and a minimum salary—perhaps just above the lower earnings level—so that they qualify for contributory benefit and no more. By that device, they pay significantly less national insurance than they should. That is simply not fair on other workers who are employed directly and who do not avoid their national insurance contributions.
Many measures in the Budget improve support for small, innovative companies, such as the extension of enhanced capital allowances for small and medium-sized business, and investment in machinery or plant. It is important that that support and the measures that the
759 Government are taking on that front are not undermined by those who seek to disguise avoidance as entrepreneurship. That is what the measures would tackle.
§ Mr. BradyThe House is being asked to agree to sweeping new powers, which can be changed almost at whim, and we have not even seen the draft regulations. Will the Minister guarantee that the House will have a chance to debate and vote on the regulations, once those are available?
§ Mr. TimmsI shall come to that question in a moment, because others have raised it as well. First, let me comment on the points made by the hon. Member for Christchurch (Mr. Chope), who asked why we could not introduce the measure in next year's Finance Bill. The convention is that national insurance is outside the scope of Finance Bills, and must be dealt with in social security legislation. This is our opportunity to deal with the matter, which is why we are introducing it now.
§ Mr. TimmsBecause, as the hon. Gentleman knows, the responsibility for national insurance policy has been transferred to the Treasury through the Contributions Agency transfer legislation, which a number of us enjoyed debating not long ago. However, this is still a matter for social security legislation.
The hon. Member for Torridge and West Devon (Mr. Burnett) asked for assurance that the income tax and national insurance procedures around this change will be carefully aligned. They will, and he is absolutely right to say that subsection (9) allows us to achieve that. It is important that we achieve that, and that is how we shall proceed. The regulations that will put the measure into effect will be subject to the negative procedure, as is standard for national insurance measures. The House will then have the opportunity to debate them if it chooses to do so.
This important measure closes a significant loophole in the legislation, which loses the national insurance fund hundreds of millions of pounds—£216 million in the long term. That is less than some hon. Members have said, but it is a substantial sum. We cannot, as the hon. Member for Twickenham suggested, sit around and do nothing and take our time over this matter. We must move swiftly to deal with the problem. We must ensure that, from April next year, there is not the unlevel playing field that I have described, and that people are required to pay the national insurance that the House has determined is due from them.
§ Mr. Duncan SmithI have never heard such a lot of rubbish in my life. Labour Members are sitting there like a bunch of sheep. Half of them have not even bothered to read this new clause. As my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) correctly said, the new clause is breathtaking. I have never seen anything quite like it. It moves from being a Henry XIII clause to being a Louis XIV clause—absolute power to the absolute monarch—before any consultation.
The Minister quietly slipped out the fact that the regulations will subsequently be subject to the negative procedure of the House. There will not be even a limited 760 ability to debate them. As my right hon. Friend said, the most breathtaking part is new subsection 9, which states that
the Treasury may with the concurrence of the Secretary of State"—forget about that now; this lot are no longer in charge because the Government passed national insurance contributions to the Treasury—by order make such modifications of the preceding provisions of this section as the Treasury think appropriate for that purpose.So there we have it. The Treasury can tear up the new clause any time it likes by order. They do not have to come back to the House. The whole thing is appalling.Late in the day, after we have been through Committee stage, the Government dump this massive element into a Bill, which allows for only a limited amount of debate and no real scrutiny. The Government have set the benchmark for scrutinising the Bill. Their document, "The Better Regulation Guide", comes from the Cabinet Office: I gather that the unit is chaired by Lord Haskins. One wonders when Lord Haskins will realise that the Government do not bother to find out what business wants, but perhaps that is in his interest.
In the foreword to the document, the Prime Minister says:
A fair, decent and safe society depends on good regulation.This measure is clearly not that. The Prime Minister goes on:The intended benefits of regulation disappear, often to be replaced by less choice, higher prices and lower employment and investment. This can be particularly damaging to our small firms.Having ignored the first part, he says:I have therefore decided that no regulatory proposal which has an impact on business, charities and voluntary bodies should be considered by the Government without a thorough assessment of the risks, costs and benefits, a clear analysis of who will be affected and an explanation of why non-regulatory action would be insufficient.Those are the Prime Minister's own words. No doubt, the Chancellor does not think that the Prime Minister is in charge, and takes his own view.The Minister says, "Don't worry. At some point in the future, these assessments will be made", but all the regulations are in the new clause. He does not have to listen to the consultations. Why should he bother? He can dismiss them and tear up anything that he likes, because he has the power. It is outrageous.
This document sets out the process: formal consultation followed by the achievement of compliance, the enforcement regime, sanctions and the appeals procedure. Right at the end, it says:
At this stage you will be ready to put specific recommendations to Ministers for them to make final decisions. You will need to present the responsible Minister with the Regulatory Impact Assessment for him or her to sign.That should be done before we get to that stage, not after. The Minister tells us not to worry, because we should trust him. Trust the Government? The Government do not care. They have imposed £39 billion of extra cost on business since they came to office, and now this.What the Government have produced is an outrage. They have dumped this provision into the Bill at this late stage. As Opposition Members have said, many people in the oil, IT and building industries will suffer extra costs.
When will the Government realise that competition is not just here in the United Kingdom? When will this Government who believe in a greater Europe realise that 761 outside the United Kingdom is a competitive area, for whose purposes they will hamstring British business? They will have done untold damage, and we should vote against the new clause.
§ Question put, That the clause be read a Second time:
§ The House divided: Ayes 375, Noes 182.
765| Division No. 180] | [11 pm |
| AYES | |
| Abbott, Ms Diane | Clark, Paul (Gillingham) |
| Adams, Mrs Irene (Paisley N) | Clarke, Charles (Norwich S) |
| Ainger, Nick | Clarke, Eric (Midlothian) |
| Ainsworth, Robert (Cov'try NE) | Clarke, Rt Hon Tom (Coatbridge) |
| Alexander, Douglas | Clarke, Tony (Northampton S) |
| Allen, Graham | Clelland, David |
| Anderson, Donald (Swansea E) | Clwyd, Ann |
| Anderson, Janet (Rossendale) | Coaker, Vernon |
| Armstrong, Rt Hon Ms Hilary | Coffey, Ms Ann |
| Ashton, Joe | Cohen, Harry |
| Atherton, Ms Candy | Coleman, Iain |
| Atkins, Charlotte | Colman, Tony |
| Austin, John | Connarty, Michael |
| Banks, Tony | Corbett, Robin |
| Barnes, Harry | Corbyn, Jeremy |
| Barron, Kevin | Corston, Ms Jean |
| Battle, John | Cousins, Jim |
| Bayley, Hugh | Cox, Tom |
| Beard, Nigel | Cranston, Ross |
| Beckett, Rt Hon Mrs Margaret | Crausby, David |
| Begg, Miss Anne | Cryer, John (Hornchurch) |
| Bell, Stuart (Middlesbrough) | Cummings, John |
| Benn, Rt Hon Tony | Cunningham, Rt Hon Dr Jack |
| Bennett, Andrew F | Cunningham, Jim (Cov'try S) |
| Benton, Joe | (Copeland) |
| Bermingham, Gerald | Curtis—Thomas, Mrs Claire |
| Berry, Roger | Dalyell, Tam |
| Best, Harold | Darling, Rt Hon Alistair |
| Betts, Clive | Darvill, Keith |
| Blears, Ms Hazel | Davey, Valerie (Bristol W) |
| Blizzard, Bob | Davidson, Ian |
| Blunkett, Rt Hon David | Davies, Rt Hon Denzil (Llanelli) |
| Boateng, Paul | Davies, Geraint (Croydon C) |
| Borrow, David | Dawson, Hilton |
| Bradley, Keith (Withington) | Dean, Mrs Janet |
| Bradley, Peter (The Wrekin) | Denham, John |
| Bradshaw, Ben | Dismore, Andrew |
| Brinton, Mrs Helen | Dobbin, Jim |
| Brown, Rt Hon Gordon | Donohoe, Brian H |
| (Dunfermline E) | Doran, Frank |
| Brown, Rt Hon Nick (Newcastle E) | Dowd, Jim |
| Brown, Russell (Dumfries) | Drew, David |
| Browne, Desmond | Drown, Ms Julia |
| Buck, Ms Karen | Dunwoody, Mrs Gwyneth |
| Burden, Richard | Eagle, Angela (Wallasey) |
| Burgon, Colin | Eagle, Maria (L'pool Garston) |
| Butler, Mrs Christine | Edwards, Huw |
| Byers, Rt Hon Stephen | Efford, Clive |
| Campbell, Alan (Tynemouth) | Ellman, Mrs Louise |
| Campbell, Mrs Anne (C'bridge) | Ennis, Jeff |
| Campbell, Ronnie (Blyth V) | Field, Rt Hon Frank |
| Campbell—Savours, Dale | Fisher, Mark |
| Canavan, Dennis | Fitzpatrick, Jim |
| Cam, Jamie | Fitzsimons, Lorna |
| Caplin, Ivor | Flynn, Paul |
| Casale, Roger | Follett, Barbara |
| Caton, Martin | Foster, Michael Jabez (Hastings) |
| Cawsey, Ian | Foster, Michael J (Worcester) |
| Chapman, Ben (Wirral S) | Foulkes, George |
| Chaytor, David | Fyfe, Maria |
| Clapham, Michael | Galbraith, Sam |
| Clark, Rt Hon Dr David (S Shields) | Gapes, Mike |
| Clark, Dr Lynda | Gardiner, Barry |
| (Edinburgh Pentlands) | George, Bruce (Walsall S) |
| Gerrard, Neil | Ladyman, Dr Stephen |
| Gibson, Dr Ian | Lawrence, Ms Jackie |
| Gilroy, Mrs Linda | Laxton, Bob |
| Godman, Dr Norman A | Lepper, David |
| Godsiff, Roger | Leslie, Christopher |
| Goggins, Paul | Levitt, Tom |
| Gordon, Mrs Eileen | Lewis, Ivan (Bury S) |
| Griffiths, Jane (Reading E) | Lewis, Terry (Worsley) |
| Griffiths, Nigel (Edinburgh S) | Liddell, Rt Hon Mrs Helen |
| Griffiths, Win (Bridgend) | Linton, Martin |
| Grocott, Bruce | Lloyd, Tony (Manchester C) |
| Grogan, John | Lock, David |
| Gunnell, John | Love, Andrew |
| Hain, Peter | McAllion, John |
| Hall, Mike (Weaver Vale) | McAvoy, Thomas |
| Hall, Patrick (Bedford) | McCabe, Steve |
| Hamilton, Fabian (Leeds NE) | McCafferty, Ms Chris |
| Harman, Rt Hon Ms Harriet | McCartney, Rt Hon Ian |
| Heal, Mrs Sylvia | (Makerfield) |
| Healey, John | McDonagh, Siobhain |
| Henderson, Doug (Newcastle N) | Macdonald, Calum |
| Henderson, Ivan (Harwich) | McDonnell, John |
| Hepburn, Stephen | McGuire, Mrs Anne |
| Heppell, John | McIsaac, Shona |
| Hesford, Stephen | McKenna, Mrs Rosemary |
| Hewitt, Ms Patricia | Mackinlay, Andrew |
| Hinchliffe, David | McLeish, Henry |
| Hodge, Ms Margaret | McNamara, Kevin |
| Hoey, Kate | McNulty, Tony |
| Home Robertson, John | MacShane, Denis |
| Hood, Jimmy | Mactaggart, Fiona |
| Hoon, Geoffrey | McWalter, Tony |
| Hope, Phil | Mahon, Mrs Alice |
| Hopkins, Kelvin | Mallaber, Judy |
| Howarth, Alan (Newport E) | Mendelson, Rt Hon Peter |
| Howarth, George (Knowsley N) | Marsden, Gordon (Blackpool S) |
| Howells, Dr Kim | Marsden, Paul (Shrewsbury) |
| Hoyle, Lindsay | Marshall, David (Shettleston) |
| Hughes, Ms Beverley (Stretford) | Marshall—Andrews, Robert |
| Hughes, Kevin (Doncaster N) | Martlew, Eric |
| Humble, Mrs Joan | Maxton, John |
| Hurst, Alan | Meacher, Rt Hon Michael |
| Hutton, John | Meale, Alan |
| Iddon, Dr Brian | Merron, Gillian |
| Illsley, Eric | Michael, Rt Hon Alun |
| Ingram, Rt Hon Adam | Michie, Bill (Shefld Heeley) |
| Jackson, Ms Glenda (Hampstead) | Milbum, Rt Hon Alan |
| Jackson, Helen (Hillsborough) | Miller, Andrew |
| Jamieson, David | Mitchell, Austin |
| Jenkins, Brian | Moffatt, Laura |
| Johnson, Alan (Hull W & Hessle) | Moonie, Dr Lewis |
| Johnson, Miss Melanie | Moonie, Dr Lewis |
| (Welwyn Hatfield) | Morgan, Ms Julie (Cardiff N) |
| Jones, Barry (Alyn & Deeside) | Morley, Elliot |
| Jones, Mrs Fiona (Newark) | Morris, Ms Estelle (B'ham Yardley) |
| Jones, Helen (Warrington N) | Morris, Rt Hon John (Aberavon) |
| Jones, Ms Jenny | Mountford, Kali |
| (Wolverh'ton SW) | Mowlam, Rt Hon Marjorie |
| Jones, Jon Owen (Cardiff C) | Mowlam, Rt Hon Marjorie |
| Jones, Dr Lynne (Selly Oak) | Mullin, Chris |
| Jones, Martyn (Clwyd S) | Murphy, Denis (Wansbeck) |
| Jowell, Rt Hon Ms Tessa K | Murphy, Denis (Wansbeck) |
| kaufman, Rt Hon Gerald | Murphy, Denis (Wansbeck) |
| Keeble, Ms Sally | Murphy, Denis (Wansbeck) |
| Keen, Alan (Fettham & Heston) | O'Brien, Mike (N Warks) |
| Keen, Ann (Brentford & Isleworth) | O'Brien, Mike (N Warks) |
| Kelly, Ms Ruth | Olner, Bill |
| Kemp, Fraser | O'Neill, Martin |
| Kennedy, Jane (Wavertree) | Organ, Mrs Diana |
| Khabra, Piara S | Osborne, Ms Sandra |
| Kidney, David | Pearson, Ian |
| Kiifoyle, Peter | Pendry, Tom |
| King, Andy (Rugby & Kenilworth) | Perham, Ms Linda |
| King, Ms Oona (Bethnal Green) | Pickthall, Cohn |
| Kingham, Ms Tess | Pike, Peter L |
| Kumar, Dr Ashok | Plaskitt, James |
| Pollard, Kerry | Stevenson, George |
| Pond, Chris | Stewart, David (Inverness E) |
| Pope, Greg | Stinchcombe, Paul |
| Pound, Stephen | Stoate, Dr Howard |
| Powell, Sir Raymond | Stott, Roger |
| Prentice, Ms Bridget (Lewisham E) | Strang, Rt Hon Dr Gavin |
| Prentice, Gordon (Pendle) | Straw, Rt Hon Jack |
| Primarolo, Dawn | Stringer, Graham |
| Prosser, Gwyn | Stuart, Ms Gisela |
| Purchase, Ken | Sutcliffe, Gerry |
| Quinn, Lawrie | Taylor, Rt Hon Mrs Ann |
| Radice, Giles | (Dewsbury) |
| Rammell, Bill | Taylor, Ms Dari (Stockton S) |
| Raynsford, Nick | Temple-Morris, Peter |
| Reid, Rt Hon Dr John (Hamilton N) | Thomas,Gareth(Clwyd W) |
| Robertson, Rt Hon George | Thomas, Gareth R (Harrow W) |
| (Hamilton S) | Timms Stephen |
| Robinson, Geoffrey (Cov'try NW) | Tipping, Paddy |
| Roche, Mrs Barbara | Todd, Mark |
| Rooker, Jeff | Touhig, Don |
| Rooney, Terry | Trickett, Jon |
| Ross, Ernie (Dundee W) | Truswell, Paul |
| Rowlands, Ted | Turner, Dennis (Wolverh'ton SE) |
| Roy, Frank | Turner, Dr Desmond (Kemptown) |
| Ruane, Chris | Turner, Dr George (NW Norfolk) |
| Ruddock, Joan | Twigg, Derek (Halton) |
| Russell, Ms Christine (Chester) | Twigg, Stephen (Enfield) |
| Ryan, Ms Joan | Vaz, Keith |
| Satter, Martin | Vis, Dr Rudi |
| Sarwar, Mohammad | Walley, Ms Joan |
| Savidge, Malcolm | Ward, Ms Claire |
| Sawford, Phil | Wareing, Robert N |
| Sedgemore, Brian | Watts, David |
| Shaw, Jonathan | White, Brian |
| Sheldon, Rt Hon Robert | Whitehead, Dr Alan |
| Short, Rt Hon Clare | Wicks, Malcolm |
| Simpson, Alan (Nottingham S) | Williams, Rt Hon Alan |
| Singh, Marsha | (Swansea W) |
| Skinner, Dennis | Williams, Alan W (E Carmarthen) |
| Smith, Rt Hon Andrew (Oxford E) | Williams, Mrs Betty (Conwy) |
| Smith, Angela (Basildon) | Wills, Michael |
| Smith, Rt Hon Chris (Islington S) | Wilson, Brian |
| Smith, Miss Geraldine | Winnick, David |
| (Morecambe & Lunesdale) | Winterton, Ms Rosie (Doncaster C) |
| Smith, Jacqui (Redditch) | Wise, Audrey |
| Smith, John (Glamorgan) | Wood, Mike |
| Smith, Llew (Blaenau Gwent) | Woolas, Phil |
| Snape, Peter | Worthington, Tony |
| Soley, Clive | Wright, Anthony D (Gt Yarmouth) |
| Southworth, Ms Helen | Wright, Dr Tony (Cannock) |
| Spellar, John | Wyatt, Derek |
| Squire, Ms Rachel | Tellers for the Ayes: |
| Starkey, Dr Phyllis | Mr. David Hanson and |
| Steinberg, Gerry | Mr. Keith Hill. |
| NOES | |
| Ainsworth, Peter (E Surrey) | Brake, Tom |
| Allan, Richard | Brazier, Julian |
| Amess, David | Breed, Colin |
| Ancram, Rt Hon Michael | Brooke, Rt Hon Peter |
| Arbuthnot, Rt Hon James | Browning, Mrs Angela |
| Ashdown, Rt Hon Paddy | Bruce, Malcolm (Gordon) |
| Atkinson, Peter (Hexham) | Burnett, John |
| Ballard, Jackie | Burns, Simon |
| Beggs, Roy | Burstow, Paul |
| Beith, Rt Hon A J | Butterfill, John |
| Bell, Martin (Tatton) | Cable, Dr Vincent |
| Bercow, John | Campbell, Rt Hon Menzies |
| Beresford, Sir Paul | (NE Fife) |
| Blunt, Crispin | Cash, William |
| Body, Sir Richard | Chapman, Sir Sydney |
| Boswell, Tim | (Chipping Barnet) |
| Bottomley, Peter (Worthing W) | Chidgey, David |
| Bottomley, Rt Hon Mrs Virginia | Chope, Christopher |
| Brady, Graham | Clappison, James |
| Clifton—Brown, Geoffrey | Maclennan, Rt Hon Robert |
| Colvin, Michael | McLoughlin, Patrick |
| Cormack, Sir Patrick | Maples, John |
| Cotter, Brian | Mates, Michael |
| Cran, James | Maude, Rt Hon Francis |
| Cunningham, Ms Roseanna | Mawhinney, Rt Hon Sir Brian |
| (Perth) | May, Mrs Theresa |
| Davey, Edward (Kingston) | Michie, Mrs Ray (Argyll & Bute) |
| Davies, Quentin (Grantham) | Moore, Michael |
| Davis, Rt Hon David (Haltemprice & Howden) | Morgan, Alasdair (Galloway) |
| Moss, Malcolm | |
| Day, Stephen | Nicholls, Patrick |
| Donaldson, Jeffrey | Oaten, Mark |
| Duncan, Alan | Öpik, Lembit |
| Duncan Smith, Iain | Ottaway, Richard |
| Emery, Rt Hon Sir Peter | Page, Richard |
| Evans, Nigel | Paice, James |
| Ewing, Mrs Margaret | |
| Paterson, Owen | |
| Faber, David | Pickles, Eric |
| Fabricant, Michael | Prior, David |
| Fallon, Michael | Redwood, Rt Hon John |
| Forsythe, Clifford | Rendel, David |
| Forth, Rt Hon Eric | Robathan, Andrew |
| Foster, Don (Bath) | Robertson, Laurence (Tewk'b'ry) |
| Fox, Dr Liam | Roe, Mrs Marion (Broxbourne) |
| Fraser, Christopher | Rowe, Andrew (Faversham) |
| Gale, Roger | Ruffley, David |
| Garnier, Edward | Russell, Bob (Colchester) |
| George, Andrew (St Ives) | St Aubyn, Nick |
| Gibb, Nick | Salmond, Alex |
| Gill, Christopher | Sanders, Adrian |
| Gillan, Mrs Cheryl | Sayeed, Jonathan |
| Gorman, Mrs Teresa | Shephard, Rt Hon Mrs Gillian |
| Gorrie, Donald | Simpson, Keith (Mid-Norfolk) |
| Gray, James | Smith, Sir Robert (W Ab'd'ns) |
| Green, Damian | Smyth, Rev Martin (Belfast S) |
| Greenway, John | |
| Soames, Nicholas | |
| Grieve, Dominic | Spicer, Sir Michael |
| Gummer, Rt Hon John | Spring, Richard |
| Hamilton, Rt Hon Sir Archie | Stanley, Rt Hon Sir John |
| Hammond, Philip | Streeter, Gary |
| Harvey, Nick | Stunell, Andrew |
| Hawkins, Nick | Swayne, Desmond |
| Hayes, John | Swinney, John |
| Heath, David (Somerton & Frome) | Syms, Robert |
| Heathcoat—Amory, Rt Hon David | Tapsell, Sir Peter |
| Hogg, Rt Hon Douglas | Taylor, Ian (Esher & Walton) |
| Horam, John | Taylor, Rt Hon John D (Strangford) |
| Howard, Rt Hon Michael | Taylor, Matthew (Truro) |
| Howarth, Gerald (Aldershot) | Taylor, Sir Teddy |
| Hunter, Andrew | Thompson, William |
| Jack, Rt Hon Michael | Tonge, Dr Jenny |
| Jackson, Robert (Wantage) | |
| Townend, John | |
| Jenkin, Bernard | Tredinnick, David |
| Jones, Nigel (Cheltenham) | Trend, Michael |
| Keetch, Paul | |
| Tyler, Paul | |
| Key, Robert | Tyrie, Andrew |
| King, Rt Hon Tom (Bridgwater) | Viggers, Peter |
| Kirkbride, Miss Julie | Wardle, Charles |
| Kirkwood, Archy | Waterson, Nigel |
| Laing, Mrs Eleanor | Webb, Steve |
| Lait, Mrs Jacqui | Wells, Bowen |
| Lansley, Andrew | Welsh, Andrew |
| Leigh, Edward | Whitney, Sir Raymond |
| Letwin, Oliver | Whittingdale, John |
| Lewis, Dr Julian (New Forest E) | Widdecombe, Rt Hon Miss Ann |
| Lidington, David | Wilkinson, John |
| Livsey, Richard | Willetts,David |
| Lloyd, Rt Hon Sir Peter (Fareham) | |
| Llwyd, Etfyn | |
| Loughton, Tim | |
| Luff, Peter | |
| Lyell, Rt Hon Sir Nicholas | |
| MacGregor, Rt Hon John | |
| McIntosh, Miss Anne | |
| MacKay, Rt Hon Andrew |
| Willis, Phil | Tellers for the Noes: |
| Woodward, Shaun | Mr. Oliver Heald and |
| Yeo, Tim | Mr. Tim Collins. |
| Young, Rt Hon Sir George |
§ Question accordingly agreed to.
§ Clause read a Second time, and added to the Bill.