Skip to main content

Clause 3

Volume 887: debated on Tuesday 4 March 1975

The text on this page has been created from Hansard archive content, it may contain typographical errors.

Relief For "Do-It-Yourself" Builders

7.58 p.m.

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'.

Amendment No. 377 is not moved, Mr. Deputy Speaker, under protest.

The next amendment selected is Amendment No. 305, with which we are to take Amendments Nos. 306 and 307.

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.

That is agreeable to us.

8.0 p.m.

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'.

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'.

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 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 were to signify his intention to accept, at any rate in principle, what is proposed in the amendment.

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.

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 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.

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.

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 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 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.

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 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.

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 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.

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 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.

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 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.

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 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.

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 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 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.

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.

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.

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 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.

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.

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.

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-p 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.

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 of new houses, which would qualify under the clause as drafted?

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-p 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.

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 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 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 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

Division No. 121.]

AYES

[9.11 p.m.

Adley, RobertDurant, TonyHicks, Robert
Aitken, JonathanEden, Rt Hon Sir JohnHiggins, Terence L.
Alison, MichaelEdwards, Nicholas (Pembroke)Holland, Philip
Amery, Rt Hon JulianElliott, Sir WilliamHooson, Emlyn
Atkins, Rt Hon H. (Spelthorne)Emery, PeterHordern, Peter
Awdry, DanielEvans, Gwynfor (Carmarthen)Howe Rt Hon Sir Geoffrey
Bain, Mrs MargaretEwing, Mrs Winifred (Moray)Howell, David (Guildford)
Baker, KennethEyre, ReginaldHowell, Ralph (North Norfolk)
Banks, RobertFairbairn, NicholasHowells, Geraint (Cardigan)
Beith, A. J.Fairgrieve, RussellHurd, Douglas
Bell, RonaldFarr, JohnIrving, Charles (Cheltenham)
Berry, Hon AnthonyFell, AnthonyJames, David
Biffen, JohnFinsberg GeoffreyJenkin, Rt Hon P. (Wanst'd & W'df'd)
Biggs-Davison, JohnFisher, Sir NigelJessel, Toby
Blaker, PeterFletcher, Alex (Edinburgh N)Johnston, Russell (Inverness)
Bowden, A. (Brighton, Kemptown)Fookes, Miss JanetJones Arthur (Daventry)
Boyson, Dr Rhodes (Brent)Fowler Norman (Sutton C'f'd)Jopling, Michael
Bradford, Rev RobertFox, MarcusJoseph, Rt Hon Sir Keith
Braine, Sir BernardFraser, Rt Hon H. (Stafford & St)Kellett-Bowman, Mrs Elaine
Brittan, LeonFreud, ClementKilfedder, James
Brotherton, MichaelFry, PeterKimball, Marcus
Brown, Sir Edward (Bath)Galbraith, Hon. T. G. D.King, Evelyn (South Dorset)
Bryan, Sir PaulGardiner, George (Reigate)King, Tom (Bridgwater)
Buchanan-Smith, AlickGardner, Edward (S Fylde)Kitson, Sir Timothy
Buck, AntonyGilmour, Rt Hon Ian (Chesham)Knight, Mrs Jill
Budgen, NickGilmour, Sir John (East Fife)Lamont, Norman
Bulmer, EsmondGlyn, Dr AlanLane, David
Burden, F. A.Goodhart, PhilipLangford-Holt, Sir John
Butler, Adam (Bosworth)Goodhew, VictorLatham, Michael (Melton)
Carlisle, MarkGoodlad, AlastairLawrence, Ivan
Chalker, Mrs LyndaGorst, JohnLawson, Nigel
Channon, PaulGow, 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, HamishLoveridge, John
Clarke, Kenneth (Rushcliffe)Grieve, FercyMacCormick, Iain
Clegg, WalterGriffiths, EldonMcCusker, H.
Cockcroft, JohnGrimond, Rt Hon J.Macfarlane, Neil
Cooke, Robert (Bristol W)Grist, IanMacGregor, John
Cope, JohnGrylls, MichaelMacmillan, Rt Hon M. (Farnham)
Cormack, PatrickHall, Sir JohnMcNair-Wilson, M. (Newbury)
Corrie, JohnHall-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 KeithMarshall, Michael (Arundel)
Crawford, DouglasHannam, JohnMarten, Neil
Critchley, JulianHarrison, Col Sir Harwood (Eye)Mates, Michael
Davies, Rt Hon J. (Knutsford)Harvie Anderson, Rt Hon MissMather, Carol
Dean, Paul (N Somerset)Hastings, StephenMaude, Angus
Dodsworth, GeoffreyHavers, Sir MichaelMawby, Ray
Douglas-Hamilton, Lord JamesHawkins, PaulMaxwell-Hyslop, Robin
du Cann, Rt Hon EdwardHayhoe BarneyMayhew, Patrick
Dunlop, JohnHenderson, DouglasMeyer, Sir Anthony

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.

Miller, Hal (Bromsgrove)Rees-Davies, W. R.Steen, Anthony (Wavertree)
Miscampbell, NormanReid, GeorgeStewart, Donald (Western Isles)
Mitchell, David (Basingstoke)Renton, Rt Hon Sir D. (Hunts)Stewart, Ian (Hitchin)
Moate, RogerRenton, Tim (Mid-Sussex)Stokes, John
Molyneaux, JamesRhys Williams, Sir BrandonStradling Thomas, J.
Monro, HectorRidley, Hon NicholasTaylor, R. (Croydon NW)
Montgomery, FergusRidsdale, JulianTaylor, Teddy (Cathcart)
Moore, John (Croydon C)Rifkind, MalcolmTebbit, Norman
More, Jasper (Ludlow)Rippon, Rt Hon GeoffreyTemple-Morris, Peter
Morgan, GeraintRoberts, Michael (Cardiff NW)Thatcher, Rt Hon Margaret
Morgan-Giles, Rear-AdmiralRoberts, 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, DavidRost, Peter (SE Derbyshire)Tugendhat, Christopher
Neave, AireyRoyle Sir Anthonyvan Straubenzee, W. R.
Nelson, AnthonySainsbury, TimViggers, Peter
Neubert, MichaelScott-Hopkins, JamesWainwright, Richard (Colne V)
Newton, TonyShaw, Giles (Pudsey)Wakeham, John
Normanton, TomShaw, Michael (Scarborough)Walters, Dennis
Nott, JohnShelton, William (Streatham)Warren, Kenneth
Onslow, CranleyShepherd, ColinWatt, Hamish
Oppenheim, Mrs SallyShersby, MichaelWeatherill, Bernard
Osborn, JohnSims, RogerWells, John
Page, John (Harrow West)Sinclair, Sir GeorgeWelsh, Andrew
Page, Rt Hon R. Graham (Crosby)Skeet, T. H. H.Whitelaw, Rt Hon William
Paisley, Rev IanSmith, Cyril (Rochdale)Wiggin, Jerry
Parkinson, CecilSmith, Dudley (Warwick)Wigley, Dafydd
Pattie, GeoffreySpeed, KeithWilson, Gordon (Dundee E)
Penhaligon, DavidSpence, JohnWinterton, Nicholas
Percival, IanSpicer, Jim (W Dorset)Wood, Rt Hon Richard
Peyton, Rt Hon JohnSpicer, Michael (S Worcester)Young, Sir G. (Ealing, Acton)
Pink, R. BonnerSproat, IainYounger, Hon George
Powell, Rt Hon J. EnochStainton, Keith
Raison, TimothyStanbrook, IvorTELLERS FOR THE AYES:
Rathbone, TimStanley, JohnMr. W. Benyon and
Rawlinson, Rt Hon Sir PeterSteel, David (Roxburgh)Mr. Fred Silvester
Rees, Peter (Dover & Deal)

NOES

Abse, LeoColeman, DonaldFlannery, Martin
Allaun, FrankColquhoun, Mrs MaureenFletcher, Raymond (Ilkeston)
Anderson, DonaldConcannon, J. D.Fletcher, Ted (Darlington)
Archer, PeterConlan, BernardFord, Ben
Armstrong, ErnestCook, Robin F. (Edin C)Forrester, John
Ashley, JackCorbett, RobinFowler, Gerald (The Wrekin)
Ashton, JoeCox, Thomas (Tooting)Freeson, Reginald
Atkins, Ronald (Preston N)Craigen, J. M. (Maryhill)Garrett, John (Norwich S)
Atkinson, NormanCronin, JohnGarrett, W. E. (Wallsend)
Bagier, Gordon A. T.Crosland, Rt Hon AnthonyGilbert Dr John
Barnett, Guy (Greenwich)Cryer, BobGinsburg, David
Barnett, Rt Hon JoelCunningham, G. (Islington S)Golding, John
Bates, AlfCunningham, Dr J. (Witeh)Gould, Bryan
Benn, Rt Hon Anthony WedgwoodDalyell, TamGourlay, Harry
Bennett, Andrew (Stockport N)Davidson, ArthurGraham, Ted
Bidwell, SydneyDavies, Bryan (Enfield N)Grocott, Bruce
Bishop, E. S.Davies, Denzil (Llanelli)Hamilton, James (Bothwell)
Blenkinsop, ArthurDavies, Ifor (Gower)Hamilton, W. W. (Central Fife)
Boardman, H.Davis, Clinton (Hackney C)Hamling, William
Booth, AlbertDeakins, EricHardy, Peter
Boothroyd, Miss BettyDean, Joseph (Leeds West)Harper, Joseph
Bottomley, Rt Hon Arthurde Freitas, Rt Hon Sir GeoffreyHarrison, Walter (Wakefield)
Boyden, James (Bish Auck)Dell, Rt Hon EdmundHattersley, Rt Hon Roy
Bradley, TomDempsey, JamesHatton, Frank
Bray, Dr JeremyDoig, PeterHayman, Mrs Helene
Brown, Hugh D. (Provan)Dormand, J. D.Healey, Rt Hon Denis
Brown, Robert C. (Newcastle W)Douglas-Mann, BruceHeffer, Eric S.
Brown, Ronald (Hackney S)Duffy, A. E. P.Hooley, Frank
Buchan, NormanDunn, James A.Horam, John
Butler, Mrs Joyce (Wood Green)Dunnett, JackHowell, Denis (B'ham, Sm H)
Callaghan, Rt Hon J. (Cardiff SE)Dunwoody, Mrs GwynethHoyle, Doug (Nelson)
Callaghan, Jim (Middleton & P)Eadie, AlexHuckfield, Les
Campbell, IanEdelman, MauriceHughes, Rt Hon C. (Anglesey)
Canavan, DennisEdge, GeoffHughes, Mark (Durham)
Cant, R. B.Edwards, Robert (Wolv SE)Hughes, Robert (Aberdeen N)
Carmichael, NeilEllis, Tom (Wrexham)Hughes, Roy (Newport)
Carson, JohnEnglish, MichaelHunter, Adam
Carter, RayEvans, Ioan (Aberdare)Irving, Rt Hon S. (Dartford)
Carter-Jones, LewisEvans, John (Newton)Jackson, Colin (Brighouse)
Castle, Rt Hon BarbaraEwing, Harry (Stirling)Jackson Miss Margaret (Lincoln)
Clemitson, IvorFaulds, AndrewJanner, Greville
Cocks, Michael (Bristol S)Fernyhough, Rt Hon E.Jay, Rt Hon Douglas
Cohen, StanleyFitt, Gerard (Belfast W)Jeger, Mrs Lena

Jenkins, Hugh (Putney)Moonman, EricSilverman, Julius
Jenkins, Rt Hon Roy (Stechford)Morris, Alfred (Wythenshawe)Skinner, Dennis
John BrynmorMorris, Charles R. (Openshaw)Small, William
Johnson, James (Hull West)Morris, Rt Hon J. (Aberavon)Smith, John (N Lanarkshire)
Johnson, Walter (Derby S)Moyle, RolandSnape, Peter
Jones, Alec (Rhondda)Mulley, Rt Hon FrederickSpearing, Nigel
Jones, Barry (East Flint)Murray, Rt Hon Ronald KingSpriggs, Leslie
Jones, Dan (Burnley)Newens, StanleyStallard, A. W.
Judd FrankNoble, MikeStewart, Rt Hon M. (Fulham)
Kaufman, GeraldOakes, GordonStott, Roger
Kelley RichardOgden, EricStrang, Gavin
Kerr RussellO'Halloran, MichaelStrauss, Rt Hon G. R.
Kilroy-Silk RobertOrbach, MauriceSummerskill, Hon Dr Shirley
Kinnock, NeilOrme, Rt Hon StanleySwain, Thomas
Lambie, DavidOvenden, JohnTaylor, Mrs Ann (Bolton W)
Lamborn, HarryOwen, Dr DavidThomas, Jeffrey (Abertillery)
Lamond, JamesPadley, WalterThomas, Mike (Newcastle E)
Latham, Arthur (Paddington)Palmer, ArthurThomas Ron (Bristol NW)
Leadbitter, TedPark, GeorgeThorne, Stan (Preston South)
Lee JohnParker, JohnTierney, Sydney
Lewis, Ron (Carlisle)Parry, RobertTinn, James
Lipton, MarcusPavitt, LaurieTomlinson, John
Litterick, TomPendry, TomTorney, Tom
Lomas, KennethPerry, ErnestUrwin, T. W.
Loyden, EddiePhipps, Dr ColinVarley, Rt Hon Eric G.
Luard, EvanPrentice, Rt Hon RegWainwright, Edwin (Dearne V)
Lyon, Alexander (York)Prescott, JohnWalden, Brian (B'ham, L'dyw'd)
Lyons, Edward (Bradford W)Price, C. (Lewisham W)Walker, Harold (Doncaster)
McCartney, HughPrice, William (Rugby)Walker, Terry (Kingswood)
McElhone, FrankRees, Rt Hon Merlyn (Leeds S)Ward, Michael
MacFarquhar, RoderickRichardson, Miss JoWatkins, David
McGuire, Michael (Ince)Roberts, Albert (Normanton)Watkinson, John
Mackenzie, GregorRoberts, Gwilym (Cannock)Weitzman, David
Mackintosh, John P.Robertson, John (Paisley)Wellbeloved, James
Maclennan, RobertRoderick, CaerwynWhite, Frank R. (Bury)
McMillan, Tom (Glasgow C)Rodgers, George (Chorley)White, James (Pollok)
McNamara, KevinRodgers, William (Stockton)Whitehead, Phillip
Madden, MaxRooker, J. W.Whitlock, William
Magee, BryanRoper, JohnWilley, Rt Hon Frederick
Mahon, SimonRose, Paul B.Williams, Alan (Swansea W)
Marks, KennethRoss, Rt Hon W. (Kilmarnock)Williams, Rt Hon Shirley (Hertford)
Marquand, DavidRowlands, TedWilliams, W. T. (Warringon)
Marshall, Dr Edmund (Goole)Ryman, JohnWilson, Alexander (Hamilton)
Marshall, Jim (Leicester S)Sandelson, NevilleWilson, Rt Hon H. (Huyton)
Mason, Rt Hon RoySedgemore, BrianWilson, William (Coventry SE)
Meacher, MichaelSelby, HarryWise, Mrs Audrey
Mellish, Rt Hon RobertShaw, Arnold (Ilford South)Woodall, Alec
Mikardo, IanSheldon, Robert (Ashton-u-Lyne)Wrigglesworth, Ian
Millan, BruceShore, Rt Hon PeterYoung, 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, WilliamSillars, JamesMr. John Ellis.

Question accordingly negatived.

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.]

Order. Will right hon. and hon. Members who do not wish to listen to the moving of the amendment kindly withdraw from the Chamber quietly?

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 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?

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 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.

Does the hon. Gentleman have it in mind to introduce amending legislation on this point at a later date?

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.

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.