Sitting of 4 March 1975

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS

  BRITISH RAILWAYS BILL
  Order read for consideration of Lords amendments.
  Motion made, and Question proposed, That the Lords amendments be now considered.
  Sir Bernard Braine: On a point of order Mr. Speaker. May I, through you, inquire whether the promoter of the Bill is present and can give the House the assurance, for which I asked verbally on a previous occasion, that the offensive Clause 6 of the previous Bill has been withdrawn?
  Mr. Speaker: Order. I think I must first put the Question.
  Question put and agreed to.
  Sir Bernard Braine: Mr. Speaker—
  The Chairman of Ways and Means (Mr. George Thomas): Mr. Speaker, in
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  Clause 6 one new work, Canvey Island, in subsection (1) is abandoned.
  Lords amendments considered and agreed to.

  BRITISH RAILWAYS BILL

    MERSEYSIDE METROPOLITAN RAILWAY BILL (By Order)
    Order for consideration, as amended, read.
    To be considered upon Tuesday next.

    BRITISH RAILWAYS (No. 2) BILL (By Order)
    Order for Second Reading read.
    To be read a Second time upon Tuesday next.

    LONDON TRANSPORT BILL (By Order)
    Order for Second Reading read.
    To be read a Second time upon Tuesday next.

    GREATER LONDON COUNCIL (GENERAL POWERS) BILL (By Order)
    Order for Second Reading read.
    To be read a Second time upon Thursday next.

ORAL ANSWERS TO QUESTIONS
  EDUCATION AND SCIENCE

    School Building Programme
    Mr. Duffyasked the Secretary of State for Education and Science when he expects to be able to announce the allocations for the school building programme for 1975–76 for the Yorkshire and Humberside Region.
    The Under-Secretary of State for Education and Science (Mr. Ernest Armstrong): My Department wrote to local education authorities on 27th January informing them of their lump sum authorisations for school building in 1975–76.
    Mr. Duffy: Is my hon. Friend aware that no region has more pupils per teacher in secondary schools than Yorkshire and Humberside? Although there are doubtless many factors involved, and therefore many explanations, is he quite sure that one explanation is not the amount and quality of accommodation at secondary school level in Yorkshire and Humberside?
    Mr. Armstrong: Yes, I am aware of the problems. The building allocations are very largely related to basic need—that is, for children who would otherwise have no school to attend. Of this year's allocations Yorkshire and Humberside, although it has only 8·9 per cent. of the population, has 9·5 per cent. of the overall building allocation.
    Mr. Skinner: Is my hon. Friend aware that whereas in South Yorkshire and Humberside the problem may be one of pupil-teacher ratio, in North Derbyshire and in my constituency in particular it is a question of having a large number of pre-1903 slum infant and junior schools? Is he aware that in Whitwell in particular, which was subject to cuts as a result of the intervention by the present Leader of the Opposition in her former guise as Secretary of State for Education and Science in November 1973, pupils are still having to walk many miles every week in order to get their meals and to go to the sports hall? We have a name on the school building but
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    we have no school. Will my hon. Friend get the matter restored as quickly as possible?
    Mr. Armstrong: Yes, I am aware of the acute difficulties to which my hon. Friend has drawn my attention previously. He has highlighted the problem that no two authorities are the same. They all have their different problems. That is why the building allocation is now a lump sum allocation so that priorities can be decided at local level instead of in Whitehall.

    School Transport
    Dr. John A. Cunninghamasked the Secretary of State for Education and Science whether he will publish an analysis of the views of the local authorities which have now made their representations to him on the matter of school transport; and if he will make a statement.
    Mr. Hicksasked the Secretary of State for Education and Science when he hopes to announce his decision in respect of the recommendations of the interdepartmental inquiry on school transport; and if he will make a statement.
    Mr. Stanleyasked the Secretary of State for Education and Science what representations he has received on the non-implementation of the working party's report on school transport.
    Mr. Armstrong: My right hon. Friend will take full account of the views expressed by local authorities about school transport, which I know is a subject of concern in many quarters. The problems are complex and I am not yet able to say when it will be possible to make a statement. I do not think that publication of an analysis of the views submitted by the various bodies would be helpful.
    Dr. Cunningham: Is my hon. Friend aware that we have now been waiting since the previous Conservative administration were in office for a decision on this matter? Is he further aware that particularly in rural areas with low family incomes the ever-increasing impact of school bus fares is having a very deleterious effect? We have been patient, but will my hon. Friend now assure us that

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    we are soon to have a decision on this subject?
    Mr. Armstrong: Yes, I recognise the concern of the House and I regret that we have not yet come to a final decision. That is because we are trying to find the right answer. Only last week I visited a local authority where there are small rural schools. I found that the authority was spending £1½ million a year on transport. That is an indication of the serious concern that is felt in the country and of our desire to get things done properly.
    Mr. Hicks: Will not the Minister show more urgency about the situation? Does he not agree that the circumstances and conditions that were relevant at the time the existing regulations involving the present statutory limits came into being are now totally out of date? Further, in the case of rural areas in particular does he not agree that a more flexible and wider system involving meaningful parental contribution should be introduced urgently?
    Mr. Armstrong: Yes, I am well aware of the sentiments expressed by the hon. Gentleman. Over the past five years the expenditure by local authorities on school transport has increased from £20 million to no less than £45 million. If the hon. Gentleman adds to that the substantial amount now being paid by parents, he will get an understanding of the serious problem that we face. We are treating the matter urgently, but there is no easy answer. The money has to be found. We want to protect parents and to ensure that parental contributions are not a deterrent in getting their children to school.
    Mr. Tomlinson: While I understand the pressure on public expenditure, may I ask whether my hon. Friend accepts that the present arrangements are setting neighbour against neighbour and community against community and that something serious has to be done? I believe that there should be urgent consideration of a systematic and uniform entitlement to transport for all schoolchildren.
    Mr. Armstrong: I would not disagree with anything that my hon. Friend has said on this matter. The solution proposed by the working party—namely, that the same amount should be paid by all parents whether they live half a mile, five
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    miles or seven miles from school—would also set neighbour against neighbour. There is no easy answer. We are trying to find the right answer. I hope to make a statement to the House in the near future.
    Mr. Stanley: Has the Minister accepted the principle of the working party's report that the existing two- or three-mile limit system should be replaced by a system of flat-rate charges? Will he bear in mind that a flat-rate charge would not set neighbour against neighbour and that, unlike the present means of financial support, it could be rebated in the case of less-well-off families?
    Mr. Armstrong: No, we have not yet accepted the recommendations made by the working party. We are still discussing the matter with the local authorities. There is a great deal of controversy about the particular recommendation to which the hon. Gentleman refers.
    Dr. Edmund Marshall: In view of the prolonged delay in these matters, will the Minister encourage local education authorities to follow the example of Humberside County Council? Is he aware that that council has used its present discretionary powers in respect of school transport to provide special transport for secondary school children from Old Goole in my constituency from 1st January this year?
    Mr. Armstrong: Indeed, we are collecting evidence of good practice in various parts of the country. Local authorities have wide discretion. I remind the House that local authorities are also strained in their resources. There is no simple answer. In fact, every answer is a very expensive answer.
    Sir G. Sinclair: Is not the Minister weary of sitting on this report for a whole year? Does he not realise that this delay is causing hardship both for local authorities and for parents and that that will continue to be the position until he can lay down the principles on which the Government set out to improve bus services for schoolchildren? In particular, will he hasten to help the rural areas, where this problem is often the most serious?
    Mr. Armstrong: There are plenty of urban areas that have serious complaints

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    about the impact of transport costs. Of course I am weary. I would like to find the answer but there is no quick, slick solution. We are searching for the right answer.

    Public Expenditure
    Dr. Hampsonasked the Secretary of State for Education and Science if he will make a statement on the substantial reduction in expenditure promised in the current expenditure White Paper compared with the 1973 White Paper.
    The Secretary of State for Education and Science (Mr. Reg Prentice): No, Sir. Pages 94–97 of the White Paper "Public Expenditure to 1978–79" provide ample comment on the Government's plans for education expenditure.
    Dr. Hampson: Does not the right hon. Gentleman agree, particularly in the light of research that has appeared in The Times Higher Education Supplement, that of all spending Departments Education is to gain the least from the present Government? Further, does he not agree that there has been a collapse in growth in real terms, as forecast, which is related in no way to the cuts of December 1973 or to the fall in the birth rate but to a change of Government priorities? Does not that show up as a total cover-up the Prime Minister's speech in Newcastle on 21st February? What is the right hon. Gentleman's strategy for distributing the cuts?
    Mr. Prentice: The White Paper that we have recently published provides for a growth rate in real terms of about 2¾ per cent. a year over a five-year period. If the hon. Gentleman compares that White Paper with the White Paper issued by the previous Government in 1973, he should bear in mind that on the very day that the December 1973 White Paper appeared the then Chancellor of the Exchequer announced substantial cuts. The result was that that White Paper was strangled at birth. In the sense that our White Paper represents lower figures, this is partly due to those cuts and partly due to a new demographic trend which has become apparent since then.
    Mr. Bryan Davies: May I ask my right hon. Friend to disregard the hypoc-p1246
    risy that comes from the Opposition? Is he aware that while continually emphasising the need for reduction in public expenditure they continually seek to identify programmes that involve such expenditure for the Government? Does my right hon. Friend recognise that many of his right hon. and hon. Friends are extremely concerned by the implications of the public expenditure programme? Is he aware that it appears as if the Government may be in danger not so much of pigeon-holing but of burying the Russell Report on adult education?
    Mr. Prentice: All of us share a common desire to see faster progress towards our education objectives. I repeat that the White Paper we have recently published represents a growth rate in real terms. That is not as fast a rate as any of us would wish, but it is not true to describe it as cutting education expenditure. It is a programme for slow but steady growth.
    Mr. St. John-Stevas: Speaking as one economic illiterate to another, would I be wrong in assuming that there would be much more cash available for education if less money had been wasted on the municipalising of housing and if there had been a more faithful observance of the social contract?
    Mr. Prentice: It is of vital importance that we should have a coherent housing programme as well as a coherent education programme. Therefore, I do not agree with the hon. Gentleman's first point. As for adherence to the social contract, I believe strongly in that and in recent days I have made my views on that matter very clear.
    Mr. Russell Kerr: Has my right hon. Friend made any calculation of the effect on the social contract of the recently announced 25 per cent. increase in the cost of school meals?
    Mr. Prentice: The increase that will take place later in the price of school meals will add a very small part of 1 per cent. to the cost of living. Of course I regret doing that, but in a time of rapid inflation I do not think we can expect the price of school meals or anything else to remain at precisely the same level year after year.

    Schools (Reorganisation and Closure)
    Mr. Beithasked the Secretary of State for Education and Science what weight he attaches, when considering schemes for the reorganisation of secondary education and proposals for the closure of village primary schools, to any consequent additional costs for the transport of children.
    Mr. Armstrong: My right hon. Friend takes into account all relevant factors, of which additional transport costs may be one, in his consideration of proposals under Section 13 of the Education Act 1944, as amended, and gives them due weight.
    Mr. Beith: Does the Minister recognise that in areas such as Northumberland the reorganisation and closure of village schools tends to lead to bussing on a grand scale, with children travelling 15, 20 or 25 miles a day? Does he recognise that as well as the social disadvantages of such a system the cost should be weighed in the balance when the economics of village schools and small local schools are being considered?
    Mr. Armstrong: Yes, I recognise the factors that the hon. Gentleman has mentioned. I remind him that the initiative for the reorganisation or the closure of any school comes from the local authority and that my right hon. Friend takes into consideration all matters. Of course, the overriding consideration is the educational well-being of the children in the area.
    Mr. George Rodgers: Is my hon. Friend aware that in many areas, and certainly in my constituency of Chorley, the bus companies have refused to harmonise their concessionary fares to scholars with the raising of the school leaving age? As there has recently been an increase of 30 per cent. in the cost of public transport, does not my hon. Friend think that remedies should be applied in this direction?
    Mr. Armstrong: This is a matter we have in mind when discussing the wide issues of transport policy which were raised in a previous Question.

    Reading Ability (Bullock Report)
    Dr. Boysonasked the Secretary of State for Education and Science what action he intends to take to secure the implementation of the recommendations of the Bullock Report on the reading ability of children.
    Mr. Bryan Daviesasked the Secretary of State for Education and Science if he has made a study of the Bullock Report on the reading ability of children; and whether he will make a statement.
    Mr. Prentice: I would refer to the reply I gave to a Question by my hon. Friend the Member for Lewisham, West (Mr. Price) on 18th February 1975.—[Vol. 886, c. 356–7.]
    Dr. Boyson: Does not the Secretary of State agree that among the 332 recommendations, 17 of which concern the primary sector, there is no emphasis on the return of the infant school in particular to the teaching of literacy as its primary purpose, which is a view that is held by many of us on this side and by hon. Members on the Government side too?
    Mr. Prentice: This very distinguished report, which deserves to be read widely and closely and to be discussed throughout the whole teaching profession, placed emphasis on the need for improved training in language ability at all levels of education, including the infant stage.
    Mr. Davies: Does my right hon. Friend agree that very few of the 332 recommendations of the Bullock Report bear out the assertions of the Opposition that standards are substantially declining in primary schools? Does he accept, however, that what the Bullock Report identifies is the necessity for a greater concentration of resources in schools and areas where the children are most socially disadvantaged?
    Mr. Prentice: On the latter part of my hon. Friend's question, the Government have taken many steps to remedy matters. On the former part, I agree that the Bullock Report demolished many of

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    the scare stories which had been current about the declining standards, but it went on to say—I agree with it strongly—that standards are not good enough and never have been, and therefore a concerted effort must be made to improve them.
    Miss Fookes: What steps does the Minister intend to take to improve the training of teachers, since the Bullock Report states that the good teacher is the most important single factor?
    Mr. Prentice: This Government have done many things to improve the status and morale of the teaching profession, including the highest pay increase in the history of the profession. There are many recommendations of the Bullock Report which will apply to the curriculum and the content of training courses for new teachers and I am sure that they will be closely studied in colleges of education.
    Mr. Guy Barnett: Is my right hon. Friend aware that this report will do an immense amount for the morale of the teaching profession and is the key to restoring confidence in our educational system amongst the public in general, particularly amongst parents? Is he aware also that the report, if it is to be implemented,—I believe it to be one of high priority—will involve the expenditure of money so that the monitoring and screening proposals can be implemented? What has he to say about that?
    Mr. Prentice: There are many aspects of the report and many of the 332 recommendations which can be implemented without extra expenditure. There are others which can be implemented with very modest expenditure. All the recommendations need to be studied carefully by the teaching profession, by local authorities and by my Department, and this process is going ahead rapidly.
    Mr. St. John-Stevas: I welcome the report, which confirms so much of what the Opposition have been saying about standards over the past 12 months, but may I join in the plea made by the hon. Member for Greenwich (Mr. Barnett) that the Secretary of State should give priority to the monitoring system? May I ask him to go further and introduce national standards of reading, writing and mathematics so that we can know exactly what are the achievements
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    in a school and what are the shortcomings?
    Mr. Prentice: I certainly would not accept the latter proposition without much more consultation with everyone concerned. On the question of monitoring, the assessment of performance unit which I have established within the Department is urgently studying the recommendations of the Bullock Report on this point. I hope to receive the unit's advice shortly.

    School Leaving Date
    Mr. McCrindleasked the Secretary of State for Education and Science what progress he is making in his consultations about introducing greater flexibility into the school leaving age.
    Mr. Lawsonasked the Secretary of State for Education and Science whether he is now able to make a statement on his policy on the school leaving age.
    Mr. Andrew F. Bennettasked the Secretary of State for Education and Science if he is now in a position to make a statement about legislation on a common summer leaving date for school leavers.
    Mr. Prentice: I stand firmly by the raising of the school leaving age to 16 and have no plans to alter this. As I told my hon. Friend the Member for Stockport, North (Mr. Bennett) on 4th February—[Vol. 885, c. 450.]—there is no prospect of legislation in the current Session affecting the summer leaving date this year. I am still studying the question in relation to future years and will make an announcement in due course.
    Mr. McCrindle: Is the Secretary of State aware that there are thousands of teachers who have borne the difficulties arising from the raising of the leaving age—I think that the Secretary of State concedes this—and who are very anxious for an early announcement indicating that at the very least it will become possible in 1976 for 15-year-olds to leave school immediately after taking the examinations? Is there any prospect of the Secretary of State making an announcement to that effect in the near future?
    Mr. Prentice: I am considering all the advice I have on this from teachers' organisations and many other quarters.

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    The advice does not all point the same way. It is a complex question. I shall make an announcement as soon as possible.
    Mr. Flannery: Does my right hon. Friend agree that the position in regard to the raising of the leaving age will stabilise itself and be accepted as time passes? Does he agree also that it is characteristic of Tory Members that, although they would never dream of lowering the school leaving age for their own children, they are constantly trying to lower it for the mass of the people?
    Mr. Prentice: I agree with my hon. Friend that already this year the raised leaving age is more acceptable to the age group concerned than it was 12 months ago, and in successive years the raised age will become accepted as a matter of course. I believe that the lesson of the first year that the majority of children benefited from the extra year at school, but in so far as mistakes are made in some areas experience will teach the schools how to recover from those mistakes and we shall see an improving result from this long overdue reform in the future.
    Mr. Lawson: Does not the Secretary of State agree that since economic conditions and Government policy together are calling for a massive reduction in the rate of increase of public expenditure—local authority expenditure particularly, and notably on education, from which my county of Leicestershire is suffering—economies have to be made? Would it not be sensible to look again at the question of the raising of the school leaving age, which I accept is a commitment but which is a mixed blessing? If the Secretary of State goes back on this commitment in the light of economic conditions, will he accept an assurance that this will not be regarded as welshing?
    Mr. Prentice: I believe that all the parties were right to enter into the commitment. It is a great pity that we had to wait so long before that commitment was implemented. It would be a very retrograde step ever to go back on it, and it is no part of my policy to consider doing so.
    Mr. Hooley: I entirely support my right hon. Friend's stand against
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    any fiddling about with the school leaving age. Does he agree that there might be more flexibility between schools and further education colleges in teaching children of the age of 15 or 16?
    Mr. Prentice: Yes. There has been some welcome progress in this direction in recent years, and I hope that it will increase. I strongly agree that there is great scope in many areas for greater co-operation between the further education system and the schools.
    Sir John Hall: Is the Secretary of State aware that at a recent consultation between the secretaries of schools and headmasters in my county of Buckinghamshire the growing truancy in schools was attributed largely to the increase in the leaving age? Although the headmasters concerned would not wish the leaving age to be reduced—here I agree with the right hon. Gentleman—they nevertheless thought that the times at which 16-year-olds can leave should be reduced from twice a year to once a year—namely, in May of each year—which would ease the problem.
    Mr. Prentice: I do not exactly regard Buckinghamshire as the major source of enlightenment on education matters. Nevertheless, I take the point that teachers all over the country are discussing the practical implications of possible flexibility in the school leaving date within the summer term. In reply to earlier supplementary questions I said that I was giving urgent consideration to this matter.

    Rainow Church of England Junior School
    Mr. Wintertonasked the Secretary of State for Education and Science whether he will take exceptional steps to include the proposed Rainow County Junior School and Infants School in an early building programme on account of the overcrowding, fire hazards and highway dangers of the existing Rainbow Churh of England Junior School.
    Mr. Armstrong: No, Sir. Under the terms of my Department's Circular 13/74, it is for the local education authority in the first instance to decide which projects should be started within its lump sum building authorisations.
    Mr. Winterton: I thank the Minister for his reply. Does he agree that a village which is expanding very fast and into which many new families with young children are moving should be considered as a priority? Does he consider that a totally inadequate school which opens on to a dangerous road with a very narrow pavement should justify a priority too? Does he consider that a school with no playing facilities puts children moving on to the secondary sector at a severe disadvantage?
    Mr. Armstrong: Yes, this is a school I want to see replaced as quickly as possible. The Cheshire authority has been allocated £3,712,000 in the 1975–76 building year. That is mostly for basic needs, but it is for the authority to decide the relative merits of this school and others within its area.

    Further Education
    Mr. Thorneasked the Secretary of State for Education and Science if he will take special steps, in view of the intention of local authorities to reduce their further education expenditure, to ensure that any progress made in extending day release for young workers can be met by the resources available in the colleges of further education which such young workers would attend.
    Mr. Prentice: I am not aware that local authorities generally have decided to reduce their expenditure on further education. The rate support grant settlement for 1975–76 allows provision for the expected increase in the number of students in maintained colleges of further education in the coming year. I am anxious that opportunities for the continued education of young people in employment should be improved, and I am discussing with interested bodies possible ways of making practical progress in difficult economic circumstances.
    Mr. Thorne: Is my right hon. Friend satisfied that the local authorities can meet all the needs of the further education sector in view of the Chancellor of the Exchequer's call for a reduction in revenue expenditure and the restrictions placed on capital projects? Does he consider that lower expenditure on education is part of the social contract?
    Mr. Prentice: As I explained earlier, there is rising expenditure on education, and the education element in the rate support grant for 1975–76 allowed both for an increased number of students in further education and for some modest improvement in non-teaching costs. It is therefore not true to say what my hon. Friend said. I think we can see some progress here. In some areas, though not all, there are empty seats in classrooms in further education colleges and I would like to see these filled with extra students since that could be done without extra cost.
    Dr. Hampson: Since the Government have asked local authorities to cut back on expenditure, and since education is now at the bottom of the Government's priority list of expenditure forecasts, how does the right hon. Gentleman justify asking local authorities to make reorganisation of secondary education their number one education priority? This lack of strategy and lack of guidelines will cause indiscriminate cuts and great damage to the system.
    Mr. Prentice: I tried to explain earlier that education was not at the bottom of the Government's priorities. If the Conservatives had won the last election, however, it would have been at the bottom of theirs. It was a very important part of the Conservative election campaign to call for cuts in public expenditure with the exception of housing, pensions and agriculture. So education clearly was due for considerable cuts, and the country has been saved from that by the continuation in office of a Labour Government.
    Mr. Spearing: Does my right hon. Friend agree that in spite of the welcome increase in education expenditure in polytechnics and technical colleges there is a distinct danger of valuable courses which cost very little being cut in order to maintain other more prestigious courses which appeal to the nominally better-qualified teachers? Will my right hon. Friend look at this as it affects the efficacy of the school leaving age programme and those not going for the more scholastic certificates and degrees?
    Mr. Prentice: Both in our capital allocations and in all our policies we are

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    tending to favour the local authority sector of higher education rather than universities and, within that, to give all possible priority to non-advanced work such as that provided for those on day release and further education courses.
    Sir John Hall: Is the Secretary of State aware that, if the local authorities are to meet the Government's request that rate increases in the coming year should be restricted to no more than 25 per cent., there will inevitably be a cut in education expenditure in real terms? The target cannot be achieved in any other way. How does the right hon. Gentleman answer that point?
    Mr. Prentice: No, Sir. The rate support grant settlement was negotiated between the Government and the local authority associations on the basis that rate increases should be confined within the limits laid down and that expenditure increases should be confined to inescapable commitments. The education component of that envisaged growth in real terms of 4 per cent. and the further education component, which is the subject of the Question, envisages increased student numbers and some modest improvement in standards.
    Mr. Gwilym Roberts: I accept most of the things my right hon. Friend has said, but is he aware that there is very real concern among people who are involved in these matters that cuts are taking place in post-16 education in general? Does he accept that post-16 education is particularly vulnerable in times of economic stringency compared with the mandatory pre-16 sector?
    Mr. Prentice: I accept that it is a particularly vulnerable sector because it is not mandatory. I would like to put on record that I would greatly regret the policy of any local education authority which involved economies at the expense of those in the 16 to 19-year age group in employment who still have educational needs as important to them as the needs of those who go on to full-time higher education.
    Mr. Christopher Price: Is my right hon. Friend aware that the needs of this age group were amongst the top four priorities in two successive Labour manifestos last year? So far the Government have not brought forward any specific
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    proposals to fulfil either manifesto pledge. When are we going to do so?
    Mr. Prentice: I have made it clear that within the framework of the rate support grant we have made a better provision than many hon. Members realise. I am consulting a number of bodies about long-term changes. They include the TUC education committee, the ATTI, the City and Guilds of London Institute, the Association of Metropolitan Authorities and others. I am exchanging views with them about the future pattern of provision for this important age group.

    Secondary Education (Trafford)
    Mr. Churchillasked the Secretary of State for Education and Science what discussions he has had with representatives of Trafford in regard to the implementation of a comprehensive system of secondary education; what is the capital cost involved in achieving this changeover; and how soon its share of the necessary resources will be made available by central Government.
    Mr. Armstrong: My right hon. Friend has had no such discussions with representatives of the authority. He expects to receive shortly the authority's response to Circular 4/74 which called for information about the measures to be taken for comprehensive reorganisation. That circular stressed the importance of making the maximum use of existing buildings and available resources. I cannot yet say what resources will be available for school building in 1976–77 and later years.
    Mr. Churchill: Is the Minister aware that the estimated cost of imposing a comprehensive scheme in the Trafford district of Manchester is no less than £4 million, which will fall squarely upon the ratepayers? Is he aware that this is more than eight times as much as the total available for all capital expenditure on education in the coming year? In the circumstances, is he satisfied that the Government have their priorities right in pursuing this element of doctrinaire Socialism when in the case of the Trafford district—[HON. MEMBERS: "Too long."]—one-fortieth of this expenditure would provide a replacement school for St. Bride's Primary School, which is 100 years old and which has already been condemned as structurally unsound?
    Mr. Armstrong: I am not aware of the cost of the proposals from the Trafford authority because as yet we have not received the proposals from the authority. As for our priorities, for far too long most of our resources have gone to the gifted and privileged children at the expense of those who are disadvantaged and less gifted. Because we want to get rid of the unfair and wasteful system of selecting children, this is our highest priority—
    Mr. Churchill: What about St. Bride's?
    Mr. Armstrong: —and we are expecting a quick response from the hon. Member's authority.
    Mr. Marks: Some of the authorities which have submitted their plans hope to go comprehensive in September next year. Will my hon. Friend's investigations be complete in time for them to do so?
    Mr. Armstrong: Yes, Sir. We have in mind the desire of most authorities to abolish selection as quickly as possible. We shall deal with all Section 13 proposals as expeditiously as possible.
    Mr. St. John-Stevas: May I repeat the Opposition's plea to the Minister for a moratorium on the policy of compulsory comprehensivisation of schools? Does he not realise that by insisting on reorganisation and providing no money to do it he is not only lowering standards but bringing the whole idea of the comprehensive school into disrepute?
    Mr. Armstrong: I reject the hon. Gentleman's suggestion outright, I remind him of a distinguished predecessor of my right hon. Friend, Lord Boyle, who said that the greatest fact in British education was the waste of talent. Waste of talent occurs because we label and segregate our children.

    Nursery Education (Hampshire)
    Mr. Gouldasked the Secretary of State for Education and Science what action he is proposing to take in respect of Hampshire County Council's grant for nursery school building in the light of its intention to cut back its programme for 1975–76.
    Mr. Armstrong: My Department authorises capital building for nursery
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    education provision in local authority areas and the rate support grant takes account of the costs incurred. The Hampshire County Council has informed my Department that it does not intend to carry out any nursery education building in 1974–75 or 1975–76 although its allocation from the resources available over the two years totalled £1,105,000. As I have already made clear, these resources will be made available to other authorities able and willing to use them for nursery education building.
    Mr. Gould: Is my hon. Friend aware that in Hampshire only one child out of 40 attends nursery school, compared with the national figure of one in nine? Does he agree that Hampshire County Council's refusal to accept its allocation for nursery school building will further prejudice Hampshire schoolchildren in this respect and that if that is to be avoided in the light of the priority the Government give to nursery education, further Government action is needed?
    Mr. Armstrong: Yes, Sir. It is difficult for the Department to intervene. I agree with my hon. Friend that hundreds of thousands of children are born to fail. To compensate for that we must have more pre-school education. I very much deplore Hampshire's attitude. I am glad to say that 57 other authorities have willingly applied for the resources that Hampshire does not want to use.

    CLASP-built Schools
    Mr. Radiceasked the Secretary of State for Education and Science if, in the light of recent evidence, he will issue fresh guidance to local authorities about fire hazards associated with CLASP-built schools.
    Mr. W. E. Garrettasked the Secretary of State for Education and Science whether, in view of further instances of serious fires in schools built on the CLASP system, he will now take specific action to ensure greater safety of existing schools built under this system and to ensure that future methods of school construction ensure maximum safety.
    Mr. Armstrong: My Department's current requirements for fire precautions, framed in consultation with other Government Departments, set high standards for new schools of all kinds. Decisions

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    to improve the fire resistance of existing schools require local knowledge and are for local determination. My Department wrote to all local education authorities on 9th January to remind them of basic fire precautions in schools.
    Mr. Radice: I thank my hon. Friend for that answer, which will go a long way towards allaying public anxiety. Is he aware, however, that some existing schools built on the CLASP system have a gap between the roof and the ceiling which can be a fire hazard? What advice is he giving to local authorities about the problem and about the prevention of arson?
    Mr. Armstrong: In Building Bulletin No. 7 we have referred to the urgent need for fire-stopping in floor and roof cavities. The CLASP buildings are a major concern of ours. Local authorities are responding and are spending money to remedy pre-1971 schools. Of the 32 school fires that have occurred in the North-East recently, seven were in CLASP buildings.
    Mr. Garrett: Will my hon. Friend accept my assurance that I and many of my colleagues from the North-East are very satisfied with the work that has been done to ensure that satisfactory reply?
    Mr. Armstrong: I am grateful to my hon. Friend.

    SOCIAL CONTRACT
    Mr. George Gardinerasked the Prime Minister whether the public speech by the Secretary of State for Employment on 14th February at Ebbw Vale on the subject of the social contract represents Government policy.
    Mr. Peter Morrisonasked the Prime Minister whether the Secretary of State for Employment's public speech at Ebbw Vale on the social contract on Friday 14th February represents Government policy.
    Mr. Hurdasked the Prime Minister whether the public speech by the Secretary of State for Employment on the social contract at Ebbw Vale on 14th February represented Government policy.
    The Prime Minister (Mr. Harold Wilson): Yes, Sir.
    Mr. Gardiner: The right hon. Gentleman will be aware that the Secretary of State for Employment has since developed his theme. As the Prime Minister, by virtue of his own frequent appeals for restraint in pay claims within the social contract, must be classed as an economic illiterate in his right hon. Friend's eyes, will he take this opportunity to express his full support for those of his Cabinet colleagues, such as the Secretary of State for Education and Science, who seek in their speeches to underline the wage responsibilities of the social contract, or will the Prime Minister, too, welsh on those responsibilities?
    The Prime Minister: While the matter does not technically arise on this Question, as the speech referred to was about the miners' settlement, I am happy to say, on the point raised by the hon. Gentleman so touchingly and movingly, that the House can leave it to me to ensure that the normal rules in these matters are observed. [An HON. MEMBER: "What rules?"] The rules of every Government in this country. But while my colleagues and I have been urging for months, before both trade union and other audiences, compliance with the social contract guidelines, I must tell the House—and I want this to be understood—that no Minister has at any time over those months proposed any alternative policy to the social contract. [Interruption.] Certainly no Minister has proposed a return to the disastrous policies of a year ago this week, based on statutory controls and the three-day week. I thought that what I said would be cheered by Opposition Members, because I am glad to feel that on this matter there is total bipartisanship in the House. I understand that the right hon. Lady the Leader of the Opposition has now forsworn the statutory pay policy of her predecessor which she supported when in government.
    Mr. Kinnock: Does my right hon. Friend appreciate that no useful advice is to be gained on policy of any kind from the economic sub-literates on the Opposition benches, and that far from unemployment, as offered by them, and statutory incomes policy, as undertaken by them, being the cure for our economic

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    problem, that problem and the problems of our democracy can be overcome[HON. MEMBERS: "Too long."]—only by means of persuasion and example, which are the basis of the social contract?
    The Prime Minister: I must say with regret that I disagreed with what my hon. Friend said at the beginning of his question. It is wrong to say that we cannot learn from the Opposition. We can learn from their experience, as they have now done. But I join my hon. Friend in expressing great anxiety about what have clearly become the Conservatives' policies, although they have not yet been made articulate—monetarist policies which can lead only to unemployment.
    Mr. Morrison: Is the Prime Minister aware that the Secretary of State's speech was also about the social contract? Is he or is he not satisfied that the convention of collective Cabinet responsibility still exists in regard to the social contract?
    The Prime Minister: Certainly. Many of my right hon. Friends and I have been urging compliance with the social contract over many months. But if I want to study collective responsibility I will not look at the Opposition benches—[HON. MEMBERS: "Answer."]—because for precisely three weeks the Opposition Front Bench has been dissociating itself from everything it did under the previous Prime Minister.
    Mr. Lipton: Will my right hon. Friend put a guillotine on his answers to the silly questions asked by the Opposition? I should like to know whether my right hon. Friend will be visiting Beckermet.
    The Prime Minister: I know that my hon. Friend, with his long experience and wisdom in these matters, can put a correct evaluation on the quality and motives of the questions of hon. Members opposite. I shall get to Beckermet when the relevant Question is asked.
    Mr. Hurd: Is it not just possible that the Secretary of State for Education and Science is right? Why is it that after one year of the social contract as administered by the Prime Minister and the Secretary of State for Employment we have in this country a rate of inflation which is far higher than that of any of our competitors—twice that of the United States and three times that of Germany?
    The Prime Minister: In so far as my hon. Friend was following the speeches which I made, from the TUC onwards last September, urging compliance with the contract, he was expressing the view of all of us and, I should hope, of the whole House since the Opposition have rejected any alternative policy.
    The figures which were published last month were inflated by the Tory Government's thresholds—[HON. MEMBERS: "Oh."]—which throughout the election I said I supported; they are a very considerable proportion of this. Secondly, the figures include long overdue settlements, which I have not heard criticised by any right hon. or hon. Gentlemen, for people such as nurses and teachers who had been left behind and who received back pay for anything from eight to 10 months. The hon. Gentleman must study the figures before he asks questions about them.
    Mr. Edwin Wainwright: Will my right hon. Friend cut down his replies to the Opposition's ridiculous supplementary questions? Does he realise that they do not want the social contract to succeed? Therefore, will he bear in mind that if any disagreement arises between my right hon. Friends he must advise them not to express it in public?
    The Prime Minister: My hon. Friend is right in what he says about the Opposition's motives. But they have no alternative policy. As there have been suggestions this afternoon of a certain marginal crossing of ministerial lines, I feel a deep sense of responsibility to engage in some educational help for Opposition Members.
    Mrs. Thatcher: Bearing in mind that in answer to a Question in November the Prime Minister said that all his Ministers were responsible for the social contract, may I ask whether the Friday speech of the Secretary of State for Education and Science represented Government policy?
    The Prime Minister: So far as it involves support for the social contract, yes. So far as it has been interpreted, rightly or wrongly, as proposing other alternative policies, I am happy to say that my right hon. Friend at no point, in public or elsewhere, has advocated an alternative policy.
    Mr. Thorpe: As no one suggests that the Secretary of State for Education and Science was proposing an alternative policy but was merely suggesting that the present policy was not working, and as the Secretary of State for Employment said that the social contract was the best shield against worsening inflation and rising unemployment, and as many of his colleagues have said that it is not working, what measures does the right hon. Gentleman propose to back up his Ministers who are trying to make it work?
    The Prime Minister: The social contract is the right policy. I have not heard an alternative policy from the official Opposition, and I am glad that they have repudiated the policy which they were following a year ago. I pay this tribute to the right hon. Member for Devon, North (Mr. Thorpe). He at least has produced an alternative policy. He supports a statutory policy. The Opposition have thrown over what they supported in office. I congratulate the right hon. Gentleman. I think he is wrong, but at least he is showing more honesty than the official Opposition.

    NATIONAL ECONOMIC DEVELOPMENT COUNCIL
    Mr. Duffyasked the Prime Minister when he next expects to take the chair at a meeting of the NEDC.
    The Prime Minister: My right hon. Friend the Chancellor of the Exchequer is chairman of the council. I have said previously that I hope to take the chair about once a quarter, but I have no specific date in mind at present.
    Mr. Duffy: Is my right hon. Friend aware that the worsening outlook for capital investment confirmed by yesterday's CBI Industrial Trends Survey can only prolong the recent fall in industrial production and thus add to unemployment? Will he therefore take an early opportunity, such as chairing the NEDC can provide, to put some backbone into business men, pointing out to them that theirs is the responsibility for the present lack of investment because theirs is the crucial rôle, impressing on them that no one, including themselves, can benefit from this state of affairs, and asking them
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    whether they will start trying to believe once more in themselves?
    The Prime Minister: As I have told the House, the NEDC—both sides of industry and the Government—at its last two meetings, and it will happen again tomorrow, has been working on the problem of investment and increased industrial capacity to meet the requirements of world markets in the oil States, in the Soviet Union and elsewhere.
    My hon. Friend, and I hope right hon. and hon. Members opposite, will have been encouraged to see the figures published this morning showing that, despite earlier forecasts, industrial investment in manufacturing rose in the fourth quarter of last year. It was 5·4 per cent. up on the fourth quarter of 1973, when the Opposition were responsible for these matters, and 19·9 per cent. up on the fourth quarter of 1972. [Interruption.] In reply to the illiterate muttered supplementary question about prices, may I say that the hon. Member knows that these figures are at constant prices.
    Mr. Grylls: If the Prime Minister takes the chair at the NEDC, will he be repeating his speech outlining the Government's achievements, and does he consider the present rate of inflation to be an achievement or a failure?
    The Prime Minister: All my speeches from the moment we came to office have dealt with the problem of inflation. Nothing happening today is different from what we were told a year ago—[HON. MEMBERS: "Oh."]—since we were told a year ago today about the likelihood for inflation and for unemployment, except that all of us—I should like the Opposition's support—are struggling to stop the increase in unemployment then forecast which is occurring in most other industrial countries. We have also made more impact on the balance of payments problem.
    Mr. Noble: When the Prime Minister meets trade union leaders at NEDC or elsewhere, will he listen carefully to what they have to say about import controls? Will he note that these are a means of improving the balance of payments and preventing unemployment from increasing, particularly in such industries as textiles and footwear?
    The Prime Minister: There is a special textile and footwear problem. Hon. Members on both sides of the House are concerned about it, and I have suggested that they should meet my right hon. Friend. I have been in touch with the industry and certain action has been taken, but I know of the anxiety.
    I take the view that import controls as a general policy would be bad for Britain from the point of view of dealing with the balance of payments, because they would help to get world trade spiralling further downwards. I point out to my hon. Friend and to those who support him that if we impose physical controls to restrict imports it will not be an alternative to deflation. We reject both policies. We should have to have deflation in order to prevent a big increase in consumption which would frustrate our exports.
    Mr. Heseltine: Does not the Prime Minister agree that investment intentions are declining to the worst level ever and that, until we see a new confidence in industry, forward investment will not increase? Does he agree that the terms of the letter which I wrote to him on Friday setting out the instructions that would have to be given to bring the Industry Bill into the terms of the White Paper—as he has promised to do—are the basis of the instructions which he will be giving to parliamentary draftsmen for preparing Government amendments to the Industry Bill?
    The Prime Minister: I do not accept any of the points made by the hon. Gentleman. As to the effect of business confidence on investment, the figures have been showing a decline for a very long period. The figure for the fourth quarter is actually up, and I hoped that the hon. Gentleman would say how delighted he was, but that is not in his nature. The intentions for the fourth quarter were worse, but they have improved in reality and I hoped that the hon. Gentleman would be pleased.
    The hon. Gentleman will be receiving a reply to the letter he so kindly sent to me, and he will know that I am currently discussing these matters with the CBI and the TUC. I thought I might
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    perhaps send him a detailed reply because it is plain from his letter that he has totally falsified the position in relation to the Bill. The hon. Gentleman in his speeches and letters should stop thinking in slogans and apply himself to the problems. He will get the reply to his letter, and I hope that he will be a much humbler man when he has read it.
    Mr. Bidwell: Does my right hon. Friend agree that, worrying as inflation is, the villain of the piece has been the failure of those with the ability to invest to do so or their preference to invest overseas? Does he agree that, in spite of what he said, this is a continuing worry? Does he think that the policies are sufficient to arrest the tendency and drastically to improve investment?
    The Prime Minister: Yes, Sir. I answered that question a week ago, and I dealt with it at some length when discussing these matters with the Scottish TUC last week and on television in Scotland. I said then, and I must repeat, that, as we have said for 12 months and more, the immediate problem of inflation can arise from self-generated income demands—wages, salaries and other incomes outside the employment field. The long-term problem we face is the totally inadequate investment—under successive Governments; I concede that—for about 20 years. That is the basic problem. Had business invested when it should and could have done and had every chance of doing, we should not be as vulnerable as we are to short-term factors.
    Mr. William Clark: When the Prime Minister takes the chair will be explain to the council why his Government are steamrollering through the House an iniquitous tax which is ill-understood and which has far-reaching economic consequences, without adequate debate because of the timetable motion?
    The Prime Minister: I do not agree with the hon. Member's premise. There have already been about 170 hours of debate. I understand that the House is being asked today to approve other arrangements which will provide adequate time for considering all the nonsense of hon. Gentlemen opposite for another four days.

FINANCE BILL (POINTS OF ORDER)
Mr. Speaker: I wish to say something to the House about what happened when I was in the Chair late last night. I allowed the Leader of the House to make a statement about the business for today, the Finance Bill (Allocation of Time) motion. I thought that that was for the convenience of the House.
An analogy is when the Government of the day are defeated in a Division. On such occasions the Leader of the Opposition sometimes rises on a point of order to ask what are the Government's intentions. That is not really a point of order at all, as I have stated more than once, I think. My practice has been to allow a statement by the Government spokesman and one further question. That is what I did last night. I called the right hon. Member for Yeovil (Mr. Peyton) after the Lord President. I refused to take points of order on the statement because, in my view, there could not possibly be a valid point of order. The Lord President had used parliamentary language, the course which he proposed was in accordance with Standing Orders and no valid question of order could arise.
I must remind the House that the use of points of order to advance arguments or to comment unfavourably or favourably on Government actions is an abuse which is growing in frequency, and it occurs on both sides of the House.
If the House wishes a change of business to be announced in some other way, the Procedure Committee could be asked to examine the matter. That Committee might also consider how the Chair might be helped to deal with points of order.
Mrs. Thatcher: May I thank you very much, Mr. Speaker, for clarifying the position? We were a little worried lest a new precedent should have been created. I understand that it has not, and I am grateful to you.
Mr. Thorpe: I wonder whether the point could be referred to the Procedure Committee, Mr. Speaker? The matters which you have indicated to the House are with precedent, as you rightly said. What the House finds difficult—and it may be a matter for the Procedure Com- 1268
mittee to consider—is that the House is invited to vote on a matter and a Minister afterwards gives his reasons why it is right that we should have done so. It would be nice if we could reverse the process, as has always been the tradition of the House.
Mr. Speaker: I do not think that that is a matter for the Chair.
Mr. Emery: Thank you for your statement, Mr. Speaker. May I ask you about one aspect of it? Erskine May, on page 430, reads as follows:
"it is also the right of any Member who conceives that a breach of order has been committed … to rise in his place, interrupting any Member who may be speaking, and direct the attention of the Chair to the matter, provided he does so the moment the alleged breach of order occurs."
I wish to refer to three remarks which you made last night, Mr. Speaker. For the sake of accuracy I have consulted the report of the proceedings, which is not yet published. You are reported as saying, on three occasions:
"I may perhaps take points of order afterwards."
"I might perhaps take a point of order after that."
'If I think it appropriate, I will take the point of order after I have heard the right hon. Gentleman."
I ask you to rule, Sir, that an hon. Member has a right to raise a point of order. It was quite obvious last night that several hon. Members wished to raise points of order. I wished to refer not to the statement that had been made but to what had happened previously, and that was the first opportunity I had to do so. It is important that the Chair should not be seen in any way to restrict the right of hon. Members which is so clearly stated in Erskine May.
Mr. Speaker: The Chair has no such desire. The hon. Member for Honiton (Mr. Emery) was called last night on a point of order, so he does not have much about which to complain.
The Chair is in great difficulty with points of order. Until it has heard the points of order it cannot always say whether it is a good one. For example, the hon. Member for Blaby (Mr. Lawson) yesterday was indignant and said he wished to raise a new point of order. It turned out not to be

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a point of order but to refer to something which the Lord President had said on the length of time to be given to the Report stages of Finance Bills. That is not a matter of order and not a matter for the Chair. If on occasion the Chair thinks thmat a point of order cannot be a valid one it must allow the House to get on with its business. It can be seen from the number of points of order that are raised that I have no desire to restrict hon. Members' rights.
Mr. Gorst: I thank you, Mr. Speaker, for the explanation and the statement that you have made, which are entirely satisfactory as no precedent has been set. May I just explain the point of order which I intended to raise? I was intending to make a point of order not on the matter which was currently under discussion but on the Division which had just taken place. In view of your satisfactory explanation, Mr. Speaker, may I take this opportunity to give public notice that I shall withdraw my motion of censure.
Mr. Speaker: I am obliged.
Mr. Kershaw: On a point of order, Mr. Speaker. In your remarks just now, you pointed out that you did not see how a point of order could arise and, of course, the Chair must have discretion in such matters. Like my hon. Friends the Members for Hendon, North (Mr. Gorst) and Honiton (Mr. Emery), I wished to raise a point of order, not on your ruling about the statement of the Leader of the House but about what had immediately gone before. Unless you were willing to listen to the first few words, you could have had no idea of what I was intending to say.
Mr. Speaker: I suspected that it might be that, because the hon. Member for Honiton (Mr. Emery) had already raised that point of order. That business had been concluded. The hon. Member was too late to raise a point of order about the Division. I had announced the result of the Division. However, we will not go into that now.

QUESTION OF PRIVILEGE
Mr. Speaker: I will now rule on the complaint of breach of privilege raised by the hon. Member for Crewe (Mrs. Dunwoody).
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I have considered the matter of the complaint made yesterday by the hon. Member of certain passages in the Travel Trade Gazette newspaper. I am satisfied that this is a proper case for me to allow a motion with precedence over the Orders of the Day.
The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short): In view of your ruling, Mr. Speaker, I beg to move,
That the matter of the complaint be referred to the Committee of Privileges.
It would, I think, be in the interests of the House as a whole now if it were to decide that no further debate should take place at this stage.
Question put and agreed to.
Ordered,
That the matter of the complaint be referred to the Committee of Privileges.

NORTON VILLIERS TRIUMPH LTD. ORDER (BUSINESS STATEMENT)
Mr. Heseltine: On a point of order, Mr. Speaker. Last night we had a Business Statement from the Leader of the House announcing a guillotine on the Finance Bill and informing the House that the Norton Villiers Triumph Order was to be taken late on Wednesday night. My right hon. Friend the Member for Yeovil (Mr. Peyton) asked why, since the order had been on the Notice Paper for four months, it was necessary to give such extraordinarily short notice of the decision to bring it forward to a debate. The Leader of the House replied to my right hon. Friend by saying that it was
"because the Chairman of Norton Villiers Triumph has informed us today that this money must be forthcoming this week, otherwise there will be redundancies. This is the first that the Government have heard of the urgency of the matter."
I have this morning spoken to the Chairman of NVT, who tells me that he has had no conversations with Ministers since last Thursday—[Hon. Members: "Oh."]—that no meeting took place with civil servants except for one last Friday with Treasury civil servants. The Chairman tells me that the position about redundancies in the company has been known, on an increasingly serious basis,

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to Ministers in the Department of Industry for the past two to three months. I understand, although I am not able to get this information in writing because the Chairman is not in London, that that is the gist of the information that has been made available to the national Press.
There are two points on which I seek your guidance, Mr. Speaker. The first is whether you feel it would be appropriate, since we can no longer question the Business Statement made last night, for the Leader of the House now to add to the statement he made then. Second, if on reflection it turns out that the information given by the Leader of the House to justify bringing forward the NVT order at such short notice was based on false information given to the right hon. Gentleman then, what possible ground is there for proceeding with the order at such peremptory speed?
The Secretary of State for Industry (Mr. Anthony Wedgwood Benn): Further to that point of order, Mr. Speaker. Perhaps it would be for the convenience of the House if I were to reply. [Hon. Members: "No. The Leader of the House."] As the hon. Member for Henley (Mr. Heseltine) quite properly said, the order in question has been upon the Notice Paper for some time. It followed from discussions with the company that there was a degree of urgency in the matter—
Mr. Rost: When?
Mr. Benn: —which led me to communicate with my right hon. Friend the Leader of the House about this and to ask that the debate take place this week. There will be an opportunity during the debate, if it follows in accordance with the Business Statement made by my right hon. Friend last night, to explain the circumstances in which it was necessary to bring it forward. I believe that that will be for the convenience of the House.
Mr. Adley: Further to that point of order, Mr. Speaker. As I understand it, the Secretary of State for Industry was in Bristol yesterday. The Leader of the House came to the House at midnight last night with this extraordinary statement about the urgency of this matter. Could we please know from the Secretary of
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State when he informed his right hon. Friend of the sudden urgency of this business?
Mr. Benn: I spoke to my right hon. Friend on the telephone from Bristol yesterday, before he made the Business Statement. My right hon. Friend—
Mr. Rost: When?
Mr. Benn: I spoke to my right hon. Friend from Bristol late yesterday morning. He was very anxious not to interfere with the pattern of business this week—[Hon. Members: "Oh."]—unless it was necessary so to do. I underlined in my conversation with the Leader of the House the importance of getting the order this week for the reason I gave.
Mr. Thorpe: With respect, this is an important point. [An hon. Member: "It is not a point of order."] I am not certain. I think that the Secretary of State in replying to the point of order was using the same discretion as you mentioned has existed on previous occasions, Mr. Speaker. Therefore it is in order, that discretion having been exercised, to ask a question. Is the Seccretary of State aware that no one doubts for a moment that he spoke to his right hon. Friend along the lines he has indicated? Is he aware that what the House will be interested to know is at what stage in the past four months did the sudden urgency arise which was transmitted to the Leader of the House yesterday?
Mr. Benn: I would have hoped that the House would have taken the normal procedure of listening to the argument on the order and not seek to anticipate the debate by means of points of order.
Several Hon. Members rose—
Mr. Speaker: Order. Mr. William Hamilton.
Mr. William Hamilton: I beg—
Mr. Heseltine: Further to that point of order, Mr. Speaker. The House will be at a loss to understand how a question to the Leader of the House can be answered by the Secretary of State for Industry.
Mr. Speaker: Order. That is not a matter for the Chair. Mr. Hamilton.
Mr. William Hamilton: I beg—
Mr. Heseltine: Further to that point of order—
Mr. Gow: On a point of order, Mr. Speaker—
Mr. William Hamilton: I beg to—
Mr. Heseltine: Further to that point point of order, Mr. Speaker. In my original request to you, I sought guidance upon two points. The first point depended on whether—
Mr. Speaker: Order. The content of an answer is not a matter for the Chair. It cannot be a matter of order. We will go on. Mr. Hamilton.
Mr. William Hamilton: I beg to move—
Mr. Heseltine: Further to that point of order, Mr. Speaker—
Mr. Speaker: Order. We cannot pursue this matter further. [HON. MEMBERS: "Yes."]
Mr. William Hamilton rose—
Mr. Whitelaw: On a point of order, Mr. Speaker. It really is not fair to my hon. Friend the Member for Henley (Mr. Heseltine) and to the House. My hon. Friend asked two questions seeking guidance from you. We have not had an answer from the Leader of the House. We have not been told why the Leader of the House had to announce this business last night as a matter of urgency. That is what we are entitled to know, and it is what we are entitled to know from the Leader of the House.
Mr. Speaker: Order. This is all coming out of the time to be devoted to the Finance Bill. The matters which have been raised are not matters for the Chair. I so rule.
Mr. William Hamilton rose—
Mr. Gow: I gave notice at the earliest possible moment that I wished to make an application under Standing Order No. 9. May I now please do so, Mr. Speaker?
Mr. Speaker: Now is the appropriate time.
Mr. Gow: I beg to ask leave to move the Adjournment of the House, under
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Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration: namely,
"The untrue statement by the Leader of the House in the early hours of this morning when he said, 'It is because the Chairman of Norton Villiers Triumph has informed us today'—I underline the word 'today'—'that this money must be forthcoming this week otherwise there will be redundancies.'"
My hon. Friend the Member for Henley (Mr. Heseltine) has just told the House that, despite the assurance given to the House by the Lord President shortly after midnight this morning, no such information had been given to the Government.
I submit that this is a specific matter. I also submit that it is an important matter. What could be more important than the assurance of the Leader of the House, one of the most senior members of the Government and himself the guardian and custodian of the rights of back benchers?
I turn now to the third aspect, that of urgency. What could be more urgent than the honour, truthfulness and integrity of the Government—
Mr. Speaker: The hon. Gentleman must not make the sort of speech he would make if I were to grant his application. He has to satisfy me that there should be a debate on this matter either today or tomorrow.
Mr. Gow: I hope that I have demonstrated that this matter is specific and important and that on the matter of urgency the whole credibility of the Government Front Bench is at stake.
Mr. Speaker: The hon. Member for Eastbourne (Mr. Gow) has made an application under Standing Order No. 9 asking me to allow a debate either today or tomorrow on the matter which he raised.
I am not prepared to grant that request.
Mr. Whitelaw: Further to the point of order raised by my hon. Friend the Member for Henley (Mr. Heseltine), I believe that the House is entitled to an answer to one simple question: when the Leader of the House made that statement last night, was it or was it not true? If it was not true, the order should be withdrawn and taken later. If it was true, the right hon. Gentleman the Leader of

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the House should get up and say so. Was it true or was it not?
Hon. Members: Answer.
Mr. Speaker: Order. If the noise continues, I shall suspend the sitting.
Hon. Members: Answer, answer.
Mr. Speaker: The sitting is suspended until 4.15 p.m.
Grave disorder having arisen, Mr. SPEAKER, pursuant to Standing Order No. 26 (Power of Mr. Speaker to adjourn the House or suspend the sitting), suspended the Sitting of the House.
Sitting suspended at five minutes to Four o'clock and resumed at a quarter, past Four o'clock.
The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short): During the adjournment I have made further inquiries into this matter.
I made a short Business Statement last night. In reply to the right hon. Member for Yeovil (Mr. Peyton), I gave an explanation in perfectly good faith believing that all that I said was absolutely accurate.
I have now found that my right hon. Friend the Secretary of State for Industry met Mr. Poore, the Chairman of Norton Villiers Triumph Ltd., on Thursday of last week. My right hon. Friend telephoned me yesterday from Bristol, and
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said that this matter must be dealt with this week, otherwise there would be great difficulties in the firm. I pointed out to him the great inconvenience to the House in debating the matter this week. However, he insisted that the matter must be dealt with this week, otherwise there was a danger of redundancies. Therefore, I announced the matter last night.
There was no intention of misleading the House—none whatever—and my statement was made in perfectly good faith.
Mrs. Thatcher: We are grateful to the Leader of the House for making that statement. Do we understand that the order is still to stay on the Order Paper?
Mr. Edward Short: I know that this is extremely inconvenient, but I am told that there would be great difficulties in the firm if the guarantees to the bank were not not made available by Thursday morning.
I apologise to the House for this.
Mr. Ridley: On a point of order, Mr. Speaker. I do not understand how it was possible for the Government to guarantee £50 million to British Leyland, whereas they appear to be totally incapable of making this guarantee without—
Mr. Speaker: That illustrates the difficulty of the Chair over points of order. That is a very relevant point for the debate, but it is not a point of order for me today.

CROWN DEPARTMENT
4.17 p.m.
Mr. William Hamilton: I beg to move,
That leave be given to bring in a Bill to establish a Crown Department of State.
I do this as a man of peace.
This is not an original idea. There was a debate on this proposition on 14th December 1971, and it had extremely respectable—one might almost say "conservative"—protagonists. Its supporters were not what I would call radicals and certainly not anti-monarchists. They included the present Lord Houghton, then the right hon. Member for Sowerby and a devout defender of the institution of the Monarchy.
Perhaps I might quote what he said on that occasion. The scheme which he was putting forward and which I am now putting forward
"… is not primarily devoted to money. It is more to do with the method of providing money."
He went on to expound the purpose of his proposal which had been before a Select Committee on which both he and I sat, and it was a proposition which had been defeated by only one vote in that all-party Committee.
The purpose was to pay
"… the cost of the upkeep of the Monarchy … out of moneys provided by Parliament instead of it being a permanent charge by Act of Parliament on the Consolidated Fund."
My right hon. Friend went on to point out that the scheme would make
"… the main expenses of the Monarch open to scrutiny and … to debate in this House."—[Official Report, 14th December 1975; Vol. 828, c. 293.]
He asserted, as has been asserted again by the recent report of the Trustees, that in any event there is a good deal of expenditure on this institution already dealt with on departmental Votes. My right hon. Friend quoted the Royal Yacht, the Queen's Flight, the Royal Palaces, and so on. In fact, about £3 million expenditure on the Monarchy is already borne by departmental Votes.
The object of my exercise this afternoon is to carry that further by bringing all the expenses of the upkeep of this institution, now scattered around in various
1278
forms, under one head. The body responsible, as my right hon Friend suggested four years ago, would be the Commissioners of the Crown with, although I think that my right hon. Friend retreated from this proposal, a Department and a Minister responsible for answering Questions and debates in this House. That Department would clearly by the Treasury. However, there would be Commissioners of the Crown in the same way as we have Commissioners of the House of Commons to look into the expenditure of this House which is produced on a departmental Vote.
Under my proposals the expenses of the staff and officials of the Crown would be taken off the Civil List and put on the Vote of the Commissioners of the Crown. That would mean that the inflationary problems which we all face today could be dealt with on an annual basis within the terms of the social contract.
Indeed, my right hon. Friend the Prime Minister went very far along this line when he made his statement on 12th February, because he said:
"The Government therefore propose, with the Queen's agreement, to seek the authority of Parliament to finance future increases in the provision for the Civil List and in the other payments authoriesd by Civil List Acts from 1976 onwards by means of a grant-in-aid made to the Royal Trustees by the Treasury out of moneys provided by Parliament. Grants-in-aid made in accordance with this arrangement would be included in Estimates and voted by Parliament in accordance with the normal procedure of Supply."—[Official Report, 12th February 1975; Vol. 886, c. 375.]
My Bill would not carry that much further than that which the Prime Minister recommended a few weeks ago, but it would bring us nearer to what every hon. Member wants—open and honest democratic government.
It seems to many hon. Members that the Monarch cannot have it both ways as is the case now. It cannot be argued that there is a private Household and all that taxpayers have to do is foot the bill. It is either private or public. It cannot be private and yet be financed by the taxpayer.
The principles enunciated by my right hon. Friend the then Member for Sowerby, now Lord Houghton, were supported by the Leader of the Liberal Party. One of his arguments was that

1279
the creation of a Crown Department of State would
"relieve the Monarch and the Royal Family of the enormous amount of very unfair publicity which they have to suffer at the moment."—[Official Report, 14th December 1971; Vol. 828, c. 327.]
My right hon. Friend the Member for Heywood and Royton (Mr. Barnett), now a brilliant jewel on the Treasury Bench, referred in scathing terms to the tax-free income of well over £100,000 for Prince Charles. We are waiting impatiently for him to remedy those abuses in the tax system. But that has nothing to do with my Bill. That is for the Treasury.
I refer now to the closing speech in the debate in December 1971 made by my right hon. Friend the Home Secretary. That was a forthright speech in which he accepted the proposition put forward by my right hon. Friend the then Member for Sowerby, now Lord Houghton. In the vote that ensued the present Prime Minister, with the Foreign Secretary, the Chancellor of the Exchequer, the Home Secretary, the Secretary of State for Education and Science, the Secretary of State for Employment, the Secretary of State for Social Services, the Chancellor of the Duchy of Lancaster and the Chief Whip voted for the proposition. In fact, that Lobby on that day reeked of respectability and deference. Therefore, there can be no question but that this Bill has very respectable antecedents.
I feel that the fears expressed in that debate—namely, that if annual Votes were presented to this House on the cost of the Monarchy they might lead to unseemly and perhaps embarrassing party wrangling—are unjustified. Having witnessed the scenes of the last few minutes, I do not think that we need to be afraid or ashamed of scenes of that kind. I understand the hysteria of right hon. and hon. Gentlemen opposite. They know that there is an unpleasant tax on its way for them, but we shall be debating that in due course. What I am proposing will happen anyway under the limited proposals announced by the Prime Minister on 12th February. The prospect is now offered of getting the institution of the Monarchy and its costs on to a more comprehensible and democratic footing.
It is in that spirit that I hope that the House will give me leave to introduce the Bill.
4.25 p.m.
Mr. Patrick Cormack: I shall not detain the House long. I do not think that the hon. Member for Fife, Central (Mr. Hamilton) should be allowed to get away with this Bill. Although the hon. Gentleman sought leave in terms rather more moderate than he adopts when talking in somewhat bilious rhetoric about the Royal Family, I think that it could be said that he seeks leave to introduce the Bill because, as a passionate believer in republicanism, he sees this as a step on the road towards republicanism.
I do not believe that the House should countenance this kind of suggestion and should not allow the Bill to be introduced, let alone have a Second Reading. To have a Minister of the Crown answerable for the affairs of the Monarchy at the Dispatch Box could serve only to weaken the democracy in which we all believe and for which we all struggle.
Anyone who witnessed the events of the last hour and of last night—the hon. Gentleman quite fairly referred to that matter—cannot for a moment think that to have the Crown represented by a partisan Minister at the Dispatch Box could serve the purposes of democracy and of the British constitution. I suggest that if hon. Members opposite allow the hon. Gentleman to introduce his Bill and consider giving it a Second Reading at a later date, they will be dealing a very real blow against the constitution which we all seek to uphold and at the Monarchy in which most people in this country—
Mr. J. Enoch Powell: Not all.
Mr. Cormack: Not all, I am reminded. I think that 91 hon. Members indicated last week that they did not support it. However, I suggest that most people in this country would view with considerable—[Interruption.] Hon. Gentlemen may make impolite interjections from a sedentary position, but most people in this country wish to uphold the Monarchy. Most people believe that it is the most priceless asset that this country has and that it is the most important guardian of the liberties of the individual.
Mr. Leslie Spriggs: On a point of order, Mr. Deputy Speaker. The

1281
hon. Gentleman is raising an issue that was not dealt with by my hon. Friend in seeking leave to introduce his Bill. I appeal to you to bring some order to the House.
Mr. Deputy Speaker (Mr. George Thomas): I regret that it is a common experience for hon. Members to refer to issues that have not been raised. I suggest that the House hears the hon. Gentleman and reaches a decision rather quickly.
Mr. Cormack: Thank you, Mr. Deputy Speaker, for your protection. I was seeking to argue that anybody who heard the sepech by the hon. Member for Fife, Central could not deny that he was suggesting that there should be a Department of the Crown with a Minister answerable to this House. I suggest that that would weaken the Monarchy and our constitution. Furthermore, I suggest that
the hon. Gentleman was merely moving that motion because it was inappropriate to move a motion for the abolition of royalty—or royalties—or anything like that.
I put it to the House that the greatest symbol of unity that this country has is the Monarchy and that anybody who accepts the suggestions of the hon. Member and brings into the political arena, with all the problems that that involves, the Monarchy of this country is doing a great disservice to our democracy. With those words I forthrightly oppose the Bill that the hon. Gentleman seeks to introduce.
Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of Public Business):—
The House divided: Ayes 174, Noes 207.

Division No. 119.]

AYES

[4.30 p.m.

Allaun, Frank

Evans, John (Newton)

McElhone, Frank

Anderson, Donald

Ewing, Harry (Stirling)

MacFarquhar, Roderick

Armstrong, Ernest

Faulds, Andrew

Mackenzie, Gregor

Ashley, Jack

Fernyhough, Rt Hon E.

McMillan, Tom (Glasgow C)

Ashton, Joe

Flannery, Martin

McNamara, Kevin

Atkins, Ronald (Preston N)

Fletcher, Ted (Darlington)

Madden, Max

Bagier, Gordon A. T.

Fraser John (Lambeth, N'w'd)

Marks, Kenneth

Barnett, Guy (Greenwich)

Freeson, Reginald

Marquand, David

Bates, Alf

Garrett, John (Norwich S)

Marshall, Jim (Leicester S)

Bennett, Andrew (Stockport N)

Garrett, W. E. (Wallsend)

Meacher, Michael

Booth, Albert

Ginsburg, David

Miller, Dr M. S. (E Kilbride)

Boothroyd, Miss Betty

Golding, John

Miller, Mrs Millie (Ilford N)

Bradley, Tom

Gould, Bryan

Molloy, William

Bray, Dr Jeremy

Grocott, Bruce

Newens, Stanley

Brown, Hugh D. (Provan)

Hamilton, W. W. (Central Fife)

Noble, Mike

Buchan, Norman

Hardy, Peter

Orbach, Maurice

Butler, Mrs Joyce (Wood Green)

Hatton, Frank

Ovenden, John

Callaghan, Jim (Middleton & P)

Hayman, Mrs Helene

Palmer, Arthur

Campbell, Ian

Heffer, Eric S.

Pardoe, John

Canavan, Dennis

Hooley, Frank

Park, George

Carmichael, Neil

Hoyle, Doug (Nelson)

Parry, Robert

Carter, Ray

Huckfield, Les

Pavitt, Laurie

Clemitson, Ivor

Hughes, Robert (Aberdeen N)

Penhaligon, David

Cocks, Michael (Bristol S)

Hughes, Roy (Newport)

Perry, Ernest

Cohen, Stanley

Hunter, Adam

Prescott, John

Colquhoun, Mrs Maureen

Jackson, Colin (Brighouse)

Price, C. (Lewisham W)

Cook, Robin F. (Edin C)

Janner, Greville

Price, William (Rugby)

Corbett, Robin

Jeger, Mrs Lena

Radice, Giles

Cox, Thomas (Tooting)

Johnston, Russell (Inverness)

Richardson, Miss Jo

Craigen, J. M. (Maryhill)

Jones, Alec (Rhondda)

Roberts, Gwilym (Cannock)

Cunningham, Dr J. (Witeh)

Jones, Barry (East Flint)

Roderick, Caerwyn

Davies, Bryan (Enfield N)

Jones, Dan (Burnley)

Rodgers, George (Chorley)

Davies, Denzil (Llanelli)

Judd, Frank

Rodgers, William (Stockton)

Deakins, Eric

Kaufman, Gerald

Rooker, J. W.

Dean, Joseph (Leeds West)

Kelley Richard

Roper, John

de Freitas, Rt Hon Sir Geoffrey

Kerr, Russell

Rose, Paul B.

Dempsey, James

Kilroy-Silk, Robert

Rowlands, Ted

Doig, Peter

Kinnock, Neil

Sedgemore, Brian

Dormand, J. D.

Lambie, David

Selby, Harry

Douglas-Mann, Bruce

Lamborn, Harry

Shaw, Arnold (Ilford South)

Eadie, Alex

Lamond, James

Sheldon, Robert (Ashton-u-Lyne)

Edelman, Maurice

Latham, Arthur (Paddington)

Short, Mrs Renée (Wolv NE)

Edge, Geoff

Lewis, Ron (Carlisle)

Silverman, Julius

Ellis, John (Brigg & Scun)

Lipton, Marcus

Skinner, Dennis

Ellis, Tom (Wrexham)

Litterick, Tom

Snape, Peter

English, Michael

Lomas, Kenneth

Spearing, Nigel

Ennals, David

Loyden, Eddie

Spriggs, Leslie

Evans, Gwynfor (Carmarthen)

Mabon, Dr J. Dickson

Stallard, A. W.

Evans, Ioan (Aberdare)

McCartney, Hugh

Steel, David (Roxburgh)

Stewart, Rt Hon M. (Fulham)

Torney, Tom

Whitlock, William

Stoddart, David

Wainwright, Edwin (Dearne V)

Willey, Rt Hon Frederick

Stott, Roger

Walker, Terry (Kingswood)

Wilson, Alexander (Hamilton)

Taylor, Mrs Ann (Bolton W)

Ward, Michael

Wilson, William (Coventry SE)

Thomas, Dafydd (Merioneth)

Watkins, David

Wise, Mrs Audrey

Thomas, Mike (Newcastle E)

Watkinson, John

Wrigglesworth, Ian

Thomas, Ron (Bristol NW)

Wellbeloved, James

Young, David (Bolton E)

Thorne, Stan (Preston South)

White, Frank R. (Bury)

TELLERS FOR THE AYES:

Tierney, Sydney

White, James (Pollok)

Mr. Bob Cryer and

Tomlinson, John

Whitehead, Phillip

Mr. James Johnson.

NOES

Adley, Robert

Grant, Anthony (Harrow C)

Morris, Michael (Northampton S)

Alison, Michael

Gray, Hamish

Morrison, Charles (Devizes)

Amery, Rt Hon Julian

Grieve, Percy

Morrison, Hon Peter (Chester)

Atkins, Rt Hon H. (Spelthorne)

Griffiths, Eldon

Mudd, David

Awdry, Daniel

Grimond, Rt Hon J.

Neave, Airey

Baker, Kenneth

Grist, Ian

Nott, John

Banks, Robert

Grylls, Michael

Onslow, Cranley

Beith, A. J.

Hall, Sir John

Osborn, John

Bell, Ronald

Hall-Davis, A. G. F.

Page, Rt Hon R. Graham (Crosby)

Bennett, Dr Reginald (Fareham)

Hampson, Dr Keith

Paisley, Rev Ian

Benyon, W.

Hannam, John

Parkinson, Cecil

Berry, Hon Anthony

Harrison, Col Sir Harwood (Eye)

Pattie, Geoffrey

Biffen, John

Harvie Anderson, Rt Hon Miss

Percival, Ian

Biggs-Davison, John

Havers, Sir Michael

Peyton, Rt Hon John

Blaker, Peter

Hayhoe Barney

Powell, Rt Hon J. Enoch

Boscawen, Hon Robert

Henderson Douglas

Prior, Rt Hon James

Bowden, A. (Brighton, Kemptown)

Heseltine, Michael

Pym, Rt Hon Francis

Boyson, Dr Rhodes (Brent)

Higgins, Terence L.

Raison, Timothy

Braine, Sir Bernard

Holland, Philip

Rathbone, Tim

Brotherton, Michael

Hooson, Emlyn

Renton, Rt Hon Sir D.(Hunts)

Buchanan-Smith, Alick

Hordern, Peter

Renton, Tim (Mid-Sussex)

Bulmer, Esmond

Howe Rt Hon Sir Geoffrey

Rhys Williams, Sir Brandon

Burden, F. A.

Howell, David (Guildford)

Ridley, Hon Nicholas

Butler, Adam (Bosworth)

Howell, Ralph (North Norfolk)

Rifkind, Malcolm

Chalker, Mrs Lynda

Howells, Geraint (Cardigan)

Roberts, Michael (Cardiff NW)

Channon, Paul

Irvine, Bryant Godman (Rye)

Roberts, Wyn (Conway)

Churchill, W. S.

Irving, Charles (Cheltenham)

Ross, Stephen (Isle of Wight)

Clark, Alan (Plymouth, Sutton)

James, David

Ross, William (Londonderry)

Clark, William (Croydon S)

Jenkin, Rt Hon P. (Wanst'd & W'df'd)

Rossi, Hugh (Hornsey)

Clarke, Kenneth (Rushcliffe)

Jessel, Toby

Sainsbury, Tim

Clegg, Walter

Jones, Arthur (Daventry)

St. John-Stevas, Norman

Cockcroft, John

Jopling, Michael

Shaw, Michael (Scarborough)

Cooke, Robert (Bristol W)

Kellett-Bowman, Mrs Elaine

Shelton, William (Streatham)

Cope, John

Kershaw, Anthony

Shepherd, Colin

Cormack, Patrick

Kilfedder, James

Silvester, Fred

Corrie, John

King, Tom (Bridgwater)

Sims, Roger

Costain, A. P.

Knight, Mrs Jill

Sinclair, Sir George

Craig, Rt Hon W. (Belfast E)

Lane, David

Smith, Dudley (Warwick)

Crawford, Douglas

Langford-Holt, Sir John

Spence, John

Crouch, David

Latham, Michael (Melton)

Spicer, Jim (W Dorset)

Davies, Rt Hon J. (Knutsford)

Lawrence, Ivan

Sproat, Iain

Dean, Paul (N Somerset)

Lawson, Nigel

Stainton, Keith

Dodsworth, Geoffrey

Le Marchant, Spencer

Stanley, John

Douglas-Hamilton, Lord James

Lester, Jim (Beeston)

Stewart, Donald (Western Isles)

du Cann, Rt Hon Edward

Luce, Richard

Stokes, John

Dunlop, John

MacCormick, Iain

Stradling Thomas, J.

Durant, Tony

McCrindle, Robert

Tapsell, Peter

Dykes, Hugh

McCusker, H.

Taylor, R. (Croydon NW)

Eden, Rt Hon Sir John

Macfarlane, Neil

Taylor, Teddy (Cathcart)

Edwards, Nicholas (Pembroke)

Macmillan, Rt Hon M. (Farnham)

Tebbit, Norman

Emery, Peter

McNair-Wilson, M. (Newbury)

Thatcher, Rt Hon Margaret

Ewing, Mrs Winifred (Moray)

Madel, David

Thompson, George

Eyre, Reginald

Marshall, Michael (Arundel)

Townsend, Cyril D.

Fairbairn, Nicholas

Marten, Neil

Tugendhat, Christopher

Fairgrieve, Russell

Mather, Carol

van Straubenzee, W. R.

Fell, Anthony

Maudling, Rt Hon Reginald

Vaughan, Dr Gerard

Finsberg Geoffrey

Mawby, Ray

Wainwright, Richard (Colne V)

Fisher, Sir Nigel

Maxwell-Hyslop, Robin

Walters, Dennis

Fletcher-Cooke, Charles

Mayhew, Patrick

Warren, Kenneth

Fowler Norman (Sutton C'f'd)

Meyer, Sir Anthony

Watt, Hamish

Fraser, Rt Hon H. (Stafford & St)

Miller, Hal (Bromsgrove)

Weatherill, Bernard

Freud, Clement

Mills, Peter

Welsh, Andrew

Fry, Peter

Mitchell, David (Basingstoke)

Whitelaw, Rt Hon William

Gardiner George (Reigate)

Moate, Roger

Winterton, Nicholas

Gilmour, Rt Hon Ian (Chesham)

Molyneaux, James

Young, Sir G. (Ealing, Acton)

Gilmour, Sir John (East Fife)

Monro, Hector

Younger, Hon George

Goodhew, Victor

Montgomery, Fergus

Gorst, John

Moore, John (Croydon C)

TELLERS FOR THE NOES:

Gow, Ian (Eastbourne)

More, Jasper (Ludlow)

Mr. Peter Rost and

Gower Sir Raymond (Barry)

Morgan-Giles, Rear-Admiral

Mr. Michael Mates.

Question accordingly negatived.

FINANCE BILL (ALLOCATION OF TIME)
4.41 p.m.
The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short): I beg to move, That the

Proceedings

Time for conclusion or interruption

New Clauses not relating to capital transfer tax or estate duty, and Amendments relating to Clauses 1 to 18 and 50 to 56 and to Schedules 1 to 3 and 12.

To be brought to a conclusion at midnight on the first allotted day.

New Clauses relating to capital transfer tax or estate duty.

To be brought to a conclusion at midnight on the second allotted day.

Amendments relating to Clauses 19 to 49, new Schedules.

(a) To be interrupted at midnight on the third allotted day;

Amendments relating to Schedules 4 to 11, and Third Reading.

(b) to be brought to a conclusion at midnight on the fourth allotted day.

(2) Standing Order No. 43 (Business Committee) shall not apply to this Order.
(3) The Third Reading of the Bill may be taken immediately after the Consideration of the Bill, notwithstanding the practice of the House as to the interval between the stages of a Finance Bill.
Dilatory motions
2. No dilatory Motion with respect to, or in the course of, Proceedings on the Bill shall be made on an allotted day except by a Member of the Government, and the Question on any such Motion shall be put forthwith.
Standing Order No. 13
3. Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business) shall not apply on an allotted day.
Private Business
4. Any private business which has been set down for consideration at Seven o'clock on an allotted day shall, instead of being considered as provided by the Standing Orders, be considered at the conclusion of the Proceedings on the Bill on that day, and paragraph (1) of Standing Order No. 3 (Exempted business) shall apply to the private business for a period of three hours from the conclusion of the Proceedings on the Bill or, if those Proceedings are concluded before Ten o'clock, for a period equal to the time elapsing between Seven o'clock and the completion of those Proceedings.
Conclusion of Proceedings
5.—(1) For the purpose of bringing to a conclusion any Proceedings which are to be
following provisions shall apply to the remaining Proceedings on the Bill:
Report and Third Reading
1.—(1) The remaining Proceedings on Consideration and the Proceedings on Third Reading of the Bill shall be completed in four allotted days and (subject to paragraph 5(2) of this Order) shall be brought to a conclusion or interrupted, as the case may be, at the times shown in the following Table:
brought to a conclusion at a time appointed by this Order and which have not previously been brought to a conclusion, Mr. Speaker shall forthwith proceed to put the following Questions (but no others) that is to say—

(a) the Question or Questions already proposed from the Chair, or necessary to bring to a decision a Question so proposed (including, in the case of a new Clause or new Schedule which has been read a second time, the Question that the Clause or Schedule be added to the Bill);

(b) the Question on any amendment or Motion standing on the Order Paper in the name of any Member, if that amendment or Motion is moved by a Member of the Government;

(c) any other Question necessary for the disposal of the business to be concluded;

and on a Motion so moved for a new Clause or a new Schedule, Mr. Speaker shall put only the Question that the Clause or Schedule be added to the Bill.
(2) Proceedings under sub-paragraph (1) of this paragraph shall not be interrupted under paragraph 1(1) of this Order.
(3) If an allotted day is one to which a Motion for the adjournment of the House under Standing Order No. 9 stands over from an earlier day, the bringing to a conclusion or interruption of any Proceedings which under this Order are to be brought to a conclusion at a stated time on that day shall be deferred for a period equal to the duration of the Proceedings on the Motion under Standing Order No. 9.
(4) If a Motion for the adjournment of the House under Standing Order No. 9 stands over

1287
to Seven o'clock on an allotted day, the bringing to a conclusion or interruption, as the case may be, of any Proceedings on the Bill which, under this Order, are to be brought to a conclusion or interrupted on that day at any hour falling after the beginning of the Proceedings on that Motion shall be postponed for a period equal to the duration of the Proceedings on that Motion.
Supplemental orders
6.—(1) The Proceedings on any Motion moved in the House by a Member of the Government for varying or supplementing the provisions of this Order shall, if not previously concluded, be brought to a conclusion one hour after they have been commenced, and the last foregoing paragraph shall apply as if the Proceedings were Proceedings on the Bill on an allotted day.
(2) If on an allotted day on which any Proceedings on the Bill are to be brought to a conclusion at a time appointed by this Order the House is adjourned, or the sitting is suspended, before that time no notice shall be required of a Motion at the next sitting by a Member of the Government for varying or supplementing the provisions of this Order.
Saving
7. Nothing in this Order shall—

(a) prevent any Proceedings to which the Order applies from being taken or completed earlier than is required by the Order, or

(b) prevent any business (whether on the Bill or not) from being proceeded with on any day after the completion of all such Proceedings on the Bill as are to be taken on that day.

Interpretation
8. In this Order—
'allotted day' means any day (other than a Friday) on which the Bill is put down as first Government Order of the Day provided that a Motion for allotting time to the Proceedings on the Bill to be taken on that day either has been agreed on a previous day, or is set down for consideration on that day;
'the Bill' means the Finance Bill.
It is with great regret that I move this motion. There are, of course, many precedents for timetable motions under Governments of both parties. One of my predecessors, the late Mr. Iain Macleod, introduced four guillotine motions in one Session. This is the first that I have moved in a year. As for the record of the two parties, since the Second World War, Conservative Governments have introduced 21 timetable motions and Labour Governments have introduced eight.
Mr. Macleod said that no Leader of the House had to argue that there might be occasions on which a guillotine was
1288
justified. He went on to say that what he always had to argue was that the particular motion before the House was justified. That I now seek to do.
Sir John Hall: The right hon. Gentleman has given the House information about the number of times on which guillotine motions have been moved. How many times have they been moved to closure a Finance Bill?
Mr. Short: I am sure that the hon. Gentleman will make his own speech and my right hon. Friend the Chief Secretary will answer all these points. I think that the last occasion was in 1968.
I hope that the Opposition will spare us any ritual objections to timetable motions as such, when we recall the guillotines which they imposed on the Industrial Relations Act, the Housing Finance Act, the Housing (Financial Provisions) (Scotland) Act, the European Communities Act and the Counter-Inflation (Temporary Provisions) Act.
I should have preferred that we completed our proceedings on the Finance Bill with no need for a timetable motion. I wish that the two sides of the House could have agreed on sensible arrangements for allocating what is by any standard a generous amount of time for the remaining stages of the Bill. That would have allowed us to complete our consideration of it in a sensible manner. Unfortunately, such an agreement proved to be unobtainable. My right hon. Friend the Chief Secretary sought such an understanding last week in discussion with the right hon. and learned Member for Surrey, East (Sir G. Howe) but could not obtain it.
The reason why he could not do so became only too clear yesterday morning, when the right hon. and learned Gentleman was heard saying on the BBC "Today" programme:
"Oh, it isn't a question of extra time to debate in the House. We shall be using our time in the House to use every legitimate parliamentary means to secure the withdrawal of this tax and that's the object of our debate this week…. And we are entitled to use every legitimate parliamentary means to stop this tax and we intend to try and do just that."
This intention by the Opposition to use every device, every stratagem, to block the Bill's progress was only too clearly confirmed yesterday when there were large

1289
numbers of Opposition points of order—or I should say, as Mr. Speaker said, the same point of order made over and over again—and when the House was required to spend over three hours discussing a procedural motion, the terms of which had already been agreed with the right hon. and learned Gentleman and which were intended to honour the promise that I made to the House last Thursday. Yet the Opposition felt it necessary to debate the motion for three hours.
I make no complaint whatever about all this. The Opposition are entitled to proceed in any way they wish, so long as they remain within the rules of order—which is entirely a matter for the Chair. Whether the public outside are impressed with all this is another matter altogether. Our system of parliamentary democracy requires that Oppositions shall be allowed to do everything in their power to prevent a Bill with which they profoundly disagree from reaching the Statute Book. On the other hand, our system requires that a Government with a majority in this House should be entitled to ask the House at the end of the day to pass the legislation for which they have a mandate from the electorate—
Mr. Percy Grieve: Nonsense.
Mr. Short: We had a million more votes than the hon. and learned Member's party.
Every reasonable opportunity must be provided for discussion of the Bill and amendments to it. But when that has been done, the Government are entitled to ask for its enactment. That is what has happened in this case.
However much the Opposition may dislike the capital transfer tax, there can be no doubt that we have a mandate to introduce it—[HON. MEMBERS: "No."] It was included in our election manifesto last February, it was repeated in October, we published a White Paper about it in August and we fought the last election on it.
As soon as my right hon. Friend the Chancellor of the Exchequer opened his Budget on 12th November, it was known to all hon. Members that the Finance Bill must receive the Royal Assent within four months of the passing of the Budget Resolutions—that is, by 14th March—
1290
in accordance with the Provisional Collection of Taxes Act 1968. In that broad sense, the timetable for all Finance Bills is laid down from the start.
The Government have certainly wasted no time. The Bill had its Second Reading on 17th December, and its Committee stage on the Floor started on 15th January and finished on 22nd January. It entered Standing Committee the following day and the Committee reported on 19th February. Allowing 15 hours for dinner breaks, the Bill was in Committee, in the House and upstairs, for about 160 hours. By any recent standards that is a generous allowance of time, even for a highly controversial Bill. It would be appropriate indeed to pay tribute to the energy, stamina and determination of the Standing Committee—both sides. I do not know how they stood it.
I think that the House will also acknowledge the patient, resilient and reasonable manner in which the Chancellor, the Chief Secretary and the Financial Secretary responded to the points put to them. When serious points were made, they did not just brush them aside but responded seriously and helpfully to them. Indeed, that willingness to meet the points made in Committee is one of the reasons for the sizeable number of Government amendments on Report.
Mr. Peter Hordern: Does the right hon. Gentleman recognise the distinction between applying a timetable motion on Finance Bills and doing so on other legislation? Does he recognise that, on the only other occasion since the war when there was a guillotine motion on a Finance Bill, time was allotted for 11 further sittings for discussion after the guillotine had been applied? Does he not now recognise that the very amendments of which he speaks, for which the Government are entirely responsible, require far more time than is allotted in the motion?
Mr. Short: My right hon. Friend will deal with that point when he replies. Whether the vast number of Opposition amendments now flooding the order paper are all points of substance is not for me to say. No doubt the Chief Secretary will comment on that, too. All that I would say is that it is clear from the sheer volume of those amendments and from the very slow progress made

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yesterday that the Opposition are seeking to prolong proceedings on the Bill to the point at which it cannot be completed in the time laid down by statute. There is no doubt about that whatever.
Mr. Peter Emery: Will the right hon. Gentleman give way?
Mr. Short: This is a very short debate, and many hon. Members wish to speak.
Mr. Emery: I thank the right hon. Gentleman for giving way. There is a most relevant point with which he has not dealt in his speech. Will he tell the House how many new Government amendments—not Opposition amendments—have to be considered during the Report stage, with the same consideration as would be given in Committee? I believe that there is a large number. The House should know how many there are.
Mr. Short: Almost all the Government amendments are concessions.
Mr. Emery: How many?
Mr. Short: Almost all.
Hon. Members: How many?
Mr. Short: I do not know how many, but a very large number.
No one can argue that insufficient time has been allowed for the remaining stages. Since 1909 there has been only one Finance Bill for which more time has been allowed for Report and Third Reading. What we have now to decide is a sensible way of allocating the very reasonable amount of time available.
The motion before the House would provide for us to complete, as follows, first, all the non-capital transfer tax clauses and schedules by tonight; second, the new clauses on capital transfer tax or estate duty by tomorrow night; and all the remaining amendments, new schedules and the Third Reading by Monday night—that is, we would have both Thursday and Monday for these. I would draw the particular attention of the House to this last point, as the way in which this part of the order has been printed may give rise to some doubt about it.
Of course, if the Opposition would prefer some different arrangement for allocating the time or some supplementary arrangement for the proceedings on any
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of the allotted days, I should be only to glad to consider this. Paragraph 6(1) of the motion provides for any necessary supplemental orders.
At the end of the proceedings tonight, tomorrow night or on Monday night, paragraph 5(1) of the motion provides that any amendments or new clauses not moved by a member of the Government and relating to those parts of the Bill to be completed on that day, should fall. The Question would then be put without further debate on amendments or new clauses moved by a member of the Govment. The reason for this provision is that, as I have just said, virtually all the Government amendments are in fact concessions. Clearly the House would wish such amendments to be taken.
On Thursday night the motion simply provides for the proceedings to be interrupted at midnight, and nothing more. They would then continue on Monday at the point at which they were left over. The remaining provisions are common form, but my right hon. Friend will gladly deal with any points made in the debate about them when he winds up the debate.
Mr. Nigel Lawson: The right hon. Gentleman has said very kindly that he is prepared to entertain suggestions from the Opposition side of the House as to changes in the timetable. Why is it that the debates have to stop at midnight and not at a later hour? The right hon. Gentleman could still have his days and get the Pill through Report by the day he wishes, but he could allow more time for the discussion of this very important tax.
Mr. Short: The finishing time each day is the part of the motion which is not negotiable, but the allocation of the time is. We believe that the debates will be all the better for finishing at a reasonable hour.
I would say once again that if the Opposition want to use the available time differently, this could easily be arranged. In particular, if they would prefer to dispense with a Third Reading so as to give more time for the Report stage, that is entirely open to them.
This motion is needed to enable the proceedings on the Finance Bill, for which we have a mandate front the electorate, to be completed in a fair and

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reasonable way by the date prescribed by law.
4.55 p.m.
Mr. John Peyton: I have never believed that guillotine debates have been made any more interesting by the number of precedents that the introductory speeches have contained. I am bound to say that I have not bothered myself with them. I should like to assure the right hon. Gentleman the Leader of the House that I have no ritual objections to timetable motions as such. I think that we should do much better on some occasions to limit our debates to reasonable lengths. [Interruption.] It would be very helpful indeed if Oppositions could make their perfectly reasonable points without a long stream, a Niagara, of tiresome interruptions by people who are determined to ruin discussion and not to contribute to it. I refer specifically to the hon. Member for Bolsover (Mr. Skinner).
I have always been among the most charitable of men. I wish to see the best in everyone.
An Hon. Member: Do not look in the mirror.
Mr. Peyton: I almost wish that I could look in a mirror rather than face hon. Members on the Government side of the House.
As I was saying, I try to take the most favourable view, even of right hon. and hon. Members on the Government side. But I was a little surprised this afternoon when the right hon. Gentleman the Leader of the House suddenly said, quite baldly, "I make no complaint". We were not waiting for any complaints from him. We have some complaints to make. It is entirely from the Opposition side of the House that the complaints will come. We hope very much that the right hon. Gentleman will listen to them.
I should like to take the opportunity—rare in these days—of agreeing with the Leader of the House on one point, and that is saluting the stamina of the Standing Committee. One can only hope that Government Members got some satisfaction out of it. My right hon. and hon. Friends got none at all; of that I am sure. Nevertheless, they gallantly
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did their duty in attempting to secure improvements to a very nasty measure.
I am concerned—because I think that this goes to the right hon. Gentleman's good faith—to know whether the Leader of the House is really satisfied that his undertakings to give five days on Report have been discharged by the arrangements now made. I must tell him that I am not. If the right hon. Gentleman will consider the statements that he has made on a number of occasions, together with the questions that I have asked in reply, I think that he will find—or at least, any independent judge would conclude this—that he was bound in honour to give five full days on Report.
The Government's handling of the measure has not been received with wild acclamation in the Press. Perhaps the best comment was:
"A lesson in how not to legislate."
But there was one more to which I particularly call the attention of the Government. It appeared in the Financial Times of 1st March:
"The more one looks at this Bill, the more one finds in it to criticise. It is by far the most incompetently drafted and ill-conceived legislation since 1965, and the sooner the Government drops the whole scheme for a year's proper consideration the better."
My suggestion to the House is that there should be two main aims of legislation, particularly where tax is concerned. It should be fair. I am not quite certain whether the Government really aim to be fair; but that would certainly be the aim of my right hon. and hon. Friends. The second main purpose is that it should be clear and certain. Not even the most enthusiastic supporters of this wretched measure could possibly claim that it was clear.
I wonder very much what in the long run will be the effect of a measure such as this on the already stretched relations which exist between the Inland Revenue and the public. I know that some Labour Members and some members of the Government have rather fanciful ideas about the Inland Revenue. The other day the right hon. Lady the Secretary of State for Social Services compared the Inland Revenue with Robin Hood. That seemed to be a slight flight of fantasy. I am not quite sure whether we are now to be told that she is Maid Marion.

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To impose this kind of legislation upon the public when it is so ill-digested, ill-designed and ill-thought-out will dangerously worsen the relations between the Government machine and the public.
Mr. John Gorst: Will my right hon. Friend add a third point to the two that he has already made? Does he agree that there should not be any taxation without discussion?
Mr. Peyton: Indeed. I am obliged to my hon. Friend. Of course, my hon. Friend is right—[Interruption.] In discussing a motion like this in a Parliament where the aim of the Government is to terminate and shorten discussion it is interesting to observe how hard Labour Members find it to stomach the views of those who do not agree with them. If any hon. Members wish to interrupt me, they are perfectly free to do so. I shall gladly give way. I point out, however, that when Labour Members sprinkle sedentary interruptions over our affairs they do little credit to themselves and bring no glory to Parliament.
Mr. John Tomlinson: I suggest to the right hon. Gentleman that the people who did not like listening to arguments with which they disagreed were his own supporters in Standing Committee. They seemed to run away with remarkable regularity, to such effect that the Government were winning votes in Standing Committee, despite the Opposition's wholehearted opposition, by 16 votes to 5 in the small hours of the morning.
Mr. Peyton: Looking at the hon. Gentleman and hearing what he has to say, I am bound to say that I have the utmost sympathy with my hon. Friends who wished to get away.
The Chancellor is introducing two new taxes. He has properly referred the wealth tax to a Select Committee. It is a complicated matter which clearly needs a good deal of preparatory thought before it can be introduced into Parliament. By contrast, the Government have plunged into the capital transfer tax on the ground, presumably, that some immediate meal had to be thrown to the Left wing wolves. Perhaps it was considered that they could wait until later for
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the rest of the meal—[Interruption.] Again and again the Patronage Secretary is making speeches from a sedentary position. I hope very much that one day he will cease to be Patronage Secretary. Perhaps we shall then be able to hear him making speeches from the Dispatch Box. I hope that they will be even more sensible than some of the interventions which he so constantly makes from his present position. I said to the right hon. Gentleman the other day that he has achieved the status of being the most garrulous Chief Whip of all time.
The Parliamentary Secretary to the Treasury (Mr. Robert Mellish): I am obliged to the right hon. Gentleman, but I never said a word.
Mr. Peyton: Then we can only tender our profound sympathy. It seems that the right hon. Gentleman does not even know when he is talking. What concerns and worries my right hon. and hon. Friends is that the Government have shown little concern for the impact of this legislation upon farms, woodlands, small businesses, charities and gifts. Initially it was apparently the Chancellor's intention to put gifts to families on the same basis as gifts to anybody else. It seems that that has gone by the board. I am bound to say that I recognise that fact with some gratitude. None the less, I do not believe that the Government have yet hoisted in just how bitter many people will feel throughout the country. They are not all rich, prosperous, bloated plutocrats but people who are desperately trying to run businesses in a difficult climate. In many cases this burden will make it almost impossible for them to do so. The way in which the Government continue to dismiss that danger and to treat it lightly is wrong and unfair. It is something for which they will be roundly and properly condemned in the near future.
I now turn to the painful question of how the Bill was handled in Standing Committee. The presence of the Chief Secretary and the Financial Secretary really requires one in kindness to draw a veil over those proceedings. Suffice it to say, they have earned no laurels for the way in which they handled the proceedings in Standing Committee. The Leader of the House, in opening the

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debate, referred perfectly properly to the fact that there had been some 160 hours of debate in Committee on the Floor of the House and in Standing Committee.
Mr. William Molloy rose—
Mr. Peyton: I shall give way to the hon. Gentleman shortly. The point that I wish to make is that no Treasury Minister ever complained, so far as I am aware in Standing Committee that the Opposition were filibustering or holding up the progress of the Bill. Indeed, the situation was very much the reverse. It is my understanding that avoidable delays were caused because Treasury Ministers were not always as familiar as one would have hoped them to be with all the features of the nasty little creature that they had sired.
I understand that 167 Government amendments have been tabled. The Leader of the House referred to the many Opposition amendments and wondered how many of them were genuine. The Opposition have tabled roughly 700 amendments for consideration. I hope that the Government will take them seriously even in the limited time that is available. I am concerned with the 167 amendments which have come from the Government. Many of them are long and complex, and there should have been very much more time for mature consideration to be given to them by people inside and outside the House.
There have been repeated requests made to the Leader of the House for more time to consider the Government amendments. All that the right hon. Gentleman has ever been willing to say is "I assure the House that there will be sufficient time for consideration to be given to them." Never has the right hon. Gentleman even adverted to the need to give those outside the House who will be affected by the Bill an opportunity to attempt to understand what is contained in the very complicated amendments which the Government have tabled.
Sir John Hall: Would not my right hon. Friend agree that to debate the very large number of Government amendments, some of which are highly complex, allowing a short time for each one would take about 40 hours?
Mr. Peyton: I quite agree. One of the questions which Mr. Patrick Hutber raised in the Sunday Telegraph last Sunday was: how on earth can these vital amendments be properly considered in the time? Mr. Hutber mentioned three amendments the results of which seem to be very obscure. I wonder whether the Chancellor or whichever Treasury Minister replies will be good enough to answer the points which are raised in Mr. Hutber's article.
Mr. Lawson: Is my right hon. Friend aware that the allotted time works out at less than 10 minutes per Government amendment, assuming no discussion of Opposition amendments whatsoever?
Mr. Peyton: My hon. Friend is quite right to point out that monstrous fact. The Government have plainly reached—I can understand this attitude of theirs—a position of total despair about this wretched Bill, and the sooner they can put the wraps over it the better, and the less probing it receives from Parliament and from my hon. Friend in particular, the better obviously they will be pleased.
Mr. Denis Skinner: The right hon. Gentleman referred to someone called Patrick Hutber who writes the City columns in the Sunday Telegraph. Is it a fact that this same man was the wizard behind John Bloom?
Mr. Peyton: The hon. Gentleman must pursue his nasty feuds elsewhere. He almost always manages to keep his interruptions well in character. He has succeeded on this occasion.
The questions the Government must answer are: first, are they satisfied that those outside the House have had a reasonable chance to consider the Government's amended proposals; and, secondly, did they ever really intend that those outside should have such a chance?
Mr. Molloy: I readily understand that it is the responsibility of any Opposition to oppose any guillotine motion, and, if they did not, they would not be doing their proper job. Will not the right hon. Gentleman concede that he cannot legitimately claim that my right hon. and hon. Friends who served on the Standing Committee should not be accorded any laurels simply because the Conservative

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Opposition failed to turn up or ran away long before the debates were finished? If the Opposition really represented the people outside—
Mr. Deputy Speaker (Mr. George Thomas): Order. This is a three-hour debate and long interventions will take time that could be used for speeches.
Mr. Peyton: I apologise to you, Mr. Deputy Speaker, and to the House for my error of judgment in giving way to the hon. Gentleman.
The politics of envy have drawn the Government, first, into a dislike of success and, secondly, into showing a positive hostility to wealth which leaves one astonished that only the other day they were all muttering the chorus question—why no investment? If they would only look at themselves and at what they are now doing and saying and then ask that question again, they might find the answers very near home on their own desks.
Mr. Bob Cryer: Will the right hon. Gentleman give way?
Mr. Peyton: No. I have already learned a very sharp lesson from the hon. Gentleman's two neighbours.
Lastly, what is under charge here is the good faith of the Labour Party. We on this side of the House freely acknowledge that the Leader of the House has a very difficult task in reconciling the interests of the House of Commons with those of the Government, and particularly does this apply to this Government. His failure to do so is something which we would always regret. What we deplore is the fact that he never even tries and so has forfeited wholly the confidence of this side of the House.
5.15 p.m.
Mr. Maurice Macmillan: The other day we decided as an experiment that the proceedings of the House should be broadcast on radio. I do not know whether to be glad or sad that that experiment has not yet started.
I think I am sad, because I believe that the public would be reassured to see how very quick the House is to react to clear evidence that it is being misled by the Government and equally quick to
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accept without reservation a statement made by a Minister that his misleading is due to a misunderstanding.
In another sense I am glad that our proceedings are not being broadcast, because I am sure that the public would have been so kind as the House has been today to the right hon. Member for Newcastle-upon-Tyne, Central (Mr. Short) and I am not sure that they would trust him as much as no doubt they now do if they had heard for themselves the arrogant contempt with which he, as Leader of the House, announced this guillotine motion earlier this morning, with no explanation, after the closure had been already decided and with no possibility of his being questioned at that time about his motives or reasons. The public would not have been satisfied with the right hon. Gentleman's wholly inadequate justification of the need for a timetable on this Finance Bill.
Finance Bills should never be guillotined. With the sole unfortunate exception of the 1931 Bill they never have been, except by Labour Governments—
Mr. Alf Bates: 1967.
Mr. Macmillan: —in 1968 and now in 1975, in both cases bringing in ill-thought out new schemes which are damaging major interests covering great aspects of our national life.
The Leader of the House and hon. Members below the Gangway in their seated interventions have tried to make out that the capital transfer tax is of little importance except to a few very rich men, most of whom, they imply, are crooks anyway, otherwise, how could they be rich?
That is the view of right hon. and hon. Members below the Gangway. I do not think that it is wholly the view of the Government who, as far as one can judge from the enthusiasm with which they pursue every contradictory aspect of their policies, still believe in a mixed economy in which private enterprise has a function.
The new tax and the 167 amendments which the debates in Standing Committee have produced on the Notice Paper in the names of Treasury Ministers affect outside interests which, as my right hon.

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Friend the Member for Yeovil (Mr. Peyton) said, have had no time to consider their new position, because these amendments have been only recently published and are very complicated. They may be minority interests, but that is no reason why they should be shabbily treated by the Government. There are other minorities affected by the Bill, including 10¼ million members of trade unions out of the 22 million men and women at work.
I am not complaining about the need to look after minorities. I am merely saying that if minorities are important they are all important. That is partly because many of them involve far more people than seems to be the case at first sight and the ramifications of their activities are important to a large number of ordinary men and women on the shop floor.
There is no doubt of the effect, on every kind of business, of the tax which we are forced to discuss so inadequately. Those businesses which are particularly affected are the unquoted companies which employ one-third of the 22 million men and women at work—over half the employees of the private sector—and it is their jobs that are at risk—[Interruption.] Hon. Members below the Gangway will not be laughing when their constituents complain to them about the bankruptcies of their employers and the difficulties of getting new work. I am glad that those hon. Members have shown that they are opposed to any form of family business or any unquoted company, large or small.
I am worried that the tax will have an unpredictable effect upon a very large but so far unknown number of people. There is no reason to curtail discussion of it, except for the incompetence of the Government. When the Conservatives introduced major tax changes our Treasury Ministers did not find it necessary to have a guillotine. In 1971 we brought in the unification of tax and produced the option mortgage scheme, the Bill occupied 69 clauses and 14 schedules. In 1972 there were 56 clauses on VAT alone, measures on the income and corporation taxes which affected companies' distributions, and the abolition of the SET, which covered 49 clauses. There were 134 clauses and 28 schedules in all. We did not need a guillotine to get them properly discussed, because we had done the work before-
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hand. I accuse Treasury Ministers of having brought in an ill-prepared scheme which was announced in the Budget but was not even worked out in time for the December Finance Bill.
The Government's laxity will punish the interests adversely affected through the failure to get adequate discussion. It is failure to discuss these matters which helps to produce bad legislation. Perhaps we are luckier than we were in 1968. At least it is only the Report stage of this Bill which is being guillotined. In 1968 it was the Committee stage, too, as far as I can remember. On the other hand, this Bill is worse than the 1968 Act, in that that Act at least damaged only individuals. Now we are not to discuss adequately and properly how this tax will damage the future of this country and adversely affect its capacity to achieve the economic recovery which we are all seeking.
5.25 p.m.
Mr. John Tomlinson: We are seeing this afternoon yet another example of the mock hysteria that the Opposition seem to be able to turn on and off like a tap. They are making complaints about lack of time to discuss the capital transfer tax and yet yesterday and this afternoon they engaged in generalised time wasting when they could have been discussing important amendments upon which they say they want to spend more time.
Mr. Patrick Cormack: Will the hon. Member accept once and for all that my right hon. and hon. Friends and I are quite prepared to sit through the night every night this week and through the weekend if necessary?
Mr. Tomlinson: I put as much value on what the hon. Member said as I did in the performance of that full-hearted opposition in Standing Committee, when, in the early hours of the morning, the Government's majority increased progressively as the light dawned. When we sat all through the night the Government's majority started off at one and went through to three, five, and seven, and finished at 11 in the small hours of the morning. The record is there for anyone to see.
Sir John Hall: Does the hon. Member recall that throughout the proceedings in Standing Committee the burden of debate was borne almost entirely by Members of the Opposition? During the early hours of the morning most Government Members were spending their time outside the Committee, turning up only for votes. They were resting while the burden of this debate was put on the Opposition.
Mr. Tomlinson: I cannot accept that the burden of debate was borne by the Opposition. I had to spend many hours there listening to Conservative Members, and I found that just as much of a burden.
What interests me about this debate and the debate yesterday is the number of allegations that have been made that the capital transfer tax has not been understood, and how this lack of understanding is a reason for the House needing more time to consider it. The exact opposite is the truth. There is a precise understanding of the effects of capital transfer tax and it is this precise understanding that has prompted the right hon. and learned Member for Surrey, East (Sir G. Howe) to try to use every device at his command to ensure that Part III of the Bill does not reach the statute book. He is motivated not by an ignorance of the tax but by the fact that he is all too familiar with it. A similar awareness on our part of the meaning of the tax has resolved us to make sure that it becomes law as soon as possible.
Some extremely insulting comments were made about my right hon. Friends, particularly my right hon. Friend the Chief Secretary and my hon. Friend the Financial Secretary. I assure all hon. Members who did not have the privilege of attending the Standing Committee and of hearing their performance, that the Ministers met with the universal respect of all Government Members and, I suspect, of many more people besides. So highly did we regard their efforts that at the end of the proceedings my hon. Friends and I were even prepared to chip in 50p so that we could buy them a drink in recognition of their valiant efforts. The glass of champage that each of them had was in recognition of their sterling performance and of the way they had
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conducted themselves through the long hours.
Mr. Brian Sedgemore: Will my hon. Friend confirm that one of the reasons we drank champagne at the end of the Committee was that the tax was still basically intact, and that is what all the synthetic row was about?
Mr. Tomlinson: I agree with my hon. Friend on that score.
We were told that there were not many time-wasting devices during the Committee stage. I can remember when we spent no fewer than 8¼ hours debating multinational corporations. My right hon. Friend the Chief Secretary was seeking to take measures in the Bill to stop tax avoidance dodges and to stop the problems of transfer pricing mechanisms in multinational companies. The 8¼ hours of debate on that one item were clear evidence that substantial time wasting was going on in Committee.
The 167 Government amendments have been referred to by a number of Opposition Members. If there is to be so much concern that the Government are giving so many concessions away, my right hon. Friend will not meet much resistance from the Government benches if he decides selectively to withdraw some of those amendments in order to give the hon. Member for Blaby (Mr. Lawson), for example, more than 10 minutes per amendment for those that are left. We shall understand the difficulties that he faces.
I turn to the remarks made by the right hon. Gentleman the Member for Farnham (Mr. Macmillan), who waxed eloquent about the wrong use of a timetable motion for ill-thought-out schemes. He said that it was a Labour Government that used such a motion previously on a Finance Bill.
If we are to be concerned only with ill-thought-out schemes, let us look at some of the measures that the last Conservative Government saw fit to guillotine, and see how well thought out they were. For example, the Industrial Relations Act was not only timetabled on Report, but was guillotined in Committee and on Third Reading. I believe that even the former Leader of the Opposition, the right hon. Member for Sidcup

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(Mr. Heath), admitted that that was an ill-thought-out measure. Certainly, with the passage of time, it did not do him much good. The Housing Finance Act was also guillotined by the last Government in Committee, on Report and on Third Reading, as was the Housing (Financial Provisions) (Scotland) Act. The European Communities legislation was guillotined in Committee. The counter-inflation measures, which were directly responsible for the confrontation with the miners, and thus for the fact that the Conservatives are now on the Opposition benches, were guillotined at all three stages. When people start talking about ill-thought-out measures and the necessity for not having guillotine motions on such measures, they should look into the more recent history in which they have been involved.
Sir John Hall: Does the hon. Gentleman not agree that the view has been expressed from the Opposition benches that from time to time the guillotine motion is necessary and justified? Does he also agree that it is against the general traditions of the House to guillotine a Finance Bill? Will he tell us when a Finance Bill was last guillotined by a Conservative administration?
Mr. Tomlinson: If the performances over the last two days are in accord with the general traditions of the House, I am not very impressed by them, and I do not regard them as being an important argument against the motion.
The right hon. Member for Farnham was arguing the need to consult outside interests and the paramount importance of such consultation. He spoke about the need to consult minority groups such as trade unions, as he referred to them. I remember that when his right hon. Friend the Member for Carshalton (Mr. Carr) had responsibility for such outside consultations on the Industrial Relations Act, he made a statement to the effect that he would consult on principles, but not details. That was precisely why the consultations with the trade union movement broke down.
Mr. Macmillan: Perhaps I telescoped my remarks in an effort to be brief, with the result that the hon. Gentleman misunderstood me. I was referring to taxation schemes. My argument was that
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Finance Bills should never be guillotined. Part of the reason why minority interests are so important in connection with any Finance Bill is that they are often the people who are used by the Government as tax gatherers. They are the people who have to be able to work all this Bill—the shopkeepers and others.
Mr. Deputy Speaker: Order. I am sorry to interrupt the right hon. Gentleman, but the same rule must apply to everyone: short interventions, please.
Mr. Tomlinson: There is an exact parallel with the Industrial Relations Act, because that Act taxed trade unions, by the process of registration or non-registration, to the tune of £10 million. That is something we have put right in this Bill in the Committee of the whole House.
It is right that we should pass the motion. Capital transfer tax is exceedingly important to my constituents. I am sure they are all aware that the rate of capital transfer tax is lower than the rate of estate duty tax—for those who paid it. The new tax will be of substantial benefit to the majority of my constituents who paid their taxes and did not seek to avoid them. The ease of avoidance is the major reason why so many Opposition Members seek to retain estate duties and oppose the capital transfer tax.
There is an impatience on the Government side of the House—which I am sure is shared by the majority of my constituents—to get this radical taxation reform on to the statute book. It will produce a greater equity of contribution to our national economic well-being, and as such it should go on to the statute book as speedily as possible.
We can no longer countenance delay. The motion must be passed, and we must get the capital transfer tax into effect as soon as possible.
5.37 p.m.
Mr. J. Enoch Powell: There are licensed occasions for clowning, and there are also licensed occasions for humbug. It is well understood in the House that the periodical debates upon a guillotine motion belong to the latter category. Hon. Members sit scarcely concealing their cynicism when they hear the same defence and attack repeatedly from

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reciprocal sides of the Chamber. But there is a certain danger in our getting used to this shuttlecock, this navette, in that we may not perceive the gradual shifting of the ground. We may not perceive an important extension of the use of the guillotine which perhaps none of us might seriously wish to accept.
It is hard to deny at this time of day that the use of the timetable motion for legislation has become an accepted part of the procedure of the House, though it is the business of every Opposition, confronted with a timetable motion, to oppose it, whatever may be the legislation to which it is applied. Indeed, I believe it would be wrong for an Opposition not to do so; and it is for that reason that in two hours or so my right hon. and hon. Friends and myself will go into the Lobby against the motion.
However, there is something special—not, unfortunately, unprecedented—about the occasion of this timetable motion. The right hon. Member for Farnham (Mr. Macmillan) was right to emphasise that the application of a timetable motion to a Finance Bill puts it into a different category.
Mr. Molloy: The argument about the Finance Bill being in a special category was advanced before the right hon. Gentleman spoke. Does he not concede that it was equally indefensible that a Bill which could unjustifiably put dockers in gaol was subjected to a guillotine motion?
Mr. Powell: I do not agree, because the financial procedure of the House is integral to its powers in a sense which cannot be predicated of any other sort of legislation.
I fancy that the curious omission of that point from the speech of the Shadow Leader of the House might have been a tacit or unconscious admission of guilt, namely, the recollection that it was the Conservative Party which had used a timetable motion in 1972, with the assistance of the Liberal Party, to force through the House what could otherwise not have been forced through—the renunciation of its exclusive right to tax. It is therefore perhaps more appropriate that this vital point about the special nature of our financial procedures should not come specific-p1308
ally from the official Opposition Front Bench.
The House will be poorer as a result of the passing of this motion, in a way that it is not impoverished by the passing of most other guillotine motions. As with most such motions, and most such steps of deterioration, the blame is not all on one side of the House. When the breakdown in communications, the breakdown in that understanding on which the existence and management of this Chamber depends, occurs, it is never due wholly to the default of one side.
In this case, I do not see how it can be denied that the Government have mismanaged their timetable. They were under great difficulties owing to the date of the General Election and the necessity—or so they believed—of introducing a second Finance Bill in 1974. Nevertheless, it is indisputably mismanagement to be still dealing with a Finance Bill in the House of Commons in the week before the last day for Royal Assent under the Provisional Collection of Taxes Act. Whatever else the managers of Government business should avoid, they should avoid getting themselves driven into that corner. There can be little excuse for it.
That is the Government's contribution to the failure which we are recording by having this motion before us. But there was also a false tactical decision by the official Opposition. They decided that they should mark their objection to one of the central features of the Bill by driving the Government into either guillotining the remaining stages of the Bill or abandoning the measure altogether, which for any Government would be impossible.
Sir Geoffrey Howe: I recognise the way in which my right hon. Friend seeks to put a balanced view of responsibility, but does he not acknowledge that there was a third possibility which was, and still is, open to the Government, namely, to recommit the Bill so as to allow the new tax to be considered by a Select Committee and still proceed with the measure which they must get through by the magic date next week?
Mr. Powell: Just so. The Opposition decided that they must drive the Government up against—what the right hon. and learned Gentleman has re-stated in

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another form—the abandonment of the Bill, or else the repetition of the one precedent for guillotining a Finance Bill. I do not believe that the sincerity or effectiveness of their opposition to the capital transfer tax has been enhanced by that decision. It was a mistaken tactical decision which, by enforcing this motion, has impoverished the House.
Sir John Hall: It was a question not of forcing the Government to abandon their measure but of requiring them to give further consideration to complex provisions which would have far-reaching consequences and therefore of asking them to give more time by referring them to a Select Committee.
Mr. Powell: I have some reflections to offer the House in a moment which bear on that point.
Let me first re-emphasise, rather in opposition to the hon. Member for Ealing, North (Mr. Molloy), the special position of a Finance Bill and the particular undesirability of the precedent, once established, which we are broadening; for let there be no doubt that, having had a Finance Bill guillotined on two occasions, a sort of Gresham's Law will begin to operate. Oppositions will consider themselves to be doing less than is expected of them by the keenest of their supporters if, whenever there is a major element in a Finance Bill which is objectionable to them, they do not force the Government—which every Opposition can do if they want—into guillotining the Bill. The danger we face is that we shall have timetabled Finance Bills as a matter of course. [Interruption.] Does my hon. Friend the Member for St. Ives (Mr. Nott) want to prove that my argument is nonsense?
Mr. John Nott: I apologise to my right hon. Friend. It was impolite of me to make a comment from a sedentary position. However, because the Opposition feel strongly about a particular financial measure, it is not necessarily the case that by the House debating it at length the Government are forced into abandoning it.
Mr. Powell: Of course that is so. There is a difference between debating a measure thoroughly and at length and debating it in such a manner, and moving amendments to it in such a manner, that
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it is evident and inevitable that the outcome will be a guillotine motion.
I return to my point that, once this precedent is broadened, it takes future Oppositions prisoner, as it were, and creates a presumption that if there is something seriously objectionable to them in a Finance Bill there must be a timetable motion. It follows all too easily from that that a timetable motion is introduced from the start, on the ground that if there is to be a timetable motion sooner or later we may as well have it at the beginning.
A timetable motion on a Finance Bill is specially damaging—my right hon. Friend the Member for Farnham made the point acutely—for the reason that the rights of minorities outside the House are specially involved in Finance Bills, perhaps more than in any other part of our procedure, with the possible exception of the Consolidated Fund, which nowadays is a fossilised part of our procedure. It is the ability of a small number of hon. Members or, as I have often known, even an individual Member, who is convinced of an injustice or an error which is capable of being remedied, to have it debated on the Floor of the House by facing the unpopularity of tiring the House and delaying it, which is one of the ultimate safeguards which we still preserve. That safeguard would be destroyed if it became accepted that a timetable motion was applicable on the same basis to a Finance Bill as to any other legislation.
I have been reflecting in the past 24 hours on the strange course of events in handling Finance Bills over the last quarter of a century. In the first few years after 1950, when I was first a Member of the House, the passage of a Finance Bill was accompanied, in Committee and on Report, by night after night of all-night sittings. It was passed by exhaustion in those early years of the 1950s. Then there was a sudden change; and for a whole series of years, although in some years there was not even a closure moved, the Finance Bill was fully debated on the Floor of the House both in Committee and on Report within reasonable hours. Then we came to the 1960s, and the fashion in the 1960s for reforming the procedure of the House by the use of Committees. We entered

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upon the habit of splitting the Finance Bill and sending it upstairs for examination—so it was said at first—of the technical and relatively unimportant matters while keeping the major subjects on the Floor of the House.
I am sorry to say that we have grown beyond that. What happens now is that on the Floor of the House we have four rather dull artificial Second Reading debates, and then the examination of what really matters in the Bill is carried out hour after hour by 35 or thereabouts hon. Members upstairs.
Mr. Skinner: In the main, by the Opposition.
Mr. Powell: As the hon. Member for Bolsover (Mr. Skinner) says, in the main, by the Opposition.
The difficulty in which the Government and the House find themselves today is a result of this Committee procedure and of its impact upon the consideration of the Finance Bill. Instead of having had the intensive discussions of matters on which large numbers of hon. Members feel strongly at the proper time, in Committee on the Floor of the House, until late at night—in some cases right through the night, with the whole House having to stay up—we have put the Bill into commission. So it comes down to us on Report—with a perfectly generous allocation, by common comparison of standards, of five days—as a virtually new Bill from the point of view of most hon. Members. The hon. Member for Wycombe (Sir J. Hall) was on the same point as I am in feeling that we have not had the proper Committee consideration of the essential parts of the Bill that a Finance Bill requires. All of us who were not members of the Standing Committee have the feeling that there has been an inadequate understanding and an inadequate discussion of the central provisions of the Bill.
I hope, therefore, that we shall not in our collective wisdom treat this as just another of those timetable motions, with a smirk and a shrug of the shoulders. We have been brought face to face with a developing inadequacy in our procedure. I believe that we must bring the Finance Bill back on to the Floor of the House, where it belongs, for open-ended debate: I say that, because only when debate is
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open-ended is the public opinion of the House brought to bear upon those who-seek to participate in the debate. So I believe we shall have to consider how to bring the essence of the Finance Bill back on to the Floor of the House.
Mr. Sedgemore: Is the right hon. Gentleman aware of the skilled opposition which was brought to the Bill in Committee when Opposition Members used skilled advisers? How could that kind of opposition function in the House?
Mr. Powell: Far be it from me to wish that any hon. Members who take part in debate should be less than adequately and skilfully briefed; but the hon. Member for Luton, West (Mr. Sedgemore) has reminded us of one of the applications of Parkinson's Law—that debate expands to fill the time available. A great deal of the work which was done in 160 hours in Committee would have been done in many fewer hours on the Floor of the Chamber, and would have provided that preparation for Report and Third Reading which we are lacking and which has led to the motion.
After this experience, I hope that we shall be able to knit together again that common understanding on the conduct of our business—which has to be a less than public understanding—between both sides of the House, without which our affairs, and especially our financial affairs, cannot be properly, democratically and parliamentarily discussed, and that we shall, after this motion, avoid for the future, by the common efforts of both Front Benches and by re-thinking our whole procedure in the light of the past 25 years, any repetition of what we shall do this evening.
5.55 p.m.
Mr. Dennis Skinner: I shall follow to some extent upon the remarks made by the right hon. Member for Down, South (Mr. Powell). He dealt not with this isolated issue but with the real problem of how to get controversial—and less controversial—legislation through the House. One reason why we have had this fracas during the past few days, and why such an inordinate number of points of order—usually the same ones—have been raised, is that the Opposition, particularly the Tories, came to believe in themselves after they got over the traumatic process of selecting their new

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Leader. To that extent the capital transfer tax became a virility symbol, to which they could all become closely attached.
That is not to say that there would not have been a hell of a row over the capital transfer tax, but, having got over their recent trauma, they wanted more than ever to have a go. The right hon. Gentleman touched upon that when he spoke about the general problem. Nevertheless, the Tories suffered from a malaise for a long period, until the election.
So we are here today—that sounds almost like the vicar—introducing another timetable motion, and we are witnessing the usual scenes produced by the Opposition suggesting that parliamentary democracy is almost in ruins. I am thankful that I am able to say this today. I was not silly enough when I was in opposition—or, to put it more precisely, on the other side of the House—to attack a timetable motion. I might have made a few noises from a sedentary position, but I do not believe that there is anything on the record.
I regard the timetable motion as an extension or elongation of our parliamentary devices. It is there. It can be used. It can be described as unpleasant, but so can many other devices that we use. I have good reason to understand the way in which many of the devices can be used and the way in which they can be made unpleasant. I might make a few comments about it, but I am not offended by the Government's introducing a timetable motion to rescue the battered remains of a Finance Bill that has been the subject of so many concessions in Committee. There are still more to come—I am told there are 165 Government amendments and concessions.
Such was the extent of the concessions made by the Chancellor, when he was announcing that he would look at that matter, that he would deal with the other matter and that he would examine another matter raised by the Opposition, that the Financial Times Index shot up five points every time he opened his mouth. It shot up from a low point of 146 to a topside of 300 while the concessions were being made. It is perhaps significant that when the Stock Exchange smelled something in the air yesterday the Financial Times Index
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dropped 14 points. I have no doubt that there are other reasons for that.
However, returning to the main question, I have the experience of the Housing Finance Committee proceedings behind me. The idea of that Bill was to collect money from approximately 6 million tenants—that is a great many taxpayers. The Government were taking half of it into the Exchequer. As the right hon. Member for Down, South said, it was a farce. My job then was not dissimilar from the job of those on the Tory Opposition benches yesterday who were trying to halt a political measure that they detested. They had to do this because they had to support those who, largely—I am careful about my words—support them and who may increasingly support them in future.
What was my job on the Housing Finance Bill? My job was to ensure that we fought to the last drop of blood. I use those words because the Government spokesman at that time was the right hon. Member for Brighton, Pavilion (Mr. Amery). Every time he opened his mouth he referred to his troops. He has never stopped doing so since. We did the job we were expected to do—for over 200 hours, night after night. This is no different, except that the rôles are reversed. We had hon. Members like the present Leader of the Opposition, who returned to her cosy little bed in time to get the television cameras lined up outside for the battle taking place at the time. We had the same sort of leader on our Committee, who found it necessary on one occasion to go home in his carpet slippers while we were slogging away upstairs.
Mr. Cormack: And the champagne?
Mr. Skinner: There was champagne. It is rather incredible but it was the Government side who drank it. The only difference was that they drank it in Committee Room No. 7—that hallowed room belonging to the Tribune Group from 4.15 on Monday. They drank champagne, not when the Bill had finished its Committee proceedings but when hon. Members like myself were slogging away in Committee. It was a farce.
It was supposed to be the essence of Opposition. I do not think it works. It is high time that the Government looked at the whole question not just of Finance Bills but of Bills, in Committee and on

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the Floor of the House. They should find out the number of hours that adequately fit the measure, whether it is controversial or less controversial. Provided that the Government can muster sufficient people in the Lobby to support a timetable motion, they can do all the other things I have described. That is the key.
There are many other ways of arranging a timetable without having a guillotine. It has been done on this Bill. Hon. Members get into a frenzy about the Finance Bill. My right hon. Friend the Parliamentary Secretary to the Treasury is back in good health and spirits. His opposite number and other hon. Members who took part in exchanges have found, surprisingly without consulting me or the right hon. Member for Down, South, an adequate number of days for the Finance Bill. There is a rumour that the proposed number was different from the one that finally transpired. Consultations did not take place between all 635 Members of Parliament. The days were arranged by a relatively few people. That in itself is a restriction. We might not like it and we might resent it. But it is a restriction. A great many less important and more trivial issues that surround the issue of getting legislation on the statute book are decided by relatively few people.
Mr. Mellish: After the usual channels had got up to the mischief which my hon. Friend thinks we had, we had to produce a motion that had to go before the House, and be debated and agreed by the House. That was after we had come to the general arrangement which we suggested would be for the convenience of the House. At the end of the day it was the House that decided.
Mr. Skinner: That is precisely the point I am making. If my right hon. Friend and those who engaged in the talks with him had not found a formula that guaranteed that 300 members would troop through the Lobby at the end of this timetable motion, all those talks would be to no avail.
Mr. Nicholas Ridley rose—
Mr. Skinner: I would like to give way to the hon. Gentleman, but while I was sitting down waiting for my right hon. Friend the Parliamentary Secretary to make his point another of my hon. Friends whispered in my ear and indicated that he wished to speak. I understand the problem. We are here for only three hours. I shall refrain from mentioning many of the other points I wanted to raise.
If the decision in June—if it is June—by the British people is different from the challenge I shall be posing to them to come out of the European Economic Community this issue will appear minuscule in proportion. If we stay in the Community we shall be taking another step towards allowing not my right hon. Friend, not even some of his more or less important right hon. Friends within the Cabinet, to take decisions about taxing our people. We shall be allowing others to take those decisions. I shall be playing my part in that argument and that issue.
If we are to get any legislation through for which the Government, in most cases, but not all, have a mandate from the people to carry through irrespective of the argument about percentage polls, we shall have to have a fresh look at our methods. At the end of the day we shall have to come back to the formula I suggested in a rather loose form; namely, to decide from the beginning that a particular measure needs a certain number of days and hours. Then all hon. Members will be able to discuss the real questions. In this case it would be the capital transfer tax, argued not from one side of the House only but from both sides in the knowledge that we were getting to the heart of the measure. If that were the case we would refine these matters to a greater degree than we are able to do through the ad hoc way in which we are attempting to act at present.
6.10 p.m.
Mr. John Pardoe: It falls to me to mark a great parliamentary event—namely, significant agreement between the right hon. Member for Down, South (Mr. Powell) and the hon. Member for Bolsover (Mr. Skinner)—and not just on the question of Europe. In speeches by both of them there was a sense

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of disillusionment with our present procedures for approving and improving legislation, particularly in the remarks of the right hon. Gentlemen on the control of expenditure. I entirely agree with the right hon. Member for Down, South that the control of expenditure is a special matter in our procedures. He seeks to bring a little reason to the situation—and that, following the events of yesterday and today, is a welcome change.
In principle I am not opposed to timetabling. As the right hon. Member for Down, South pointed out, I and my Liberal colleagues supported a timetable motion on the European Communities Bill. Indeed, I can think of timetable motions which we would support again. I have argued in the House on previous occasions that there should be more timetabling so that we can consider Bills in a proper way without, as was the case with the Industrial Relations Bill, considering only a tiny part of it and then having to troop through the Lobby, without proper debate, on clause after clause. Unfortunately, such a suggestion is not possible in this House because as a legislative chamber it has sunk so low that reasonable debate is not now acceptable to the great majority of Members in all parts of the House.
We may regret the present situation. I certainly regret what has happened, but the present situation has arisen for a variety of reasons some constitutional, some historical. Certainly the solidified nature of our two-class, two-party system was obvious at the time of the Industrial Relations Act. This factor is obvious on the proposed tax, and is becoming obvious even in the Select Committee on the Wealth Tax. Again there is the question of the strength of Government patronage and the power of the Whips. This is an opinion held by Liberals, and it is held partly because we are Liberals and partly because we are members of a minority party.
Because there is no bipartisanship to important legislation, the only weapon which Oppositions have is the weapon of delay. I do not believe that it is a very effective weapon. It is not a very glorious thing to say to our constituents "I won a great battle because I stayed up until four, five or six in the morning". As the right hon. Gentleman the Chief Secretary to the Treasury will know, I do not stay
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up until four or five in the morning, because if I did so my constituents would think that I was stark staring bonkers. If we cannot get our work undertaken during normal working hours, I do not think we are doing a good job.
With all the delays which the Opposition have been able to bring about over the years, the records show that the Government find it only too easy to get foolish, bad legislation through the House. In 1973 the House passed more than 60 Acts and over 2,000 statutory instruments. I wonder how many were worth passing. We are now in the throes of the third abortive—no doubt it will in the end be abortive—pensions scheme in seven years. One scheme got through all the procedures of the House, and yet another pension scheme passed virtually all the stages. Those provisions were prevented from coming into law only by the advent of chance—namely, a General Election. Such schemes would have been thoroughly bad, and I believe would have been accepted to be bad by all sides, even by their own "fathers". There are many other examples of such measures. The Industrial Relations Act and the legislation for bringing about local government reorganisation readily spring to mind.
The amendments which we are to consider in respect of the capital transfer tax are not, as the Lord President of the Council would have us believe, concessions. They have not come about because the Opposition, with splendid reason and delaying tactics, have managed to wring by force of argument some good reasonable concessions out of the Government. We shall consider the basic amendment on charities, which is a fundamental change and not just a minor or middling concession; and there is to be a fundamental change in respect of forestry operations, which does not seem to me to be a change for the better. Then there is the change in respect of political parties. It is incredible that the Government put that tax before the House of Commons without realising what they were doing to their political opponents. Now that they have realised what they were doing, they have changed that provision completely.
We have to ask ourselves why these provisions have had to be changed so greatly. Is it the fault, as some have suggested, of the benighted Government spokesmen in Committee? I do not

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believe that to be the case. I do not think the right hon. Gentleman the Chief Secretary put up too bad a show. I was not in the Standing Committee for all of the time, but on the few occasions when I was present in the small hours I thought the right hon. Gentleman showed immense resilience. I believe the tax in question was a bad tax from beginning to end because it was put up to the Government by civil servants in the Inland Revenue and was a mess. In our view, the tax is not bad in its purposes, and we support some of those purposes—
Mr. Deputy Speaker: I hope the hon. Gentleman will not discuss the tax in detail but will discuss the timetable motion.
Mr. Pardoe: I have no intention of discussing the tax in detail. We shall have a few hours to discuss the tax even if the timetable motion is agreed. I am asking why the timetable motion is necessary and was seeking to emphasise that the Government amendments are not minor concessions but seek to change the tax out of all proportion.
I believe that our methods of approving and improving legislation at present are inadequate. The Standing Committee merely repeats the adversary politics which we conduct in this House. With due respect to the right hon. Member for Down, South, if we were to bring the Finance Bill back to the Floor of the House I do not think that we should do a very much better job in improving these taxes. We know what happens in Select Committees on these matters and to Green Papers on new taxes. The Green Paper on the tax credit scheme and, indeed, that on the wealth tax were appallingly amateurish. It is incredible—and would certainly appear to be incredible to any member of the United States Congress—that, the House having set up an all-party Select Committee to investigate a great new tax, the wealth tax, it is decided that it should sit once a week for two hours. That is the total sum of our labours in trying to get the tax right. If we mean business in improving legislation, we must take these matters more seriously. We certainly must treat these Green Papers seriously and examine them in detail.
The right hon. Gentleman the Lord President of the Council suggested that
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the Government have a mandate for this tax. I do not know what a mandate is.
Mr. Molloy: Then the hon. Gentleman is not qualified to speak about it.
Mr. Pardoe: I do not suppose hon. Gentlemen know what a mandate is either. The right hon. Gentleman certainly said that the Government had a mandate. But there are only two ways in which he can make such a claim. The first is that the Labour Party put before the electorate a tax which was almost exactly the same as the one we now face. It did no such thing. The Chancellor of the Exchequer admitted that, while in opposition, he favoured a tax on the donee rather than on the donor. He has changed that opinion at the behest of the Inland Revenue, although that Department admitted that it carried out no adequate investigation of whether the donee or donor tax would best redistribute wealth. He cannot claim that he has a mandate because he put the tax to the people. He put to them an entirely different sort of tax, and one that we Liberals would have supported. However, I have no doubt that if we had done so the Conservatives would have been screaming and baying at us, since they are nothing more than a society for the preservation of the rich.
The second possibility is to argue that the Labour Party has a mandate because it secured a majority. At the last General Election only 39 per cent. of the people voted for the Government. My guess would be that, when all the thunder has died down, if free elections were held in any one of the Communist dictatorships east of the Iron Curtain now, more than 39 per cent. of the electorate would vote for the Government in power, with the possible exception of Czechoslovakia. That says something about our form of democracy and about any mandate which the Government claim.
If Conservative Members intend to shout down the Lord President, as they did on the question of the mandate, they will have to do something about it. They will have to ensure that the electoral procedures give a party a mandate to conduct legislation through the House.
The view of the Liberal Party is that this is the wrong tax and that it has been inadequately considered. It should be

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considered by the Select Committee on the Wealth Tax, since it is part of the taxation of wealth in its entirety. The Select Committee should get down to making a professional and businesslike job of it.
6.23 p.m.
Mr. William Molloy: I suppose that it is inevitable that when a timetable motion is before the House, those who have formerly opposed such motions and the guillotine with great vehemence should suddenly discover that the idea has much relevance. As the right hon. Member for Down, South (Mr. Powell) said, we have endured this procedure for the past 30-odd years, certainly since the war, in the House of Commons when successive Governments have found it necessary to introduce guillotine motions and successive Oppositions have found the idea reprehensible, anti-democratic and a means of destroying the status and principles of the House of Commons. I accept that argument from the right hon. Member for Down, South. However, I find it repugnant and nauseating to accept that argument from the Liberal Party and the majority of the Conservative Party, because in a much more insidious way they wish to remove this problem from us altogether.
Therefore, while people such as the right hon. Gentleman, myself and some of my hon. Friends have massive disagreements on issues as to how we believe our nation should be governed and on the sort of society we want to create, we believe that the argument has been decided and that the final arbiter should be the British people and not a bunch of bureaucrats in Brussels. When we have this sort of argument, it behoves us all, irrespective of our views, to realise that it is not a bit of use pleading when the butchers of Brussels will not allow us to discuss these matters.
I want now to refer to one matter about which I disagree with the right hon. Member for Down, South. I do not believe that we can raise objections to any measure, with the exception of the Finance Bill, going through the House of Commons being guillotined or time-tabled—
Mr. Tomlinson rose—
Mr. Deputy Speaker: The hon. Member has spoken. Others wish to speak. I have no doubt the hon. Member wishes to intervene to agree with his hon. Friend.
Mr. Tomlinson: In deference to the Chair, I shall resume my seat.
Mr. Molloy: I shall try to improve my hon. Friend's understanding privately after the debate.
If we all feel fervently about the way in which the House of Commons operates, it is logical that we should be concerned about its future. Both sides of the House will always be concerned about the measures to be debated and the manner in which we should debate them. I refer to issues which will affect the lives of all our people and end up on the statute book. People must believe that those measures will be effective for all time. However, that thought might inadvertently have running through it a thread of hypocrisy. If we experience scenes such as those which took place last night, and the furious speeches from the Opposition this afternoon, people may for the moment be indignant but they do not wish to abolish the system altogether and hand it over to someone else.
Back benchers on both sides of the House object to any form of government which takes away from us our right to express ourselves. From time to time I have felt that we should look at the principle of calling Privy Councillors ahead of back benchers. I can never see the logic of that. Occasions arise when Government supporters consider some points most important, whereas Opposition Members may not do so. We must seek a formula whereby we can acknowledge that we have different degrees of priority in our philosophy as to the legislation to be passed.
When the right hon. and learned Member for Surrey, East (Sir G. Howe) pushed through the Industrial Relations Bill, I thought it was wholly reprehensible that such a measure, touching so many lives, and resulting in men being incarcerated in gaol, should have been passed. It was so abominable that the Prime Minister of the day had to find a legal means of securing the release of our fellow men from gaol who ought never to have been put there and who never would have

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been put there had it not been for the fact that the measure was pushed through the House by means of the guillotine. That is what we have against it. How can I tell working men and women in my constituency that that was not all that important and that I should not have objected to a guillotine doing that sort of thing but that I must join the Conservative Party in objecting to it on this occasion because they are very worried that certain financial strictures which are to be imposed upon a tiny minority of very wealthy people should be allowed the most massive debate?
In my view, both should be allowed a massive debate. We should try to find ways and means in this House of Commons whereby no debate is curtailed. In time, I believe that we shall evolve such a system. It does not matter whether people are members of minority parties. The fact that they are here means that their status is no less and no greater than mine, irrespective of the side of the House on which I sit. They have the right to submit their views, and no administration or official Opposition should try to impose on them and to deny them that right
We have this measure before us, and I have to acknowledge that ample time was provided in the Committee stage. My right hon. Friend the Chief Secretary made the point that he sat for hours in the Standing Committee while various provisions were discussed in detail. Members of the Opposition found the length of sittings extremely tiring. They had to retire. Apparently, at one stage, there were five Opposition Members and 16 Government supporters present. When such a situation is reached in a Committee, this House cannot be blamed for decided that certain issues should be examined in detail upstairs in Standing Committees. That was the idea, and I am sure that when that was proposed and when we examined it we assumed that the Opposition would be there, especially on an important financial matter such as this. We assumed that Tory Members more than anyone else would be there, willing to slog it out through the night, as my own colleagues did on the Housing Finance Bill. If, therefore, those Opposition Members who served on the Standing Committee, as the result of some self-denying ordinance,
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decided for one reason or another that they could not attend, that is hardly a good argument for asking me to agree that there should be an extension of the time on the Floor of the House.
Mr. Cecil Parkinson: I have no wish to spoil a good story, but I hope that the hon. Gentleman will get the facts straight. For 80 per cent. of the time in Committee, the Opposition supplied the quorum. When 16 Government supporters were present on the occasion to which he referred, about 12 of them had to be dragged out of bed where they had been sleeping all night. If the hon. Gentleman cares to refer to the Official Report, he will see that almost every speech was made by an Opposition Member and that the contribution of Government supporters was either to sleep or to remain silent.
Mr. Molloy: If that is really so, I can understand why the Tory Opposition on the Committee are being described as a "bum" Opposition. They should have latched on to that. They could have ended the Committee, come to this House and complained that there was no quorum. They know that they botched their opposition in Committee, and they are now full of spleen and annoyance. They have had a traumatic experience, because the right hon. Member who misled them in that Committee has now been put in charge of leading the whole lot of them on the Floor of the House. How savage can luck be?
With one exception, I accept the arguments advanced by the right hon. Member for Down, South. I can see a great deal of sense in them. I cannot help commenting, however, that the record shows that before the right hon. Gentleman disagreed with his erstwhile colleagues he at one time was a champion of the guillotine and the timetable motion. That was when he had Front Bench responsibilities. Nevertheless, I am always prepared to welcome a genuine convert to true democracy.
I referred to my one disagreement with the speech of the right hon. Member for Down, South. That was when he said that there should never be a timetable motion on a Finance Bill but that it did not matter about other legislation. I disagree with him about that. However,

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I believe sincerely that it is not beyond the bounds of possibility that right hon. and hon. Members will find means of avoiding scenes of the kind that we had last night and the business that we are going through today. It is absurd to use a number of hours to discuss whether we shall have a number of hours more to discuss a feature of any Bill. The time has come for us to find a solution. It has been going on for centuries. But it is not impossible to devise a method whereby we can improve our procedures and our ways of examining Bills which will result in legislation for our citizens.
Once we have passed this Bill, I hope that Members of all parties will get together—perhaps my right hon. Friend the Chief Whip will be able to arrange a meeting—with a view to finding new procedures whereby back benchers are not put in this position—
Mr. Marcus Kimball: On a point of order, Mr. Speaker. Is it in order for a Member of one of the minority parties to read a newspaper? I hardly feel that the Grand National has much to do with this debate.
Mr. Speaker: It is not in order to read a newspaper in the House or to bring one into the Chamber, unless it relates directly to the debate in progress.
Mr. Molloy: In defence of the hon. Member for Hamilton (Mr. Wilson), when I was making my point about minority parties I had hoped that he was nodding his agreement with what I was saying, not reading a newspaper. What is more, I wish that the hon. Member for Gainsborough (Mr. Kimball) had been listening to me instead of trying to read the newspaper over the shoulder of the hon. Member for Hamilton.
It is never easy for any back bencher to have to support his Front Bench colleagues who wish to impose a guillotine motion. We do it with great reluctance. I shall do so tonight for the reasons that I have outlined.
I hope, however, that it will not be beyond the wit of the leaders of all parties to devise a new procedure whereby we do not have to go through this traumatic experience and this absurdity,
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especially after what happened last night. It must have placed an immense strain on you personally, Mr. Speaker. It could be avoided if a simple method were evolved to allow the maximum discussion of all proposed legislation, bearing in mind always, of course, that there must come a time when discussion ceases and decisions are made.
6.38 p.m.
Mr. Douglas Crawford: I do not agree with all that the hon. Member for Ealing, North (Mr. Molloy) said, but perhaps I might take up his generous remarks about the position of the minority parties.
The Scottish National Party objects to this guillotine on very simple grounds of principle. They concern the rights of a minority party. However, it is not in the minority in Scotland. We polled in excess of 200,000 votes more than the Conservatives. I do not see a Member of the Scottish Conservative Party in the House. I do not think that there has been any one of them present in this debate. [An HON. MEMBER: "Yes, there has."] I apologise if that is the case.
We are in a minority in this House, although we are not a minority in Scotland. The right hon. Member for Farnham (Mr. Macmillan) spoke about the rights of minorities. The rights of minorities are being eroded. The Scottish National Party was denied a place on the Standing Committee considering the Finance Bill. It has now been denied a place on the Standing Committee considering the Industry Bill. Our only chance to make our views known is during the Report stage on the Floor of the House. If we are denied a fair hearing, the people of Scotland, especially after the disgraceful scenes in the House on both the Labour and the Conservative benches, will join us in saying that from Scotland's point of view this House has had its day. To deny the Scottish National Party the chance to speak for Scotland, as is being done, is effectively to gag the voice of a nation.
6.40 p.m.
Mr. Alf Bates: The right hon. Member for Down, South (Mr. Powell) began his speech by saying that he was about to participate in a show of humbug. How right he was.

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None of us is in principle against the idea of a guillotine motion. Certainly the Tory Party is not against the idea in principle. It was in favour of it for the Housing Finance Bill, which simply attacked council tenants, and it was in favour of it for the Industrial Relations Bill, which simply attacked trade unionists. However, it is against the idea of a guillotine motion on the capital transfer tax because that is an attack on capital.
What is so particular about this Bill that it should not be guillotined? The Opposition say that they want a lot of time to discuss the many amendments that have been put down. Why did they not simply get on and do that? We have had two days in which they could have been doing that. It is well known that the two Front Benches, through the usual channels, agreed that there should be five days on Report. That is a little longer than some hon. Members might have wished, but in the end that was agreed. So why did not the Opposition simply get on with the debate in what was an agreed fashion?
The Tory Front Bench has either lost control or found a new kind of control. Since the start of the Report stage yesterday, we have spent over three and a half hours debating a motion on the order in which we should take the clauses. That was nothing to do with capital transfer tax. The fact is that the Opposition have started filibustering. There was no vote on that motion. The Opposition simply wanted to talk for three and a half hours. We spent another two hours on a motion to delete Clause 1, which relates to value added tax. That was nothing to do with capital transfer tax. The Tories wanted to take up a further two hours to try to extend the debate. There was no vote on that motion. We then had a further debate on Amendments Nos. 2 and 3.
The matters to which I have referred had nothing to do with any desire to debate in detail the many amendments which have been put down. If the Opposition had been interested in doing that, they would have got on with it from the word "Go" yesterday. They have not done so. They are interested only in preventing the Bill reaching the statute book. That was made clear to anybody who heard the right hon. and learned Member for Surrey, East (Sir G. Howe)
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on radio earlier today. The Opposition do not want this tax on the statute book, and they are prepared to use any means to prevent it.
The only course for the Government now is to introduce this timetable motion. If agreement between the two Front Benches has broken down because of the intransigence of the Opposition, that is all that the Government can do.
The Tories do not like this measure. The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) made that clear in his great praise of estate duty. He said that estate duty had been a good tax simply because it had been avoidable.
The hon. Gentleman, who contributed so well to the various stages of filibustering in Committee, introduced us to some exciting new creatures, Durham Man and Plumstead Man, but the creature we all enjoyed most was Tewkesbury Man, a gentleman who is the proud possessor of £500,000 worth of assets but is forced to get up at 7 o'clock in the morning, work in threadbare clothes, and is unable to afford holidays. Poor Tewkesbury Man is not satisfied with being passed on £75,000 without tax. He wishes to receive from the start of his life what most people have to earn during their lives.
Mr. Gwilym Roberts: I entirely agree with most of my hon. Friend's sentiments, but I feel that he is going slightly astray with his suggestion that an ordinary person who lives in a terraced house or on a Welsh mountainside could earn in a lifetime the kind of money that some of these people inherit. That is the fiction that the Tory Party tries to create. I felt that my hon. Friend was well on the mark when he spoke about the division within the Opposition. Is not the reason that the Tory Front Bench lost control that when any genuine redistribution is involved the animal teeth and claws of Tory back benchers come to the fore? Is not that what we have seen in this House?
Mr. Bates: I think that my hon. Friend puts it in much better words than I could use. I was thinking not of terraced houses in Wales but more of car workers living on council estates in Ellesmere Port. None of those supposedly overpaid people would ever manage to get anywhere near the wealth that hon. Gentlemen opposite

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complain they will be unable to pass on without tax. That is why the Bill is being delayed.
Whenever I hear about Tewkesbury man, the poor individual who is unable properly to pass on his £500,000 without tax or anybody complaining about the difficulties of his wealth, I think that he is either a fool or a brigand. I think that Tewkesbury man is both.
I suggest that, because the Government's proposals have come through the Committee stage without any serious alteration, the Tories have now decided that the only weapon available to them to prevent them is a filibuster on the Floor of the House. That is why the Government have introduced the motion.
6.47 p.m.
Mr. Kenneth Baker: Any guillotine debate tends to have the character of a journey down memory lane. However, I should never have thought to hear the nostalgic reminiscences of the hon. Member for Bolsover (Mr. Skinner) about drinking champagne in Committee Room 7, because when the hon. Gentleman rises one associates him rather with the sound of tumbrels than with the tinkling of champagne glasses. For those of us on the Opposition benches who find a certain charm and delight in the continuity of tradition, it is pleasing that the spiritual heirs of Nye Bevan, whose favourite champagne was Bollinger, should keep this patrician tradition so alive.
I have some degree of sympathy with hon. Members on both sides of the House who have said that, on the whole, they do not like timetable motions. There has been a tendency for Governments of both parties in recent years to use guillotines rather too quickly. Timetable motions have to be introduced because whichever party occupies the Treasury Bench cannot resist the itch to legislate. Conservative Governments usually come in determined to do less and end up by doing more. Socialist Governments come in determined to do a great deal efficiently and end up by doing a great deal more inefficiently.
The reason for this timetable motion owes a lot not to the date by which the Finance Bill has to become an Act but to the heavy legislative programme on which the Government have embarked. The passage of this Bill would have been just
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a shade easier if the Leader of the House had been just a shade more flexible. Those who know him personally outside this Chamber will know that he is not rude, discourteous or stubborn; but when he gets to that Dispatch Box some sea change takes place and he becomes all these things. He has a highly developed talent to offend. I would say of him, as was said of Parnell, that he has all the qualities of a poker except its warmth.
Turning to the rôle of the Treasury Ministers in this, there is no doubt that the procedure we adopt for the passage of tax legislation in our Finance Bills is entirely unsatisfactory. The case has been made many times by the right hon. Member for Heywood and Royton (Mr. Barnett). Some of us can remember him, when he was on the back benches in 1968 and 1969, lecturing his own Government on the need to adopt much better methods of introducing complicated taxation. We all said "Hear, hear" many times in the 1968–69 Finance Bills. We tried to show the way when we were in Government by having Green Papers which were discussed by Select Committees. I well recall that being done on tax credits and the imputation system of company taxation. He is not hostile to that scheme because the Government have set up a Select Committee on the wealth tax. This is the proper way to legislate.
The wrong way to legislate on complicated taxation, irrespective of the mandate that any Government have, is to introduce an ill-thought-out, complicated tax measure and then be determined to get it through by a specific date. The capital transfer tax should, in my view, have been subjected to a searching examination by a Select Committee and then brought forward. My right hon. Friend the Shadow Chancellor provided the means whereby the Government could have done this, by putting the capital transfer clauses into cold storage even for six months—though he was asking for one year—so that they could be subjected to proper examination. This was not done, and I agree with my hon. Friends and the right hon. Member for Down, South (Mr. Powell) about the need to examine that process of tax legislation.
I believe that we shall have to move towards a system whereby Finance Bills will deal mainly with changes in tax

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rates, but changes of fundamental taxation will need separate Bills, previously examined by Select Committees which would not have upon them the enormous pressure of having to effect the introduction of the Bills by a specific day as otherwise the taxing provisions of the Act would not apply. I hope, therefore, that we shall be able to avoid in future what has happened during the course of this Finance Bill.
The right hon. Member for Heywood and Royton has been virtually rewriting the Bill upstairs. It is only because he is an experienced accountant, able to think quickly on his feet, that he has been able to give coherence to what he has said. Important parts of the Bill are now being rewritten on Report. Because, on the whole, we do not have such experts in the House, very few hon. Members can understand the details of such Bills; and many commentators outside, this week and next, will be denied a real chance to comment on these complicated provisions. This brings our whole legislative process in this House into ridicule and contempt. How can this be the best way of introducing complicated tax measures?
I end very much as I started by regretting the need for guillotine motions in general; but the particular character of this guillotine motion makes it unique. Since the war only one Finance Bill, that in 1968, has been guillotined. I believe that that was a very regrettable precedent because the unique power that we have—some hon. Members have called it a precious right, though it is more than that—is the reason why this Chamber has over the centuries acquired certain powers. It is because we have the right to deny the executive of the day, whether Tory, Liberal or Conservative, Supply before there has been adequate debate or redress of grievance. If we surrender that right we are surrendering one of the very reasons that have brought us into being as a legislative House. For these reasons I very much oppose this guillotine measure.
6.55 p.m.
Mr. Jim Marshall: I do not wish to reply in detail to the remarks of the hon. Gentleman who has just sat down, but he referred towards the end of his speech to "Tory, Liberal or Conservative". I hope that amongst
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that group of three he was not referring to my right hon. and hon. Friends sitting on the Front Bench. If he was, I am sure they will correct that impression. The hon. Gentleman referred in some detail to my right hon. Friend the Leader of the House and made certain remarks about his virtues outside the House. As a colleague of my right hon. Friend I would say that within this Chamber we know him as a kind-hearted, warm and considerate man, whose great virtue is to give us all methods of expediting business through the House and for that, on this occasion, we are indebted to him.
Today I had a deputation from a group of hosiery manufacturers in Leicester. They came to the House to discuss certain aspects of the capital transfer tax. I would be maligning their case if I were to say other than that they disagreed with the tax in a number of ways, and I shall be conveying their points to my right hon. Friend the Chancellor of the Exchequer. But before they left the House today they made the point that it is not timetable arrangements or guillotine arrangements that bring this House into disrepute but the behaviour of right hon. and hon. Members both in this Chamber and upstairs which brings this House into disrepute.
The deputation told me that they thought it somewhat odd that at this time grown men and women should sit upstairs in Committee all night and in some cases all day—I forgot the hon. Member for Cornwall, North (Mr. Pardoe), who left at 12 o'clock each night, presumably to get his beauty sleep—
Mr. Pardoe: The hon. Gentleman and the right hon. Lady.
Mr. Marshall: Nevertheless, the gentlemen from Leicester made the point that it is behaviour of that kind that tends to bring this Chamber into disrepute. That was reinforced by the abysmal behaviour of certain hon. and right hon. Members last night. I telephoned my wife earlier this afternoon and she gave a further example to me. I was absent from the Chamber at the time, meeting constituents from Leicester, but my wife recited to me an example of what had been broadcast—no doubt by the BBC—of an hon. Member opposite actually striking one of my hon. or right hon. Friends. That may

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not be true, but none the less it has been reported on a national television broadcasting network. If that is true—and, as I have said, I was not in the House when the incident is said to have occurred—nothing could do more to bring this House into disrepute.
Mr. Peter Snape: As one who was present at the time of the incident to which my hon. Friend refers, may I ask him whether he is aware that the hon. Gentleman opposite who reportedly committed this offence is one of the leading upholders of the doctrine of the preservation of law and order in this country—and does he agree with me that the display by the Conservative Party today would make Clay Cross Urban District Council proceedings look like a Boy Scouts' jamboree?
Mr. Marshall: I thank my hon. Friend for those pertinent and salient comments. He referred to the hon. Member for Blaby (Mr. Lawson). I know the hon. Members. He happens to be my constituency Member. Over the past six months I have been inundated with his views on law and order. But I shall come back to that matter—
Mr. Powell: On a point of order. Is it in order for a reference to be made during a debate to an alleged assault on or by an hon. Member?
Mr. Speaker: The position is that if such a thing had happened one would expect the matter to be raised as a matter of privilege. No such matter has been raised as a matter of privilege. I do not know that I can rule what the hon. Member has said as out of order, but I do not think that it is a very profitable line to pursue.
Mr. Marshall: I apologise, Mr. Speaker. I was simply reporting a conversation that I had had with my wife.
Getting back to my main argument, hon. Members opposite are deliberately trying to prevent the Government from introducing legislation for which the electorate twice gave them a mandate last year. The hon. Member for Blaby has made a statement to the local newspaper in Leicester that he and his hon. Friends would do all in their power, by delaying tactics, to prevent the implement-p1334
tation of the new tax rates by 14th March. Their policy is to filibuster, and it is a deliberate policy.
My right hon. Friends have to take that attitude into account, and by moving this motion they have done so. I thank them for doing so. This will not only expedite business; it will also prevent my having so many sleepless nights over the next two weeks.
Coming back to the antics of the so-called Opposition, I realise that there are deep feelings on the capital transfer tax but, having searched my soul over the last few weeks and days, I still find their antics churlish. I cannot forget the Industrial Relations Act, the Housing Finance Act, or the European Communities Act, on all three of which the debates were guillotined. The Housing Finance Act was a deliberate attack upon council tenants, the Industrial Relations Act was a deliberate attack on the trade unions, and the European Communities Act took away constitutional responsibility from this House. Nevertheless, all three were guillotined.
I have campaigned over the past 12 months, almost to the day, for the fairer distribution of wealth as well as income. I believe that the capital transfer tax, which we shall be debating later in the week—
Mr. Sedgemore: But not for long.
Mr. Marshall:—will help to bring about a fairer distribution of wealth. When that legislation reaches the statute book this Government will have carried out another pledge, and in a small but significant way I may have helped. When that happens, I shall tell the people of Leicester, "Your Labour Government, ably backed by the Labour Member for Leicester, South, have carried out another pledge."
Mr. Tomlinson: Will my hon. Friend give way?
Mr. Speaker: Order. I must tell the House that I want to call another speaker before right hon. Gentlemen from the Front Benches. I therefore hope that the hon. Gentleman will not give way.
Mr. Marshall: I appreciate your difficulties, Mr. Speaker. I conclude my case.
7.5 p.m.
Mr. Peter Emery: I am sure that the hon. Member for Leicester, South (Mr. Marshall) will forgive me if I do not follow him into discussing his conversations with his wife but deal instead with three major points which have not yet been mentioned.
First, there is no way in which the House could know it, but I handed in to the Table Office an amendment to the motion to leave out "midnight" and to insert "2 a.m." as the time for the debate to finish each day. That would have allowed hon. Members to discuss a number of major issues raised by their constituents. As the right hon. Member for Down, South (Mr. Powell) rightly said, when parts of a Finance Bill are taken in Standing Committee many ordinary back benchers cannot express the fears, doubts and concerns of their constituents.
It is unbelievable that the Leader of the House should move the motion without knowing what it involves. That is a pretty rough accusation but it was clear that this was the case when I asked him how many Government amendments were to be debated and he could not say. We know now that there are 167 Government amendments. If this debate ends at 7.30 tonight, 29 hours will be left for the rest of the Report stage. If only Government amendments were discussed, each one could be discussed for a little under 600 seconds.
Yet these are new amendments which should have the scrutiny of a Committee stage. The Government say that they are intended to meet the requirements of the Opposition, but we need to study them to see whether they are in line with the pledges given by Treasury Ministers. It must be wrong for the Government to use the guillotine to force through what are virtually 167 new pieces of legislation. The time allotment I described would operate only if there were no debate at all on the other 200 or 250 amendments.
This situation is entirely different from many other guillotine motions—
Mr. Paul B. Rose: No.
Mr. Emery: These are major financial matters, Certainly the capital transfer tax will affect the jobs of hundreds of
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thousands of people. It will affect mainly small businesses, which are unlikely to be able to sustain their operations when it comes in. It has been estimated that it will affect 6 million jobs. It must be wrong to push through such a tax without adequate debate.
The motion will allow, almost ensure, that when the Bill is passed this part of the tax law will be ill-prepared, ill-thought-out, ill-advised and in many ways unjust. That the House should be forced to do that by a guillotine motion is entirely wrong.
7.10 p.m.
Sir Geoffrey Howe: Many aspects of the debate have been familiar to hon. Members in all parts of the House, but underlying the familiar elements there has been a developing strand of important argument about the way in which our parliamentary procedures can be and should be used, and are used, as the best means of resolving differences of opinion within our society in a way that seeks to reflect the will of the majority, so far as that can be identified, without overriding the interests of the minority, and that does no harm to the common understanding, as the right hon. Member for Down, South (Mr. Powell) put it, upon which all depends.
The success or failure we have in achieving that depends to some extent upon the usual channels, so affectionately and lightheartedly described by the hon. Member for Bolsover (Mr. Skinner)—sometimes and to some extent. It depends also on the extent to which we have been wise or unwise in making the changes referred to by the right hon. Member for Down, South. Speaking for myself, I thought that there was a great deal in the point he was making.
One of the pressures that is now placing these procedures under strain is one that is at the heart of the faith of the Labour Party, which is referred to, interestingly enough, in a book, to which I referred yesterday, on the procedure of the House, published in 1908 by Josef Redlich. On page 197, one of the pressures is identified as
"a craving for social or economic equality."
The author said that that could threaten
"the majority principle, a fundamental convention upon which all parliamentary government is built"

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and that that
"must needs begin to lose its moral force. At the same time"—
this point was made by my right hon. Friend the Member for Farnham (Mr. Macmillan)—
"and to the same degree, the principle of protection for the minority begins to suffer from decay. There is a total collapse of the system of ideas of representative government."
Those are the kind of pressures which Governments ought to consider when they bring legislation of any kind, and certainly of this kind, before the House. The extent to which we strain those conventions depends, first, upon the nature of the legislation—the essential substance and the quality of that legislation, the extent to which it has been properly considered, and, finally, the way in which it is actually handled through the House. In each of these three respects, the Government have placed undue strain upon our system. We are entitled to argue those points in resisting the motion.
First, concerning the quality of the legislation itself, the hon. Member for Meriden (Mr. Tomlinson) suggested that this legislation was to the great economic advantage of the nation. One asks, how so? No evidence has been advanced in any of the debates to suggest that it is economically advantageous to the nation. The hon. Member for Bebington and Ellesmere Port (Mr. Bates) suggested that it was beneficial because of the harm that it might do to Tewkesbury Man. But why seek to do that harm? What harm is done by him if he is one of the many people running a business, small or large, for the benefit of the nation? The truth is that the capital transfer tax is totally destructive, it threatens bankruptcy, and it is disastrous for thousands of small firms, farms, and businesses throughout the United Kingdom. As my right hon. Friend the Member for Farnham has said, it is casting the shadow of insecurity and unemployment over millions of employees in these businesses, the 6 million people to whom my hon. Friend the Member for Honiton (Mr. Emery) referred.
The capital transfer tax is threatening also—this may surprise Labour Members—to bring about a sharp reduction in choice and the quality of life for the consumers of this country. As more and more firms pass into the control of giant
1338
public companies, or, still worse, of the State, so the quality of life is diminished. It is in no sense of jest that I refer to the comments made by the organisation concerned with the quality of British beer. It has been pointing out, quite rightly, that many small breweries, giving jobs to many people, are threatened by this tax.
Mr. Tomlinson: Tell us about the Carlisle brewery.
Sir G. Howe: I hold no brief for that brewery, whatever the hon. Gentleman may think. I want to concentrate on this tax and the damage it is doing to the quality of life in this respect.
Finally, this tax also threatens to do serious damage to voluntary organisations—that is beyond charities, and not just the political parties which, as the hon. Member for Cornwall, North (Mr. Pardoe) has pointed out, may be saved in the nick of time—and to the non-charitable public organisations which contribute a great deal to the quality of our life and which ought to be the subject of a Government amendment which has not yet been tabled. I want to quote from a document that has been submitted to many of us by the Child Poverty Action Group, which says that
"it is therefore crucial that the Government should encourage a thriving voluntary sector which is free to criticise official action as well as to feed back to authority grassroots opinion on the effects Government measures are having on ordinary people…. From reading the Committee stage of the Finance Bill"—
this is the important point—
"it would appear that most of your colleagues"—
the letter is addressed to the Chancellor of the Exchequer—
"were unaware of the effects the proposed capital transfer tax—which CPAG supports in principle—will have on the voluntary sector."
That is another illustration of the way in which this is a thoroughly destructive, damaging tax.
Woodlands, building employers, small employers, small firms, a range of jobs, and voluntary institutions—all these things will be severely damaged. Hon. Members should not smile at that argument, which is being put powerfully by many people inside and outside the House.
That is the first important reason for seeking to prevent the measure reaching.

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the statute book. The measure is misconceived. It is, quite simply, a bad tax. It has been prepared and considered and is being enacted, as my hon. Friend the Member for St. Marylebone (Mr. Baker) pointed out, with a combination of folly, arrogance and incompetence that is, mercifully, without precedent in the proceedings of this House. Not a voice has been raised in answer to the criticisms advanced by my right hon. Friend the Member for Yeovil (Mr. Peyton) about the way in which this legislation has been prepared. The Leader of the House said, as though this were an answer to all the questions, "We have a mandate to bring this in". But there is no legitimate mandate for the introduction of a measure so badly mishandled as this one.
It has never been our purpose, as the hon. Member for Leicester, South (Mr. Marshall) pointed out, to prevent the collection of existing taxes, the rates of which are altered by the Bill. Our objective has been—it is a perfectly justifiable objective—to persuade the Government, even now, to unstitch Part III, to proceed by all means with the rest by the magic date of Friday week, and to consider again the way in which they have mishandled the preparation of this tax.
I accept that there may be some point in the criticism of the right hon. Member for Down, South, suggesting that our attempt to secure that detachment need not have been the only way of handling this matter. But the fact is—I am sure that the right hon. Member would agree—that it is this incompetence in the preparation of this measure which has driven the Opposition and, therefore, this House to press as hard as we legitimately can for the removal, detachment and reconsideration of Part III. It is that which has driven the Government, through their own original mistakes, to introduce this unjustifiable timetable motion.
My right hon. Friend the Member for Yeovil referred to the criticisms advanced by Mr. Patrick Hutber in the Sunday Telegraph. He is not such an undistinguished advocate, because in the same article to which reference has been made he draws attention to the fact that over 10 years ago he was a great deal more Socialist and unwise than he is today.
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He is learning wisdom from the past which far exceeds that of hon. Members opposite.
This measure has been criticised also by The Times and the Financial Times. Most important of all is the comment in The Guardian today, which says quite plainly:
"For the House of Commons to discuss even the most important amendments thoroughly in the five days allotted under the Report stage will be extremely difficult…. Beyond doubt, the tax has been introduced in too much of a hurry and without sufficient public discussion…. It is in the Government's own interest, as well as the taxpayer's, to see that brand new taxes are more thoroughly discussed."
That is the central part of the indictment that we lay against the Government.
I next turn to the way in which this measure has been handled. Even without a timetable motion its history will stand as a monument to the lunatic and fruitless impatience of the Chancellor of the Exchequer and his two preachers, the Chief Secretary and the Financial Secretary. They were called upon, with fumbling conceit, to carry out his dirty work. The proper way of handling this measure was foreshadowed by the Chancellor in his Budget speech of 26th March 1974. In discussing the wealth tax he said:
"I believe that it should be introduced only after a thorough public discussion about the precise form it should take, the rate at which it is levied, and its relationship with other forms of taxation."—[Official Report, 26th March 1974; Vol. 871, c. 312–13.]
Would that he had applied those same wise words to the way in which he introduced this monstrous capital transfer tax. That is the second formidable criticism that we advance of the way that this measure has been handled.
Our third criticism is that the capital transfer tax is not just an evil and envious tax but that it has been prepared with outstanding incompetence. It is now being presented to Parliament in a totalitarian fashion. The Leader of the House suggested that we were seeking to prolong the debate instead of concentrating on the merits of the argument. That is certainly not so. The debate on this measure prolongs itself. We were ready yesterday to debate the matter for very much longer than was allowed. My hon. Friend the Member for Honiton (Mr. Emery) has tabled an amendment seeking

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to allow us that opportunity now. It was the Leader of the House who, without precedent, intervened at an astonishingly early hour last night to curtail our discussion. The truth is that this legislation is being forced through by what will be regarded as jackboot tactics.
The Chancellor, in his Budget Statement, in introducing this tax—perhaps he can scarcely remember what he said on that occasion—said:
"I can assure them that, while I am determined to ensure that the new taxes will be effective instruments for redistributing wealth as a means to greater justice and equality in our society, I am concerned that they should operate fairly on those affected and I will listen to any reasonable representations which will help to secure this end."[Official Report, 26th March 1974; Vol. 871, c. 314.]
What hollow words those sound now. The substance of this legislation has been laid upon the Order Paper, but even now it is not complete. Only in the past two or three days have we learned that the Government, to use the Chancellor's words, are prepared to
"listen to any reasonable representations …"
Mr. Russell Kerr: We have not heard any.
Sir G. Howe: The hon. Member for Feltham and Heston (Mr. Russell Kerr) says that he has not heard any reasonable representations. That is the point. The Government have given no opportunity for them to be heard.
One example which the Government have acknowledged to be important in that they have introduced an amendment, is the forestry industry. All hon. Members received yesterday a copy of the telegram that was sent on Sunday 2nd March to the Chancellor which read:
"The Forestry Committee of Great Britain have just seen the Government amendment to the Finance Bill. We regret the lack of consultation and the unnecessary haste …. This will have a disastrous and decisive effect on planting programmes and employment. It will make forestry uneconomic. Posterity will suffer."
How can the Chancellor sit in his place with any degree of complacency upon his face when we contrast that absurd brushing aside of any attempt to allow consultation with what he said so blandly when he introduced his Budget Statement? That sort of thing makes nonsense of the par-p1342
liamentary process. The whole story makes clear the commitment of the Labour Party to conduct a continuing onslaught on independent resources and an independent means of existence in this country. It has a commitment to conduct a continuing onslaught on the existence of private property. It is ruthless in its planned pursuit of equality. It cares not what damage it does to the freedoms and conventions which have held this nation together.
I close by urging Labour Members to reflect on the following proposition, to which they should harken with care. I quote:
"The pursuit of equality has developed in an unprecedented manner and this fact has become one of the most important obstacles to intensive economic development and higher living standards. The negative aspects of equality are that lazy people, passive individuals and irresponsible employees profit at the expense of dedicated and diligent employees, unskilled workers profit at the expense of skilled ones, and those who are backward from the point of view of technology profit at the expense of those with initiative and talent."
Mr. Russell Kerr: That sounds like the right hon. Member for Finchley (Mrs. Thatcher).
Sir G. Howe: The hon. Gentleman says that it sounds like my right hon. Friend the Leader of the Opposition. I wish that Labour Members had listened to it more closely. It does not come from any Conservative platform or from any Conservative programme, but from the action programme adopted by the Czechoslovak Communist Party in April 1968 when, under the leadership of Dubcek, it was seeking to escape from the extremes of egalitarianism to which Marxist doctrines had led it.
It is because of our conviction that the Government are taking us down the same disastrous road that we are committed to oppose this tax with all the energy at our command.
Mr. Speaker: I have had a request from the hon. Member for Lewisham, West (Mr. Price) to allow a manuscript amendment to leave out paragraph 3. The motion must be put at 7.41 p.m. I am afraid that it does not rest in my hands whether the hon. Member will have time to move his amendment, but I will select it and it can be moved if there is time.
7.27 p.m.
The Chief Secretary to the Treasury (Mr. Joel Barnett): First, I say to the right hon. Member for Yeovil (Mr. Peyton) that my hon. Friend the Financial Secretary and I will not be too disturbed that we have not won any laurels from him. We prefer the laurels of our hon. Friends and, if I may say so, their champagne.
We have had a number of interesting contributions. We had two serious and excellent speeches from my hon. Friend the Member for Bolsover (Mr. Skinner) and from the right hon. Member for Down, South (Mr. Powell). They and a number of other hon. Members have referred to the fact that a timetable motion has been placed on the Bill. Serious problems arise when a Finance Bill is timetabled, and a number of points have been made about that by my hon. Friends. That a Finance Bill has been guillotined twice under Labour Governments is clear evidence of the kind of opposition we get when we seek to put measures on the statute book which remove tax avoidance schemes. As many of my hon. Friends will recall, a similar occurrence took place in 1968.
As the right hon. Member for Down, South said, no responsible Government can ever rule out the need at times for a timetable motion. I would have thought that the right hon. and learned Member for Surrey, East (Sir G. Howe) would be the last person in the world to rule out any such motion.
Questions have been asked about the number of Government amendments and the time that it will take to debate them. There are some 25 major Government amendments. Many of the other amendments are of a consequential nature which will be well understood by Conservative Members. The guillotine motion became inevitable, as hon. Members on both sides will recognise who are being reasonable about the matter, once the Opposition had made clear their intention to stop the capital transfer tax by all measures available to them. That became absolutely clear in Standing Committee. We spent many hours in Standing Committee and in Committee on the Floor of the House debating amendments. Including dinner breaks, we spent 160 hours in debate. Many of those amendments
1344
could have been dealt with in a quarter of the time or less if Conservative Members had dealt with them reasonably. There is no doubt that any objective observer could have seen that.
As the right hon. Member for Down, South and others have said, it is an example of our crazy system that an Opposition—and this Opposition in particular—can be so concerned with vying with one another to see who can speak the longest so as to bring about the maximum possible pressure. That is what happened. As an operation it was interesting but not very successful. It was not a very good way of achieving a proper examination of a Finance Bill or any other Bill. Most of the major Government changes were decided well in advance of our debates in Standing Committee. Indeed, I announced that we would move those amendments before we started to debate them. The Opposition were very upset about it.
We eventually finished the Standing Committee proceedings after two days and nights, finishing at 8.30 one morning and 9.30 the following morning. There was no reason for that except that the Opposition decided that it might be a useful ploy to sit two nights on the run before we finish.
Much has been said about how good the Opposition were in Committee, what an excellent Opposition back bench team it was. They needed to be good. After all, there were only 16 of them against my hon. Friend the Financial Secretary and myself, so they needed to be reasonably good.
When we came to the Report stage, the right hon. and learned Member for Surrey, East approached it rather differently, because it was clear that he had instructions from his right hon. Friend the Leader of the Opposition. She wanted to show just how tough she was in these matters. Unfortunately for her, she did not realise how incompetent her right hon. and learned Friend was. The right hon. and learned Gentleman took the right hon. Lady literally and decided to make it quite clear by overplaying his hand, as the right hon. Member for Down, South pointed out.
The right hon. and learned Gentleman over-played his hand in a number of different ways. Many of the Opposition

1345
amendments, especially the new clauses, could have been tabled days before they were tabled. Many of them were tabled—pages and pages of them simply by photo-stating the Committee stage amendments—late on the Thursday, and many of them after 10 o'clock that night. It was being unreasonable then to expect the workers at the Stationery Office to have the amendments printed for the Friday morning. It was synthetic anger when Tory Members came here on the Friday morning and said that the amendments were not printed.
The Opposition have disgraced themselves during the last few days. In so doing they have been led by that arch villain, the right hon. Member for Yeovil. He has excelled himself in these matters. It is no wonder that I noticed the serious members of the Opposition looking shamefaced and embarrassed last night. As the right hon. Member for Down, South said, the tactics embarrassed the House and did the House great harm.
The whole exercise of the Opposition stems, as they told us quite clearly, from the fact that they do not like the capital transfer tax. So they ran a deliberate campaign to distort and mislead the public.
On whose behalf have the Opposition been pleading so strongly? At the outset of our debates today the right hon. Member for Yeovil said that the tax should be fair. That is right, but I am bound to ask—fair to whom? He could not have meant that it should be fair to the majority of the people, because what we had before certainly was not fair to the majority of the people. The majority of people did not have enough money to pay estate duty, or they did not know how, or did not want, to avoid estate duty. Those better off were the ones who had the major relief from estate duty. Now under the capital transfer tax widows and widowers and those who paid the lowest rates of estate duty will be much better off. It is a tiny minority whom the Opposition are representing in the House.
Much has been made about forestry and woodlands. The right hon. and learned Gentleman should be aware that the amendment we have tabled, which was to some extent welcomed in Standing Committee by his hon. Friends who
1346
understood these matters, will help all those who are genuine foresters, not those who under estate duty were using woodlands for a massive form of tax avoidance, often on their death beds. We have stopped that by the amendment we have tabled, whilst we are helping genuine foresters.
Another kind of people that Tory Members seek to help are those who had trusts and used them to avoid estate duty to a tremendous extent. Another tiny minority that the Opposition represent in the House—we saw this in Standing Committee when one Tory Member after another spoke in this regard—is the tiny minority who use the Channel Islands to avoid tax on a growing scale. Not one Tory Member spoke about the majority of other taxpayers who were paying estate duty properly.
This is the kind of Opposition we had upstairs and downstairs. The "Shadow Leader of the House", if that is his title, said that not all those affected by the capital transfer tax are plutocrats. That is absolutely true. They are not, they will be the kind of people who will be helped by the capital transfer tax, including the small traders—the really small businessmen—whom Tory Members purport to represent. There will not be very many small shopkeepers in any of our constituencies who will be hurt by the capital transfer tax.
The very reverse will be the case, because on the right hon. Gentleman's own arguments these are the people who could not afford to give away their businesses in their lifetime. They were left with their businesses when they died. Now they will pay capital transfer tax at lower rates. If they leave the business to a widow, there will be no tax. That is how they will be helped. So hon. Members opposite simply do not speak for really small traders and small businessmen.
I should have preferred it if we could have had a serious examination of the Bill, but the Opposition made it absolutely clear that that was not their intention. The right hon. and learned Gentleman foolishly let the cat out of the bag on Monday. He told us that it was their intention by every legitimate means to stop this part of the Bill from going

1347
forward. He did not tell us that the Opposition would subject it to serious examination. That was not the right hon. and learned Gentleman's intention.
I hope that the House will take note of what my hon. Friend the Member for Bolsover and the right hon. Member for Down, South said. I think that there is a need to look at our procedures and our way of examining Bills. There may be a need to timetable Bills—preferably voluntarily—at the outset. There may be a need for Select Committees to look at Bills.
These things could be done if we had a reasonable Opposition that joined in the examination of our procedures. However, we do not have a reasonable Opposition. We have an Opposition who are thoroughly irresponsible and obstructive. If they had wished, even now they could have had three full days in which to debate the capital transfer tax. They have no wish to do so. This is an appalling Opposition. They do not represent anyone other than a tiny minority in the country. I hope that my right hon. and hon. Friends will support the motion so as to put this excellent tax on the statute book.
7.38 p.m.
Mr. Christopher Price: I beg to move, as a manuscript amendment, to leave out paragraph 3.
As your predecessor in the Chair indicated, Mr. Deputy Speaker, this is an entirely non-controversial motion. It was never intended that a motion such as this should kill motions under the Ten Minutes Rule. When the right hon. Member for Carshalton (Mr. Carr) was Leader of the House, he gave a pledge that in future this matter would be taken care of. I understand that I have the assent of both Front Benches and of many hon. Members on both sides, because the Bill with which I am concerned is about mentally retarded persons.
Amendment agreed to.
Main Question, as amended, put:—
The House proceeded to a Division—
Mr. Deputy Speaker (Mr. Oscar Murton): Order. The Chair has been informed that the Division bells are not ringing at least in part of the Palace of Westminster. In the circumstances, I shall put the Question again.
Main Question, as amended, put:—
The House divided: Ayes 296, Noes 287.

Division No. 120.]

AYES

[7.43 p.m.

Abse, Leo

Campbell, Ian

Dell, Rt Hon Edmund

Allaun, Frank

Canavan, Dennis

Dempsey, James

Anderson, Donald

Cant, R. B.

Doig, Peter

Archer, Peter

Carmichael, Neil

Dormand, J. D.

Armstrong, Ernest

Carter, Ray

Douglas-Mann, Bruce

Ashley, Jack

Carter-Jones, Lewis

Duffy, A. E. P.

Ashton, Joe

Cartwright, John

Dunn, James A.

Atkins, Ronald (Preston N)

Castle, Rt Hon Barbara

Dunnett, Jack

Atkinson, Norman

Clemitson, Ivor

Dunwoody, Mrs Gwyneth

Bagier, Gordon A. T.

Cocks, Michael (Bristol S)

Eadie, Alex

Barnett, Guy (Greenwich)

Cohen, Stanley

Edelman, Maurice

Barnett, Rt Hon Joel

Coleman, Donald

Edge, Geoff

Bates, Alf

Colquhoun, Mrs Maureen

Edwards, Robert (Wolv SE)

Bean, R. E.

Concannon, J. D.

Ellis, John (Brigg & Scun)

Benn, Rt Hon Anthony Wedgwood

Conlan, Bernard

Ellis, Tom (Wrexham)

Bennett, Andrew (Stockport N)

Cook, Robin F. (Edin C)

English, Michael

Bidwell, Sydney

Corbett, Robin

Evans, Ioan (Aberdare)

Bishop, E. S.

Cox, Thomas (Tooting)

Evans, John (Newton)

Blenkinsop, Arthur

Craigen, J. M. (Maryhill)

Ewing, Harry (Stirling)

Boardman, H.

Cronin, John

Faulds, Andrew

Booth, Albert

Crosland, Rt Hon Anthony

Fernyhough, Rt Hon E.

Boothroyd, Miss Betty

Cryer, Bob

Fitt, Gerard (Belfast W)

Bottomley, Rt Hon Arthur

Cunningham, G. (Islington S)

Flannery, Martin

Boyden, James (Bish Auck)

Cunningham, Dr J. (Witeh)

Fletcher, Raymond (Ilkeston)

Bradley, Tom

Dalyell, Tam

Fletcher, Ted (Darlington)

Bray, Dr Jeremy

Davidson, Arthur

Foot, Rt Hon Michael

Broughton, Sir Alfred

Davies, Bryan (Enfield N)

Ford, Ben

Brown, Hugh D. (Provan)

Davies, Denzil (Llanelli)

Forrester, John

Brown, Robert C. (Newcastle W)

Davies, Ifor (Gower)

Fowler, Gerald (The Wrekin)

Brown, Ronald (Hackney S)

Davis, Clinton (Hackney C)

Fraser John (Lambeth, N'w'd)

Buchan, Norman

Deakins, Eric

Freeson, Reginald

Butler, Mrs Joyce (Wood Green)

Dean, Joseph (Leeds West)

Garrett, John (Norwich S)

Callaghan, Rt Hon J. (Cardiff SE)

de Freitas, Rt Hon Sir Geoffrey

Garrett, W. E. (Wallsend)

Callaghan, Jim (Middleton & P)

Delargy, Hugh

George, Bruce

Gilbert Dr John

Mabon, Dr J. Dickson

Rose, Paul B.

Ginsburg, David

McCartney, Hugh

Ross, Rt Hon W. (Kilmarnock)

Golding, John

McElhone, Frank

Rowlands, Ted

Gould, Bryan

MacFarquhar, Roderick

Ryman, John

Gourlay, Harry

McGuire, Michael (Ince)

Sandelson, Neville

Graham, Ted

Mackenzie, Gregor

Sedgemore, Brian

Grant, John (Islington C)

Mackintosh, John P.

Selby, Harry

Grocott, Bruce

Maclennan, Robert

Shaw, Arnold (Ilford South)

Hamilton, James (Bothwell)

McMillan, Tom (Glasgow C)

Sheldon, Robert (Ashton-u-Lyne)

Hamilton, W. W. (Central Fife)

McNamara, Kevin

Shore, Rt Hon Peter

Hamling, William

Madden, Max

Short, Rt Hon E. (Newcastle C)

Hardy, Peter

Magee, Bryan

Short, Mrs Renée (Wolv NE)

Harper, Joseph

Mahon, Simon

Silkin, Rt Hon John (Deptford)

Harrison, Walter (Wakefield)

Marks, Kenneth

Silkin, Rt Hon S. C. (Dulwich)

Hart, Rt Hon Judith

Marquand, David

Sillars, James

Hattersley, Rt Hon Roy

Marshall, Dr Edmund (Goole)

Silverman, Julius

Hatton, Frank

Marshall, Jim (Leicester S)

Skinner, Dennis

Hayman, Mrs Helene

Mason, Rt Hon Roy

Small, William

Healey, Rt Hon Denis

Maynard, Miss Joan

Smith, John (N Lanarkshire)

Heffer, Eric S

Meacher, Michael

Snape, Peter

Hooley, Frank

Mellish, Rt Hon Robert

Spearing, Nigel

Horam, John

Mikardo, Ian

Spriggs, Leslie

Howell, Denis (B'ham, Sm H)

Millan, Bruce

Stallard, A. W.

Hoyle, Doug (Nelson)

Miller, Dr M. S. (E Kilbride)

Stewart, Rt Hon M. (Fulham)

Miller, Mrs Millie (Ilford N)

Stott, Roger

Huckfield, Les

Mitchell, R. C. (Soton, Itchen)

Strang, Gavin

Hughes, Rt Hon C. (Anglesey)

Molloy, William

Strauss, Rt Hon G. R.

Hughes, Mark (Durham)

Moonman, Eric

Summerskill, Hon Dr Shirley

Hughes, Robert (Aberdeen N)

Morris, Alfred (Wythenshawe)

Swain, Thomas

Hughes, Roy (Newport)

Morris, Charles R. (Openshaw)

Taylor, Mrs Ann (Bolton W)

Hunter, Adam

Morris, Rt Hon J. (Aberavon)

Thomas, Jeffrey (Abertillery)

Irving, Rt Hon S. (Dartford)

Moyle, Roland

Thomas, Mike (Newcastle E)

Jackson, Colin (Brighouse)

Mulley, Rt Hon Frederick

Thomas, Ron (Bristol NW)

Jackson Miss Margaret (Lincoln)

Murray, Rt Hon Ronald King

Thorne, Stan (Preston South)

Janner, Greville

Newens, Stanley

Tierney, Sydney

Jay, Rt Hon Douglas

Noble, Mike

Tinn, James

Jeger, Mrs Lena

Oakes, Gordon

Tomlinson, John

Jenkins, Hugh (Putney)

Ogden, Eric

Torney, Tom

Jenkins, Rt Hon Roy (Stechford)

O'Halloran, Michael

Urwin, T. W.

John Brynmor

O'Malley, Rt Hon Brian

Varley, Rt Hon Eric G.

Johnson, James (Hull West)

Orbach, Maurice

Wainwright, Edwin (Dearne V)

Johnson, Walter (Derby S)

Orme, Rt Hon Stanley

Walden, Brian (B'ham, L'dyw'd)

Jones, Alec (Rhondda)

Ovenden, John

Walker, Harold (Doncaster)

Jones, Barry (East Flint)

Owen, Dr David

Walker, Terry (Kingswood)

Jones, Dan (Burnley)

Padley, Walter

Ward, Michael

Judd, Frank

Palmer, Arthur

Watkins, David

Kaufman, Gerald

Park, George

Watkinson, John

Kelley Richard

Parker, John

Weitzman, David

Kerr, Russell

Parry, Robert

Wellbeloved, James

Kilroy-Silk, Robert

Perry, Ernest

White, Frank R. (Bury)

Kinnock, Neil

Phipps, Dr Colin

White, James (Pollok)

Lambie, David

Prentice, Rt Hon Reg

Whitehead, Phillip

Lamborn, Harry

Prescott, John

Whitlock, William

Lamond, James

Price, C. (Lewisham W)

Willey, Rt Hon Frederick

Latham, Arthur (Paddington)

Price, William (Rugby)

Williams, Alan (Swansea W)

Leadbitter, Ted

Radice, Giles

Williams, Rt Hon Shirley (Hertford)

Lee, John

Rees, Rt Hon Merlyn (Leeds S)

Williams, W. T. (Warringon)

Lever, Rt Hon Harold

Richardson, Miss Jo

Wilson, Alexander (Hamilton)

Lewis, Ron (Carlisle)

Roberts, Albert (Normanton)

Wilson, William (Coventry SE)

Lipton, Marcus

Roberts, Gwilym (Cannock)

Wise, Mrs Audrey

Litterick, Tom

Robertson, John (Paisley)

Woodall, Alec

Lomas, Kenneth

Roderick, Caerwyn

Wrigglesworth, Ian

Loyden, Eddie

Rodgers, George (Chorley)

Young, David (Bolton E)

Luard, Evan

Rodgers, William (Stockton)

TELLERS FOR THE AYES:

Lyon, Alexander (York)

Rooker, J. W.

Mr. Laurie Pavitt and

Lyons, Edward (Bradford W)

Roper, John

Mr. David Stoddart.

NOES

Adley, Robert

Biggs-Davison, John

Burden, F. A.

Aitken, Jonathan

Blaker, Peter

Carlisle, Mark

Alison, Michael

Boscawen, Hon Robert

Carr, Rt Hon Robert

Amery, Rt Hon Julian

Bowden, A. (Brighton, Kemptown)

Carson, John

Atkins, Rt Hon H. (Spelthorne)

Boyson, Dr Rhodes (Brent)

Chalker, Mrs Lynda

Awdry, Daniel

Bradford, Rev Robert

Channon, Paul

Bain, Mrs Margaret

Braine, Sir Bernard

Churchill, W. S.

Baker, Kenneth

Brittan, Leon

Clark, Alan (Plymouth, Sutton)

Banks, Robert

Brotherton, Michael

Clark, William (Croydon S)

Beith, A. J.

Brown, Sir Edward (Bath)

Clarke, Kenneth (Rushcliffe)

Bell, Ronald

Bryan, Sir Paul

Clegg, Walter

Bennett, Dr Reginald (Fareham)

Buchanan-Smith, Alick

Cockcroft, John

Benyon, W.

Buck, Antony

Cooke, Robert (Bristol W)

Berry, Hon Anthony

Budgen, Nick

Cope, John

Biffen, John

Bulmer, Esmond

Cormack, Patrick

1350

1351

Corrie, John

Johnston, Russell (Inverness)

Rawlinson, Rt Hon Sir Peter

Costain, A. P.

Jones Arthur (Daventry)

Rees, Peter (Dover & Deal)

Craig, Rt Hon W. (Belfast E)

Jopling, Michael

Rees-Davies, W. R.

Crawford, Douglas

Joseph, Rt Hon Sir Keith

Reid, George

Critchley, Julian

Kaberry, Sir Donald

Renton, Rt Hon Sir D. (Hunts)

Crouch, David

Kellett-Bowman, Mrs Elaine

Renton, Tim (Mid-Sussex)

Crowder, F. P.

Kershaw, Anthony

Rhys Williams, Sir Brandon

Davies, Rt Hon J. (Knutsford)

Kilfedder, James

Ridley, Hon Nicholas

Dean, Paul (N Somerset)

Kimball, Marcus

Ridsdale, Julian

Dodsworth, Geoffrey

King, Evelyn (South Dorset)

Rifkind, Malcolm

Douglas-Hamilton, Lord James

King, Tom (Bridgwater)

Rippon, Rt Hon Geoffrey

du Cann, Rt Hon Edward

Kitson, Sir Timothy

Roberts, Michael (Cardiff NW)

Dunlop, John

Knight, Mrs Jill

Roberts, Wyn (Conway)

Durant, Tony

Lamont, Norman

Ross, Stephen (Isle of Wight)

Eden, Rt Hon Sir John

Lane, David

Ross, William (Londonderry)

Edwards, Nicholas (Pembroke)

Langford-Holt, Sir John

Rossi, Hugh (Hornsey)

Elliott, Sir William

Latham, Michael (Melton)

Rost, Peter (SE Derbyshire)

Emery, Peter

Lawrence, Ivan

Royle, Sir Anthony

Evans, Gwynfor (Carmarthen)

Lawson, Nigel

Sainsbury, Tim

Ewing, Mrs Winifred (Moray)

Lester, Jim (Beeston)

Scott, Nicholas

Eyre, Reginald

Lewis, Kenneth (Rutland)

Scott-Hopkins, James

Fairbairn, Nicholas

Lloyd, Ian

Shaw, Giles (Pudsey)

Fairgrieve, Russell

Loveridge, John

Shaw, Michael (Scarborough)

Farr, John

Luce, Richard

Shelton, William (Streatham)

Fell, Anthony

MacCormick, Iain

Shepherd, Colin

Finsberg Geoffrey

McCrindle, Robert

Shersby, Michael

Fisher, Sir Nigel

McCusker, H.

Silvester, Fred

Fletcher, Alex (Edinburgh N)

Macfarlane, Neil

Sims, Roger

Fletcher-Cooke, Charles

MacGregor, John

Sinclair, Sir George

Fookes, Miss Janet

Macmillan, Rt Hon M. (Farnham)

Skeet, T. H. H.

Fowler Norman (Sutton C'f'd)

McNair-Wilson, M. (Newbury)

Smith, Cyril (Rochdale)

Fox, Marcus

McNair-Wilson, P. (New Forest)

Smith, Dudley (Warwick)

Fraser, Rt Hon H. (Stafford & St)

Madel, David

Speed, Keith

Freud, Clement

Marshall, Michael (Arundel)

Spence, John

Fry, Peter

Marten, Neil

Spicer, Jim (W Dorset)

Galbraith, Hon. T. G. D.

Mates, Michael

Spicer, Michael (S Worcester)

Gardiner, George (Reigate)

Mather, Carol

Sproat, Iain

Gardner, Edward (S Fylde)

Maude, Angus

Stainton, Keith

Gilmour, Rt Hon Ian (Chesham)

Maudling, Rt Hon Reginald

Stanbrook, Ivor

Gilmour, Sir John (East Fife)

Mawby, Ray

Stanley, John

Glyn, Dr Alan

Maxwell-Hyslop, Robin

Steel, David (Roxburgh)

Goodhart, Philip

Mayhew, Patrick

Steen, Anthony (Wavertree)

Goodhew, Victor

Meyer, Sir Anthony

Stewart, Donald (Western Isles)

Goodlad, Alastair

Miller, Hal (Bromsgrove)

Stewart, Ian (Hitchin)

Gorst, John

Mills, Peter

Stokes, John

Gow, Ian (Eastbourne)

Miscampbell, Norman

Stradling Thomas, J.

Gower Sir Raymond (Barry)

Mitchell, David (Basingstoke)

Taylor, R. (Croydon NW)

Grant, Anthony (Harrow C)

Moate, Roger

Taylor, Teddy (Cathcart)

Gray, Hamish

Molyneaux, James

Tebbit, Norman

Grieve, Percy

Monro, Hector

Temple-Morris, Peter

Griffiths, Eldon

Montgomery, Fergus

Thatcher, Rt Hon Margaret

Grimond, Rt Hon J.

Moore, John (Croydon C)

Thomas, Dafydd (Merioneth)

Grist, Ian

More, Jasper (Ludlow)

Thomas, Rt Hon P. (Hendon S)

Grylls, Michael

Morgan-Giles, Rear-Admiral

Thompson, George

Hall, Sir John

Morris, Michael (Northampton S)

Thorpe, Rt Hon Jeremy (N Devon)

Hall-Davis, A. G. F.

Morrison, Charles (Devizes)

Townsend, Cyril D.

Hamilton, Michael (Salisbury)

Morrison, Hon Peter (Chester)

Trotter, Neville

Hampson, Dr Keith

Mudd, David

Tugendhat, Christopher

Hannam, John

Neave, Airey

van Straubenzee, W. R.

Harrison, Col Sir Harwood (Eye)

Nelson, Anthony

Vaughan, Dr Gerard

Harvie Anderson, Rt Hon Miss

Neubert, Michael

Viggers, Peter

Hastings, Stephen

Newton, Tony

Wainwright, Richard (Colne V)

Havers, Sir Michael

Normanton, Tom

Wakeham, John

Hawkins, Paul

Nott, John

Walker, Rt Hon P. (Worcester)

Hayhoe Barney

Onslow, Cranley

Walters, Dennis

Henderson Douglas

Oppenheim, Mrs Sally

Warren, Kenneth

Heseltine, Michael

Osborn, John

Watt, Hamish

Hicks, Robert

Page, John (Harrow West)

Weatherill, Bernard

Higgins, Terence L.

Page, Rt Hon R. Graham (Crosby)

Wells, John

Holland, Philip

Paisley, Rev Ian

Welsh, Andrew

Hooson, Emlyn

Pardoe, John

Whitelaw, Rt Hon William

Hordern, Peter

Parkinson, Cecil

Wiggin, Jerry

Howe Rt Hon Sir Geoffrey

Pattie, Geoffrey

Wigley, Dafydd

Howell, David (Guildford)

Penhaligon, David

Wilson, Gordon (Dundee E)

Howell, Ralph (North Norfolk)

Percival, Ian

Winterton, Nicholas

Howells, Geraint (Cardigan)

Peyton, Rt Hon John

Wood, Rt Hon Richard

Hurd, Douglas

Pink, R. Bonner

Young, Sir G. (Ealing, Acton)

Irving, Charles (Cheltenham)

Powell, Rt Hon J. Enoch

Younger, Hon George

James, David

Prior, Rt Hon James

Jenkin, Rt Hon P. (Wanst'd & W'df'd)

Pym, Rt Hon Francis

TELLERS FOR THE NOES:

Jessel, Toby

Raison, Timothy

Mr. Adam Butler and

Johnson Smith, G. (E Grinstead)

Rathbone, Tim

Mr. Spencer Le Marchant.

Question, as amended, accordingly agreed to.

Ordered,
That the following provisions shall apply to the remaining Proceedings on the Bill:—
Report and Third Reading
1.—(1) The remaining Proceedings on Consideration and the Proceedings on Third Reading

Proceedings

Time for conclusion or interruption

New Clauses not relating to capital transfer tax or estate duty, and Amendments relating to Clauses 1 to 18 and 50 to 56 and to Schedules 1 to 3 and 12.

To be brought to a conclusion at midnight on the first allotted day.

New Clauses relating to capital transfer tax or estate duty.

To be brought to a conclusion at midnight on the second allotted day.

Amendments relating to Clauses 19 to 49, new Schedules.

(a) To be interrupted at midnight on the third allotted day;

Amendments relating to Schedules 4 to 11, and Third Reading.

(b) to be brought to a conclusion at midnight on the fourth allotted day.

(2) Standing Order No. 43 (Business Committee) shall not apply to this Order.
(3) The Third Reading of the Bill may be taken immediately after the Consideration of the Bill, notwithstanding the practice of the House as to the interval between the stages of a Finance Bill.
Dilatory motions
2. No dilatory Motion with respect to, or in the course of, Proceedings on the Bill shall be made on an allotted day except by a Member of the Government, and the Question on any such Motion shall be put forthwith.
Private Business
3. Any private business which has been set down for consideration at Seven o'clock on an allotted day shall, instead of being considered as provided by the Standing Orders, be considered at the conclusion of the Proceedings on the Bill on that day, and paragraph (1) of Standing Order No. 3 (Exempted business) shall apply to the private business for a period of three hours from the conclusion of the Proceedings on the Bill or, if those Proceedings are concluded before Ten o'clock, for a period equal to the time elapsing between Seven o'clock and the completion of those Proceedings.
Conclusion of Proceedings
4.—(1) For the purpose of bringing to a conclusion any Proceedings which are to be brought to a conclusion at a time appointed by this Order and which have not previously been brought to a conclusion, Mr. Speaker shall forthwith proceed to put the following Questions (but no others), that is to say—
(a) the Question or Questions already proposed from the Chair, or necessary to bring to a decision a Question so proposed (including, in the case of a new Clause or new Schedule which has been read a second time, the Question that the Clause or Schedule be added to the Bill);
(b) the Question on any amendment or Motion standing on the Order Paper in the
of the Bill shall be completd in four allotted days and (subject to paragraph 4(2) of this Order) shall be brought to a conclusion or interrupted, as the case may be, at the times shown in the following Table:—
name of any Member, if that amendment or Motion is moved by a Member of the Government;
(c) any other Question necessary for the disposal of the business to be concluded;
and on a Motion so moved for a new Clause or a new Schedule, Mr. Speaker shall put only the Question that the Clause or Schedule be added to the Bill.
(2) Proceedings under sub-paragraph (1) of this paragraph shall not be interrupted under paragraph 1(1) of this Order.
(3) If an allotted day is one to which a Motion for the adjournment of the House under Standing Order No. 9 stands over from an earlier day, the bringing to a conclusion or interruption of any Proceedings which under this Order are to be brought to a conclusion at a stated time on that day shall be deferred for a period equal to the duration of the Proceedings on the Motion under Standing Order No. 9.
(4) If a Motion for the adjournment of the House under Standing Order No. 9 stands over to Seven o'clock on an allotted day, the bringing to a conclusion or interruption, as the case may be, of any Proceedings on the Bill which, under this Order, are to be brought to a conclusion or interrupted on that day at any hour falling after the beginning of the Proceedings on that Motion shall be postponed for a period equal to the duration of the Proceedings on that Motion.
Supplemental orders
5.—(1) The Proceedings on any Motion moved in the House by a Member of the Government for varying or supplementing the provisions of this Order shall, if not previously concluded, be brought to a conclusion one hour after they have been commenced, and the last foregoing paragraph shall apply as if the Proceedings were Proceedings on the Bill on an allotted day.
(2) If on an allotted day on which any Proceedings on the Bill are to be brought to a conclusion at a time appointed by this Order the House is adjourned, or the sitting is suspended, before that time no notice shall be

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required of a Motion moved at the next sitting by a Member of the Government for varying or supplementing the provisions of this Order.
Saving
6. Nothing in this Order shall—

(a) prevent any Proceedings to which the Order applies from being taken or completed earlier than is required by the Order, or

(b) prevent any business (whether on the Bill or not) from being proceeded with on any day after the completion of all such Proceedings on the Bill as are to be taken on that day.

Interpretation
7. In this Order—
"allotted day" means any day (other than a Friday) on which the Bill is put down as first Government Order of the Day provided that a Motion for allotting time to the Proceedings on the Bill to be taken on that day either has been agreed on a previous day, or is set down for consideration on that day;
the Bill' means the Finance Bill.

ORDERS OF THE DAY

  FINANCE BILL
  [1st Allotted Day]
  Not amended (in the Committee) and as amended (in the Standing Committee), further considered.

  FINANCE BILL
    Clause 3

      RELIEF FOR "DO-IT-YOURSELF" BUILDERS
      7.58 p.m.
      Mr. Deputy Speaker (Mr. Oscar Murton): The first amendment selected is No. 377, in page 3, line 9, after 'garage' insert
      'shop, workshop, outhouse, greenhouse, stable or kennel'.
      With it we may discuss Amendment No. 300, in page 3, line 11, after 'it', insert
      'and to the provision of a building incorporating a dwelling from which the said person intends to conduct his own business'.
      Mr. David Howell: Amendment No. 377 is not moved, Mr. Deputy Speaker, under protest.
      Mr. Deputy Speaker: The next amendment selected is Amendment No. 305, with which we are to take Amendments Nos. 306 and 307.
      Mr. David Howell: On a point of order, Mr. Deputy Speaker. It was suggested last night, when we were discussing these matters in a rational manner before the Government began to put the strong arm on, that we should take these amendments together with the succeeding group of amendments, Amendments Nos. 8, 301, 303, 304 and 319, in the names of the right hon. Member for Down, South (Mr. Powell) and his hon. Friends. If it is for the convenience of the House, perhaps we can proceed in that way.
      The Financial Secretary to the Treasury (Dr. John Gilbert): That is agreeable to us.
      8.0 p.m.
      Mr. J. Enoch Powell: I beg to move Amendment No. 8, in page 3, line 15, at end insert
      'unless one or more new dwellings are provided by such conversion, reconstruction, alteration or enlargement'.
      Mr. Deputy Speaker: I understand, in view of what has just been said, that it is convenient to discuss with this amendment the following amendments:
      No. 305, in page 3, line 13, leave out 'conversion, reconstruction,'.
      No. 306, in page 3, line 14, after 'reconstruction', insert 'or'.
      No. 307, in page 3, line 14, leave out 'or enlargement'.
      No. 301, in page 3, line 15, at end insert
      'except where such conversion, reconstruction, alteration or enlargement provides accommodation for a disabled person or persons'.
      No. 303, in page 3, line 15, at end insert
      'except where it provides additional accommodation either as part of the existing dwelling or as a separate unit attached to or within the said dwelling'.
      No. 304, in page 3, line 15, at end insert
      'except where it provides additional accommodation as a separate unit attached to or within the said dwelling'.
      No. 319, in page 3, line 15, at end insert
      'save where such work qualifies for grants under Part II of the Housing Act 1974'.
      Mr. Powell: I move the amendment with some confidence because of the course of the debate on the same point in Committee. The Financial Secretary was good enough to say at the end of that debate that he would be happy to study the clause again and come back on Report. I am inviting him to do just that. The effect of the amendment would be to realise more satisfactorily and without anomalies what is generally agreed to be the Government's object in Clause 3, namely, to ensure that where a new unit of accommodation or dwelling is provided there shall be no inequity between the instance where it is provided by a professional builder and the instance where it is provided by amateurs doing their own work.
      As drafted, the clause would exclude from the benefit of the VAT refund new dwellings which were provided by self-build when they were the result of the alteration or conversion of existing buildings. I assure the House that this is a practical and in no way captious point. However it may be in other parts of the country, in Northern Ireland it is quite
      1358
      common for people, with their own labour, to convert something which is not a dwelling into one or more dwellings.
      In Committee, my hon. Friend the Member for Londonderry (Mr. Ross) mentioned the possibility of converting a school house into a dwelling. I have such an example clearly in mind in my constituency. In Northern Ireland a large number of small schools have, as a result of reorganisation, become superfluous and are perfectly capable of being converted into acceptable dwelling places for one or more families. Obviously this sort of work can be done, and is done, by people working in their own time.
      It cannot possibly be the intention to penalise the providing of a new dwelling in that way. After all, it is an economical method of increasing the amount of accommodation with far fewer materials and much less work than are required in a new dwelling. In Committee the Financial Secretary said:
      "The relief that we have devised in the clause is intended to assist people who are actually creating new living space …".—[Official Report, Standing Committee A, 23rd January 1975; c. 65.]
      He went on to make the matter a little more precise—to exclude extension, I take it—by referring to "constructing new housing units". It follows necessarily and logically that the hon. Gentleman should accept the principle of the amendment to fulfil his intention.
      I hope that the Financial Secretary will not argue that difficulty could arise in policing the scheme or in avoiding misuse of the clause. There can be no difficulty in deciding whether a new dwelling has been created. For rating purposes, it is necessary that the new dwelling should be rated separately. There are several respects in which the existence of a new dwelling is objectively ascertained, so that there is no problem for Customs and Excise to ascertain whether an application for refund falls within the ambit of the clause.
      This is by no means an academic point. Substantial numbers of people will benefit from and will be encouraged to provide new dwellings by means of conversion if this logical completion of the clause is accepted by the Minister. It would assist our proceedings and help us to reach other matters in the Bill if he

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      were to signify his intention to accept, at any rate in principle, what is proposed in the amendment.
      Mr. Hugh Rossi: The right hon. Member for Down, South (Mr. Powell) has addressed his remarks exclusively to Amendment No. 8. I should like to refer to the amendments in the names of my right hon. and hon. Friends.
      Amendments Nos. 305, 306 and 307 are grouped and I should like to add for the purpose of my comment Amendments Nos. 303 and 304, whose objective is precisely the same as that of the right hon. Member for Down, South. The intention is to add to the relief given against VAT work done for the reconstruction, alteration and conversion of buildings as well as new construction. The concept of Amendment No. 301 is the same, but it is somewhat limited as it relates only to accommodation for disabled persons. Therefore, inasmuch as those amendments are already covered by the arguments adduced by the right hon. Member for Down, South, I do not propose to detain the House by arguing about them, save to say that my right hon. and hon. Friends are perfectly prepared to support the right hon. Gentleman in his amendment.
      I turn to Amendment No. 319, which is somewhat different in concept. There is an error in the print of the amendment. It refers to Part II of the Housing Act 1974. It should refer to Part VII. I took up the matter with the Public Bill Office and I believe that the error has been pointed out to the Government, so that we may proceed without difficulty.
      In Committee the Financial Secretary resisted on a number of grounds amendments which proposed relief from VAT in addition to the relief where a new building was being erected. First, he said that the amendments made no distinction between useful additions to buildings and an addition where "an element of discretionary expenditure" arose. He went on in column 65 of the Official Report for 23rd January of the proceedings in Standing Committee to talk about the possibility of billiard rooms and rooms for luxury use being brought within the ambit of the amendment, and he said that for that reason he had to resist it.
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      The second objection which the Financial Secretary raised was that an amendment extending the relief to reconstruction, alterations and conversions would make it difficult to estimate what the cost to the Exchequer would be. His third objection was that such works, especially repairs and decorations, were difficult to police. Fourthly, he objected to amendments of the kind proposed on the basis that they would give rise to a myriad of small claims which the Customs and Excise would find it difficult to deal with. He was kind enough to say in Committee that he would be happy to study the matter again. He said that he would be particularly anxious to study again the position where the works attracted local government grants. Amendment No. 319 is precisely on that point.
      Part VII of the Housing Act 1974 provides for financial assistance to be given by local authorities to those who carry out certain works of improvement, repairs and conversion when it is in the public interest that such work be carried out. Section 56 provides that grants may be made towards the cost of work required for the following matters. First, they may be made for the provision of dwellings by the conversion of houses or other buildings, which is much in line with the argument put by the right hon. Member for Down, South. Secondly, grants may be made for the improvement of dwellings; thirdly, for the repair of dwellings; and, fourthly, for the improvement of houses in multiple occupation by the provision of standard amenities.
      There are various grants laid down in the Housing Act 1974 which are all directed to those specific objectives. There is an improvement grant, which is for work required for the provision or improvement of a dwelling for a registered disabled person. That relates to the area covered by Amendment No. 301. There is an intermediate grant for work which is required for the improvement of a dwelling by the provision of standard amenities. Standard amenities are defined in the Sixth Schedule to the Housing Act as the provision of a bath, a hot water supply, a sink and a water closet where those amenities do not exist. That is part of the general strategy of successive Governments to bring the housing stock up to modern standards and to make

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      houses suitable for everyday living. In addition, there is a special grant for works required for the improvement of a house in multiple occupation, and a repairs grant in respect of repair or replacement relating to a dwelling in a housing action area or general improvement area.
      There is no need for me to go into the concepts of housing action and general improvement areas. They are areas in cities on which Parliamment has decided that money shall be spent from the public purse to rescue houses and prevent them from becoming slums so that decent conditions may be provided for the people living there.
      From my brief outline of the area covered by improvement grants, I am sure that the Financial Secretary will see at once that his prime objection to extending Clause 3 is met. There is no question that public money will be wasted on frivolous or luxurious extensions to houses. We are limiting the amendment precisely to those areas in which Parliament has already determined that public money must be spent in the national interest to obtain the necessary improvement of our housing stock.
      The Financial Secretary's second objection was that there would be a cost to the Revenue which would be difficult to estimate. Here again, we are meeting the point by limiting the extension of Clause 3 to areas where these grants apply. Strict criteria are laid down in the Act which must be fulfilled before the grants can be paid by local authorities. Clause 57 of the Housing Act 1974 states that the application to the local authority must contain certain information, in particular details of the work and an estimate of its cost, before a grant will be entertained. The Department of the Environment already has experience of the level and rate at which improvement grants are running. There is no open-ended commitment and no unknown quantity here. The Treasury has merely to look at the rate at which the grants are running in the Department of the Environment to see what will be the cost, and the argument that it is diffisult to estimate in advance cannot apply to this category.
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      8.15 p.m.
      The Financial Secretary's third objection was that these matters are difficult to police. There is no question of there being any difficulty of policing, because there must be a prescribed application to a local authority in a particular form, with details of the work and estimates of the cost being specified in advance, the work being supervised by local authority employees and final certification being required by the borough surveyor or the borough engineer before the grant is paid. There is policing right the way through virtually on schedules of works.
      Finally, the objection that there will be a myriad of small claims is not valid. Section 64 of the Housing Act 1974 refers to a grant of up to £2,000 for a single dwelling or, where a house is being converted into a number of separate dwellings, a grant of £2,400 for each dwelling. Following the encouragement which the Financial Secretary gave us in Committee, I entreat him to accept the amendment, which meets all the objections he raised in Committee against extending Clause 3.
      I add one further argument to my case. The Government have said that it is right that public money by way of grant should be spent on doing this work. The money is given to the person carrying out the work to enable him to do it. When we give public money in that way it is a little absurd to seek to claw it back by VAT on the material used in doing that work. It is a derogation from the grant for the Government to take part of it back by way of VAT. I urge the Financial Secretary to give sympathetic consideration to the amendment.
      Mr. Wm. Ross: Being fortunate, or unfortunate, enough to be a member of the Standing Committee, I have no doubt that the Financial Secretary recognises that we have here a valid point. Many right hon. and hon. Members have complained that the Financial Secretary did not write to them, but he did write to me on this matter. He sent me a most courteous letter, and the only fault with it is that he turned down my application. I do not understand why, because after the manner in which he treated us upstairs I had hoped

      1363
      that he would go some way towards accepting the principle of our argument.
      Some of the reasons for not doing so which the hon. Member advanced in his letter I find rather strange. He said that,
      "The inclusion in the scheme of relatively minor work would multiply the number of claims out of all proportion."
      What on earth has that got to do with the principle? If it is a reasonable point, it is only right that the Government should make some effort to meet it. The hon. Gentleman went on to talk about
      "a further relatively marginal fiscal relief for such improvement work".
      It is not necessarily marginal to the individual. No doubt the Treasury considers that it is marginal, but it collects hundreds of millions of pounds each year. The Financial Secretary went on to say that
      "almost invariably some of this would consist of repair work."
      Surely this is an indication of the thinking underlying the hon. Gentleman's attitude. It would appear that the Revenue is treating individuals carrying out conversions as if they were setting out to defraud the Revenue. I do not think that the average person is a criminal, or has criminal intent. These are honest people, trying to do something for themselves. It is extremely unlikely that they would defraud anyone. The Minister went on to say that it is possible that some of the material could even be sold to another individual. The people we are speaking about are unlikely to go to that length. These are people trying to carry out a cheap job and they are extremely unlikely to try to make a business out of collecting 8 per cent. on the material. It is so ridiculous that it does not bear thinking about.
      The Government seem to have the impression that they would have to police every building that has been converted. Surely it does not take that much policing to find out, in general terms, the amount of material needed in a conversion. Any master builder could tell. If a master builder is brought in to do the job, he will get a refund. I cannot see any reason why the individual should not have the same treatment. It is nonsense to say that VAT cannot be refunded if a conversion is built by the owner but it
      1364
      can be refunded if it is built by a builder. There is no difference whatever to the Revenue.
      It may be that in Committee we went further than giving relief for the conversion of a new housing unit. This amendment does not go as far as we sought to do then. We have made it tighter. There is no reason why the amendment should be turned down.
      Often, the man who owns a large house and has retired, and whose family has grown up, finds that he has room to spare. Such a house may lend itself to subdivision into flats. That should be encouraged, especially in towns. If such a person calls in a builder to carry out the conversion work the VAT will be refunded. If he is a handy fellow and does the work himself he will not get the VAT back. This is a gross inequity, which the Government should make every effort to remedy. The amendment will meet the point easily. It should be accepted.
      Mr. Ivan Lawrence: I support these amendments and am grateful to my hon. Friend the Member for Hornsey (Mr. Rossi) for his persuasive replies to the issues which were bothering the Financial Secretary in Committee. I am grateful to the Financial Secretary for keeping an open mind, at any rate until this stage. Not only in Northern Ireland are there people who are anxious that this concession should be made to cover "do-it-yourself" work. It is a matter of some amazement to me that the Government and their advisers did not think that this was important enough to warrant bringing forward a clause embodying these amendments much earlier.
      I hope that the Financial Secretary will not be deterred from accepting the amendment by the fact that, traditionally, it is the Conservative Party that has been concerned with legislation that would extend the quality of life in the way that people will be able to extend the quality of their life by extending and improving their homes. I hope that he will not be deterred by the fact that it is normally the Conservatives who have supported self-reliance, which is typified by those who extend their homes in this way. I hope, also, that he will not be deterred by the fact that it is normally the Conservatives who have had respect for the

      1365
      atmosphere of family life engendered among those who carry out "do-it-yourself" work, when young people often leave the television sets to help Dad instead.
      Perhaps the Financial Secretary, being a Financial Secretary, will bear in mind that the improvements resulting from such work will probably increase the rateable value of premises and thereby increase the income of local authorities without affecting the Exchequer—something which the Financial Secretary and his right hon. Friends would be happy to see. I hope that the Financial Secretary will sense the strong feeling on the Opposition side of the House and in the country in favour of these concessions. If he fails to grant them it will look very much as though he is being particularly petty to millions of ordinary men and women who take pleasure in "do-it yourself" activities. I am sure that neither meanness nor pettiness is a mark of this Financial Secretary.
      Mr. Andrew Bowden: I support the amendments. There are in my constituency a considerable number of self-build owners. Many of these schemes have operated for many years. The standards which were originally agreed are out of date and require improvement. I am concerned about those people who have made sacrifices and a determined effort to engage in self-build schemes. That group is determined not to be dependent on the State in any way. Its members wish to own their own homes and in many cases they have given up holidays, luxuries and pleasures to build their own houses and to become owner-occupiers. They are very much concerned with family responsibilities, determined to improve themselves and to give better opportunities and conditions to their children and other members of their family.
      I hope that the Financial Secretary will give careful consideration to these amendments. Many of the people concerned have elderly relatives, particularly parents, whom they wish to incorporate into their homes as members of the family. If they are fortunate enough to obtain planning permission, and if they have a little land on which to build an additional room to bring an elderly parent into their home, this is very much
      1366
      to be desired and will mean a considerable saving to the local authority. We should encourage the fact that the family is being kept together and that the responsibility is being taken by the son-in-law or by the son of the family.
      Any steps taken by the Government which will actively discourage these activities will turn out to be more expensive in the long run either to central or local authority funds. I hope that the Minister will support this group of people and will give them all the help he possibly can.
      I suggest that there will be little scope for anybody to fiddle the situation. Inevitably, there will be some people who will fall into this category. However, an easy check can be carried out, because whatever plans are approved must have local authority permission and details must have been submitted to the local planning committee. It would not be difficult to check the value of materials used and to compare it with the plans submitted to and approved by the planning committee. I hope that the Minister will give the most sympathetic consideration to these amendments, will give genuine help to this section of the community and will do nothing to discourage the desire to improve properties. I hope that the Government will do all they can to help these families and to make them more effective and useful members of the community.
      8.30 p.m.
      Mr. David Mitchell: If the Government resist this amendment, they will prevent people who wish to take advantage of self-build schemes to obtain VAT relief. I do not see how the Government can sustain such an attitude. Indeed, I am surprised that the Financial Secretary has not cut short the debate and said that he is prepared to accept the amendment. I hope that I shall encourage him to do so very shortly.
      We are dealing in this amendment with a group of people who are, perhaps, among the less wealthy. They do not have the means to bring in a builder to do the work for them, but have enough initiative to undertake the work themselves. They are self-reliant people who have avoided the soft option of sticking mum or dad in a council house or an old person's bungalow. They have taken the

      1367
      initiative in helping their families by creating an additional housing unit. They are the very people that society should seek to encourage.
      I have in my constituency a number of people who find themselves in this situation. The Government should go out of their way to help them rather than to adopt a niggling attitude. Since I am on the subject of niggling attitudes, I should like to ask the Financial Secretary to re-examine the question of the date from which the self-build remission of VAT is to count. Is it necessary to run it right through till November? Could not he take it from the beginning of the last financial year—5th April 1974? If he did that, he would be helping a group of people who it is wholly desirable to encourage.
      The Government fear abuse. However, the only excuse which can be presented for not accepting the amendments is the niggling one that one citizen might make 8 per cent. profit on the property. It is an example of the tortuous mind of the Treasury that it is more concerned with the possibility of one person abusing a rule than with encouraging 99 self-reliant citizens to get on with helping themselves.
      Rev. Ian Paisley: I support the amendment. This is an important matter to Northern Ireland. A recent survey in Northern Ireland, conducted by the Housing Executive, showed that 40 per cent. of all the houses there, were not up to standard. Therefore, there is a great need to give this relief to those people who by their own efforts are prepared to bring their houses up to standard.
      It was said that the local authority would have the opportunity of passing the plans. In Northern Ireland the position is centralised. The Planning Commission centralises the drafting of plans for the whole of Northern Ireland. Therefore, the Treasury has no excuse if it says that planning permission will be divided between the various local authorities and that it will be hard for the Treasury to keep in step with those who wish to claim the benefit if this concession is granted. That does not apply to Northern Ireland. This matter is of great importance to Northern Ireland, since it
      1368
      affects the well-being of the majority of people there.
      The matter was raised in Committee by my hon. Friend the Member for Londonderry (Mr. Ross). A promise was given that the matter would be considered and we expected a favourable response. It seems to me that since the Government spokesman has not spoken, we shall not convince him. Therefore, is he prepared to listen to all that is said and then to knock down the proposal? I trust that that is not so. However, that is the way I read the position at present.
      Mr. Nicholas Ridley: How interesting it is that once the guillotine has safely fallen the Government benches become deserted. It seems that Government supporters' interest in the Bill is only that it should pass.
      I support the amendments. Although I do not wish to repeat the arguments in favour, I wish to demolish the defence put up by the Financial Secretary. He was kind enough to send out advance copies of it, and I am most grateful to him.
      The defence appears to be this. The Customs will look at each application on the basis that it knows roughly what materials are incorporated in the average house. Therefore, if the figure is £5,000, it can allow that relief claim to that extent. When it comes to conversions or alterations, the Customs will not know whether the conversion should have cost £1,000 or £10,000, and, therefore, an inspection will have to be made. The implication is that the Customs will not make any inspection of new houses built under the do-it-yourself VAT relief scheme. This is fallacious, because a new house can cost anything between £5,000 and £50,000, depending on its scale, and the Customs will have no idea whether every £1-worth of material which is alleged to have been incorporated in the new house has been so incorporated. If a dishonest do-it-yourself builder wishes to purchase extra materials and flog them off to his friends, VAT included, and pocket the 8 per cent. difference, he will be just as able to do that in the case of new houses as in that of conversions. In effect, we are laying the Customs and Excise open to this risk by passing the clause at all. To extend it to conversions

      1369
      or alterations will in no sense increase that risk.
      There is the further point that some of this will be repairs money. However, as has been pointed out, what is so dreadful about repairs? That is a matter in respect of which we ought to be prepared to allow a little money to go through which perhaps was not strictly intended under the clause.
      The defence is fallacious. The Customs and Excise will be no more able to police exactly accurately the new house provisions than it will the conversion provisions about which we are talking. It is unlikely that it will be worth while to engage in flogging off VAT-free do-it-yourself materials, because the profit will be 8 per cent. at the most, and we all know that slightly suspect goods of this kind do not fetch the full market price. What is more, most of the materials will be heavy goods like cement, timber, bricks, aggregate and sand, which cost a great deal to move from one place to another. It would seem to be a hazardous business which made its profit out of shifting VAT-relieved building materials from the site of a conversion to the site of a would-be purchaser's establishment. If anyone suggested transferring such a business to his son, I should have thought that he would certainly be exempt from the capital transfer tax.
      Mr. John MacGregor: We had a valuable debate in Committee on this topic, but it was one without a conclusion. The various amendments being discussed in this debate give us an opportunity to reach a constructive and useful conclusion which will benefit many people.
      The main point which I wish to bring out was touched upon in Committee, but it was not fully emphasised. The Financial Secretary will remember talking about building billiard rooms or swimming pools and about the difficulty of line-drawing. One of the most important line-drawing positions relates to the situation where someone is wealthy enough to employ a builder to provide a new unit of accommodation for his mother-in-law, to provide an additional room for a child or, for that matter, to provide a billiard room or a swimming pool. He will get VAT relief. Those
      1370
      who do not have sufficient income or capital to enable them to do this with the aid of a builder but have to do it themselves will not get the relief.
      That leads on to two other points, especially in relation to the amendment moved by the right hon. Member for Down, South (Mr. Powell) and the amendment about housing grants. The two amendments are limited to new units of accommodation and to housing grant situations. In most cases they will have already been provided by builders. Therefore, by extending relief to the do-it-yourself builder we are assisting the more needy and less well-off. What is more, the costs will be comparatively small, as will the claims. I know that the claims point was bothering the Financial Secretary from the administrative point of view. But it follows that in both situations builders will provide that work. Therefore, we are dealing only with minority situations. But they happen to be the most worthy.
      The case for these two amendments is very clear, and I hope that the Financial Secretary will be able to go a little further than he did in Committee. Amendment No. 303 was designed to deal with the situation where someone wanted to provide additional accommodation for a child, or possibly for his mother-in-law, in a house which was becoming too small but did not wish to have a separate unit. Again, this is a situation which is a worthy one and one where normally a builder would be employed. It is a situation which would be clearly identifiable. If the person does it himself, it seems reasonable to give him VAT relief. I have no doubt that the Financial Secretary will say that additional accommodation cannot be clearly defined and that the amendment is therefore defective. However, I hope that he will find some way of dealing with this situation.
      8.45 p.m.
      I was greatly impressed last weekend by a deputation which came to see me to talk about the difficulties relating to an appeal that had been made for funds for repairs and improvements to a church. The VAT to be paid would make all the difference, in terms of the amount that they had raised on the appeal, to whether they could go ahead because they would need to make a separate appeal to raise the VAT. That

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      situation is relevant to these amendments. It may be that the 8 per cent. VAT will make all the difference to people without much additional income or capital going ahead with repairs or maintenance.
      For these various reasons, I believe that we have offered to the Financial Secretary in this batch of alternatives the opportunity to cap what he generously said in Committee on this matter by finding some way to meet the objectives of putting into legislation something that is worth while.
      Dr. Gilbert: We have had a useful and welcome temperate debate after some of the excitement earlier today. It is almost a relief to get back to the Finance Bill.
      It is certainly useful to take these groups of amendments together. Amendments Nos. 303 and 304 are virtually identical with Amendment No. 8 moved by the right hon. Member for Down, South (Mr. Powell). Amendment No. 319, in the name of the hon. Member for Hornsey (Mr. Rossi), merely qualified the relief to make it available for work which qualified for grant under Part VII of the Housing Act 1974. Amendments Nos. 305, 306 and 307 have much the same effect as Amendment No. 8, though without specifying, as that amendment did, that a new dwelling had to be created.
      I accept without reservation that the spirit of these amendments is at one with the Government's intention under the clause. I should not attempt to resist that proposition. However, there are difficulties. I must ask the House to accept my assurance that I have looked at the situation again between the Committee stage and Report.
      The right hon. Member for Down, South suggested, for example, that there was no difficulty for the Customs and Excise in deciding whether an application for a refund fell within the clause. I could probably agree so far as that goes, but the difficulty arises in deciding whether the amounts are appropriate for relief. I am sure the right hon. Gentleman will accept that the Customs and Excise has to police any scheme of relief carefully and responsibly.
      1372
      I am certain that in the part of the United Kingdom represented by the right hon. Gentleman and his hon. Friend the Member for Londonderry (Mr. Ross) and the hon. Member for Antrim, North (Rev. Ian Paisley) there are cases where old farm houses, and so on, are constantly being converted to make living accommodation. The problem is that almost invariably in such situations there will be a considerable element of repair and maintenance. I remind the right hon. Gentleman that repair and maintenance are still standard rated whether carried out by a do-it-yourself house builder or by a builder acting on instructions from a house owner. There will have to be checks on the quantities of materials involved to assess the reasonableness of the claims that are being made. The majority of taxpayers in this country are overwhelmingly honest in relation to both direct and indirect taxation but one has to recognise, and to guard against, the fact that there are people who are not quite as forthcoming as they might be in paying their taxes; and it is not impossible that some material might accidentally have been used in a building other than that for which a claim is being made. Again, it is the responsibility of Customs and Excise to police situations to see that such evasion—or, worse than that, a fraudulent claim—does not get past them.
      The hon. Member for Hornsey moved an amendment with respect to houses qualifying for local authority grants. I entirely accept that his amendment is within the spirit of Clause 3. I have no difficulty at all in doing so but it is possible that he may be under a slight misapprehension with regard to this particular set of circumstances, because grants from a local authority also cover the VAT element in the proportion of the total cost covered by the grant. The only VAT that remains to be paid by the taxpayer is that which arises on the proportion of the cost of the project which is not covered by the grant. Here again we have the same kind of problem to which I referred in my answer to the right hon. Gentleman.
      Mr. Michael Morris: I do not quite understand the hon. Gentleman, because surely he knows that a local authority, as he rightly said, goes through in great detail a submission from an applicant, chopping off

      1373
      what relates to repairs and maintenance and segregating that from improvement. Local authorities already do that in great detail and ask for full receipts and come back and check when the work is done, so that I do not think that the Financial Secretary's proposition stands up.
      Dr. Gilbert: I do not think that the hon. Gentleman quite sees my point. It is precisely that part which the local authority has policed that is reimbursed to the taxpayer, and on that part the local authority is also reimbursing VAT. It is the other part that a local authority puts on one side as ineligible for reimbursement that we are discussing, and that is where the proposed relief would apply. A local authority will say "This is improvement, and that is repairs and maintenance." As I have told the right hon. Member for Down, South that is the problem with which we are concerned.
      Mr. Rossi: I do not quite follow the hon. Gentleman's arithmetic. Let us assume that the total cost of the work required is £6,000, including VAT, and the grant is a maximum of £2,000, leaving the person doing the work to pay the other £4,000 out of his own pocket. If there were no VAT to be paid it would be £4,000 minus the sum attributable to VAT materials.
      Dr. Gilbert: We are at one in relation to the element not covered by the local authority grant where there would be an element of VAT. I am not disputing that with the hon. Gentleman. His hon. Friend put lucidly and forcibly that it is the element that the local authority has winnowed out as not eligible for the grant that we are talking about but again we have problems of policing in relation to repair and maintenance costs. The hon. Member for Londonderry (Mr. Ross) has said that there is a great anomaly here. He drew attention to the fact that if work were done by a builder he could get relief from VAT, and I accept that. That is a continuing anomaly in the situation and I would not for a moment attempt to deny the force of what the hon. Gentleman says. But in such policing there is a very difficult borderline between an alteration and repairs and maintenance as far as builders are concerned. I am advised that even with their experience they have very consider-p1374
      able difficulty in their daily work. In some circumstances a piece of work may have elements on both sides of the borderline, and, therefore, the treatment of materials may have to vary from situation to situation. It would be all the more difficult for the private individual to determine who was not engaged on that sort of work as part of his everyday trade.
      The hon. Member for Burton (Mr. Lawrence) did not make his points in a partisan way but he drew a lot of attention to the Conservative Party and the quality of family life and said that I should be particularly mean and petty if I resisted this group of amendments. It is only fair to remind him and his hon. Friends that it is we who are relieving the do-it-yourself builder from VAT in the first place. I am sure that he does not need reminding who imposed VAT on the do-it-yourself builder a couple of years ago. So let us hear a little less about the care and quality of family life.
      We heard much the same from the hon. Member for Brighton, Kemptown (Mr. Bowden). Of course one accepts that it is a valuable social development for people to take elderly relatives into their homes, and we want to encourage it. To suggest, as he did, that the Government are "actively discouraging" that trend when, in fact we are relieving VAT rather than imposing it is stretching the case a little far.
      The hon. Member for Cirencester and Tewkesbury (Mr. Ridley), as so often, got to the nub of the matter when he asked "Why not repairs?" The problem there, too, is that if repairs were included it would be impossible to establish a borderline between repairs and decorations. One could often say that decorations and repainting could be considered part of keeping a house in good order and, therefore, would be an appropriate subject for relief.
      If relief were extended in that way, the Revenue cost would be about £100 million a year, even at the new standard rate of 8 per cent.
      Mr. Ridley: With respect, I did not argue that case. What I asked was: if the Customs and Excise could not distinguish between genuine and ungenuine materials in the case of conversions and alterations, how could it do so in the case

      1375
      of new houses, which would qualify under the clause as drafted?
      Dr. Gilbert: I was coming to that point as well, but I think that, in an aside, the hon. Gentleman said "Why not repairs?" I am sure that he will be the first to accept that the last Government felt unable to go even a part of the way that we have gone.
      The hon. Member seemed to assume that there would be no inspection of new houses. I have to correct him slightly on that. There will be a proportion of visits, spot checks, to new houses, particularly those which are the subject of large claims. As he said, there could be a large claim for relief on a very expensive house. By and large, Customs will go on a standard amount of building materials for a house or a bungalow with a given number of rooms. But in a very large claim for an expensive house of the sort to which the hon. Gentleman referred, there would be from time to time spot visits to judge the reasonableness of the claim.
      But when we are talking about small additions and extensions, any scheme of policing would mean a series of ad hoc visits. I must ask hon. Members to accept that it would be undesirable to amend the clause. I make that request with considerable reluctance, but I am sure that they will recognise that a relief scheme must operate efficiently and economically and with propriety. It is not just a question of convenience for the staff of Customs and Excise. It is really a question whether a scheme of relief can be operated at all.
      9.0 p.m.
      The scheme we are proposing is a new departure. For the first time we are saying to the public "You may make a claim for relief from VAT, send in documents and write to Customs and Excise and get relief if your claim is adjudged to be valid." There will be for many members of the public problems of assembling evidence and producing invoices, which may go back over a considerable period. As hon. Members know, it takes a long time to build one's own house.
      Therefore, for the time being I think that we have to confine this scheme to whole houses. It will be extremely diffi-p1376
      cult —I make no bones about it—for Customs and Excise even to operate a scheme of this sort. We think that it will be just about practicable. But if it were to be extended to conversions, alterations and repairs, as I say, the scheme would be totally unworkable.
      The best course for us is to get the scheme started. It may well be—I hope that it will be—that the difficulties that we anticipate will be much fewer than I fear at present. It may be that before too long we can look at the situation again.
      I assure the House that I shall look at the matter very sympathetically. I hope that the House will accept that assurance because, after all, it is we who are introducing this relief. As I say, the problems of VAT on do-it-yourself builders are not of our making. The relief we are introducing under the clause will be of great benefit to many people. It would be irresponsible of me now to agree to changes, however well intentioned, for purposes which I myself would be the first to applaud but which might have the effect of jeopardising the whole scheme.
      Mr. David Howell: I think that the Financial Secretary will agree that there really is an element of lunacy in the position that he has now taken up on behalf of the Government by discouraging and turning down the amendments of the right hon. Member for Down, South (Mr. Powell) and my hon. Friends.
      Just to make it absolutely clear to the House—because it was not, perhaps, clear from the emollient words of the Financial Secretary—what madness we are about, let us recapitulate the situation as it stands. It is that for those who can afford to hire builders to add extensions to their houses, however large and for whatever purposes, virtually, VAT is allowed. Whether the extension be a billiard room or some luxury expansion of a kind which would be disapproved of and frowned upon by some of the puritan spirits on the Government side, or whether it is a minor extension, as long as builders and contractors can be hired, VAT is allowed. That is the position for those who can afford to hire a building firm. But for the do-it-yourself lot—for those who do not have the money to throw around on bringing in a firm, accepting

      1377
      its estimate, and so on—the provision, as the Bill stands unamended, would be only for whole new houses.
      That is a patently absurd position. It is absurd for a number of reasons, one of which is that the whole thrust of housing policy, certainly on the part of my right hon. and hon. Friends, has been to encourage the improvement of terrace houses, of dwellings that in a previous era might have been swept aside by some enthusiastic planner and redeveloper but are now reckoned, with intelligent improvement, as capable of being made adequate and, indeed, in some cases, more than adequate dwellings.
      This is obviously a major aim of housing policy. It is perhaps more of an aim now than it was a few years ago. It does not need me to reinforce the experience of the right hon. Member for Down, South and his hon. Friends that in Northern Ireland, and the cities there, in particular, there are many houses and homes where the prime need, and sometimes the only choice, is to recreate the home by reconstruction, by alteration or by some extension of the kind that is ruled out from qualifying under subsection (3)(b).
      That is the idiocy of the situation. It makes no sense. I know that the Financial Secretary knows that. It could be detected in the way that he tried to defend the present position. But he comes back to the difficulty of policing, and of how Customs and Excise could be sure that this bit of wood would be used for an extension and that that bit would be used for internal repair and decoration, and how could the problem of size be solved. Those have been the flimsy grounds on which the Financial Secretary has tried to defend the present position.
      In Standing Committee his hon. Friend the Member for Llanelli (Mr. Davies) raised the idea of establishing the criterion of planning permission. The Financial Secretary said that he would be prepared to give Clause 3 some frenetic study before Report. Obviously he has done so and has found that his frenetic study has not allowed him to come to any conclusions.
      My hon. Friend the Member for Hornsey (Mr. Rossi) has moved a much more powerful case, and one that has gone
      1378
      quite unanswered. My hon. Friend suggested that the basis used should be the same as that which was used for improvement grants under the 1974 Act. That would clearly and specifically limit the relief to areas in which public money should be spent. That is an unequivocal and easily recognisable criterion. Presumably the Minister believes that the ground on which he seeks to defend his case is defensible. If that is so, I would have thought that my hon. Friend advanced a much more defensible situation with great skill.
      Another argument that came up in Standing Committee, which is perhaps relevant, is that the Financial Secretary and the drafters of the Bill may have in mind altogether the wrong concept when they talk about "do-it-yourself". It was one of the Financial Secretary's hon. Friends who suggested that Ministers and the Treasury really meant "self-built". Would not that definition solve for them the problem of sitting up at night and worrying about all the small items which would be unpoliceable and which would get through the net and qualify for relief? Surely that would be the position if the Financial Secretary were to yield to the amendment.
      When I heard that argument in Committee I thought that it had some validity. I was suspicious in the first place to see the DIY phrase pop up in the Bill. One has a vision of someone in the Treasury, or perhaps one of the Ministers on the Treasury Bench, noticing after some years that do-it-yourself has become fashionable, and at once beginning to rush around saying "This is what we must have in the Bill." It may be a little late in the day to discover the fashion and the techniques relating to do-it-yourself.
      I do not know whether Labour Ministers indulge in do-it-yourself. I do not know whether the Financial Secretary is handy with a pot of emulsion paint, or whether he does a little extension work or conversion work to his own house. If there had been more familiarity on the Treasury Bench with the way that these things are done the difficulties might have been realised. I suppose it is too late to correct the definition. That is a pity. The Government could have solved the problem about the do-it-yourself industry being involved in

      1379
      VAT relief by going for the phrase "self-built." I suspect that there was a little misunderstanding.
      All in all, the right hon. Member for Down, South made a powerful case for the situation in Northern Ireland. Of course, it is a case that applies everywhere. I would have thought that the amendments were satisfactory, in that where dwellings are provided by conversion, reconstruction, alteration or enlargement they must come within the terms of what the Financial Secretary was proposing in Committee. I do not see how the hon. Gentleman can reject them. I also think that the suggestion of my hon. Friend the Member for Hornsey to use the improvement grant criterion would provide a far better borderline than anything
      thing that the hon. Gentleman has put forward.
      All in all, I think that my hon. Friends have presented not only a demolition of the flimsy arguments of the Financial Secretary but a far better basis on which the Government could police and operate this levy than the one that the Government have put forward. I think that the Government and the Financial Secretary have made a mistake by not reconsidering this matter as we suggested in Standing Committee. I strongly urge my right hon. and hon. Friends to support the amendments, as I believe they make sense.
      Question put, That the amendment be made:—
      The House divided: Ayes 264, Noes 284.

      Division No. 121.]

      AYES

      [9.11 p.m.

      Adley, Robert

      Durant, Tony

      Hicks, Robert

      Aitken, Jonathan

      Eden, Rt Hon Sir John

      Higgins, Terence L.

      Alison, Michael

      Edwards, Nicholas (Pembroke)

      Holland, Philip

      Amery, Rt Hon Julian

      Elliott, Sir William

      Hooson, Emlyn

      Atkins, Rt Hon H. (Spelthorne)

      Emery, Peter

      Hordern, Peter

      Awdry, Daniel

      Evans, Gwynfor (Carmarthen)

      Howe Rt Hon Sir Geoffrey

      Bain, Mrs Margaret

      Ewing, Mrs Winifred (Moray)

      Howell, David (Guildford)

      Baker, Kenneth

      Eyre, Reginald

      Howell, Ralph (North Norfolk)

      Banks, Robert

      Fairbairn, Nicholas

      Howells, Geraint (Cardigan)

      Beith, A. J.

      Fairgrieve, Russell

      Hurd, Douglas

      Bell, Ronald

      Farr, John

      Irving, Charles (Cheltenham)

      Berry, Hon Anthony

      Fell, Anthony

      James, David

      Biffen, John

      Finsberg Geoffrey

      Jenkin, Rt Hon P. (Wanst'd & W'df'd)

      Biggs-Davison, John

      Fisher, Sir Nigel

      Jessel, Toby

      Blaker, Peter

      Fletcher, Alex (Edinburgh N)

      Johnston, Russell (Inverness)

      Bowden, A. (Brighton, Kemptown)

      Fookes, Miss Janet

      Jones Arthur (Daventry)

      Boyson, Dr Rhodes (Brent)

      Fowler Norman (Sutton C'f'd)

      Jopling, Michael

      Bradford, Rev Robert

      Fox, Marcus

      Joseph, Rt Hon Sir Keith

      Braine, Sir Bernard

      Fraser, Rt Hon H. (Stafford & St)

      Kellett-Bowman, Mrs Elaine

      Brittan, Leon

      Freud, Clement

      Kilfedder, James

      Brotherton, Michael

      Fry, Peter

      Kimball, Marcus

      Brown, Sir Edward (Bath)

      Galbraith, Hon. T. G. D.

      King, Evelyn (South Dorset)

      Bryan, Sir Paul

      Gardiner, George (Reigate)

      King, Tom (Bridgwater)

      Buchanan-Smith, Alick

      Gardner, Edward (S Fylde)

      Kitson, Sir Timothy

      Buck, Antony

      Gilmour, Rt Hon Ian (Chesham)

      Knight, Mrs Jill

      Budgen, Nick

      Gilmour, Sir John (East Fife)

      Lamont, Norman

      Bulmer, Esmond

      Glyn, Dr Alan

      Lane, David

      Burden, F. A.

      Goodhart, Philip

      Langford-Holt, Sir John

      Butler, Adam (Bosworth)

      Goodhew, Victor

      Latham, Michael (Melton)

      Carlisle, Mark

      Goodlad, Alastair

      Lawrence, Ivan

      Chalker, Mrs Lynda

      Gorst, John

      Lawson, Nigel

      Channon, Paul

      Gow, Ian (Eastbourne)

      Le Marchant, Spencer

      Churchill, W. S.

      Gower Sir Raymond (Barry)

      Lester, Jim (Beeston)

      Clark, Alan (Plymouth, Sutton)

      Grant, Anthony (Harrow C)

      Lewis, Kenneth (Rutland)

      Clark, William (Croydon S)

      Gray, Hamish

      Loveridge, John

      Clarke, Kenneth (Rushcliffe)

      Grieve, Fercy

      MacCormick, Iain

      Clegg, Walter

      Griffiths, Eldon

      McCusker, H.

      Cockcroft, John

      Grimond, Rt Hon J.

      Macfarlane, Neil

      Cooke, Robert (Bristol W)

      Grist, Ian

      MacGregor, John

      Cope, John

      Grylls, Michael

      Macmillan, Rt Hon M. (Farnham)

      Cormack, Patrick

      Hall, Sir John

      McNair-Wilson, M. (Newbury)

      Corrie, John

      Hall-Davis, A. G. F.

      McNair-Wilson, P. (New Forest)

      Costain, A. P.

      Hamilton, Michael (Salisbury)

      Madel, David

      Craig, Rt Hon W. (Belfast E)

      Hampson, Dr Keith

      Marshall, Michael (Arundel)

      Crawford, Douglas

      Hannam, John

      Marten, Neil

      Critchley, Julian

      Harrison, Col Sir Harwood (Eye)

      Mates, Michael

      Davies, Rt Hon J. (Knutsford)

      Harvie Anderson, Rt Hon Miss

      Mather, Carol

      Dean, Paul (N Somerset)

      Hastings, Stephen

      Maude, Angus

      Dodsworth, Geoffrey

      Havers, Sir Michael

      Mawby, Ray

      Douglas-Hamilton, Lord James

      Hawkins, Paul

      Maxwell-Hyslop, Robin

      du Cann, Rt Hon Edward

      Hayhoe Barney

      Mayhew, Patrick

      Dunlop, John

      Henderson, Douglas

      Meyer, Sir Anthony

      Miller, Hal (Bromsgrove)

      Rees-Davies, W. R.

      Steen, Anthony (Wavertree)

      Miscampbell, Norman

      Reid, George

      Stewart, Donald (Western Isles)

      Mitchell, David (Basingstoke)

      Renton, Rt Hon Sir D. (Hunts)

      Stewart, Ian (Hitchin)

      Moate, Roger

      Renton, Tim (Mid-Sussex)

      Stokes, John

      Molyneaux, James

      Rhys Williams, Sir Brandon

      Stradling Thomas, J.

      Monro, Hector

      Ridley, Hon Nicholas

      Taylor, R. (Croydon NW)

      Montgomery, Fergus

      Ridsdale, Julian

      Taylor, Teddy (Cathcart)

      Moore, John (Croydon C)

      Rifkind, Malcolm

      Tebbit, Norman

      More, Jasper (Ludlow)

      Rippon, Rt Hon Geoffrey

      Temple-Morris, Peter

      Morgan, Geraint

      Roberts, Michael (Cardiff NW)

      Thatcher, Rt Hon Margaret

      Morgan-Giles, Rear-Admiral

      Roberts, Wyn (Conway)

      Thomas, Dafydd (Merioneth)

      Morris, Michael (Northampton S)

      Ross, Stephen (Isle of Wight)

      Thomas, Rt Hon P. (Hendon S)

      Morrison, Charles (Devizes)

      Ross, William (Londonderry)

      Thompson, George

      Morrison, Hon Peter (Chester)

      Rossi, Hugh (Hornsey)

      Townsend, Cyril D.

      Mudd, David

      Rost, Peter (SE Derbyshire)

      Tugendhat, Christopher

      Neave, Airey

      Royle Sir Anthony

      van Straubenzee, W. R.

      Nelson, Anthony

      Sainsbury, Tim

      Viggers, Peter

      Neubert, Michael

      Scott-Hopkins, James

      Wainwright, Richard (Colne V)

      Newton, Tony

      Shaw, Giles (Pudsey)

      Wakeham, John

      Normanton, Tom

      Shaw, Michael (Scarborough)

      Walters, Dennis

      Nott, John

      Shelton, William (Streatham)

      Warren, Kenneth

      Onslow, Cranley

      Shepherd, Colin

      Watt, Hamish

      Oppenheim, Mrs Sally

      Shersby, Michael

      Weatherill, Bernard

      Osborn, John

      Sims, Roger

      Wells, John

      Page, John (Harrow West)

      Sinclair, Sir George

      Welsh, Andrew

      Page, Rt Hon R. Graham (Crosby)

      Skeet, T. H. H.

      Whitelaw, Rt Hon William

      Paisley, Rev Ian

      Smith, Cyril (Rochdale)

      Wiggin, Jerry

      Parkinson, Cecil

      Smith, Dudley (Warwick)

      Wigley, Dafydd

      Pattie, Geoffrey

      Speed, Keith

      Wilson, Gordon (Dundee E)

      Penhaligon, David

      Spence, John

      Winterton, Nicholas

      Percival, Ian

      Spicer, Jim (W Dorset)

      Wood, Rt Hon Richard

      Peyton, Rt Hon John

      Spicer, Michael (S Worcester)

      Young, Sir G. (Ealing, Acton)

      Pink, R. Bonner

      Sproat, Iain

      Younger, Hon George

      Powell, Rt Hon J. Enoch

      Stainton, Keith

      Raison, Timothy

      Stanbrook, Ivor

      TELLERS FOR THE AYES:

      Rathbone, Tim

      Stanley, John

      Mr. W. Benyon and

      Rawlinson, Rt Hon Sir Peter

      Steel, David (Roxburgh)

      Mr. Fred Silvester

      Rees, Peter (Dover & Deal)

      NOES

      Abse, Leo

      Coleman, Donald

      Flannery, Martin

      Allaun, Frank

      Colquhoun, Mrs Maureen

      Fletcher, Raymond (Ilkeston)

      Anderson, Donald

      Concannon, J. D.

      Fletcher, Ted (Darlington)

      Archer, Peter

      Conlan, Bernard

      Ford, Ben

      Armstrong, Ernest

      Cook, Robin F. (Edin C)

      Forrester, John

      Ashley, Jack

      Corbett, Robin

      Fowler, Gerald (The Wrekin)

      Ashton, Joe

      Cox, Thomas (Tooting)

      Freeson, Reginald

      Atkins, Ronald (Preston N)

      Craigen, J. M. (Maryhill)

      Garrett, John (Norwich S)

      Atkinson, Norman

      Cronin, John

      Garrett, W. E. (Wallsend)

      Bagier, Gordon A. T.

      Crosland, Rt Hon Anthony

      Gilbert Dr John

      Barnett, Guy (Greenwich)

      Cryer, Bob

      Ginsburg, David

      Barnett, Rt Hon Joel

      Cunningham, G. (Islington S)

      Golding, John

      Bates, Alf

      Cunningham, Dr J. (Witeh)

      Gould, Bryan

      Benn, Rt Hon Anthony Wedgwood

      Dalyell, Tam

      Gourlay, Harry

      Bennett, Andrew (Stockport N)

      Davidson, Arthur

      Graham, Ted

      Bidwell, Sydney

      Davies, Bryan (Enfield N)

      Grocott, Bruce

      Bishop, E. S.

      Davies, Denzil (Llanelli)

      Hamilton, James (Bothwell)

      Blenkinsop, Arthur

      Davies, Ifor (Gower)

      Hamilton, W. W. (Central Fife)

      Boardman, H.

      Davis, Clinton (Hackney C)

      Hamling, William

      Booth, Albert

      Deakins, Eric

      Hardy, Peter

      Boothroyd, Miss Betty

      Dean, Joseph (Leeds West)

      Harper, Joseph

      Bottomley, Rt Hon Arthur

      de Freitas, Rt Hon Sir Geoffrey

      Harrison, Walter (Wakefield)

      Boyden, James (Bish Auck)

      Dell, Rt Hon Edmund

      Hattersley, Rt Hon Roy

      Bradley, Tom

      Dempsey, James

      Hatton, Frank

      Bray, Dr Jeremy

      Doig, Peter

      Hayman, Mrs Helene

      Brown, Hugh D. (Provan)

      Dormand, J. D.

      Healey, Rt Hon Denis

      Brown, Robert C. (Newcastle W)

      Douglas-Mann, Bruce

      Heffer, Eric S.

      Brown, Ronald (Hackney S)

      Duffy, A. E. P.

      Hooley, Frank

      Buchan, Norman

      Dunn, James A.

      Horam, John

      Butler, Mrs Joyce (Wood Green)

      Dunnett, Jack

      Howell, Denis (B'ham, Sm H)

      Callaghan, Rt Hon J. (Cardiff SE)

      Dunwoody, Mrs Gwyneth

      Hoyle, Doug (Nelson)

      Callaghan, Jim (Middleton & P)

      Eadie, Alex

      Huckfield, Les

      Campbell, Ian

      Edelman, Maurice

      Hughes, Rt Hon C. (Anglesey)

      Canavan, Dennis

      Edge, Geoff

      Hughes, Mark (Durham)

      Cant, R. B.

      Edwards, Robert (Wolv SE)

      Hughes, Robert (Aberdeen N)

      Carmichael, Neil

      Ellis, Tom (Wrexham)

      Hughes, Roy (Newport)

      Carson, John

      English, Michael

      Hunter, Adam

      Carter, Ray

      Evans, Ioan (Aberdare)

      Irving, Rt Hon S. (Dartford)

      Carter-Jones, Lewis

      Evans, John (Newton)

      Jackson, Colin (Brighouse)

      Castle, Rt Hon Barbara

      Ewing, Harry (Stirling)

      Jackson Miss Margaret (Lincoln)

      Clemitson, Ivor

      Faulds, Andrew

      Janner, Greville

      Cocks, Michael (Bristol S)

      Fernyhough, Rt Hon E.

      Jay, Rt Hon Douglas

      Cohen, Stanley

      Fitt, Gerard (Belfast W)

      Jeger, Mrs Lena

      1382

      1383

      Jenkins, Hugh (Putney)

      Moonman, Eric

      Silverman, Julius

      Jenkins, Rt Hon Roy (Stechford)

      Morris, Alfred (Wythenshawe)

      Skinner, Dennis

      John Brynmor

      Morris, Charles R. (Openshaw)

      Small, William

      Johnson, James (Hull West)

      Morris, Rt Hon J. (Aberavon)

      Smith, John (N Lanarkshire)

      Johnson, Walter (Derby S)

      Moyle, Roland

      Snape, Peter

      Jones, Alec (Rhondda)

      Mulley, Rt Hon Frederick

      Spearing, Nigel

      Jones, Barry (East Flint)

      Murray, Rt Hon Ronald King

      Spriggs, Leslie

      Jones, Dan (Burnley)

      Newens, Stanley

      Stallard, A. W.

      Judd Frank

      Noble, Mike

      Stewart, Rt Hon M. (Fulham)

      Kaufman, Gerald

      Oakes, Gordon

      Stott, Roger

      Kelley Richard

      Ogden, Eric

      Strang, Gavin

      Kerr Russell

      O'Halloran, Michael

      Strauss, Rt Hon G. R.

      Kilroy-Silk Robert

      Orbach, Maurice

      Summerskill, Hon Dr Shirley

      Kinnock, Neil

      Orme, Rt Hon Stanley

      Swain, Thomas

      Lambie, David

      Ovenden, John

      Taylor, Mrs Ann (Bolton W)

      Lamborn, Harry

      Owen, Dr David

      Thomas, Jeffrey (Abertillery)

      Lamond, James

      Padley, Walter

      Thomas, Mike (Newcastle E)

      Latham, Arthur (Paddington)

      Palmer, Arthur

      Thomas Ron (Bristol NW)

      Leadbitter, Ted

      Park, George

      Thorne, Stan (Preston South)

      Lee John

      Parker, John

      Tierney, Sydney

      Lewis, Ron (Carlisle)

      Parry, Robert

      Tinn, James

      Lipton, Marcus

      Pavitt, Laurie

      Tomlinson, John

      Litterick, Tom

      Pendry, Tom

      Torney, Tom

      Lomas, Kenneth

      Perry, Ernest

      Urwin, T. W.

      Loyden, Eddie

      Phipps, Dr Colin

      Varley, Rt Hon Eric G.

      Luard, Evan

      Prentice, Rt Hon Reg

      Wainwright, Edwin (Dearne V)

      Lyon, Alexander (York)

      Prescott, John

      Walden, Brian (B'ham, L'dyw'd)

      Lyons, Edward (Bradford W)

      Price, C. (Lewisham W)

      Walker, Harold (Doncaster)

      McCartney, Hugh

      Price, William (Rugby)

      Walker, Terry (Kingswood)

      McElhone, Frank

      Rees, Rt Hon Merlyn (Leeds S)

      Ward, Michael

      MacFarquhar, Roderick

      Richardson, Miss Jo

      Watkins, David

      McGuire, Michael (Ince)

      Roberts, Albert (Normanton)

      Watkinson, John

      Mackenzie, Gregor

      Roberts, Gwilym (Cannock)

      Weitzman, David

      Mackintosh, John P.

      Robertson, John (Paisley)

      Wellbeloved, James

      Maclennan, Robert

      Roderick, Caerwyn

      White, Frank R. (Bury)

      McMillan, Tom (Glasgow C)

      Rodgers, George (Chorley)

      White, James (Pollok)

      McNamara, Kevin

      Rodgers, William (Stockton)

      Whitehead, Phillip

      Madden, Max

      Rooker, J. W.

      Whitlock, William

      Magee, Bryan

      Roper, John

      Willey, Rt Hon Frederick

      Mahon, Simon

      Rose, Paul B.

      Williams, Alan (Swansea W)

      Marks, Kenneth

      Ross, Rt Hon W. (Kilmarnock)

      Williams, Rt Hon Shirley (Hertford)

      Marquand, David

      Rowlands, Ted

      Williams, W. T. (Warringon)

      Marshall, Dr Edmund (Goole)

      Ryman, John

      Wilson, Alexander (Hamilton)

      Marshall, Jim (Leicester S)

      Sandelson, Neville

      Wilson, Rt Hon H. (Huyton)

      Mason, Rt Hon Roy

      Sedgemore, Brian

      Wilson, William (Coventry SE)

      Meacher, Michael

      Selby, Harry

      Wise, Mrs Audrey

      Mellish, Rt Hon Robert

      Shaw, Arnold (Ilford South)

      Woodall, Alec

      Mikardo, Ian

      Sheldon, Robert (Ashton-u-Lyne)

      Wrigglesworth, Ian

      Millan, Bruce

      Shore, Rt Hon Peter

      Young, David (Bolton E)

      Miller, Dr M. S. (E Kilbride)

      Short, Rt Hon E. (Newcastle C)

      Miller, Mrs Millie (Ilford N)

      Short, Mrs Renée (Wolv NE)

      TELLERS FOR THE NOES:

      Mitchell, R. C. (Soton, Itchen)

      Silkin, Rt Hon S. C. (Dulwich)

      Mr. David Stoddart and

      Molloy, William

      Sillars, James

      Mr. John Ellis.

      Question accordingly negatived.
      Mr. Wm. Ross: I beg to move Amendment No. 9 in page 3, line 15, at end insert:
      'where the total cost, exclusive of value-added tax, of such conversion, reconstruction, alteration or enlargement does not exceed £400'.
      I understand that with this amendment we may take Amendment No. 320, in page 3, line 15, at end insert:
      'save in any case where the supply of goods is at a total cost of more than £1,000'.
      Amendment No. 9 is designed to meet the principal objections of the Treasury Bench, one of which appeared to be that Ministers objected to small amounts of tax being repaid. [Interruption.]
      Mr. Deputy Speaker: Order. Will right hon. and hon. Members who
      1384
      do not wish to listen to the moving of the amendment kindly withdraw from the Chamber quietly?
      Mr. Ross: Another principal objection that has been raised concerns the policing that is necessary to ensure that there is no attempt to defraud the Revenue. With the figure of £400, only about £30 VAT is repayable. That is still worth while to the individual and it cuts out the very small amounts. The Treasury and I may have different views of what comprises a small amount, but £32 is still a week's wages, and a sum of money which many people would find extremely useful.
      There was a long discussion previously on this general point. All the points that were made in respect of the earlier amendment can equally be made for

      1385
      this. I see no reason why the Minister cannot accept this—to him—lesser evil, which will be a great help to the people attempting to improve their lot.
      Reference has been made to the fact that the Conservative Government imposed VAT. I was not a member of the House when VAT was introduced and I should like to ask the Minister whether he raised any objection when VAT was imposed on self-builders. The impression is given that the sin lies all on one side, namely, with the Conservative Government. I wonder what efforts have been made to secure relief for those who have had to pay VAT since then. The Minister said earlier this evening that he could not accept an amendment at this stage, thereby implying that there would come a time when it would be possible to accept an amendment. If that is correct, when will that time come?
      Dr. Gilbert: The hon. Member for Londonderry (Mr. Ross) has asked what efforts we made with regard to VAT on the 1972 Finance Bill. Mercifully, memory obscures what happened during the Committee proceedings on that Bill. VAT was introduced by the Conservative Government, and the first relief from it for "do-it-yourself" builders is incorporated in Clause 3. The hon. Member for Guildford (Mr. Howell), who waxed indignant because we were not being more generous, and described our dividing line as lunacy, might have acknowledged that the position after the clause has been enacted will be an improvement on the inheritance which his party left us and the British people.
      The difficulty which I mentioned in the debate on the last amendment occurs again on this one. It proposes that if the cost incurred is £400 or more there shall be relief, but if it is less there will be no relief. By this method the hon. Member for Londonderry seeks to rule out the more trivial claim. That would create anomalies and incentives for people to spend more than £400 to obtain the benefit of the provision—a minimum of £32. Therefore, the cost to them as a result of the amendment would be less by having more work done.
      Most of the arguments which I put forward on the last amendments which we debated apply just as forcefully to this
      1386
      amendment. Since the hon. Member for Londonderry was good enough not to repeat his arguments, I hope that the House will not accuse me of discourtesy if I do not repeat my arguments. There would be problems about deciding whether materials were used for repair rather than for conversion. There would be a borderline with regard to decorations, and so on.
      I must therefore advise hon. Members with regret, that this amendment is no more acceptable than the last amendment.
      Rev. Ian Paisley: Does the hon. Gentleman have it in mind to introduce amending legislation on this point at a later date?
      Dr. Gilbert: By the leave of the House, may I say that I make no commitment. I have said that the spirit of the amendment is in harmony with the Clause. We expect considerable difficulty even in operating the clause. The Government thought this a proper relief to make to try to move back the line of anomaly in existing legislation. If it transpires that the difficulties of policing the scheme envisaged in the clause are not as great as we expect, it may be possible to go further, but we need to give the clause time to operate and to see how it works in practice. We can then consider the matter. If it proves to be less difficult to operate than we fear, we shall certainly look again sympathetically at the situation.
      Mr. Wm. Ross: The Financial Secretary said, and we all agree, that the clause is an improvement, but it is only a half-way house, and half way is neither here nor there. It is not a satisfactory position to be in.
      The hon. Gentleman said that acceptance of the amendment would create anomalies. There are already anomalies which we are trying to get rid of. The Financial Secretary also said that the amendment would encourage people to spend more than £400. On £400 a person would get only £32 back. The most he could spend would be an extra £30, which would not go far.
      I realise that the axe is poised and we cannot take up too much time. I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Clause 4

      REFUND TO DIPLOMATIC MISSIONS, ETC., OF VAT ON IMPORTATION OF HYDROCARBON OIL
      9.30 p.m.
      Mr. Robin Maxwell-Hyslop: I beg to move, Amendment No. 327, in page 3, line 23, after 'provisions', insert
      '(but only in respect of such countries as the Secretary of State for Foreign and Commonwealth Affairs shall certify as offering reciprocal alleviation of taxation to British diplomatic and consular staff)'.
      Mr. Speaker: With this we are taking Amendment No. 331, in page 3, line 31, at end insert
      'but the Commissioners shall not make any payment by virtue of the words so inserted before such date as may be specified by directions of the Treasury embodied in a statutory instrument which shall be subject to annulment in pursuance of a resolution of the Commons House of Parliament'.
      Mr. Maxwell-Hyslop: This is one of the few amendments which save public money instead of spending it. The Government propose a VAT drawback for diplomatic missions. The amendment seeks to confine that tax drawback to diplomatic missions from countries which make a reciprocal concession to British diplomatic and similar bodies.
      The proposal is entirely reasonable on two grounds. First, it gives other countries an incentive to provide reciprocal tax drawbacks for British missions. Secondly, it limits the value of the concession.
      At a time when we suffer from a plethora of international bodies, all claiming tax exemption, exemption from rates, and so on, we should discipline our enthusiasm for giving relief by limiting it to countries which the Secretary of State for Foreign and Commonwealth Affairs certifies as offering reciprocal alleviation of taxation to British diplomatic and consular staff.
      The matter needs no further elucidation; it is entirely clear. Whether it recommends itself to the Government, which should welcome an amendment which reduces public expenditure, we shall doubtless shortly hear.
      Dr. Gilbert: As no one has spoken to Amendment No. 331, which stands in the name of the official Opposition, the House
      1388
      will understand if I address my remarks solely to Amendment No. 327.
      I assure the hon. Member for Tiverton (Mr. Maxwell-Hyslop) that the principle he puts forward is already well recognised and taken care of. He seeks to secure that relief from VAT shall be limited to countries which afford reciprocal privileges to diplomats in this country. That principle is already recognised in the two main enactments. Section 3(1) of the Diplomatic Privileges Act 1964 provides for restrictions on privileges and immunities by Order in Council in any case where a foreign country affords lesser privileges to members of a United Kingdom mission stationed there than those which are conferred by the United Kingdom on officials of that country stationed here. Section 2 of the Consular Relations Act 1968 provides similarly. On that basis the hon. Gentleman may be assured that what he seeks to provide against is already covered.
      Mr. Maxwell-Hyslop: Before the hon. Gentleman sits down, can he tell us about subsection 5(b), dealing with the International Organisations Act, because international organisations seem to be multiplying even faster than sovereign States?
      Dr. Gilbert: I deliberately did not refer to international organisations because it seemed to me that the hon. Gentleman's amendment did not purport to deal with that problem. As drafted, it leaves their position totally unclear. As far as I can understand, the question of reciprocity does not arise with international organisations. They do not extend any relief of this sort to us. If the hon. Gentleman has any specific examples in mind that have escaped my imagination I would be grateful to hear from him.
      Mr. Maxwell-Hyslop: I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Clause 5

      INCOME TAX: ALTERATION OF ADDITIONAL RATES FOR 1974–75
      Mr. Speaker: The next amendment is Amendment No. 298, in page 3, line 36, leave out from 'say' to 'except' in line 42 and insert:
      '(b) in respect of so much of the investment income (other than estate income, income aris-p
      1389
      ing from a purchased annuity within the meaning of section 285 of the Taxes Act 1970 and a share in partnership income) included in an individual's total income as exceeds £1,000 at the additional rate of 10 per cent. for the first £1,000 of the excess and 15 per cent. for the remainder;'.
      Mr. David Howell: Not moved, under protest.
      Mr. Speaker: The next amendment is Amendment No. 346, in page 3, line 37, at beginning insert:
      'where an individual's total income exceeds £3,000,'.
      Mr. David Howell: Not moved, under protest.
      Mr. Speaker: The next Amendment is Amendment No. 349.
      Mr. David Howell: On a point of order, Mr. Speaker. I wonder if, before this amendment is moved, I may ask whether it would be for the convenience of yourself and the House if we were to take with it the remaining amendments to Clause 5 which you have selected? This would enable us, in the limited time we have left, to have a full and proper debate on the important issues that are raised. There are many kinds of people, such as the disabled and widows, who are affected. I would also suggest that, if possible, we have a separate vote on Amendment No. 349 and Amendment No. 16.
      Mr. Speaker: If that is agreeable to the House I am willing to have the amendments taken together and to have a separate vote on the two amendments referred to.
      Mr. A. J. Beith: Further to that point of order, Mr. Speaker. With respect to your selection, some embarrassment and difficulty is caused to some of us by the absence of Amendment No. 15 from your selection. I hope that you will be indulgent and allow those of us who are worried about certain specific superannuation schemes, particularly FSSU and FSSNU, to deal with these matters in the general discussion on Clause 5.
      Mr. Speaker: The general discussion can include that point.
      Mr. Nigel Lawson: I beg to move Amendment No. 349, in page 3, line 39, leave out '10' and insert '5'.
      1390
      I understand that with this amendment we are also discussing Amendment No. 16, in page 4, line 1, after 'more', insert:
      'or was in receipt of an invalidity pension or unemployed and in receipt of an attendance allowance'.
      With Amendment No. 349 there should logically go an amendment which may not have appeared on the Order Paper and which is consequential. It reads:
      "page 4, line 2, leave out '10' and insert '5'."
      Like the Financial Secretary just before the last Division, I, too, am glad that we have now come back to the relative calm of proceedings of the Finance Bill.
      This amendment concerns an old story. Unlike many old stories, it does not improve in the telling. It goes back to the last Finance Bill introduced by the Government in the last Parliament. Then the Chancellor decided to change the point at which the investment income surcharge came into effect, so that instead of coming into effect on investment incomes of £2,000 a year and above it came into effect on investment incomes of £1,000 a year and above for most people, or £15,000 and above for those over 65 years of age. This was an increase in tax upon those people with savings incomes between £1,000 and £2,000 a year.
      The purpose of this amendment is to achieve some kind of compromise and put a surcharge not at the 10 per cent. rate which the Chancellor suggested in the Budget but at a rate of 5 per cent. We are talking about the financial year which is now almost over. One reason why the story does not improve in the telling is that the Chancellor of the Exchequer, having made this proposal in the last Parliament, had the experience of its being rejected by the House. That having happened by a majority of 16, he returned in the present Finance Bill and said that he would put back the increase in investment income surcharge for those with small investment incomes to what he had intended the figure to be—in other words, retrospectively for the whole of the year 1974–75. Therefore, in this Bill we are being asked—in the eleventh month of that financial year—retrospectively to put up the investment income surcharge on those with small investment incomes.
      This is a disgraceful example of retrospective legislation—and there is no doubt

      1391
      that it is retrospective. The Chief Secretary in trying to defend the provision in Committee attempted to suggest that there was a precedent. That does not make things right, but he said that that was so. He quoted the action of the Conservative Government in December 1973 who announced a surtax surcharge which, had that Government remained in office, would have had a retrospective effect. I hold no brief for that retrospective legislation any more than I do for any other retrospective tax legislation, but the difference is very considerable. The difference is that the previous provision did not reject retrospectively a decision of the House. The present legislation is retrospective for 1974–75, but is intended to continue in future years, whereas the previous legislation was for one year only. Therefore, the precedent which was quoted was not a good one and was certainly not valid in terms of the retrospective legislation that we are being asked to enact tonight.
      The Chancellor of the Exchequer and the Chief Secretary have from time to time attempted to justify this vicious attack on those with small investment incomes. Let us remember that we are talking of people with savings which may amount to £20 a week and upwards. That is not a large income. There are many of my constituents who cannot understand why, having saved all their lives out of taxed income, they should now be expected to pay any surcharge at all on an investment which is less than half the national average wage. However, this is what they are being told they must do by the Government.
      The Chancellor and the Chief Secretary have advanced various reasons why this should be done. I am glad to see that the Chief Secretary has now come into the Chamber and is about to take part for a little while in our debate. I know how much he enjoyed our debates upstairs, and I hope that, having acquired the taste, he will stay in the House longer tonight and on subsequent evenings. Government spokesmen have said that a large part of the money will go to those with investment incomes of over £3,000 a year. My goodness, what a tremendous income and how dreadful for anybody to earn over £3,000!
      1392
      The fact of the matter, as I established in a Written Answer recently, is that the Chancellor's view is that of those with investment incomes of over £1,000 a year who come into the taxable bracket, 75 per cent. have incomes below £3,000 a year. Indeed, 50 per cent. of the total taxpayers with investment incomes of over £1,000 come into the £1,000 to £2,000 a year bracket. Therefore, the great majority of people whom we are trying to help in the amendment are people with investment incomes—savings—of between £1,000 or £2,000 a year. By any stretch of the imagination, those people are not rich.
      9.45 p.m.
      A further point was established as a result of the Written Answer given by the Chancellor of the Exchequer. We hear the Labour Party and Government supporters going on about the evils of investment income and savings income. However, 85 per cent. of the taxpayers have such incomes of less than £1,000 a year. Those people have saved because they hoped their incomes would increase beyond £1,000 a year, which is not very much in these times. Those people are being deliberately discriminated against by the Chancellor of the Exchequer, and we seek relief for them by means of this amendment.
      A further reason has been given by the Government. However, I interpolate to say that the real reason is pique, because Parliament has undone what the Chancellor of the Exchequer provided in his first Budget this year. The Government are determined to put back that provision, because they cannot stand for Parliament asserting its sovereignty in any context. That is the reason for this rigid guillotine motion, which is curtailing our debates.
      Mr. James Dempsey: I was very interested in the point made by the hon. Gentleman about investment incomes which he estimated at £1,000. Can he say how much capital a person needs to receive that income?
      Mr. Lawson: I am happy to answer the hon. Gentleman. I estimate that a capital investment in War Loan of £6,150 is sufficient to produce that income. That is not a large sum of money.

      1393
      Other reasons have been given for this piece of vicious legislation. We were told that the cost was great and that a large amount of money would have to be borrowed, since the total of the investment income surcharge on these people was £40 million. However, a 50 per cent. charge as a compromise could apply to people receiving between £1,000 and £2,000. That cost would be £20 million, which is not a large sum of money by the standards of national budgeting of the Government. We can find £10 million straight away by not giving the handout to the trade unions, which is provided for under another clause. In addition, £10 million is less than one-third of the annual cost of the tea subsidy, let alone other food subsidies. My constituents are far more concerned about the surcharge they will have to pay on their small savings and small investment incomes than they are about a negligible change in the price of a quarter-pound packet of tea. The Government's priorities are wrong, even if they are concerned to help the people they profess to wish to assist.
      When speaking about sums of £20 million, it is monstrous that the borrowing requirement should be flung in our face, since the borrowing requirement is not £20 million, £200 million, or £2,000 million. Officially the borrowing requirement was £6,300 million. It is now running at about £7,500 million. In the coming financial year, if nothing is done, the borrowing requirement will be £9,000 million. The recently published White Paper on public expenditure shows vast expenditures so far beyond what the country can bear that to talk about not being able to afford £20 million is utterly indecent and, to use a word much favoured by Government supporters, obscene.
      Finally, the Government have said that it is an essential part of the social contract. Right hon. and hon. Members may well ask "What social contract?" Like Pilate, they will not receive an answer. But many Opposition Members are beginning to believe that the social contract, so far from doing little good, is doing positive harm. If the sort of things that the Government have produced to carry out their side of the contract are things like this, whereas the trade unions on their side do not carry out their side,
      1394
      the existence of the social contract is positively harmful, far from being useful.
      We have to say that the social contract, the borrowing requirement and all the other arguments put forward by the Government do not hold water. This is a vindictive and petty piece of spite designed to stoke up the furnaces of envy which lurk in many people's hearts. It is designed, too, like many other measures, to deter saving, to deter independence, to deter self-reliance and self-respect among the people of this country.
      I hope that the Government at this late stage will decide to abandon this retrospective piece of legislation or, if they do not feel that they can do that, at least accept the half-measure or compromise—it does not go far enough to satisfy me—which is put forward in the amendment.
      Mr. Beith: After the rather wider discourse by the hon. Member for Blaby (Mr. Lawson) on the impact of the investment income surcharge, I hope that I may be allowed to concentrate the Government's mind on one of its specific impacts. In doing so, I have to declare an interest in the federated superannuation scheme for universities. I wish to draw attention to the impact of the surcharge on members of that scheme and of others like it, including the federated superannuation scheme for nurses.
      Both are dying schemes, in that one is to be replaced by a new university salaries scheme and the other has already been replaced. However, there are and will remain beneficiaries for many years to come who will be affected by the surcharge and who would benefit from this amendment being made.
      It should be made clear that the schemes in all respects are like any other pension scheme, except that they involve insurance policies which mature in the form of lump sums which are then used to purchase annuities. The member pays ordinary pension contributions in the same way as anyone else, but, at the end, he acquires a lump sum and secures his pension by investing it in an annuity. Such people have not accumulated capital, acquired windfall sums or made additional savings over and above their pensions. We are talking about normal pension provisions. Nor are they in retirement and in receipt of other income. They are in

      1395
      the position of anyone taking part in a superannuation scheme, with the difference that they acquire lump sums which they invest to purchase annuities.
      Between the ages of 60 and 65 these people will be affected by investment income of over £1,000. Those over 65 will be affected by the over-£1,500 level. We are dealing with the normal salaries of some of those concerned. If we take the lecturer salary range of between £3,000 and £4,000, someone expecting half pay on that will immediately feel the impact of the investment income surcharge on his retirement income. Alongside him in retirement will be people who for one reason or another have been able to transfer to other pension schemes like the new university superannuation schemes. There will be people who have been superannuated in other ways. The scientist in a research laboratory will find alongside him in retirement people who have been superannuated on a Civil Service basis, and their pensions will not be affected by the surcharge in the way that his is.
      When this matter was raised in Committee, it was in the context of an amendment which went very much wider than these specific cases. My right hon. and hon. Friends tabled Amendment No. 15, which was designed specifically to deal with this one. It would have been possible for the Government to act in a number of ways to deal with the problem. They could have accepted the amendment moved by the hon. Member for Kingston-upon-Thames (Mr. Lamont) which went somewhat wider. I could have understood the Government's doing that rather than making concessions over the whole of the investment income surcharge, because we are talking about a specific group and not the whole range of people affected by the surcharge. If the Government were not happy about the wide range covered by the amendment tabled by the hon. Member for Kingston-upon-Thames, they could have taken the narrower version which we suggested and moved it themselves.
      It is disturbing to those who have to consider these groups of people that, even in the concluding speech in Committee, when this matter was discussed, there was no specific reference to their problems,
      1396
      except those between the ages of 60 and 65. It seems that throughout our discussions this, I am sure, unintended effect on a particular group of pensioners has been allowed to continue. I suggest that Ministers must look more closely at the situation. I cannot imagine that they intended to create a situation in which groups of pensioners from universities and nursing—there are others—will be disadvantaged because their pensions are nominally from investment income which is not paid to them in the way that conventional superannuation schemes operate.
      These schemes were devised to be flexible for the person who changed his employment for a normal superannuation scheme. They were based on insurance policies, so that a man working in a university could readily move into Civil Service employment, a research department or industry, and maintain some pension rights in a situation even less favourable than the present regarding transferability of pensions. It was no part of the understanding of those who joined these schemes that when they retired they would be affected by an investment income surcharge which was designed for different purposes and was never intended to penalise their pensions.
      I am sure that hon. Members who have become familiar with the details of these categories of people will realise that the investment income surcharge was not intended to deal with them in the way that it does and will be surprised that the Government have not made greater efforts to exempt them from the provisions of the charge.
      Mr. John Tomlinson: I hope that my right hon. and hon. Friends will not be beguiled by the glib superficiality of some of the arguments put forward by the hon. Member for Blaby (Mr. Lawson). We should examine in detail some of the assertions made by the hon. Gentleman in his contribution to the debate on investment income surcharge.
      First, when questioned by my hon. Friend the Member for Coatbridge and Airdrie (Mr. Dempsey) about the amount of capital required to get an investment income of £1,000, the hon. Gentleman glibly trotted out the prepared figure of £6,150. That figure is correct only if we

      1397
      assume that people bought War Loan at the bottom of the market. But such is the confidence which has recently been restored to the market that it would cost over £7,000 today to purchase War Loan to get the equivalent income. It does not serve the argument well to take the bottom of the market when we have already passed it. It is typical of the superficially of the argument that we heard from the hon. Gentleman.
      Mr. David Mitchell: Will the hon. Gentleman give way?
      Mr. Tomlinson: No. The hon. Gentleman can come in later. There is plenty of time up to 12 o'clock.
      As somebody who has, on a number of occasions in this House, expressed concern about the increase in the public borrowing requirement—a concern which I know is shared by the hon. Member for Blaby—I do not think that it serves his argument well to suggest that because the public borrowing requirement is already high a further £20 million is nothing to be concerned about. Therefore, to argue that we can afford an extra £20 million is a distortion of the serious argument that lies beneath it.
      Mr. Lawson: I am sure that the hon. Gentleman will not forget that I specifically pointed out that this matter could be financed by savings that could be made elsewhere in public expenditure. Therefore, there would be no increase in the borrowing requirement.
      10.0 p.m.
      Mr. Tomlinson: One of the arguments put forward by the hon. Member for Blaby on how savings could be made would be in contradiction of the expressed wishes of this House. That is in relation to the £10 million fund, on which this House has already clearly expressed the view that it should be returned to the trade unions. It is not adequate to propose that savings should be found from areas on which this House has already taken a decision. What is really suggested is that we should find fictitious savings that are not clearly available to the Government. To argue that an extra £20 million on top of the existing public borrowing requirement is something that we can afford is an act of irresponsibility in the current economic climate, and I am sure it is an argument which my right
      1398
      hon. and hon. Friends will not be prepared to accept.
      The level of argument becomes somewhat worse when Opposition Members say that the social contract is positively harmful. I would have thought that at this time, above all else, if we are to come to grips with the serious problems of inflation we have to make the social contract work. Different people are putting different emphases on what needs to be done to make it work, but to allege that the social contract is positively harmful, without offering a single positive suggestion about what needs to be done to make it work, is an act of gross irresponsibility. At the moment that is the only bulwark this society has against two possible alternatives—mass unemployment and a return to the kind of statutory incomes policy that led the previous Government to the verge of economic chaos. We cannot, therefore, accept that kind of nonsense in a debate on investment income surcharge.
      I am sure that you, Mr. Speaker, like the rest of us, will have been somewhat bemused by the hon. Gentleman's comments about the need for us to concede his amendment on investment income surcharge if we are not to lose our self-reliance and self-respect. I am sure that every hon. Member on the Government side of the House goes to his constituency every weekend full of self-respect and particularly pleased, in that self-respect, with the actions taken by the Government in the present Finance Bill. I hope my right hon. Friends will reject the proposals put forward.
      Mr. John Hannam: I shall not follow the line taken by the hon. Member for Meriden (Mr. Tomlinson) as I wish to speak particularly to Amendment No. 16 in my name and that of other hon. Members on both sides of the House. It deals specifically with the disabled and seeks to rectify what appears, and can only appear, to be an unintentional mistake on the part of the Government in omitting the disabled from the exemptions to this infamous surcharge on investment income. The effects of inflation are harsh enough on all normally fit people but the disabled person suffers even more, because he or she is generally more likely to be unemployed, is certainly facing disproportionately higher

      1399
      living costs than the average person and does not benefit from the abnormally high increases in income accruing to organised workers.
      The costs of medicines, heating, travel, special aids and equipment and special clothes place an unfair burden upon our severely disabled people. If this surcharge is allowed to bear down on them, all the improvements which, over the last two years, this House and Government and previous Governments have produced for the disabled, will be undone. As the Chairman of the Child Poverty Action Group said recently:
      "Many disabled people are suffering real hardship. What the Government has offered in October amounts to 34p a week for each of Britain's disabled people. Many of them are living on fixed incomes."
      From my work, together with hon. Members on both sides of this House on the All-Party Disablement Group, I can verify the serious effects that inflation is having on our disabled people. I had hoped, last night, to introduce amendments seeking to relieve disabled drivers of the VAT charge on fuel, but my amendment was not selected, despite the all-party signatories to it. But in regard to that alone, motoring costs have risen by 80 per cent. since 1972, and the costs of other vital necessities for disabled people have risen even faster, so that there is a crisis situation in the field of disablement.
      We all know that the Minister for the Disabled is doing his best to help, but what can he do if he is stabbed in the back by the Treasury bringing forward such measures as this surcharge on low levels of investment income on which so many disabled people depend?
      1400
      I should like to quote briefly from a letter from a 37-year-old polio victim:
      "My wife and I live on investment income which is derived from rents received from 22 lock-up garages and two unfurnished flats. This is the only method I have within my powers to provide my wife and I with an income. We think it is very unfair that disabled people should have their pockets picked by government who refer to our type of income as 'unearned' and therefore we have to pay their tax surcharge on an amount as low as £19.24 a week. There is no need to wonder what the reaction would be from the general public if they were told they had to pay 43 per cent. tax on everything they received over £19.23 per week."
      I could give many more examples, but I think that the House understands the problem.
      Amendment No. 16, which also has come from the pen of Peter Large of the Disablement Income Group, asks the Government to choose one definition of unemployed disabled people who are forcibly retired because of disability. As it points out, the financial needs of people retired as a result of disability are not less than those of people retired as a result of age. Indeed, the financial needs of retired disabled people are greater in that they incur additional expense because of disability. For this reason, can the Government really condone disabled people being treated less favourably than non-disabled people aged 65 or over, particularly as the latter could still be working?
      I hope that the Minister will accept Amendment No. 16, which is supported by hon. Members from both sides. The cost cannot be overwhelming to the Treasury, but if we have to vote and the Government once again, as on the disabled housewife's benefit under the Social Security Benefits Bill, try to fudge the issue, the disabled of this country will judge them accordingly.
      Mr. David Mitchell: The amendment would reduce the surcharge on "unearned", as it is called, income—an odd phrase to use considering the circumstances in which people have built up the money. I have two points to make. The first relates to who is hit by the surcharge as it stands and the second is the question whether it is desirable that it should apply and that people should be discouraged.
      The hon. Member for Meridan (Mr. Tomlinson) said that because the House had already passed the provision to give £10 million to certain trade unions—generally the more millitant ones—it was not relevant to this discussion as a means of saving money and making it available for this purpose. I find it a very odd priority to give £10 million to the unions and to refuse this amendment to help the disabled.
      Mr. Dennis Canavan: Does the hon. Gentleman not realise that that £10 million came from the provident funds of the trade unions and was money intended to be used to help the sick, the unemployed and widows?
      Mr. Mitchell: If the hon. Member investigates the matter, he will find that there is very little truth in what he has just said.
      Mr. Lawson: Is my hon. Friend not also aware that the hon. Member for Meridan (Mr. Tomlinson) is in error, no doubt inadvertently, that this provision has not been passed and will not be passed until this Bill is on the statute book?
      Mr. Mitchell: I am grateful to my hon. Friend. My point is still valid, that there is a question of priorities. Who has the higher priority—the disabled, whom I intend to talk about, or the trade unions, who are not exactly skint?
      This provision clobbers widows. I have had correspondence from a number of widows who have relied on what I suppose is unearned income—money left to them by their husbands to keep themselves and their children. These people are in a parculiarly vulnerable position because at a time of great inflation they have the cost of maintaining a house and raising children without having a wage-earner in the family. I should have thought that they
      1402
      were a group which even the hon. Member for Meridan would regard as being more important than the £10 million for the trade unions.
      Then there are the self-employed—people who do not have a superannuation scheme and who have saved throughout their working lives. Because they have saved and been self-reliant, because they have sought to look after their own old age instead of relying upon the State to rescue them, these people, too, are surcharged on their income.
      Then there is the small businessman. In many cases he, throughout his working life, has sought to build up a business. Any available cash that he has had has not gone in a pension fund but has gone into the business to make it grow. When he comes to retirement age he may sell that business. It is then his hard work in building up that business which has created the capital which the Government now propose to tax by a surcharge at this additional and unreasonable rate.
      The question one asks is this: is it desirable? I suggest that it is undesirable for two principal reasons. It is undesirable because we ought to be seeking to encourage the self-reliant and to encourage people to save, for as you, Mr. Speaker, will recall from your own long experience in the financial field, there is no capital other than from savings. Therefore, we should be seeking to encourage savings so that we can have the wherewithal to re-equip and modernise British industry. The one thing about which all the economists agree is the desperate shortage of capital. Yet here we are being asked to pass legislation which clobbers those who have created capital and dispels any encouragement to others to save and to create capital.
      My second point on this subject is this. Hon. Members on the Government side of the House are rightly concerned about the problem of trade unionists who do not have wages as high as they would like them to have, or as high as we should like them to have, or as high as wages in Europe and other advanced industrial areas. One asks what is the difference between us and those other areas. It is not that

      1403
      our workers do not work as hard. The difference lies in the fact that they have more capital behind each worker than we have.
      Therefore, from the workers' point of view we should be seeking to encourage the creation of capital. Yet the present Government propose to surcharge those who create capital and to make it not worth while to do so. By discouraging savings and thrift and those who build up businesses and create capital to put behind the workers, the Government are doing a grave disservice to workers, to managements and to the economy as a whole.
      Mr. Jack Ashley: I should like to revert to Amendment No. 16, in which we find an attempt to include disabled people in the same group of concessions as is carefully and calculatedly provided for by the Treasury Bench. It seems to me that it is difficult to draw any clear distinction between the needs of old people and the needs of disabled people. What Amendment No. 16 says, in effect, is that if the Government are as aware as they appear to be of the fundamental problems and dilemmas of old people, who are often classed as second-class citizens, the Government should equally be aware of the problems of disabled people, who, unfortunately, are too often classed as third-rate citizens. I find it very difficult to distinguish between the two, and I should have thought that by any standards the Government ought to include the one with the other.
      Where, therefore, does the House stand on this crucial issue? I believe that the major problem is to draw this matter to the attention of the House and the public at large. That is the main issue before the House tonight.
      10.15 p.m.
      I hope that the Opposition will not force this issue to a vote. Equally, I hope that the Government will say to the Opposition, and to many of my hon. Friends who are much disturbed about this matter, that something worth while will be forthcoming. If that is not so my hon. Friends and I will not be able to support the Government. I am assuming, given the profoundly difficult
      1404
      problems that we face, that the Government will be able to meet us half way. We are making a reasonable request. Are the Government able to say that they understand the difficulties of disabled people and that they are not prepared to leave them out in the cold? They are not spies or saboteurs but ordinary people suffering from a disability. It is entirely wrong that a disability should result in an added financial burden.
      I shall listen carefully to my hon. Friend's reply. I know that he is anxious to help, and I am anxious to help him. The last thing I want is for this issue to result in party political conflict. As chairman of the all-party group on disablement, I have found no acrimony on the problem of disablement. I enjoy scoring points off the Opposition, as they enjoy doing so off me and my colleagues, on every issue except disablement. If the Government can offer us some concession they will find us supporting them. If they cannot do so, I regret that we shall not be able to support them.
      Sir John Hall: The House will have been moved by the appeal of the hon. Member for Stoke-on-Trent, South (Mr. Ashley) to his own Front Bench, and by the plea of my hon. Friend the Member for Exeter (Mr. Hannam). I am afraid that I must disappoint my hon. Friend. He said that the disabled had been excluded from this clause by accident. I am afraid that it was no accident. I moved an amendment in Committee on the Floor of the House that was designed to give a small concession to the disabled and to the registered blind. Although it was received with sympathy, the Chief Secretary said that the proper way of dealing with such matters was through the social services. I suggest that social service allowances for the disabled, whether they are registered under the Chronically Sick and disabled Persons Act or whether they are registered blind persons, do little more than maintain the living standard of the individual concerned. They do little more than maintain the value of allowances as originally granted.
      When we think of the problems which face the disabled, to which the hon. Member for Stoke-on-Trent, South has drawn attention, it seems extraordinary

      1405
      that the Government should introduce legislation which imposes a separate surcharge on people with comparatively limited incomes. How do I explain to my disabled constituents who come to me for advice that, whereas it is possible for a man to earn £4,000 a year as a miner, for example—in fact, dockers and bummarees are getting that as well—they cannot enjoy an annual income of £1,000 or a little more without incurring an additional surcharge?
      I put to the House a personal example of a man and his wife who came to see me only last Thursday. The man had met with a serious accident and was almost completely disabled. He was still able to do about half a day's work occasionally during the week. He came to me to see if I could help him get a petrol allowance as without a car he could not go out and do half a day's work. He was not able to get that allowance because he had an income from the compensation that was made payable to him. He received compensation of some £19,000. He and his wife had invested that sum following advice and they had an investment income of a little over £1,000 a year. He is now liable to pay a surcharge. How can I explain to him that an able-bodied man can earn three or four times as much and not have to pay the surcharge? Nevertheless, as a disabled man with a dependent wife, with an income derived from compensation rightly and properly awarded to him, he has to pay a surcharge.
      The amendments make several modest suggestions for overcoming the problems. We ask only that disabled persons and the registered blind should be treated on the same basis as people aged 65 and over. The Chief Secretary knows that the cost would be comparatively small and that it is difficult to tell how many disabled persons are involved. The last time we debated this question he agreed that it was not likely that a large number of people would be involved.
      I know that the Chief Secretary and, indeed, the whole Front Bench have sympathy with us. I know, too, that they dislike introducing exceptions for any special category. However, surely the disabled must come before anyone else. I am certain that if the Government applied their minds to it they could
      1406
      accept one or other of the amendments, which would give the relief we want.
      I am certain that the Government do not want it to be believed in the country that they are prepared to see the incomes of workers of all categories rise year by year and more than keep pace with the cost of living while they impose an extra penalty on those who have no opportunity of increasing their earnings and depend on compensation and on social service allowances which are increased in arrear merely to keep pace with the increased cost of living.
      I beg Ministers to give careful consideration to the pleas which have been advanced by my hon. Friends and by the hon. Member for Stoke-on-Trent, South, who speaks from great experience in these matters, who knows precisely what he is talking about, and who has personal experience of the type of cases we seek to help. I therefore hope that the Government will give sympathetic consideration to this matter and will express their intention of finding a way of meeting the amendments.
      Mr. Lewis Carter-Jones: I do not think that hon. Members care much which one of Amendments Nos. 16, 17 and 18 the Government are prepared to accept. I think the Government should accept Amendment No. 16.
      The argument is based on the fact that the Government have identified a target area of need. They have recognised that amongst the elderly there is a group which is in need of special consideration. The Bill recognises the needs of the pensioner and there is a disregard of £500 of the excess above £1,000.
      The Government having recognised this need, my hon. Friends and I ask the Government Front Bench to recognise the needs of the disabled. The disabled are at as great a risk as any other group. The cost of making this concession would be small. As my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) said, it may well be that the amendment is not drawn as tightly as the Government would like. Nevertheless, the intention is clear.
      A person would qualify for the allowance, first, if he were in receipt of an invalidity pension. To qualify for such a pension it is necessary to go through

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      quite a rigmarole. A person would qualify, secondly, if he were
      "unemployed and in receipt of an attendance allowance".
      Hon. Members on both sides will be well aware of the difficulties of obtaining the attendance allowance.
      Amendment No. 16 would tie the exceptions to those in receipt of invalidity pension or the attendance allowance. This should not present administrative problems and would not involve great cost. It would bring to a group of people in need a very welcome relief. I hope that the Government will accept the amendment.
      Mr. Patrick Mayhew: I should like to echo the sentiments which have been expressed so far by the hon. Member for Stoke on Trent, South (Mr. Ashley), my hon. Friend the Member for Wycombe (Sir J. Hall) and others of my hon. Friends, and to put flesh and blood on to the arguments they advanced. I understand that the principle behind the surcharge on investment income is that those who have such an income have broader backs. The members of the class that we are speaking about tonight have backs that are not broad but are broken. I can illustrate what I mean by three examples which show how unfair is the Government's intransigence on this matter.
      The first example is of someone who has been injured in an accident but had the foresight to insure against future loss of earnings. That person, now disabled from earning his living, hopes to be able to live on the proceeds of a lump sum paid by the insurance company. His back is not broad in this case. He is seeking to replace earnings that his disability now prevents him from collecting, and he is now to be charged an extra tax over and above what he would pay if he still went out to work. Where is the justice in that?
      The second category covers accidents at work. Anyone suffering such an accident can recover damages if he can show that the accident was wholly or partly the fault of his employer. He will receive a lump sum which he will invest, and he will hope to live upon the proceeds of that investment. Where is the justice in his having to pay more in taxation when
      1408
      he is unable to earn his living like his more fortunate work mates who were not injured? Why should such a man pay more tax? I do not seek to make a party point, still less to make one which cannot be sustained. Governments from both sides of the House have supported the principle of the investment surcharge, making no exemption for those injured at work. I hope the Government will say whether they think it is just that those workmen and their families whose damages are calculated in this way, and who are caught by the low figure at which the surcharge now comes into operation should from now on have to pay more in tax.
      Thirdly, is it right that the widow who is living on the proceeds of a successful claim under the fatal accidents legislation should from now on pay a greater sum in tax than had been thought to be the case when her husband's damages were fixed by he courts? Labour Members have asked us to say how we would strengthen the social contract. One way would be by making, for example, Amendment No. 18, so that widows of those killed at work shall not be required to pay the extra tax required by the clause. I would have thought that that was not only a sensible strengthening of the social contract but also common justice.
      I hope that the Government will listen to the arguments from both sides of the House in favour at least of this relatively small class of people amongst those living on investment incomes. Their backs are not broad. They need help with the burdens which are already far too great for them.
      10.30 p.m.
      Mr. Tony Newton: I support the arguments of my right hon. and hon. Friends on this group of amendments.
      I do not want to speak at great length, partly because we have had endless debates on the subject. If it was not apparent by last June or July that the Government would pay little attention to our arguments, it has become apparent from their behaviour now that they have a majority and are in a position to do exactly what they wish.
      The arguments which have been deployed time and again about the increased

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      surcharge become more valid, not less, each time they are raised. The more I hear Labour Members arguing that they are attacking the wealthy by attacking people with modest investment incomes of £1,000 or £2,000 a year, many of whom may not have much other income, the less convinced I am, and the less satisfactory I find their position.
      I want to say something about the position of retired taxpayers. Regardless of all the arguments about the surcharge as a whole, one of the meanest-minded and nastiest actions of the Government was to increase the taxation of the savings income of retired people. That is a feature of the Bill. There cannot be an hon. Member on either side of the House who does not have coming to him a steady stream of elderly people who do not know how they will make ends meet. Almost every Government announcement, almost every post, brings them a higher bill for electricity, petrol, coal, television licence, telephone, rates, water rates, sewerage rates and postage.
      Mr. Tomlinson: Does the hon. Gentleman agree that a motor car, television and telephone are all the classic symptoms of poverty?
      Mr. Newton: The hon. Member for Meridan (Mr. Tomlinson), for whom in the ordinary course of events I have a good deal of respect, has done himself considerably less than justice throughout today. If he cannot see the fallacy and absurdity of the argument he has just advanced, I doubt whether I shall be able to enlighten him in the few minutes available.
      The hon. Gentleman is one of the few Labour Members with any knowledge of, or concern for, the more rural areas. He knows perfectly well that anyone aged 60 or more without a telephone and without a car in parts of the area he represents, and certainly many of the villages I represent, is cut off, isolated, stranded. We rightly hear it said on both sides of the House that more and more elderly people should be able to have a telephone. I agree. It is hypocritical now to argue that because a person has the telephone he or she deserves no consideration under the tax system. It is a patently ridiculous argument. No doubt we shall have an unsympathetic reply from the Govern-
      1410
      ment, as we have had throughout the past year.
      I also support the points made by my hon. Friend the Member for Basingstoke (Mr. Mitchell) about the whole attitude of Labour Members to the question of capital and investment or savings income. At Question Time today the Prime Minister tried to make the best he could of the investment intentions figures. Hon. Members on both sides of the House have expressed great concern about the level of investment, the threat to employment and the need for expanded spending on capital equipment. Where is the money supposed to come from if people will not save?
      Up to a point and over a period one can do what hon. Members opposite have always tried to do in government—to make up for the drop in private savings by increasing taxation. But sooner or later even those whose interests they claim to care about—for example the average worker in the car industry—will revolt at the taxation increases, the forced savings, required to make up the gap. It is increasingly becoming nonsense to hear hon. Members opposite, from the top of the Cabinet down to everyone on the Government back benches, demanding action against unemployment and action to increase capital investment, with, at the same time, the Government introducing Bill after Bill to clobber those who save and help to provide the capital which can be invested and to clobber profits out of which equipment is provided.
      In the light of almost every economic speech made by hon. Members opposite in the past few months, there are large parts of the Bill—this is one of them—which are total and complete nonsense. I was told shortly after Christmas that large department stores could not believe the amount of money being spent at their sales. Somebody said that it was as if money was going out of fashion. Under the impact of the Government's policies, it is going out of fashion. I was recently at an antiques auction sale where people could not believe the prices being realised for quite indifferent pieces of furniture. The reason is partly the problem of inflation and that people want to put their money into articles which they think will retain their value.
      I do not lay the whole blame for this situation on hon. Members opposite, but

      1411
      people who come to see me say "What is the point of saving when all that happens is that the Government penalise us for doing so?" That is an argument which hon. Members opposite would accept regarding the so-called—[Interruption.] If the hon. Member for Meriden wishes to interrupt, I wish he would stand up and not simply mutter.
      Mr. Tomlinson: I was observing that the present level of investment in building societies conflicted with the point about savings made by the hon. Gentleman.
      Mr. Newton: A large number of people have decided that there is little point in saving, except on a short-term basis, which is the kind of money which tends to go into building societies. It is much the same argument as we often hear, rightly, about the so-called disregards under the social security schemes. Hon. Members opposite would accept it in that context. People say "What is the point of my saving if my benefits are reduced?"—which is another form of taxation.
      These amendments are not extravagant. It could be argued that they are very modest. Compared with the level of relief from the investment income surcharge which existed when the previous Government introduced the £2,000 relief, we should be moving to increase the relief to about £2,500 simply to take account of the past year's inflation. We are proposing far more modest amendments simply to try to rescue something of the loss the Government are imposing on this group of people.
      My specific points concern Amendments Nos. 341 and 344, which relate to the treatment of women under the Government's proposals. It will not come as a surprise to Ministers to know that in their proposals the relief from the extra surcharge granted to elderly taxpayers applies where an individual's age, or that of his wife living with him, is 65 or more. Plainly this proposal is designed to help the retired taxpayer. I cannot understand the justice of a proposal which fails to acknowledge that the retirement age for women is 60. The purpose of Amendment No. 344 is to allow a single woman to enjoy the benefit of this relief from the age of 60 and not 65. Amendment No. 341 would allow a married
      1412
      couple to enjoy the benefit of the relief when the wife reached the age of 60.
      The point was touched on during Committee proceedings on the Floor of the House. In what was perhaps his weakest reply the Financial Secretary referred to a recommendation of the Royal Commission on Taxation, which, from memory, reported in 1954. Much water has passed under the bridge since then. It is thoroughly unsatisfactory for the hon. Gentleman to rely on a single sentence dismissing the whole problem of treating married women as retired at the age of 60. It cannot be right that we should treat women, particularly single women, in this way. I hope that we shall have a specific and detailed reply on this point.
      Mrs. Lynda Chalker: I wish to refer to Amendments Nos. 16, 17 and 18. The first of this group is probably the most appropriate in terms of the disabled. It is a small concession to ask of the Government, who can hand out money for other things quite liberally. It asks only for an additional disregard for the disabled. I am concerned with people who have a limited amount of investment income and no other income but need increasing amounts of equipment to reach some bearable level of living in their later years.
      Today we see many parents trying, hard though it may be, to set aside savings for a mongol child and many other categories of children who will never be able to earn a living and keep themselves in the way that the rest of us wish they could. We know that the Government recognise such problems in a better fashion than before; for example, hypothermia in old people. They are prepared to grant concessions for people aged over 65.
      It seems strange that the Government are not prepared to grant this concession for people who have no hope of earning their own living and often have only what is left to them by relatives, or have to fall back on the State. I know of three cases of people suffering from progressive illnesses. At present they can still earn their living. In one case, after perhaps five years, that person will not be able to go out to work. In the other cases it will be about nine years or perhaps 15 years. By hook or by crook they are trying to save every penny they

      1413
      can and invest it so that they will not have to rely on the State in future. They are trying to invest wisely as a hedge against inflation, if that is possible today.
      It is surely right to help these people so that they may buy further equipment with the money they do not pay in additional taxation. When we cannot always give them individual funds this is a way of helping them to provide for themselves.
      10.45 p.m.
      Mr. Ian Gow: I support Amendments No. 349 and No. 356. I wish first to deal with the crucial matter of retrospective legislation.
      On 31st July last the Finance Act 1974 received the Royal Assent. Section 7(1)(b) provided for the rate of tax which would apply to what was therein described as "investment income". It was reasonable and proper for the Queen's subjects to base their liability to tax for the current year on the provisions of Section 7(1)(b) of that Act. The 1974 Act provided that investment income should be subject to a surcharge at the rate of 15 per cent. to the extent that that income exceeded £2,000 in the current financial year. But Clause 5 of the present Bill provides retrospectively—that is to say, from 5th April last—that there shall be a change in the Act passed by Parliament as recently as July last year.
      I wish to protest in the most vigorous terms against the whole principle of retrospective legislation. I draw no comfort from the fact that previous Tory Chancellors of the Exchequer have resorted to the same device. It is a practice which is thoroughly discreditable and disreputable—whether the practice comes from this side of the House or from the Labour benches.
      Secondly, I wish to refer to the remarks made by the Chief Secretary to the Treasury at the beginning of this afternoon's proceedings. He appeared to defend the provisions of the capital transfer tax on the ground—a ground which I do not accept—that they would not apply to a great many people. That was his case. I do not think he is right. I believe the provisions of that tax will affect not just thousands but millions of our fellow citizens. Precisely the same
      1414
      argument has been advanced in respect of Clause 5 of the present Bill.
      We are urged by the Government Front Bench "Don't worry—the investment income surcharge applies to only comparatively few people." But is it not the function of the Government to be fair not just to the majority but also to the minority? Or is it the present Government's view that it is only the big battalions who count. I fear that it is.
      I wish also to reject the argument that because only a comparatively few people are affected by the investment income surcharge that is a category of persons who can be disregarded. I wish to assert the opposite proposition. It is true that the number of people who will be affected by the provisions of Clause 5 will be comparatively small. But let us think to which people the clause will apply. It will apply in the main to those who spent their working lives saving, denying themselves that excess of consumption which the present Government are encouraging the rest of us to indulge in. We are talking of a category of people who desire not less consideration but the greatest possible consideration of all.
      I say that for the following reason. The big battalions in our society are able, in an inflationary period, to protect themselves by means of their unions and their bargaining capacity. However, those persons to whom we refer are literally defenceless against inflation. Government supporters cannot deny that. The trouble with them is that they seem to be concerned with fairness only for the big battalions and reject the concept of fairness for those people with no one to defend them save the Opposition.
      Mr. Russell Kerr: Surtax payers of the world unite.
      Mr. Gow: The doctrine of fairness should apply to all our citizens, and, above all, to those who have saved during their lifetime. I wish to give a concrete example. Suppose that a man reaches the age of 65 after a lifetime of toil. Suppose a miner has saved £20,000 during a lifetime.
      Mr. Joseph Ashton: What does he earn as a miner?
      Mr. Gow: That is exactly the point I am making. Suppose that, after a lifetime of toil, a man, having denied himself the consumption which is available to people nowadays, has saved £20,000 and invested it at 8 per cent. That would produce £1,600 a year, the purchasing power of which has fallen dramatically over the past four years. Is it fair that that savings income should be hit still further by this mean and petty investment income surcharge? It is right that the Opposition should champion the cause of those who have saved, who have been hit hardest by inflation, and who have no redress against the evils of inflation.
      For those reasons I support the amendments.
      Mr. Patrick Cormack: I associate myself with the excellent comments of my hon Friend the Member for Eastbourne (Mr. Gow).
      I should like to refer to the points raised with regard to the disabled. I am glad to see the hon. Member for Stoke-on-Trent, South (Mr. Ashley) in his place. He made a very forceful contribution. I hope that the Treasury Bench will listen to what he said and will act accordingly.
      The hon. Gentleman spoke about being chairman of the all-party group for the disabled, in which connection he does a great deal of valuable work. I cannot help but put in some special pleading on my own account. As chairman of the all-party group for widows I come into contact with a vast number of people who are affected by these amendments. There are many widows dependent on investment incomes, but no one would suggest that they are among the rich of the land, as the hon. Member for Holborn and St. Pancras, South (Mrs. Jeger) will agree.
      Mr. Ashton: Did the hon. Gentleman vote for televising the House?
      Mr. Cormack: I did not vote for televising the proceedings of the House.
      The widows are particularly hard hit. I hope that the Chief Secretary to the Treasury will heed my words. The Minister courteously received a deputation from the National Association of Widows who spoke about many of the problems they face. Its representatives did not raise this specific matter. But the National Association—[Interruption.]—
      Mr. Deputy Speaker (Sir Myer Galpern): I think that the hon. Gentleman has sufficiently awakened too many hon. Members. I cannot hear what he is saying.
      Mr. Cormack: I am delighted with the electric effect of my words. I wish that the shock was universal. But I hope that at least there will be an effect.
      Although it is right and proper to talk about the disabled, whose needs are real, and about the widows, whose needs are equally real and who will be affected greatly unless there is a substantial amendment along the lines proposed, it is equally right to talk about the saving classes—the able-bodied, those upon whom the country depends. The country depends for its future on the saving classes more than on any other group of people—
      Mr. Ashton: What about the workers?
      Mr. Cormack: The workers are the same people.
      Mr. Ashley: Speaking as the former Chairman of the Widows' and Single-Parents' Group and the hon. Gentleman's predecessor, I cannot help feeling that he is damaging the case for this amendment and supporting the Government's opposition to disabled people. This is precisely what the Government will say. We have been pleading for disabled people to be allied to old people. The more categories that there are, the weaker our case becomes. I have fought for widows for years—my mother was a widow—just as the hon. Gentleman has. But he is undermining the case made so eloquently by hon. Members on both sides of the House.
      Mr. Cormack: Not at all. I do not dissent from the hon. Gentleman's argument. In widening it, I am not destroying the validity of his case. There are many amendments on the Notice Paper specifically concerned with the disabled. If the Government accept one of those and not the others, I shall be pleased. But I am seeking to suggest that there are many other categories and that, by the transference of a very small sum of money, the whole case could be met—disabled, widows, and the others about whom I am talking. If the Government indicate that they will do something for the disabled and for no one else, I shall

      1417
      rejoice in that little, at least. But I hope that they will accept the good sense of our aguments and do a little more. That is a perfectly fair attitude to adopt.
      Going back to what I was saying, it is upon the saving classes that the country depends, and I reply to the intervention of the hon. Member for Bassetlaw (Mr. Ashton) by saying that many of them are ordinary workers who have in their working lives put a little away for a rainy day.
      Mr. Ashton: Not £20,000.
      Mr. Cormack: But we do not need £20,000. We are talking in terms of people who in their working lives have saved perhaps £6,000 or £7,000. After 40 years, £7,000 is not a vast sum. Yet these people will be penalised if the Government's intentions are enacted as they stand in the Bill at the moment.
      11 p.m.
      We are talking not about the vastly wealthy, the extravagantly rich—we do not find many of them anyhow—but about ordinary people. The self-employed have been mentioned many times. I stress that we are talking about ordinary workers. If the Government in the Coal Industry Bill can make proper provision, with the acclamation of hon. Members on both sides of the House, for those stricken down by pneumoconiosis, that is right and proper. But why do that Government, who have shown proper sensitivity in that regard, clobber those who have saved for their old age? It seems a ridiculously mean and petty attitude.
      I hope that the Minister, who I am sure practises thrift even if the Chancellor does not—the hon. Gentleman told us that he spends his money as he gets it, but I am sure that he must practise thrift—realises that there are virtues and values in it. Let both Ministers—[HON. MEMBERS: "Three."] Indeed, three. The Paymaster-General is most appropriately named. Let the Ministers draw upon their experience and do something for those who have worked and saved and upon whom the prosperity of this country depends.
      Ministers are trotting up and down the country time and again bemoaning the level of investment. How can they expect to encourage investment—
      Mr. Russell Kerr: Travelling first class.
      Mr. Cormack: Travelling first class, as the hon. Gentleman, in his helpful intervention, points out. We are delighted that he is in the Chamber. If Ministers are travelling up and down the country bemoaning the level of investment, what nonsense it makes of their protestations if they actively discourage the saving classes. At an earlier stage I referred to the Government as the scourge of the saving classes. They have not yet earned remission from that title. I sincerely hope that they will and that we shall have a sensible reply tonight.
      The Minister of State, Treasury (Mr. Robert Sheldon): The hon. Member for Staffordshire, South-West (Mr. Cormack) accurately reminded or informed the House that I was privileged to receive a delegation, which he accompanied, from the National Association of Widows. One advantage of such meetings is in being able to remove a number of misconceptions, which I think the hon. Gentleman will agree was achieved on that occasion.
      I shall attempt to remove a number of misconceptions, as I see them, arising out of the debate this evening. We are discussing 10 amendments which are being taken together. The House will understand that, although I was happy to accept that these amendments should be taken together, it means that we must cover a fair amount of ground. Therefore, I must beg the indulgence of the House if I deal with each in turn.
      First, I should like to reply to the hon. Member for Berwick-upon-Tweed (Mr. Beith) on the Federated Superannuation Scheme for Universities. I should be happy to go into that matter in greater detail, but, as it was mentioned only by the hon. Gentleman, perhaps a shorter version of what I might otherwise have said will be acceptable to the House in present circumstances.
      The FSSU is an old style superannuation scheme. The code under which it was approved goes back quite a long time. It is unusual in present circumstances in that the whole benefit can be taken in a lump sum. The hon. Gentleman will know that that is now being phased out. However, the point remains that income from the investment

      1419
      of the lump sum received is still income from investment. If there are any other matters, I shall be happy to have further discussions with the hon. Member or even to go into it further by correspondence.
      Mr. Beith: I appreciate the Minister's desire to be brief, but he has stated the fact without explaining his attitude to it. He said that it is investment income, but the point that I sought to make is that it is someone's pension and is in every way comparable to the pension of someone who invests in a superannuation scheme. Why should it be distinguished for treatment when he receives it on retirement?
      Mr. Sheldon: This is the misconception that I should like to go into at some length. I am sorry, but it is not possible to deal with this briefly. I shall be happy to explain the full circumstances to the hon. Member, and perhaps he would accept that.
      Mr. Beith rose—
      Sir John Hall rose—
      Mr. Sheldon: I had understood that hon. Members would have preferred to see progress, but, if the House wishes, I will now make the explanation that I had hoped to cut short.
      Mr. David Howell: Of course we should like to examine all these matters in full, but the difficulty, to which the Minister alluded, is that the Government have put the strong arm on this debate, and we cannot fully discuss these important amendments.
      Mr. Sheldon: We understand that and have debated it. What we have before us is one amendment which it seems the House wishes me to examine at greater length than I had intended.
      The amendment of the hon. Member for Berwick-upon-Tweed seeks to give the lower thresholds to those who on retirement receive lump sum payments from the superannuation arrangements and the retirement annuity contracts approved by the Board of Inland Revenue or from private pension arrangements of the kind the hon. Member described. The fully approved schemes under the new or the old codes
      1420
      cannot normally begin paying annuities to someone under 60. The hon. Gentleman may be arguing that, since the Government recognise 60 as the proper age for paying retirement benefits in testing the eligibility of a superannuation fund for tax concessions, it is only legitimate to test the eligibility of a person under the schemes that he has in mind in the same way.
      But this argument is misconceived. The fact that a company or a scheme—the argument applies to both—can, with full tax benefit, provide its employees with a pension at 60 is no reason why those with large investment incomes should benefit from yet further tax concessions. Indeed, an employee in that position might be rather more fortunate than someone who has to wait until 65 to get a pension. The case is not made any stronger by the fact that he may opt to take part of his pension rights in the form of a lump sum. He gains the additional security of the capital sum. He may or may not choose to invest it in an income-bearing form, but in either case there is no reason why he should benefit from a lower surcharge threshold five years earlier than other people.
      I could give some details of how the amendment does not even fulfil the hon. Member's intention, but I should like to move on to the nine other amendments, to which most interest seems to have been directed.
      On Amendment No. 349, we believe that the investment income surcharge threshold was fixed far too high at £2,000 in 1973–74. That is the starting point of our criticism of what happened then. The figure of £2,000 for the investment income surcharge in 1973–74 was a very substantial sum of money by comparison with that of a number of people who were faced with very great difficulties because of the economic situation as it then was as well as what it subsequently became. Under the legislation that we have provided, the first £1,000 over the new threshold is to be taxed at 10 per cent. Because of this the extra surcharge cannot be greater than £100 in total.
      There is another comparison that the House could make if it so chose. That is the treatment of investment income by

      1421
      comparison with what existed before the present unified system was introduced by the Conservative Government. Before then taxpayers paid the full standard rate and got relief for earned income at the rate of two-ninths. That was very substantially more than the investment income surcharge which replaced it. This was a very big distribution to the better off. Like all these arrangements, whenever they are made, the biggest advantages accrue to the best off, because they pay the highest rate of tax.
      Mr. Lawson: In Committee we heard this argument about the comparison in relation to the 1972–73 period before the unified rates. It was pointed out that this is a completely inadequate comparison because of the rate of inflation. Prices have risen by about 35 per cent. since then. Therefore, one cannot compare £1,000 then with £1,000 now. In addressing himself to that matter, perhaps the Minister would also address himself to Amendment No. 362, which takes account of the inflationary element.
      Mr. Sheldon: The hon. Gentleman is pressing me to make progress, and I am happy to respond to that. The point I was making is that a very considerable advantage was given to those with investment income at the time of the introduction of the unified tax system. This big advantage is something that people have to accept, but, at the same time as they have come to accept it, we must look at it also in the context of the assistance being sought by hon. Members of the Opposition for this kind of taxpayer.
      The hon. Member for Blaby (Mr. Lawson) thought that it was a question of pique, and that the Government, having been defeated in a Division last year, sought to restore the position that they had attempted to create. He may bandy those kinds of words about, and I might respond also. The intention of the Government was clear. It was stated so, both in the House and in the Bill. When the Division was lost it was also repeatedly stated. At no time could anyone have been under any misapprehension about what it was the Government's intention to achieve, when they were so able to act. This we have been able to do, and this is the result that we have before us.
      Mr. William Clark: This is arrogance.
      Mr. Sheldon: The hon. Gentleman might call it arrogance. I would say that it is maintaining what we said we would do when we were in a position to do it, and fulfilling our undertakings, which is something he might care to contemplate.
      I should like to turn to Amendments Nos. 341 and 344. Amendment No. 341 is an attempt to apply the reduced surcharge threshold of £1,500 for the elderly to a married couple when the wife became 60 years old if that was earlier than when the husband became 65. The effect would be, as can be readily understood, to give a decided advantage to those married men who are younger than their wives or near the age of their wives. As such it discriminates against other married men as well as single men. I find it difficult to understand the basis of such a form of discrimination. We believe that the fairest arrangement in dealing with these matters is to have the same qualifying age for men as for women for the purposes of the investment income surcharge and taxation generally. That is what we have sought to achieve.
      11.15 p.m.
      Mr. Newton: As I understand it, the Bill is open to exactly the criticism that the Minister has just made. If a man is 60 and his wife becomes 65 he will receive the benefit. All that I am saying is that women should be treated the same under these provisions as they are under the National Insurance Scheme. The criticism that the Minister has made applies to his own Bill. It applies, as it were, to a different point under my proposal.
      Mr. Sheldon: No, the arrangements under the amendment as it stands are that when a wife becomes 60—and if that is sooner than when the husband becomes 65—the relief will be given. If the hon. Gentleman cares to table an alternative amendment that seeks to fulfil his aims I shall be pleased to consider it.
      Mr. Newton: When?
      Mr. Sheldon: Other Finance Bills come to the House from time to time. Amendments may be tabled and new clauses may be suggested for the interest and improvement of our debates.

      1423
      I now turn to the problems of the disabled and to Amendments Nos. 16, 17 and 18. Under the clause as it stands the first £1,000 of the investment income has a zero surchange, the following £1,000 has a surcharge of 10 per cent. and the remainder has a surcharge of 15 per cent. For married couples, where either partner is older than 65, the sucharge is zero for the first slice of £1,000. The next slice of £500, is again zero, and a further slice of £500 is at 10 per cent. Thereafter the rate is 15 per cent.
      I draw the attention of the House to the notable contribution of my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley). What he said is best understood by those Members who have the interests of certain sections of the community at heart. They are represented tonight; I see them in various parts of the Chamber. They understand that the best way of obtaining justice is to act in the manner adopted by my hon. Friend—namely, to bring to the attention of the House the difficulties, the needs and the requirements of various sections of the community. In that way they inform and educate every one of us. I am grateful to my hon. Friend, and I am sure that other hon. Members will express their gratitude to those who inform us on such matters.
      Mr. Gow: The Minister will recall that the Chancellor first introduced the proposals now in the Bill when he made his Budget Statement on 26th March 1974. The Minister will also remember that in the Finance Act that received Royal Assent on 31st July the Chancellor's proposals were reversed. If the figure for the investment income surcharge was right on 26th March 1974, how can it be right in March 1975, bearing in mind that we have had inflation during that time at a rate of over 25 per cent.?
      Mr. Sheldon: I am sorry that the hon. Gentleman seeks to go back on discussions we have had and comments I have made. I assure him that I shall deal with that before I conclude.
      The approach of my hon. Friend the Member for Stoke-on-Trent, South is that which I most admire. He drew attention to these problems, as did my hon. Friend the Member for Eccles (Mr. Carter-Jones). The amendments deal with those who are
      1424
      receiving an invalidity pension, who are unemployed and receiving an attendance allowance, who are unemployed and are registered disabled persons under the Disabled Persons (Employment) Act 1944, and who are unemployed and registered disabled persons under the Chronically Sick and Disabled Persons Act 1970.
      I note with great interest the proposals which are put forward from time to time for giving help to the disabled in many ways. I note, too, the way in which this has been put forward as a change in the tax system. Such changes are frequently made and they are frequently debated in the House of Commons. I do not believe that there is any lack of understanding of the problems of the physically handicapped, because of the action of so many of my hon. Friends and hon. Gentlemen generally.
      This is a big general problem that frequently arises in our debates on taxation. I suggest that at least one reason why it arises in our debates on taxation is that we tend to have more debates on taxation than on most other matters, so there is a more convenient slot there than in many other areas.
      The tax system is not a particularly good way to help the physically handicapped. The Department of Health and Social Security does the job very much better. The whole point about the tax system is that it gives most to those who have most. Those at the higher end of the income scale receive the most. That is not in itself an inescapable way of saying that we can do nothing about it, but it shows that there is a deficiency in the operation of the system.
      Mr. Ashley: I greatly appreciate what my hon. Friend is saying. He is obviously leaning over backwards in an effort to oblige both sides of the House. I am disturbed by the narrow party political stance adopted by some hon. Members opposite. Nevertheless, my hon. Friend must answer this question. Can he justify helping old people and not helping the disabled? This is the nub of the problem.
      I appreciate the difficulties. I am not trying to score party points. I hope to vote with the Government. I want a concession. I would appreciate it if my hon. Friend could promise me a concession of some kind, because there is no point in saying "I sympathise"

      1425
      unless sympathy is translated into action. Is it possible to make some concession to disabled people? If that can be done, I shall happily vote with the Government? Can my hon. Friend help me?
      Mr. Sheldon: I am happy to respond. I will deal with the problem of the old in a moment. My hon. Friend rightly compared the problem of the disabled with the concessions given to the old. For that reason, I said that I wished to deal with the problems of the old, to show why, in my view, they can be treated under the tax system more readily than can the problems of the disabled.
      Mr. Hannam rose—
      Mr. Sheldon: May I give the House a bit of advice? In dealing with the problems of certain groups of people, one can use one instrument to greater effect than another. There is no difference between the aim sought by my hon. Friend the Member for Stoke-on-Trent, South and those who want to assist the disabled and the aim which I seek.
      Mr. William Clark rose—
      Mr. Sheldon: If I may be allowed to continue, I was about to say that one method is better for treating certain aspects of the problem and another method is better for treating others, and, if I am allowed to proceed, I shall, I hope, make clear what I am trying to establish.
      If we use the tax system to give benefits of this kind, what we are doing is applying a sort of inverse means test. What happens when the tax system is used in that way? Whatever is given, most is given to those who have most. [HON. MEMBERS: "Not given."] All right. I had assumed that the House had grown up and was not prepared to entertain arguments about whether one was taking away or giving. The whole argument here depends on the treatment which the Department of Health and Social Security gives, on its side, in making contributions, and what the Inland Revenue does, on its side of the same problem, in not taxing people. I believe that in a wider range of problems the one can be made the equal of the other, and what one is concerned with at the end of the day is how much extra stays in a person's pocket and how much is taken out.
      Several Hon. Members rose—
      Mr. Sheldon: That applies to both aspects of the matter. I remember what was said by hon. Members opposite who fought hard for the tax credit system. I see the Chairman of that Select Committee here, the hon. Member for Croydon, South (Mr. Clark). He accepted that argument, and he now produces arguments which run counter to the very case which was the basis of that proposed innovation in our tax system.
      Mr. William Clark: The hon. Gentleman need not worry about whether the House has grown up. It has. But I wonder whether he has grown up, for he has not appreciated the argument. It is not a question of giving something back or giving something to the disabled. Our case is based on the circumstances of the disabled person. If someone is disabled through his job, he goes to the court for compensation, and the court gives him compensation for his loss of earnings. Whatever he receives is supposed to compensate him for his lack of earning capacity.
      That disabled person then enjoys investment income on the compensation awarded by the court. Why should that person be clobbered if his investment income is £20 a week and his earning capacity has been reduced by £30 a week? The Minister must address his mind to that. There is no point in suggesting that the House has not grown up. It certainly has, and it is about time he did.
      Mr. Sheldon: The hon. Gentleman is now shifting his ground. I do not object to that, but I must remind him that what we were debating a few moments ago, before his rather lengthy intervention, was the equivalence between tax allowances and grants.
      Mr. William Clark: Answer the question.
      Mr. Sheldon: I was pointing out what I believe to be the right relationship between the two, and saying that when we give a tax relief, using the tax system instead of the social security system, we give most to those who have most rather than, as the DHSS system rightly does, give most to those who have least. That is the distinction. The Department of

      1427
      Health and Social Security can operate in that way but the tax system cannot.
      11.30 p.m.
      I shall now deal with the Government's record of help to the disabled and the least well off. This concerns the task of the social security service as it exists today. There is a fundamental reason why we give relief to the old person but not to the disabled. It is not that the latter group is any less deserving. That must be clearly understood.
      Mr. Keith Stainton: Address the Chair.
      Mr. Sheldon: I am speaking in the direction of my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) in order that he may fully understand the position.
      The disabled, of course, get much more than our sympathy. They also get our understanding.
      Mr. Lawson: Humbug.
      Mr. Sheldon: The hon. Member should contain himself. What is happening in the tax system is—
      Mr. Deputy Speaker: Order. I must ask the Minister to address the Chair, not the Paymaster-General. [Interruption.] Hon. Members should address the Chair. It leads to less trouble if they do.
      Mr. Sheldon: I am not sure that you understand the reason for my turning towards my hon. Friend the Member for Stoke-on-Trent, South, Mr. Deputy Speaker.
      Mr. Deputy Speaker: In the circumstances, I sincerely apologise to the Minister.
      Mr. Sheldon: There is a particular problem, Mr. Deputy Speaker, and I am grateful for your understanding.
      The justification for giving assistance to the over-65s through the tax system is not that they are worthy of our sympathy and understanding. That sympathy and understanding must apply to a greater extent to many of the cases that have been mentioned by my hon. Friends the Members for Stoke-on-Trent, South and Eccles. The over-65s are dependent for a large element of their income on
      1428
      the savings they have made throughout their lives. Taxation is levied on the basis of capacity to pay. In the case of the disabled we have to consider how we can channel most money to those most in need. That is the whole basis of the social security approach to the matter.
      Sir John Hall: Many of the disabled persons referred to by my hon. Friends are living on savings accumulated when they were at work. Why should they not be treated the same as someone 65 years old who is also living on accumulated savings?
      Mr. Sheldon: I have listened to the hon. Member with great respect on many occasions, but in view of the action taken by his Government on these matters his party's attitude tonight strikes me as being very close to the humbug which has been referred to on previous occasions.
      Mr. Ashley: I apologise for intervening once more. I am anxious not only to vote for the Government but against the Opposition, because they are making party political points. Will my hon. Friend answer the question? He has not yet drawn a satisfactory distinction between old people and disabled people. I cannot support him if the Bill does not take account of disabled people.
      May I highlight the position by asking my hon. Friend whether thalidomide children will be exempt from this tax, as old people are, or will they have to pay it?
      Mr. Sheldon: My hon. Friend will know better than most hon. Members the arrangements that are made for the disabled—arrangements of a kind that I have explained to the House. What it is important to understand is the fact that when we are talking about the problems of the disabled we also have to compare their sources of income, and the sources of income of the older people tend to be more uniform than the sources of income of the disabled.
      I want to speak about the amendment concerning the combined investment income for those with incomes not greater than £3,000—Amendment No. 383. Under this there is a separate income threshold of £1,000 for each spouse. It is held that as a result there is to be double surcharge threshold for a married couple by comparison with a single person. The figures for the married couple with

      1429
      a total income of £3,000 will be £1,000 for the wife and £1,000 for the husband. The single person—[Interruption.] I am trying to reply to some of the points made. We all understand the difficulties, but I am trying to answer the debate. If the right hon. Member for Yeovil (Mr. Peyton) had been present he would have been aware that some of his hon. Friends put questions to me, which questions I am now trying to answer.
      Sir Geoffrey Howe: I intervene concisely to make the point that the current debate has been running for just over two hours and the Minister, in replying, has taken up more than 25 per cent. of that time. Quite aside from wishing to debate these matters in the limited time available, we wish to divide on the issues now before the House. We shall therefore be grateful if the Minister will contain his remarks within a matter of seconds rather than minutes.
      Mr. Sheldon: I am happy to oblige the House in whatever it wishes, but if the right hon. and learned Gentleman had turned round he would have seen many of his colleagues rising to their feet to ask me questions.
      The House has had a comprehensive debate on this matter. What we have seen is quite clear, as a result of the amendments that have been moved. What the Government have been interested in doing is to restore equity between those paying investment income surcharge and those who are earning their money day by day. We believe that we have a reasonable relationship between the two—a relationship of a kind that right hon. and hon. Gentlemen on the Opposition side of the House never sought to achieve. We believe that we have that kind of relationship and that it is in the interests of our people.
      Mr. David Howell: The Minister began his speech, which was an embarrassingly
      pathetic effort, by reminding us that the House was in difficulties. It certainly is, because we have had to lump together the two sets of amendments on the clause on investment income surcharge affecting a whole range of people—the elderly, widows, superannuated, work people living on damages, and the disabled.
      We had a telling intervention from the hon. Member for Stoke-on-Trent, South (Mr. Ashley), for whom I have a profound respect, who laid emphasis on the amendments concerned with the disabled.
      In the few minutes left to us by the Minister's verbosity, I must tell my hon. Friends that, although my party stands for the savers, the superannuated, the elderly and single people struggling on a maintenance income, when I look at Members such as the Minister or the hon. Member for Meriden (Mr. Tomlinson) I do not think that we shall move Labour Members on these issues. I think that all those categories will have to fall beneath the Socialist heel. That is inevitable, much as we should like the time to argue it.
      I believe that if we approach the matter in the right way we can save the disabled, if no one else, from the Socialist guillotine. [HON. MEMBERS: "Humbug."] If we can do that; if we can overcome the pathetic little cries of "Humbug" and the mutterings from the Treasury Bench, whose occupants put up such a pathetic performance; if we can combine to show the Government the shoddiness of their ways with regard to the disabled alone; then on this bad day for Parliament we may yet do some good.
      I urge that we press both amendments.
      Question put, That the amendment be made:—
      The House divided: Ayes 269, Noes 282.

      Division No. 122.]

      AYES

      [11.43 p.m.

      Adley, Robert

      Biffen, John

      Buck, Antony

      Aitken, Jonathan

      Biggs-Davison, John

      Budgen, Nick

      Alison, Michael

      Blaker, Peter

      Bulmer, Esmond

      Amery, Rt Hon Julian

      Bowden, A. (Brighton, Kemptown)

      Burden, F. A.

      Atkins, Rt Hon H. (Spelthorne)

      Boyson, Dr Rhodes (Brent)

      Butler, Adam (Bosworth)

      Awdry, Daniel

      Bradford, Rev Robert

      Carlisle, Mark

      Bain, Mrs Margaret

      Braine, Sir Bernard

      Carson, John

      Baker, Kenneth

      Brittan, Leon

      Chalker, Mrs Lynda

      Banks, Robert

      Brotherton, Michael

      Channon, Paul

      Beith, A. J.

      Brown, Sir Edward (Bath)

      Churchill, W. S.

      Benyon, W.

      Bryan, Sir Paul

      Clark, Alan (Plymouth, Sutton)

      Berry, Hon Anthony

      Buchanan-Smith, Alick

      Clark, William (Croydon S)

      Clarke, Kenneth (Rushcliffe)

      James, David

      Rathbone, Tim

      Clegg, Walter

      Jenkin, Rt Hon P. (Wanst'd & W'df'd)

      Rawlinson, Rt Hon Sir Peter

      Cockcroft, John

      Jessel, Toby

      Rees, Peter (Dover & Deal)

      Cooke, Robert (Bristol W)

      Johnston, Russell (Inverness)

      Rees-Davies, W. R.

      Cope, John

      Jones, Arthur (Daventry)

      Reid, George

      Cormack, Patrick

      Jopling, Michael

      Renton, Rt Hon Sir D. (Hunts)

      Corrie, John

      Joseph, Rt Hon Sir Keith

      Renton, Tim (Mid-Sussex)

      Costain, A. P.

      Kaberry, Sir Donald

      Rhys Williams, Sir Brandon

      Craig, Rt Hon W. (Belfast E)

      Kellett-Bowman, Mrs Elaine

      Ridley, Hon Nicholas

      Crawford, Douglas

      Kershaw, Anthony

      Ridsdale, Julian

      Critchley, Julian

      Kilfedder, James

      Rifkind, Malcolm

      Crowder, F. P.

      Kimball, Marcus

      Rippon, Rt Hon Geoffrey

      Davies, Rt Hon J. (Knutsford)

      King, Evelyn (South Dorset)

      Roberts, Michael (Cardiff NW)

      Dean, Paul (N Somerset)

      King, Tom (Bridgwater)

      Roberts, Wyn (Conway)

      Dodsworth, Geoffrey

      Kitson, Sir Timothy

      Ross, Stephen (Isle of Wight)

      Douglas-Hamilton, Lord James

      Knight, Mrs Jill

      Ross, William (Londonderry)

      du Cann, Rt Hon Edward

      Lamont, Norman

      Rossi, Hugh (Hornsey)

      Dunlop, John

      Lane, David

      Rost, Peter (SE Derbyshire)

      Durant, Tony

      Langford-Holt, Sir John

      Royle, Sir Anthony

      Eden, Rt Hon Sir John

      Latham, Michael (Melton)

      Sainsbury, Tim

      Edwards, Nicholas (Pembroke)

      Lawrence, Ivan

      Scott-Hopkins, James

      Elliott, Sir William

      Lawson, Nigel

      Shaw, Giles (Pudsey)

      Emery, Peter

      Lester, Jim (Beeston)

      Shaw, Michael (Scarborough)

      Evans, Gwynfor (Carmarthen)

      Lewis, Kenneth (Rutland)

      Shelton, William (Streatham)

      Ewing, Mrs Winifred (Moray)

      Loveridge, John

      Shepherd, Colin

      Eyre, Reginald

      MacCormick, Iain

      Shersby, Michael

      Fairbairn, Nicholas

      McCrindle, Robert

      Silvester, Fred

      Farr, John

      McCusker, H.

      Sims, Roger

      Fell, Anthony

      Macfarlane, Neil

      Sinclair, Sir George

      Finsberg Geoffrey

      MacGregor, John

      Skeet, T. H. H.

      Macmillan, Rt Hon M. (Farnham)

      Smith, Cyril (Rochdale)

      Fisher, Sir Nigel

      McNair-Wilson, M. (Newbury)

      Smith, Dudley (Warwick)

      Fletcher-Cooke, Charles

      McNair-Wilson, P. (New Forest)

      Speed, Keith

      Fookes, Miss Janet

      Marshall, Michael (Arundel)

      Spence, John

      Fowler Norman (Sutton C'f'd)

      Spicer, Jim (W Dorset)

      Fox, Marcus

      Marten, Neil

      Spicer, Michael (S Worcester)

      Fraser, Rt Hon H. (Stafford & St)

      Mates, Michael

      Sproat, Iain

      Freud, Clement

      Mather, Carol

      Stainton, Keith

      Fry, Peter

      Maude, Angus

      Stanbrook, Ivor

      Galbraith, Hon. T. G. D.

      Mawby, Ray

      Stanley, John

      Gardiner, George (Reigate)

      Maxwell-Hyslop, Robin

      Steel, David (Roxburgh)

      Gardner, Edward (S Fylde)

      Mayhew, Patrick

      Steen, Anthony (Wavertree)

      Gilmour, Rt Hon Ian (Chesham)

      Meyer, Sir Anthony

      Stewart, Donald (Western Isles)

      Gilmour, Sir John (East Fife)

      Miller, Hal (Bromsgrove)

      Stewart, Ian (Hitchin)

      Glyn, Dr Alan

      Miscampbell, Norman

      Stokes, John

      Goodhart, Philip

      Mitchell, David (Basingstoke)

      Stradling Thomas, J.

      Goodhew, Victor

      Moate, Roger

      Taylor, R. (Croydon NW)

      Goodlad, Alastair

      Molyneaux, James

      Taylor, Teddy (Cathcart)

      Gorst, John

      Monro, Hector

      Tebbit, Norman

      Gow, Ian (Eastbourne)

      Montgomery, Fergus

      Temple-Morris, Peter

      Gower Sir Raymond (Barry)

      Moore, John (Croydon C)

      Thatcher, Rt Hon Margaret

      Grant, Anthony (Harrow C)

      More, Jasper (Ludlow)

      Thomas, Dafydd (Merioneth)

      Gray, Hamish

      Morgan, Geraint

      Thomas, Rt Hon P. (Hendon S)

      Grieve, Percy

      Morgan-Giles, Rear-Admiral

      Thompson, George

      Griffiths, Eldon

      Morris, Michael (Northampton S)

      Thorpe, Rt Hon Jeremy (N Devon)

      Grimond, Rt Hon J.

      Morrison, Charles (Devizes)

      Townsend, Cyril D.

      Grist, Ian

      Morrison, Hon Peter (Chester)

      Tugendhat, Christopher

      Gryils, Michael

      Mudd, David

      van Straubenzee, W. R.

      Hall, Sir John

      Neave, Airey

      Vaughan, Dr Gerard

      Hall-Davis, A. G. F.

      Nelson, Anthony

      Viggers, Peter

      Hamilton, Michael (Salisbury)

      Neubert, Michael

      Wainwright, Richard (Colne V)

      Hampson, Dr Keith

      Newton, Tony

      Wakeham, John

      Hannam, John

      Normanton, Tom

      Walters, Dennis

      Harrison, Col Sir Harwood (Eye)

      Nott, John

      Warren, Kenneth

      Harvie Anderson, Rt Hon Miss

      Onslow, Cranley

      Watt, Hamish

      Hastings, Stephen

      Oppenheim, Mrs Sally

      Weatherill, Bernard

      Havers, Sir Michael

      Osborn, John

      Wells, John

      Hawkins, Paul

      Page, John (Harrow West)

      Welsh, Andrew

      Hayhoe Barney

      Page, Rt Hon R. Graham (Crosby)

      whitelaw, Rt Hon William

      Henderson, Douglas

      Paisley, Rev Ian

      Wiggin, Jerry

      Hicks, Robert

      Pardoe, John

      Wigley, Dafydd

      Higgins, Terence L.

      Parkinson, Cecil

      Wilson, Gordon (Dundee E)

      Holland, Philip

      Pattie, Geoffrey

      Winterton, Nicholas

      Hooson, Emlyn

      Penhaligon, David

      Wood, Rt Hon Richard

      Hordern, Peter

      Percival, Ian

      Young, Sir G. (Ealing, Acton)

      Howe Rt Hon Sir Geoffrey

      Peyton, Rt Hon John

      Younger, Hon George

      Howell, David (Guildford)

      Pink, R. Bonner

      Howell, Ralph (North Norfolk)

      Powell, Rt Hon J. Enoch

      TELLERS FOR THE AYES:

      Howells, Geraint (Cardigan)

      Prior, Rt Hon James

      Mr. Russel Fairgrieve and

      Hurd, Douglas

      Raison, Timothy

      Mr. Spencer Le Marchan

      1432

      1433

      NOES

      Abse, Leo

      Fernyhough, Rt Hon E.

      Madden, Max

      Allaun, Frank

      Flannery, Martin

      Magee, Bryan

      Anderson, Donald

      Fletcher, Raymond (Ilkeston)

      Mahon, Simon

      Archer, Peter

      Fletcher, Ted (Darlington)

      Marks, Kenneth

      Armstrong, Ernest

      Foot, Rt Hon Michael

      Marquand, David

      Ashley, Jack

      Ford, Ben

      Marshall, Dr Edmund (Goole)

      Ashton, Joe

      Forrester, John

      Marshall, Jim (Leicester S)

      Atkins, Ronald (Preston N)

      Fowler, Gerald (The Wrekin)

      Mason, Rt Hon Roy

      Atkinson, Norman

      Fraser John (Lambeth, N'w'd)

      Meacher, Michael

      Bagier, Gordon A. T.

      Freeson, Reginald

      Mellish, Rt Hon Robert

      Barnett, Guy (Greenwich)

      Garrett, John (Norwich S)

      Mikardo, Ian

      Barnett, Rt Hon Joel

      Garrett, W. E. (Wallsend)

      Millan, Bruce

      Bates, Alf

      Gilbert Dr John

      Miller, Dr M. S. (E Kilbride)

      Benn, Rt Hon Anthony Wedgwood

      Ginsburg, David

      Miller, Mrs Millie (Ilford N)

      Bennett, Andrew (Stockport N)

      Golding, John

      Mitchell, R. C. (Soton, Itchen)

      Bidwell, Sydney

      Gould, Bryan

      Molloy, William

      Bishop, E. S.

      Gourlay, Harry

      Moonman, Eric

      Blenkinsop, Arthur

      Graham, Ted

      Morris, Alfred (Wythenshawe)

      Boardman, H.

      Grocott, Bruce

      Morris, Charles R. (Openshaw)

      Booth, Albert

      Hamilton, James (Bothwell)

      Morris, Rt Hon J. (Aberavon)

      Boothroyd, Miss Betty

      Hamilton, W. W. (Central Fife)

      Moyle, Roland

      Bottomley, Rt Hon Arthur

      Hamling William

      Mulley, Rt Hon Frederick

      Boyden, James (Bish Auck)

      Hardy, Peter

      Murray, Rt Hon Ronald King

      Bradley, Tom

      Harper, Joseph

      Newens, Stanley

      Bray, Dr Jeremy

      Harrison, Walter (Wakefield)

      Noble, Mike

      Brown, Hugh D. (Provan)

      Hattersley, Rt Hon Roy

      Oakes, Gordon

      Brown, Robert C. (Newcastle W)

      Hatton, Frank

      Ogden, Eric

      Brown, Ronald (Hackney S)

      Hayman, Mrs Helene

      O'Halloran, Michael

      Buchan, Norman

      Healey, Rt Hon Denis

      Orbach, Maurice

      Butler, Mrs Joyce (Wood Green)

      Heffer, Eric S.

      Orme, Rt Hon Stanley

      Callaghan, Jim (Middleton & P)

      Hooley, Frank

      Ovenden, John

      Campbell, Ian

      Horam, John

      Owen, Dr David

      Canavan, Dennis

      Howell, Denis (B'ham, Sm H)

      Padley, Walter

      Cant, R. B.

      Hoyle, Doug (Nelson)

      Palmer, Arthur

      Carmichael, Neil

      Huckfield, Les

      Park, George

      Carter, Ray

      Hughes, Mark (Durham)

      Parker, John

      Carter-Jones, Lewis

      Hughes, Robert (Aberdeen N)

      Parry, Robert

      Castle, Rt Hon Barbara

      Hughes, Roy (Newport)

      Pendry, Tom

      Clemitson, Ivor

      Hunter, Adam

      Perry, Ernest

      Cocks, Michael (Bristol S)

      Irving, Rt Hon s. (Dartford)

      Phipps, Dr Colin

      Cohen, Stanley

      Jackson, Colin (Brighouse)

      Prentice, Rt Hon Reg

      Coleman, Donald

      Jackson Miss Margaret (Lincoln)

      Prescott, John

      Colquhoun, Mrs Maureen

      Janner, Greville

      Price, C. (Lewisham W)

      Concannon, J. D.

      Jay, Rt Hon Douglas

      Price, William (Rugby)

      Conlan, Bernard

      Jeger, Mrs Lena

      Richardson, Miss Jo

      Cook, Robin F. (Edin C)

      Jenkins Hugh (Putney)

      Roberts, Albert (Normanton)

      Corbett, Robin

      Jenkins, Rt Hon Roy (Stechford)

      Roberts, Gwilym (Cannock)

      Cox, Thomas (Tooting)

      John Brynmor

      Robertson, John (Paisley)

      Craigen, J. M. (Maryhill)

      Roderick, Caerwyn

      Johnson, James (Hull West)

      Rodgers, George (Chorley)

      Cronin, John

      Jonnson, Walter (Derby S)

      Rodgers, William (Stockton)

      Crosland, Rt Hon Anthony

      Jones, Alec (Rhondda)

      Rooker, J. W.

      Cryer, Bob

      Jones, Barry (East Flint)

      Roper, John

      Cunningham, G. (Islington S)

      Jones, Dan (Burnley)

      Rose, Paul B.

      Cunningham, Dr J. (Witeh)

      Judd, Frank

      Ross, Rt Hon W. (Kilmarnock)

      Dalyell, Tam

      Kaufman, Gerald

      Rowlands, Ted

      Davidson, Arthur

      Kelley, Richard

      Ryman, John

      Davies, Bryan (Enfield N)

      Kerr, Russell

      Sandelson, Neville

      Davies, Denzil (Llanelli)

      Kilroy-Silk, Robert

      Sedgemore, Brian

      Davis, Ifor (Gower)

      Kinnock, Neil

      Selby, Harry

      Davis, Clinton (Hackney C)

      Lamble, David

      Shaw, Arnold (Ilford South)

      Deakins, Eric

      Lamborn, Harry

      Sheldon, Robert (Ashton-u-Lyne)

      Dean, Joseph (Leeds West)

      Lamond, James

      Shore, Rt Hon Peter

      de Freitas, Rt Hon Sir Geoffrey

      Latham, Arthur (Paddington)

      Short, Rt Hon E. (Newcastle C)

      Dell, Rt Hon Edmund

      Leadbitter, Ted

      Short, Mrs Renée (Wolv NE)

      Dempsey, James

      Lee, John

      Silkin, Rt Hon John (Deptford)

      Doig, Peter

      Lewis, Ron (Carlisle)

      Silkin, Rt Hon S. C. (Dulwich)

      Dormand, J. D.

      Lipton, Marcus

      Sillars, James

      Douglas-Mann, Bruce

      Litterick, Tom

      Silverman, Jullus

      Duff, A. E. P.

      Lomas, Kenneth

      Skinner, Dennis

      Dunn, James A.

      Loyden, Eddie

      Small, William

      Dunnett, Jack

      Luard, Evan

      Smith, John (N Lanarkshire)

      Dunwoody, Mrs Gwyneth

      Lyon, Alexander (York)

      Snape, Peter

      Eadie, Alex

      Lyons, Edward (Bradford W)

      Spearing, Nigel

      Edelman, Maurice

      McCartney, Hugh

      Spriggs, Leslie

      Edge, Geoff

      McElhone, Frank

      Stallard, A. W.

      Edwards, Robert (Wolv SE)

      MacFarquhar, Roderick

      Stewart, Rt Hon M. (Fulham)

      Ellis, Tom (Wrexham)

      McGuire, Michael (Ince)

      Stoddart, David

      English, Michael

      Mackenzie, Gregor

      Stott, Roger

      Evans, Ioan (Aberdare)

      Mackintosh, John P.

      Strang, Gavin

      Evans, John (Newton)

      Maclennan, Robert

      Strauss, Rt Hon G. R.

      Ewing, Harry (Stirling)

      McMillan, Tom (Glasgow C)

      Summerskill, Hon Dr Shirley

      Faulds, Andrew

      McNamara, Kevin

      Swain, Thomas

      1434

      1435

      Taylor, Mrs Ann (Bolton W)

      Walker, Harold (Doncaster)

      Williams, Rt Hon Shirley (Hertford)

      Thomas, Jeffrey (Abertillery)

      Walker, Terry (Kingswood)

      Williams, W. T. (Warringon)

      Thomas, Mike (Newcastle E)

      Ward, Michael

      Wilson, Alexander (Hamilton)

      Thomas, Ron (Bristol NW)

      Watkins, David

      Wilson, Rt Hon H. (Huyton)

      Thorne, Stan (Preston South)

      Watkinson, John

      Wilson, William (Coventry SE)

      Tierney, Sydney

      Weitzman, David

      Wise, Mrs Audrey

      Tinn, James

      Wellbeloved, James

      Woodall, Alec

      Tomlinson, John

      White, Frank R. (Bury)

      Wrigglesworth, Ian

      Torney, Tom

      White, James (Pollok)

      Young, David (Bolton E)

      Urwin, T. W.

      Whitehead, Phillip

      Varley, Rt Hon Eric G.

      Whitlock, William

      TELLERS FOR THE NOES:

      Wainwright, Edwin (Dearne V)

      Willey, Rt Hon Frederick

      Mr. John Ellis and

      Walden, Brian (B'ham, L'dyw'd)

      Williams, Alan (Swansea W)

      Mr. Laurie Pavitt

      Question accordingly negatived.
      Amendment proposed: No. 16, in page 4, line 1, after 'more', insert
      'or was in receipt of an invalidity pension or unemployed and in receipt of an attendance allowance'.—[Mr. Hannam.]
      Question put. That the amendment be made:—
      The House divided: Ayes 269, Noes 274.

      Division No. 123.]

      AYES

      [11.56 p.m.

      Adley, Robert

      Eyre, Reginald

      Jessel, Toby

      Aitken, Jonathan

      Fairbairn, Nicholas

      Johnston, Russell (Inverness)

      Alison, Michael

      Fairgrieve, Russell

      Jones Arthur (Daventry)

      Amery, Rt Hon Julian

      Farr, John

      Jopling, Michael

      Atkins, Rt Hon H. (Spelthorne)

      Fell, Anthony

      Joseph, Rt Hon Sir Keith

      Awdry, Daniel

      Finsberg Geoffrey

      Kaberry, Sir Donald

      Bain, Mrs Margaret

      Fisher, Sir Nigel

      Kellett-Bowman, Mrs Elaine

      Baker, Kenneth

      Fletcher-Cooke, Charles

      Kershaw, Anthony

      Banks, Robert

      Fookes, Miss Janet

      Kilfedder, James

      Beith, A. J.

      Fowler Norman (Sutton C'f'd)

      Kimball, Marcus

      Berry, Hon Anthony

      Fox, Marcus

      King, Evelyn (South Dorset)

      Biffen, John

      Fraser, Rt Hon H. (Stafford & St)

      King, Tom (Bridgwater)

      Biggs-Davison, John

      Freud, Clement

      Kitson, Sir Timothy

      Blaker, Peter

      Fry, Peter

      Knight, Mrs Jill

      Bowden, A. (Brighton, Kemptown)

      Galbraith, Hon. T. G. D.

      Lamont, Norman

      Boyson, Dr Rhodes (Brent)

      Gardiner, George (Reigate)

      Lane, David

      Bradford, Rev Robert

      Gardner, Edward (S Fylde)

      Langford-Holt, Sir John

      Braine, Sir Bernard

      Gilmour, Rt Hon Ian (Chesham)

      Latham, Michael (Melton)

      Brittan, Leon

      Gilmour, Sir John (East Fife)

      Lawrence, Ivan

      Brown, Sir Edward (Bath)

      Glyn, Dr Alan

      Lawson, Nigel

      Bryan, Sir Paul

      Goodhart, Philip

      Le Marchant, Spencer

      Buchanan-Smith, Alick

      Goodhew, Victor

      Lester, Jim (Beeston)

      Buck, Antony

      Goodlad, Alastair

      Lewis, Kenneth (Rutland)

      Budgen, Nick

      Gorst, John

      Loveridge, John

      Bulmer, Esmond

      Gow, Ian (Eastbourne)

      MacCormick, Iain

      Burden, F. A.

      Gower Sir Raymond (Barry)

      McCrindle, Robert

      Carlisle, Mark

      McCusker, H.

      Carson, John

      Grant, Anthony (Harrow C)

      Macfarlane, Neil

      Chalker, Mrs Lynda

      Gray, Hamish

      MacGregor, John

      Channon, Paul

      Grieve, Percy

      Macmillan, Rt Hon M. (Farnham)

      Churchill, W. S.

      Griffiths, Eldon

      McNair-Wilson, M. (Newbury)

      Clark, Alan (Plymouth, Sutton)

      Grimond, Rt Hon J.

      McNair-Wilson, P. (New Forest)

      Clark, William (Croydon S)

      Grist, Ian

      Marshall, Michael (Arundel)

      Clarke, Kenneth (Rushcliffe)

      Grylls, Michael

      Marten, Neil

      Clegg, Walter

      Hall, Sir John

      Mates, Michael

      Cockcroft, John

      Hall-Davis, A. G. F.

      Mather, Carol

      Cooke, Robert (Bristol W)

      Hamilton, Michael (Salisbury)

      Maude, Angus

      Cope, John

      Hampson, Dr Keith

      Mawby, Ray

      Cormack, Patrick

      Hannam, John

      Maxwell-Hyslop, Robin

      Corrie, John

      Harrison, Col Sir Harwood (Eye)

      Mayhew, Patrick

      Costain, A. P.

      Harvie Anderson, Rt Hon Miss

      Meyer, Sir Anthony

      Craig, Rt Hon W. (Belfast E)

      Hastings, Stephen

      Miller, Hal (Bromsgrove)

      Crawford, Douglas

      Havers, Sir Michael

      Miscampbell, Norman

      Critchley, Julian

      Hawkins, Paul

      Mitchell, David (Basingstoke)

      Crowder, F. P.

      Hayhoe Barney

      Moate, Roger

      Davies, Rt Hon J. (Knutsford)

      Henderson Douglas

      Molyneaux, James

      Dean, Paul (N Somerset)

      Hicks, Robert

      Monro, Hector

      Dodsworth, Geoffrey

      Higgins, Terence L.

      Montgomery, Fergus

      Douglas-Hamilton, Lord James

      Holland, Philip

      Moore, John (Croydon C)

      du Cann, Rt Hon Edward

      Hooson, Emlyn

      More, Jasper (Ludlow)

      Dunlop, John

      Hordern, Peter

      Morgan, Geraint

      Durant, Tony

      Howe Rt Hon Sir Geoffrey

      Morgan-Giles, Rear-Admiral

      Eden, Rt Hon Sir John

      Howell, David (Guildford)

      Morris, Michael (Northampton S)

      Edwards, Nicholas (Pembroke)

      Howell, Ralph (North Norfolk)

      Morrison, Charles (Devizes)

      Elliott, Sir William

      Howells, Geraint (Cardigan)

      Morrison, Hon Peter (Chester)

      Emery, Peter

      Hurd, Douglas

      Mudd, David

      Evans, Gwynfor (Carmarthen)

      James, David

      Neave, Airey

      Ewing, Mrs Winifred (Moray)

      Jenkin, Rt Hon P. (Wanst'd & W'df'd)

      Nelson, Anthony

      Neubert, Michael

      Ross, Stephen (Isle of Wight)

      Taylor, Teddy (Cathcart)

      Newton, Tony

      Ross, William (Londonderry)

      Tebbit, Norman

      Normanton, Tom

      Rossi, Hugh (Hornsey)

      Temple-Morris, Peter

      Nott, John

      Rost, Peter (SE Derbyshire)

      Thatcher, Rt Hon Margaret

      Onslow, Cranley

      Royle, Sir Anthony

      Thomas, Dafydd (Merioneth)

      Oppenheim, Mrs Sally

      Sainsbury, Tim

      Thomas, Rt Hon P. (Hendon S)

      Osborn, John

      Scott-Hopkins, James

      Thompson, George

      Page, John (Harrow West)

      Shaw, Giles (Pudsey)

      Thorpe, Rt Hon Jeremy (N Devon)

      Page, Rt Hon R. Graham (Crosby)

      Shaw, Michael (Scarborough)

      Townsend, Cyril D.

      Paisley, Rev Ian

      Shelton, William (Streatham)

      Tugendhat, Christopher

      Pardoe, John

      Shepherd, Colin

      van Straubenzee, W. R.

      Parkinson, Cecil

      Shersby, Michael

      Vaughan, Dr Gerard

      Pattie, Geoffrey

      Silvester, Fred

      Viggers, Peter

      Penhaligon, David

      Sims, Roger

      Wainwright, Richard (Colne V)

      Percival, Ian

      Sinclair, Sir George

      Wakeham, John

      Peyton, Rt Hon John

      Skeet, T. H. H.

      Walters, Dennis

      Pink, R. Bonner

      Smith, Cyril (Rochdale)

      Warren, Kenneth

      Powell, Rt Hon J. Enoch

      Smith, Dudley (Warwick)

      Watt, Hamish

      Prior, Rt Hon James

      Speed, Keith

      Weatherill, Bernard

      Raison, Timothy

      Spence, John

      Wells, John

      Rathbone, Tim

      Spicer, Jim (W Dorset)

      Welsh, Andrew

      Rawlinson, Rt Hon Sir Peter

      Spicer, Michael (S Worcester)

      Whitelaw, Rt Hon William

      Rees, Peter (Dover & Deal)

      Sproat, Iain

      Wiggin, Jerry

      Rees-Davies, W. R.

      Stainton, Keith

      Wigley, Dafydd

      Renton, Rt Hon Sir D. (Hunts)

      Stanbrook, Ivor

      Wilson, Gordon (Dundee E)

      Renton, Tim (Mid-Sussex)

      Stanley, John

      Winterton, Nicholas

      Rhys Williams, Sir Brandon

      Steel, David (Roxburgh)

      Wood, Rt Hon Richard

      Ridley, Hon Nicholas

      Steen, Anthony (Wavertree)

      Young, Sir G. (Ealing, Acton)

      Ridsdale, Julian

      Stewart, Donald (Western Isles)

      Younger, Hon George

      Rifkind, Malcolm

      Stewart, Ian (Hitchin)

      Rippon, Rt Hon Geoffrey

      Stokes, John

      TELLERS FOR THE AYES:

      Roberts, Michael (Cardiff NW)

      Stradling Thomas, J.

      Mr. Adam Butler and

      Roberts, Wyn (Conway)

      Taylor, R. (Croydon NW)

      Mr. W. Benyon

      NOES

      Abse, Leo

      Cryer, Bob

      Graham, Ted

      Allaun, Frank

      Cunningham, G. (Islington S)

      Grocott, Bruce

      Anderson, Donald

      Cunningham, Dr J. (Whiteh)

      Hamilton, James (Bothwell)

      Archer, Peter

      Dalyell, Tam

      Hamilton, W. W. (Central Fife)

      Armstrong, Ernest

      Davidson, Arthur

      Hamling, William

      Ashton, Joe

      Davies, Bryan (Enfield N)

      Hardy, Peter

      Atkins, Ronald (Preston N)

      Davies, Denzil (Llanelli)

      Harper, Joseph

      Atkinson, Norman

      Davies, Ifor (Gower)

      Harrison, Walter (Wakefield)

      Bagier, Gordon A. T.

      Davis, Clinton (Hackney C)

      Hattersley, Rt Hon Roy

      Barnett, Guy (Greenwich)

      Deakins, Eric

      Hatton, Frank

      Barnett, Rt Hon Joel

      Dean, Joseph (Leeds West)

      Hayman, Mrs Helene

      Bates, Alf

      de Freitas, Rt Hon Sir Geoffrey

      Healey, Rt Hon Denis

      Benn, Rt Hon Anthony Wedgwood

      Dell, Rt Hon Edmund

      Heffer, Eric S.

      Bennett, Andrew (Stockport N)

      Dempsey, James

      Hooley, Frank

      Bidwell, Sydney

      Doig, Peter

      Horam, John

      Bishop, E. S.

      Dormand, J. D.

      Howell, Denis (B'ham, Sm H)

      Blenkinsop, Arthur

      Douglas-Mann, Bruce

      Hoyle, Doug (Nelson)

      Boardman, H.

      Duffy, A. E. P.

      Huckfield, Les

      Booth, Albert

      Dunn, James A.

      Hughes, Mark (Durham)

      Boothroyd, Miss Betty

      Dunnett, Jack

      Hughes, Robert (Aberdeen N)

      Bottomley, Rt Hon Arthur

      Dunwoody, Mrs Gwyneth

      Hughes, Roy (Newport)

      Boyden, James (Bish Auck)

      Eadie, Alex

      Hunter, Adam

      Bradley, Tom

      Edelman, Maurice

      Irving, Rt Hon S. (Dartford)

      Bray, Dr Jeremy

      Edge, Geoff

      Jackson, Colin (Brighouse)

      Brown, Hugh D. (Provan)

      Edwards, Robert (Wolv SE)

      Jackson Miss Margaret (Lincoln)

      Brown, Robert C. (Newcastle W)

      Ellis, Tom (Wrexham)

      Janner, Greville

      Brown, Ronald (Hackney S)

      English, Michael

      Jay, Rt Hon Douglas

      Buchan, Norman

      Evans, Ioan (Aberdare)

      Jenkins, Hugh (Putney)

      Butler, Mrs Joyce (Wood Green)

      Evans, John (Newton)

      Jenkins, Rt Hon Roy (Stechford)

      Callaghan, Jim (Middleton & P)

      Ewing, Harry (Stirling)

      John Brynmor

      Campbell, Ian

      Faulds, Andrew

      Johnson, James (Hull West)

      Canavan, Dennis

      Fernyhough, Rt Hon E.

      Johnson, Walter (Derby S)

      Cant, R. B.

      Flannery, Martin

      Jones, Alec (Rhondda)

      Carmichael, Neil

      Fletcher, Raymond (Ilkeston)

      Jones, Barry (East Flint)

      Carter, Ray

      Fletcher, Ted (Darlington)

      Jones, Dan (Burnley)

      Castle, Rt Hon Barbara

      Foot, Rt Hon Michael

      Judd, Frank

      Clemitson, Ivor

      Ford, Ben

      Kaufman, Gerald

      Cocks, Michael (Bristol S)

      Forrester, John

      Kelley Richard

      Cohen, Stanley

      Fowler, Gerald (The Wrekin)

      Kerr, Russell

      Coleman, Donald

      Fraser John (Lambeth, N'w'd)

      Kilroy-Silk, Robert

      Colquhoun, Mrs Maureen

      Freeson, Reginald

      Kinnock, Neil

      Concannon, J. D.

      Garrett, John (Norwich S)

      Lambie, David

      Conlan, Bernard

      Garrett, W. E. (Wallsend)

      Lamborn, Harry

      Cook, Robin F. (Edin C)

      Gilbert Dr John

      Lamond, James

      Cox, Thomas (Tooting)

      Ginsburg, David

      Latham, Arthur (Paddington)

      Craigen, J. M. (Maryhill)

      Golding, John

      Leadbitter, Ted

      Cronin, John

      Gould, Bryan

      Lee, John

      Crosland, Rt Hon Anthony

      Gourlay, Harry

      Lewis, Ron (Carlisle)

      1438

      1439

      Lipton, Marcus

      Padley, Walter

      Stewart, Rt Hon M. (Fulham)

      Litterick, Tom

      Palmer, Arthur

      Stott, Roger

      Lomas, Kenneth

      Park, George

      Strang, Gavin

      Loyden, Eddie

      Parker, John

      Strauss, Rt Hon G. R.

      Luard, Evan

      Parry, Robert

      Summerskill, Hon Dr Shirley

      Lyon, Alexander (York)

      Pavitt, Laurie

      Swain, Thomas

      Lyons, Edward (Bradford W)

      Pendry, Tom

      Taylor, Mrs Ann (Bolton W)

      McCartney, Hugh

      Perry, Ernest

      Thomas, Jeffrey (Abertillery)

      McElhone, Frank

      Phipps, Dr Colin

      Thomas, Mike (Newcastle E)

      MacFarquhar, Roderick

      Prentice, Rt Hon Reg

      Thomas, Ron (Bristol NW)

      Mackenzie, Gregor

      Prescott, John

      Thorne, Stan (Preston South)

      Mackintosh, John P.

      Price, C. (Lewisham W)

      Tierney, Sydney

      Maclennan, Robert

      Price, William (Rugby)

      Tinn, James

      McMillan, Tom (Glasgow C)

      Richardson, Miss Jo

      Tomlinson, John

      McNamara, Kevin

      Roberts, Albert (Normanton)

      Torney, Tom

      Magee, Bryan

      Roberts, Gwilym (Cannock)

      Urwin, T. W.

      Mahon, Simon

      Robertson, John (Paisley)

      Varley, Rt Hon Eric G.

      Marks, Kenneth

      Roderick, Caerwyn

      Wainwright, Edwin (Dearne V)

      Marquand, David

      Rodgers, George (Chorley)

      Walden, Brian (B'ham, L'dyw'd)

      Marshall, Dr Edmund (Goole)

      Rodgers, William (Stockton)

      Walker, Harold (Doncaster)

      Marshall, Jim (Leicester S)

      Rooker, J. W.

      Walker, Terry (Kingswood)

      Mason, Rt Hon Roy

      Roper, John

      Ward, Michael

      Meacher, Michael

      Rose, Paul B.

      Watkins, David

      Mellish, Rt Hon Robert

      Ross, Rt Hon W. (Kilmarnock)

      Watkinson, John

      Mikardo, Ian

      Rowlands, Ted

      Weitzman, David

      Millan, Bruce

      Ryman, John

      Wellbeloved, James

      Miller, Dr M. S. (E Kilbride)

      Sandelson, Neville

      White, Frank R. (Bury)

      Miller, Mrs Millie (Ilford N)

      Sedgemore, Brian

      White, James (Pollok)

      Mitchell, R. C. (Soton, Itchen)

      Selby, Harry

      Whitehead, Phillip

      Molloy, William

      Shaw, Arnold (Ilford South)

      Whitlock, William

      Moonman, Eric

      Sheldon, Robert (Ashton-u-Lyne)

      Willey, Rt Hon Frederick

      Morris, Alfred (Wythenshawe)

      Shore, Rt Hon Peter

      Williams, Alan (Swansea W)

      Morris, Charles R. (Openshaw)

      Short, Rt Hon E. (Newcastle C)

      Williams, Rt Hon Shirley (Hertford)

      Morris, Rt Hon J. (Aberavon)

      Short, Mrs Renée (Wolv NE)

      Williams, W. T. (Warringon)

      Moyle, Roland

      Silkin, Rt Hon John (Deptford)

      Wilson, Alexander (Hamilton)

      Mulley, Rt Hon Frederick

      Silkin, Rt Hon S. C. (Dulwich)

      Wilson, Rt Hon H. (Huyton)

      Murray, Rt Hon Ronald King

      Sillars, James

      Wilson, William (Coventry SE)

      Newens, Stanley

      Silverman, Julius

      Woodall, Alec

      Noble, Mike

      Skinner, Dennis

      Wrigglesworth, Ian

      Oakes, Gordon

      Small, William

      Young, David (Bolton E)

      Ogden, Eric

      Smith, John (N Lanarkshire)

      O'Halloran, Michael

      Snape, Peter

      TELLERS FOR THE NOES:

      Orbach, Maurice

      Spearing, Nigel

      Mr. John Ellis and

      Orme, Rt Hon Stanley

      Spriggs, Leslie

      Mr. David Stoddart

      Owen, Dr David

      Stallard, A. W.

      Question accordingly negatived.
      It being after Twelve o'clock, Mr. DEPUTY SPEAKER proceeded, pursuant to order this day, successively to put the Questions on amendments moved by a Member of the Government of which notice had been given, relating to Clauses 1 to 18 and 50 and 56 and to Schedules 1 to 3 and 12.

    Clause 7

      EARLY SURRENDER OR CONVERSION OF LIFE POLICIES
      Amendment made:
      No. 21, in page 4, line 36, at end insert 'unless the body is wound up and the event is a surrender or conversion effected in connection with the winding-up'.—[Mr. Joel Barnett.]

    Clause 17

      SALES, ETC. AT UNDERVALUE OR OVERVALUE
      Amendments made:
      No. 29, in page 12, line 1, after 'or', insert:
      'subject to subsection (5A) below'.
      No. 30, in line 5, at end insert:
      '(5A) If, in a case in which under subsection (5) above the parent body is by notice required to make available for inspection any books, accounts, documents or records of a body of persons resident outside the United Kingdom over which the parent body has control, it appears to the Board, on the application of the parent body, that the circumstances are such that the requirement ought not to have effect, the Board shall direct that the parent body need not comply with the requirement.
      If, on such an application, the Board refuse to give a direction under this subsection, the parent body may, by notice in writing given to the Board within thirty days after the refusal, appeal to the Special Commissioners who, if satisfied that the requirement in question ought in the circumstances not to have effect, may determine accordingly.'
      No. 32, in line 7, after 'transaction', insert 'or transactions'.
      No. 33, in line 13, leave out 'any' and insert 'the relevant'.
      No. 34, in line 13, after 'persons', insert:
      '(that is to say, the trade in the course of which the transaction or transactions were effected)'.
      No. 36, in line 18, at end insert:
      'An inspector's authority for entering any premises under this subsection shall state the

      1441
      name of the inspector and the name of the body of persons carrying on the trade in connection with which the premises are used'.—[Mr. Joel Barnett.]

    Clause 18

      RELIEF FOR INCREASE IN STOCK VALUES IN FINANCIAL YEAR 1973
      Amendments made:
      No. 37, in page 14, line 20, leave out 'three' and insert 'six'.
      No. 38, in line 22, at end insert:
      '(6A) In any case where—

      (a) by virtue of subsection (2)(b) above, a company's 1973 accounting period consists of two or more accounting periods and the last of those periods (in this subsection referred to as "the relevant accounting period") coincides with a period of account, and

      (b) the company makes a claim for relief under this section, and

      (c) in the relevant accounting period the company incurs a loss in the trade referred to in subsection (1)(a) above,

      then, notwithstanding that the relevant accounting period is less than 12 months, in relation to so much of the loss referred to in paragraph (a) above as would not have been incurred if the claim for relief under this section had not been made, subsections (2) and (3) of section 177 of the Taxes Act (carry back of losses against profits of preceding accounting periods ending within a specified time) shall have effect as if the time specified in the said subsection (3) comprised—

      (i) so much of the 1973 accounting period as does not consist of the relevant accounting period; and

      (ii) the period which ends immediately before the 1973 accounting period and is either equal in length to that period or 12 months, whichever is the shorter'.—[Mr. Joel Barnett].

    Clause 50

      RECIPIENT BODIES REFERRED TO IN FINANCE ACT 1972, SECTION 119
      Amendment made:
      No. 113, in page 38, line 2, leave out '25th' and insert '26th'.—[Mr. Joel Barnett.]

    Schedule 2

      LIFE POLICIES, LIFE ANNUITIES AND CAPITAL REDEMPTION POLICIES
      Amendment made:
      No. 118, in page 42, line 33, at end insert:
      "or, if he so elects, to the Special Commissioners"
      Amendment proposed, No. 128 in page 50, line 26, at end insert
      "(and if the policy is one falling within subsection (2) of section 394, those results shall follow under section 8 of this Act, whether or not a gain would be treated as arising on the surrender)".—[Mr. Joel Barnett.]
      Question put, That the amendment be made:—
      The House proceeded to a Division:—
      Mr. Russell Kerr(seated and covered): On a point of order, Mr. Deputy Speaker. Is it in order that the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) should be bullied in the way that I have just seen him being bullied to try to persuade him to withdraw from this rather stupid action?
      Mr. John Ellis and Mr. David Stoddart were appointed Tellers for the Ayes but, no Member being willing to act as Teller for the Noes, Mr. Deputy Speaker declared that the Ayes had it.
      Amendment accordingly agreed to.
      Amendments made: No. 130, in page 50, line 35, leave out paragraph (b) and insert—
      "(b) either interest at a commercial rate is payable on the sum lent or the sum is lent to a full-time employee of the body issuing the policy for the purpose of assisting him in the purchase or improvement of a dwelling used or to be used as his only or main residence".
      No. 134, in page 51, line 12, at end insert—
      "18A.—(1) Where such an excess is mentioned in paragraph (a) or (b) of section 395(1) or paragraph (a) of section 397(1) would be

      1443
      treated as a gain arising in connection with a policy or contract and would form part of an individual's total income for the year of assessment in which the final year ends, a corresponding deficiency occurring at the end of the final year shall be allowable as a deduction from his total income for that year of assessment, so far as it does not exceed the total amount treated as a gain by virtue of section 395(1)(d) or 397(1)(c) on the previous happening of chargeable events.

      '11 & 12 Geo. 6. c. 38.

      The Companies Act 1948.

      In section 459(9)(c), the words from "subsection (4)" to "Act) of" and the word "other".'

      No. 295, in page 139, line 46, at end insert—

      1960 c. 22 (N.I.)

      The Companies Act (Northern Ireland) 1960.

      In section 403(9)(b), the words from "subsection (4)" to "Act) of" and the word "other".'

      No. 296, in page 142, line 8, leave out '25th' and insert '26th'.—[Mr. Joel Barnett.]
      Further consideration of the Bill, as amended, stood adjourned.
      Bill, as amended, to be further considered this day.

  VIOLENCE IN MARRIAGE
  Ordered,
  That Mr. Eric Moonman be discharged from the Select Committee on Violence in Marriage and that Mr. Ronald Atkins be added to the Committee.—[Mr. Walter Harrison.]

  WEALTH TAX
  Ordered,
  That Mrs. Ann Taylor be discharged from the Select Committee on Wealth Tax and that Mr. John Cartwright be added to the Committee.—[Mr. Walter Harrison.]

  WEALTH TAX
    ADJOURNMENT
    Motion made and Question proposed, That this House do now adjourn.—[Mr. James Hamilton.]

  WATER CHARGES (WALES)
  12.13 a.m.
  Mr. Roy Hughes rose—[Interruption.]
  Mr. Deputy Speaker (Mr. George Thomas): Order. Would hon. Members please leave in an orderly manner and not stand in front of the Table?
  Mr. Hughes: I welcome this opportunity to raise the question of the water
  (2) In this paragraph "final year" has the same meaning as in paragraph 9 above".—[Mr. Joel Barnett.]

  WATER CHARGES (WALES)
    Schedule 12

      REPEALS
      Amendments made: No. 294, in page 136, line 3, at end insert—
      charges levied by the Welsh Water Authority on the borough of Newport. The Water Act 1973 was the work of the last Conservative Government, who went out of office in February last year after the debacle of the three-day working week and the confrontation with the miners. They were in office for three years and eight months and their main legislation fell into three sections.
      First, there was the Industrial Relations Act, which has now been wiped off the statute book with hardly a whimper from the Opposition. Second, there was the European Economic Community legislation, which is now to be the subject of a referendum, three years later. Third, there was the reorganisation of local government, along with the reorganisation of water and health services.
      Last Sunday in the Sunday Telegraph, Mr. Patrick Hutber, the Economic Editor, said that the reorganisation was "disastrous",
      "… quite possibly the single worst official decision since the war, with effects which are as devastating in Whitehall and the Treasury as they are upon the ground."
      That is a formidable indictment from a paper which we have always recognised as—
      Mr. Michael Roberts: They are all Socialists.
      Mr. Hughes: Almost an official organ of the Conservative Party. But it appears that this view is now held by many Conservative Members.
      Mr. Michael Roberts: That is why they are all here to support the hon. Member.
      Mr. Hughes: Last Wednesday there was an Early Day Motion on the Notice Paper, signed by a number of hon. Members, headed by the hon. Member for Sudbury and Woodbridge (Mr. Stainton), which said:
      "That, in view of mounting disquiet regarding the structure, manning, salaries, efficiency and constantly increasing responsibilities of local government, this House appoints a Select Committee to appraise the situation before the recent reorganisation becomes ossified, and contemporaneous with the work of the Layfield Committee on local government finance."
      I put down an amendment to the motion, pointing out that Conservative Members were now regretting the undue haste with which the last Conservative Government pressed their local government reorganisation proposals in the Local Government Act 1972 and their failure to take note of the then Opposition's warning that the financial arrangements and the devolution of central government to the regions should be decided upon first. The Minister who will be replying to the debate was one of the active Labour Members pressing that point of view, but he got very little joy from the Government of the day.
      The criticism in the Sunday Telegraph is applicable to the borough of Newport. Before reorganisation, it was a reasonably efficient one-tier authority.
      Mr. Michael Roberts: Does the hon. Gentleman agree that one of the benefits of the reorganisation of local government, whatever criticisms can be levelled at it, is that the social services departments have been so well organised on a comprehensive basis that they have embraced the whole level of social service development and have proved in many areas—and I hope in Newport—a great success?
      Mr. Hughes: I assure the hon. Gentleman, without qualification, that the benefits to Newport of reorganisation are very thin on the ground.
      Mr. Michael Roberts: Will the hon. Gentleman answer on the matter of social services?
      Mr. Hughes: If the hon. Gentleman does not mind, I prefer to make my own speech.
      The action of the Conservative Government was the worst single thing to happen to Newport since the end of the war. In
      1446
      regard to water supplies, due to the initiative and imagination shown by the town council in generations past the town had provided itself with adequate supplies of water and with proper facilities for sewage disposal. We must not exaggerate these sorts of things because, after all, most of what we know now about sanitation, and so on, was known way back in the 1830s, in the time of Edwin Chadwick. Nevertheless, the Chief Executive of the Welsh Water Authority, Mr. H. H. Crann, in his circular letter of two weeks ago, pointed out that an inadequate level of services had been provided by many predecessor local authorities.
      It seems that the Welsh Water Authority is now trying to make up the leeway too quickly, and areas such as Newport, Cardiff and Swansea are having to pay for it. This is just not good enough. Some areas have suffered from years of neglect. There has been skimping on their rates. What I have always felt about rates is that they should provide value for money, not skimping on services, because when good amenities and facilities are provided for citizens and ratepayers, they in turn are prepared to pay.
      Newport at present is desperately trying to keep down the increase in its rates to 20 per cent., which is no more than is required to deal with inflation. But even if the borough and the Gwent County Council keep down the rate increases to that 20 per cent. figure, the effect of water and sewerage charges will be to increase rates by between 67 per cent. and 80 per cent.
      The water authority has almost doubled its expenditure on sewerage, from £18 million to £35 million, and its expenditure on water has risen by nearly a half, from £23 million to £33·3 million. What is more, it has equalised its charges over the whole of its area in one go. In other reorganisations, of course, the equalisation has been spread over a period of perhaps five or even seven years. This happened when the South Monmouthshire Water Board and the Gwent Water Board were created. But the combined effect of the water authority's action is that Newport's bill for sewerage is jumping from £890,000 this year to £2½ million next year. If the reorganisation had not taken place, the bill to Newport would be half of that latter figure.

      1447
      Perhaps the most evil principle of the 1973 Act, however, was that water was to be self-financing. That meant that a whole range of subsidies to the consumer on water and sewerage was withdrawn. That was despite intense opposition from the party which now forms the Government. My hon. Friend the Under-Secretary of State for Wales—the hon. Member for Merthyr Tydfil (Mr. Rowlands)—was prominent in that opposition. It was government by steamroller. We know that the driver of that steamroller has since been sacked. The authority is almost an autonomous body and the ratepayers are having to suffer accordingly. Newport, for instance, is the third largest town in Wales, but it has no representatives on the authority. That in itself is disgraceful.
      It should be said that rating is a bad basis for levying a charge. We know that rating valuation was transferred from the local authorities to the Inland Revenue in 1948 to even up the various areas, but vast anomalies remain. For example, a three-bedroomed house in Newport has a rateable value 50 per cent. greater than a comparable house in Merthyr Tydfil. I would have thought that a different formula needs to be worked out. If we are to have equalisation, let us have it, but let us not have the artificial loading of a few areas.
      To add insult to injury, Newport is now being called upon to contribute £17,000 per annum for 12 years as a contribution on a guaranteed basis for the completion of a sewerage scheme within the borough boundary. It seems that the Welsh Water Authority is having its cake and eating it. The borough should be treated as a single complex, but the authority is picking off small schemes within the borough which individually do not pass the test of viability. Under the Act the authority can claim extra rates. That is just not good enough.
      What should now be done? Firstly, there should be Government assistance to those areas which are worst hit. Schedule 3 of the Act provides for that to be done. Secondly, there should be equalisation spread out over a period from five to perhaps seven years. There are many precedents for that.
      Mr. Michael Roberts: Hear, hear.
      Mr. Hughes: I am glad to have the agreement of the hon. Gentleman. I know that the ratepayers of his area have suffered in just the same way as have the residents of Newport, from the legislation of the Government which he supported. Official reports have also recommended that the equalisation should be spread out over a period of years. Perhaps more fundamental, equalisation should be spread out over the country as a whole. We have a ridiculous situation in respect of Welsh water. As my hon. Friend the Member for Brecon and Radnor (Mr. Roderick) has pointed out, the reservoirs in the Elan Valley in Radnorshire are almost on top of the people's doorways, but the people of Birmingham, whom the reservoirs are supplying, are paying considerably less for their water than are those people living at the edge of the reservoirs. There could be nothing more ridiculous than that. I sympathise with my hon. Friend the Member for Brecon and Radnor. He has been to the fore in his advocacy on this problem.
      Mr. Michael Roberts: Where is he?
      Mr. Hughes: My right hon. and learned Friend the Secretary of State for Wales, at Question Time on Monday, pointed out in a reply to my right hon. Friend the Member for Anglesey (Mr. Hughes) that the committee under Sir Goronwy Daniel that was set up to investigate this matter would be reporting in the next few days. We await with interest that report, and we wait for the Minister to reply. I hope that he has something of interest to tell us. Areas like Newport have fared badly. Councillors and ratepayers are fed up. Revolt is in the air. There has been talk of a refusal to collect the water rates. I am not advocating such a course, but something needs to be done urgently.
      12.30 p.m.
      The Under-Secretary of State for Wales (Mr. Edward Rowlands): The importance of the subject of water charges in Wales generally as well as in individual communities like Newport can be measured by the number of times we have returned to the issue during the past year. There can be no doubt in the mind of any hon. Member that the increased water service charges introduced

      1449
      12 months ago and those which are now proposed for 1975–76 are without parallel in the history of the industry.
      The context in which we discuss the issue, in particular in relation to Newport, is one of a water industry which has never before been afflicted with so many severe handicaps. There are, first, the twin evils of inflation and high interest rates. If these were not enough, the effects of the Water Act 1973 have been the last straw.
      I will not bore my hon. Friend the Member for Newport (Mr. Hughes), who has mentioned my personal antipathy to the 1973 Act, by repeating our criticisms of the Act. They are well known and firmly on the record. I shall, however, mention one thing which has a firm bearing upon the position of the Welsh Water Authority and its decisions this year. I refer to the requirement that water authorities shall be self-supporting from charges. This has probably caused more difficulty than any other single factor. The removal of rate support from water and sewerage services had a sudden and dramatic effect, particularly on the rural areas whose need for subsidy from the rates was greatest. As a result, massive charge increases were visited on these areas in 1974–75.
      Mr. Michael Roberts: The hon. Member for Newport (Mr. Hughes) criticised the legislation which was introduced by the Conservative Government. The Under-Secretary has said that he is on record as having opposed that legislation. It is no secret that when my party was in power, Labour Members made it clear that when they were returned to office they were prepared to make changes and that they would reorganise the structure of local government which we had introduced. After one year in office, what changes does the Minister intend to introduce? If he intends to introduce no changes, I ask him not to continue saying merely that the Tories introduced the 1973 Act. If he has nothing constructive to say, let him stop criticising the constructive changes that we introduced.
      Mr. Rowlands: The Tories introduced very little in the way of constructive change. The hon. Gentleman's remarks were not exactly constructive. What we have been saying is that there were many
      1450
      aspects of the 1973 Act which caused great offence to hon. Members on both sides. Nevertheless, for better or worse, this is the system that the Government and the authority have to operate. We cannot change it overnight.
      We have had one great unheaval in administration. As my hon. Friend the Member for Newport said, we have had simultaneously an upheaval in the health service, in local government and in water. To throw the new administration of these services into further upheaval would obviously be a matter of considerable concern.
      My hon. Friend raised the particular problem of areas like Newport. When the Welsh Water Authority took over responsibility in April 1974, it faced a very difficult situation. It inherited estimates prepared by local authorities which were based on wide-ranging assumptions with great variations from place to place. At the same time, local government had been reorganised. The Welsh Water Authority thus had no practical choice but to impose its rates for 1974–75 based on the cost of supplying water in each division of the authority in 1973–74, plus a uniform percentage increase to cover increased costs. Added to that was the effect of losing the rate subsidy. Hon. Members will realise that those areas which most needed help were the ones which suffered the largest increase.
      I mention those matters because I am sure that my hon. Friend will not wish to consider merely the problems of his own community but will consider the position nationally as well as locally.
      My hon. Friend has described the situation facing Newport in 1975–76. Invidious comparisons can be and have been made. I must tell my hon. Friend of the present position, and of the present plight of many communities in Wales as a result of the 1973 Act. Let me contrast Newport's water charge for 1974–75 of 6·6p in the pound with that of Cardigan and Radnor and North Brecon at 20p in the pound, Anglesey at 18·8p in the pound, Merioneth at 18p in the pound, and, if I may be forgiven for mentioning my own area, Taf Fechan at 16·8p in the pound. Indeed, of the 17 water division areas, Newport, as part of Gwent division, had one of the lowest water rates of all in 1974–75.

      1451
      A similar pattern of charges can be found in relation to sewerage and general services. I assure my hon. Friend, therefore, that he is not alone in feeling strongly about the problem of water charges. Many other communities have suffered huge increases during the course of this financial year.
      I turn now to the future. My hon. Friend spoke of the burden on his community, and the possibility of Government assistance under one of the provisions of the Water Act. I remind him—this is in answer to the hon. Gentleman, also—that when we found the situation, as we did, arising from the 1973 Act, we acted swiftly to try to relieve the domestic ratepayer of the burden. In Wales in 1974–75 generous domestic relief was awarded, double that in England, to offset, among other things, the effect of water charges. All consumers in the whole of Wales benefited from that, but, ironically, those in urban areas were particularly well shielded from the increases of 1974–75. That was our immediate answer to the problem with which we were confronted.
      In some districts—the hon. Gentleman represents one of them—ratepayers had to pay less in 1974–75 in total general rates, including water and sewerage, than they did in 1973–74. For example, in Newport the total net demand on domestic consumers was reduced by 6·8p in the pound as a result of the change which we made for domestic rate relief. In Cardiff the total net demand was reduced by 7·1p in the pound. That was, I am sorry to say, in sharp contrast to what happened in other communities in 1974–75.
      I come now to the problem for 1975–76. The Welsh Water Authority faces an even more difficult situation. My hon. Friend tended to suggest that the authority has had something of a spending spree. This has been put to us also by letters from Newport and other places. I should put the record straight.
      There was a deficit of £5 million on 1974–75, which had to be made good, as well as the need to avoid a similar deficit for 1975–76. Loan charges and inflation accounted for a further increase of £15½ million. Quite clearly these increases could not be passed on to the communi-p1452
      ties which had borne the heaviest burden in 1974–75. These increased revenue requirements are firmly in the class of "inescapable commitments".
      The Welsh Water Authority has not been given carte blanche for new capital spending. Its programmes for 1975–76 are generally confined to priority works required for reasons of public health and for new housing, as well as to completing schemes started by its predecessors. Indeed, I have frequently had to explain to hon. Members why schemes in their own constituencies cannot go ahead.
      I understand and, indeed share, the dismay expressed by my hon. Friend about the steep rise in charges in Newport and other urban areas. I respect the force of the argument that it might have been preferrable to phase the move towards equalisation. But each authority has to deal with the circumstances in which it finds itself. My hon. Friend referred to the problems of my hon. Friend the Member for Brecon and Radnor (Mr. Roderick), and his constituency has certainly faced massive problems over water charges. If the Welsh Water Authority had not chosen to equalise it would have had to raise heavier charges upon those communities which bore the brunt of the increase last year. It did not consider that was fair, or equitable, but that was part and parcel of the principle of the 1974 Act. Similarly, if a phased introduction of equalisation had been made, this, too, would have maintained a considerable discrepancy in rates of water charges between community and community.
      The authority faced the nightmare dilemma that if charges were not increased in an area such as Newport, other areas would have to suffer more than they have suffered in 1974–75. We believe that the authority was right to abandon the system adopted in 1974–75. It decided to do so and the decision was its own, taken under the powers given to it under the 1973 Act. It therefore moved to full equalisation in one stage.
      My hon. Friend has advanced two main arguments for phasing equalisation over a number of years. First, he suggested that the authority should have followed the advice of the recent Jukes

      1453
      Report, which advised caution in this matter. The Jukes Report was advisory, and regional water authorities were not bound to follow it
      The question for the authority was whether an equalised system would be more—
      The Question having been proposed after Ten o'clock on Tuesday evening and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
      Adjourned at seventeen minutes to One o'clock.

EDUCATION AND SCIENCE
  Polytechnics and Further Education Colleges
  Polytechnics and Further Education Colleges
  Social Science Research Council
  Social Science Research Council
  Comprehensive Education (Kent)
  Comprehensive Education (Kent)
  Hereford
  Hereford
  Student Grants
  Student Grants
  Dyslexic Children (Bullock Report)
  Dyslexic Children (Bullock Report)
  North-West Region
  North-West Region
  Teacher Training (West Midlands)
  Teacher Training (West Midlands)
  Carley Hill School, Sunderland
  Carley Hill School, Sunderland
  School Transport
  School Transport
  Higher Education
  Higher Education
  Reading Ability (Bullock Report)
  Reading Ability (Bullock Report)
  School Leaving Age
  School Leaving Age
  Direct Grant Schools
  Direct Grant Schools
  Educational Disadvantage
  Educational Disadvantage
  School Books and Materials
  School Books and Materials
  Comprehensive Education
  Comprehensive Education
  Teachers of the Deaf
  Teachers of the Deaf
  The Arts
  The Arts
  Needy Children (Clothing)
  Needy Children (Clothing)
  School Building Programme
  School Building Programme
  Adult Education (Russell Report)
  Adult Education (Russell Report)
  Teacher Supply
  Teacher Supply
  School Meals (Expenditure)
  School Meals (Expenditure)
  Private Education
  Private Education
  University Teachers (Pay)
  University Teachers (Pay)
  Single-sex Secondary Colleges
  Single-sex Secondary Colleges
  Medical School Places
  Medical School Places
  National Portrait Gallery
  National Portrait Gallery
  Comprehensive Schools (Warrington)
  Comprehensive Schools (Warrington)
  School Management and Government
  School Management and Government
  Moss Bank C. of E. Primary School
  Moss Bank C. of E. Primary School
  Theatre Museum and Somerset House
  Theatre Museum and Somerset House
  Education (Monitoring of Performance)
  Education (Monitoring of Performance)
  Free Schools
  Free Schools
  Superannuation Act 1946 (Wartime Service)
  Superannuation Act 1946 (Wartime Service)
  Technician and Business Education
  Technician and Business Education
  Further Education (Curricula)
  Further Education (Curricula)
  Craftsmen
  Craftsmen
  Youth Service Buildings
  Youth Service Buildings
  European Architectural Heritage Year
  European Architectural Heritage Year
  Museums
  Museums
  Schools (Social and Recreational Activities)
  Schools (Social and Recreational Activities)
  Public Lending Right
  Public Lending Right
DEFENCE
  YF-16 Aircraft
  YF-16 Aircraft
  Motorways (Southern England)
  Motorways (Southern England)
  North Sea Rigs
  North Sea Rigs
  Tidworth and Wroughton Hospitals
  Tidworth and Wroughton Hospitals
  Departmental Land (Scotland)
  Departmental Land (Scotland)
HOME DEPARTMENT
  Animal Experiments
  Animal Experiments
  Community Programme
  Community Programme
  Immigration (Indian Subcontinent)
  Immigration (Indian Subcontinent)
  Repatriation
  Repatriation
  SECRETARY OF STATE FOR INDUSTRY
  SECRETARY OF STATE FOR INDUSTRY
  PRIME MINISTER (VISITS)
  PRIME MINISTER (VISITS)
  CBI (MEETINGS)
  CBI (MEETINGS)
  INDUSTRY BILL
  INDUSTRY BILL
  SOCIAL CONTRACT
  SOCIAL CONTRACT
  MIDDLE EAST (PEACE TALKS)
  MIDDLE EAST (PEACE TALKS)
  FOREIGN INVESTMENT
  FOREIGN INVESTMENT
  PRIME MINISTER (OFFICIAL OVERSEAS VISIT)
  PRIME MINISTER (OFFICIAL OVERSEAS VISIT)
  WOMEN (EQUALITY OF OPPORTUNITY)
  WOMEN (EQUALITY OF OPPORTUNITY)
  NEW ZEALAND PRIME MINISTER (TALKS)
  NEW ZEALAND PRIME MINISTER (TALKS)
  PRESS (ROYAL COMMISSION)
  PRESS (ROYAL COMMISSION)
AGRICULTURE, FISHERIES AND FOOD
  Wine Standards Board (Consultations)
  Wine Standards Board (Consultations)
  Pig Producers
  Pig Producers
  Eggs (Imports)
  Eggs (Imports)
OVERSEAS DEVELOPMENT
  Overseas Development Agency Staff, Tolworth
  Overseas Development Agency Staff, Tolworth
  EEC MEMBERSHIP (REFERENDUM)
  EEC MEMBERSHIP (REFERENDUM)
EMPLOYMENT
  Social Contract
  Social Contract
  Retail Price Index
  Retail Price Index
  Unfair Dismissal (Reinstatements)
  Unfair Dismissal (Reinstatements)
  Court Line
  Court Line
  EEC Social Fund (Scotland)
  EEC Social Fund (Scotland)
  EEC Surveys
  EEC Surveys
SOCIAL SERVICES
  Child Minders
  Child Minders
  Smoking (Hospitals and Clinics)
  Smoking (Hospitals and Clinics)
  Pensions (Over-80s)
  Pensions (Over-80s)
  Huntington's Chorea
  Huntington's Chorea
  Radiographers
  Radiographers
  Hospital Waiting Lists
  Hospital Waiting Lists
  Tidworth Army Hospital
  Tidworth Army Hospital
  Nottingham City Hospital
  Nottingham City Hospital
  Highbury Hospital, Nottingham
  Highbury Hospital, Nottingham
TRADE
  USSR (Loan)
  USSR (Loan)
  Tourism
  Tourism
  Egg and Poultry Imports
  Egg and Poultry Imports
  Fishing Vessels
  Fishing Vessels
  Scottish Exports
  Scottish Exports
  Investment Overseas
  Investment Overseas
  Public Lending Right
  Public Lending Right
  Crestwood Properties Limited (Mortgage Register)
  Crestwood Properties Limited (Mortgage Register)
CIVIL SERVICE
  Opposition Parties (Government Finance)
  Opposition Parties (Government Finance)
  Public Service Pensions
  Public Service Pensions
ENERGY
  Household Appliances
  Household Appliances
  Coal Prices
  Coal Prices
ENVIRONMENT
  Architecture (Rural Housing)
  Architecture (Rural Housing)
  Odours
  Odours
  Railways (Fares and Freight Rates)
  Railways (Fares and Freight Rates)
  Railways (Staff Wages and Salaries)
  Railways (Staff Wages and Salaries)
  Water Rates
  Water Rates
  Water and Sewerage
  Water and Sewerage
  Roads
  Roads
  Motorways (Overhead Lighting)
  Motorways (Overhead Lighting)
  Transport Authorities and Executives
  Transport Authorities and Executives
  Building Industry
  Building Industry
  Local Government Officers
  Local Government Officers
  Motorways (Visibility Meters)
  Motorways (Visibility Meters)
  Sunday Markets
  Sunday Markets
  Building Design (Matthew-Skillington Report)
  Building Design (Matthew-Skillington Report)
  Construction Industry (Consultative Arrangements)
  Construction Industry (Consultative Arrangements)
  Speed Limits
  Speed Limits
  Tree Planting
  Tree Planting
  Cyanide-Contaminated Waste (Dumping)
  Cyanide-Contaminated Waste (Dumping)
FOREIGN AND COMMONWEALTH AFFAIRS
  Military Alliances
  Military Alliances
  North-Sea Rigs
  North-Sea Rigs
INDUSTRY
  Post Office Mail
  Post Office Mail
  Paper
  Paper
  Kirkby and Meriden Co-operatives
  Kirkby and Meriden Co-operatives
  Scotland
  Scotland
  Offshore Techniques (Research)
  Offshore Techniques (Research)
  Business Statistics (Forms JA 520)
  Business Statistics (Forms JA 520)
  Knowsley Industrial Estate
  Knowsley Industrial Estate
NATIONAL FINANCE
  Wives' Allowances
  Wives' Allowances
  EEC Budget
  EEC Budget
  Husband's Allowance
  Husband's Allowance
  Taxation (Oilfields)
  Taxation (Oilfields)
  Company Dividends
  Company Dividends
  Income Tax Yield
  Income Tax Yield
  Stock Relief (Claims)
  Stock Relief (Claims)
NORTHERN IRELAND
  Rathlin Island
  Rathlin Island
  Rents and Rates Strike
  Rents and Rates Strike
  Electricity and Gas Supplies (Meter Reading)
  Electricity and Gas Supplies (Meter Reading)
  Rents (Housing Executive Houses)
  Rents (Housing Executive Houses)
PRICES AND CONSUMER PROTECTION
  Mail Order Firms
  Mail Order Firms
  Electric Panel Radiators
  Electric Panel Radiators
SCOTLAND
  Barlinnie Prison
  Barlinnie Prison
  Courts (Glasgow)
  Courts (Glasgow)
  Road Building
  Road Building
  Occupational Centres
  Occupational Centres
  Haemophiliacs (Drugs)
  Haemophiliacs (Drugs)
  Burgh and County Council Records
  Burgh and County Council Records
  Mountain Rescue Teams
  Mountain Rescue Teams
  Cremation
  Cremation
  Herring Catch (West Coast)
  Herring Catch (West Coast)
  Government Costs
  Government Costs
  Local Government (Personnel Costs)
  Local Government (Personnel Costs)
WALES
  Llangollen Bypass
  Llangollen Bypass
  Pig Producers
  Pig Producers
  Pneumoconiosis
  Pneumoconiosis
  Welsh Assembly
  Welsh Assembly
  Radiographers
  Radiographers
  Employment (Factories)
  Employment (Factories)

Preamble
The House met at half past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Rochester.

LORD ARMSTRONG OF SANDERSTEAD
The Right Honourable Sir William Armstrong, G.C.B., M.V.O., having been created Baron Armstrong of Sanderstead, of the City of Westminster, for life—Was, in his robes, introduced between the Lord O'Brien of Lothbury and the Lord Trend.
The Duke of Grafton—Took the Oath.

CONTROL OF GAMING
2.47 p.m.
Lord NEWALL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government why foreigners are permitted to own gaming operations in the United Kingdom so that the benefits accrue abroad rather than to this country.
Lord WELLS-PESTELL: My Lords, Her Majesty's Government do not think it practicable to impose such restrictions on gaming as are implied in this Question. It is, however, important that effective control of gaming remains firmly in the country, and the Gaming Board for Great Britain exercises its responsibilities under the Gaming Act 1968 to this end.
Lord NEWALL: My Lords, I thank the noble Lord for that Answer. May I further ask whether he is aware that in many cases licences have been withdrawn from clubs with foreign interests, particularly American ones, and is he therefore sure that the Gaming Board has adequate powers to deal with situations like this?
Lord WELLS-PESTELL: My Lords, my information is that the Gaming Board does have sufficient powers to deal with the situation.
Lord BROCKWAY: My Lords, is the noble Lord aware that some of these gaming operations are part of one of the most unscrupulous multi-national rackets in the whole of the world, exploiting tourist resorts in many parts? Will the Board look carefully at its finances to be sure that we are securing the correct revenue from them?
Lord WELLS-PESTELL: My Lords, the Government's view is that the gaming industry must be treated on a par with the rest of industry, which increasingly operates on an international basis. We shall take into account what the noble Lord has said, and if it is necessary to pursue inquiries along the lines he suggests, no doubt they will be pursued.
Earl COWLEY: My Lords, would the noble Lord say what criteria the Gaming Board uses in deciding whether foreign money is acceptable in our gaming clubs?
Several Noble Lords: Answer!
Lord WELLS-PESTELL: My Lords, I am sorry but I did not follow the noble Earl's question.
Earl COWLEY: My Lords, I asked whether the criteria used by the Gaming Board are laid down by Statute when deciding whether foreign money is acceptable in our gaming clubs.
Lord WELLS-PESTELL: My Lords, my understanding of the situation is that the authority is set out in the Gaming Act 1968. I cannot give the noble Earl details for the simple reason that I do not have them, but I understand that this is where the authority is to be found.
The Earl of KIMBERLEY: My Lords, can Her Majesty's Government state categorically that British applicants for gaming licences are given priority, and if not, why not?
Lord WELLS-PESTELL: My Lords, I have no information at all with regard to that, but if this is so, it is a matter that ought to be looked into and the Gaming Board will, I am sure, do so.

RICHMOND TERRACE, WHITEHALL
Lord PANNELL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what future plans they have for Richmond Buildings in Richmond Terrace, Whitehall; whether they intend to develop or demolish them; and what future use they propose for the site in view of Sir Leslie Martin's scheme.
The PARLIAMENTARY UNDER-SECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness Birk): My Lords, in his plan for Whitehall Sir Leslie Martin proposed that Richmond Terrace should be demolished. Later, following a public inquiry, the Willis Report recommended that the Terrace should not be demolished and that a satisfactory scheme for the re-development of this particular area of Whitehall could be achieved by preserving the facades. The Government endorse this recommendation. My right honourable friend the Secretary of State for the Environment hopes to commission shortly a study designed to examine and cost redevelopment options consistent with the preservation of the facades.
Lord PANNELL: My Lords, is the Minister aware that when I was the Minister concerned in the reception of Sir Leslie's scheme ten years ago, certain decisions were taken, but that all that seems to have happened since has been the Willis Inquiry and a tedious degree of procrastination? Is my noble friend aware that I visited these premises last week, that they are an inglorious slum and that there is nothing to be done about them except to go back to the original wise decision, taken under my Ministry, to have them demolished?
Baroness BIRK: My Lords, while not for a moment questioning my noble friend's wisdom, which I know to be very great, I should point out that nowadays it is recognised that a policy of conservation coupled with sensitive, gradual and small-scale renewal is much more fitting for an area of such historic importance as Whitehall, which is now a conservation area. In reply to my noble friend's
1190
second point, Richmond Terrace was used as offices until 1973, when it was considered unsafe. It has been empty since then and it is in order to carry on the scheme proposed in the Willis Report that the Secretary of State for the Environment is setting up a study.
Lord PANNELL: My Lords, is my noble friend firmly of the opinion—which I am not—that the Minister for the Environment knows the difference between conservation and preservation?
Viscount ST. DAVIDS: My Lords, is the noble Baroness aware that I am very unhappy to know that I was bom in a slum—the building in question—but that I am very glad to hear that at least the facade is to be preserved?

EEC: EGG IMPORTS
2.56 p.m.
Earl FERRERS: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what action they intend to take to prevent the import of subsidised eggs from the Continent.
Lord STRABOLGI: My Lords, the Government could justify seeking to control the import of eggs from other member-States of the Community only if there were clear evidence that such imports were at the heart of our industry's problems.
Earl FERRERS: My Lords, is the noble Lord aware that the French egg producers are receiving an interest-free loan from their Government so that they are able to export eggs to this country below the cost of production, and that this is therefore affecting our egg producers? Does this not contravene Article 46 of the Treaty of Rome, and is it not possible to take action under Article 136 of the Treaty of Accession?
Lord STRABOLGI: My Lords with regard to the first part of the noble Earl's supplementary question, the French Government loan—in the form of launching aid for a producer funded and organised price equalisation fund—is one of a number of national aids being considered by the Commission under Article 93 of the

1191
Treaty of Rome. With regard to the question which the noble Earl asked about Article 136 of the Treaty of Accession, before one could consider invoking the protection clauses of either the Treaty of Rome or the Treaty of Accession, it would be necessary to produce hard evidence that imports were at the heart of the United Kingdom's industry's problems. There is at present no conclusive evidence, but if the industry could produce such evidence the Government would, of course, examine it.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, has the noble Lord considered the evidence in the Press that some of these French eggs are marked with the British stamp and a date later than that on which they are imported? Whether or not that is at the heart of our industry's problems, can it not be stopped as a Common Law cheat?
Lord STRABOLGI: My Lords, we certainly did find on 19th February the first case of wrong date stamping on a consignment of French eggs. The boxes in question were returned to France for restamping and the French authorities have been asked to take action to try to avoid a recurrence. Otherwise, we have found only minor infringements. Any irregularities will be followed up promptly and firmly.
Lord SHINWELL: My Lords, is my noble friend aware that the importing of these eggs from the Continent is not a matter for ribaldry, but is a very serious matter indeed? Could he say whether, under the Treaty of Rome and its various provisions, we are bound to accept these eggs whether they are good or bad? Would he also be good enough to say whether the observations which recently came from another quarter of your Lordships' House, mean that there is some fading away from the proposition of remaining in the Treaty of Rome because of this matter of eggs?
Lord STRABOLGI: My Lords, the Treaty of Rome does not allow us to accept eggs with wrong date stamps, even from France.
Lord SANDYS: My Lords, while recognising the complexity of this issue, have the Government considered the necessity of taking into account the
1192
recently published Swan Report on toxicity of foodstuffs, and should the import of French and other eggs be considered in the light of that Report?
Lord STRABOLGI: My Lords, I assume that the noble Lord is referring to antibiotics in egg production. The Community rules are similar to our own, and it is therefore unlikely that imported eggs will have been produced with the aid of antibiotics not permitted here.
Lord SHINWELL: My Lords, would my noble friend make a submission to his right honourable friend the Prime Minister that, in making up his mind about the question associated with the Referendum, instead of all the palaver and fine words the Referendum question should consist of whether or not we should accept these eggs?
Baroness SUMMERSKILL: My Lords, could my noble friend say whether the price of the eggs was reduced after they were redated, or whether they were sold to the unsuspecting housewife?
Lord STRABOLGI: My Lords, I am afraid I do not know what happened once they got back to France.
Earl FERRERS: My Lords, am I to understand the noble Lord seriously to say that the eggs were sent back to be restamped and, if so, did they come back to this country again?
Lord STRABOLGI: No, my Lords, what I said was that they were sent back so that we could get a consignment with a correct stamp on it.
Lord WIGG: My Lords, would my noble friend be good enough to say whether there is a special branch of the Foreign Office dealing with the question of eggs, good or bad?
Lord STRABOLGI: No, my Lords, not yet.
Lord HOY: My Lords, may I ask my noble friend what is the total number and total value of these eggs coming in, and what proportion they represent of the total egg consumption in this country?
Lord STRABOLGI: My Lords, I think we must put this matter into perspective. Imports are estimated to have

1193
been only 70,000 boxes, which is 2 per cent. of our supply, and this is more than 30,000 fewer boxes than in January 1974, when noble Lords opposite were in Government.
Lord SLATER: My Lords, is my noble friend aware that there is no complexity attached to the supplementary question asked from the other side on this issue? Is it not correct to state that the time is fast approaching when this island will be covered with foreigners coming from the EEC countries and taking up forms of labour which have not been overtaken by the unemployment situation?
Lord STRABOLGI: My Lords, I suggest that that is quite a different question concerning a different Government Department.
Viscount ST. DAVIDS: My Lords, if we may set aside the question of bad eggs, may I ask what rights of complaint we would have, if we left the Common Market organisation, against the breaches of price and other troubles that have been pointed out?
Lord STRABOLGI: My Lords, I suggest that that question goes rather wider than the original Question.
The LORD PRIVY SEAL (Lord Shepherd): My Lords, may I rather plaintively suggest that we bring Question Time to an end and move to the next Business?

HOUSE OF COMMONS DISQUALIFICATION BILL [H.L.]
3.1 p.m.
The LORD CHANCELLOR (Lord Elwyn-Jones): My Lords, I beg to move that this Bill be now read a second time. Like the three Bills which follow, it is a pure consolidation Bill and, subject to your Lordships' approval, it will, in the usual way, be referred to the Joint Committee on Consolidation Bills for consideration. It consolidates the House of Commons Disqualification Act 1957 and certain other relevant enactments relating to disqualification for the House of Commons. My Lords, I beg to move.
Moved, That the Bill be now read 2a.— (The Lord Chancellor.)
On Question, Bill read 2a, and committed to the Joint Committee on Consolidation Bills.

NORTHERN IRELAND ASSEMBLY DISQUALIFICATION BILL [H.L.]
The LORD CHANCELLOR: My Lords, I beg to move that this Bill be now read a second time. It consolidates that part of the House of Commons Disqualification Act 1957 which deals with disqualification for the Northern Ireland Assembly and certain other relevent enactments. My Lords, I beg to move.
Moved, That the Bill be now read 2a. — (The Lord Chancellor.)
On Question, Bill read 2a, and committed to the Joint Committee on Consolidation Bills.

MINISTERS OF THE CROWN BILL [H.L.]
The LORD CHANCELLOR: My Lords, I beg to move that this Bill be now read a second time. It consolidates the Ministers of the Crown (Transfer of Functions) Act 1946, the Ministers of the Crown Act 1974, and certain other relevant enactments. My Lords, I beg to move.
Moved, That the Bill be now read 2a. —(The Lord Chancellor.)
On Question, Bill read 2a, and committed to the Joint Committee on Consolidation Bills.

MINISTERIAL AND OTHER SALARIES BILL [H.L.]
The LORD CHANCELLOR: My Lords, I beg to move that this Bill be now read a second time. It consolidates the Ministerial and Other Salaries Act 1972 and the Ministers of the Crown Act 1974. My Lords, I beg to move.
Moved, That the Bill be now read 2a. —(The Lord Chancellor.)
On Question, Bill read 2a, and committed to the Joint Committee on Consolidation Bills.

OFFSHORE PETROLEUM DEVELOPMENT (SCOTLAND) BILL
3.3 p.m.
The MINISTER of STATE, SCOTTISH OFFICE (Lord Hughes): My Lords, I beg to move that the Commons' Reasons for disagreeing to certain of the Lords Amendments be now considered.
Moved, That the Commons' Reasons for disagreeing to certain of the Lords Amendments be now considered.—(Lord Hughes.)
Lord CRAIGTON: My Lords, I should like to make one brief comment on the second of the Amendments—
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, perhaps my noble friend would wait until the Amendments are considered. What we are now considering, I believe, is whether they should be considered.
The LORD CHANCELLOR: My Lords, perhaps I had better put the Question again. The Question is, That the Commons' Reasons for disagreeing to certain of the Lords Amendments be now considered?
On Question, Motion agreed to.
Lord HENLEY: My Lords, the noble and learned Lord is proceeding too quickly. The noble Lord, Lord Craigton, wished to make an interjection on the Question, Whether they should be considered?
Several Noble Lords: Did he?
Lord HENLEY: My Lords, he attempted to do so and was stopped in his tracks. I hope that the noble and learned Lord will put this Question again, because I think that the noble Lord, Lord Craigton, has something useful to say.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, my noble friend will correct me if I am wrong, but I thought he wanted to make a comment on the Commons' Reasons. If that is the case the appropriate moment to do it would be when we consider whether we should assent to the Reasons or dissent from them. If he wished to discuss the Question, whether the Commons' Amendments should be considered now,
1196
he would have been in order, and in that case I can only apologise for interrupting him.
Lord CRAIGTON: My Lords, my noble and learned friend is quite right; I just wanted to say something about the Amendments.
COMMONS' REASONS FOR DISAGREEING TO CERTAIN OF THE LORDS AMENDMENTS
[References are to Bill (50) as first printed by the Lords. Commons Reasons are printed in italics.]

LORDS AMENDMENT
[Nos. 1 and 2]
Clause 1, page 1, line 8, leave out from "for" to "the" in line 11 and insert "purposes relating to exploration for or exploitation of offshore petroleum in".
The Commons disagreed to this Amendment for the following Reason:—
Because the Amendment would restrict excessively the purposes for which land may be acquired under the Bill.
Lord HUGHES: My Lords, I hesitate to enter into what appears to be a family quarrel. I beg to move that the House doth not insist on their Amendment No. 1 to which the Commons have disagreed for the Reason No. 2,
"Because the Amendment would restrict excessively the purposes for which land may be acquired under the Bill."
I do not wish to go into too much detail on this Amendment, since the point it raises has been very fully debated on a number of occasions both in your Lordships' House and in another place. The effect of the Amendment would be to restrict the purposes for which land may be acquired under the Bill to those specified in Clause 1(2); that is, platform sites, pipelines, terminals and infrastructure. It would similarly restrict the application of other provisions of the Bill relating to the carrying out of works, the making of loans or guarantees and reinstatement. Such a definition of purposes would be too limiting. As I explained to your Lordships on Report stage when this Amendment was debated, there may well be occasions in the future when the Government would wish to facilitate oil operations by acquiring land and making it available for other purposes relating to the exploration for or the exploitation of offshore petroleum, but to which no particular degree of urgency of acquisition attaches.

1197
At Report stage in the House on 18th February I was asked why the wording of paragraphs (a), (b), (c) and (d) of Clause 1(2) do not cover the examples I gave. Let us take, for example, an off-shore oil service or supply base to be located at a port or harbour in Scotland. The purposes of such a facility would be to keep offshore drilling operations, whether for exploration or production, supplied with their material needs. Clause 1(2)(a) covers only a site or facilities for the construction or assembly of platforms or installation. A supply base does not carry out that function, and therefore the powers of land acquisition would not be available under the terms of the Amendment. Similarly, testing or research facilities for underwater equipment are not comprehended within Clause 1(2)(a) because they are not construction or assembly. It was suggested in one of our earlier debates that the wording of Clause 1(2)(d) with its reference to:
"… services or facilities … for … development … of land …"
might cover a service base. What Clause 1(2)(d) is meant to cover in this sense is services by way of roads, sewers, et cetera, for the development or use of land. It would not cover the provision of a base whose function is to give service not in relation to land but in relation to offshore operations.
It is worth emphasising also that the Amendment would prevent the acquisition of land by the Secretary of State for these purposes even with the agreement of the owner. The effect of the Amendment is therefore to make the Bill a less versatile tool for the Government's task in helping to ensure development of, and securing lasting benefit from, our offshore oil. The Government therefore remain convinced that it is necessary to give the general power of land acquisition in Clause 1(1) to give a degree of flexibility to meet land requirements arising from future offshore technology; and for the reasons I have outlined, I ask your Lordships not to insist on this Amendment.
Moved, That this House doth not insist on their Amendment No. 1.—(Lord Hughes.)
Lord CAMPBELL of CROY: My Lords, the Amendment in question would restrict the powers in the Bill to
1198
what, in our opinion, are necessary to deal with the urgent situations that can be foreseen. We were told during the discussions on the Bill in this House that the outstanding virtue of the additional very wide power which would be dropped under your Lordships' Amendment was that it was most unlikely ever to be used. That was stated as a reassurance to Parliament but it is hardly an argument in favour of that power. We believe that neither this part of the clause, if restored, nor the rest of the clause is likely to be needed. The whole concept is concerned with compulsory acquisition of land to avoid delays in the oil programme, but so far no delay to our oil programme has been caused by any difficulties over the acquisition of land; the delays have occurred for other reasons, as I and my noble friends have explained to the House. It will be interesting to see, if this Amendment is not pursued, whether the Government will use these powers and, if so, in what circumstances.
On Question, Motion agreed to.

LORDS AMENDENTS
[Nos. 3 to 6]
Clause 1, page 2, line 34, at end insert—
"( ) An expedited acquisition order shall not be made in respect of any land or part thereof which has been declared to be inalienable by virtue of any enactment."
The Commons disagreed with this Amendment for the following Reason:—
Because the possibility cannot be excluded that land which is inalienable might have ta be acquired urgently under the Bill.
Clause 12, page 10, line 41, leave out sub-section (3).
The Commons disagreed to this Amendment for the following Reason:—
Because the possibility cannot be excluded that land which is inalienable might have ta be acquired urgently under the Bill.
3.11 p.m.
Lord HUGHES: My Lords, with permission I should like to speak to Amendments Nos. 3 and 5. I beg to move that this House doth not insist on their Amendment No. 3, to which the Commons have disagreed for Reason No. 4, and that this House doth not insist on their Amendment No. 5, to which the Commons have disagreed for Reason No. 6; in both cases because the possibility cannot be excluded that land which is inalienable might have to be acquired urgently under the Bill. In the proceedings on the Bill the substance of these

1199
Amendments has now been fully debated on four separate occasions; once in this House at Committee stage, and in another place at both Committee and Report stages and on consideration of Lords Amendments.
In asking your Lordships not to insist on these Amendments in the face of disagreement in another place, the Government's position is as follows. Although the Government have no plans at present to acquire for the purposes of the Bill any land held inalienably by the National Trust for Scotland, we cannot rule out the possibility that such land might be required urgently in the future. Acceptance of the Amendments would rule out the use of an expedited acquisition order and, although a compulsory purchase order could be used, it would be subject to special Parliamentary procedure which would cause an unacceptable delay. Failure to provide for the compulsory acquisition of inalienable land by expedited acquisition order could prove to be a serious handicap at some time in the future. There could arise a case where the national interest, in terms of acquiring land quickly for a crucial oil development, had to be weighed against the benefit to the nation as represented by the National Trust's tenure of inalienable land. Through the Affirmative Resolution procedure, Parliament will be able to look at the merits of each case and resolve any such conflict.
Any expedited acquisition order dealing with inalienable land will be subject to the hybridity procedures of this House, as they are applied by the Amendment which your Lordships made on Third Reading. This will afford additional protection to the Trust and I hope will go a long way to meet the fears which they have expressed. The Amendment seeks a blanket exemption for all National Trust inalienable land, present and future. To agree would be to prejudge the national interest issue now, and would apply acceptance of the fact that whatever unforeseen situations may arise in future the inalienability of National Trust land must, in respect of urgent oil-related developments, remain forever inviolate. In these uncertain times that concept is one which the Government would find it difficult to justify.
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The Bill does not strike at the concept of inalienability of land in general; it aims to apply a special procedure with appropriate planning, and Parliamentary safeguards to any areas of land which are urgently needed for a narrow range of special purposes. The Bill has no effect whatever on land which is not touched by oil-related developments. The Executive Council of the National Trust for Scotland have offered to consult with the Government on future declarations of inalienability. We have taken up that offer and will be getting in touch with the Trust very soon to work out the details of such an exercise. As I indicated at Report stage, such consultations could at the very least identify areas which are unlikely to be needed for oil development and which the Trust could confidently declare inalienable, if they so wished. The Government have tried to be as helpful as possible in this matter and have thought long and hard about it, as I know your Lordships also have done.
I should particularly like to pay tribute to the wholly constructive approach to this important provision, which moved your Lordships to give the other place an opportunity to examine it again in the light of your Lordships' own views and of the many strongly held beliefs voiced in both Houses and outwith Parliament. But I know that in these circumstances your Lordships will be very conscious of the implications for this legislation of any decision of your Lordships' House to overturn a provision on which the will of the other place has twice been expressed. I therefore ask your Lordships not to insist on the Amendments. I beg to move.
Moved, That this House doth not insist on their Amendments Nos. 3 and 5 to which the Commons have disagreed.— (Lord Hughes.)
3.17 p.m.
Lord CRAIGTON: My Lords, I and my noble friends believe that in asking your Lordships to agree to overturn a decision which they have previously made the Government are breaching for the first time the legal method by which your Lordships can already overturn inalienability. I believe that that is a fundamental error, and the only gain is the saving of perhaps a few short weeks. In so doing the Government undermine the

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confidence in the National Trust of those who were considering donating land and properly, and that may not now be given because donors will feel that what can be done once may be done again. As the noble Lord, Lord Hughes, said, both he and Mr. Bruce Millan in another place have been most co-operative in seeking a solution. The delay of 28 days before the expedited acquisition order procedure can be applied is an additional safeguard provided by the Government at Third Reading in your Lordships' House. So I and those for whom I speak accept the position, and will do all in our power to prove that our fears are groundless. We hope that from now on closer co-operation with St. Andrew's House may prevent those acquisition crises, which we feared might happen with such disastrous results to Scotland and indeed to England, before they arise.
Lord CAMPBELL of CROY: My Lords, on these two Amendments, also, we regret that the other place has not agreed with our views, though there has been some amelioration in another Amendment which the other place accepted, as the noble Lord, Lord Hughes, has reminded us, over the hybridity arrangements. That was a great improvement on the previous subsection in the Bill, which we dropped. But we regret that the procedure for considering inalienable land, including a Joint Committee of both Houses, has not been retained and I join my noble friend Lord Craigton in being disappointed. Both National Trusts for England and Wales and for Scotland have made it clear that they do not regard inalienable land as exempt from compulsory purchase, provided that decisions are taken by Parliament in accordance with the previously stipulated procedure. We do not think that that procedure need have been discarded for the purposes of the Bill, and we are sorry that the other place has not agreed.
Lord WTONE-JONES: My Lords, this is a matter which is of considerable importance to all of us and I find myself in some sympathy with what has been said by the noble Lords, Lord Craigton and Lord Campbell of Croy. I think that there is little doubt that one wants to see that land is kept inalienable; but, at the same time, there is the highly important question of the development
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for a specific purpose. I do not know whether my noble friend Lord Hughes can enlighten me on this, but I understood from the Bill that where land is taken it is not taken permanently; it is taken for a specific purpose and when that purpose is achieved the land returns to its original state. It seems to me—and I hope that I am right in this—that although the land is called inalienable and although it is taken for a specific purpose, it returns to its inalienable state after that purpose has been fulfilled. If I am right on this, then the position is fully defended; but, at the same time, I can fully understand the noble Lord, Lord Craigton, and others being a little anxious about it. I hope that we can say that the present state of the Bill clarifies the matter for those of us who can be worried about the situation.
Lord HUGHES: My Lords, I am grateful for the way in which the noble Lords, Lord Craigton and Lord Campbell of Croy, have spoken. What they have said is very much in line with what the National Trust for Scotland have done. My honourable friend the Minister of State kept the National Trust very much in touch with what was taking place in the later stages. If I may quote extracts from the last letter from the Trust to Mr. Millan, it shows exactly how the noble Lord, Lord Craigton, was echoing his position. They say in the third paragraph:
"The Trust in accepting the situation as it stands today "—
that is, after the Commons voted not to agree with the Lords Amendments—
"must of course express its deep regret that the Government did not feel convinced in accepting the arguments advanced both in the Commons at an earlier stage and throughout the three debates in the House of Lords ".
Further on, they say:
"Indeed, support for the Trust has been reinforced in recent months thanks to the decision made by the Secretary of State over Drambuie over which issue the Trust was joined by Ross and Cromarty County Council and local opinion including the crofting township most directly concerned."
The letter goes on:
"The contingency of extreme urgency over some site in the future should, it is very much hoped, be remote but in any event it should be capable of solution as a result of the prior consultations to which you refer in the penultimate paragraph of your letter. On this point I am glad to be able to report to you that

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the undertaking given by the Trust's President, Lord Wemyss, in the House of Lords during the Report stage on Tuesday, February 18th, was fully endorsed by the Council meeting yesterday. The Council was anxious to ensure that the maximum degree of mutual confidence existed between the Government and the Trust in the pursuit of its many aims and objectives. Thank you for undertaking to ask officials of the SDD to get in touch with us in order to work out appropriate machinery."
My Lords, in regard to the point made by my noble friend, obviously I cannot refer to any precedent because it has rarely happened in Scotland that this position has arisen; but I must point out that he is not totally correct. It will not follow that all land will be returned to its original state; there could well be circumstances in which it would be in the national interest that the land should continue in (shall we say?) industrial use. Obviously, however, in a case where inalienable land was no longer required for the purposes and was to be returned to its original state, I do not think that there is the slightest doubt that it will be returned to the National Trust in, I hope, as near as may be the state in which it was originally taken over. I hope that that partial point will satisfy my noble friend Lord Wynne-Jones.
On Question, Motion agreed to.

HOUSING RENTS AND SUBSIDIES (SCOTLAND) BILL
3.26 p.m.
Lord HUGHES: My Lords, I beg to move that this Bill be now read a second time. I should like first of all to set this comparatively short Bill in perspective. As your Lordships are aware, the reform of housing finance is one of the Government's major political commitments. This task is being tackled in two stages. We are embarking on a longer-term review of housing policies and finance, which will no doubt lead to further housing legislation. Meanwhile, we have introduced this Bill, which has immediate significance for housing in Scotland, since it repeals the parts of the Housing (Financial Provision) (Scotland) Act 1972 which aroused widespread objection and makes a number of improvements in existing subsidy arrangements. The Bill deals with both the public sector and the private rented sector.
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In the public sector Clause 1 of the Bill restores freedom to local authorities to determine for themselves what rents should be charged for the houses built and managed by them. It does so by restoring the well tried principle of reasonable rents which allows authorities to have regard to local circumstances in determining rent levels. The Bill also requires authorities to review their rents from time to time; they may do this when they are preparing their annual budgets or at such other intervals as they think appropriate.
Authorities are required in fixing rents to disregard the personal circumstances of their tenants; so the rents charged continue to reflect the value of houses rather than the means of the tenants, who —to the extent that they require assistance—are protected by the rebate scheme. Authorities are permitted to maintain a working balance in their Housing Revenue Account, so that they may take account of fluctuations in expenditure from year to year, but they are not permitted to make a surplus on their Housing Revenue Account. This is an especially apt time for these changes—when the new district authorities will be taking over responsibility for housing for the first time.
From the meetings which the Under-secretary of State and I have been having with the new district authorities, we know how keen they are to get on with their task, and how they welcome the freedom the Bill provides for them to reach their own decisions—decisions for which, let us remember, they are answerable to the tenants and rate-payers affected by them.
So far as Clause 2 is concerned, as a Government we are naturally concerned about the effects of very steep rent increases. We have therefore subjected the rent freedom to a counter-inflation safeguard: a maximum limit of £39, which may be variable by order, on the rent increases which may be imposed on any individual house in any period of 12 months. This is not a prescribed average increase, comparable to the £26 under the 1972 Act. This limit also applies to development corporation and Scottish Special Housing Association houses. Clause 3 and Schedule 1 strengthen Exchequer support for housing.

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The Bill provides for an increase of some £5 million in the payment of housing expenditure subsidy for 1975–76, with cumulative increases thereafter. This means that Central Government will be paying in subsidy 75 per cent. of all the increases in expenditure per house over the previous year, without any contribution from rents. The Bill also continues the payment of rent income subsidy under the Housing (Scotland) Act 1974 for the year 1975–76. We estimate that together these additional subsidy payments of some £16 million should serve to contain the growth in rate fund contributions to the bottom end of the range quoted in the Financial Memorandum to the Bill; that is £7 million to £9 million.
Clause 4 makes some minor adjustments to facilitate the closing of Housing Revenue Accounts at the end of the current year. Clause 5 inserts into the New Towns (Scotland) Act 1968 a provision, already present in English New Towns legislation, which allows the Secretary of State to recover all or part of any surplus which may be made by a New Town development corporation, after he has consulted the corporation and the Treasury. This is purely an enabling provision which we do not expect to use in the near future. Schedule 1 to the Bill also repeals the Secretary of State's special powers in relation to housing default. This is part of our approach towards creating the right climate of co-operation between Central Government and local authorities. The Secretary of State will retain the same general default powers as he has in relation to all other local authority functions, but authorities will no longer feel that their housing functions are singled out for special attention.
To turn to the private sector, we have provided a logical extension of the principles recognised in existing legislation. Within the fair rents system we have ensured that where rent increases take place, they take place at a gradual rate for all tenants. As to Clause 6 and Schedule 2, the main private sector provisions extend the phasing of rent increases to all cases where the tenant has had a fair rent registered. This means that, generally speaking, rent increases which are due after a fair rent has been registered by a rent officer will be made in three equal stages, normally over a
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two-year period, subject to a minimum increase in any one year of 40p per week and a maximum of £1·50 per week. Special arrangements have been made in the Bill for adjusting phasing for rents registered during the freeze and for rents which were caught at stages of phasing by the freeze. The purpose of these arrangements is to ensure that the benefits of the standstill will not be wiped away by steep increases immediately it ends on 15th May. We think that where rents must rise they should do so in a steady progression enabling tenants to adjust their budgets.
Section 34 of the 1972 Act provided that all controlled tenancies should be brought out of rent control in bands related to the rateable value of the houses concerned without any reference to their condition. Clause 8 stops this automatic process of decontrol in the case of the remaining controlled tenancies; namely, those with a rateable value of £25 or less. Though their numbers have been shrinking recently, in the main because of redevelopment, it is estimated that there are still some 5,000 such houses in Scotland. In order to convert a controlled tenancy into a regulated one, a landlord will now require to obtain a qualification certificate by satisfying the local authority that the house contains all the standard amenities, meets the tolerable standard, and is in a good state of repair.
We are concerned to ensure that continuing rent control on properties under £25 rateable value does not result in their falling into hopeless disrepair, with distressing consequences for the people who rely on them to provide hearth and home. For the first time landlords are to be allowed, under Clause 9 of the Bill, to make rent increases directly related to the cost of any repairs which they carry out. They may increase rents by 12½ per cent. of the cost of any repairs carried out to a house which is let on a controlled tenancy. By tying rent increases to land-lords' performance in this way we hope to exert a direct influence to prevent these houses from sliding into irremediable disrepair.
My Lords, this Bill marks the first stage in a review of housing and finance to which we in the Government are committed. But it is no ephemeral piece of legislation. It unmistakably conveys the Government's faith in the responsibility

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of local authorities who have traditionally taken their housing functions very seriously. Central Government is being taken out of essentially local decisions on rents and rate fund contributions. At the same time, the Bill shows the Government's realism in providing in the private sector for a steady adjustment towards fair rents from a comparatively low historic rent base. While the logic of upward rent movements cannot be ignored, it would be irresponsible not to provide a framework to prevent the serious social and individual consequences of steep rent increases, to which tenants cannot readily adjust. I confidently recommend this Bill to your Lordships. I beg to move.
Moved, That the Bill be now read 2. —(Lord Hughes.)
3.36 p.m.
Lord CAMPBELL of CROY: My Lords, housing legislation is needed from time to time to adjust the system to changing circumstances, in Scotland as elsewhere in the United Kingdom. But much of this Bill is unnecessary, and the effects of Clause 1 are likely, we believe, to be harmful in Scotland. The Bill is turning the clock back on housing progress in Scotland. Having fabricated a false mythology about the Housing (Financial Provisions) (Scotland) Act 1972, the Labour Party are now apparently left with no alternative to changing the provisions of the Act on council rents, although they accept the principle of balancing housing accounts and accept that that principle is right. The 1972 Act required housing accounts to be balanced in due course—as distinct from the English Act which provided for surpluses—but any increases in rent in the Scottish Act were limited to an average of only £26 a year. This should be compared with the limit of £39 a year for any house in this Government's present Bill. Our arrangement was that the increases in rent would be more gradual.
The 1972 Act also prescribed generous and comprehensive rebate and rent allowance schemes for private housing as well as public. As a result, no family needed to pay more rent than they could afford. Indeed, many families then started paying less rent than they had been paying before. Over much of Scotland councils have behaved responsibly, both before
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the 1972 Act and after it, and have balanced, or been within reach of balancing, their housing accounts. But in other areas —and the noble Lord, Lord Hughes, will be well aware of this—there have unfortunately been councils which have kept rents ridiculously low, have refused to operate proper rebate schemes to eliminate any hardship, and have heaped an intolerable burden upon their ratepayers.
In 1969 about 34 per cent. of council housing costs in Scotland were being met by the Scottish ratepayers; the equivalent in England was about 8 per cent.—the difference being between 34 per cent. and 8 per cent. That was the measure of the distortion to the detriment of Scotland. One result was that the building of private houses was running at less than one-third of building in the public sector—sometimes much less than that. But with the distortion coming to an end a welcome transformation took place in the private house building sector in Scotland. There was a fourfold increase between 1970 and 1973. Moreover, housing societies and associations—which had understandably been little interested in Scotland before that—were starting schemes for co-ownership. Such private building was badly needed because—as a few years ago the Cullingworth Report stated—there was less home ownership in Scotland than in any other European country West of the Soviet bloc. That was one reflection of the sad state of housing in Scotland which the 1972 Act was starting to change.
Regrettably, this Bill will be a charter for certain councils, which are often dominated by extremists of different kinds, to act irresponsibly. Despite the rebate scheme, their interpretation of what is a reasonable rent would be nil, or as near to nothing as is possible. This is grossly unfair to their local ratepayers who have to foot the bill. The 1972 Act was reducing the housing contribution from ratepayers. At a time when the Government ought to be doing everything possible to slow down increases in the rates, it is shocking that through this Bill they are adding in the coming year at least £7 million to the rates in Scotland; that is according to their own estimates in the Financial Memorandum which is attached to the Bill. In fact, the sum is likely to be much larger because of the irresponsible, but predictable, action by certain councils.

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The Government are relinquishing any means of protecting ratepayers. The only apparent sanction will be the public inquiry into whether a council has properly reviewed its rents. In the past in Scotland, this has proved to be a clumsy, vague and thoroughly ineffective method which all who are concerned with good housing conditions had hoped was buried in the past. Since there is nothing in the Bill to indicate when reviews should take place, or what is a reasonable rent, the stage is being set for understandable repercussions from ratepayers—probably, and regrettably, including refusal to pay identifiable amounts related to housing. Very often ratepayers can see that they are paying for people who are a good deal better off then they are.
All this should be considered against the background that the average weekly council house rent in Scotland is about £1·30 less than in England and Wales. There is no particular reason why this should be so. According to the latest statistics, the average Scottish council house rent is about £2·40. Therefore the average rent South of the Border is over half as much again as it is in Scotland. Certainly there is no question of Scottish tenants being faced with higher rents than tenants in England and Wales.
The Government have been unable to give any respectable reason for replacing the Scottish rent system for the public sector in the 1972 Act. That is a system, known as the "pooled historic cost system", which has been accepted by virtually everybody working in housing in Scotland, including the Labour Party who have also accepted it for England and Wales. At the risk of being immodest, I myself claim some credit for having introduced this system which is especially suited to conditions in Scotland. The Government's attitude in dropping the fair rents system in England and Wales, which allows for surpluses, is just comprehensible to me, although they themselves introduced the fair rent concept in the private sector in the 1960s. But it is incomprehensible to me that they should seek to change the Scottish system, except to try to give some substance to the bogus legends about the 1972 Act which an unscrupulous political campaign invented at the time. People whose rents were, in the event, reduced as a result of the rebate scheme had first been scared by
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a campaign into thinking that they were going to have to pay a large increase. That is what happened in 1971–72.
While retaining the main principles of balancing the housing accounts and the universal rebate scheme, all that this Bill is doing is giving carte blanche to certain councils not to comply. The result will be to create unfairness between different areas, which the 1972 Act was removing. Above all, it will create unfairness for the ratepayers. Some councils will observe the principle which is still enshrined in this Bill, as it was enshrined in our 1972 Act. They will aim to balance their housing accounts, increasing rents by easy annual stages, as we prescribed. But other councils will do nothing; and so far as we can see, they will not effectively be brought to book for failing to carry out what both this Bill and the 1972 Act set out as the best system for Scotland.
Also, most councillors will find that the 1972 Act helped them by providing a limit for average rent increases—the limit of 50p a year. That was a modest increase. It meant that while they were approaching the balancing of their accounts, rents went up by no more than a modest amount. Most councillors in Scotland knew that this was right, but under this Bill many councillors will be faced with invidious comparisons with what other councils are doing. Rents are usually delicate matters for decision. Councillors will not thank this Government for having moved from an orderly progression to an uncharted "free-for-all."
Before 1970, when I was moving among social workers and both voluntary and professional bodies working in housing, I constantly heard this plea from all shades of political opinion, and none: "In future, please change the system to steer the help which is coming from the taxpayers and the ratepayers to those who need it; relate that help to the circumstances of the tenants and get away from the system of subsidies being attached to the houses—to the bricks and mortar or to the stone—depending in amount upon the historical coincidence of when those houses were built and in what circumstances". That was their plea, and the major change which we succeeded in carrying out in 1972, with the rebate system and subsidies to meet the rebate payments, did meet that

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request. It would be tragic to throw away that system, which this Bill still confirms in principle, simply because there is no way of ensuring that it is carried out. Therefore, during the later stages of this Bill we shall examine what is meant by "a reasonable rent" and also what is meant by "reviewing rents from time to time".
The first part of the Bill upon which I have dwelt so far deals with the public sector. It is of main significance to Scotland, because about one-half of the population are tenants of public authorities—a much larger proportion than in England and Wales. What happens in the public sector affects considerably housing in Scotland as a whole. In the 1960s there were some vast and seemingly soulless council housing estates and tower blocks built by local authorities; both were lacking in amenities for tenants and their families. Apparently, it was then the purpose to produce large numbers of units at highly subsidised rents. However, that policy is now being widely condemned, even by Scottish Labour Members of Parliament, as indicated by the Committee debates in another place on this Bill.
There is also the problem of empty council houses in Scotland. Usually, of course, these are the older ones. I understand that at the moment there are well over 1,000 empty council houses in Glasgow. For some time there has been the problem of hundreds of empty council houses in Dundee, Paisley and elsewhere, and unfortunately that situation has been aggravated by vandalism. However, this state of affairs can be assisted if there are more opportunities for home ownership in Scotland. I hope that the Government will not again adopt a doctrinaire attitude towards that idea. It has become acceptable to Socialists in England and Wales, and more and more Labour supporters in Scotland are seeing the benefits of enabling tenants to buy their council houses, although inflation and economic troubles at the moment may make this difficult. I am sure that the noble Lord, Lord Hughes, would not be risking a public rebuke from the Prime Minister if he were to concede this point.
Clause 5 deals with the New Town corporations and provides for payments of surpluses from them to the Secretary
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of State for Scotland. These New Towns in Scotland have set a good example in selling their houses; the oldest Scottish New Town, East Kilbride, has sold a great many. This is a credit to the noble Lord, Lord Wallace of Campsie, the chairman of East Kilbride, because I understand many hundreds of houses have been sold while he has been chairman, and I trust the Government will not discourage such sales by New Town Corporations or local authorities in appropriate circumstances where everyone— including applicants on the housing list— is likely to benefit. The second part of the Bill proposes some changes in the private rented sector. This is a comparatively small part of the Scottish housing scene, but it is important that this housing stock should be maintained in good repair and not be allowed to sink into slumdom because of lack of money to mend roofs or carry out other essential work. I was glad to hear the noble Lord, Lord Hughes, draw attention to this in his speech.
We are also concerned that the system should be fair as between tenants and owners, and we know that a considerable number of amendments were made by the Government in the other place in order, it seems, to avoid anomalies which the Bill in its original form would have caused. We shall examine those clauses in the Bill, with all this in mind, during its passage through the House. It is a pity, my Lords, that when valuable Parliamentary time might be occupied with other measures more urgent and relevant, much of this Bill is unnecessary and is likely to confuse and upset a system introduced into Scotland by us and accepted in principle by the Government.
3.52 p.m.
Lord FERRIER: My Lords, although my name appears on the list after that of my noble friend Lord Lyell, I understand that if I speak now it will be more convenient to your Lordships. In any case I shall be brief. I have little to say, although I feel strongly about this Bill, the purpose of which is to reverse the policy of the last Government. That is clear from the opening phrases of the preamble. As I have said before in your Lordships' House, that policy of the late Government was revolutionary. What we now see is part of a counter-revolution. We are back to the old, outdated,

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disreputable Socialist system, detrimental to the most deserving of house owners or occupiers—a system which, in the view of some people, may be regarded as putting temptation in the way of the potentially corrupt, and as such I oppose the whole principle of the Bill, which is what we are here to discuss. If, when the Question is put I express myself as being Not Content, I assure your Lordships that I have no intention of dividing the House, but I can do no less than so express myself.
3.54 p.m.
Lord LYELL: My Lords, we on these Benches have to consider this Bill as a measure which enables the Government to fulfil their Election pledges. As such I do not think we would seek to destroy it, or indeed to alter it too drastically, while we still reserve the right to consider that there are various aspects of it which we hope the Government can see their way to amend or alter. We accept that the Government wish to repeal the Housing (Financial Provisions) (Scotland) Act 1972, but we believe it must be a cause of regret that so many council and private tenants are no longer eligible for the fairly substantial rent rebates paid towards the economic rents charged all over Scotland on a nation-wide basis. Nevertheless, we hope that the Bill, which enables local authorities to charge reasonable rents, will continue the trend towards local authorities' Housing Revenue Accounts being paid from rents charged. As we have already heard from my noble friend Lord Campbell of Croy, in 1969 there was a shortfall in Housing Revenue Accounts in Scotland of around 34 or 35 per cent. which was not covered by rents, but by 1974 it had been cut to about 13 per cent. As noble Lords are aware, shortfalls in Housing Revenue. Accounts in Scotland are normally met from local authority rates, so that over those years the substantial burden which had rested on the shoulders of ratepayers was progressively lifted, which we believe was a useful and helpful movement.
The Bill admits that £27 million is currently paid (in the year 1974–75) from local authority rates to Housing Revenue Accounts, but under the financial provisions of the Bill that figure will increase by £7 million to £9 million during the year 1975–76 and, as has been said that is a
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matter of regret. Further, the rents paid by council tenants all over Scotland will vary quite alarmingly, depending on the geographical situation of the tenant and not necessarily on his financial situation or the region. We understand that in 1974 about 30 per cent. of council tenants were enabled to receive a rent rebate and these averaged about £75 per annum. So there were fairly substantial rebates available under the old Act which is now to be repealed. Nevertheless, the Government have said that they intend to take adequate substitute steps. Of course there is nothing to prevent local authorities from operating their own rebate schemes; however it appears that the cost will be borne by the rates.
There is also one point on Clause 5, which enables the Secretary of State to require any surplus from New Towns' Housing Revenue Accounts to be paid direct to him. There is no indication that any such payments would be used to benefit a New Town in any way; for example, by reducing the capital debt incurred by a New Town Corporation. This is a point which concerns the New Town Corporations very much and we should be grateful to the noble Lord and to the Government for any observations on it. There is one further point which I think the Government could explain. It concerns the qualifications which the noble Lord mentioned—
Lord HUGHES: My Lords, will the noble Lord forgive me for interrupting. I must apologise, because I was seeking information on one of his earlier points, and I am not absolutely certain what he asked me in relation to the New Town Development Corporations. Perhaps he would be kind enough to repeat it.
Lord LYELL: My Lords, the point that I was requesting an answer about was whether any surplus on a New Town's Housing Revenue Account would be used to the benefit of that New Town rather than being completely at the discretion of the Secretary of State. As we understand Clause 5, there is no indication that the Secretary of State is under any obligation to see that the surplus accrued by the New Town shall go to the benefit of that New Town. We seek some clarification of this point, and wonder whether the noble Lord can give us any further information.

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The noble Lord, Lord Hughes, mentioned the qualification certificate in respect of a controlled house in the private sector. He gave the figure of 12½ per cent. of the cost of repairs, which is the maximum rent increase which can be charged by a landlord. Perhaps the noble Lord can explain where the finance for such repairs—let alone any improvements—could be obtained at a rate of 12½ per cent. It does not cover the cost, even of financing the repairs or the borrowing for any improvements. If this rate could be raised slightly to 15 per cent., this would cover the cost of bank borrowing. This is a situation which will affect many landlords in this particular sector.
My Lords, we are pleased to see that any rent increases which are to be introduced are to be graduated over three years. Nevertheless, there is the point that the liberty granted to local authorities under the Bill we believe too often slides into licence. Reasonable rents will mean different things and different amounts to different councils. We are gravely concerned about the prospective burdens liable to end up on the shoulders of the ratepayers.
In conclusion, there is one small point that the noble Lord might be kind enough to explain to the House. Precisely what is meant in Clause 1(5) by, reasonable working balance, while forbidding the local authorities to budget for any form of surplus. Can the Government say whether local authorities are in dereliction of their duty if they make a small, or perhaps fairly large, unexpected surplus on their Housing Revenue Account? I can understand that local authorities will wish to make provision for a reasonable working balance, but if this balance has to be a deficit balance, perhaps the Bill should lay down that there should be a deficit balance. This is perhaps merely a matter of drafting, but may we have the point clarified?
4.2 p.m.
Baroness ELLIOT of HARWOOD: My Lords, I have listened to my noble colleagues speaking on this Bill. There is no doubt that one of the most difficult things one has to face when in local government—the noble Lord, Lord Hughes, has been in local government for a great many years, and I have been in local
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government now for almost thirty years —is being an elected councillor sitting for an industrial area, where possibly the houses are in poor condition and where to raise rents is a near impossibility because the electors are prejudiced against one when one stands for re-election in that area. That is a very well-known phenomenon in being elected to represent a city. It does not happen quite so much in rural areas, because there the shortage of houses is not at all great. In rural areas there is bad housing; housing that is not up to standard, and so on. That is the biggest bugbear, but in agricultural and rural areas the number of houses is on the whole, somewhat surplus to the number required, because there are fewer people living on the land. A shortage of housing has existed in the City of Glasgow ever since I can remember—and that is a great many years. I do not know what the latest figures are.
Under the 1972 Act, there was a progession towards a reasonable rent, or having rents which made the Housing Revenue Account a progression which did not depend so much upon the elected members, but was built into the system. I thought this was a very good idea indeed, because it meant that the Housing Revenue Account was balanced in a proper way and other ratepayers were not being charged for the failure to balance that account, which is what has been done in many areas over many years. In this way, one achieved a properly balanced Housing Revenue Account. In many areas, this meant that assistance had to be given to those who, through circumstances possibly over which they had no control, were not able to meet the rent which was the proper rent for their house, and who were able to get supplementary assistance. Again, I thought that was a very good idea. It meant that one was not charging people on the general rate sums of money to meet the failure properly to balance the Housing Revenue Account.
My Lords, I know that this Bill requires that local authorities should balance their accounts, but not provide for a surplus. If local authorities balance the Housing Revenue Account, shall we be quite sure that those councils, particularly in big industrial areas where there is the problem of less good housing, will be

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able to charge reasonable rents to cover the Housing Revenue Account? It would be a tragedy if we went back to the bad old days when, in certain parts of the country, particularly in Scotland, in the days before the money changed, there were rents of something like 7s. 6d. and 9s. 6d. a week for a house, which would not cover the costs. Yet nobody would put up the rents. On occasions, I remember that we had to take special powers from local authorities to make them put up their rents. Those were the bad old days. I do not think such things happen at the moment, and I should hate to see those days come back.
My Lords, I have been serving on a council now for a great many years. I have served on every single committee, including the housing committee. To put up rents is a very difficult thing to do. You are extremely unpopular; people resent it very much indeed. Yet something has to be done, particularly if you are building good standard housing. The rent must be an economic one unless you are going to run into debt, or ask the ordinary ratepayer to meet the difference. I always thought that to do that was unfair, because the ordinary ratepayer may be living in a lower standard house than the council house tenant, yet paying more rent. His house is not subsidised by the rates. I hope that the noble Lord, Lord Hughes, can assure us that this will not happen, because if it does it will be a step backwards.
My Lords, I hope too that this Bill will not in any way discourage expansion in the building of houses where they are badly needed. I ask the noble Lord whether this Bill will have a discouraging effect. My hope is that it will encourage rather than discourage house-building. That point is most important, because there are still parts of the country where housing is in very short supply indeed.
My other question to the noble Lord is this: What are the Government going to do about those councils, which, for want of a better description, I call the bad councils, namely those who will not balance their Housing Revenue Account? Of course, there are good councils who do balance their Housing Revenue Account. Our council in Roxburghshire is a good council. We do not run into debt in our Housing Revenue Account, but we are a small council and our task
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is easier than for those in a large area. There are a number of good councils who are prepared to do this, but a number of bad ones will not. What sanctions have the Government in this Bill to make the bad councils balance their Housing Revenue Accounts? This is an extremely important matter. The noble Lord, Lord Hughes, is a great expert on all these matters of local government, and I am sure he will give us the answers. It is a pity that when one has got into a good system—and a system of rent rebates when the rents were too high, and of rents based on costs, was a good system—one should change it to something which I only hope will not revert to what I call the bad old days. We still have good housing accounts that do not run into debt. I hope that we shall continue to enlarge our house-building programme in areas where it is still badly needed.
4.10 p.m.
Lord HUGHES: My Lords, I think I can say that the response which has been given to this Bill is as favourable as I could expect in the circumstances. I am not surprised that the noble Lord, Lord Campbell of Croy, as a former Secretary of State for Scotland and the one responsible for putting the 1972 Act on the Statute Book, sees virtues in it of which very many people in Scotland found themselves totally unaware. I do not expect him to change his view because he has proved to be in a minority in holding that view. After all, he can probably tell me that there have been occasions when it has been the minority that has been right. But I do not think that he is entitled to refer to false mythology and bogus legends. We consider that what we are doing in this Bill is taking account of the facts which have emerged since the passing of the 1972 Act.
If there is any question of bogus legend, the noble Lord is on the way to perpetrating one himself when he compares the £39 maximum laid down in the Bill to the £26 mandatory average increase for which he was responsible. I would remind him that there is one sense in which his Act and our Bill are identical; that is, in laying down a maximum increase of £39 for any one house. The difference between the Act of 1972 and this Bill is that we do not lay down any mandatory increase. We agree with the

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noble Lord that the figure of £39 is a reasonable maximum, but we do not say that authorities should be compelled to have an average increase.
Lord CAMPBELL of CROY: My Lords, would the noble Lord give way? That is exactly what I sought to say, too. In the Bill, any house can have its rent put up by as much as £39, so in theory the rent for every house could be so put up. I was comparing not like with like, but the average; I said, "average" in the case which we had in 1972.
Lord HUGHES: My Lords, I think that if the noble Lord looks tomorrow at what he said, it at least gives the impression that he was comparing an average of £26 under his Act with a possible average of £39 under this one. I am emphasising the fact that we, like him, have felt that, in these inflationary days, it is reasonable to have a maximum laid down, and we have accepted his own maximum figure of £39. I seem to remember that, between the years 1964 and 1970, the constant theme of noble Lords opposite was that the town hall knows better than Whitehall; it was even interpreted that the town house knew better than St. Andrew's House. He forgot about that in 1972. Generally speaking, we think that the argument is right on matters where local interest is a factor to be taken into account; local circumstances should be considered, and the people best in a position to know them are the local authorities.
The noble Lord gave away part of the case of the Government when he said that most councils in Scotland behaved responsibly, even before and after the passing of the 1972 Act, but that there was a minority which did not so act, and then he went on to say that the action of certain councils is predictable. At the present time there are some 200 housing authorities in Scotland. It has surely escaped the notice of the noble Lord that as from 16th May these authorities are swept away and we have approximately 60 new housing authorities. How, therefore, can the noble Lord predict what any of these new authorities will do in relation to housing in respect of the Bill? I do not see how he can, because not one of the authorities that he criticised remains unchanged as a result of the new
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Act. I have no doubt, for instance, that he has Clydebank in mind. It is not a single new authority in terms of reorganisation. I think we must wait and see. If the noble Lord will permit me, I have been having meetings—and so has my honourable friend the Under-Secretary of State—with the new district councils.
The noble Baroness, Lady Elliot of Harwood, will be interested to know that last Thursday I spent a very pleasant day in Hawick meeting the chairmen and the housing conveners of the four district councils into which the Borders are divided. I have no doubt whatever that she will have no occasion to describe any of these new councils as bad councils. I also met the council in Dundee and various others, and I have so far met two regional councils. I am quite certain that the Government are not making any mistake in trusting these new bodies to exercise their responsibilities in a reasonable way. I shall give way to the noble Lord, Lord Strathclyde.
Lord STRATHCLYDE: My Lords, I thank the noble Lord. I wanted only to ask him, in view of what he said a moment ago, whether he really anticipates any change in housing policy, in regard to the rents of the Glasgow district, from what has existed in theory' for the last 30 or 40 years?
Lord HUGHES: Yes, my Lords. I may be optimistic, but, in this set-up, I think it is reasonable that we should assume that the new authorities will act in a reasonable way. The best way of guaranteeing that they do not act in a reasonable way is to go about telling them that we expect them to do the opposite. I certainly have not done that in meetings with any of them. On the question of increases in rents—and what is meant by regular reviews of rents—I have been asked that question and I have said, as I said in my speech, that it would, perhaps, be reasonable for the authorities, when they are considering their annual budget, to consider as part of that budget what the rent level should be in the ensuing year. So far none of them has dissented from that point of view, so I think I am justified, so far, in being optimistic. I must mention the division which has taken place between my honourable friend and myself; I

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have taken the East and South and he has taken the West and the North. So I do not know whether any differences will emerge on a geographical basis when we compare notes at the end of the day about the response of the district councils.
Lord CAMPBELL of CROY: My Lords, I am most grateful to the noble Lord for giving way again. He did. quite unwittingly I am sure, misquote my words, which I have in front of me. Just to remind the House of what I said— because this makes a great deal of difference to the sense—I said that over much of Scotland councils have behaved responsibly. But I went on to say that in other areas there have, unfortunately, been councillors who have kept rents ridiculously low. My point was not that it was the individual councils of the future but that it was very much a matter of areas. My noble friend Lady Elliot confirmed this from her own experience in her speech. This is the point. It has been a matter of different areas. While I, naturally, hope that councils will behave responsibly, we have, unfortunately, memories of what has happened in the past in these different areas.
Lord HUGHES: My Lords, I am sorry if I misunderstood what the noble Lord said. We are dealing with what councils do. It is not pieces of land which take action; it is the councils which exist in these areas, and I have emphasised the fact that they are new councils. The councils which are taking power are the councils for which the noble Lord, Lord Campbell of Croy, was responsible. It was he who chose, not all of but almost all of, the councils. Your Lordships made certain improvements, and if the noble Lord had been as reasonable on this as he has been on other matters, there would have been even more changes made, provided another place had accepted them. However, that is water under the bridge. In this connection, the indications are—and I am glad to be able to say this—that the relationship between the Strathclyde authority and the district councils in the West seems to be developing into a very good one indeed. From that point of view, therefore, the noble Lord's faith in Strathclyde may yet be justified. That is slightly away from the question of housing.
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On the question of the empty houses, the noble Lord, Lord Campbell of Croy, is out of touch. He spoke of figures of a thousand in Glasgow and some hundreds in Edinburgh—I do not remember whether it was three or four hundred, but it was something of that order. I should like to give the more up-to-date figures. I cannot give them completely up-to-date; the last set we have is as at November 1974, and at the end of that month 263 houses in Glasgow were available for letting but had been unlet for more than eight weeks. At the same time Edinburgh Corporation had 631 houses which had been empty for more than six weeks, but most of these houses were not in fact available for letting because they were being improved and repaired. At the end of December 1974 Dundee Corporation had 149 houses which had been empty for more than eight weeks. Of these only 13 were available for letting, the remainder having been withdrawn from the letting pool for modernisation and repair. So the situation has completely changed in the interval, but, I would emphasise, not for a good reason. It has changed because of the inability of many people who would have wished to purchase their houses being unable either to afford to borrow from the building societies, or other borrowers, at current rates, or being unable to get mortgage finance, and many of these people then turn to local authorities to rent a house instead. So although the situation has improved it has, I would suggest, improved for the wrong reason.
The noble Lord referred to improved private building as a result of the 1972 Act. I do not think he is entitled to say that this position was due entirely to the Act of 1972, and, in fairness, I do not think that he said "entirely", but one could imply that he was saying the position was improved because of the 1972 Act. If that were the case, how does one attribute to the 1972 Act the dreadful slump which has taken place in private building? The fact is that over a period of years (and I myself in 1968, 1969 and 1970 went up and down Scotland encouraging the local authorities to do everything they could to make land available for houses for owner occupation, and I was not without success in that direction) if we look at the statistics we will see that we go back to the middle of the

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'sixties, when the figures of owneroccupation in Scotland started to improve. I would emphasise that during my visits I have told local authorities, first—and this meets the point of the noble Baroness —there is no financial restriction on the number of new houses which a local authority may build to meet their ascertained needs. Secondly, I have emphasised to the authorities, as has the Under-secretary, the desirability of using the "housing action area" principles to improve the existing houses, and that where possible they should take steps to build in gap sites in the centre of cities and that they should use demolition in the central areas only as a policy of last resort.
Obviously if a house is totally unfit and incapable of being brought into a reasonable state of repair, then demolition is the proper course; but it should be regarded as the last course to be considered, and I am glad to say that each of the authorities we have met is happy to fit in with these views. So far as the encouragement of private development is concerned the attention of the new housing authorities has been drawn to the improved lending facilities which are available to them. Instead of lending at their most recent public works loan board rate of borrowing, plus the quarter per cent. which is mandatory, we have encouraged them to lend at the pooled rate, which means, for instance, that in Glasgow the rate at which they are lending for private house-purchase is about 9 or 9½ per cent. We are encouraging them in that way, and we are encouraging them to make use of the deferred mortgage system, and of lending for a fixed period of years during which only interest would be payable, with the bond falling to be repaid or renewed at the end of that period.
So in all of these steps we are taking to encourage the build up of owner-occupation, and in reference to what has been said about the selling of houses in East Kilbride, we accept that both in the New Towns and in the local authority housing stock, it should be possible to sell houses, but, in the words of the noble Lord, Lord Campbell of Croy, "where the circumstances are appropriate". I must say clearly that possibly his and
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my view of what are "appropriate circumstances" can be very different. But as between the local authorities and the New Towns there is at least one difference which we are keeping in mind; that is, that unless attempts are made to provide owner-occupation you could have a situation that a New Town would be totally artificial in that all houses were rented. So there is a greater encouragement given to the selling of houses in New Towns, but not at the expense of depriving people of the opportunity to rent if their need exists and renting is the only thing which is possible for them.
I come to the remarks of the noble Lord, Lord Ferrier. He at least made my task easy. All I have written down against his name is the word "against". That is a fair summary of his speech. It is a simple position to take up. Unfortunately, or fortunately, it is not a position which the traditions of your Lordships' House encourage people to carry to its logical conclusion. The noble Lord has accepted this and he does not propose to divide the House against the Bill.
I come now to the noble Lord, Lord Lyell, I must say right away that he is under a total misapprehension when he talks about the Bill annulling the rent rebate system. We did not believe that it was possible, even for the last Government, to produce a Bill which was totally bad. That requires a degree of genius which is seldom given to human beings and even less to normal politicians. The rebate system is one which we are continuing. We do not say that it is perfect and it may well be that in the review of the housing finance, which we are undertaking, that there will be changes in the system. But the rebate system is sufficiently workable, and sufficiently reasonable in its results, to be maintained as it is. So under this Bill no one will be deprived of the benefits of the rebate system in the 1972 Act.
The noble Lord went on to ask about the surpluses on New Towns. I said that we did not expect this surplus to be used in the near future; I am not certain, but I may have even said, "In the foreseeable future". But the position, so far, is that the only New Town in Scotland which has had a surplus has been

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East Kilbride. But it is not a surplus that would be annexed in these terms, because it was applied by them instead of borrowing for new purposes. There will not be a surplus of this kind until a New Town has completed both its housing and industrial operations and has no further need to borrow.
In these circumstances, the likelihood is that the surplus would go to the Ex-chequer for general use, since it would not be required for use in the New Town. But so long as there was need for further borrowing to carry on the purposes of the New Town there would be no annexable surplus in terms of the Bill. The noble Lord then asked a question about repairs. I expected this because I am certain that it is a perfectly fair question, and it would have been just as fair if the figure in the Bill, instead of being 12½ per cent., had been 15 per cent., 20 per cent., or 10 per cent.; and the noble Lord would obviously be entitled to ask, "Why that figure?" Quite frankly, I do not know why, except that it does not seem unreasonable given at least the theory— and it may be very much theory nowadays—that the rent is expected to provide some money towards repairs. Whether that is a reasonable expectation when the rent is as low as £25, I should not like to argue. It is the figure which is in the Bill. I think that there are precedents for a figure of 12£ per cent. on repairs and that may be its origin. Does the noble Lord wish to come back on this?
Lord LYELL: My Lords, I thank the noble Lord for the speed with which he has replied. The only point which I was worried about was that the figure of 12½ per cent. may have appeared reasonable in the "foreseeable future"—and I take the noble Lord's words—but it does not repay any of the repairs. I sought to point out that the landlord was financing the repairs at a loss and that, with a rent increase of 12½ per cent., he will not even cover the cost of financing the repairs, let alone: the cost of the repairs themselves. It is that point which I was worried about. It would be a very small increase—perhaps 13 or 14 per cent.— to cover the cost of finance, but I was seeking to point out that, in these days, 12½ per cent. does not cover the cost of financing.
Lord HUGHES: Yes, my Lords, but there are hopeful signs. One of the big banks will be reducing its base lending rate tomorrow, so we may be moving into a more hopeful position in that respect.
My Lords, the noble Lord asked what was meant by the "reasonable balance" on local authority accounts. The position is quite simple: the Bill accepts the principle that a prudent authority will want to have a balance of some kind to make certain that it does not at the end of a year find itself with an unexpected deficit so that it has to rate for that the following year. Authorities ought not to be aiming at making a deliberate profit on the Housing Revenue Account. That is forbidden. However, they will be allowed to take reasonable balances and I think that this must depend entirely on the size of the Housing Revenue Account. A reasonable balance in the case of an authority with 200,000 houses will be a very different figure from a reasonable balance for an authority which has 2,000 houses.
Lord LYELL: My Lords, if the noble Lord will give way briefly, I am sure that he is aware, as I and, I hope, the House are aware, that the term "balance" can imply a deficit as well as a surplus. So far as I understand it, the Bill and everything that the noble Lord has been saying assume that the term "working balance" means a surplus. If it means a surplus balance, I think that it should say so. I am sure that the noble Lord is aware that a balance may be a surplus balance or a deficit, and if the Bill seeks to prohibit a surplus balance I think that it should say so. The word "balance" cover both surplus and deficit and it is just this woolliness of phraseology of which I was seeking some clarification.
Lord HUGHES: My Lords, I take the noble Lord's point and I will look into it. I must say that, in my simple, non-chartered accountant way, I should have regarded a deficit as a not very workable balance, though most of us with overdrafts seem to manage on what is probably a deficit balance. I think that the intention was that the local authorities, while being forbidden to make a profit on the revenue account, are not being forbidden to have a workable surplus on that account. It may be that the noble

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Lord has put forward a point which should be made clear in the Bill and I shall certainly have it looked at to see whether the words should be put in, provided that we do not create a situation in which a local authority is breaking the law if it ends the year with a deficit. We cannot proceed from one anomaly to another.
My Lords, I think that I have dealt with most of the points raised by the noble Baroness, Lady Elliot. The only thing is, as I said to the noble Lord, Lord Campbell of Croy, that we approach these things from a different standpoint altogether. The noble Baroness spoke of what had taken place as a good system. I suggest that it was like the curate's egg—good in parts. I believe that we are seeking in the Bill to preserve the parts which are good and to improve the parts which we think are bad. To refer to something which happened a little earlier and not accepting the parallel of sending the eggs back to be restamped, we think we are doing something a little better than that in relation to housing.
My Lords, I believe that eventually your Lordships will find that the Bill can go through without radical amendment, but I look forward to what will in due course emerge from the further close scrutiny which the noble Lord, Lord Campbell of Croy, and his colleagues will give to the Bill when we reach the next stage.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

NOISE INSULATION (SCOTLAND) REGULATIONS 1975
4.38 p.m.
Lord HUGHES Lord HUGHES rose to move, That the Draft Noise Insulation (Scotland) Regulations 1975, laid before the House on 21st January, be approved. The noble Lord said: My Lords, Section 18 of the Land Compensation (Scotland) Act 1973 enables the Secretary of State to make regulations imposing a duty or conferring a power on authorities to insulate buildings against noise caused by the construction or the use of certain public works.
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The problems associated with noise from new roads are perhaps more widespread than any other form of nuisance. Serious loss of amenity can very frequently be avoided by judicious planning and design of roads, but this is not always-able, especially in densely populated urban areas. The Government are therefore providing a scheme of sound insulation to cover those cases where, without insulation, peoples' homes would suffer unduly from noise from roads.
The Draft Regulations before the House today provide for the insulation of dwellings and other residential accommodation against noise caused by new and certain altered roads where this noise exceeds a specified level. The draft has already been approved in another place. Comparable Regulations for England and Wales were made in September 1973. Every attempt has been made to ensure that right to noise insulation from new roadworks will be the same throughout Great Britain. The Scottish and English regulations provide for the same qualifying noise level, the same specifications of work to be done and the same procedure for claiming. However, the method and timing of calculation of noise levels which is proposed for the Scottish scheme is different from that presently operating in England. The English method is based on a calculation at a single point in time, from which the prevailing noise levels for up to 15 years ahead are predicted. This approach is not considered appropriate to Scottish conditions, since traffic flows in Scotland are generally much lower than in England and therefore any attempt at long-term prediction of traffic volumes would be open to a much greater margin of error in Scotland than in England. We have opted for a calculation of noise levels based on measurement of existing traffic densities. Measurements will be taken again periodically, and new calculations made in the light of them.
My Lords, the Regulations impose a duty on highway authorities to carry out sound insulation, or to make grants in respect of the cost of insulating those buildings which are subjected to excessive noise from new roads, and roads to which a carriageway has been added, opened to public traffic after 16th October 1972 (Regulation 3). They confer a power to do so in the case of roads opened or

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altered after 16th October 1969 (Regulation 4). This is the same period of retrospection applied by the English Regulations, and discharges an undertaking on the part of Government given in the White Paper (Cmnd. 5124) which preceded the 1973 Compensation Act.
Regulations 3 and 4 will operate when the calculated noise level is at or above 68 decibels, "A" weighting, on the L–10 (18 hour) scale. For noble Lords who do not understand these technicalities, this means, approximately, that the average of the levels of noise for one-tenth of the time during each hour between 6 a.m. and midnight must exceed 68 decibels. This is lower than the threshold of 70 decibels recommended by the Noise Advisory Council and supported by the Urban Motorways Committee. The Regulations also allow an authority to insulate dwellings subjected to noise below this qualifying level, if they are part of a building of which some other part is exposed to this level of noise. This provision should allow some flexibility on the part of highway authorities.
Assessment of noise levels in Scotland will normally be based on traffic counts made within a year of the opening of a new road or additional carriageway. Calculations of noise levels will then be made on the basis of these counts, and, under Regulation 6, a map or list of all houses which quality for insulation will be prepared and made available for inspection. Offers of insulation, or grants in lieu thereof, will be made within three months thereafter. Prevailing noise levels will be reassessed five, 10 and 15 years after a road is opened. A new map or list will then be prepared and offers of insulation made for those houses which have subsequently become subject to excessive noise. Thus, if there is a substantial increase in noise from a road during the period up to 15 years after it has been opened, insulation can be provided to alleviate its effects.
Lord HARMAR-NICHOLLS: My Lords, the Wilson Report suggested that the bearable noise level was 35 decibels. Am I to understand that if the noise is 68 decibels for one-tenth of an hour it is acceptable, but if it is more than one-tenth of an hour in continuity of noise it has to drop down to 35 decibels if the Wilson level is accepted?
Lord HUGHES: My Lords, I am more knowledgeable when I am dealing with matters of housing finance than with this subject. Perhaps the noble Lord will allow me to continue with the excellent brief that has been presented to me, and he may find that an answer will emerge before I finish.
A memorandum describing in detail the method and prescribing the timing of assessment of noise levels will be published separately. Copies of this memorandum have been made available for inspection in the Library. The enabling Act specifically empowers the Secretary of State to specify these elements of the scheme in a document not incorporated in the Regulations. The device has been adopted, because a highly technical document of this nature may require frequent amendment in the light of future experience and technical innovation. I am sure your Lordships will agree that Parliament need not be approached every time a technical alteration to the assessment method is found to be necessary. Steps will be taken to ensure that the memorandum is always available wherever the Regulations are on sale and that Its existence is well publicised. By arrangement with the Joint Committee on Statutory Instruments, addition is to be made to the Explanatory Note, before publication, pointing out the existence of the memorandum.
There may be some houses which are severely affected by construction noise during the building of a road, but which are not likely to be subjected to excessive noise once a road comes into use. A further power has been provided in Regulation 5 to allow authorities to make offers in such cases. The Schedule describes in detail the specifications for the work to be carried out. This package has been shown to be capable of reducing internal noise levels by about 35 decibels from the prevailing external levels. This represents a reduction of about 80 per cent. in noise as experienced. The specifications will apply to all insulation work under these Regulations whether carried out by the highway authority or by a person in receipt of a grant.
There should be no need for people to make claims for sound insulation, under normal circumstances, since authorities will take all the necessary steps to

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identify those buildings which are eligible, and offers of insulation will be made to the owners or occupiers who qualify under the scheme. The procedures to be followed in making and accepting offers of grant or work, and the time limits for the making and accepting of offers are set out in Regulation 8. However, a resident who is not offered insulation and claims to be entitled to such an offer, may appeal to the highway authority under Regulation 13, and that authority will then be required to review its calculations and to give a full explanation if the appeal is rejected.
I have been handed a note which I am having difficulty in deciphering. I am sure that the noble Lord, Lord Campbell of Croy, will be able to say exactly how we have followed what was done by the previous Government. If he does that at sufficient length to enable a legible answer to appear, I may be able to give it at the end of the debate. I beg to move.
Moved, That the Draft Noise Insulation (Scotland) Regulations 1975, laid before the House on 21st January, be approved. —(Lord Hughes.)
4.48 p.m.
Lord CAMPBELL of CROY: My Lords, I had not intended to speak at length but we are grateful to the noble Lord, Lord Hughes, for his explanation of these Regulations and we sympathise with him about the technical nature of some of it. He will not be surprised to hear that my noble friends and I are, in general, in favour of what is proposed, since it arises from our 1973 Act and the policy of assisting those whose homes are near to road traffic. I have two queries, and let me say straight away that we will understand if in the course of this short debate it is not possible for the Minister to reply to them now, or perhaps to decipher any note which he may receive.
My first query is about the conditions of grant in Regulation 10. From paragraph (c), it appears to be stipulated that the work must be completed within 12 months and there does not appear to be any discretion about this. What will happen if, for some reason beyond the fault of the person concerned, it is not possible to complete the work in that time? We found from experience of
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the Housing Improvement Scheme during the last four years that there was a time of acute shortage of labour and building materials, when it was difficult for people whose applications had been approved to get the work completed before the final date; and, consequently, as your Lordships will know, that date was considerably postponed. However, in this case it appears that they simply have 12 months in which to get the work finished. At present, the construction industry is unfortunately suffering a recession, but these periods come in cycles and it was only two or three years ago that the industry was fully extended, so there could come a time in the future when, with the best will in the world, it would be impossible to get approved work finished in the stipulated time.
My second query, which is a small but interesting one, arises from paragraph 4 of the Schedule. Where double windows are being created, it appears that a Venetian blind is insisted on, and I presume that the purpose of this is to prevent direct heat from the sun where sunlight falls directly on a double window which it is not possible to open. It could be that it is a matter of light as well, but I presume that it is heat because the occupier would no doubt be expected to provide internal curtains against light—for example, headlamps at night, as well as daylight. But if the windows are not in the direct line of the sun, and if the owner does not wish to have this additional work done, is it still obligatory? With all the complicated paraphernalia described in paragraph 4 of the Schedule, it looks as though the job of installing a Venetian blind will be more complicated and expensive than the double glazing job which is the main object. Therefore it seemed to me odd that there was no discretionary element there, because the final sentence of paragraph 4 of the Schedule gives a certain amount of latitude, but not to dispense altogether—as I interpret it—with a Venetian blind which, in the circumstances I have described, would not be necessary and might be an extra which the owner would not wish.
Lord MOWBRAY and STOURTON: My Lords, a further point which my noble friend has not asked about, and about which I am curious, concerns Regulation 10. Supposing the occupants of a house were an old couple who were

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deaf and so did not mind about noise. They may not want the trouble of having the work done. Would not the noble Lord the Minister agree that it might be a wise addition to the Order to add "and owner", since the occupant may be a person who willingly refuses to have the work done because it is not in his or her own personal interest, whereas to any normal person in good health it would be very useful?
Lord HUGHES: My Lords, in reply to the noble Lord, Lord Harmar-Nicholls, the position is that the 35 decibels is the figure for inside a house and 68 decibels, to which I have referred, is for outside. With regard to the Venetian bind, the noble Lord, Lord Campbell of Croy, is correct in his assumption that the purpose here was to reduce the possibility of overheating in the case of a window which could not be opened to provide ventilation, which would be the position with double glazing. As the noble Lord suspected, I am not in a position to give an answer on this, but I certainly see the point. There is hardly any need to install a Venetian blind in a North-facing window, which will never get any sun anyway. I do not visualise the circumstances in which this could apply, but I should certainly like to look into the matter and write to the noble Lord.
With reference to the matter of flexibility and the 12 months period, I suspect that the answer is that there is not any flexibility because, as one knows, if there is not a period fixed at some time, then it becomes regarded as a door which is permanently open. If one took away the 12 month period, we would have to say "provided it did not exceed it by so' much", and we could be in exactly the same position as in the difficult situation which arose regarding improvement grants, because of a strike. Apart from everything else, there was a shortage of materials and people could not get on with the work because they had to wait a long time for plasterboard. The delay in delivery of plasterboard rose to eight or nine months, compared with a normal delivery period of two or three weeks. We cannot make provision for that sort of situation in an Order of this kind.
I think the probability is that as people will be wanting work done, because they
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are being faced with an intolerable situation there will be a very definite urge on them to get it done as quickly as possible. I do not think this is the sort of work which involves structural alterations, and so should not take long. Many of us who now have double glazing know that it is comparatively simple to install, and it is certainly not time consuming. I am not certain that I can do anything other than inquire about the point raised by the noble Lord, Lord Mowbray and Stourton. If there was a change of house and the new people wanted to do something which had not been done by their predecessors, we would suddenly find that—
Lord MOWBRAY and STOURTON: A change of occupier.
Lord HUGHES: If there was something which had not been done by the previous occupier, we might find that there had been a sudden unaccountable increase in deafness among the departing tenants. I am not certain whether this point could be, or is, covered by the noble Lord's other point about applying it to the owner. I recollect that there was a reference in my remarks to the owner-occupier. I should like to look at this and write to the noble Lord to explain the position.
Lord MOWBRAY and STOURTON: My Lords, may I ask the Minister, with reference to the question raised by my noble friend Lord Campbell of Croy, whether, if he had a bedroom facing North and there was a sudden great increase of traffic at night, he would not be very glad of double glazing so that he would not be kept awake at night by headlights, especially if there was a curve in the road at that point?
Lord HUGHES: My Lords, I do not think that the noble Lord's point was in connection with double glazing; it was in connection with Venetian blinds. In order to keep out light it is not necessary to have a Venetian blind fitted on windows with double glazing. It is sufficient to have an ordinary blind which can be pulled down. I do not know whether that is the answer, but I will query the situation. My notes specifically relate the provision of the Venetian blind to a possible overheating of the house, which

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the noble Lord, Lord Campbell of Croy, assumed was the point intended.
On Question, Motion agreed to.

UNSOLICITED GOODS AND SERVICES (AMENDMENT) BILL
4.58 p.m.
Lord DRUMALBYN: My Lords, I beg to move that this Bill be now read a second time. This is a short Bill, limited in scope, and it is the ideal sort of Bill for a Back Bencher. It was introduced in another place by my honourable friend and erstwhile colleague at the Department of Trade and Industry, Mr. Anthony Grant. The 1971 Act, which it amends, was introduced by my honourable friend Mr. Philip Goodhart, and that Act was an improved version of a Bill presented and carried through in another place by Mr. Arthur Davidson and which was a casualty in the 1970 General Election. There is no doubt, therefore, that legislation on these lines has the support of all Parties in the other place, and I trust that it will have the support of all Parties in your Lordships' House as well. I should add that the Government have given all possible assistance in preparing this Bill and in consulting representatives of interests— that is. legitimate interests—mainly concerned.
The purpose of the Bill is to amend the provisions of the Unsolicited Goods and Services Act 1971 which deal with directory entries. Those provisions were intended to stop the practice of sending by post, or otherwise, what appeared to be invoices in respect of entries in directories, with the object of deceiving the recipients into paying for such entries in the belief that an obligation to pay had already been incurred, although no order for such an entry had been given. Unfortunately, the provisions have not succeeded in stamping out this abuse and there is a good deal of evidence that it continues to be widely practised. It worries the police and it damages the good name of honest publishers.
There are several ways in which the deception is practised. The most common are these. What appears to be an extract from a directory which has already been published may be sent—a voucher
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copy, as it were—together with a demand for payment. Sometimes the entry has been included, unordered and unwanted; sometimes no such entry has appeared, or indeed it may never appear; or an entry may be sent, apparently for verification, together with an invoice. In any such case the seeming invoice may be passed for payment without checking whether the entry was ever ordered. Some of your Lordships may think that if a firm's control system is as lax as that, it has only itself to blame if it pays bills for services which have not been rendered or even ordered, and which are practically worthless anyhow when they are rendered The fact remains, however, that those who play these tricks are wily and get away with substantial sums of money. More-over, it is small businesses which are most vulnerable to this kind of deception.
For these reasons, the 1971 Act pro-vides that no one need pay for an entry which has been included, or is to be included, in a directory unless he, or someone on his behalf, signed an order for it on his own regular order form or business stationery, or signed a note of agreement complying with certain requirements laid down in Section 3 of the Act. That states that any person who demands payment or asserts a right to payment, without having complied with the requirements of the Act, commits an offence and is liable to a fine not exceeding £400.
A person is regarded as asserting a right to payment if he sends an invoice or similar document which shows the amount payable for the service, and does not state as least as prominently as the amount that no claim is made to payment. But these provisions have proved inadequate for two reasons. First, this concept of prominence of the statement that no claim is made for payment is not precise. The people who run these bogus directories still send out documents in the form of invoices in which the statements required by the Act are deliberately printed in such a way that they are likely to be overlooked by a proportion of the recipients. I am informed that there have been over 900 of these complaints received by the Department since the Act came into effect. Secondly, the penalties which have been imposed where prosecutions have proceeded have tended to be quite small and seriously out of proportion to the proceeds of the fraud.

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This Bill has two main objects. The first is to ensure that disclaimers are so conspicuous that they cannot be overlooked, and to tighten up the note of agreement provision which must be complied with before a demand for payment can legally be made. It is proposed to do this by amending that part of Section 3(3) of the Act which lays down the requirement, and substituting a power to make regulations about the content and form of notices, agreements, invoices and similar documents. In addition, it is proposed in Clause 2(2) to replace Section 6(2) of the Act, which relates 10 the prominence of the disclaimer, with the requirement that any invoice or the like must comply with the regulations. Clauses 1 and 2 will enable the Secretary of State not only to lay down precise requirements with which documents must comply, but also to differentiate between various classes of documents and various circumstances so as to reduce to a minimum any inconvenience to reputable bodies. They will also enable him to change the regulations should an artful dodger find a loophole through which to extract money from the unwary.
The second main objective is to provide a stronger deterrent. The police have told us that the director of one firm, not a United Kingdom citizen, I may add, got away with about £250,000. In such cases a fine of £400 is plainly derisory—I call it piffling. So Clause 3. while retaining the maximum fine of £400 on summary conviction, provides no limit to the amount of the fine for a person convicted on indictment. If your Lordships pass this Bill this clause will come into operation immediately it receives the Royal Assent, although it will apply only to offences committed after the Bill becomes law. Clause 1, which gives the power to make regulations, will also come into operation on the passing of the Bill.
It is not expected that the regulations will take long to draft. Clause 2, which amends Section 3(3) and Section 6(2) of the 1971 Act, will come into effect on such date, or dates, as the Secretary of State may appoint by order. The regulations made under Clause 1 can then be brought into force. Meantime, until those regulations are brought into force, the existing provisions of the 1971 Act will continue to have effect. My Lords,
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I hope that this Bill will receive your Lordships' assent and that it will be proved successful in putting a stop to what is a very unpleasant form of fraud. I beg to move.
Moved, That the Bill be now read 2a.— (Lord Drumalbyn.)
5.5 p.m.
Viscount HANWORTH: My Lords, we have had a very clear and complete exposition of this Bill by the noble Lord, Lord Drumalbyn. Therefore it only remains for me to say that I support it and that I feel it is an intolerable situation if we have brought in legislation which is being flouted by deceitful people to the extent which is apparent. I hope that this Bill will be given a very rapid passage through this House and that the provision for increasing the penalties will not be altered during its stages. We must remember today that, in many cases, penalties—and this, I think, is a good example—are quite inadequate to act as a deterrent.
5.6 p.m.
Lord JACQUES: My Lords, I have pleasure in supporting the noble Lord in his quest to remove the mischief which is being caused by unethical directory publishers in sending out invoices which firms can so easily be deceived into paying. The sponsor of this Bill in another place announced that the Department had received over 800 complaints since the Act was passed in 1971. This figure has now increased to 950–100 from the beginning of the present year. A matter which has caused a great deal of concern is the practice of sending invoices from overseas, usually without even a small print disclaimer. Even though this may constitute an offence in the United Kingdom, our legislation is no deterrent unless prosecutions can be brought. This is impossible, unless the operators come to the United Kingdom. The only effective solution is to persuade other countries to introduce similar legislation to our own, and this the Government will seek to do. It will, of course, take time to achieve this and, in the meantime, firms in this country must be increasingly vigilant in checking any overseas invoices.
The House will wish me to say something about the Government's intentions regarding regulations. The object of the regulations laying down the requirements

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for invoices and similar documents will be to ensure that in future any invoice for an unordered entry will bear a disclaimer so conspicuous that the recipient cannot overlook it and be deceived into paying. The intention, therefore, is to lay down a detailed specification for the form of disclaimer which must appear. We have it in mind that this would be along these lines: first, in the top left-hand corner of the document the following words would appear in a specified colour and type-size: "This is not a demand for payment. There is no obligation to pay the charge shown." In addition, the words, "This is not an invoice" will have to be printed diagonally across the face of the document, also in a specified colour and in a type-size larger than any other type appearing on the invoice. These requirements will, of course, not apply to invoices sent out by reputable publishers demanding payment for an entry which has been properly ordered.
The main purpose of the regulations relating to notes of agreement will be to ensure that the firm is not deceived into signing a valid order and so becomes liable to pay for an unwanted entry. We intend to achieve this by requiring that a specified warning is printed on the face of the note of agreement to alert the reader to the consequences of signing the document. We shall also require specified information about the directory to appear, broadly along the lines of the requirements of the 1971 Act. We shall draw up these regulations in the light of consultations already under way with interested parties, including reputable directory publishers and the Post Office. We do not want to cause legitimate publishers unnecessary difficulties in the conduct of their business. To meet their needs we shall do everything possible, consistent with the objective of preventing practices which deceive the public. It is in the interests of reputable publishers that those who are disreputable should be eliminated from the market.

Public Corporation

Relative Consumer Body

When Established

National Coal Board

Domestic Coal Consumers' Council.

First chairman appointed in July 1947 under the Coal Industry Nationalisation Act 1946.

5.11 p.m.
Lord DRUMALBYN: My Lords, I should like to thank the noble Viscount, Lord Hanworth, for his support and also, in particular, the noble Lord, Lord Jacques, for his response to this Bill. It must be plain to your Lordships that I was not exaggerating when I said that Mr. Anthony Grant who introduced this Bill had all possible support and assistance from the Department Your Lordships will have noted that the Department have already taken many steps to bring this Bill into operation, to get regulations prepared and to consult with various parties. I think that the extent to which the Department have assisted must be almost unprecedented. All I can say is that this is an excellent augury for the Bill and for its success, and I hope very much that your Lordships will give it a very speedy passage. I should again like to thank the noble Lord, Lord Jacques, and the Department for their courtesy.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

SOCIAL SECURITY BENEFITS BILL
Report received.
  PUBLIC CORPORATIONS AND CONSUMER BODIES
  PUBLIC CORPORATIONS AND CONSUMER BODIES