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Income Tax: Alteration Of Additional Rates For 1974–75

Volume 887: debated on Tuesday 4 March 1975

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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 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;'.

The next amendment is Amendment No. 346, in page 3, line 37, at beginning insert:

'where an individual's total income exceeds £3,000,'.

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.

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.

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.

I beg to move Amendment No. 349, in page 3, line 39, leave out '10' and insert '5'.

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 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! 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.

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?

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.

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, 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.

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 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, 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.

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 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.

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.

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.

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 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.

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 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?

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.

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.

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?

If the hon. Member investigates the matter, he will find that there is very little truth in what he has just said.

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?

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 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 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.

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 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.

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 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 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.

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 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.

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 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.

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 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.

Does the hon. Gentleman agree that a motor car, television and telephone are all the classic symptoms of poverty?

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- 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 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.

I was observing that the present level of investment in building societies conflicted with the point about savings made by the hon. Gentleman.

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 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.

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 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.

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 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.

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.

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.

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.

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.]—

I think that the hon. Gentleman has sufficiently awakened too many hon. Members. I cannot hear what he is saying.

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—

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.

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 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.

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—

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 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 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.

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?

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.

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.

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.

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 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 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.

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.

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.

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.

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.

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.

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.

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.

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.?

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 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.

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" 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?

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.

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.

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.

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.

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.

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.

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 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.

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.

The hon. Member should contain himself. What is happening in the tax system is—

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.

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.

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 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.

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?

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.

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?

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 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.

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.

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.

Division No. 122.]


[11.43 p.m.

Adley, RobertBiffen, JohnBuck, Antony
Aitken, JonathanBiggs-Davison, JohnBudgen, Nick
Alison, MichaelBlaker, PeterBulmer, Esmond
Amery, Rt Hon JulianBowden, A. (Brighton, Kemptown)Burden, F. A.
Atkins, Rt Hon H. (Spelthorne)Boyson, Dr Rhodes (Brent)Butler, Adam (Bosworth)
Awdry, DanielBradford, Rev RobertCarlisle, Mark
Bain, Mrs MargaretBraine, Sir BernardCarson, John
Baker, KennethBrittan, LeonChalker, Mrs Lynda
Banks, RobertBrotherton, MichaelChannon, Paul
Beith, A. J.Brown, Sir Edward (Bath)Churchill, W. S.
Benyon, W.Bryan, Sir PaulClark, Alan (Plymouth, Sutton)
Berry, Hon AnthonyBuchanan-Smith, AlickClark, William (Croydon S)

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.

Clarke, Kenneth (Rushcliffe)James, DavidRathbone, Tim
Clegg, WalterJenkin, Rt Hon P. (Wanst'd & W'df'd)Rawlinson, Rt Hon Sir Peter
Cockcroft, JohnJessel, TobyRees, Peter (Dover & Deal)
Cooke, Robert (Bristol W)Johnston, Russell (Inverness)Rees-Davies, W. R.
Cope, JohnJones, Arthur (Daventry)Reid, George
Cormack, PatrickJopling, MichaelRenton, Rt Hon Sir D. (Hunts)
Corrie, JohnJoseph, Rt Hon Sir KeithRenton, Tim (Mid-Sussex)
Costain, A. P.Kaberry, Sir DonaldRhys Williams, Sir Brandon
Craig, Rt Hon W. (Belfast E)Kellett-Bowman, Mrs ElaineRidley, Hon Nicholas
Crawford, DouglasKershaw, AnthonyRidsdale, Julian
Critchley, JulianKilfedder, JamesRifkind, Malcolm
Crowder, F. P.Kimball, MarcusRippon, 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, GeoffreyKitson, Sir TimothyRoss, Stephen (Isle of Wight)
Douglas-Hamilton, Lord JamesKnight, Mrs JillRoss, William (Londonderry)
du Cann, Rt Hon EdwardLamont, NormanRossi, Hugh (Hornsey)
Dunlop, JohnLane, DavidRost, Peter (SE Derbyshire)
Durant, TonyLangford-Holt, Sir JohnRoyle, Sir Anthony
Eden, Rt Hon Sir JohnLatham, Michael (Melton)Sainsbury, Tim
Edwards, Nicholas (Pembroke)Lawrence, IvanScott-Hopkins, James
Elliott, Sir WilliamLawson, NigelShaw, Giles (Pudsey)
Emery, PeterLester, Jim (Beeston)Shaw, Michael (Scarborough)
Evans, Gwynfor (Carmarthen)Lewis, Kenneth (Rutland)Shelton, William (Streatham)
Ewing, Mrs Winifred (Moray)Loveridge, JohnShepherd, Colin
Eyre, ReginaldMacCormick, IainShersby, Michael
Fairbairn, NicholasMcCrindle, RobertSilvester, Fred
Farr, JohnMcCusker, H.Sims, Roger
Fell, AnthonyMacfarlane, NeilSinclair, Sir George
Finsberg GeoffreyMacGregor, JohnSkeet, T. H. H.
Macmillan, Rt Hon M. (Farnham)Smith, Cyril (Rochdale)
Fisher, Sir NigelMcNair-Wilson, M. (Newbury)Smith, Dudley (Warwick)
Fletcher-Cooke, CharlesMcNair-Wilson, P. (New Forest)Speed, Keith
Fookes, Miss JanetMarshall, Michael (Arundel)Spence, John
Fowler Norman (Sutton C'f'd)Spicer, Jim (W Dorset)
Fox, MarcusMarten, NeilSpicer, Michael (S Worcester)
Fraser, Rt Hon H. (Stafford & St)Mates, MichaelSproat, Iain
Freud, ClementMather, CarolStainton, Keith
Fry, PeterMaude, AngusStanbrook, Ivor
Galbraith, Hon. T. G. D.Mawby, RayStanley, John
Gardiner, George (Reigate)Maxwell-Hyslop, RobinSteel, David (Roxburgh)
Gardner, Edward (S Fylde)Mayhew, PatrickSteen, Anthony (Wavertree)
Gilmour, Rt Hon Ian (Chesham)Meyer, Sir AnthonyStewart, Donald (Western Isles)
Gilmour, Sir John (East Fife)Miller, Hal (Bromsgrove)Stewart, Ian (Hitchin)
Glyn, Dr AlanMiscampbell, NormanStokes, John
Goodhart, PhilipMitchell, David (Basingstoke)Stradling Thomas, J.
Goodhew, VictorMoate, RogerTaylor, R. (Croydon NW)
Goodlad, AlastairMolyneaux, JamesTaylor, Teddy (Cathcart)
Gorst, JohnMonro, HectorTebbit, Norman
Gow, Ian (Eastbourne)Montgomery, FergusTemple-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, HamishMorgan, GeraintThomas, Rt Hon P. (Hendon S)
Grieve, PercyMorgan-Giles, Rear-AdmiralThompson, George
Griffiths, EldonMorris, Michael (Northampton S)Thorpe, Rt Hon Jeremy (N Devon)
Grimond, Rt Hon J.Morrison, Charles (Devizes)Townsend, Cyril D.
Grist, IanMorrison, Hon Peter (Chester)Tugendhat, Christopher
Gryils, MichaelMudd, Davidvan Straubenzee, W. R.
Hall, Sir JohnNeave, AireyVaughan, Dr Gerard
Hall-Davis, A. G. F.Nelson, AnthonyViggers, Peter
Hamilton, Michael (Salisbury)Neubert, MichaelWainwright, Richard (Colne V)
Hampson, Dr KeithNewton, TonyWakeham, John
Hannam, JohnNormanton, TomWalters, Dennis
Harrison, Col Sir Harwood (Eye)Nott, JohnWarren, Kenneth
Harvie Anderson, Rt Hon MissOnslow, CranleyWatt, Hamish
Hastings, StephenOppenheim, Mrs SallyWeatherill, Bernard
Havers, Sir MichaelOsborn, JohnWells, John
Hawkins, PaulPage, John (Harrow West)Welsh, Andrew
Hayhoe BarneyPage, Rt Hon R. Graham (Crosby)whitelaw, Rt Hon William
Henderson, DouglasPaisley, Rev IanWiggin, Jerry
Hicks, RobertPardoe, JohnWigley, Dafydd
Higgins, Terence L.Parkinson, CecilWilson, Gordon (Dundee E)
Holland, PhilipPattie, GeoffreyWinterton, Nicholas
Hooson, EmlynPenhaligon, DavidWood, Rt Hon Richard
Hordern, PeterPercival, IanYoung, Sir G. (Ealing, Acton)
Howe Rt Hon Sir GeoffreyPeyton, Rt Hon JohnYounger, Hon George
Howell, David (Guildford)Pink, R. Bonner
Howell, Ralph (North Norfolk)Powell, Rt Hon J. EnochTELLERS FOR THE AYES:
Howells, Geraint (Cardigan)Prior, Rt Hon JamesMr. Russel Fairgrieve and
Hurd, DouglasRaison, TimothyMr. Spencer Le Marchan


Abse, LeoFernyhough, Rt Hon E.Madden, Max
Allaun, FrankFlannery, MartinMagee, Bryan
Anderson, DonaldFletcher, Raymond (Ilkeston)Mahon, Simon
Archer, PeterFletcher, Ted (Darlington)Marks, Kenneth
Armstrong, ErnestFoot, Rt Hon MichaelMarquand, David
Ashley, JackFord, BenMarshall, Dr Edmund (Goole)
Ashton, JoeForrester, JohnMarshall, Jim (Leicester S)
Atkins, Ronald (Preston N)Fowler, Gerald (The Wrekin)Mason, Rt Hon Roy
Atkinson, NormanFraser John (Lambeth, N'w'd)Meacher, Michael
Bagier, Gordon A. T.Freeson, ReginaldMellish, Rt Hon Robert
Barnett, Guy (Greenwich)Garrett, John (Norwich S)Mikardo, Ian
Barnett, Rt Hon JoelGarrett, W. E. (Wallsend)Millan, Bruce
Bates, AlfGilbert Dr JohnMiller, Dr M. S. (E Kilbride)
Benn, Rt Hon Anthony WedgwoodGinsburg, DavidMiller, Mrs Millie (Ilford N)
Bennett, Andrew (Stockport N)Golding, JohnMitchell, R. C. (Soton, Itchen)
Bidwell, SydneyGould, BryanMolloy, William
Bishop, E. S.Gourlay, HarryMoonman, Eric
Blenkinsop, ArthurGraham, TedMorris, Alfred (Wythenshawe)
Boardman, H.Grocott, BruceMorris, Charles R. (Openshaw)
Booth, AlbertHamilton, James (Bothwell)Morris, Rt Hon J. (Aberavon)
Boothroyd, Miss BettyHamilton, W. W. (Central Fife)Moyle, Roland
Bottomley, Rt Hon ArthurHamling WilliamMulley, Rt Hon Frederick
Boyden, James (Bish Auck)Hardy, PeterMurray, Rt Hon Ronald King
Bradley, TomHarper, JosephNewens, Stanley
Bray, Dr JeremyHarrison, Walter (Wakefield)Noble, Mike
Brown, Hugh D. (Provan)Hattersley, Rt Hon RoyOakes, Gordon
Brown, Robert C. (Newcastle W)Hatton, FrankOgden, Eric
Brown, Ronald (Hackney S)Hayman, Mrs HeleneO'Halloran, Michael
Buchan, NormanHealey, Rt Hon DenisOrbach, Maurice
Butler, Mrs Joyce (Wood Green)Heffer, Eric S.Orme, Rt Hon Stanley
Callaghan, Jim (Middleton & P)Hooley, FrankOvenden, John
Campbell, IanHoram, JohnOwen, Dr David
Canavan, DennisHowell, Denis (B'ham, Sm H)Padley, Walter
Cant, R. B.Hoyle, Doug (Nelson)Palmer, Arthur
Carmichael, NeilHuckfield, LesPark, George
Carter, RayHughes, Mark (Durham)Parker, John
Carter-Jones, LewisHughes, Robert (Aberdeen N)Parry, Robert
Castle, Rt Hon BarbaraHughes, Roy (Newport)Pendry, Tom
Clemitson, IvorHunter, AdamPerry, Ernest
Cocks, Michael (Bristol S)Irving, Rt Hon s. (Dartford)Phipps, Dr Colin
Cohen, StanleyJackson, Colin (Brighouse)Prentice, Rt Hon Reg
Coleman, DonaldJackson Miss Margaret (Lincoln)Prescott, John
Colquhoun, Mrs MaureenJanner, GrevillePrice, C. (Lewisham W)
Concannon, J. D.Jay, Rt Hon DouglasPrice, William (Rugby)
Conlan, BernardJeger, Mrs LenaRichardson, Miss Jo
Cook, Robin F. (Edin C)Jenkins Hugh (Putney)Roberts, Albert (Normanton)
Corbett, RobinJenkins, Rt Hon Roy (Stechford)Roberts, Gwilym (Cannock)
Cox, Thomas (Tooting)John BrynmorRobertson, John (Paisley)
Craigen, J. M. (Maryhill)Roderick, Caerwyn
Johnson, James (Hull West)Rodgers, George (Chorley)
Cronin, JohnJonnson, Walter (Derby S)Rodgers, William (Stockton)
Crosland, Rt Hon AnthonyJones, Alec (Rhondda)Rooker, J. W.
Cryer, BobJones, Barry (East Flint)Roper, John
Cunningham, G. (Islington S)Jones, Dan (Burnley)Rose, Paul B.
Cunningham, Dr J. (Witeh)Judd, FrankRoss, Rt Hon W. (Kilmarnock)
Dalyell, TamKaufman, GeraldRowlands, Ted
Davidson, ArthurKelley, RichardRyman, John
Davies, Bryan (Enfield N)Kerr, RussellSandelson, Neville
Davies, Denzil (Llanelli)Kilroy-Silk, RobertSedgemore, Brian
Davis, Ifor (Gower)Kinnock, NeilSelby, Harry
Davis, Clinton (Hackney C)Lamble, DavidShaw, Arnold (Ilford South)
Deakins, EricLamborn, HarrySheldon, Robert (Ashton-u-Lyne)
Dean, Joseph (Leeds West)Lamond, JamesShore, Rt Hon Peter
de Freitas, Rt Hon Sir GeoffreyLatham, Arthur (Paddington)Short, Rt Hon E. (Newcastle C)
Dell, Rt Hon EdmundLeadbitter, TedShort, Mrs Renée (Wolv NE)
Dempsey, JamesLee, JohnSilkin, Rt Hon John (Deptford)
Doig, PeterLewis, Ron (Carlisle)Silkin, Rt Hon S. C. (Dulwich)
Dormand, J. D.Lipton, MarcusSillars, James
Douglas-Mann, BruceLitterick, TomSilverman, Jullus
Duff, A. E. P.Lomas, KennethSkinner, Dennis
Dunn, James A.Loyden, EddieSmall, William
Dunnett, JackLuard, EvanSmith, John (N Lanarkshire)
Dunwoody, Mrs GwynethLyon, Alexander (York)Snape, Peter
Eadie, AlexLyons, Edward (Bradford W)Spearing, Nigel
Edelman, MauriceMcCartney, HughSpriggs, Leslie
Edge, GeoffMcElhone, FrankStallard, A. W.
Edwards, Robert (Wolv SE)MacFarquhar, RoderickStewart, Rt Hon M. (Fulham)
Ellis, Tom (Wrexham)McGuire, Michael (Ince)Stoddart, David
English, MichaelMackenzie, GregorStott, Roger
Evans, Ioan (Aberdare)Mackintosh, John P.Strang, Gavin
Evans, John (Newton)Maclennan, RobertStrauss, Rt Hon G. R.
Ewing, Harry (Stirling)McMillan, Tom (Glasgow C)Summerskill, Hon Dr Shirley
Faulds, AndrewMcNamara, KevinSwain, Thomas

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, MichaelWilson, Alexander (Hamilton)
Thomas, Ron (Bristol NW)Watkins, DavidWilson, Rt Hon H. (Huyton)
Thorne, Stan (Preston South)Watkinson, JohnWilson, William (Coventry SE)
Tierney, SydneyWeitzman, DavidWise, Mrs Audrey
Tinn, JamesWellbeloved, JamesWoodall, Alec
Tomlinson, JohnWhite, Frank R. (Bury)Wrigglesworth, Ian
Torney, TomWhite, James (Pollok)Young, David (Bolton E)
Urwin, T. W.Whitehead, Phillip
Varley, Rt Hon Eric G.Whitlock, WilliamTELLERS FOR THE NOES:
Wainwright, Edwin (Dearne V)Willey, Rt Hon FrederickMr. 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.]

Division No. 123.]


[11.56 p.m.

Adley, RobertEyre, ReginaldJessel, Toby
Aitken, JonathanFairbairn, NicholasJohnston, Russell (Inverness)
Alison, MichaelFairgrieve, RussellJones Arthur (Daventry)
Amery, Rt Hon JulianFarr, JohnJopling, Michael
Atkins, Rt Hon H. (Spelthorne)Fell, AnthonyJoseph, Rt Hon Sir Keith
Awdry, DanielFinsberg GeoffreyKaberry, Sir Donald
Bain, Mrs MargaretFisher, Sir NigelKellett-Bowman, Mrs Elaine
Baker, KennethFletcher-Cooke, CharlesKershaw, Anthony
Banks, RobertFookes, Miss JanetKilfedder, James
Beith, A. J.Fowler Norman (Sutton C'f'd)Kimball, Marcus
Berry, Hon AnthonyFox, MarcusKing, Evelyn (South Dorset)
Biffen, JohnFraser, Rt Hon H. (Stafford & St)King, Tom (Bridgwater)
Biggs-Davison, JohnFreud, ClementKitson, Sir Timothy
Blaker, PeterFry, PeterKnight, Mrs Jill
Bowden, A. (Brighton, Kemptown)Galbraith, Hon. T. G. D.Lamont, Norman
Boyson, Dr Rhodes (Brent)Gardiner, George (Reigate)Lane, David
Bradford, Rev RobertGardner, Edward (S Fylde)Langford-Holt, Sir John
Braine, Sir BernardGilmour, Rt Hon Ian (Chesham)Latham, Michael (Melton)
Brittan, LeonGilmour, Sir John (East Fife)Lawrence, Ivan
Brown, Sir Edward (Bath)Glyn, Dr AlanLawson, Nigel
Bryan, Sir PaulGoodhart, PhilipLe Marchant, Spencer
Buchanan-Smith, AlickGoodhew, VictorLester, Jim (Beeston)
Buck, AntonyGoodlad, AlastairLewis, Kenneth (Rutland)
Budgen, NickGorst, JohnLoveridge, John
Bulmer, EsmondGow, Ian (Eastbourne)MacCormick, Iain
Burden, F. A.Gower Sir Raymond (Barry)McCrindle, Robert
Carlisle, MarkMcCusker, H.
Carson, JohnGrant, Anthony (Harrow C)Macfarlane, Neil
Chalker, Mrs LyndaGray, HamishMacGregor, John
Channon, PaulGrieve, PercyMacmillan, Rt Hon M. (Farnham)
Churchill, W. S.Griffiths, EldonMcNair-Wilson, M. (Newbury)
Clark, Alan (Plymouth, Sutton)Grimond, Rt Hon J.McNair-Wilson, P. (New Forest)
Clark, William (Croydon S)Grist, IanMarshall, Michael (Arundel)
Clarke, Kenneth (Rushcliffe)Grylls, MichaelMarten, Neil
Clegg, WalterHall, Sir JohnMates, Michael
Cockcroft, JohnHall-Davis, A. G. F.Mather, Carol
Cooke, Robert (Bristol W)Hamilton, Michael (Salisbury)Maude, Angus
Cope, JohnHampson, Dr KeithMawby, Ray
Cormack, PatrickHannam, JohnMaxwell-Hyslop, Robin
Corrie, JohnHarrison, Col Sir Harwood (Eye)Mayhew, Patrick
Costain, A. P.Harvie Anderson, Rt Hon MissMeyer, Sir Anthony
Craig, Rt Hon W. (Belfast E)Hastings, StephenMiller, Hal (Bromsgrove)
Crawford, DouglasHavers, Sir MichaelMiscampbell, Norman
Critchley, JulianHawkins, PaulMitchell, David (Basingstoke)
Crowder, F. P.Hayhoe BarneyMoate, Roger
Davies, Rt Hon J. (Knutsford)Henderson DouglasMolyneaux, James
Dean, Paul (N Somerset)Hicks, RobertMonro, Hector
Dodsworth, GeoffreyHiggins, Terence L.Montgomery, Fergus
Douglas-Hamilton, Lord JamesHolland, PhilipMoore, John (Croydon C)
du Cann, Rt Hon EdwardHooson, EmlynMore, Jasper (Ludlow)
Dunlop, JohnHordern, PeterMorgan, Geraint
Durant, TonyHowe Rt Hon Sir GeoffreyMorgan-Giles, Rear-Admiral
Eden, Rt Hon Sir JohnHowell, David (Guildford)Morris, Michael (Northampton S)
Edwards, Nicholas (Pembroke)Howell, Ralph (North Norfolk)Morrison, Charles (Devizes)
Elliott, Sir WilliamHowells, Geraint (Cardigan)Morrison, Hon Peter (Chester)
Emery, PeterHurd, DouglasMudd, David
Evans, Gwynfor (Carmarthen)James, DavidNeave, Airey
Ewing, Mrs Winifred (Moray)Jenkin, Rt Hon P. (Wanst'd & W'df'd)Nelson, Anthony

Question put. That the amendment be made:—

The House divided: Ayes 269, Noes 274.

Neubert, MichaelRoss, Stephen (Isle of Wight)Taylor, Teddy (Cathcart)
Newton, TonyRoss, William (Londonderry)Tebbit, Norman
Normanton, TomRossi, Hugh (Hornsey)Temple-Morris, Peter
Nott, JohnRost, Peter (SE Derbyshire)Thatcher, Rt Hon Margaret
Onslow, CranleyRoyle, Sir AnthonyThomas, Dafydd (Merioneth)
Oppenheim, Mrs SallySainsbury, TimThomas, Rt Hon P. (Hendon S)
Osborn, JohnScott-Hopkins, JamesThompson, 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 IanShelton, William (Streatham)Tugendhat, Christopher
Pardoe, JohnShepherd, Colinvan Straubenzee, W. R.
Parkinson, CecilShersby, MichaelVaughan, Dr Gerard
Pattie, GeoffreySilvester, FredViggers, Peter
Penhaligon, DavidSims, RogerWainwright, Richard (Colne V)
Percival, IanSinclair, Sir GeorgeWakeham, John
Peyton, Rt Hon JohnSkeet, T. H. H.Walters, Dennis
Pink, R. BonnerSmith, Cyril (Rochdale)Warren, Kenneth
Powell, Rt Hon J. EnochSmith, Dudley (Warwick)Watt, Hamish
Prior, Rt Hon JamesSpeed, KeithWeatherill, Bernard
Raison, TimothySpence, JohnWells, John
Rathbone, TimSpicer, Jim (W Dorset)Welsh, Andrew
Rawlinson, Rt Hon Sir PeterSpicer, Michael (S Worcester)Whitelaw, Rt Hon William
Rees, Peter (Dover & Deal)Sproat, IainWiggin, Jerry
Rees-Davies, W. R.Stainton, KeithWigley, Dafydd
Renton, Rt Hon Sir D. (Hunts)Stanbrook, IvorWilson, Gordon (Dundee E)
Renton, Tim (Mid-Sussex)Stanley, JohnWinterton, Nicholas
Rhys Williams, Sir BrandonSteel, David (Roxburgh)Wood, Rt Hon Richard
Ridley, Hon NicholasSteen, Anthony (Wavertree)Young, Sir G. (Ealing, Acton)
Ridsdale, JulianStewart, Donald (Western Isles)Younger, Hon George
Rifkind, MalcolmStewart, Ian (Hitchin)
Rippon, Rt Hon GeoffreyStokes, JohnTELLERS FOR THE AYES:
Roberts, Michael (Cardiff NW)Stradling Thomas, J.Mr. Adam Butler and
Roberts, Wyn (Conway)Taylor, R. (Croydon NW)Mr. W. Benyon


Abse, LeoCryer, BobGraham, Ted
Allaun, FrankCunningham, G. (Islington S)Grocott, Bruce
Anderson, DonaldCunningham, Dr J. (Whiteh)Hamilton, James (Bothwell)
Archer, PeterDalyell, TamHamilton, W. W. (Central Fife)
Armstrong, ErnestDavidson, ArthurHamling, William
Ashton, JoeDavies, Bryan (Enfield N)Hardy, Peter
Atkins, Ronald (Preston N)Davies, Denzil (Llanelli)Harper, Joseph
Atkinson, NormanDavies, Ifor (Gower)Harrison, Walter (Wakefield)
Bagier, Gordon A. T.Davis, Clinton (Hackney C)Hattersley, Rt Hon Roy
Barnett, Guy (Greenwich)Deakins, EricHatton, Frank
Barnett, Rt Hon JoelDean, Joseph (Leeds West)Hayman, Mrs Helene
Bates, Alfde Freitas, Rt Hon Sir GeoffreyHealey, Rt Hon Denis
Benn, Rt Hon Anthony WedgwoodDell, Rt Hon EdmundHeffer, Eric S.
Bennett, Andrew (Stockport N)Dempsey, JamesHooley, Frank
Bidwell, SydneyDoig, PeterHoram, John
Bishop, E. S.Dormand, J. D.Howell, Denis (B'ham, Sm H)
Blenkinsop, ArthurDouglas-Mann, BruceHoyle, Doug (Nelson)
Boardman, H.Duffy, A. E. P.Huckfield, Les
Booth, AlbertDunn, James A.Hughes, Mark (Durham)
Boothroyd, Miss BettyDunnett, JackHughes, Robert (Aberdeen N)
Bottomley, Rt Hon ArthurDunwoody, Mrs GwynethHughes, Roy (Newport)
Boyden, James (Bish Auck)Eadie, AlexHunter, Adam
Bradley, TomEdelman, MauriceIrving, Rt Hon S. (Dartford)
Bray, Dr JeremyEdge, GeoffJackson, 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, MichaelJay, Rt Hon Douglas
Buchan, NormanEvans, 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, IanFaulds, AndrewJohnson, James (Hull West)
Canavan, DennisFernyhough, Rt Hon E.Johnson, Walter (Derby S)
Cant, R. B.Flannery, MartinJones, Alec (Rhondda)
Carmichael, NeilFletcher, Raymond (Ilkeston)Jones, Barry (East Flint)
Carter, RayFletcher, Ted (Darlington)Jones, Dan (Burnley)
Castle, Rt Hon BarbaraFoot, Rt Hon MichaelJudd, Frank
Clemitson, IvorFord, BenKaufman, Gerald
Cocks, Michael (Bristol S)Forrester, JohnKelley Richard
Cohen, StanleyFowler, Gerald (The Wrekin)Kerr, Russell
Coleman, DonaldFraser John (Lambeth, N'w'd)Kilroy-Silk, Robert
Colquhoun, Mrs MaureenFreeson, ReginaldKinnock, Neil
Concannon, J. D.Garrett, John (Norwich S)Lambie, David
Conlan, BernardGarrett, W. E. (Wallsend)Lamborn, Harry
Cook, Robin F. (Edin C)Gilbert Dr JohnLamond, James
Cox, Thomas (Tooting)Ginsburg, DavidLatham, Arthur (Paddington)
Craigen, J. M. (Maryhill)Golding, JohnLeadbitter, Ted
Cronin, JohnGould, BryanLee, John
Crosland, Rt Hon AnthonyGourlay, HarryLewis, Ron (Carlisle)

Lipton, MarcusPadley, WalterStewart, Rt Hon M. (Fulham)
Litterick, TomPalmer, ArthurStott, Roger
Lomas, KennethPark, GeorgeStrang, Gavin
Loyden, EddieParker, JohnStrauss, Rt Hon G. R.
Luard, EvanParry, RobertSummerskill, Hon Dr Shirley
Lyon, Alexander (York)Pavitt, LaurieSwain, Thomas
Lyons, Edward (Bradford W)Pendry, TomTaylor, Mrs Ann (Bolton W)
McCartney, HughPerry, ErnestThomas, Jeffrey (Abertillery)
McElhone, FrankPhipps, Dr ColinThomas, Mike (Newcastle E)
MacFarquhar, RoderickPrentice, Rt Hon RegThomas, Ron (Bristol NW)
Mackenzie, GregorPrescott, JohnThorne, Stan (Preston South)
Mackintosh, John P.Price, C. (Lewisham W)Tierney, Sydney
Maclennan, RobertPrice, William (Rugby)Tinn, James
McMillan, Tom (Glasgow C)Richardson, Miss JoTomlinson, John
McNamara, KevinRoberts, Albert (Normanton)Torney, Tom
Magee, BryanRoberts, Gwilym (Cannock)Urwin, T. W.
Mahon, SimonRobertson, John (Paisley)Varley, Rt Hon Eric G.
Marks, KennethRoderick, CaerwynWainwright, Edwin (Dearne V)
Marquand, DavidRodgers, 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 RoyRoper, JohnWard, Michael
Meacher, MichaelRose, Paul B.Watkins, David
Mellish, Rt Hon RobertRoss, Rt Hon W. (Kilmarnock)Watkinson, John
Mikardo, IanRowlands, TedWeitzman, David
Millan, BruceRyman, JohnWellbeloved, James
Miller, Dr M. S. (E Kilbride)Sandelson, NevilleWhite, Frank R. (Bury)
Miller, Mrs Millie (Ilford N)Sedgemore, BrianWhite, James (Pollok)
Mitchell, R. C. (Soton, Itchen)Selby, HarryWhitehead, Phillip
Molloy, WilliamShaw, Arnold (Ilford South)Whitlock, William
Moonman, EricSheldon, Robert (Ashton-u-Lyne)Willey, Rt Hon Frederick
Morris, Alfred (Wythenshawe)Shore, Rt Hon PeterWilliams, 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, RolandSilkin, Rt Hon John (Deptford)Wilson, Alexander (Hamilton)
Mulley, Rt Hon FrederickSilkin, Rt Hon S. C. (Dulwich)Wilson, Rt Hon H. (Huyton)
Murray, Rt Hon Ronald KingSillars, JamesWilson, William (Coventry SE)
Newens, StanleySilverman, JuliusWoodall, Alec
Noble, MikeSkinner, DennisWrigglesworth, Ian
Oakes, GordonSmall, WilliamYoung, David (Bolton E)
Ogden, EricSmith, John (N Lanarkshire)
O'Halloran, MichaelSnape, PeterTELLERS FOR THE NOES:
Orbach, MauriceSpearing, NigelMr. John Ellis and
Orme, Rt Hon StanleySpriggs, LeslieMr. David Stoddart
Owen, Dr DavidStallard, 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.