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Commons Chamber

Volume 82: debated on Wednesday 10 July 1985

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House Of Commons

Wednesday 10 July 1985

The House met at half-past Two o'clock


[MR. SPEAKER in the Chair]

Private Business

East Lothian District Council (Musselburgh Links, Etc) Order Confirmation

Mr. Secretary Younger presented a Bill to confirm a Provisional Order under section 7 of the Private Legislation Prodecure (Scotland) Act 1936, relating to East Lothian District Council (Musselburgh Links, etc.): And the same was read the First time; and ordered to be considered upon Tuesday 16 July and to be printed. [Bill 187.]

Shetland Islands Council Order Confirmation

Mr. Secretary Younger presented a Bill to confirm a Provisional Order under section 7 of the Private Legislation Procedure (Scotland) Act 1936, relating to Shetland Islands Council: And the same was read the First time; and ordered to be considered upon Tuesday 16 July and to be printed. [Bill 188.]

Peterhead Harbours (South Bay Development) Order Confirmation

Mr. Secretary Younger presented a Bill to confirm a Provisional Order under section 8 of the Private Legislation Procedure (Scotland) Act 1936, relating to Peterhead Harbours (South Bay Development): And the same was read the First time; and ordered to be read a Second time upon Thursday 18 July and to be printed. [Bill 189.]

Oral Answers To Questions


Regional Water Authorities


asked the Secretary of State for the Environment how many representations he has received regarding the proposed privatisation of the regional water authorities.

Why does the Minister persist in putting the public's health at risk by water privatisation? Does he not realise that water is an essential commodity which cannot be substituted? What will happen to investment in the water authorities, especially with respect to replacing sewerage and recreation centres? Does this mean that the water supply will be in the hands of the City of London and foreign investment? Why does the hon. Gentleman persist in this folly, especially as the public are outraged by this privatistion?

Does the hon. Gentleman not realise that if he continues with this programme the public will rise up and give him a black eye? That is no trivial matter.

I am aware that water is essential to human life. The House would do well to remember that 25 per cent. of the British people are already provided with fresh water by the private water companies. Hon. Members should understand that many great benefits will accrue to the water industry and, above all, to customers if we can bring a measure of privatisation to the water industry. The Government intend persevering in their examination to ascertain whether they can bring some free enterprise to the industry.

Order. Long supplementary questions lead to long ministerial replies, which cannot help Question Time.

Is my hon. Friend aware that private water companies are celebrating this year their 100th anniversary of supplying wholesome water to the people? Will my hon. Friend consider, during discussions on privatisation, the possibility of using the legislation covering the water companies as a model for the privatisation of the authorities?

There could be no better example of the success of the private water companies than the successful private water company of which my hon. Friend is a director. During our examination of privatisation we shall certainly consider the lessons that we can learn from the successful private companies.

How many water authorities have been exempted from the EEC requirement which came into effect this month on the amount of nitrates allowable in drinking water?

Although that matter does not arise directly from this question, I can point out that I had a meeting yesterday with the Government's Chief Medical Adviser on the subject. I shall be announcing the decision on derogations shortly.

If a decision is taken on that matter, will my hon. Friend bear in mind that it is desirable not only that costs should be kept as low as possible but that there should be no great variation of water prices throughout Britain? That would be most undesirable as regards past investment in the industry and what is available now. Such a variation might widen the gap between those areas that are fortunate in fostering investment and those that are not.

I shall certainly consider my hon. Friend's advice. I remind the House that among the advantages of privatisation will be the possibility that those who at present work for water authorities and, not least, those who are customers of the water authorities will become shareholders.

Will the Minister reflect on the fact that water is far too important a commodity, to use his own words, to leave to the "whims" of the free market? If he will not reflect on that, I am bound to say that the Labour party in power will return it to public control. If the private sector is so good, will the Minister kindly explain why the private firm that supplies Eastbourne charges more than the public sector?

It used to be believed, even by some of my right hon. and hon. Friends, that the ratchet-effect of Socialism was such that any threat to renationalise that which we denationalised should be taken seriously. I say to the House and to the engaging Labour party spokesman on water that a threat to renationalise that which we may denationalise is no threat.

Is not the present position unsatisfactory, in that those who supply water are not properly accountable as virtually all water authorities, with some notable exceptions, meet in private? Why would a privatised system be more accountable than the present system, which is hardly accountable to consumers? What protection will there be to ensure a pure water supply?

It is because the present organisation of the water industry, though greatly improved since 1979, is not yet perfect that we are examining the possibility of a measure of privatisation. I should have thought that the Liberal party, which claims to be the party of participation, would have welcomed the opportunity for more and more customers and more and more employees to become owners of the business. It is characteristic of the Liberal party — that band of visionary missionaries with neither vision nor mission — that it should make a wet observation of that kind.

Derelict Dormant Land


asked the Secretary of State for the Environment how many acres of publicly owned derelict dormant land now appear on the register of vacant land; and how that compares with the figures for each of the last three years.

At the end of June 1985 the land registers showed 113,000 acres of unused or underused land owned by local authorities and other public bodies in England. Figures for the last three years are:

  • 1982 95,000 acres
  • 1983 109,000 acres
  • 1984 114,000 acres
Those figures conceal the fact that over 21,000 acres have been removed since the registers started because the land has been sold or brought back into use.

In view of the immense amount of land stuck on the registers, which I believe is only the tip of the iceberg, will my right hon. Friend consider privatising public land, raising the necessary finance through the issue of industrial revenue bonds, and amending planning laws so that a national, wasting asset may be put to excellent use?

My hon. Friend's proposals are interesting. We wish to persuade local authorities to use the land, because the public hoarding of land when nothing is planned for it and nothing is happening to it is unacceptable. I shall certainly consider my hon. Friend's proposals.

Is the Minister aware that a great deal of public and private land from which the negative value has been removed by public money from the Merseyside development corporation is still standing idle because private developers will not go on it?

Merseyside development corporation is undertaking some of the best developments on Merseyside, as I think the hon. Gentleman will recognise. Members on both sides of the House will agree that it is a disgrace when public authorities—local authorities or nationalised industries—own land and are doing nothing with it, and that that land should be sold and developed.

My right hon. Friend will be aware of the pressure on housing land in the south. Is it not a scandal that those authorities are still holding on to land which in many cases is derelict? Has the time not come to give up persuasion and to set a time limit on how long those authorities may hang on to what is a valuable and, as my hon. Friend the Member for South Hams (Mr. Steen) said, wasting asset?

A third of the land is in the inner cities, and the Government are not sitting idly by. We have already issued four directions, and in June my right hon. Friend the Secretary of State said that he was thinking of giving warnings that he would issue instructions on a further 50 sites covering some 388 acres. We are moving energetically.

Is not one of the biggest single obstacles to bringing derelict land back into use, particularly in inner cities, the Government's failure to remove the restrictions on the expenditure of derelict land grant? Have not hundreds of projects submitted by local authorities been held up by the Government's restrictions? Could such schemes not bring commerce, industry and housing, and private investment to match public expenditure, if only the Government would increase the permitted expenditure?

We have substantially increased expenditure on derelict land grants since we came into office. It has increased again this year to about £75 million a year. I agree with everything that the right hon. Gentleman said, and I hope that there will be an increase next year.

Office Development


asked the Secretary of State for the Environment if he will make a statement on his policy towards the control of office development in the light of the report on office rents and rates 1973 to 1985, published in May by Debenham, Tewson and Chinnocks, a copy of which has been sent to him.

The Parliamentary under-Secretary of State for the Environment
(Mr. William Waldegrave)

I have read the report with interest.

That was a pathetic answer. Does not an hon. Member who has tabled a question deserve an answer from a Minister? Should the Minister not have taken into consideration the comments by Mr. Peter Evans, the head of research at Debenham, Tewson and Chinnocks, who said that office accommodation is cheaper now than for a long time, and that one cannot claim that the rates burden is causing rent rises because the relationship between the two is not proved, rents not having risen in real terms over the past few years? How does the Minister justify that statement?

I read the report with interest, because it says:

"As found in both the association's report and our survey, commercial rates in the inner London boroughs have risen by one of the lowest margins in the last 10 years and this can be attributed directly to the Government's rate capping controls."
For that and other reasons, I read the report carefully.

Does my hon. Friend agree that the Debenham, Tewson and Chinnocks annual report is crammed with statistics and does not make good bedtime reading? Only one sentence in it could affect and influence the hon. Member for Houghton and Washington (Mr. Boyes)—that which said that many office accommodation owners are moving out of the London area, and perhaps into the hon. Gentleman's constituency. Will not economic measures influence such moves, with offices then going to the provinces?

The move to constituencies such as that of the hon. Member for Houghton and Washington (Mr. Boyes) might be the kind of phenomenon that the report shows, because it shows that because of the rates office accommodation has been tending to move out of areas such as Lambeth and Southwark.

South-East (Housing Demand)


asked the Secretary of State for the Environment what assessment he has made concerning the supply and demand for houses in the south-east of England.

While my Department does not attempt to forecast housing supply and demand, it publishes much information on recent trends. The London and south-east regional planning conference—SERPLAN—is preparing an assessment of future housing requirements in the region.

Is my right hon. Friend aware that one of the proposals to meet the alleged shortfall is that proposed by Consortiums Developments Ltd. to build a new town of 5,000 houses in my constituency between West Horndon and Bulphan? Is my right hon. Friend further aware that that proposal has led to universal and substantial all-party opposition from the Essex county council, from the London borough of Thurrock and from the villages of Bulphan and West Horndon and the local Members of Parliament? Will he take that into account when he makes his decision?

I am aware of the proposal to which my hon. Friend draws attention. The matter will be dealt with in accordance with normal planning procedures. There is a planning application before the Thurrock borough council, and it will be for it to take a view in the first instance.

Does the right hon. Gentleman agree that in inner London there are many badly housed or homeless people who are too poor to compete effectively in the private housing market and that his policies of cutting back on the public sector are denying many of them the chance of decent homes in their lifetimes?

The hon. Gentleman will recognise that it has been Government policy that the demand for new homes should primarily be met by the private sector and that the number of houses built by the private sector has increased substantially. The Government recognise that there will always be a proportion of the population unable to afford the full cost of private sector housing. For them, the housing associations and local authorities will provide a way to be housed. But it is up to the local authorities to make the best use of their resources and not, for instance, have up to 25,000 houses and flats empty for more than a year. If they can deal with that, they may be able to help some of the homeless.

Is my right hon. Friend aware that there is no proof of the size of demand for new houses in central Berkshire to justify the foisting of an excessive number of houses on to the area completely against the wishes of the people, the local planning authority and local business?

I am aware of my hon. Friend's forcefully expressed views on this, which I know are reflected in those of a great many of those whom he represents. The Government will be making their view public on this shortly.

Is the right hon. Gentleman aware that, according to his Department's figures, there is enough land available with planning permission to continue building houses at the present rate in Essex until 1990? Is he aware, further, that the proposals by Consortium Developments to use green belt land is opposed by the leading Labour group on Thurrock borough council and that, furthermore, Thurrock borough council is considering plans to use derelict land which is available in Thurrock and can build a further 5,000 to 6,000 houses on it and that therefore Consortium Developments' planning application to misuse green belt land should be firmly rejected by his Department?

I am sure the hon. Lady recognises that if Consortium Developments appealed against a refusal of permission or a failure to give permission within the specified time, that appeal would have to come to my Department and that it would be wrong for me to express any view on the merits of the proposal to which she referred.

Is my right hon. Friend aware that in the south-east many people are extremely alarmed about the pressure on land for house building? That being so, will he assure the House that he will respect the integrity of the county plans, which are an important protection for my constituents?

Yes, indeed. The county structure plans are one of the mechanisms whereby it is possible to regulate the development of housing in areas which are already under pressure. My hon. Friend will know that the Government have made it abundantly clear again and again that they do not wish to see development on the green belt, where the protection should be permanent, and that they do not want to see good agricultural land taken. At the same time, it has to be said that there is a demand for housing in the south-east, as there is in other parts of the country. It is our policy to make sure that sufficient suitable land comes forward for that purpose to meet the demand.

Given that incomes in my constituency average about £5,000 and that the average price in the private sector is £39,000 for a flat and £48,000 for a terraced house, will the right hon. Gentleman give some thought — given that he accepts the demand for low-cost homes for sale in docklands, especially from young married couples — to introducing new schemes and methods of finance so that people can live where they work and come from and not be forced to move from the area when the demand is there, the land is there and the supply could be there as well?

I understand the hon. Gentleman's point, and he knows of the various low-cost home ownership schemes promoted by the Government. He also knows that in his constituency the London Docklands development corporation has been among the foremost in making use of those schemes so that his constituents can occupy homes close to where they have always lived on land which for many years has lain derelict. I hope that the hon. Gentleman approves of that.

Despite comments from some of my hon. Friends, does my right hon. Friend accept that in parts of east London and south-west Essex there is considerable unmet demand for houses to buy? That must be taken into account when he considers these policies, because many young people are being driven from where they wish to live.

I certainly take most careful note of what my hon. Friend said. It reflects my impression, as I also have a constituency in that area.

Is the Secretary of State aware that in Greater London the average price of a pre-1919 terraced house is now almost £50,000, which is twice the national average and well beyond the means of many needy first-time buyers? Is he further aware that that extremely high price is a reflection of the 1,000 per cent. increase in the south-east in land prices since the Government took office? Does he agree that we have, not a housing policy, but a speculators' bonanza? Will he now engage in an exercise of positive planning to identify private land, along the lines suggested by my hon. Friend the Member for Thurrock (Dr. McDonald), which can be used for private housing, without raping the green belt for private profit?

The Government certainly want to see the maximum possible use of inner city land that is available for housing for that purpose. However, one of the best ways in which inner city authorities, particularly those in London, can meet the needs of the families to whom the hon. Gentleman referred is to bring into use by homesteading or other ways the many thousands of empty houses and flats that they have on their books. It is a scandal that so many should be allowed to remain empty for so long, and that homeless families must then be put into bed-and-breakfast accommodation.

Liverpool (Rates)


asked the Secretary of State for the Environment if he has any plans to meet Liverpool city council leaders to discuss the council's recent decision about rates.

Will the Secretary of State at least meet elected Members of Parliament to discuss this critical position and consider meeting council leaders? Meantime, will he ask the district auditor to withdraw the letter that has been sent to councillors who are defending jobs, services and rates in Liverpool? The right hon. Gentleman knows that the previous Tory-Liberal coalition left Liverpool city council in a mess, because he saw that for himself. Is it not a disgrace that councillors could be banned from office or gaoled for carrying out their pledges to their citizens?

The district auditor is completely independent of central Government, which has been the case since the office was first established 150 years ago. I therefore have no power to control him in the performance of his duties. However, it is a complete fallacy to imagine that the problems which now beset Liverpool city council are all the making of its predecessors. The present councillors were given time last year to put their house in order, but they failed utterly to do anything about it. On the hon. Gentleman's first point, I shall be ready to meet Members of Parliament from Liverpool who would like to discuss the matter.

Will my hon. Friend take this opportunity to remind the people of Liverpool that they are heavily dependent on the charity of taxpayers in other areas, and that many of those hard-working people resent their money being poured down the bottomless hole which the leaders of Liverpool city council seem determined to create?

The Government certainly think it right to give substantial help to Merseyside in general and Liverpool in particular. We look to Liverpool city council to do more to help itself. Why does collecting the refuse in Liverpool cost the council double the number of rounds as, and 25 per cent. more staff than, in Birmingham, which is twice the size of Liverpool? That is an example of the woeful inefficiency of Liverpool city council.

Will the Secretary of State repudiate what his hon. Friend the Member for Stockport (Mr. Favell) said? The people of Liverpool or elsewhere do not receive charity from anyone. [Interruption.] Although many of the problems were caused by the previous administration in Liverpool, the basic problem is that the rate support grant was cut drastically by the Government over several years, and this year the housing investment programme for Liverpool was cut. On that basis, is it not clear that a reversal of policy is needed? As the Government are already intending to go in that direction, why not start now?

If the Liverpool city council was prepared to tailor its budget so that it could live within its target, it could have rate support grant this year of £118 million. If it succeeded in living within its target, it could manage its services with a very modest rate rise.

Does my right hon. Friend agree that the disastrous policies of the current Liverpool city council serve only to make things worse in that sad city by deterring any potential employer from moving there? Will he say why people in south Derbyshire should have to fork out a ton of money to keep that council afloat on the Mersey when the money could be far better spent on our own ratepayers and taxpayers?

I entirely agree with my hon. Friend. I hope that members of the Liverpool city council will recognise, from what has been said from the Conservative Benches, that Parliament's patience is running very short. It is high time that they set about putting their house in order instead of continually standing with their hands outstretched, asking for more money.

Is it not the case that, by budgeting for £100 million above the income that the council will receive this year, the trouble has been brought on the heads of the councillors because they have practised policies of self-immolation? Will the Secretary of State give the House an assurance the he will not send a commissioner to Liverpool—he would be seen as the Prime Minister's henchman — but will instead allow the law to run its natural course? Will he also give assurances to council employees, who are worried about what will happen to them when the money runs out?

The employees of the council, including the members of NALGO and of the teachers' unions, have already made their anxieties extremely plain to the ruling majority on the Liverpool city council. The law will take its course as the district auditors' proceedings go through the normal process. I have no power whatever to send in commissioners. I hope that the Liverpool city council will take the steps that still remain within its powers to set its affairs in order.

Does the right hon. Gentleman agree that the people of Mossley Hill do not need a Tory Member of Parliament when they have the hon. Member for Liverpool, Mossley Hill (Mr. Alton)?

Does the right hon. Gentleman agree that the people of Liverpool are trying to put their affairs in order? They have 17 priority housing areas. He has seen the housing problems on Merseyside, and will see them again during his visit next Friday. He refuses to acknowledge the real needs of the people of Merseyside and prefers instead to dissipate taxpayers' money on international garden festivals and Tate galleries for the north, which, while desirable, are not first priorities for the people of Liverpool.

The hon. Gentleman has been less than fair to those who successfully carried through Britain's first international garden festival. Nothing did more to lift the spirits of the people of Liverpool than that festival last year. They demanded that it should be opened again this year, and it has been. That in no way excuses the failure of the Liverpool city council to use the time that it was given last year to put its house in order, to seek to get more efficient services and better value for money, and so live within its income. It is because the council has failed to do that that it is now facing very serious problems.

Will the Minister accept some responsibility, as the Minister responsible for Merseyside—as was his predecessor — for the fact that hard drug-taking among young people has increased fourfold, while at the same time Government policies have created a situation in which the leader of Liverpool city council, a JP and retired schoolmaster who has never broken the law in his life, is being turned into a law-breaker by the Government because he wants to defend services for the elderly, the disabled and the children in Liverpool?

The hon. Gentleman is seriously misrepresenting the situation. If Councillor Hamilton or any other councillor of Liverpool city council chooses to go outside the law and vote for a budget or rate which may or may not be illegal, that is a matter for the courts. That is their decision. It is in no sense a decision of the Government, and I repudiate wholly what he has said.

Council Housing Stock


asked the Secretary of State for the Environment if he will institute a survey in all major cities of council housing stock to discover how much money necessary repairs will cost.

My Department has already launched such an inquiry. On 11 April of this year my Department wrote to all local housing authorities in England asking them for information on the condition of their housing stock, and the expenditure they estimate is needed to put it in good condition. Local authorities' returns are now being processed and I hope initial results will be available by the end of this month.

Is it not a fact that Sheffield launched such a survey, the results of which show that hundreds of millions of pounds are needed at a time when the trail of destruction of cuts by the Government is not only allowing the infrastructure to degenerate on a grand scale but is causing the superstructure to degenerate? When will the hon. Gentleman realise that, as a result of those cuts and the ensuing rate capping, it is impossible to provide services for people in the way that councils have been doing for years because the Government are cutting out the money that is needed to repair council houses, for which the waiting lists grow longer every week?

On the first point, my Department is indeed analysing the results of the survey that Sheffield council has done. As I said, we hope that the results will be available by the end of the month. With regard to reductions in public expenditure investment in housing, as I am sure the hon. Gentleman knows, between 1974 and 1979 public sector investment in housing fell by 45 per cent., after allowing for inflation, and since we came to power it has fallen by 26 per cent. on the same basis, so I reject his criticism.

Has my hon. Friend had any discussions with the Halifax building society about the approval of repair schemes for pre-cast reinforced concrete houses in major cities or elsewhere? If so, can he tell the House what types of houses and what methods of repair may now be eligible for mortgages from the Halifax as a result of what seems to be an excellent initiative by the society?

I was delighted to learn that the Halifax building society has agreed that PRC houses repaired under the NHBC schemes will automaticaly be accepted by the society for a mortgage. It has done this in advance of formal approval by the NHBC. I very much welcome that initiative, which I think will be greatly welcomed by many owners. I hope that it will not be too long before other building societies follow in its wake.

Does the Minister recognise that the massive problems of dampness and condensation, which affect so many flats in constituencies like mine, result directly from the fact that many tenants simply cannot afford adequate heating in their own homes, particularly when they have to contend with wickedly expensive and inefficient heating systems put in during the 1960s? What steps are the Government planning to help local authorities to tackle those problems?

As the hon. Gentleman knows, I visited his constituency and met a number of the tenants in some of the more difficult estates in Greenwich. If Greenwich borough council wishes to spend part of its HIP on improving the heating systems in local authority stock, the Government would not question its priority. We shall be discussing at a later stage with Greenwich and other local authorities which have difficulty what can be done through the newly established unit on urban housing renewal, which my Department launched a few weeks ago.

*Having carried out this survey, will my hon. Friend also take the opportunity to examine the length of time for which council houses remain void in the Middlesbrough area in particular, and the outstanding rents that are owed in that area? If the two things were brought together, after 50 years of almost continuous rule by the Labour authority in Middlesbrough, the situation would improve for council house and other tenants in that region.

I agree with my hon. Friend that if houses are left unlet there is a loss of income. Likewise, if rents are not collected, the local authority is also out of pocket. This may inhibit the level of service that it can provide to tenants and ratepayers. I hope that Middlesbrough will respond to the prodding of my hon. Friend and reduce the number of vacant properties and outstanding debts.

Has the Minister seen the Royal Institute of British Architects' survey on local authority housing entitled "Decaying Britain", which shows that £10,000 million is needed to deal with the backlog of repairs and maintenance? Is the Minister aware that selling council houses will not raise that amount of money? Where will it come from? Will the Government cough up? Can the people who live in that housing be assured that these problems will be resolved?

As of a few days ago, I understood that the policy, supported by a number of the hon. Friends of the hon. Gentleman, was to sell council houses. I am surprised to learn that this policy does not have the support of the hon. Gentleman. On the figure of £10 billion that he mentioned, I have seen a range of figures, from £10 billion up to £20 billion, from the Association of Metropolitan Authorities. When we have the results of the survey to which I referred we shall have a much clearer picture of how much money is needed to catch up with the backlog of repairs to local authority stock.

*The question was in fact asked by Mr. Holt. see Official Report, 11 July 1985, c. 1291.

My hon. Friend realises that repairs and maintenance are a serious matter for any city. The citizens who occupy council tenancies in Southampton are very angry with the Labour-controlled council because its repairs fund is underspent by £600,000, due mainly to a series of mistakes and omissions. Whatever may be the council's excuse, this is deplorable when one realises how much of the housing stock of some cities is in need of repair.

I hope that the electors of Southampton will wreak their vengeance on a local authority which has failed to spend the resources that have been made available to it. It is worth reminding the House that expenditure this year on renovating public sector housing stock is running at over £1 billion. That is an increase on the 1979 figure.

Does the Under-Secretary of State really need an inquiry to point out to him that the major social problem in many of our inner cities is the repair of houses, when people are constantly complaining about the condition of their houses? When the report is published there will be only one recommendation: that local authorities need money to help them to repair their housing stock.

I referred not to an inquiry but, to a survey. We require up-to-date, accurate information about what is needed to put local authority housing stock into a better condition. My Department has asked for this information to be made available in time for the public expenditure round. When we have the information we shall be better placed to make decisions and solve the problems to which the right hon. Gentleman has referred.

Is the Secretary of State confessing to the House and to the millions of people who live in substandard and inadequate accommodation that the Government do not understand the problems and do not have the information? If, when the survey is completed, the overwhelmimg evidence that is already available from the Association of Metropolitan Authorities, the Royal Institute of British Architects and others is confirmed, will the Government provide the extra resources that are needed to help the millions of families who are living in squalor, dampness and freezing conditions?

The problems to which the hon. Gentleman has just referred have not arisen only during the last four or five years. They are due to years of neglect and bad management of local authority stock. The Government are trying to obtain an up-to-date and accurate assessment of the resources that are needed. When we have that information we shall be better placed to negotiate the resources that are needed.

Halvergate Marshes


asked the Secretary of State for the Environment what progress has been made by the Government to save the Halvergate marshes.

One hundred and eighteen applications have been received under the Broads experimental scheme, covering nearly 95 per cent. of the estimated total eligible grazing marshes. The scheme will run for three years and all the applicants have agreed not to plough or destroy their marshland and to manage it in sympathy with conservation objectives. In return, they will receive an annual payment of £50 per acre. This take-up is very encouraging and should do much to ensure that this landscape is preserved.

I thank my hon. Friend for his answer. I am very pleased that the Halvergate scheme is proceeding so well. At the same time, I urge him to continue to seek a balance between agriculture and conservation, particularly in environmentally sensitive areas such as the Halvergate marshes.

This experimental scheme is an outstanding example of co-operation between the Ministry of Agriculture, Fisheries and Food and the Countryside Commission. It may provide useful lessons for the development by my right hon. Friend the Minister of Agriculture, of his environmentally sensitive areas scheme.

Is not £50 an acre quite a lot of money to pay people for not doing what they ought not to have done anyway? Is this not an argument for the listing of sites of special scientific interest, just as buildings are listed?

The problem in the Halvergate area is that there are very few SSSIs. We are involved there with general landscape matters. The interesting point is that the £50 per acre scheme is cheaper than the management agreements for which payments were being made, so it can be argued that the scheme is good value for money.

Has my hon. Friend calculated by how much it would be necessary to reduce cereal prices to remove the financial inducement to plough areas such as the marshes?

That would be a difficult calculation to make. The cereal problem is not the only factor. Pressure from the dairy industry meant that there were fewer dairy followers to go to grazing in the Broads, which meant that there was a further incentive to plough. It is a little more complicated than my hon. Friend believes.

Will the Minister pursue the request of his hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen), because the figures would be interesting? Further to the Minister's reply to the hon. Member for Suffolk, Central (Mr. Lord), who is PPS to the Minister of State, Ministry of Agriculture, Fisheries and Food, will he give the House a categorical assurance that no farmers in Halvergate are applying for grants to drain parts of that wetland?

On the fundamental point, there is no disagreement between us. The Government have been among the leaders of those seeking more realistic cereal prices in the European Community. It would be rash of me to assure the hon. Gentleman — as I once assured the hon. Member for Linlithgow (Mr. Dalyell) — that no field in this area will ever be ploughed. However, we hope that the great majority of the area is now safe.

Capital Spending


asked the Secretary of State for the Environment what representations he has received since 19 June from the Association of County Councils on capital spending.

None, Sir. But I met all the associations on 20 May to discuss the review of the capital control system and the chairman of the ACC wrote to me after that meeting.

Bearing in mind the association's concern about the capital control system and the Audit Commission's condemnation of it, will my right hon. Friend comment on the strength of that feeling and assure us that he will give careful consideration to a recommendation that he either has received or is about to receive from the joint working party of the Department of the Environment and ACC officials?

The report that Ministers have received certainly confirms the need for a change in the system. It also identifies a number of options, which we have been discussing with the local authority associations. We seek two objectives. The first is to get better control of the totals of capital spending by local authorities, and the second, which is no less important, is to give local authorities greater certainty so that they can plan their expenditure more efficiently.

Is the Secretary of State aware that the present system of capital spending controls is causing absolute chaos for local authorities at all levels, because they do not have the opportunity to plan ahead? Is he aware that capital spending must be planned on as long a term as possible, yet some authorities are working on plans covering less than six months? Does the right hon. Gentleman agree that he should consider introducing a proper system of capital spending controls? One cannot criticise controls of some sort, but they must be on a longer-term basis.

I do not agree with what the hon. Gentleman has said, but I hope that he took some comfort from my answer to my hon. Friend the Member for Skipton and Ripon (Mr. Watson) on 26 June, when I said that we did not propose to take any action at present where we noticed that there was the prospect of an overspend on local authority capital spending this year. I know that the statement was widely welcomed by local authorities.

Housing (Elderly Persons)


asked the Secretary of State for the Environment how many housing units built for the elderly were completed by local housing authorities in the years 1980, 1981, 1982, 1983 and 1984.

The latest figures of completions of local authority dwellings for the elderly are 10,300, 7,600, 7,600 and 8,500 in 1981 to 1984, respectively. Complete figures are not available for 1980.

Is the hon. Gentleman aware that that is a terrible record and that the Government and particularly the Secretary of State ought to be ashamed of themselves? The Government regularly trip out the claim that they look after the elderly, yet in my constituency and, no doubt, throughout the country, elderly people are living in two-bedroomed houses or three-bedroomed houses which could be allocated to young married couples. Because the Government have cut back on finance, properties for the elderly are not being built. What does the Minister intend to do about that?

I hope that the hon. Gentleman will recognise that local authority renovations in 1984 added 5,200 to the figures which I have just given and that the number of housing association schemes has risen from 1,800 to 2,500. The figures indicate a rising trend, which I hope he welcomes.

Do not the figures announced by the Minister this afternoon represent a good record for pensioners? Do not the figures illustrate vividly that pensioners, in terms of pensions and living accommodation, are far better off under the Conservatives?

I am grateful to my hon. Friend for his robust defence of Government policy. It is worth remembering that a growing number of pensioners are owner-occupiers and have a substantial equity in their own homes. They do not look to the local authority for accommodation in their retirement, but are happy to buy leaseholds on suitable accommodation provided by the private sector — a fact overlooked by the hon. Member for Ashfield (Mr. Haynes).

Housing Investment


asked the Secretary of State for the Environment if he will list those local housing authorities which have expressed approval of current Government policy in respect of housing investment.

Does the Minister accept that if there were a list it would be incredibly short? Is he aware that the majority of housing authorities which have to face staff decay and the reality of need, even if Conservative, would be exceedingly critical of present policy? Has the Minister seen the pertinent comments by the retiring ombudsman about improvements, or does he think that everyone other than Ministers is out of step?

The common experience of mankind is that all those who receive allocations would like more. The House should understand that.

Given the appalling record of mismanagement by many Labour-controlled local authorities, instead of listening to their whingeing about not having the funds and not being able to cope, why does my hon. Friend not require them to hand over much of their housing to skilfully managed private sector companies, which would have three advantages: first, they would not be politically motivated, secondly, they would be using private not public funds, and, thirdly they might actually know what they were doing?

My hon. Friend rightly draws attention to the importance of improving the management of our public sector housing stock. My hon. Friend the Under-Secretary of State last month launched the urban housing renewal unit, which is devoted to a much closer partnership between the public and private sectors in trying to find solutions to our housing problems.

Since 100,000 homeless families report to local authorities every year, since millions of families are badly housed and in need of council accommodation and since 400,000 construction workers are on the dole, costing the British Exchequer £2,400 million a year, would it not make social, compassionate and economic sense to put those people to work building more houses?

It is unworthy of Opposition Members to claim a monopoly of compassion. I am looking forward to visiting the Brent, East and Brent, South constituencies on Monday week, when, in the company of the right hon. and hon. Members who represent those constituencies, I shall examine the severe problems of homelessness in that area. A real contribution to solving the problem of homelessness could be made if some of the 25,300 local authority-owned dwellings which have been empty for more than a year were brought back into use.

If my hon. Friend wants a cheap way of improving housing imvestment, will he immediately sell off the historic buildings in which his Department keeps sculptures, which are surrounded by neat little lawns with expensive little notices telling us that we are not allowed to walk on them, so that the buildings can be restored as homes for people by people who care about old buildings?

I am not sure that I entirely understand my hon. and learned Friend's suggestion but as it comes from him I shall examine it most carefully.

If the Minister and, indeed, the Secretary of State are so concerned about the homeless, why is the Department refusing to have a British element in the 1987 International Year for the Homeless? Secondly, does the hon. Gentleman agree that an element of Government policy should be investment in housing, including repairs, new build and renewal, at a rate that is at least equal to that of deterioration?

I shall discuss with my right hon. Friend the Minister for Overseas Development, who represents the sponsoring Department, the first issue raised in the hon. Gentleman's supplementary question. Secondly, my hon. Friend the Under-Secretary of State told the House earlier this afternoon that £1 billion a year from housing investment programme allocations is being spent on the repair of our local authority housing stock. In addition, another £1 billion a year is being spent from the housing revenue account.

Southwark Borough Council


asked the Secretary of State for the Environment how many meetings there have been between officials of his Department and senior officers of Southwark borough council since the beginning of 1985; and what were the reasons for such meetings.

There have been two such meetings this year: a discussion about the redevelopment of the Bonamy estate and one about the disposal of land on the borough's land register. However, my hon. Friend the Minister for Housing and Construction is arranging to meet the elected representatives of Southwark, together with their officials, in the near future to discuss the unwarranted delays being experienced by tenants seeking to exercise their right to buy from the council.

I thank my hon. Friend for his answer. I hope that when the meeting takes place my hon. Friend the Minister for Housing and Construction will tell the officials of Southwark borough council of the frustration, anger and disappointment that so many of my constituents feel because of the lack of progress with their right-to-buy applications? Will he say what he intends to do about the incompetence and intransigence of Southwark borough council in dealing with the applications?

I understand my hon. Friend's indignation. He has been in regular contact with my Department about the frustrations of the tenants in his constituency. My Department has formally warned the council under section 23 of the Housing Act 1980 that we are contemplating intervention. Before we take that step we wish to discuss the issue with councillors and officials in the near future. Southwark borough council indulges in meaningless procedural requirements, which delays the opportunity for tenants to buy their homes.

Will the Minister think again about the powers of the ombudsman? It appears that Southwark and many other authorities are guilty regularly of what is found to be maladministration. There will be no effective remedy until the ombudsman is given power to impose a solution when a local authority is not going about its affairs properly.

I have noted what the hon. Gentleman has said. I have no doubt that the Government Departments that are responsible for these matters will take account of what he has said and consider whether there is any remedy for the injustice that he has described.

Business Rates


asked the Secretary of State for the Environment what responses he has received to his letter of 8 March asking for details of the effects of business rates on the location of employment.

I have received six replies from organisations I consulted. A number of other bodies have also volunteered their interest.

Will the Minister accept the conclusions of the Cambridge report entitled "The Effects of Rates on the Location of Employment"? The report was commissioned by the Government at a cost of £50,000. It concludes that there is no evidence that rates or rate increases have an effect on employment. It states also that rating does not have an effect on the location of employment in local authority areas. Will the Minister accept the report in full?

The dossier which the CBI sent to me does not support what the hon. Gentleman says. If he believes what he says, let him make a speech in Birmingham, where the rates have gone up by 42p this year, or in Newcastle, where they have gone up by 54p. Let him try to persuade the business men in those two great industrial cities that rates are not important.

Is my right hon. Friend aware that a department store in Darlington has a rates bill this year of over £250,000, that many smaller businesses have to pay rates of over £100 a week and that high rates in the north are not only driving businesses away from the region but are dissuading them from coming to the north?

My hon. Friend is right — and hon. Members on both sides of the House know from experience that he is right—in saying that high rates by high-spending authorities affect areas adversely. That is true both in jobs and in the domestic area.

Why is the Minister refusing to accept the conclusions of the independent study which his Department established? Does he appreciate, since he referred to Birmingham, that that city had the fastest rate of job loss when the Conservatives were in control there and that the rates fell? Is he aware that the report not only said that there was no relationship between rates and unemployment but that it went on to say that higher levels of spending in Labour areas led to higher levels of employment? As there is now clear evidence that Labour policies by Labour-controlled authorities are working to bring down unemployment, when will the Minister change his policies, which have led to massive cuts in services and jobs and have in no way helped the businesses which he claims to represent?

The hon. Gentleman lives in an unreal world. After the big increase in Birmingham, Ericsons told the leader of Birmingham city council:

"Your decision to increase your prices, the rates, by 43 per cent. has, at a stroke, reversed our attitude towards our planned further expansion in Birmingham."
That is the real world. High rates affect business decisions and employment.

Written Questions

3.32 pm

On a point of order, Mr. Speaker. I wish to draw your attention to, and ask your advice about, written question No. 104, which stands in the name of the hon. Member for Westminster, North (Mr. Wheeler), which appears at page 4454 of the Order Paper and which, according to the note on the Order Paper, was tabled only yesterday, but nevertheless will be answered immediately today. That question, clearly put down at the instance of the Home Secretary, asks

"the Secretary of State for the Home Department, whether he has decided on changes to the immigration rules to comply with the recent judgment of the European Court of Human Rights."
It is clear that the Home Secretary is using this planted question as the occasion to make an announcement about his decision on the matter.

On 3 June I moved a Standing Order No. 10 motion that we should debate this subject, but you, within your discretion, decided that that was not the occasion for such a debate. A month later, the Home Secretary, speaking about the matter, said:
"I made it clear at the time of the decision that we would take whatever steps were necessary to ensure that we were complying with the convention as interpreted by the Court. I hope to announce our plans for doing so shortly."—[Official Report, 4 July 1985; Vol. 82, c. 508.]
The implication to a large number of people of a statement such as that by the Home Secretary must have been that he would make an announcement to the House about the Government's decision on a matter of enormous constitutional and human importance to many thousands of women in Britain.

What will now happen is that a written answer will be made available to the hon. Member for Westminster, North and to the press. It will be available to the news media for the rest of the day and be subject to the news management of the Home Office during that period. However, the House will not have an opportunity to question the Home Secretary about his decision.

I am therefore asking you, Mr. Speaker, in your role as guardian of the rights of hon. Members to explain how we can secure a statement to the House by the Home Secretary in oral form so that we may question him on a decision of very great importance indeed.

The right hon. Gentleman well knows that it is not for me to summon Ministers to make statements. I have no authority over that. It is some three or four years since I heard the phrase "planted question", so I do not know what the right hon. Gentleman means by that, either. Copies of written answers are always available in the Library, so the right hon. Gentleman and other hon. Members who are interested in the subject—I know that many are — will have an opportunity of seeing the answer to this question.

Further to that point of order, Mr. Speaker. Planted questions answered by putting the replies in the Library does not give Members of the House of Commons an opportunity to pursue this highly important—

Further to that point of order, Mr. Speaker. As the answer that the Minister will give is a matter of law and might require a change in the immigration rules, would it be in order for him to make a statement, as he must before such changes can be put into operation, so that he can be questioned and these matters can be debated on the Floor of the House?

Further to that point of order, Mr. Speaker. The shadow Home Secretary raised a point of order, but are we not just being presumptuous, because many times when we table questions we get a holding answer saying that the Minister will make a statement shortly? How on earth can we now discuss what might be in an answer when we have not yet seen it?

Further to that point of order, Mr. Speaker. This procedure is within the rules of the House, but Ministers are aware of special interest. I received letters this morning from two Mr. Patels, which are fairly typical of my mail. They have fiancée problems. The Home Secretary is aware that certain areas and certain hon. Members have a specific interest. Is it not your experience, Mr. Speaker, that when this kind of thing has occurred the Minister concerned has informed individual Members and given them the opportunity of contacting the Minister's private office on the matter?

Further to that point of order, Mr. Speaker. I acccept what you said, that this is not a point of order, but may we have your advice on the matter? Giving a written answer to a question, whether planted or not, is giving information to Parliament, and is within the rules. However, this is a most important matter, and for the Government to proceed in this way is wrong. We need to discuss it.

Order. None of this is a matter for me. I also am a constituency Member of Parliament, and I have an interest in the matter, too. I have not seen the answer to the question. I shall be sending to the Library also. It is not a point of order for me.

Further to that point of order, Mr. Speaker. You have stated that it is not a matter for you, and we understand that. No doubt Ministers will argue that the procedure is in order. However, would I not be right in saying that when a matter is controversial, hon. Members should be able to question Ministers? Does not the procedure that has been adopted illustrate the contempt that Ministers have for the House of Commons?

Order. We do not know whether the matter is controversial. I have not seen the answer.

Further to that point of order, Mr. Speaker. You will appreciate that I have asked several questions on the issue recently. I was contacted by the press this morning and virtually told the answer. Many newspapers are running this as an important issue in their evening editions. I recognise that a planted question is not an issue for you, Mr. Speaker, but if the answer is known, and has been given to the press, is that not a matter for you?

The House well knows my oft-repeated comments on this matter. If the press has information that is embargoed, it should never make use of it before hon. Members have had an opportunity to see the answer.

Order. I cannot take any further points of order on this matter. The House well knows that it is not a matter for me. It will have to be pursued in other ways.

Thank you, Sir. May I put this to you, in the presence of the Government Chief Whip? Since I raised my point of order, evidence of concern in the House has manifested itself—[HON. MEMBERS: "No."]—and it is clear that if you had not decided to curtail any further points of order it would have manifested itself further. That being so, may I say, in the presence of the Government Chief Whip, that I hope that the Government will take account of what has been said this afternoon, that they will consider the comments carefully and that they will come back to the House with a response.

It is adjacent to the matter that is being discussed.

On Monday there was a fairly considerable change in the Government's policy — for which they are, of course, not responsible. The Government decided to relax trade with Argentina. The information came in the form of a written question and answer. Some would say that it was a planted question and a planted answer. However, we are not into that, because we have heard enough about it.

I should have thought, Mr. Speaker, that you, as the custodian of our affairs, would want the House of Commons, at all times when this is possible, to be able to debate the issues of the day. On Monday, I and others said, "Is it not a scandal that we have a written question and answer on trade with Argentina being relaxed?" At one time, that was a big affair. Today, my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) has raised another issue. I took only a passing interest in chat matter. The Home Secretary made a promise to the House—not just to my right hon. Friend, but to Mr. Speaker—that this matter would be dealt with in the House. He was saying that you, Mr. Speaker, would be in charge of the proceedings when the matter was raised.

The last thing that we want is for the Front Bench continually to be heaping insults upon the Chair. I make a suggestion along the lines of your statement last week, after you were faced with a problem. You gave an off-the-cuff response, but came back a few days later—I do not want to have to repeat this story, because it is difficult to remember and difficult to digest—and said, "In future, I shall look at matters in a more studied fashion."

You have heard the complaints about the Government's growing practice of abusing the form of written questions and answers. I suggest that you examine this matter and return with a statement on a future occasion.

Order. It is plainly not a question on which I can make a statement. It is nothing at all to do with me. The House well knows that this is a matter for the Government. Whether statements are made, whether answers are given and whether written or oral questions are asked has nothing to do with me.

On a separate point on the same issue, Mr. Speaker. May I put it to you that you are the guardian of Back Benchers' rights in the Chamber? We respect your task. Some of us have many cases relating to the particular problem of the immigration of fiancées. The problem is that, once the issue is raised in the press as a result of a reply to a written question, a number of our constituents will come to us with different parts of the reply. If we have no opportunity in the Chamber to ask the Minister questions on the different aspects, we have no way of answering our constituents' questions. Is it not part of your duties, Mr. Speaker, in protecting the rights of individual Members who are faced with these problems, to ensure that the information comes to the House in the proper way?

Order. The House has never given the Chair that responsibility. It is not a matter for me.

South Africa (Sanctions)

3.44 pm

I beg to move,

That leave be given to bring in a Bill to establish machinery to impose economic sanctions on trade with South Africa subject to conditions relating to the system of apartheid operated in South Africa.
It is extremely unfortunate that the subject of sanctions against South Africa has to come before the House of Commons in the form of a ten-minute Bill. The people of this country would have expected the Government to have given time for a full debate on what is an extremely important issue.

The Bill has five main elements. The first is to give the Secretary of State, by order, the power to control the import and export of goods to and from South Africa. That is a general provision. Secondly, there is a power to stop the import or export to or from South Africa of oil or products derived from it, coal or products derived from it, uranium and all militarily strategic goods of a description included in groups 1 –4 of part II of schedule 1 to the Export of Goods (Control) Order 1985. Thirdly, there is the element that gives the Chancellor of the Exchequer power to prohibit and regulate transactions between the United Kingdom and South Africa relating to individual residents in or bodies corporate registered in South Africa, directly or indirectly, of gold, currency payments, securities, debts and the import-export transfer and settlement of property. Fourthly, the Chancellor of the Exchequer shall prohibit the import of Krugerrands, dealing in gold and currency, the payment of any capital moneys, directly or indirectly, to any person resident in South Africa or body corporate in South Africa. Fifthly, there is the power to request Her Majesty, by Order in Council, to effect the United Nations Council on Namibia decree No. 1.

The position in South Africa is deteriorating daily. I have heard and seen that on the radio and television today. Over the past nine months there have been over 500 deaths in that country, the vast majority of which have been at the hands of the security forces or the police.

In the past week the South African Government's think-tank report proclaimed that apartheid has failed to solve South Africa's racial problems, and warned that attempts to enforce it would only exacerbate racial tension. That long-awaited report from the Government-funded Human Science Research Council recommended talks with the leaders of all races and the establishment of a democratic system open to all South Africans. The report also noted that nearly 66 per cent. of the black population favoured the use of violence to bring about change. I and many people believe that that shows that the level of repression in South Africa is such that the majority of blacks are prepared to resort to violence to secure basic freedoms.

One of the report's most striking points is the acknowledgement that the security legislation, whilst theoretically designed to ensure the security of the state, has, in practice:
"been largely employed to deal with persons and organisations engaged in extra-Parliamentary opposition to Government racial policies."
The report concludes that the security legislation is
"a threat to the security of the state … the mistrust of a legal system is one of the strongest incentives for revolution."
That comment is made in a report on the internal problems of the country funded by the South African Government. The South African authorities clearly break and disregard international law with their illegal occupation of Namibia and by acts of international terrorism — we have heard some prominent people talking about international terrorism — such as their bloody incursions last month into Botswana, when a number of innocent men, women and children were killed, and the attempted sabotage of an American oil installation in Angola.

When South African subjects carry out illegal acts in the United Kingdom—as the Coventry four trials have shown; the results are in this morning's newspapers — the South African Government openly defy the British Government's request for the return of South Africans who were involved in that illegal act, although the bail conditions were underwritten by the South African embassy in London. The bail amounted to some £400,000. The decision not to return those people to stand trial in the United Kingdom was a political decision by the South African Government.

The British Government's response to acts of international terrorism, which resulted in bloody slaughter within a Commonwealth country, is to call in the South African ambassador and to slap his wrists. I asked a question about the number of visits the South African ambassador has had to the Foreign Office and the reply states that there have been seven since August 1984. There is a path between Trafalgar Square and the Foreign Office where from time to time one might bump into the ambassador for South Africa. The Government did not even recall their ambassador from South Africa for consultation, which would at least have shown some visible signs of disapproval. Even the Americans recalled their ambassador. Against this background of growing tension and conflict the international community are taking steps in one form or another to bring pressure to bear on the South African authorities to introduce fundamental reforms to give the majority of people in South Africa their basic democratic rights and freedom.

In the United States over 20 Bills have been submitted through Congress with Republican and Democratic support and in the next few weeks the President of the United States of America will have to make a decision either to continue with his policy of constructive engagement or to support the majority decisions of the Congress. In Canada, only this past weekend, a package of economic sanctions against South Africa has been announced as part of the international action aimed at getting Pretoria to abandon apartheid.

The Nordic states have acted jointly to halt flights to South Africa. The Swedish Government, in June, recommended severely curtailing contacts with South Africa. A seven-page Foreign Ministry report urged that cultural, scientific and sports contact with Pretoria be avoided so as to express Sweden's disapproval of apartheid. France has announced measures against South Africa. The European Parliament in April, agreed a resoulution which outlined actions that should be taken against South Africa and called on the Council of Ministers to act forthwith.

Only yesterday in London the Commonwealth Committee on South Africa fully supported the Security Council resolution No. 566. These are only an illustration of what is happening on the international front. All these countries and organisations are rejecting the theory of constructive engagement. The only country that is openly advocating the status quo is our own, leaving us in total isolation and apart from the rest of the international community, which can be clearly seen as siding with the apartheid regime. The United Kingdom has a very important role to play in bringing about change in South Africa. Since 1979, when the Labour Government left office, we have invested something over £300 million each year. That is an increase since 1979 of 600 per cent.

On the question of trade, the Government have openly encouraged trade with South Africa, spending over £600,000 of taxpayers' money in promoting 85 trade missions since 1979. We are the biggest international prop to the system of apartheid. The arguments we have heard from the Foreign Office against the limited boycott of South Africa are twofold. First, it is said the blacks in South Africa are divided about sanctions. It is a bit difficult to take a Mori or NOP poll in South Africa on this question, particularly when the answers one may give could land one in jail and up until recently carried a minimum sentence of five years' imprisonment. The South African Council of Churches stated in a six-point recommendation that disinvestment was, and I quote
"one of the few remaining methods to achieve justice without violence".
The second argument put forward by the Government is that sanctions do not work, but when pressed to apply limited sanctions, such as no new investment, they argue, because one has conceded the principle of sanctions, further actions and measures would be required if the limited sanctions do not work.

We have the sports boycott through the Gleneagles agreement. We have the arms embargo through the United Nations. I challenge the Government, in the face of mounting international pressure to say that this will not work. I repeat the words of Bishop Tutu when he appealed to the people of the United Kingdom at St. Pauls' last November to
"ensure that your country exerts political, diplomatic, but above all economic pressure on the South African Government to persuade it to go to the Conference Table of a National Convention with the authentic leaders of all sections of our community, and for us blacks it would mean our real leaders, now in jail or in exile."
I ask the House to reject the argument from the hard line Members on the Conservative Benches. We want to rid South Africa of 20th century slavery, which is what segregation and apartheid means, and to stop the United Kingdom from becoming isolated in the international community. I ask the leave of the House to bring in this Bill.

3.54 pm

My right hon. and hon. Friends and I sat and listened to the epistle read out by the hon. Member for Sheffield, Central (Mr. Caborn) with a certain amount of interest, but a certain amount of sadness.

Yes it does. Will the hon. Member for Luton, North (Mr. Carlisle) tell the House whether he has any interest in South Africa?

Order. If the hon. Gentleman has a financial interest, no doubt it will be in the Register of Member's Interests. [Interruption.] Order. The hon. Gentleman has hardly begun.

The predictability of the Opposition in their usual question to me is answered in the Register of Members' Interests, as you say, Mr. Speaker. I have nothing further to add. I was tempted to ignore the squalid introduction given to the Bill by the hon. Member for Sheffield, Central. Perhaps if it had not been for his emotive language, the ignorance that he displayed and—

On a point of order, Mr. Speaker. You said that no doubt the hon. Member would declare his financial interest. The hon. Gentleman has referred to the Register of Members' Interests, but how can we know what is in that register at this stage, and how can the public know? As I understand it, the hon. Gentleman has conceded the fact that he has had a number of free trips to South Africa. He has a duty and an obligation to make it clear that he has been to South Africa at the expense of the South African authorities.

Order. It is a matter of honour for hon. Members to declare any interest in the Register of Members' Interests. If the hon. Member for Luton, North (Mr. Carlisle) has any other interests, I am sure that he will declare them.

The hon. Member for Walsall. North (Mr. Winnick) has put that point many times and obviously does not remember much of what he says in the House, which is of benefit to us. He should know, as I have declared to the House, that I have no financial interest in South Africa.

The House has been asked to hear the usual parade of conscience by a member of the anti-apartheid movement, supported by Labour Members. It is a conscience that they see fit not to parade when they talk about human rights in other countries.

I will concede, as I have always done, that I find apartheid a violation of human rights, and I abhor the system. I have always said so publicly and I repeat that assertion today. However, the House has to ask itself whether the introduction of the Bill will be of any benefit to those whom it is intended to benefit—that is, blacks in South Africa—and what effect those sanctions would have upon the blacks in South Africa and the many other people in South Africa who should also be remembered.

What the Opposition and those who advocate sanctions do not understand is that they will create an enormous loss of jobs in South Africa. A 20 per cent. disinvestment by the west would see a loss of 90,000 jobs for the whites within the South African economy and the loss of 350,000 jobs for the blacks. I should not wish to advocate that for a policy.

The second effect of sanctions on South Africa is the fact that many foreign workers, of whom there are about 1 million in South Africa, would have to leave the country and that is understandable, given the unemployment position. The third effect is perhaps one of the most telling and sad facts about this Bill. It would halt those reforms that have recently taken place in South Africa.

As usual, Labour Members have jeered ironically, and I would admit that those reforms are inadequate in terms of western ideals. We must recognise that reform there has been, and the advancement of the black in South Africa has been considerable in South African terms over the past five to 10 years. This measure would halt those reforms in their tracks, and I remind hon. Members that the changes that took place in the United States and advanced the blacks in America occurred in conditions of economic prosperity and not in the conditions that Labour Members want to see, of economic depression.

The last effect that this Bill and disinvestment would have upon South Africa is that they would undoubtedly increase violence in that society. I suspect, and I say no more, that there are many Opposition Members who would wish to see that violence increase against the elected South African Government, whether that Government be elected by the whites alone or by the whites, and the coloured and Indian populations. The case is severely undermined by the violence in that country perpetrated by the ANC and others who would, of course, welcome disinvestment.

If we are to have some sort of influence—and here I have a genuine sympathy and understanding with the Opposition — upon the South African Government, surely we would be better able to exercise it on the basis of some form of involvement with British companies investing in that country, rather than trying to disinvest and cutting ourselves off from them. The record of British companies in South Africa is extremely good and the wages of 98 per cent. of the black workers is above the EEC code laid down in Europe. We must ask ourselves whether this measure and the measures proposed by the United States Congress will benefit the blacks. I suggest they will have the opposite effect.

Evidence put forward by various commentators against disinvestment is very considerable. The opinions of the hon. Member and his hon. Friends are in a minority, certainly in South Africa as well as in the rest of the world. Prominent people like Alan Paton, who is no supporter of the South African Government, has said there should never be disinvestment. Even Bishop Tutu, who was mentioned by the hon. Member, caused some consternation when he questioned whether disinvestment would have any effect. I leave the house with the words of Chief Buthelezi who leads some one million blacks of the Inkatha tribe in South Africa, whose word I would trust rather more than the ignorant words of the hon. Member for Sheffield, Central. Chief Buthelezi says:
"If the West wants to increase black bargaining power it must double up on its investments, not disinvest."
For that reason and certainly for the good of the black people in South Africa, I ask the House to reject the Bill.

Question put and agreed to.

Bill ordered to be brought in by Mr. Richard Caborn, Mrs. Ann Clwyd, Mr. Derek Fatchett, Mr. Andrew Faulds, Mr. Robert Hughes, Mr. Peter Pike, Mr. Allan Rogers, Mr. Ernie Ross, and Mr. David Winnick.

South Africa (Sanctions)

Mr. Richard Caborn accordingly presented a Bill to establish machinery to improve economic sanctions on trade with South Africa subject to conditions relating to the system of apartheid operated in South Africa: And the same was read the First time: and ordered to be read a Second time upon Friday 25 October 1985 and to be printed. [Bill 190.]

Orders Of The Day

Finance Bill

Not amended (in the Committee) and as amended (in the Standing Committee), considered.

New Clause 9

Mitigation Of Corporation Tax Liability Of Industrial And Provident Societies And Housing Associations

'(1) Where in any accounting period of a body to which this section applies the rate of corporation tax exceeds such special rate as Parliament may fix for the purposes of this section the body may claim that the corporation tax charged on the income of that body for that period shall be calculated as if the rate of corporation tax were equal to that special rate.

(2) The bodies to which this section applies are:

  • (a) any registered industrial and provident society as defined in section 340 of the Taxes Act and any such co-operative association as is mentioned in subsection(8) of that section;
  • (b) any housing association for the time being approved for the purposes of section 341 of that Act;
  • not being a society, association or company under the control (within the meaning of section 302 of that Act) of one or more companies which are not themselves bodies to which this section applies.

    (3) For the purposes of this section the income of a company for an accounting period is its income charged to corporation tax for that period as defined in section 85(6) of the Finance Act 1972.

    (4) The special rate for the purposes of this section shall have effect for the financial year 1985 and subsequent years and be 30 per cent.'.— [Mr. Hattersley.]

    Brought up, and read the First time.

    4.7 pm

    I beg to move, That the clause be read a Second time.

    The purpose of the new clause is to provide what is wrongly, though properly, called a special rate of corporation tax, a rate of 30 per cent. which this new clause would apply to registered industrial and provident societies and to housing associations. The incidence of this tax would be importantly felt and is desperately needed by housing associations and co-operative societies.

    I said that I regarded the term "special rate" as something of a misnomer, because the idea of a special rate implies, and certainly in uninformed circles is taken to mean, that something to the advantage of the group in question is being proposed. This clause deals with the rate of corporation tax paid by industrial and provident societies and housing associations. It is not demanding, and I am not asking for them to be specially advantaged. I am asking that that group of institutions should be removed from their present situation, in which they are disadvantaged compared with their commercial competitors.

    Some of my hon. and right hon. Friends may argue — I would argue on another occasion — that the advantages of these non-profit making institutions are such that they should be given a positive advantage from corporation tax. But that is not what we are arguing for today. We are asking for their treatment to be comparable with and no worse than that which is given to commercial companies. The new clause merely seeks to relieve the societies and the associations of the discriminatory tax penalties which they presently suffer as a result of last year's Finance Bill.

    When we sought to amend last year's Finance Bill to avoid these unfair penalties, I assumed that the Government in reforming corporation tax — as they chose to describe their proposals—had simply forgotten the effect which their proposals would have on friendly societies, provident and industrial societies, co-operatives and housing associations. I assumed that they had not realised the necessity of making special arrangements for these institutions to ensure that they would not be disadvantaged. It is impossible for me to be so charitable this year. The Government must know of the damage that their tax policy is now doing to these institutions, yet they have chosen to do nothing to rectify the injustice of last year's Bill.

    Last year, when I moved the amendment which would have avoided the injustice coming about, the Financial Secretary sought to rebut the Opposition's arguments simply by saying that all tax innovations ought to be welcomed and that only fiscal conservatives would oppose a change of this kind. I understand why anyone who is responsible in any degree for Government economic policy welcomes changes of any description, but I cannot support a change—I did not support it, and I now want to remedy that change — that puts an important section of the economy at a disadvantage.

    Now that Treasury Ministers have had a year to ponder the injustice, I look forward to hearing whether it will be argued that no such injustice exists or whether it will be said that the injustice exists but that it is just the bad luck of the institutions involved. My suspicion is that the failure to remove it is at least in part the result of the Government's prejudice against some of these institutions, co-operative societies especially.

    The problem faced by the co-operative societies is easy to describe. When, in 1965, corporation tax was introduced, the rate of 40 per cent. was applicable to all companies — large and small companies and industrial and provident societies. In the early 1970s, the assessment of corporation tax was changed to what is called the imputation system. That system gave relief to businesses in respect of advance corporation tax on distributions. But since industrial and provident societies by their nature could not make such distributions, they were not originally required to pay the tax at the full rate. So when the imputation system was first introduced there were two special categories of enterprises which faced special problems for which the Government made special and necessary allowances. They were co-operatives and the like and companies or institutions which could not, sometimes by rule and often by practice, make the normal level of dividend distribution. Special arrangements were also made for small concerns which distributed a smaller proportion of their profits than the new rate of corporation tax hypothesised — 52 per cent. based on average distribution, which was anticipated to give a 40 per cent. yield.

    At that time, the Government accepted that in smaller firms and institutions where the proportion of profit distributed was smaller than in normal commercial undertakings, a special accommodation had to be made. To accommodate the small companies, the small company rate was introduced. Initially, it was 42 per cent. Then it was 40 per cent. Then it was 30 per cent. That was designed as a special encouragement to small firms.

    The Government of the day acknowledged that a parallel position existed in and for the institutions listed in the new clause. They acknowledged that co-operative societies by their nature distributed a smaller and a fixed percentage of their profits. Therefore, a special rate was fixed for them.

    The differential between normal commercial companies and friendly, industrial, provident and co-operative societies was not meant to favour the latter group. It was not meant to ensure that those institutions paid less than others in tax. It was meant to give them equality of treatment.

    The point was described exactly by the hon. Member for Croydon, South (Sir W. Clark) in Committee on last year's Finance Bill. I did not warn the hon. Gentleman of my intention to quote his words because I felt certain that he would be here to take part in the debate. I am gratified to see that my judgment on that issue about him is correct, and I repeat that I cannot imagine a better way of describing the position than that which he used a year ago. He said:
    "if one accepts the principle of the differential between imputation where one can and cannot distribute, there should be a lower rate for building societies, and presumably co-operative societies, so that we still maintain the justice effected in 1972."—[Official Report, 1 May 1984; Vol. 59, c. 286.]
    4.15 pm

    The new clause seeks to restore the justice that the Government in 1972 believed to be proper. Yet last year the justice effected in 1972, in the hon. Gentleman's terms, was removed. Co-operatives are now taxed at full corporation rate, whilst private and commerical companies are allowed to deduct their shareholders' liabilities on the distributions which are made.

    When the special rate for co-operatives was withdrawn last year, I am told that the Co-operative Union, speaking on behalf of co-operative societies in general, met the Inland Revenue. The Co-operative Union assures me that the Revenue itself, acting as the Revenue always does in a role almost independent of that of the Treasury and its Ministers, agreed that to introduce the scheme proposed in last year's Finance Bill and to abandon the special rate for co-operatives would be to militate against the interests of co-operatives in a way which placed them at a severe fiscal disadvantage to their commercial competitors.

    The talk about fiscal neutrality does not appear to apply to co-operative societies, to industrial and provident societies, to friendly societies and to housing associations.

    My right hon. Friend is on to a very important point in arguing for, in effect, simple equity. He is making a compelling case, and I welcome that as chairman of the Co-operative parliamentary group in the House. Will he emphasise that a fundamental difference is that a co-operative shareholding is quite distinct from that in a company and that co-operative members do not benefit from rights issues? Again I am extremely grateful to my right hon. Friend for the very strong and unanswerable case that he is advancing.

    I am grateful to my right hon. Friend as well, because he is right when he says that, by their constitutions, co-operative societies have members — in some cases they are nominally described as shareholders — who do not enjoy the normal privileges and advantages of shareholders. There are no rights issues and no scrip issues, and the proportions of the profits that they receive are always limited by convention, often limited by rule and sometimes limited by law. It is because of the limitation on distribution that, were there not to be a special rate for co-operatives, the co-operatives would be enormously disadvantaged.

    By their nature, co-operative societies minimise profits to their shareholders because they exist to maximise benefits to the consumers. Very much the same rule applies with the co-operative wholesale societies in England and Scotland which, although having a new and different constitutional form, nevertheless do not distribute profits in the way which is common in commercial undertakings, and they could not be allowed to do so. It is for the reasons that my right hon. Friend explained that, were they to be treated as if they were normal commercial companies operating under normal commercial rules, they would continue to be disadvantaged in the way that I have described.

    When the Financial Secretary wound up last year's debate, he made two points in rebuttal, having criticised the Opposition for not accepting any change, no matter how unjust. First, he said that the problem that we described did not arise, and he added that in any case it arose only in a very few cases. He said that fewer than 30 industrial and provident societies and what he described as rather more than 50 building societies would be adversely affected.

    At the end of the debate, I was glad that the hon. Gentleman at least conceded that some of these societies, worthy in themselves and an important part of the economy — the co-operative movement represents 6 per cent. of the total retail trade — were adversely affected by the new rule. But I made it clear on behalf of the Opposition that we regarded this as a gross injustice which ought to be removed if only one society was affected.

    However, more and more co-operative societies seem certain to be affected because of the reorganisation now going on within the co-operative societies. They are amalgamating. They are becoming larger. As they become larger, they become more profitable. As they have become simultaneously larger and more profitable, an increasing number are being required to pay a rate of tax which is unjust compared with that of commercial competitors.

    I shall conclude—no doubt the Chief Secretary will soon conclude the speech that he will give rather than the one that he is preparing — with three examples of the new iniquitous system, which the Finance Act 1984 brought about. They relate to successful co-operative societies.

    The Sheffield society, which was called the Brightside and Carbrook when I was a subscriber, would have paid £510,000 under the scheme that existed before the Finance Act 1984. Under the new scheme it pays £675,000 on exactly the same turnover, and if the new clause is accepted, the tax liability at 30 per cent. will produce a yield to the Treasury of £306,000, which will more or less return it to its position before the discriminatory clause was introduced.

    Under the old scheme the Plymouth co-operative society would have paid £20,000. Under the new scheme it pays £708,000, and if my 30 per cent. proposal is accepted the society will be required to pay £531,000, which is little more than was levied from it under the old scheme, but much more in line with what was regarded as just before the Finance Act 1984.

    Under the old scheme the Peterborough society would have paid £705,000, under the new scheme it pays £800,000, and under my scheme it would receive a benefit which would return it more or less to its position before the Finance Act 1984.

    We are asking for a return to the position that existed before the Finance Act 1984, which acknowledged that because of the co-operative societies' patterns of profit and dividend distribution, to levy corporation tax on them in the same way as on commercial undertakings would put them at a fiscal disadvantage. Surely that is wrong. I hope that the Financial Secretary will agree to change it.

    I support the new clause because I welcome the opportunity to support mutual organisations. Yesterday we discussed an amendment which sought to help friendly societies. We all know, especially those of us who come from and represent northern constituencies, of the important social and economic role that mutual organisations, such as friendly societies and co-operative ownership enterprises, have played in the north and, indeed, throughout the country. We should support those organisations because their owners and participants, whether consumers or producers, workers or customers, are motivated by a prime interest in the organisation. They participate in and organise the societies not for private gain, but for the benefit of the co-operative and the community that it serves.

    The new clause would help co-operative societies, especially co-operative ownership in housing, which is a relatively recent development. It has become a significant part of the housing sector—some would say not nearly as significant as it should be—only during the past two decades as a result of the pioneering work of a small group of enthusiastic supporters including Mr. Harold Campbell, who played a major role both through the Co-operative Housing Agency and by promoting the idea of co-operative housing in Government circles and throughout the country.

    As the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) said, the new clause seeks to extend the lower rate of corporation tax to a variety of institutions defined in the Taxes Act. As I understand it, that includes credit unions, industrial co-operatives, housing associations and self-build societies. In my constituency, self-build societies, co-operative housing bodies and housing associations are making a most worthwhile contribution to the community's housing needs, especially in the south Middlesbrough area.

    One of the best features of that development, which my colleagues and I should like to see extended to other areas, is the mixture and proximity of different types of housing ownership. Rented accommodation, self-build accommodation, part-rent and part-owned accommodation, co-operative owned accommodation and privately owned accommodation are together in the same development. That provides both a good social mix and, more importantly, a chance for consumers to have a wide range of opportunities to buy or rent houses, and to participate in housing schemes, as their inclination and pockets will allow. That sort of development, which the new clause would encourage, should be supported by the House.

    The trouble is that, even if the Government accept the new clause, it will do little to reverse the dreadful decline in support for this type of housing venture and institution that has occurred since they carne to office. There has been a 21 per cent. real fall in gross loans and grants to housing associations since 1982–83. That means that in the north-east the Housing Corporation cannot meet the bill for more than £4 million worth of major repairs to housing association properties, of which some £2·27 million relates to properties for which local authorities are prepared to provide funds, but to which the corporation cannot respond. For a Government who say that home ownership is one of their most important aims in housing policy—they said that in the housing expenditure White Paper—they have been especially tardy in helping the low-cost home ownership programmes, which have become a growing proportion of housing association activity.

    4.30 pm

    We all know from our experience in our constituency surgeries, possibly from our own personal experience, and from those with whom we have contact, that low-cost home ownership and the role that the housing associations can play in it is vital.

    In the north-east, the housing associations were allocated only £16 million, compared to bids of up to £45 million. Therefore, there is a substantial gap between what the associations could do to help the housing needs of the north-east, where the gap is considerable, and what they are enabled to do. We have rehearsed, during general economic debates in this House, the arguments for investment of that sort. It is just the type of investment on which the Government should be embarking at present. There is a real need, in areas such as the north-east, for this type of housing accommodation. There is also a real need for the spin-off in jobs and growth which would arise if the Government were to respond to the bids of £45 million made in the north-east by the housing associations.

    In view of the Labour party's new enthusiasm for home ownership, it is interesting to note that in the 1985–86 programme there are only 300 houses under this heading for the whole of Cleveland county, where the smallest number of bids in the north-east region were made. Those are in Middlesbrough, which I have already mentioned. Perhaps some of the local authorities and their representatives on the boards of housing associations should investigate that apparent lack of interest, because many of us believe that the developments in co-operative housing and housing associations in the past 20 to 30 years have led to a third force in housing that is of enormous benefit to the community.

    We hear a great deal from the Conservative Benches about the shortage of rented accommodation, but the references are usually to private rented accommodation. In recent times, to the benefit of many communities, there has been an enormous growth in the number of rented units of accommodation available through housing associations as an alternative to council housing. That is a very desirable development. I hope that the Government will support it.

    The Conservative Government's limitations on capital finance have already held back the development of housing co-operatives. While the right hon. Member for Sparkbrook and some of his hon. Friends may be enthusiastic about the development of housing co-operatives, which were supported in the past by the late Tony Crosland and others who established the Co-operative Housing Agency, only 8,000 units of housing have been provided since the Government started to take action in that area many years ago. Those 8,000 units have been provided by about 200 registered co-operatives. One of the reasons for the small number of units is that Labour councils throughout the country have been adamantly opposed to the development of housing co-operatives and housing associations because of the blind ideological commitment of those Labour councils to council housing as the answer — and the only answer — to the housing problems in their areas.

    There is no better example than Liverpool. Under the Liberal council, 2,000 homes were provided in over 30 registered co-operatives—a high proportion of the total in the country as a whole. Therefore, it is not surprising that the registered co-operatives in Liverpool have been given a tribute—

    I am marshalling the case in support of the new clause, which seeks to aid mutual bodies, such as the housing co-operatives to which I am addressing my remarks. In demonstrating why the new clause should be supported, I think it is appropriate that I should point out the developments that have taken place in housing co-operatives in past years. I have also tried to show why such developments have not taken place more rapidly than some of us would have liked to see.

    I was pointing out that one of the reasons for the slow rate of development is the antagonism towards those mutual bodies, which provide housing and other forms of enterprise, by councils such as Liverpool, because of their commitment only to local authority housing. It seems to me that that is a perfectly valid point to make, because the new clause is concerned with encouraging the development of mutual housing associations and mutual bodies which can provide facilities of that sort.

    I hope that the House will support the new clause, because the distinctive type of housing that is involved could make a major contribution to the country's housing and social needs. One of the best ways to encourage that sort of development is through the taxation system, and it is wrong that the mutual bodies should not be on all fours with companies in that respect. They should be given the fairly modest encouragement that the new clause envisages. As I said earlier, the new clause would do very little to make up for the deficiences in respect of which the Government have been guilty since they came to office.

    I am very pleased that the Government, after some dithering on coming to office, kept the Co-operative Development Agency in existence. The agency is doing a first-rate job but it could be doing a much bigger and better job if more resources were made available to it. In the 1960s and early 1970s, I was, together with other colleagues, responsible for putting together the proposals that led to the establishment of the agency. We also saw it not only as a promotional body but as a body that would provide substantial funding for co-operatives of all sorts. I appeal to the Minister, in considering the new clause, to have regard to the good work of the Co-operative Development Agency and to the extra work that it could do if given more resources.

    The case made by the right hon. Member for Sparkbrook in favour of helping mutual bodies also applies to resources for the Co-operative Development Agency. That body, which at national level can do a certain amount, could do a great deal more if it had the co-operation, support and resources of the local co-operative development agencies that local authorities have established in some areas to promote mutual bodies and co-operatives of one sort and another. We want to see the co-operative sector and the mutually owned sector develop as a significant force in the British economy. We want to see bodies with a diverse ownership. That is why in consideration of the Bill last night we proposed amendments to seek to make share ownership in institutions established under the Companies Act much broader, to try to introduce incentives to spread ownership.

    We should like to see the co-operative sector as a dynamic and much more substantial third sector of co-operative employee-owned enterprises than is currently the case. We believe that this requires a new framework, including the development of strong co-operative support organisations along the lines of the Spanish Laboral Popular, which has helped to foster the Mondragon group of co-operatives, with which I know many hon. Members on both sides of the House are familiar. That has been an enormous success. There are other reasons, in addition to the support which is being given by that body. The provision of up to 75 per cent. of the finance for new co-operatives is an enormous help to the establishment of such mutual organisations, and we have nothing comparable in this country.

    In addition to the modest incentives provided in the new clause, we also want to see a new form of incorporation.

    I would not interrupt the hon. Gentleman's exposition on co-operatives in general and on Social Democratic party policy in particular were he not doing damage to the case which some of us want to make. What we are arguing for in the new clause is not a special incentive. The strength of the case which I have tried to make out, and the strength of the case which the hon. Member for Croydon, South (Sir W. Clark) made a year ago, is not that this proposal provides anyone with some special incentive that gives an advantage, but that, unless the new clause is accepted, people will suffer from a disadvantage. If the hon. Gentleman insists on talking as if he wants to give people some special advantage, he totally undermines the case which he is making for the co-operative movement.

    I do not accept that. I take the right hon. Gentleman's point that it is a powerful argument, when a Conservative Government are in office, to suggest that mutually owned organisations should be on all fours with institutions registered under the Companies Acts, but I should like to think that he and his right hon. and hon. Friends will also accept from me and my right hon. and hon. Friends that the concept of mutual ownership and co-operative ownership is so desirable that it should be encouraged by other incentives, in addition to the modest incentive of putting it on all fours with company-registered institutions, as the new clause proposes.

    I was seeking simply to demonstrate our commitment to the co-operative sector. As you will know, Mr. Deputy Speaker, for many years many of us have had, and continue to have, long associations with that movement, and we believe that a great deal more should be done beyond putting these institutions on all fours, as the right hon. Member for Sparkbrook is proposing.

    I will not go into the details of the proposal which we have made for encouraging the co-operative sector. That will no doubt be appropriate on another occasion. New clause 9 is a limited but helpful step in the direction of giving co-operatives and other voluntary developments support on equal terms with conventionally owned companies. I hope that the Government will respond to the pressure that has come from various parts of the co-operative movement, and that they will seek to make up for some of the damage that their other policies have done by accepting what is, after all, a modest and fair proposal.

    4.45 pm

    I wish to associate myself with the remarks of the hon. Member for Stockton, South (Mr. Wrigglesworth) and of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) regarding not only co-operatives but housing associations. I think that the comments were well taken.

    The right hon. Member for Sparkbrook may not be aware that my constituency was and, indeed, still is the home of many well-known co-operative associations, particularly in the footwear industry. At the end of the 19th century, far-sighted employers set up many institutions as workers co-operatives or entities in which the principle of sharing the profits and involving the work force in the management of a company was enshrined. I think that the right hon. Member for Sparkbrook was quite correct. He may be interested to know that my council — which, incidentally, has a Conservative majority — has recently decided to provide finance for our local co-operative development association. One of the best managed co-operatives in my constituency is in Brixworth, which I have visited and which I intend to visit again soon.

    Housing associations are very important to my part of the world with its high proportion of elderly citizens who depend a great deal upon the work of institutions such as the Abbeyfield, which in turn depend upon local housing associations for support. Therefore, I agree with the sentiments.

    However, I have experienced great difficulty in accepting some of the arguments put forward in the debate. I should like to address some of the arguments, in particular those advanced by the right hon. Member for Sparkbrook. The essence of his argument is that the imputation system, the rate of advance corporation tax, which has been in operation for a decade now, in a sense benefited companies which had a distribution policy and were able to distribute some of their profits by convention or practice. For those entities which by convention or in terms of their own internal statutes or requirements did not distribute profits, his argument was that if one took the old corporation tax rate of 52 per cent., one had to deduct the standard rate of tax, the advance corporation tax, which the company was deducting from the dividend flow and paying to the Inland Revenue, with the shareholder receiving only the net payment and, therefore, 52 per cent., where, in a simplistic world, all the profits were paid out. I make that assumption to simplify the argument, although we know that it is not the case.

    At one extreme, if a company paid out all its profits, with a 30 per cent. standard rate of tax and the old 52 per cent. corporaton tax rate, that would bring down the figure to a 22 per cent. rate of tax — mainstream corporation tax, as it is called — which would compare very unfavourably with a lower company rate and, indeed, with the rate at which larger companies would be paying corporation tax. I think that that was the argument that the right hon. Member was advancing.

    I have problems with that argument, and I should like to advance three in particular. I will not pursue the obvious argument that companies do not distribute all their profits, but in the argument one would have to make some assumptions about the average rate of dividend distribution in the economy before one could compare those companies which distributed profits with those which did not. I did not pick up the exact calculation which the hon. Gentleman was making on that point, but I know that he shared the point with me.

    My three points are as follows. First, it depends on which industry and company one picks before a generalisation can be made about dividend rates. There is no way in which one can make a general argument, as the right hon. Gentleman tried to do, about companies in relation to dividend rates. They vary from industry to industry, from type of company to type of company and from year to year, whether we are in recession or in boom. It may be legitimate to use that argument in a debate, but if the right hon. Gentleman tried to reduce the argument to an amendment or to a new clause to be included in the Finance Bill I think that he would be in serious difficulties because one cannot generalise about the dividend rate. It is a fair debating point, but, in practice and reality, one which cannot be sustained in considering legislation.

    I suspect that the right hon. Member for Sparkbrook understands that point. He advanced the argument that a company is interested only in the net cost of its dividends. It assumes that the advance corporation tax that it deducts from dividends and pays to the Inland Revenue is a payment on behalf of shareholders as part of their total tax liability. That is the nature of our tax legislation and I cannot quarrel with it, but the reality is that companies look at their total corporation tax rate, not just at their mainstream rate. That is the rate which is shown in their accounts and which is used by financial analysts and the stock market when it compares the performance of different companies. Companies therefore look at their total corporation tax rate. When the right hon. Gentleman says that he is comparing the 30 per cent. rate for workers' co-operatives, housing associations and friendly societies with a higher rate nominally, but with a lower rate in reality, because of the payment in advance on account of shareholders' liability to tax, that, in the real world, is not the way in which companies look at it. They look at their total corporation tax liability.

    Another argument relating to the main philosophical thrust of the right hon. Gentleman's case is that dividends are assessable at the higher rates of tax, not just at the standard rate. He knows that the advance corporation tax that is paid by companies on dividends paid out is added back. The net dividend is grossed up at the standard rate of 30 per cent., the advance corporation tax rate, but the shareholder is liable to higher rates of tax. It is not true to say in a simplistic way that the imputation system to which he referred earlier is simply about the standard rate of tax. It is not. It is about the part deduction by a company of a shareholder's ultimate liability to tax, but one has to look at the total liability of the shareholder.

    The right hon. Member for Manchester, Wythenshawe (Mr. Morris) made an interesting point about rights issues but it seemed to me to be a bogus point. He appeared to argue that the entities that the right hon. Gentleman's new clause encompasses—housing associations, workers' co-operatives and friendly societies — do not have rights issues, whereas companies have rights issues, and that there is injustice, in the sense that corporate shareholders benefit from rights issues whereas this benefit is not available to the owners of the entities that are referred to in the right hon. Member for Sparkbrook's new clause.

    Many hon. Members will be aware that if one takes up one's rights in a rights issue all that happens is that the total equity of the company may have grown by the subscription of new cash to the company but that there is no change in the financial status of the individual shareholder who takes up his rights. Therefore, I cannot follow the argument of the right hon. Member for Wythenshawe. If a shareholder does not take up his rights but sells them, he is subject to tax, but he gives up part of his equity ownership in the company. He gains cash through the sale of his rights but he forgoes an equal amount in terms of the value of his remaining ownership in the company, assuming that he remains a shareholder. I do not therefore follow the right hon. Gentleman's argument. The fiscal relevance of rights issues is not relevant to the new clause or to the argument upon it.

    As for the main part of the right hon. Member for Sparkbrook's argument, he acknowledged that the small company rate of tax is 30 per cent. That rate is referred to in new clause 9. I imagine that the right hon. Gentleman chose that rate not only because it is the income tax rate but because it is relevant to the rate that is paid by small companies. However, the right hon. Gentleman correctly pointed out that he is addressing his argument not to the smaller entities that would pay 30 per cent. but to the larger entities where the rate of corporation tax will be 35 per cent. in the fiscal year 1986. He argued that for the larger entities paying 35 per cent. one must deduct a proportion of the advance corporation tax on dividends paid out to shareholders. That brings the effective rate which should be borne by the company below 30 per cent.

    I do not accept that argument. One should stick to the 35 per cent. rate of corporation tax for the larger entities caught by that rate for two reasons. The first is fiscal simplicity. Many farmers in my constituency choose to be taxed at income tax rates rather than at corporation tax rates. They do not incorporate themselves. That may or may not be wise. I submit that it is for the convenience of the business world that there is a 35 per cent. standard rate of corporation tax that will apply from fiscal year 1986 and a lower rate of 30 per cent. That is widely understood, so I am not in favour, unless there are compelling arguments, of variations.

    The second and more important point relates to a matter to which the right hon. Gentleman did not refer, namely, the major capital allowance changes that were announced in the 1984 Budget and incorporated in the Finance Act 1984. He knows that many large companies, although on a nominal rate of 52 per cent., were paying actual rates of corporation tax that were considerably less than that. As a general rule of thumb in the banking world one assumed, in the analysis of an industry, that the actual rate of corporation tax was between 25 per cent. and 30 per cent. for industry as a whole. What has happened as a result of the Chancellor of the Exchequer's 1984 Budget and the Finance Act 1984 is the reverse of the right hon. Gentleman's argument. The rates of corporation tax for companies have risen in many instances because capital allowances have been withdrawn. The position of entities like co-operatives and housing associations which did not have the benefit of capital allowances has remained unaltered. The effective rates of corporation tax for service companies have fallen, but for manufacturing industries and for some exploration companies they have risen. The actual rate is very close to the nominal rate. From fiscal year 1986 onwards it will be 35 per cent. Therefore, the injustice to which the right hon. Gentleman referred does not exist.

    Is that not an argument for not abolishing capital allowances? Is that not the core of the argument to which the hon. Gentleman should address himself?

    As the hon. Gentleman knows, that is an entirely separate issue which has been debated on its merits: whether there should be specific fiscal incentives for capital investment. I am very much in favour of encouraging correct capital investment, but it must be capital investment in either the public or the private sector that will make an adequate return on outlay. The right way to do that is not by the continuation of our very generous capital allowance system but by proper management systems for the review of capital investment projects and other projects to which I have referred in previous debates on the Budget and the Finance Bill and to which I intend to return later.

    5 pm

    The right hon. Member for Sparkbrook made a speech at the meeting of the Crosland Society at Trinity college on 7 June 1985. I draw the House's attention to the speech because it explains what sort of entities would benefit from the new clause, and what the right hon. Gentleman has in mind as examples of co-operatives. Towards the end of the speech, the right hon. Gentleman said:
    "We have to realise that if we are committed to a more equal distribution of power as well as of wealth, the old Morrisonian model of centrally controlled public utility does not meet our needs."
    The right hon. Gentleman made it clear that old-style nationalisation is no longer relevant to the future of the Labour party or our economy. Some enlightenment from the right hon. Gentleman would be helpful because it is confusing that later in the same speech he spoke about institutions that have been privatised by the Government. The right hon. Gentleman referred to the time
    "when a privatised utility is returned to public ownership"
    and spelt out the type of control there would be if Labour renationalises British Telecom, British Aerospace — although that is not a public utility — and British Gas which Conservative Members hope that the Government will succeed in privatisating next Session. What does the right hon. Gentleman mean when he refers to the renationalisation of utilities such as British Telecom and British Gas? What type of control will there be? Will they be genuine workers' co-operatives? The right hon. Gentleman ruled out the Morrisonian nationalized industries. Does the right hon. Gentleman imagine that if British Telecom is returned to public ownership it will be a gigantic workers' co-operative? That is the only conclusion one can draw from his speech.

    I can understand the thinking behind the new clause, if the right hon. Gentleman is serious about his intention regarding the 30 per cent. rate of corporation tax for those entities. Perhaps the real reason is to benefit the utilities that the Labour party would renationalise as workers' co-operatives if, heaven forbid, it is returned to power, because they would be subject to this rate of corporation tax. I hope that the right hon. Gentleman will enlighten the House.

    I wish only to add a few words of support for the new clause which aims to overcome the tax penalties that emanated from the Finance Bill last year. All sorts of organisations are affected, including industrial societies and other mutual organisations such as the friendly societies and the various types of co-operatives. We have heard from both sides of the House examples of the effect of the removal of the differential rate of corporation tax on those organisations.

    We had a long debate on friendly societies yesterday. Already, we have seen that the Government's action is crushing these organisations. My hon. Friend the Member for Workington (Mr. Campbell-Savours) quoted Mr. Madders, the chairman of the friendly societies liaison committee, who said that the Government's action could result in friendly societies becoming extinct. That would be sad because the societies have a long-established tradition and have been in existence for about 100 years. They have served the people of Britain, especially those on lower incomes and in rural areas. The new clause would help the mutual organisations to come to grips with the severe competition with which they must contend.

    The Government's line on friendly societies is that if they want to remain alive they must compete in broader areas of business where they would encounter more forms of taxation. They would have to employ staff to overcome the intricacies of tax problems. They do not have the necessary expertise or manpower. They rely on the voluntary help of people who do not have the skill or the time to deal with the complicated taxation matters which the organisations inevitably must deal with if they are to survive in the competitive areas into which Ministers suggest that they should move.

    The Government's removal of the differential rate of corporation tax is an additional crushing action on the friendly societies. We argue our case not only from the economic point of view, but from the social aspect. That aspect is most prominent in my mind when considering the corporation tax treatment of friendly societies.

    The local postman often plays the role of the deposit collector in rural areas, especially in the north of England. The postman does his rounds and collects deposits. He makes sure that Mrs. Smith is alive and well by checking the milk bottles on her doorstep. We must consider the friendly societies in that context. Social services have been cut; that is a broader issue and I do not wish to go wide of the point, but the social angle must be taken into account when considering the effect of last year's Finance Bill on mutual organisations.

    Some hon. Members have mentioned the effect of the changes on co-operatives and much mention has been made of housing associations. I regard my constituency as a deprived area in housing terms and hon. Members who represent deprived parts of the country welcome all initiatives to help overcome the housing crisis which has resulted from the Government's crazy economic policy. It is distressing for the co-operatives to be crushed at a time of housing crisis. In my constituency there are 2,640 families in houses unfit for human habitation, houses with black fungus crawling up the wall and so on.

    I understand the argument, but so that we may be better informed may we have an estimate of how many more properties would become available if the hon. Gentleman had his way and there was a reduction in corporation tax for housing associations?

    We are not talking about a swamping action but about a fairly small reduction. The effect will not be massive and the new clause will not change the world, but small improvements can contribute to creating a better society. I do not think that the hon. Member for Enfield, North (Mr. Eggar) would like small co-operatives or housing associations to disappear because they help, in their small way. I see that the hon. Gentleman agrees with me.

    The hon. Gentleman refers to small co-operatives and friendly societies. What rate of corporation tax do they pay now? Surely they benefit from the differential rate for small companies. Is the hon. Gentleman thinking of the larger co-operatives?

    My right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) made an interesting and useful point about the larger co-operatives when he said that because of competition co-operatives were having to get together and that we were experiencing a "fewer and larger" syndrome. That means that the tax paid by the larger co-operatives makes them uncompetitive compared with their commercial counterparts.

    Is the hon. Gentleman saying that, for instance, most of the members of the Co-operative Wholesale Society will benefit because they are covered by section 340 of the Taxes Act? I do not have a copy of that Act but is the hon. Gentleman suggesting ways of helping the Co-op to beat Sainsburys and Tescos? Is that what he is really after?

    The hon. Gentleman should go to the Library and check whether he is really talking about section 340 of that Act. I have been asked an ill-prepared question and I do not want to waste my time on it. I want to talk about the future of co-operatives.

    A specific example of the importance of co-operatives is in high technology. The Labour party is now strongly associated with high technology. I regard the Labour party as the party of the future and of high technology. There is no question about that.

    Many small companies involved in high technology are co-operatives. Such businesses, by their nature, are high risk. There is a serious downturn in the electronics industry and this is causing liquidations. The uncertain future and the changes in technology mean that a company might soon be producing obsolete products which it cannot sell and so it will become unprofitable.

    One advantage of co-operatives is that the equity can be shared among a number of owners. Many instances of that have occurred in Scotland. I think of the closure of the British Steel plants. Many organisations have branched out. Joint ownership is laudable and should be encouraged. The removal of the benefits which existed until March last year has had serious effects.

    We are talking about helping high technology not in a massive way, but in a small but significant way. My right hon. Friend the Member for Sparkbrook will recall visiting the Earls Court exhibition and speaking to three people who owned a small company. They explained how difficult it was to raise the capital to float the company. They did not intend to expand the business because they could not afford to go through yet another nine months of raising money.

    5.15 pm

    Such organisations should not be discouraged by an oppressive tax regime. Diverse ownership is the principle behind co-operatives and should be encouraged. It gives employees the opportunity to take part in the management and running of a business.

    The new clause is worth supporting. It will ensure that mutual organisations such as co-operatives and friendly societies can go from strength to strength rather than being destroyed.

    When I first saw the new clause I confess that I was attracted by the notion that co-operatives, friendly societies and housing associations should be relatively well treated compared with other companies. After all, co-operatives and friendly societies have had a long and honourable history. Long before the welfare state the majority of people in Britain were covered by friendly societies.

    There is more to the clause than meets the eye. I understand that friendly societies and co-operatives were favourably treated in terms of corporation tax before the changes made last year. The Opposition are suggesting that they should be yet more favourably treated.

    I agree about the need to encourage small companies. The hon. Member for Kingston upon Hull, West (Mr. Randall) referred in particular to high technology companies. In passing, the hon. Gentleman said that the Labour party was the party of high technology. When I first came to the House similar claims were made. The Labour party described the trend as the "searing white heat of technology." Shortly after the Labour party came to power, it put its plans in hand in the shape of the national plan. It needed evidence that there was a real interest in technology, and created the Department of Technology. More importantly, it put Mr. Frank Cousins in charge. The reason for placing Mr. Frank Cousins in charge was not—as it might seem to the general public and as we were led by Lord Wilson of Rievaulx to believe — to encourage technology but to find Frank Cousins a job. That job-finding practice has been done before and will no doubt be done again.

    I was interested in the remarks made by the hon. Member for Kingston upon Hull, West about encouraging small companies and technology. He was right to say that these companies suffer from an acute shortage of capital because they do not have much of a track record to impress bankers. The fault that the hon. Member for Kingston upon Hull, West ascribes to the present system does not apply to small companies because small companies have the benefit of the small companies corporation tax rate. I hope that the Minister will tell us how small companies, whether they are co-operatives or industrial provident societies, will be affected by the proposal.

    Small companies do not suffer in the way that the new clause tabled by the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) suggests. When the Minister replies, I hope that he will say how many co-operatives pay the full rate of corporation tax. My guess is that not many pay the full rate. Most are small, individual, friendly and provident societies that we all want to see thrive. They are doing well under the present corporation tax rate.

    The Chancellor's measures taken in last year's Finance Act were intended to avoid distortion in the operation of corporation tax. My hon. Friend the Member for Kettering (Mr. Freeman) made that point in his excellent speech when he said that there had been too much of a buzz and distortion about investment. Companies should concentrate on making profits, and any distortion of the corporation tax in favour of a specific form of money-making activity — for instance, co-operatives and friendly or industrial societies — departs from the principle set out in the Chancellor's measures.

    Some distortions do exist in corporation tax. As I see the right hon. Member for South Down (Mr. Powell) present I shall mention one area where distortion arises, and that is in Northern Ireland. I am in favour of a distinctive form of corporation tax for different parts of the country. The system of regional aid and grants has been extremely wasteful and we should reduce the cost of work either by reducing national insurance contributions or corporation tax in the regions most affected by the tax—

    Order. We have strayed from the new clause. I hope that we may return to the mitigation of corporation tax liabilities.

    I apologise, Mr. Deputy Speaker. The new clause invites us to make distortions in corporation tax, and I know that I cannot ask your opinion on that. If distortions must exist they should not be in the techniques of corporation tax or its operation but in its coverage. It is an established practice for grants to be given to firms in Northern Ireland to recover corporation tax.

    The substance of the new clause remains to be proved. I understand why the Opposition want to make a case for the co-ops and that some Opposition Members may be sponsored by the Co-operative Wholesale Society. I hope that the Minister will tell us whether the Co-operative Wholesale Society as a trading unit suffers in terms of taxation when compared with such trading units as Sainsburys or the other big multiple organisations. The new clause does not make the case and I believe that the fewer distortions in corporation tax, the better.

    I declare an interest as a member of several co-operative societies, many of which have gone bankrupt. I was a member of the Sowerby Bridge co-operative society and I am a member of the Oxford co-operative society.

    The Opposition have a simple motive in tabling the new clause. We want to encourage the co-operative principle and to encourage the co-op which has fallen on hard and tough times. The co-op is not organised on the same basis as the giant organisations and cannot fight Sainsburys, Tesco and Asda. The Government want to put the co-op on the same competitive footing as the giants in terms of taxation. The co-op is not organised for that form of competition.

    The Opposition want to encourage the principle of co-operation and the co-ops. The tax concessions to co-operatives in the rate of corporation tax has been accepted by Labour and Conservative Governments. It originated in the Heath Government, and there is no reason why what the Heath Government giveth the Thatcher Government should take away. The only reason can be that the Thatcher Government have a distaste for the principle of co-operation and for any principle decreed or decided by the Heath Government. That is another manifestation of the difference between the Heath Government, which wisely agreed a distinct rate of corporation tax for co-operatives, and the Thatcher Government, with their extremist composition.

    The Opposition seek to repair the damage caused by the Finance Act 1984 by restoring the special tax concession for co-operatives which all previous Governments have accepted.

    I shall not give way.

    The Government are clear in their commitment to remove that privilege and to put co-operative societies on the same tax footing as private firms. I know that the Economic Secretary to the Treasury will say that co-operative societies should be treated the same in tax terms, but I say that co-operatives should have special treatment. They are a special form of organisation which deserves a special concession which all Governments have conceded in the past. That is an advantage — not a major advantage—that the co-operatives need because of their peculiar form of organisation and the specific competitive difficulties they face. Their interests are different from crudely and directly motivated, profit-oriented firms. The co-operatives' role is much wider and they have a commitment to serve their members and to advance certain principles in society. Co-operation is only one of those principles. Such aims and objectives merit and justify special treatment.

    The Government will doubtless claim the principle of equality. They do not like co-operation, and do not know what co-operation and working together means. They will proclaim the virtue of one system of reduced corporation tax for all. The Opposition say that that is not right or reasonable. The co-operatives deserve a special advantage that they once had and that we are seeking to restore. The advantage springs from the co-operative principle which is not to maximise profits for their shareholders but to further the cause of their members and to maximise the benefits for their consumers by returning any profit or surplus in the system to those members at intervals in the form of the dividend in proportion to their purchases.

    The central principle of co-operative societies is a commitment of service to, and a desire to advance and improve the position of, their members. Generally speaking, the members of co-operative societies are not the wealthy in society. Indeed, in most cases they are not even the middle class, because the co-operative principle has always been strongly rooted in working-class areas. Their aim is to improve the position of the less well-off, and that is another argument for the special tax concession that they had and that we are seeking to restore by the new clause.

    5.30 pm

    Although there have been accusations of giantism against the co-operative wholesale societies, the impact of competition from undoubted giants such as Sainsbury has forced the co-ops to come together to achieve the benefits of strength and size to enable them to face competition. It is unfair, therefore, to tax them with this form of liability when it has been forced on them by the nature of the giants with which they are competing. Nevertheless, the giants among the co-operatives are organised on exactly the same co-operative principle. Although they may be concerned with production, they are organised in the interests of the consumers, their members, rather than in the interests of the profit of their shareholders.

    With more than 12 million members in about 500 separate societies, it is clear that the co-operative societies have a role which is worth encouraging. They appeal to millions of people who do not have large spending power. These are people to whom the pence really count and for whom the principle of co-operation—the return of the "divi"—is important.

    My hon. Friends and I hold strongly to the view that it is fair to give organisations which perform that important social purpose the advantage which was accepted by all Governments up to the time of the passing of the Finance Act 1984. We want to return the position to the status quo ante Lawson. That position, which we say the societies should have, arises from the nature and organisation of co-operatives. When, in the early 1970s, there was a change in the basis of corporation tax, a Select Committee examined the possibility of changing from the classical system to the imputation system. That Committee received representations from, among others, all interested bodies, including the Co-operative Union and the various co-operative societies. It agreed that the change would be unfair to the co-operatives and that there should be a special rate to recognise their unique role.

    When, therefore, the new chit system was brought in, there was a special rate; without that rate, there would have been a massive increase in taxation for co-operative societies. The reason for the distinction was simple. Co-operatives do not make distributions, as companies do, and, as the imputation system gives relief to a business in respect of the advance corporation tax on distributions, the co-operatives would have been paying tax on the full rate of mainstream tax. They were therefore given a special rate in recognition of their special role.

    The Government argue that, because they are bringing down the rate of corporation tax, the co-operatives should be on the same basis as other private firms, so that they will all pay the same rate. However, the reasons for the special concession remain. If there was justification for the concession, it remains valid whether at the higher or lower rate.

    When the Chanceller introduced his 1984 Budget, the co-operative societies protested against the abolition of their special rate, not because that rate had given them an advantage but because, if there was no special rate, the co-operatives would be liable to corporation tax at the full rate, whatever the full rate was, whereas companies could deduct the tax liability of the shareholder on the distribution.

    After that proposal was made, a meeting took place between officials of the Inland Revenue and a deputation from the Co-operative Union. That took place in September of last year, when spokesmen for the Inland Revenue agreed with the co-operatives that the withdrawal of the special rate would disadvantage the co-ops compared with companies, and they agreed to advise the Financial Secretary accordingly.

    The Inland Revenue officials also confirmed at that meeting what had been said by their predecessors in 1971 to the then Select Committee which recommended the special rate in the first place — that there had been no change in the circumstances to alter the co-operatives' position.

    That was the situation at that meeting in Somerset house in September of last year. Subsequently, the co-ops received the news that there would be no amendment of the 1984 legislation and that the special rate would be abolished. That seemed to be a negation of the agreement — or at any rate the feeling — of that September 1984 meeting. It seemed an unreasonable decision which bore no relation to the position that the Inland Revenue officials had taken at the meeting. If the grounds were as the officials had then suggested, there should have been a change. That change has not been made, and that is why we are proposing in the new clause that it be made.

    Why are the Government, in their zeal to remove anomalies and have a more uniform and simple tax system, so preoccupied with removing only those anomalies which help the mass of the people, particularly the less well-off, rather than the tax perks and advantages of those whom the Conservatives, by and large, represent?

    The Government demonstrate that zeal — as the Minister will no doubt do when he replies — single-mindedly against one section of society — those whom my hon. Friends and I represent — whereas when it comes to any similar zeal for uniformity, efficiency and simplicity in the system which might harm the supporters of the Conservative party, it suddenly dries up. The cold glint behind the steel-rimmed glasses turns warm and affectionate, and changes proposed in that direction are suddenly withdrawn.

    Let us consider some of the privileges and anomalies that are being attacked, amid howls of protest only from Opposition Members. When it comes to tax concessions which might benefit workplace nurseries or tax changes which might benefit friendly societies and working-class organisations such as the Buffaloes, or to considering postmen's Christmas boxes, the Government are full of zeal for tax reform and efficiency. When we speak of a special concession for the co-operatives, which benefit working-class people and help the humblest in society to improve their lot, giving them more power as consumers, the Government are full of energy and efficiency, bustling with zeal to clean up anomalies. But as soon as we consider anything which harms concessions to the Conservatives in society, it becomes political and cannot be done.

    The Government stopped short of the sort of changes, for example, that the Secretary of State for Education and Science wanted to make in the grant system, because that would have harmed their section of society.

    Order. The hon. member must restrict his remarks to the question of the mitigation of corporation tax liability.

    My zeal for the new clause has overcome my normal caution and desire to stay within the rules of order.

    There is a case for a special rate for co-operatives to demonstrate the Government's attachment to furthering the cause of co-operation and to demonstrate that we regard co-operatives as something of a higher order and a better form of industrial and economic organisation than the simple profit-oriented greed of the company that has only shareholders. By the new clause, we are therefore giving the comparatively small advantage to the co-operatives that they have always had.

    There are various arguments for doing that. The former economics editor of The Times, Mr. Peter Jay, was writing in the mid-1970s about the theme, which has now been taken up in America, of furthering co-operatives as a means of breaking the deadlock in society between capital and labour and ending the constant wages inflation that seemed to be the dominant theme of the economics of the 1970s. There are economic, social and political reasons for recognising co-operatives as a higher form of economic and industrial organisation that should be encouraged.

    We have to recognise that at the moment the co-op is not as healthy or as powerful as it was, and it is certainly not the intimidating organisation that Conservative Members have been trying to paint it as. It is having a difficult time in competition with Sainsbury, Asda and Tesco. One reason is that it is a democratic organisation that serves its members and puts their interest higher than sheer greed for profit.

    A second reason is that the co-op has social commitments and responsibilities that spring from being a co-operative organisation. All those factors have to be recognised in the way the co-op is run, and if they are recognised, the co-op is put at a competitive disadvantage. We could argue that the clause is not only recognising a higher organisation, but repairing a weakness under which the co-op now labours. It is totally single-minded fallacious pursuit of the principle of tax equality for the Government to kick the co-op when it is in that state, as they did in the Finance Bill last year.

    By the new clause we should recognise the unique role and special importance of the co-operatives, and express our desire to encourage that vital social principle.

    The House started off listening with interest to the hon. Member for Great Grimsby (Mr. Mitchell), but during his speech our interest waned. His special pleading on behalf of the co-operative movement killed his case. If I had anything to do with the co-operative movement, I should not ask him to advocate my case.

    The hon. Gentleman talked about the profit motive of companies such as Sainsbury and Tesco and compared that with the co-operative movement. What is wrong with the management of the co-operative movement? Why is it not making profits? Why do people who used to go to the co-operatives now go to Tesco and Sainsbury? The simple reason is that they are cheaper, so that is where the British working man and woman are now buying their goods. Let me make it clear that I have no vested interest in Sainsbury, Tesco, Fine Fare or any other supermarket.

    Does my hon. Friend agree that the speech of the hon. Member for Great Grimsby (Mr. Mitchell) called on people to shop at Tesco or Sainsbury because they are more efficient than the Co-operative Wholesale Society?

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    I am sure that my hon. Friend is right. The special pleading became a little sickening, because in my view the co-operative movement has gone down because it cannot face the competition. When the hon. Gentleman began his speech he spoke about two co-operatives that had gone bankrupt. It is small wonder that they go bankrupt if they cannot face the competitiveness of Tesco, Sainsbury and so on. The co-operatives are owned by their members, and the hon. Gentleman maintains that the mass of poor people go there. If that is so, why are the co-operatives not more successful? The Opposition are always saying that everyone is poor. If everyone is worse off, surely people should be flocking to the co-operatives, which should be thriving, but the reverse is the case, and people are shopping at Tesco, Sainsbury and so on.

    One of the best co-operative movements that we have seen in the past few years is the co-operative that has been formed by the National Freight Company. That co-operative works, but before the employee buy-out it was a loss-making organisation. It is now highly profitable. Is it not possible for the co-operative movement to do that? I do not know whether the hon. Member for Great Grimsby has anything to do with the co-operative movement, but if he has I suggest that he either pays a little more attention to why the co-operative movement has gone downhill or resigns from the movement.

    I come next to housing associations. The hon. Member for Kingston upon Hull, West (Mr. Randall) did not know what section 340 of the Taxes Act covered. It covers the mutual societies and the rest, which do a good job. Housing associations do a first-class job.

    Housing associations have done good work in the sale of the houses and flats they have owned. That is a good thing, but we have to do more. We should not single out any section, because the sale of houses and accommodation of housing associations is an incentive to buy for people who belong to the associations.

    I shall trace the history of corporation tax so that we may discuss the subject with more clarity than is evident in the clause tabled by the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley). If the right hon. Gentleman looks at corporation tax, he will see that it was introduced at a rate of 40 per cent. It was then increased to 45 per cent. and when the Conservative Government took office it came down to 40 per cent. In 1973, as the right hon. Gentleman will recollect, the imputation system was introduced, whereby advance corporation tax became an advantage to distribution—a 30 per cent. advantage.

    In an articulate speech of great clarity, my hon. Friend the Member for Kettering (Mr. Freeman) dealt with the matter. If a company distributed the whole of its profits, and if the profits were 100 units, and there was a 52 per cent. rate of corporation tax, that left a possible dividend of 48 units. If the 48 units were grossed up, it would be 70 units. With 30 per cent. ACT off, that brought one down to 48 units. In my reckoning, that meant that the effective cost of corporation tax on a distribution was just over 31 or 32 per cent. That was an advantage to companies that could distribute profits.

    Mutual societies, co-ops, and housing associations do not distribute profits in that sense. That was the origin of the special rate for the mutual societies and so on. That special rate was 40 per cent. But then, as has been mentioned, in 1984 my right hon. Friend the Chancellor stopped stock relief and cut down capital allowances. He made the reason perfectly clear last year. He did it so that overall he could cut the burden of corporation tax. It was at 52 per cent., then it was at 50 per cent., 45 per cent. and 40 per cent., and it is coming down to 35 per cent. in 1986, which is one year hence. That reduction in corporation tax is an incentive for our whole economy. I am sure that the right hon. Member for Sparkbrook, who has special responsibility for matters affecting our economic future, will agree. Corporation tax reductions must generate economic activity. That is the idea behind them.

    The special rate was and is set at 40 per cent. The Opposition want it to be reduced to 30 per cent. A rate of 35 per cent. should be the lowest level for every mutual society. What happens if the co-operatives and the housing associations do not make huge profits? They are not in business to make huge profits. As the hon. Member for Great Grimsby said, their profits are small. In the past, the co-operatives have enjoyed the advantage of paying dividends fully tax free, which are chargeable against their gross profits. Now they give a discount with their stamps, which are fully allowed for tax purposes.

    I congratulate my right hon. Friend the Chancellor on achieving a maximum 35 per cent. rate of corporation tax for next year. The corporation tax level for any business earning £100,000 profit is 30 per cent. The new clause is slightly redundant because most of the mutual societies — the co-operatives and housing associations — make profits below £100,000 and would suffer only 30 per cent corporation tax. This new clause would impose another anomaly on our tax system. If we say that all organisations should pay corporation tax at 35 per cent., let us stop special pleading. Small businesses, small mutual societies, co-operatives and housing associations would be on all fours if this measure were accepted. I trust that my hon. Friend will resist the new clause.

    The right hon. Member for Sparkbrook (Mr. Hattersley) explained that the measure followed from a similiar amendment that he moved to last year's Finance Bill. The new clause has enabled us to have an interesting and, in some ways, rather general debate on the societies — the provident societies, co-operatives, housing associations and building societies—that are affected by the new clause.

    We have had a wide-ranging debate and it is not easy for me to pick up all the threads. The hon. Member for Stockton, South (Mr. Wrigglesworth) referred to the taxation of housing associations. Under section 341 of the Taxes Act, which applies to approved housing associations, rents received by associations are not liable to tax. Interest paid by associations qualifies for tax relief for their members and the profits on house sales are exempt from capital gains tax. Housing associations are liable to the full rate of tax only if the profits exceed £100,000, when they move beyond the small companies rate. Although most hon. Members would agree that housing associations need encouragement, I believe that the regime under which they operate is favourable.

    A number of hon. Members referred to the nature and virtues of co-operatives. The right hon. Member for Sparkbrook suggested that the Government had a prejudice against co-operatives. That is not the case. The hon. Member for Stockton, South spoke of the Co-operative Development Agency's work. My hon. Friend the Member for Kettering (Mr. Freeman) referred to the work of the co-operative development association in his area. The hon. Member for Kingston upon Hull, West (Mr. Randall) referred to the possibility of co-operatives becoming more involved with the high technology sector. Hon. Members generally have recognised the valuable role that co-operatives can play.

    The hon. Member for Great Grimsby (Mr. Mitchell) said that he thought that the co-operatives should be especially advantaged and should have special treatment because they particularly look after the interests of consumers whereas companies with shareholders do not. He said that they were suffering from competition from these companies with shareholders and that this was not necessarily fair. They therefore needed special treatment. There is a certain inconsistency in that line of argument. Any company, whether an incorporated or a co-operative body, that looks after the interests of consumers and customers is likely to flourish and any body that neglects them is likely not to do so well. My hon. Friend the Member for Croydon, South (Sir W. Clark) referred to the reasons for the decline in the co-operative movement. I do not think that any of us disagrees with the fact that the cooperative societies — the industrial and provident societies, housing associations and building societies—that are covered by the suggested provisions of the new clause play an important and sometimes central role in various activities in the community. We want them to prosper and develop.

    The right hon. Member for Sparkbrook said that he was asking not for special advantages for the co-operatives and the other societies but for comparable treatment with commercial companies. He said that it would be wrong to call the proposed 30 per cent. tax a special rate and that he wanted to ensure that those societies were not disadvantaged. He referred to the "discriminatory pressures" of the 1984 changes in the corporation tax regime for capital and other allowances. He referred to the "injustice" of last year's legislation.

    Even if the comments of the right hon. Member for Sparkbrook were justified — I shall endeavour to show that they were not — they conflict with what his colleague the hon. Member for Great Grimsby said. The hon. Gentleman felt that the co-operatives should receive special treatment because they were a higher form of organisation. I do not want to dwell on this difference between Labour hon. and right hon. Members, but it is important in understanding the new clause to be clear about what they said. The right hon. Member for Sparkbrook said that he was not asking for special advantages; he was merely suggesting that last year's changes brought about particular disadvantages for the co-operative societies. He looked back to the introduction of corporation tax in 1965 and then to the significant change made in 1972, from the "classical" system to the "imputation" system. He said that special arrangements were introduced at that time for small companies—the small companies rate—and for the societies because of their acknowledged special circumstances. That is the point on which we differ, because his argument is that the maximum rate of 40 per cent. which applied to those societies from that date recognised that the industrial and provident societies were in some way disadvantaged by the imputation system and, therefore, that a special rate should be retained to shield industrial and provident societies from the impact of the 1984 corporation tax reforms. I hope that that is not an unfair representation of the right hon. Gentleman's argument.

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    I should like to take the right hon. Gentleman through the arguments, which will show that that is an incorrect interpretation of what happened. It was not the imputation system which damaged the societies from 1972 onwards. The rate of corporation tax which was, at that time, raised from 40 per cent. to 52 per cent. caused the problem. Before the imputation system was introduced, all companies paid the 40 per cent. corporation tax rate. With the introduction of the imputation system and the application of advance corporation tax payments for incorporated companies being offset by a higher rate of corporation tax, which rose to 52 per cent., the societies were damaged, but they were damaged by the rate change and not by the imputation system. It was, therefore, fair that there should be a special rate for industrial and provident societies, not because of the structural change but because it would have been wrong to make them pay the 52 per cent. which was the rate chosen to offset changes effected by advance corporation tax.

    When the rate returns to 40 per cent., as now, and goes to 35 per cent. as it will next year, there is no longer a case for retaining a special rate because the industrial and provident societies are not disadvantaged by having to pay a rate above that which operated under the old system. The 40 per cent. rate was introduced, not to advantage them but to stop the 52 per cent. rate disadvantaging them.

    The right hon. Gentleman argued that a special rate should be retained to shield societies from the consequences of last year's tax reforms. More than 99 per cent. of the industrial and provident societies pay the small companies rate, which we reduced last year from 38 per cent. to 30 per cent. Like small incorporated companies, if their profits are below £100,000 they are already enjoying a lower rate of corporation tax. Larger societies would pay the normal corporation tax rate. Most building societies pay the small companies rate, and the great majority of co-operative retail societies will be paying the small companies rate.

    May I confirm that the Minister is not misleading the House when he gives such volume figures? How much business do the societies which pay at the higher rate conduct? Many of the societies to which he referred may be substantial but they may conduct little business.

    That is a fair point. I was coming to it immediately. I do not intend to mislead the House. The hon. Member for Kingston upon Hull, West mentioned some of the smaller societies. About 20 of the 200 retail societies conduct about 75 per cent. of the turnover. The top 10 per cent. therefore conduct three quarters of the business. The smaller societies mostly benefit from the small companies rate.

    The larger co-operatives, housing associations and building societies pay at the full corporation tax rate. During the 10 or 12 years before last year such societies enjoyed a highly privileged regime. When the imputation system was introduced, the offset for companies between advance corporation tax and the 52 per cent. rate was set to produce a broadly neutral revenue outturn for the incorporated sector. At that stage it did not and could not take account of the influence on rates of tax paid caused by 100 per cent. first-year capital allowances and by stock relief because they had not been introduced. The 100 per cent. capital allowances were introduced after the imputation system and stock relief was introduced in 1974. Those allowances were designed to ameliorate the 52 per cent. basic rate of corporation tax.

    If we take into account what happened in the 10 or 12 years that followed, first, inflation turned out to be higher than had been anticipated and, therefore, stock relief came to play a much larger part in the tax affairs of distribution companies. Secondly, there was a period of heavy investment and many companies and societies took the opportunity to shelter their profits from corporation tax through capital allowances. They, therefore, enjoyed a relative advantage through an unintentional combination of circumstances during that time.

    All that is happening as a result of the 1984 changes is that the societies are being brought back to a more normal and ordinary basis of tax charge. They will still be better off than under the classical system. They will still be better off than companies because their dividends to members are allowed in full against their taxable profits whereas company dividends suffer a 30 per cent. deduction which is allowable as an offset against advance corporation tax although it does not fully cover the corporaion tax charge. In that respect, societies, co-operatives and so on are at an advantage compared with the incorporated company sector. Although such societies and co-operatives in recent years have taken great advantage—as it was reasonable for them to do — of an extraordinary combination of high capital allowances, high stock relief and a lower ceiling to the corporation tax rate, that is not a regime which we choose to perpetuate. It was a set of circumstances which did well for the societies and I do not begrudge them that. It enabled them to accumulate reserves in a satisfactory way and I hope that they will be useful to the societies. There is no argument for introducing a different system of corporation tax or a lower rate for those societies merely because they were able to take unusual advantage of a set of circumstances in recent years. I therefore ask the House to reject the new clause.

    May I first clear up the distinction—there is not a shadow of difference—that the Minister of State seemed to see between my speech and that of my hon. Friend the Member for Great Grimsby (Mr. Mitchell)? Much to my regret I missed my hon. Friend's speech, but as I understand it he was arguing for the principle of assistance because co-operatives are, in the Minister's words, a "higher form of organisation" which should be given special benefit. I share that judgment. I believe that the co-operative organisation is a superior form of organisation. I should like and hope one day to be able to give them special assistance. My hon. Friend and I are in agreement on that point.

    That is a subject, as I know my hon. Friend will agree, for another new clause or for an amendment, not the one that we are debating today. My hon. Friend and I equally agree that the new clause is only a step towards the superior treatment that we should like to see given to restore the previous position that co-operatives had in the fiscal lexicon.

    The most surprising speech of the day was that made by the hon. Member for Croydon, South (Sir W. Clark). As I understand it, he was opposed to the new clause and to the reorganisation of tax liability that I suggested for co-operative societies in particular. This is surprising, because last year when we debated the subject he was the most passionate advocate of the position which the new clause advocates. The hon. Member shakes his head. I have already had the good fortune to quote one paragraph from his speech. Let me quote his peroration in full:
    "In 1972, the Finance Bill was introduced by a Conservative Chancellor and it was seen that equity should be carried through. I hope that my hon. Friend will either now — if he can say it now all well and good—or between now and Report say that when corporation tax comes down from 50 per cent. to 40 per cent. the differential, whether it is 31 per cent. or something else—I shall not argue the percentage — will be between the top rate of corporation tax and the rate that building societies pay. If it is not, there will be an injustice because building societies and co-operative societies do not have the right to distribute their profits."—[Official Report, 1 May 1984; Vol, 59, c. 286.]
    If the hon. Gentleman will forgive me for saying so, he could not have put it more clearly a year ago, yet this afternoon he argued quite the opposite. I do not know why that should be, but the case he made a year ago is much stronger than that which he has made today and was not in any way undermined by the speech of the Minister of State. As I understand the last passages of the speech of the Minister of State, the Government case now is that co-operative societies, housing associations and the rest were unfairly advantaged in 1972. If he is not saying that, I do not understand how he can possibly advance his case.

    With corporation tax at 52 to 55 per cent. it was necessary to have a 40 per cent. special rate to meet the needs of co-operative societies because of their special conditions in that they distributed only a small percentage of their profit. If it was necessary when the normal rate was 52 per cent. to have a co-operative rate that met their needs of something like 80 per cent. of the usual figure, why is it not necessary to have 80 per cent. of the usual figure to meet the special conditions of co-operative societies?

    It is no good the Minister of State saying or implying that the change in the top rate of corporation tax has absolved the co-operative societies from the need to pay at a rate which penalises them. I gave him three examples — Sheffield, Peterborough and Ipswich. Each of those societies demonstrates that under the new arrangement, which is trumpeted about the country as a reduction in corporation tax, they are now paying more because the new method of calculation excludes them from the special rate. If they were not specially benefited 30 years ago and they are paying more now in comparison with what they might have been allowed to pay had the old arrangements been allowed to continue, the only possible conclusion anyone is able to draw in logic is that there is unfair discrimination against the societies and it operates—I do not know whether by intention or by mistake—because they distribute a very small proportion of their profits.

    The Minister if State's answer was wholly unconvincing but not surprising. The speech of the hon. Member for Croydon, South was equally unconvincing but astonishing. In the light of what the Minister of State says we shall divide the House or we shall continue to argue the case of equity for co-operative societies and the proper incentives that they need to multiply and to profit.

    Question put, That the clause be read a Second time:—

    The House divided: Ayes 197, Noes 267.

    Division No. 268]

    [6.13 pm


    Alton, DavidFreud, Clement
    Archer, Rt Hon PeterGarrett, W. E.
    Ashdown, PaddyGeorge, Bruce
    Ashton, JoeGilbert, Rt Hon Dr John
    Atkinson, N. (Tottenham)Godman, Dr Norman
    Bagier, Gordon A. T.Golding, John
    Barnett, GuyGourlay, Harry
    Barron, KevinHamilton, James (M'well N)
    Beckett, Mrs MargaretHamilton, W. W. (Central Fife)
    Beith, A. J.Hardy, Peter
    Bell, StuartHarman, Ms Harriet
    Bennett, A. (Dent'n & Red'sh)Harrison, Rt Hon Walter
    Bermingham, GeraldHattersley, Rt Hon Roy
    Bidwell, SydneyHealey, Rt Hon Denis
    Blair, AnthonyHeffer, Eric S.
    Boothroyd, Miss BettyHogg, N. (C'nauld & Kilsyth)
    Boyes, RolandHolland, Stuart (Vauxhall)
    Bray. Dr JeremyHome Robertson, John
    Brown, Gordon (D'f'mline E)Howells, Geraint
    Brown, Hugh D. (Provan)Hoyle, Douglas
    Brown, N. (N'c'tle-u-Tyne E)Hughes, Dr. Mark (Durham)
    Brown, Ron (E'burgh, Leith)Hughes, Robert (Aberdeen N)
    Bruce, MalcolmHughes, Simon (Southwark)
    Buchan, NormanJanner, Hon Greville
    Caborn, RichardJenkins, Rt Hon Roy (Hillh'd)
    Campbell-Savours, DaleJohn, Brynmor
    Carter-Jones, LewisJohnston, Sir Russell
    Cartwright, JohnJones, Barry (Alyn & Deeside)
    Clark, Dr David (S Shields)Kaufman, Rt Hon Gerald
    Clarke, ThomasKennedy, Charles
    Clay, RobertKilroy-Silk, Robert
    Clwyd, Mrs AnnKinnock, Rt Hon Neil
    Cocks, Rt Hon M. (Bristol S.)Kirkwood, Archy
    Cohen, HarryLambie, David
    Coleman, DonaldLeighton, Ronald
    Concannon, Rt Hon J. D.Lewis, Ron (Carlisle)
    Cook, Frank (Stockton North)Lewis, Terence (Worsley)
    Cook, Robin F. (Livingston)Litherland, Robert
    Corbett, RobinLloyd, Tony (Stretford)
    Corbyn, JeremyLofthouse, Geoffrey
    Cowans, HarryLivsey, Richard
    Cox, Thomas (Tooting)McCartney, Hugh
    Craigen, J. M.McCusker, Harold
    Crowther, StanMcDonald, Dr Oonagh
    Cunliffe, LawrenceMcKay, Allen (Penistone)
    Cunningham, Dr JohnMcKelvey, William
    Dalyell, TamMacKenzie, Rt Hon Gregor
    Davis, Terry (B'ham, H'ge H'l)Maclennan, Robert
    Deakins. EricMcNamara, Kevin
    Dewar. DonaldMcTaggart, Robert
    Dixon, DonaldMcWilliam, John
    Dobson, FrankMadden, Max
    Dormand, JackMarek, Dr John
    Douglas, DickMarshall, David (Shettleston)
    Dubs, AlfredMason, Rt Hon Roy
    Duffy, A. E. P.Maxton, John
    Dunwoody, Hon Mrs G.Meacher, Michael
    Eastham, KenMeadowcroft, Michael
    Edwards, Bob (W'h'mpt'n SE)Michie, William
    Ellis, RaymondMillan, Rt Hon Bruce
    Evans, John (St. Helens N)Miller, Dr M. S. (E Kilbride)
    Ewing, HarryMitchell, Austin (G't Grimsby)
    Fatchett, DerekMolyneaux, Rt Hon James
    Faulds, AndrewMorris, Rt Hon A. (W'shawe)
    Field, Frank (Birkenhead)Morris, Rt Hon J. (Aberavon)
    Fisher, MarkNellist, David
    Flannery, MartinNicholson, J.
    Foot, Rt Hon MichaelOakes, Rt Hon Gordon
    Forrester, JohnO'Brien, William
    Foster, DerekO'Neill, Martin
    Fraser, J. (Norwood)Orme, Rt Hon Stanley
    Freeson, Rt Hon ReginaldOwen, Rt Hon Dr David

    Park, GeorgeSmith, Rt Hon J. (M'kl'ds E)
    Parry, RobertSmyth, Rev W. M. (Belfast S)
    Patchett, TerrySnape, Peter
    Pavitt, LaurieSoley, Clive
    Pendry, TomSteel, Rt Hon David
    Penhaligon, DavidStewart, Rt Hon D. (W Isles)
    Pike, PeterStott, Roger
    Powell, Rt Hon J. E. (S Down)Strang, Gavin
    Powell, Raymond (Ogmore)Thomas, Dafydd (Merioneth)
    Prescott, JohnThompson, J. (Wansbeck)
    Radice, GilesThorne, Stan (Preston)
    Randall, StuartTinn, James
    Redmond, M.Torney, Tom
    Richardson, Ms JoWainwright, R.
    Roberts, Ernest (Hackney N)Walker, Cecil (Belfast N)
    Robertson, GeorgeWareing, Robert
    Rogers, AllanWeetch, Ken
    Rooker, J. W.White, James
    Ross, Wm. (Londonderry)Williams, Rt Hon A.
    Rowlands, TedWilson, Gordon
    Ryman, JohnWinnick, David
    Sedgemore, BrianWoodall, Alec
    Sheldon, Rt Hon R.Wrigglesworth, Ian
    Shore, Rt Hon PeterYoung, David (Bolton SE)
    Short, Ms Clare (Ladywood)
    Short, Mrs R. (W'hampt'n NE)Tellers for the Ayes:
    Silkin, Rt Hon J.Mr. Frank Haynes and
    Skinner, DennisMr. Sean Hughes.


    Adley, RobertChope, Christopher
    Aitken, JonathanChurch