§ Question proposed, That the clause stand part of the Bill.
§ Mr. Flight
There is a broad measure of agreement between hon. Members on both sides about the merits of employee share ownership. The changes introduced by the clause are intended to provide relief and make more flexible the share incentive plan or SIP arrangements, save-as-you-earn option schemes and the company share option plan or CSOP.
353 I believe passionately that as many people as possible should own shares in the businesses for which they work. All the evidence shows that companies with widespread employee share ownership perform better and have much better human relations. Such ownership clearly engenders an owner-employer mentality rather than a them-and-us mentality. Businesses such as the John Lewis Partnership, which has succeeded so well on the back of employee share ownership, are legendary.
The arrangements generally give greater flexibility in the administration of share plans. That includes, for example, the removal of the former requirement that, in order to be tax-free, a CSOP option must be exercised more than three years after a previous tax-free exercise. Furthermore, an individual will be able to participate in more than one connected SIP in a tax year—that is, he can participate in one or more approved SIPs established by his company or a connected one. However, three aspects of the arrangements are unsatisfactory, and the industry and associated advisers, including ProShare and many of those concerned with encouraging employee share ownership, have made criticisms and contacted the Treasury to seek changes.
Of particular concern is the change to rules about pay-as-you-earn and the national insurance contribution in relation to CSOPs exercised within three years of grant. The change is clearly unfair and will cause some problems. It should logically apply to options granted on or after 9 April this year, rather than options exercised after that date. The change to options exercised on or after 9 April has two implications for companies that are retrospective in nature.
The employer will now be responsible for withholding PAYE and NICs from employees, although he can under law deduct those payments from an employee's cash pay. There are strict rules in that regard. If the employee has already been paid for the month or his net pay is insufficient for deduction of the new PAYE and NIC liability, the employer will not have sufficient funds to pay the required sums to the Revenue. It is extremely rare for approved plans, unlike unapproved ones, to contain a provision to prevent exercise of the option if satisfactory arrangements to deal with PAYE and NICs cannot be made. The reason for that is that such provision has not been necessary in the past, as there has been no obligation to apply NICs or PAYE.
The new rule will therefore mean that employers will often have to pay PAYE and NICs without having any practical method of recovering the costs from employees. The employer will also have their own NIC liability on the exercise of the options. Typically, it will be set at 12.8 per cent. of the employee's option gain. As the new rules apply to options exercised on or after 9 April this year, the employer will have a new liability for which they could not previously have provided. When the NIC rules were amended to allow employers to transfer to employees the NIC liability on unapproved share schemes, many companies attempted to include such provisions in their approved share option plans as insurance against NICs being charged to them, but the Inland Revenue refused to approve share option plans that contained such provision.
354 A point of principle is at stake. The Government's argument for applying NIC on unapproved plans was that gains from such plans were liable to income tax, so the contributions went together. Approved plans remain under the capital gains tax regime, however, so there is an issue of principle about whether it is appropriate to charge NICs at all.
§ Mr. Djanogly
My hon. Friend makes a good point in saying that, when people try to amend approved schemes, the Inland Revenue throw them out of the door. We are talking not only about a tax implication, but significant cost implications, because many professionals will have to be paid to redo schemes.
§ 3 pm
§ Mr. Flight
I thank my hon. Friend for that accurate point.
I apologise, Mr. McWilliam, for not having welcomed you to the chairmanship of our proceedings. It has always been a great pleasure to have you as Chairman in Finance Bill Committees.
The proposed arrangements will require trustees to maintain records of those who have participated in one or more approved share incentive plans. That presents a problem in that, to maintain records of such participants, the trustees will need the full requisite information. It should not be a breach of the plan conditions if the trustees fail to maintain such records as a result of not receiving the necessary information from the company or the participants concerned.
The retrospective nature of the application of NIC charges to company share option plans will particularly hit companies that allow employees to take options with them when they leave. Such a company would find itself paying the PAYE tax and employees' NICs, as well as the employer's NICs, and would be lucky to make the payments to the accounts office in time, assuming that it knows that the exercise has taken place. Indeed, despite the statement in the Budget notes that the motivation behind the provisions is to close a loophole, there is a broad belief in the share scheme world that CSOPs have not been promoted as an NIC mitigation tool, especially given the continued low limit of only £30,000 of participation.
Companies sometimes seek to maintain approved status during a takeover as part of their general tax and NIC arrangements. In that context, some small firms may have tried to sell the CSOP to private companies that are looking for an exit on the full understanding that the options would be exercised within three years without the NIC liability being payable. Many of those companies can now benefit from the EM—executive management incentive—plan arrangements and can exercise them when they wish without paying any tax or NICs, but those that cannot benefit from EMI will now be in a less advantageous position whereby they use the CSOP instead. The chief concern is that the provision applies to all existing options. Although the provisions that allow employers to transfer their NIC charges to the employee can apply to CSOP options, it is extremely difficult to make that happen. This is a fundamental issue. The Government may ultimately decide that the measure will not yield much tax, but if the legislation has to change, it should apply only to future, not existing, option grants.
355 Another aspect of the proposals is intended to be helpful, but looks to be unworkable—that is, the changes to ease the complexity of the dividend share provisions. Those are contained in paragraphs 9 to 15 of the schedule, which we will debate Upstairs. I understand that the Government recognise the weakness of the proposals and intend to withdraw them for reconsideration. I should be grateful if the Paymaster General could confirm that.
Another important issue is the threat to employee share ownership in the shape of the proposed requirement by the International Accounting Standards Board that all forms of subsidy towards employee share ownership are charged to the profit and loss account. It is clearly understood that the background to that is abuse in the US, but if it becomes the accounting rule here, it will lead to a major contraction in employee share schemes and do much more to undermine the positive aspects of clause 138 and the accompanying schedule. It is, of course, not for politicians or Governments to tell the professional accounting bodies what to do, but it is important that they realise the extent of the threat to employee share ownership. The theoretical accounting arguments are very much balanced on both sides.
Conservative Members want to ensure maximum employee share ownership for the good of businesses, the good of individuals and the overall good of our economy.
§ Mr. Burnett
I, too, welcome you to the chairmanship of the Committee, Mr. McWilliam.
The notes to the Bill state that clause 138 deals with
tax relieved, employee share and share option schemes designed to encourage employees to identify with the success and growth of the companies for which they work.Of course, we support that aim.
An increasing amount of legislation, certainly in Finance Bills, is increasingly complicated, and Opposition Members rely heavily on briefings from outside bodies. The hon. Member for Arundel and South Downs (Mr. Flight) highlighted the problems with the clause, which is designed to simplify procedures. Will the Paymaster General tell us what consultations the Government have had with professional bodies such as the Law Society, the Institute of Chartered Accountants, other accountancy bodies, the Bar Council and the Chartered Institute of Taxation? I hope that the Government will listen not only to the submissions of the hon. Member for Arundel and South Downs, but to those of the professional bodies. It is in all our interests to have a satisfactory, tax-efficient, un-bureaucratic system that encourages employee share ownership and acts as a first-class incentive to employees. It is important that employees feel part of the ownership of an organisation. Organisations that have such schemes are shown time and again to thrive and grow.
§ Mr. Djanogly
At a time when many, if not most, option holders have been saying that their options are going underwater and that their participation in the equity of their company is being wrecked, why do the Government feel that now is the time to start cracking down even further on such schemes? With 600,000 jobs 356 lost, tough times and low productivity in the manufacturing sector, is not this the time to encourage share participation and involvement by employees? To that end, why does not the clause, rather than punishing people through tax, increase the use of approved schemes by, for instance, raising the limit of £30,000 to £100,000?
§ Dawn Primarolo
First, I want to remind hon. Members of the huge amount of taxpayers' money that we commit to supporting share ownership. Combined tax and national insurance means that the figure is rising to just under £1 billion a year, involving approximately 2.5 million employees. That figure is also rising.
The hon. Member for Arundel and South Downs (Mr. Flight) is right to extol the virtues of approved employee share ownership schemes in their varying guises in not only rewarding employees but giving them a stake in their company. That leads to the associated benefits in productivity and staff commitment. He will also know that many views exist about the administration of such schemes. As David Cohen, head of employee incentives at Norton Rose, explained recently in an article on the proposals for employee share schemes:This is an area of Tax Law which"—he phrases it delicately—has always been an active battleground between the Revenue and Tax Payers.That has happened not recently, but over time. He continues:The Revenue's abiding concern is that share schemes will be used to remunerate employeesin a way that is proper. He points out that often, taxpayers are motivated to do exactly what the Inland Revenue is trying to minimise.
It has always been a Government objective and, I presume, a goal of the previous Government, to try to ensure that the patchwork of rules and regulations that have built up over the years should be as clear and simple as possible, given that the subject is already complex.
Let me deal briefly with consultation. Over several years, the Inland Revenue has been in extensive dialogue with the representative bodies, especially those that are most concerned with employee share ownership schemes. Many comments have been made over that period about desired changes to legislation. The Inland Revenue drew on those dialogues and representations in drafting the changes that are incorporated in the Bill. I recommend the article by David Cohen in this week's "Tax Journal", which clearly sets out the main principles that needed to be tackled and would be helpful to the scheme. I am eternally grateful that they bear a startling, almost identical resemblance to the Government's actions. Dialogue and consultation have therefore been going on for some time.
Consultation does not always guarantee that there will no subsequent changes. The hon. Member for Arundel and South Downs referred to that. Sometimes representative bodies recommend actions about which they might not have consulted extensively in their organisations. They might subsequently find that they do not quite fit. I will deal with that and the changes that the Government might make later.
357 The clause introduces several changes to employee share schemes to make them simpler and more flexible, with the caveat that they are not necessarily straightforward in the first place.
The provision is focused on the tax and national insurance advantage of approved share schemes. The Government remain committed to employee share schemes as an important means of increasing productivity. We acknowledge the positive effects of staff motivation. For example, a large proportion of the FTSE 100 companies have some sort of approved scheme. More than 850 companies granted more than 4,500 options under the enterprise management initiative in 2001–02. Executive management incentive—EMI—was introduced for the smallest and newest companies to help them to recruit and reward the high-calibre staff that they need in order to grow.
Even during the current low in the stock market, companies have continued to introduce and develop their employee share schemes because they are a longterm investment. They are intended not to provide short-term gain but to give employees a long-term interest in the success of the company for which they work.
The changes that clause 138 introduces are only the latest in a series of improvements that we have continued to make to employee share schemes. Other provisions introduce the statutory corporation tax deduction for companies that offer employee share schemes. Last year, we worked closely with my hon. Friend the Member for Edinburgh, North and Leith (Mr. Lazarowicz) on the Employee Share Schemes Bill to introduce some positive changes, which would encourage share incentive plans.
The changes in this Bill will affect all the improved employee share schemes. We are proposing a key change to share incentive plans—SIPs. The SIPs scheme is one of the two newest schemes, which the Finance Act 2000 introduced. It was designed after extensive consultation and it is intended to fulfil the needs of all companies. It offers them flexible methods of achieving employee share ownership, with tax advantages for employees and the companies that employ them. As the hon. Member for Arundel and South Downs acknowledged, SIPs have been widely welcomed. To date, some 750 companies have applied for Inland Revenue approval of their plans and more than 500 have been implemented or are ready for implementation. We have listened over time to the share scheme industry's ideas on ways to improve the administration of the schemes.
The changes in the Bill to ease administration for employers respond to industry requests. They have been generally welcomed but the industry has expressed anxiety about the proposed change to the rules for dividend shares. Although the change achieves the simplification for which the industry asked, it appears that those who requested it did not establish its full impact with scheme administrators. Feedback from the 358 industry suggests that it would prefer to retain the existing rules. So, since the Government listen to business—
§ Mr. George Osborne
That was said with feeling.
§ Dawn Primarolo
Perhaps we should not have listened in the first place. I shall table amendments in Standing Committee to withdraw the new proposals, in line with the industry's request.
The package also includes changes to modernise the older approved schemes—save-as-you-earn and the company share option plan—that were developed in a more regulated climate. The provisions align the company share option plans and the save-as-you-earn rules with those of a SIP when possible and appropriate, to help reduce administration of the schemes.
Clause 138 also introduces changes to extend the application of pay-as-you-earn to any income tax due after early exercise of a company share option plan. That is not a new tax charge. Early exercise in three years of grant of a company share option plan option currently attracts a tax liability but it is collected through self-assessment and does not attract national insurance. Unfortunately, we have become aware of evidence that company share option plans are being granted and exercised within three years solely to avoid national insurance, and not for any sound commercial reasons. That is not fair on the majority of employees who pay their national insurance contributions, nor is it in line with the objective of encouraging employees to take a long-term stake in the success of their company.
§ Mr. Burnett
Will the Paymaster General address a more hazardous aspect of this issue—namely, the possible penalty on the declining value of the shares?
§ Dawn Primarolo
An initial problem that we need to address with regard to avoidance is when options are given for shares for 100 years' time, for instance, and the value is rather difficult to quantify. The tax charge is then levied and the benefit year is reassigned—and, lo and behold, it is within three years. There were some difficulties in regard to that, and I appreciate the point that the hon. Gentleman raises, but this is always a challenge. How can I put this delicately? If a set of rules is to operate fairly for everybody, everybody has to use those rules fairly. When some do not, they can spoil it for others.
§ Dawn Primarolo
I would like to make some progress, but 1 will be happy to give way to the hon. Gentleman later.
The change in the Bill will treat company share option plans exercised early in the same way as any other unapproved option. That will not only help to encourage employees to hold their options for three years to qualify for tax and national insurance relief but make collecting tax through the PAYE system simpler for the employee. We recognise that there are some difficult circumstances in which people have no choice but to exercise their options early. Other company share option plan changes that are being introduced as part of 359 this package will ensure that employees who exercise options within three years of grant because of injury, disability, redundancy or retirement, for example, will be able to do so tax and national insurance-free. That recognises the hard choices that people sometimes face in their employment. We are trying specifically to deal with that issue here.
§ Dawn Primarolo
Not at the moment.
§ Mr. Bercow
I was going to be helpful.
§ Dawn Primarolo
I thank the hon. Gentleman but I can manage under my own steam at the moment. Should I need his help, I shall certainly call on him.
The further changes proposed will modernise company share option plans and ensure that they continue to be attractive vehicles for employers wanting to encourage employees to take a stake in their company. That package of improvements is further evidence of the Government's continuing support for companies that offer employee share schemes. The changes result from listening to and working with practitioners. Indeed, ProShare, the organisation that exists to promote share ownership, has already signalled its appreciation of most of the changes.
The hon. Member for Arundel and South Downs raised a number of questions about the national insurance charge. The Government believe that employers should pay their fair share of national insurance on all forms of employment-related remuneration. While the majority of employees and employers undertake their tax responsibilities diligently, there remains a small but, unfortunately, significant group that seeks to avoid paying tax and national insurance contributions on employment remuneration. The change means that companies that seek to avoid paying national insurance can no longer do so. Employers face an employer's national insurance charge only if the options that they have awarded are capable of being exercised within three years of grant. Employees exercising their company share options within the three years of grant will be able to do so tax and national insurance-free. That means that employers who have been using company share option plans as intended—that is, to encourage employees to take a long-term stake in the company that they work for—will not be affected by the changes.
We have also been careful to protect employers from the employer's national insurance charge when employees have to exercise their option within three years. That relates to the point that I made earlier about employees being forced to exercise their options. It is a matter for companies and employees to make provisions and arrangements for the recovery of any PAYE and national insurance contributions from employees who exercise early and have a tax liability.
The hon. Member for Arundel and South Downs also raised some issues about PAYE and asked whether the measure was retrospective. The charge arises if employees exercise their option after 9 April 2003 and within three years of grant. If employees exercise their option in those circumstances, they do so in the full 360 knowledge of the tax and national insurance charge that will arise that is, on the basis of the law as it applies on exercise. That change will not prevent employees from exercising early for commercial reasons. They will simply make the decision taking into account the tax and national insurance to be paid. A company share option plan is designed so that employees can take a long-term stake in the company that they work for. If employees keep their options for at least three years after grant, they can be exercised tax and national insurance-free.
§ Dawn Primarolo
The hon. Member for Arundel and South Downs also raised the issue of tackling avoidance using company share option plans, and the question of leavers. Failure to tackle avoidance would continue to undermine the share schemes that aim to incentivise employees, and he well knows that. As I made clear in my speech on Second Reading, measures to counter tax and national insurance avoidance would not damage business or investment in the City. On the contrary, this is about creating a level playing field by ensuring that a small number of businesses can no longer gain an unfair advantage over their competitors by avoiding their national insurance and tax contributions. We estimate that the tax and national insurance that will be protected by these changes will be in the region of £55 million in 2003–04, and between £30 million and £35 million in subsequent years. Employees who have to exercise their options within three years of grant because they have lost their job or for other reasons will be protected. In that way, we protect the innocent and stop the avoiders.
§ Mr. Bercow
The Paymaster General began by appearing to lament the phenomenon of early exercise, but was then gracious enough to concede that there were circumstances in which employees would have no reasonable alternative but to exercise that option. Now that she has, with prescience, anticipated precisely the redundancy scenario that I was intending to depict for her, will she tell the Committee whether the loss of job to which she has just referred would also apply to circumstances such as the termination of employment unrelated to redundancy?
§ Dawn Primarolo
To be perfectly honest, I do not think that I understand the hon. Gentleman's question.
§ Mr. Burnett
May I help?
§ Dawn Primarolo
I am spoilt for choice. Who will help me first? I shall ask the hon. Gentleman to repeat his question.
§ Mr. Bercow
I am genuinely grateful to the right hon. Lady. She was being slightly churlish a few moments ago, because I had intended to compliment her on the intellectual osmosis that seemed to exist between us when she anticipated what I was proposing to say. I am 361 not trying to be clever or unhelpful—that would be difficult for me—but simply asking whether the concession applies when someone is sacked, as opposed to being made redundant.
§ Dawn Primarolo
I clearly was not hanging on the hon. Gentleman's every word and listening as carefully as I usually do. The answer is no.
The final point, to which the hon. Member for Arundel and South Downs and others have referred, not just in today's debate, and which is of concern elsewhere, relates to the International Accounting Standards Board's proposals. He will appreciate that its proposals for share schemes are not a Government initiative, and while the accountancy proposals are being developed, it would be inappropriate for the Government to become directly involved in the debate. However, I think that I have made it clear, as the hon. Gentleman certainly has, that we are committed to employee share schemes and continue to pursue a course that enables them to develop and benefit not only employees but the companies as well, and I hope that nothing will be done in future that would undermine that.
I commend the clause to the Committee and look forward to the debate on the schedule.
§ Question put, That the clause stand part of the Bill:—
§ The Committee divided: Ayes 291, Noes 135.352
|Division No. 196]||[2:39 pm|
|Ainsworth, Peter (E Surrey)||Clarke, rh Kenneth (Rushcliffe)|
|Allan, Richard||Collins, Tim|
|Amess, David||Conway, Derek|
|Atkinson, David (Bour'mth E)||Cotter, Brian|
|Atkinson, Peter (Hexham)||Cran, James (Beverley)|
|Bacon, Richard||Curry, rh David|
|Baldry, Tony||Davey Edward (Kingston)|
|Barker, Gregory||Davis, rh David (Haltemprice & Howden)|
|Baron, John (Billericay)|
|Barrett, John||Djanogly, Jonathan|
|Beggs, Roy (E Antrim)||Dodds, Nigel|
|Bellingham, Henry||Duncan, Alan (Rutland)|
|Bercow, John||Duncan, Peter (Galloway)|
|Beresford, Sir Paul||Duncan Smith, rh lain|
|Blunt, Crispin||Ewing, Annabelle|
|Boswell, Tim||Fabricant, Michael|
|Bottomley, Peter (Worthing W)||Field, Mark (Cities of London & Westminster)|
|Brake, Tom (Carshalton)||Flight, Howard|
|Brazier Julian||Flook, Adrian|
|Breed, Colin||Forth, rh Eric|
|Brooke, Mrs Annette L.||Foster, Don (Bath)|
|Browning, Mrs Angela|
|Burnett, John||Garnier, Edward|
|Burt, Alistair||George, Andrew (St. lves)|
|Butterfill, John||Gibb, Nick (Bognor Regin)|
|Cable, Dr. Vincent||Gidley, Sandra|
|Cameron, David||Gillan, Mrs Cheryl|
|Campbell, Gregory (E Lond'y)||Gray, James (N wilts)|
|Campbell, rh Menzies (NE Fife)||Green, Damian (Ashford)|
|Carmichael, Alistair||Green, Matthew (Ludlow)|
|Cash, William||Grieve, Dominic|
|Chapman, Sir Sydney (Chipping Barnet)||Gummer, rh John|
|Hague, rh William|
|Chope, Christopher||Hammond, Philip|
|Clappison, James||Hancock, Mike|
|Harris, Dr. Evan (Oxford W & Abingdon)||Robinson, Peter (Belfast E)|
|Harvey, Nick||Russell, Bob (Colchester)|
|Hawkins, Nick||Salmond, Alex|
|Heald, Oliver||Sanders, Adrian|
|Heath, David||Sayeed, Jonathan|
|Hendry, Charles||Selous, Andrew|
|Hermon, Lady||Shephard, rh Mrs Gillian|
|Hoban, Mark (Fareham)||Shepherd, Richard|
|Hogg, rh Douglas||Simmonds, Mark|
|Horam, John (Orpington)||Simpson, Keith (M-Norfolk)|
|Howarth, Gerald (Aldershot)||Smith, Sir Robert (W Ab'd'ns & Kincardine)|
|Jack, rh Michael|
|Johnson, Boris (Henley)||Smyth, Rev. Martin (Belfast S)|
|Key, Robert (Salisbury)||Spelman, Mrs Caroline|
|Kirkbride, Miss Julie||Spicer, Sir Michael|
|Lait, Mrs Jacqui||Spink, Bob (Castle Point)|
|Lamb, Norman||Spring, Richard|
|Lansley, Andrew||Steen, Anthony|
|Laws, David (Yeovil)||Streeter, Gary|
|Leigh, Edward||Stunell, Andrew|
|Lewis, Dr. Julian (New Forest E)||Swayne, Desmond|
|Liddell-Grainger, Ian||Swire, Hugo (E Devon)|
|Lidington, David||Syms, Robert|
|Lilley, rh Peter||Tapsell, Sir Peter|
|Loughton, Tim||Taylor, Ian (Esher)|
|Mclntosh, Miss Anne||Taylor, John (Solihull)|
|Mackay, rh Andrew||Taylor, Matthew (Truro)|
|Maclean, rh David||Taylor, Dr. Richard (Wyre F)|
|McLoughlin, Patrick||Taylor, Sir Teddy|
|Malins, Humfrey||Thomas, Simon (Ceredigion)|
|Mercer, Patrick||Thurso, John|
|Mitchell, Andrew (Sutton Coldfield)||Trend, Michael|
|Trimble, rh David|
|Moore, Michael||Turner, Andrew (Isle of Wight)|
|Moss, Malcolm||Tyler, Paul (N Cornwall)|
|Murrison, Dr. Andrew||Tyrie, Andrew|
|Norman, Archie||Viggers, Peter|
|Oaten, Mark (Winchester)||Waterson, Nigel|
|O'Brien, Stephen (Eddisbury)||Watkinson, Angela|
|Öpik, Lembit||Webb, Steve (Northavon)|
|Osborne, George (Tatton)||Weir, Michael|
|Ottaway, Richard||Whittingdale, John|
|Paice, James||Wiggin, Bill|
|Paterson, Owen||Wilkinson, John|
|Pickles, Eric||Willetts, David|
|Price, Adam (E Carmarthen & Dinefwr)||Willis, Phil|
|Winterton, Ann (Congleton)|
|Prisk, Mark (Hertford)||Wishart, Pete|
|Pugh, Dr. John||Yeo, Tim (S Suffolk)|
|Redwood, rh John||Young, rh Sir George|
|Reid, Alan (Argyll & Bute)||Younger-Ross, Richard|
|Robathan, Andrew||Tellers for the Ayes:|
|Robertson, Angus (Moray)||Mr. Mark Francois and|
|Robertson, Laurence (Tewk'b'ry)||Mr. David Wilshire|
|Adams, Irene (Paisley N)||Beckett, rh Margaret|
|Ainger, Nick||Benn, Hilary|
|Ainsworth, Bob (Cov'try NE)||Bennett, Andrew|
|Alexander, Douglas||Benton, Joe (Bootle)|
|Allen, Graham||Betts, Clive|
|Anderson, Janet (Rossendale & Darwen)||Blackman, Liz|
|Blears, Ms Hazel|
|Armstrong, rh Ms Hilary||Blizzard, Bob|
|Atkins, Charlotte||Boateng, rh Paul|
|Austin, John||Borrow, David|
|Bailey, Adrian||Bradley, rh Keith (Withington)|
|Baird, Vera||Bradley, Peter (The Wrekin)|
|Banks, Tony||Bradshaw, Ben|
|Barnes, Harry||Brennan, Kevin|
|Barron, rh Kevin||Brown, rh Nicholas (Newcastle E Wallsend)|
|Bayley, Hugh||Brown, Russell (Dumfries)|
|Beard, Nigel||Browne, Desmond|
|Burden, Richard||Harris, Tom (Glasgow Cathcart)|
|Burgon, Colin||Havard, Dai (Merthyr Tydfil & Rhymney)|
|Byers, rh Stephen||Healey, John|
|Caborn, rh Richard||Henderson, Doug (Newcastle N)|
|Cairns, David||Henderson, Ivan (Harwich)|
|Campbell, Alan (Tynemouth)||Hendrick, Mark|
|Campbell, Ronnie (Blyth V)||Hepburn, Stephen|
|Casale, Roger||Heppell, John|
|Challen, Colin||Hesford, Stephen|
|Chapman, Ben (Wirral S)||Hewitt, rh Ms Patricia|
|Chaytor, David||Heyes, David|
|Clapham, Michael||Hill, Keith (Streatham)|
|Clark, Mrs Helen (Peterborough)||Hinchliffe, David|
|Clark, Dr. Lynda (Edinburgh Pentlands)||Hodge, Margaret|
|Hoey, Kate (Vauxhall)|
|Clarke, rh Tom (Coatbridge & Chryston)||Hood, Jimmy (Clydesdale)|
|Hoon, rh Geoffrey|
|Clarke, Tony (Northampton S)||Hope, Phil (Corby)|
|Clelland, David||Howarth, George (Knowsley N & Sefton E)|
|Clwyd, Ann (Cynon V)|
|Coaker, Vernon||Howells, Dr. Kim|
|Coffey, Ms Ann||Hughes, Beverley (Stretford & Urmston)|
|Colman, Tony||Hughes, Kevin (Doncaster N)|
|Cooper, Yvette||Hurst, Alan (Braintree)|
|Corbyn, Jeremy||Hutton, rh John|
|Cousins, Jim||Irranca-Davies, Huw|
|Crausby, David||Jackson, Glenda (Hampstead & Highgate)|
|Cryer, Ann (Keighley)||Jackson, Helen (Hillsborough)|
|Cryer, John (Hornchurch)||Jamieson, David|
|Cummings, John||Jenkins, Brian|
|Cunningham, Tony (Workington)||Johnson, Alan (Hull W)|
|Curtis-Thomas, Mrs Claire||Johnson, Miss Melanie (Welwyn Hatfield)|
|Davey, Valerie (Bristol W)|
|David, Wayne||Jones, Jon Owen (Cardiff C)|
|Davies, rh Denzil (Llanelli)||Jones, Lynne (Selly Oak)|
|Davies, Geraint (Croydon C)||Jowell, rh Tessa|
|Davis, rh Terry (B'ham Hodge H)||Joyce, Eric (Falkirk W)|
|Dawson, Hilton||Kaufman, rh Gerald|
|Dean, Mrs Janet||Keeble, Ms Sally|
|Denham, rh John||Keen, Alan (Feltham)|
|Dhanda, Parmjit||Keen, Ann (Brentford)|
|Dobson, rh Frank||Kemp, Fraser|
|Doran, Frank||Khabra, Piara S.|
|Drew, David (Stroud)||Kidney, David|
|Drown, Ms Julia||Kilfoyle, Peter|
|Eagle, Angela (Wallasey)||King, Andy (Rugby)|
|Eagle, Maria (L'pool Garston)||King, Ms Oona (Bethnal Green & Bow)|
|Ennis, Jeff (Barnsley E)||Knight, Jim (S Dorset)|
|Etherington, Bill||Kumar, Dr. Ashok|
|Farrelly, Paul||Ladyman, Dr. Stephen|
|Field, rh Frank (Birkenhead)||Lammy, David|
|Fisher, Mark||Laxton, Bob (Derby N)|
|Flint, Caroline||Lazarowicz, Mark|
|Flynn, Paul (Newport W)||Lepper, David|
|Follett, Barbara||Levitt, Tom (High Peak)|
|Foster, rh Derek||Lewis, Terry (Worsley)|
|Foster, Michael (Worcester)||Linton, Martin|
|Foulkes, rh George||Lloyd, Tony (Manchester C)|
|Francis, Dr. Hywel||Love, Andrew|
|Gapes, Mike (llfordS)||Lucas, Ian (Wrexham)|
|Gardiner, Barry||Luke, lain (Dundee E)|
|Gerrard, Neil||Lyons, John (Strathkelvin)|
|Gibson, Dr. Ian||McAvoy, Thomas|
|Gilroy, Linda||McCabe, Stephen|
|Griffiths, Jane (Reading E)||McCartney, rh Ian|
|Griffiths, Nigel (Edinburgh S)||McDonagh, Siobhain|
|Griffiths, Win (Bridgend)||MacDonald, Calum|
|Grogan, John||MacDougall, John|
|Hall, Mike (Weaver Vale)||McFall, John|
|Hall, Patrick (Bedford)||McGuire, Mrs Anne|
|Hamilton, Fabian (Leeds NE)||Mclsaac, Shona|
|Hanson, David||McKechin, Ann|
|MacShane, Denis||Salter, Martin|
|Mactaggart, Fiona||Sarwar, Mohammad|
|McWalter, Tony||Savidge, Malcolm|
|Mahon, Mrs Alice||Sawford, Phil|
|Mallaber, Judy||Shaw, Jonathan|
|Mann, John (Bassetlaw)||Sheerman, Barry|
|Marsden, Gordon (Blackpool S)||Sheridan, Jim|
|Marshall, Jim (Leicester S)||Shipley, Ms Debra|
|Martlew, Eric||Simon, Siôn (B'ham Erdington)|
|Meale, Alan (Mansfield)||Singh, Marsha|
|Merron, Gillian||Smith, rh Andrew (Oxford E)|
|Michael, rh Alun||Smith, John (Glamorgan)|
|Miliband, David||Smith, Llew (Blaenau Gwent)|
|Miller, Andrew||Soley, Clive|
|Moffatt, Laura||Southworth, Helen|
|Moonie, Dr. Lewis||Spellar, rh John|
|Morley, Elliot||Squire, Rachel|
|Mountford, Kali||Starkey, Dr. Phyllis|
|Mudie, George||Stinchcombe, Paul|
|Mullin, Chris||Sutcliffe, Gerry|
|Murphy, Denis (Wansbeck)||Tami, Mark (Alyn)|
|Naysmith, Dr. Doug||Taylor, Dari (Stockton S)|
|Norris, Dan (Wansdyke)||Taylor, David (NW Leics)|
|O'Brien, Bill (Normanton)||Thomas, Gareth (Clwyd W)|
|O'Hara, Edward||Thomas, Gareth (Harrow W)|
|O'Neill, Martin||Tipping, Paddy|
|Organ, Diana||Todd, Mark (S Derbyshire)|
|Owen, Albert||Touhig, Don (Islwyn)|
|Palmer, Dr. Nick||Trickett, Jon|
|Perham, Linda||Truswell, Paul|
|Picking, Anne||Turner, Dr. Desmond (Brighton Kemptown)|
|Plaskitt, James||Turner, Neil (Wigan)|
|Pond, Chris (Gravesham)||Twigg, Derek (Halton)|
|Pound, Stephen||Tynan, Bill (Hamilton S)|
|Prentice, Ms Bridget (Lewisham E)||Vaz, Keith (Leicester E)|
|Vis, Dr. Rudi|
|Prentice, Gordon (Pendle)||Ward, Claire|
|Prescott, rh John||Wareing, Robert N.|
|Primarolo, rh Dawn||Watson, Tom (W Bromwich E)|
|Prosser, Gwyn||Watts, David|
|Purnell, James||White, Brian|
|Rapson, Syd (Portsmouth N)||Whitehead, Dr. Alan|
|Raynsford, rh Nick||Williams, rh Alan (Swansea W)|
|Reid, rh Dr. John (Hamilton N & Bellshill)||Winnick, David|
|Wood, Mike (Batley)|
|Robertson, John (Glasgow Anniesland)||Woodward, Shaun|
|Robinson, Geoffrey (Coventry NW)||Worthington, Tony|
|Wright, Anthony D. (Gt Yarmouth)|
|Roche, Mrs Barbara|
|Rooney, Terry||Wright, David (Telford)|
|Ross, Ernie (Dundee W)||Wright, Tony (Cannock)|
|Roy, Frank (Motherwell)||Wyatt, Derek|
|Russell, Ms Christine (City of Chester)||Tellers for the Noes:|
|Mr. Ivor Caplin and|
|Ryan, Joan (Enfield N)||Mr. Jim Murphy|
|Division No. 197]||[3:31 pm|
|Abbott, Ms Diane||Bryant, Chris|
|Adams, Irene (Paisley N)||Burgon, Colin|
|Ainger, Nick||Burnham, Andy|
|Ainsworth, Bob (Cov'try NE)||Byers, rh Stephen|
|Alexander, Douglas||Cairns, David|
|Allen, Graham||Campbell, Alan (Tynemouth)|
|Anderson, Janet (Rossendale & Darwen)||Campbell, Ronnie (Blyth V)|
|Armstrong, rh Ms Hilary||Challen, Colin|
|Atkins, Charlotte||Chapman, Ben (Wirral S)|
|Austin, John||Chaytor, David|
|Bailey, Adrian||Clapham, Michael|
|Baird, Vera||Clark, Mrs Helen (Peterborough)|
|Banks, Tony||Clark, Dr. Lynda (Edinburgh Pentlands)|
|Barron, rh Kevin||Clarke, rh Tom (Coatbridge & Chryston)|
|Bayley, Hugh||Clarke, Tony (Northampton S)|
|Beard, Nigel||Clelland, David|
|Beckett, rh Margaret||Clwyd, Ann (Cynon V)|
|Beggs, Roy (E Antrim)||Coaker, Vernon|
|Benn, Hilary||Coffey, Ms Ann|
|Bennett, Andrew||Coleman, lain|
|Benton, Joe (Bootle)||Colman, Tony|
|Betts, Clive||Cooper, Yvette|
|Blackman, Liz||Cousins, Jim|
|Blears, Ms Hazel||Crausby, David|
|Blizzard, Bob||Cruddas, Jon|
|Boateng, rh Paul||Cryer, Ann (Keighley)|
|Borrow, David||Cryer, John (Hornchurch)|
|Bradley, rh Keith (Withington)||Cummings, John|
|Bradley, Peter (The Wrekin)||Cunningham, Tony (Workington)|
|Bradshaw, Ben||Curtis-Thomas, Mrs Claire|
|Brennan, Kevin||Darling, rh Alistair|
|Brown, Russell (Dumfries)||Davey, Valerie (Bristol W)|
|Browne, Desmond||David, Wayne|
|Davidson, Ian||Jones, Lynne (Selly Oak)|
|Davies, rh Denzil (Llanelli)||Jowell, rh Tessa|
|Davies, Geraint (Croydon C)||Joyce, Eric (Falkirk W)|
|Davis, rh Terry (B'ham Hodge H)||Kaufman, rh Gerald|
|Dawson, Hilton||Keen, Alan (Feltham)|
|Dean, Mrs Janet||Keen, Ann (Brentford)|
|Denham, rh John||Kemp, Fraser|
|Dhanda, Parmjit||Khabra, Piara S.|
|Dobson, rh Frank||Kidney, David|
|Doran, Frank||Kilfoyle, Peter|
|Dowd, Jim (Lewisham W)||King, Andy (Rugby)|
|Drew, David (Stroud)||King, Ms Oona (Bethnal Green & Bow)|
|Eagle, Angela (Wallasey)|
|Eagle, Maria (L'pool Garston)||Knight, Jim (S Dorset)|
|Efford, Clive||Ladyman, Dr. Stephen|
|Ennis, Jeff (Barnsley E)||Lammy, David|
|Etherington, Bill||Laxton, Bob (Derby N)|
|Ewing, Annabelle||Lazarowicz, Mark|
|Farrelly, Paul||Lepper, David|
|Field, rh Frank (Birkenhead)||Leslie, Christopher|
|Fisher, Mark||Levitt Tom (High Peak)|
|Fitzpatrick, Jim||Lewis lvan (Bury s)|
|Flint, Caroline||Liddell rh Mrs Helen|
|Flynn, Paul (Newport W)||Linton Martin|
|Follett, Barbara||Lloyd, Tony (Manchester C)|
|Foster, rh Derek||Love, Andrew|
|Foster, Michael (Worcester)||Lucas lan (Wrexham)|
|Foulkes, rh George||Luke lain (Dundee E)|
|Francis, Dr. Hywel||Lyons, John (Strathkelvin)|
|Gardiner, Barry||McAvoy, Thomas|
|Gerrard, Neil||McCabe, Stephen|
|Gilroy, Linda||McCartney, rh Ian|
|Goggins, Paul||MacDonald, Calum|
|Griffiths, Jane (Reading E)||MacDougall, John|
|Griffiths, Nigel (Edinburgh S)||McFall, John|
|Griffiths, Win (Bridgend)||McGuire, Mrs Anne|
|Grogan, John||Mclsaac, shona|
|Hall, Mike (Weaver Vale)||McKechin, Ann|
|Hall, Patrick (Bedford)||McKenna, Rosemary|
|Hamilton, David (Midlothian)||Mactaggart, Fiona|
|Hamilton, Fabian (Leeds NE)||McWalter, Tony|
|Hanson, David||Mahon, Mrs Alice|
|Harris, Tom (Glasgow Cathcart)||Mallaber, Judy|
|Havard, Dai (Merthyr Tydfil & Rhymney)||Mann, Jonn (Bassetlaw)|
|Healey John||Marsden, Gordon (Blackpool S)|
|Henderson, Doug (Newcastle N)||Marshall, Jim (Leicester S)|
|Henderson, Ivan (Harwich)||Martlew, Eric|
|Hendrick, Mark||Meale, Alan (Mansfield)|
|Heppell, John||Merron, Gillian|
|Hermon, Lady||Michael, rh Alun|
|Hesford, Stephen||Miliband, David|
|Heyes, David||Miller, Andrew|
|Hill, Keith (Streatham)||Mitchell, Austin (Gt Grimsby)|
|Hinchliffe, David||Moffatt, Laura|
|Hodge, Margaret||Mole, Chris|
|Hoey, Kate (Vauxhall)||Moonie, Dr. Lewis|
|Hood, Jimmy (Clydesdale)||Morley, Elliot|
|Hoon, rh Geoffrey||Mountford, Kali|
|Hope, Phil (Corby)||Mudie, George|
|Howarth, George (Knowsley N & Sefton E)||Mullin, chris|
|Murphy, Denis (Wansbeck)|
|Howells, Dr. Kim||Naysmith, Dr. Doug|
|Hughes, Kevin (Doncaster N)||Norris, Dan (Wansdyke)|
|Hurst, Alan (Braintree)||O'Brien, Bill (Normanton)|
|Hutton, rh John||O'Hara, Edward|
|Irranca-Davies, Huw||Olner, Bill|
|Jackson, Glenda (Hampstead & Highgate)||Organ, Diana|
|Jackson, Helen (Hillsborough)||Palmer, Dr. Nick|
|Jamieson, David||Picking, Anne|
|Jenkins, Brian||Pickthall, Colin|
|Johnson, Alan (Hull W)||Plaskitt, James|
|Johnson, Miss Melanie (Welwyn Hatfield)||Pollard, Kerry|
|Pond, Chris (Gravesham)|
|Jones, Jon Owen (Cardiff C)||Pound, Stephen|
|Prentice, Ms Bridget (Lewisham E)||Squire, Rachel|
|Starkey, Dr. Phyllis|
|Prentice, Gordon (Pendle)||Stinchcombe, Paul|
|Prescott, rh John||Sutcliffe, Gerry|
|Price, Adam (E Carmarthen & Dinefwr)||Tami, Mark (Alyn)|
|Taylor, Dari (Stockton S)|
|Primarolo, rh Dawn||Taylor, David (NW Leics)|
|Prosser, Gwyn||Taylor, Dr. Richard (Wyre F)|
|Purnell, James||Thomas, Gareth (Clwyd W)|
|Rapson, Syd (Portsmouth N)||Thomas, Gareth (Harrow W)|
|Raynsford, rh Nick||Thomas, Simon (Ceredigion)|
|Reed, Andy (Loughborough)||Tipping, Paddy|
|Reid, rh Dr. John (Hamilton N & Bellshill)||Todd, Mark (S Derbyshire)|
|Touhig, Don (Islwyn)|
|Robertson, Angus (Moray)||Trickett, Jon|
|Robertson, John (Glasgow Anniesland)||Truswell, Paul|
|Turner, Dr. Desmond (Brighton Kemptown)|
|Robinson, Geoffrey (Coventry NW)|
|Turner, Neil (Wigan)|
|Rooney, Terry||Twigg, Derek (Halton)|
|Ross, Ernie (Dundee W)||Tynan, BilI (Hamilton S)|
|Roy, Frank (Motherwell)||Vis, Dr. Rudi|
|Ruane, Chris||Ward, Claire|
|Ruddock, Joan||Wareing, Robert N.|
|Russell, Ms Christine (City of Chester)||Watson, Tom (W Bromwich E)|
|Ryan, Joan (Enfield N)||Weir, Michael|
|Salmond, Alex||White, Brian|
|Sarwar, Mohammad||Whitehead, Dr. Alan|
|Savidge, Malcolm||Williams, rh Alan (Swansea W)|
|Shaw, Jonathan||Wishart, Pete|
|Sheerman, Barry||Wood, Mike (Batley)|
|Sheridan, Jim||Woodward, Shaun|
|Shipley, Ms Debra||Woolas, phil|
|Simon, Siôn (B'ham Erdington)||Worthington, Tony|
|Singh, Marsha||Wright, Anthony D. (Gt Yarmouth)|
|Smith, rh Chris (Islington S & Finsbury)|
|Wright, David (Telford)|
|Smith, John (Glamorgan)||Wright, Tony (Cannock)|
|Smith, Llew (Blaenau Gwent)||Wyatt, Derek|
|Smyth, Rev. Martin (Belfast S)|
|Soley, Clive||Tellers for the Ayes:|
|Southworth, Helen||Mr. Ivor Caplin and|
|Spellar, rh John||Mr. Jim Murphy|
§ Question accordingly agreed to.
§ Clause 138 ordered to stand part of the Bill.