I think that it will help the Committee if I say that I now propose to leave out new Clause 5 from my provisional selection of Amendments.

I beg to move Amendment No. WH17, in page 12, line 25, at end insert:

(e) in subsections (2) and (3) of section 9 for the references to £1,000 (maximum income qualifying for full relief) there shall be substituted references to £1,200, and the following words shall be added to subsection (2): except that in the case of a married couple living together the maximum income qualifying for full relief shall be 1,400'.

The Liberal Amendment not having been moved, I am glad that at least one party in opposition is present on this occasion.

The Amendment refers to the relief whereby the first slice of the income of a taxpayer, where one of the two partners to a marriage is over 65, can be treated for tax purposes as earned, when, in fact, it is unearned, income. The Committee will recollect that this relief was altered as recently as last year, and I have little doubt that when the Financial Secretary replies to the debate he will try to persuade the Committee that it would be premature to make an alteration once again. The fact is, however, that the rate of inflation during the past year makes an alteration necessary.

We are not wedded to the precise amount, but, as I shall show, there is a strong case for the figures which we have chosen. The simple fact is that so rapid has been the rise in prices during the last 12 months that a relief which was increased only a year ago needs to be increased once more.

There is a double implication in the Amendment. The first is the increase it proposes, but it goes rather wider, seeking to alter the characteristic of the relief, in that it suggests that where there are two persons in a household the relief should be higher than where there is only one. Mere common sense suggests that this should be done, and it is already done in the case of similar reliefs in income tax and in our national insurance scheme. Why is there not a differentiation in this relief between a household with two persons in it and a household with one person in it? That half of the argument is self-evident, and, therefore, I put it forward without further supporting evidence.

We suggest increasing the figure from £1,000 to £1,200, and have reached that figure in the following way. The rise in the Index of Retail Prices in the 12 months ended last April was 5·6 per cent. In a household with an income of £1,000, which is the limit of the relief at present, this would mean an additional burden, purely in terms of rising prices, of about 10s. a week, or about £26 in a year. Altering the treatment of the income from the treatment as for unearned to the treatment as for earned, as the Amendment suggests, would increase the income of the household by £18.

So, although the increase seems superficially to be very large, if we are seeking to relieve the household in this way it needs to be as much as that to make nearly full recompense for the increased cost of Labour Government. It is for those reasons that we feel that it would be desirable to make the change.

I do not know the cost of the Amendment, but I do not think that it can be very large. The House was told a year or two ago that the cost of treating all pensioners' income as earned income would be about £30 million, so I do not think that to treat a relatively small section of that income in this way could be very expensive. That is our case. We believe that such has been the pressure of inflation during the past year that the relief given only 12 months ago should be further increased.

I support the case of my hon. Friend the Member for Chelsea (Mr. Worsley). Clearly, there have been great increases in costs during the past year which alone warrant another look at the Clause. I am glad that my hon. Friend has suggested amending the approach a little this year. He his sought not only to increase the allowance, but also to differentiate between that for a single person and that for a married couple. We should work all the time to stop the discrimination against those who choose to remain in married bliss rather than to live together without the authority of a wedding, and this is another case in point.

If elderly people choose no longer to be wedded together but rather to live in sin, to use the old-fashioned description, they would be entitled to a great advantage from the Clause. Once over 65, each would be entitled to have income up to £1,000 regarded as earned income, but if they were married the benefit would be reduced, because the single allowance would apply to both, instead of each of them enjoying it.

Therefore, in so far as the Amendment seeks to expand the allowance for married couples it is to be welcomed. I hope that it can be accepted both because of increased costs and because it accepts the need to increase allowances given to married people in general.

The hon. Member for Chelsea (Mr. Worsley) put forward the case very simply and briefly, and I hope to reply in the same spirit.

This is a straightforward issue which divides into two parts. First, there is the question whether the age relief should be increased this year. Secondly, there is the question whether we should differentiate beween the single and the married rate.

With regard to the first question, my right hon. Friend the Chancellor explained that there was a limit to what could be done in the Budget this year, and he decided that on this occasion he would give help to older persons in the area where it was perhaps most needed. He has certainly not been unmindful of the needs of old people, as his record has shown. Last year, as the hon. Member for Chelsea reminded us, he raised the age relief limits from £900 to £1,000. Coupled with the marginal relief, which depends on how much of a person's income is earned or unearned, that could give some relief up to an income of £1,666.

But my right hon. Friend decided that this year the area on which he should particularly concentrate was the area of age exemption. The raising of the age exemption limit up to £475 for a single person and £740 for a married couple should give a considerable relief to a section of the population which could certainly do with such relief.

Surely the concession given by the Chancellor does not anything like compensate those people for the inflation they have suffered over the last few years?

I do not think that that is right. In many cases the relief will amount to a very useful sum for the people affected. Raising the married relief in particular from £680 to £740 should bring substantial relief to these individuals.

The cost of the proposal would be about £5 million in a full year. It is not a sum that we could neglact. There is a limited amount available, and my right hon. Friend felt that the best area in which the relief could be given this year, in the light of what happened last year, was in age exemption rather than age relief.

The second point introduced by the hon. Gentleman was a differential rate for married and single persons. I certainly would not wish to dismiss this idea out of hand. But it is true that in this sector the married couple will have benefited from the substantial raising of the married allowance by about £90.

While I regard this as an interesting idea, which has never yet been adopted by either this or the previous Conservative Administration, it could best be considered when we are looking at all the personal allowances together. Ever since this relief was introduced, it has been at a constant rate for the single person and the married couple. In the case of the married couple, there is some relief auto- matically given to them which is not given to the single person because of the ordinary personal allowances and the special allowances for the married couple.

It is not an idea which I should wish to dismiss, but I should wish to look at it with sympathy when we look at the whole question of personal reliefs, as we shall continue to do. I should wish then to bear the question very much in mind.

I beg to move Amendment No. WH13, in page 12, line 41, at end insert:

(g) in section 9 (earned income and old age reliefs) for the reference in subsection (1)(a) to two-ninths there shall be substituted reference to one-quarter.

The practice this afternoon seems to be to make brief speeches, so I shall not go into detail in proposing this Amendment on behalf of my right hon. and hon. Friends. If the Chancellor could not alter the standard rate of income tax this year, for reasons which have been thoroughly deployed already in the House, some concession is certainly warranted for people living entirely on earned incomes. There is a case for saying that there is a lack of incentive for people whose incomes are entirely earned and that whatever we do in this Finance Bill or in our fiscal policy generally should be designed particularly to encourage such people.

I had hoped that, with decimal currency in the offing, we might at least have expected a 3d. reduction in income tax this year, making it 8s. in the £, in which case altering the two-ninths fraction which has obtained hitherto to one-quarter would have made the arithmetic a good deal easier. However, that is water under the bridge now, and, in the absence of any reduction in the standard rate of income tax, there is a strong case for looking at the two-ninths fraction again.

As far as I know, this fraction has ruled for many years. I do not know how the two-ninths was originally calculated. I do not know what the logic of it is, or whether proper consideration has been given by the Treasury over the years to some variation in the amount, a variation which, as I say, would give greater incentive to people living entirely on earned income.

I do not altogether expect that the Financial Secretary will accept the Amendment, but I should like to know how the Treasury views the two-ninths fraction which has ruled for so long.

It was interesting to hear the hon. Member for Orpington (Mr. Lubbock) move the Amendment, obviously stepping into the shoes of certain of his hon. Friends, but I do not think that he understands his own party's Amendment. He laid considerable stress upon the position of elderly people with earned incomes. Perhaps I shall be corrected by the Minister and be told that I do not understand the Liberal Party's Amendment either, but I believe that the two-ninths age relief applies to all incomes, not purely to earned income.

To my mind, the argument here applies even more, perhaps, in the case of those who have saved up for the whole of their working careers, accumulating a nest-egg and then, being in receipt of income from their lifetime savings, having that income treated as unearned.

The distinction between earned and unearned income is one of the most unfair distinctions we have. I say that not because of any capitalist feeling about whether income from inheritance is more or less right or wrong than income from earnings, but simply because the term " unearned income " is thoroughly bad, because, basically, it is applied far more to savings income than to income from inheritance.

I agree that the terminology may be, unfortunate. If we spoke of income from employment, on the one hand, and income from property, on the other, we should draw a more accurate distinction between the different cases.

To some extent, I agree with the hon. Gentleman, but the point is that an elderly person may have put his life's savings into property. I am unable to see why a person's life's savings should bear a heavier form of taxation than his income during working life. If the Labour Party wishes to impose penal taxes upon inheritances, that is a different matter. It can tackle it through the estate duty or in some other way.

Many old people are having a particularly difficult time as a result of inflation. The £ is now worth 15s. 10d. compared with 1964. It is time we looked again at the two-ninths relief and made the improvement which the hon. Member for Orpington suggests. The argument applies to unearned incomes as well, and for that reason, too, since the present system applies particularly harshly to savings income, I support the Amendment.

I shall ask the Committee to reject the Amendment for three reasons. First, it would leave a mess in the whole earned incomes sector because it would not apply to the two-ninths earned income relief as regards small incomes and age relief.

Perhaps I might here answer one question raised by the hon. Member for Orpington. The two-ninths fraction was arrived at, in some ways, in rather arbitrary fashion. In 1941, it was one-tenth. In 1946, it was one-eigth. Then it became one-sixth, then one-fifth, and eventually it was brought to two-ninths, the figure which we have now.

The second reason for asking the Committee to reject the Amendment is, perhaps, slightly more important. In our view, it would mean that the benefits would go to the wrong people, giving no benefit to the lower-paid and concentrating the advantage at the upper income reaches. Here are some examples. On earned income of £720, the amount of relief each year would be £15. On earned income of about £4,000, the relief would be £110 a year. In the present climate, it would be wrong to distribute reliefs in that way.

The third and conclusive answer which I must regretfully put to the hon. Gentleman is that his Amendment would cost about £320 million.

Are we to understand that it is the philosophy of right hon. and hon. Members opposite that no reduction can ever be made in taxation paid by someone higher up the scale until everyone below has been wholly relieved of tax?

I am not saying that. I am saying that in this year it has been the Government's policy to concentrate what tax reliefs could be given at the bottom of the scale. That policy could certainly not be followed if the Amendment were carried.

If the hon. and learned Gentleman has decided that that would not be a proper course to take, will he tell us when the Socialists have ever increased, or would ever increase, reliefs at the higher range?

The question is where the main reliefs could be given this year, and we decided that they should come at the bottom. The hon. Gentleman is quite wrong in suggesting that one should never give relief at the top, or that we have never done so. He will recall that this Budget gave substantial marginal relief to a section of surtax payers.

The Financial Secretary is mistaken in thinking that Budget gives help principally to the poorer sections of the community. That is precisely what was not done. The way to help them would have been to increase family allowances.

I realise that there is a dispute here about the way relief should be given. Some say that it should come at the top of the income scale, and others at the bottom. On the question of tax reliefs, we decided that the help should be given at the bottom of the tax range.

Although I am obliged to the hon. and learned Gentleman for the historical background to the way in which the two-ninths fraction was reached, I still consider that this is a matter which the Treasury should consider in due course. However, in the light of the overall figure of cost which he has given, I beg to ask leave to withdraw the Amendment.

I beg to move Amendment No. WH 14, in page 12, line 41, at end insert:

(g) section 18 (relief for blind persons) shall also apply to any other chronically disabled person which means a person who is deaf, dumb or otherwise substantially handicapped by loss of physical or mental faculty which is likely to be permanent.

With this Amendment we can take Amendment No. WH 15, in page 13, line 4, at end insert:

(3) Where a claimant proves that he is maintaining or employing a person for the purpose of the care of either a member of his family who is incapacitated by reason of old age or chronic mental or physical disability or of himself being so incapacitated he shall be entitled to a deduction from the amount of income tax which is chargeable equal to tax at the standard rate on £120 in respect of the employment or maintenance of that person. This relief shall be allowed whether or not the person employed or maintained is resident in the same house as the incapacitated member of the family.

Yes, Mr. Irving.

This is a very simple Amendment. My argument need not detain the Committee for very long. Its object is to extend to chronically disabled the relief that is at present available to the registered blind. It is relevant to think of the purpose for which the registered blind are given a special allowance in our tax structure. At the moment, it is £100, and is given in recognition of the difficulty or handicap caused by a permanent but static disability rather than by a progressive illness or other form of trouble. This tax allowance is granted to the registered blind regardless of their capacity to overcome their handicap and to work at a profession Or trade and lead as normal a life as, I am happy to say, so many do.

The Amendment seeks to extend that recognition to those who suffer from other forms of chronic disability. In form, if not in substance, it has been moved on many previous occasions, and has been rejected by successive Governments. One of the main reasons put forward by Treasury Ministers for refusing an Amendment in these terms has been the difficulty of definition, in terms of deciding who should be covered by the description " chronically disabled "—a difficulty that does not obtain to anything like the same extent in defining the registered blind.

It is fair to say that this problem of definition is a genuine one, but it has been faced by the Government in defining the conditions for receiving a constant attendance allowance and it is, therefore, right to say that it can and has been overcome in other and similar circumstances. The allowance proposed in the Amendment is designed to help all chronically disabled, whether or not they qualify for a constant attendance allowance. The principle is quite clear. It has been put forward by the Disablement Income Group and other bodies, and has been widely accepted by hon. Members on both sides of the Committee and many different sorts of people engaged in this work. The first principle of the Amendment is that any form of allowance, tax relief or similar concession for disability should be applied to individuals taking account of the extent and nature of their handicap but not how it was acquired or in what way it operates. As far as possible disability of every kind should be equated, whether it takes the form of a loss of physical or mental faculty, including deafness, dumbness and blindness. The criterion should be the extent of the disability and the difficulty that the individual has in facing ordinary life. That principle is receiving more and more recognition.

The second principle underlying the Amendment is that an allowance of this nature should be paid regardless of the success or otherwise of the individual in overcoming his disability, and regardless of how incapacitated he may be in life—that is to say, separating the concept of a constant attendance allowance from other measures designed to help people in their homes, or to help those who cannot cope. This proposal goes beyond that, and says that the disability of those who are facing extra difficulties and handicaps in comparison with the more fortunate members of the community should, in itself, be recognised by the community, and that some attempt, however inadequate, should be made to compensate such people for this.

The Financial Secretary should reflect on the words and policies put forward by his right hon. Friend the Secretary of State for Social Services in trying to extend the concept of community care, because this proposal is part of that concept. The people that we are seeking to help are, among others, those who are already leading as normal a life as possible—people who are trying to earn their living and play their parts in our community and in doing so are facing extra difficulties and handicaps because their earning capacity will always be lower than that of a comparable normal person.

This proposal will be of help to them, and it is in that spirit that I commend it to the Committee.

I wish to address my remarks directly to Amendment No. WH 15, which seeks to provide tax relief for a taxpayer who employs, for the care of a chronically sick, mentally sick or physically sick, person in his household—or someone who suffers from extreme old-age—an allowance of £120 a year to help cover the cost of a person brought into the household to care for that chronically sick person. The last sentence in the Amendment extends that concept to provide relief even if the person employed is not resident in the same house as the incapacitated member of the family.

We have found it difficult to think of an all-embracing name for such an allowance. I propose to call it a home care allowance a phrase of which I am not very proud, but which will do as shorthand for the moment. The National Superannuation and Social Insurance Bill, now deceased, contained a proposal for an attendance allowance of £4 a week for those who attend chronically sick persons. In spite of all the efforts of the Opposition in Committee, that allowance was not to have been brought into force before 1st April, 1972, and in the present course of events it seems unlikely that it will be brought into force even then. We believe that the Amendment will meanwhile at least go some way towards helping those who have to employ people to look after the invalids in their families.

The Financial Secretary has said that he would consider one of my hon. Friend's other Amendments when he has a chance to consider all personal reliefs together. That has been the cry of Governments of all complexions for many years. Ministers have said, " We cannot do one thing because if we do we shall affect something else. Therefore, we must look at everything together." But they never get around to looking at everything together. Allowances are introduced ad hoc and piecemeal, year after year, by Governments of all complexions. There is no co-ordination of reliefs.

Among other things we have the blind persons' relief—introduced after years and years of pressure by hon. Members from both sides of the House. That is limited to blind persons only, although we seek to extend it this afternoon. There is the old-age relief. There is the housekeeper allowance for elderly widowers and the personal allowance for wives and children.

We also have—and this has recently caused some comment in political circles, as well as throughout the country—a system whereby students who are living with people who are not their spouses and who have children by them are given a grant by the Government. That has not been universally welcomed either here or in the other place, but it is a recognition of the fact that when there is a stable union, as it is called, society may wish to provide support for more partners in that union than simply the wageearner—if there is such a person in the family—or the man concerned.

These extensions having been made, there seems to me to be no reason why the concept of allowing tax relief to a member of a household who is not part of the family in that household should not be considered. Where a person or two people in a family are unable to look after a spouse or another member of that family living in the household, we ask that it should be recognised that society can, and should, take the obligation to help the head of the family in that case in paying towards the cost of bringing an individual into the household, either full-time or part-time, in order to look after the invalid whose care is beyond the ability of the family itself to provide.

I am sympathetic to the point being made by the hon. Gentleman, partly because there is provision for repayment of selective employment tax where a household employs someone to help look after someone aged over 70. This is a similar point. But surely the Amendment is defective unless it more narrowly defines what old age means. Surely we could not have inspectors all over the country defining in differing ways what is incapacity.

I am grateful to the hon. Gentleman for his sympathetic welcome to the Amendment, but I do not think that it is defective. If it is defective, however, then the Government suffer from exactly the same defect. In Committee on the National Superannuation and Social Insurance Bill, where the same sort of provision was made for the old, chronically sick and disabled through an attendance allowance, there was the same lack of definition. When we pointed it out in Committee, we were told that it would be taken care of by regulations. If this provision were included in the Finance Act, the point could also be taken care of by regulations. If it could not be so taken care of, then the Government themselves are wrong in what they said in Committee on the attendance allowance.

If this allowance is provided for in the Finance Act, and people are enabled more easily to pay for home care for invalids in their families, it is likely, if not probable, that a considerable amount of public money will be saved. Obviously, if private persons are not able to employ others to look after their chronic sick within the family, the probability is, as I am sure the Committee agrees, that sooner or later the invalid will find his way into hospital or an old people's home, or into care of some kind, because the family itself will not indefinitely be able to look after him.

The arguments on these two Amendments are to some extent familiar. They have been gone over year after year and the unattractive task of resisting what on the face of it appear to be attractive proposals normally falls to the Treasury Ministers. But although they are old arguments, they are nevertheless on a very important subject.

The first objection, which has always had merit, is that the most effective way of dealing with the problem is not through tax reliefs. Such reliefs could only benefit those who are better off, those who are paying tax. They could do nothing for those who are not paying tax at all, for example, the disabled, people who are unemployed and who are unable to find employment and earnings.

No one appreciates this point more clearly than the hon. Member for Hertford (Lord Balniel), particularly in the light of the interjection he made on a previous Amendment. Obviously, the most satisfactory answer is cash allowances. Whereas in the past there has been no concrete proposal for a cash allowance, we now have the proposal for a constant attendance allowance and I suggest that this is the right kind of solution.

Amendment No. WH14 deals with a general disablement allowance, if I may call it such. It is fairly close to the suggestion which at least commended itself to the Royal Commission, but the Commission's proposal, which it thought feasible, related only to an allowance for 100 per cent. disability. It suggested that there should be a choice between this allowance and other benefits and it made a number of other suggestions which would not apply here. But the difficulty which applied to some extent to the Royal Commission's recommendation, and particularly applies to Amendment No. WH14, is that any such allowance would need an elaborate system of medical assessments which the Revenue simply could not carry through.

If an industrial injuries benefit or a war pension is payable, to some extent provision has already been made. But when it comes to chronic illness there are problems of assessment and definition which the hon. Member for Farnham (Mr. Maurice Macmillan) referred, but did not deal with. He did not face up to that problem and it is still there. It would mean a tremendous number of claims being made with a great and deep sense of disappointment being felt among those who did not have their claims accepted because they fell on the borderline of whatever arbitrary percentage was laid down as constituting substantial disablement. It would mean that the test would be loss of functional ability and not earning power. We believe that the constant attendance allowance shows the correct way to deal with the problem.

The suggestion embodied in Amendment No. WH15 is the kind of suggestion which was specifically rejected by the Royal Commission, which felt that it would not be feasible. Indeed, the Royal Commission felt that such a suggestion had a particular quality of unfairness because it would not help people who incurred different kinds of expenditure, such as payment to nursing homes. One kind of expenditure would be liable for tax deduction while another kind would not. Because neither Amendment would deal with the problem in the way we think it should be dealt with, and because there are substantial objections in any event to these proposals I cannot recommend the Committee to accept either Amendment.

The Clause is basically concerned with personal reliefs, but, in discussing it, we should also consider the relationship of those personal reliefs with the cash allowance, because, as the Financial Secretary has quite rightly said, there is a close relationship, and as a means of alleviating poverty this is the most effective means.

My hon. Friend the Member for Kensington, South (Sir B. Rhys Williams) put down an Amendment which was designed to enable us to discuss this relationship. It was an ingenious product. His written work on social contract and his contributions to our debate on the National Superannuation and Social Insurance Bill were of great value to the House of Commons and would have been of greater value if some of the advice had been heeded by the Government. I always regard him as being one of the perennial optimists of the House, but I must disillusion him. There is little chance of the Government accepting his advice. It is too late.

The Government have not yet fully understood the relationship between tax allowance and cash allowance. In an Amendment which was out of order, we made it plain that we thought that it would be wise to publish the figures so that at least a more reforming Government, who will take office in due course, will have the basic statistical information on which to consider how best to alleviate poverty.

May I crave your indulgence, Mr. Irving, and ask for your ruling on a point of order? I notice that in your wisdom you have not selected Amendment No. WH16. In case there is any danger of establishing an unfortunate precedent, I should be glad if you would be so kind as to enlighten hon. Members who are interested in precisely your reasons. I should not like it to be thought that it was not selected because it was out of order.

It would be setting a precedent if the Chair gave reasons for the selection of Amendments. I am sorry that I cannot help the hon. Gentleman. Indeed, we have now passed that stage and are now discussing the Question, " That the Clause stand part of the Bill ".

Further to that point of order. Of course, I defer to your Ruling, Mr. Irving. I should be happy to hear from you, however, that it was not selected because you thought that it would not lead to a profitable debate on this occassion, rather than that it was out of order.

All I can say to the hon. Gentleman is that it was not selected. I cannot go further than that, not even as far as the limited point which the hon. Member wants me to reach.

The noble Lord the Member for Hertford (Lord Balniel) was somewhat dogmatic when he suggested that the poor were getting poorer. He himself said that he only suspected that that was the case and was not in a position to prove it. The basic figures show that that is not a correct view of the pattern over the last few years. Looking at the most important of all the changes, in spending ability, one finds that the social security benefits, which provide for the poorest section of the community, excluding low wage earners, have increased in real terms by 20 per cent. The increase in consumption over the last five years has been 10 per cent. That conclusively proves that those who qualify for social security benefits have increased their relative share of total consumption at the expense of the rest of the community.

I should be the first to agree that one is disappointed by the small amount of redistribution which has taken place, but the statement that there has been no redistribution and that the poor have got poorer is contradicted by the figures and is totally untrue. On the question of low wage-earners, which in some ways is the most worrying, I refer to an Answer given by my hon. Friend the Minister of State, Department of Health and Social Security, in which he said:

" If we make a comparison between 1964 and 1969, we find that the low-wage earners have done substantially better than other sections of the population. Taking account of the Budget a married couple with two children have 11½ per cent. more money in their pockets than in 1964, a couple with three children have 14½ per cent. more, and a family with four children are 16½ per cent. better off. These are genuine increases in spending power after allowing for all price increases." [OFFICIAL REPORT, 11th May. 1970; Vol. 801. c. 814.]

It is just not true to say, as the hon. Member and his hon. Friends say, that the poor have become poorer. That is not so. They are relatively speaking better off.

Does not the hon. and learned Gentleman recall an interview given by the Secretary of State for Social Services about five weeks ago in which he said that the gap between the poor and the rest of the community has not narrowed under Labour? What does the Financial Secretary say about that?

In the first place, I do not recall it. Secondly, on remarks made by my right hon. Friend, for whom I have the greatest respect, I should always like to see the full context in which they were made. These figures certainly do not bear out any such statement.

Coming back to the specific proposal made by the noble Lord, that family allowances should be increased with claw-back, I certainly do not dissent from the proposition that perhaps that is the best way at present of relieving certain sections of poverty. It is a fact, however, that when we introduced such a measure we met with the unanimous opposition of hon. Members opposite.

I do not remember the noble Lord coming into the Lobby with us on that occasion. The Tories were bitterly opposed to the 1968 Budget and in Committee on that Finance Bill they gave us no support whatever. Now, on this occasion, when we do not put forward the same principle hon. Members opposite say that we should increase family allowances plus claw-back.

Is my hon. and learned Friend being fair to the Opposition? The country knows that the basic elements of the Welfare State were created by the Labour Government from 1945 to 1951 and have been enhanced by this Government.

When, for once in a while, the Tories show an interest in the poor as an election draws near, should not my hon. and learned Friend allow them to show that compassion, if only for a few weeks?

I am sure that the Committee will have noted the observations made by my hon. Friend. I am grateful for his remarks.

To turn back to the serious question of family allowances plus clawback which suddenly the Opposition now embrace—

The hon. and learned Gentleman was extremely courteous in not interrupting my speech, but the increase in family allowances to which he referred concerned two increases which took place almost coincidentally. Total confusion was caused by an April increase in family allowances and a claw-back in the October.

The noble Lord must study the remarks made by his right hon. Friend in which he referred to the principle of claw-back as a thoroughly bad principle. The whole claw-back principle was roundly condemned by hon. Members opposite.

Of course, there are difficulties, but the reason we have not increased family allowance plus claw-back is that it would bring people back into taxation. Roughly, 300,000 would come back into taxation. Secondly, there is a serious omission in this proposal for dealing with poverty, in that it does not take into account the difficult question of the cost of housing. I do not say that the idea of increasing family allowances plus claw-back may not be the best weapon we have, but let us look at the results of the Family Expenditure Survey, which is the best way of dealing with the subject rather than going straight for this principle in a year when one of the main improvements is to take people out of taxation rather than to put them hack into taxation.

I want to object to the proposals set out in this Schedule. In different circumstances, I might have taken a little longer over this protest. I should not like the Schedule to be passed without making a small protest about the figures given at the beginning. When we first proposed taxation of gaming—a process with which I am wholly in agreement—we did so on the basis of rateable value. I always understood that to be a purely temporary measure until a more equitable basis was worked out.

I am all in favour of taxing gaming, but we should seek to be fair. If we are not manifestly fair there is real risk of driving gaming underground, with all the undesirable consequences which would follow. Before the introduction of this Bill, taxation of gaming was on a rateable value basis, but now we are to have a curious hybrid linked in large part to the rateable value basis and also bringing in the principle of leverage so that the taxation is higher if the rateable value is higher. This produces some curious anomalies. A difference of only £1 in rateable value can produce a difference of £27,500 in the basic tax, plus a difference in tax on tables of £6,000 per table if the number of tables exceeds five.

I do not wish to defend casinos, or that way of life, but it is important that we should go out of our way to see that taxation of them is fair. I do not understand why we did not get away from this basis of tax on rateable value and give consideration to the perfectly reasonable proposals of tax on turnover or the maximum stake and not on the curious basis which means that by a difference of £1 enormous variations are produced in the incidence of tax. There is a real danger not of driving casinos out of business, but driving them underground and producing a kind of bootleg casino and other undesirable practices which, by other legislation, we seek to prevent.

In other circumstances, I would have proposed an Amendment. In the present circumstances, I should not like this matter to go by without a protest.

This Schedule illustrates the great disadvantage of pushing the Finance Bill through in such a short time. I wish to mention four aspects in which I think that this Schedule would have greatly benefited from a proper discussion.

First, there is the point made by the hon. Member for Chislehurst (Mr. Macdonald). In addition to the disadvantages he described, the Schedule will put a great strain on the valuers of the Inland Revenue. I do not mean a strain in terms of the amount of work they have to do, but a strain on their probity. There will be a great deal of money to be made by having an establishment in one category rather than in another. That will depend entirely on the valuers of the Inland Revenue.

Secondly, the Schedule illustrates the absurdities to which we are reduced. In certain circumstances, a table is to count as two tables. It will have to be decided when a table is two tables. This decision is based not only on the size of the table. The Schedule says that the regulations prescribing the size of the table may take account not only of its area, but also of its characteristics. What characteristics of a table will make it count as two tables? Is it perhaps if it has skirts on its legs?

Thirdly, and very important, in company law directors are responsible for the action of companies, yet in line 12 of page 39 we see that not only the directors but the general managers and secretaries or other similar officers of bodies corporate will be responsible for offences committed unless they can prove that they are not responsible. That is something that the House should debate.

I come, finally, to the sort of detail that doubtless would have been corrected if we had had proper consideration of the Bill. Line 26, on page 39, states:

" Any officer may (without payment) enter any premises…"

That is the first mention of officers. I should have thought it essential to know whether it refers to police officers, or officers of the Customs and Excise, or of the Army, Navy, or Air Force.

My Friend the Member for Cities of London and Westminster (Mr. John Smith), whom we shall be extremely sorry to miss after the General Election, has raised a number of valid points, as did the hon. Member for Chislehurst (Mr. Macdonald), whom equally, no doubt, we shall miss.

There really is a point on the desirability of pushing legislation through with the minimum of debate when it is complex and perhaps introduces new principles, as the Clause and the Schedule do. However, I am sure that all members of the Committee recognise that, faced with the alternative of refusing to have an election there is no doubt where the advantage lies, at any rate for this side of the Committee, and we are prepared to pay the price of immediate debate to get rid of the Government.

Will the Financial Secretary give consideration not only to the points made by the hon. Members for Cities of London and Westminster and Chislehurst, both of which have a good deal of substance, but to whether the table is likely to give rise to considerable unfairness because of the substantial jump which will take place when a gaming establishment moves from one rateable value to the next? We must remember that when the Home Secretary made his statement about his policy of restricting gaming to certain defined areas he said that the purpose was to provide a facility at holiday and tourist centres, to facilitate supervision, and to ensure that gaming was carried on only in decent surroundings.

The fear of a number of hon. Members is that even after the change introduced in the Bill the tendency will be to militate against the provision of decent surroundings because of the financial penalty of the duty chargeable as a result of improved facilities. There is bound to be a tendency to restrict space and the availability of such facilities as toilets, rest rooms, restaurants, reception areas, and so on, all of which will be cut down to try to make the premises qualify for a lower rate of duty based on the rateable value. It is very difficult to see how any system based on rateable value could avoid this unless there were many stages, with such a small gradation at each stage that the advantage of improved facilities was not offset by the disadvantage of substantial additional duty.

We have here only three categories—premises of a rateable value not exceeding £1,000, those with a rateable value from £1,000 to £2,500, and premises exceeding £2,500. The second category is a very big slice. If it were divided into two, with a slice of £1,000 to £1,500 bearing a minimum rateable value charge of £1,500 instead of the £6,250 for six months, we should have a much more even gradation. Had there been time, an Amendment to that effect would undoubtedly have been moved.

On the Chancellor's present proposals a club with a rateable value of £1,500 would be required to pay in gaming licence duty on the basis of, say, seven tables an annual amount of £29,500. If the casino operator reduced the rateable value to one not exceeding £1,000, which takes it into the first category, the duty on the Chancellor's proposed rates would be only £4,500. A jump from £4,500 to £29,500, merely by a change in the rateable value of £500, seems incredible. That is why I think that the gradations in the table in Part I of the Schedule are too abrupt.

Whilst not necessarily going the whole way with the hon. Member for Chislehurst, I feel that this will require most careful consideration before next year by a new Government. It may well be right to move away altogether from the concept of rateable value, but I make it perfectly clear that I am giving no undertaking on this. We should consider carefully whether the table in the Bill does not give rise to considerable unfairness because of the very steep increase in duty arising when the rateable value exceeds £1,000.

The practical argument put by the Home Secretary is that it is desirable that these establishments should be run in decent surroundings. Our fear is that this will not happen even under the modifications in the Bill. I hope that the Financial Secretary can give an undertaking that in the unhappy event of his having anything to do with this next year he would be prepared to consider the matter.

I can assure the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) that we shall most carefully weigh what he said. I appreciate that we are labouring under some disadvantage in discussing very briefly a Clause and Schedule as wide-ranging as these, which institute an entirely new system of taxing casinos. It is not only the Committee that is under some disadvantage. I must confess that I am also at a disadvantage in that I am not sure that I have found out all the answers to the questions put to me by the hon. Member for Cities of London and Westminster (Mr. John Smith).

I shall deal, first, with the questions asked by my hon. Friend the Member for Chislehurst (Mr. Macdonald). Different methods of taxing casinos had to be considered. Consideration was given to whether the duty should be geared to turnover or staking limits, which were the two other main alternatives. The difficulty of relating excise duty to turnover on gaming is that unless there is a cagnotte there is no reliable means of establishing what turnover is. That idea proved very unpopular with the operators, and was rejected by the Gaming Board.

The cagnotte is a system used in continental countries in some games in which a percentage of the winnings is retained to meet expenses and profits of the house. It is a system which is used in Belgium. The idea of a tax on turnover was considered by the Gaming Board. It is unpopular because it slows down the pace of the game, it would be difficult to enforce and would require constant vigilance and extra staff. It would not suffice to establish a precise turnover on some games, such as craps, because of the rapid speed at which the game is played and the complicated rules to which the game is subject.

When it comes to a stake limit, there is a difficulty that the duty related to minimum stakes might be widely avoided by the simple device of an artificial minimum, while a duty related to maximum stakes could easily be evaded unless there was a high degree of control, with high staff costs, and so on. On balance, it was concluded that the best way of taxing casinos was a combination between rateable value and a tax on tables, as we propose.

As regards the number of tables and how one table is to be treated as two tables, the word " table " had to be defined because of difficulties, such as craps being played on the floor. The Commissioners will be empowered to prescribe by regulation the maximum areas of table by measurements or other characteristics. In this field there is a premium on evasion and there must be ways of countering it. Therefore, it was necessary to have the definition of " table " as set out in the Bill.

I cannot give the hon. Member for the Cities of London and Westminster the answer he deserves as to the " proper officer ". I can tell him who the proper officer is. It is the officer for Customs and Excise in the area. I looked quickly through the Bill to find out whether " officer " was defined and could not see it, nor could I find any cross-reference to other Acts. I will write to the hon. Member to see where the definition is to be found.

Is there not something at the top of page 41?

It may be that the key is to be found in Schedule 10 to the Gaming Act, 1968, which refers to an " officer of customs and excise ". I could not offhand find the place in the Bill where " officer " was defined.

I accept that the Committee is operating in difficult circumstances—indeed, I found myself in difficulties earlier this afternoon on behalf of my own party—but I feel confident that the hon. Member for the Cities of London and Westminster (Mr. John Smith) will not be satisfied with the reply given to him by the Financial Secretary to the Treasury.

The hon. and learned Gentleman raised two points which are very important indeed. The words on page 39 from line 10 onwards appear to mean that virtually any employee of the company will be responsible. In any ordinary company, under company law this would be the responsibility of the director or company secretary. It is inequitable to suggest that a general manager or similar officer should take the responsibility. This sets a wholly unfair precedent.

On the question of the phrase " any officer ", in line 26, surely even at this late stage there is no reason why the hon. and learned Gentleman could not undertake to insert " officer of customs and excise " which I understand to be his interpretation of the meaning. Presumably we are to have a Report stage and this could still be done. These matters will cause considerable confusion at a later stage. Surely there is no reason that this should not be rectified now.

There is still time. Parliament is still sitting and we have a responsibility to discharge our duties in a proper manner. I feel certain that the Committee, and indeed, the whole country will read the hon. and learned Gentleman's reply with some astonishment and a great deal of concern.

I endorse the remarks of the hon. Member for Bodmin (Mr. Bessell). Even if we are to hurry through the Bill so that Parliament can be dissolved, the hon. and learned Gentleman should be able to answer questions about offences and enforcement officers. I hope that he will be able to do so.

I will deal with these two points. There is one answer to be found in the Customs and Excise Act, 1952, which has to be read together with the Bill. In that Act the definition of " proper " is as follows:

" in relation to the person by, with or to whom, or the place at which, anything is to be done, means the person or place appointed or authorised in that behalf by the Commissioners."

It is not as if there is not a definition of the word " officer ". It was simply that I could not find it.

As regards the point about liability, which was raised by the hon. Member for Bodmin (Mr. Bessell) in gaming the considerations to be applied are entirely different from those which apply to company law. In gaming, arbitrary powers are imposed by an arbitrary body—powers which received the encouragement of the Opposition—to deal with a problem of evasion, which is different from the problems which apply to companies. The liability imposed by the Schedule is to deal with a special field.

In paragraph 11 of Schedule 1, we see:

" Where an offence under paragraph 9 or paragraph 10 above has been committed by a body corporate, every person who at the time of the commission of the offence was a director…"

is liable. It seems to me that the intention of the paragraph is to indicate that company law applies in the sense of a body corporate. It is difficult to see why the hon. and learned Gentleman seeks to make a distinction.

I do not understand that. It refers to liability for an offence which has been committed and includes similar officers to those of secretary or general manager. It then states that they may prove that the offence was committed without their consent or connivance, in which case they would not be liable. But it has nothing to do with company law as such.

I do not want to labour the point. I raised these four matters to illustrate that it is a mistake to push through the Finance Bill in this way. In an age when the State takes away £20,000 million of peoples' money, the country at large regards the Finance Bill as the most important legislation considered by Parliament in the year. Time was when we recognised that fact and discussed the whole of the contents of the Finance Bill in Committee on the Floor of the House. Then the Committee stage was taken upstairs and was discussed by a small number of hon. Members. Finally, this year, it is proposed that we should dispose in one afternoon of the Finance Bill and seven other Bills.

Has the hon. Member completed his speech?

Yes. Mr. Gourlay. But I shall be saying more later.

I was about to stop the hon. Member for being out of order.

On a point of order, Mr. Gourlay. Why was my hon. Friend the Member for the Cities of London and Westminster (Mr. John Smith) out of order? We are in Committee. Surely he can speak twice if he wishes and catches your eye?

I did not give any indication as to why the hon. Member was out of order, but I cannot at this stage go back to that point on that Schedule.

We have just started on a decade in which one million men and women will die prematurely through cigarette smoking. That figure is not mine; it appeared in the national Press and in most of the newspapers on Monday this week and it was given by Sir George Godber, Chief Medical Officer at the Department of Health and Social Security.

Clause 4 has a direct bearing on an attempt to deal with this very grave problem which faces the country as a whole and faces the Treasury, which ought to face up to some responsibility in this matter. In 1959, when I became a Member of the House, there were about 57 deaths every day from lung cancer. In those days that was only three times as many as the deaths there were from road accidents. Today the daily number of deaths from lung cancer is 84 and there are nearly five times as many deaths from lung cancer as from road accidents In 1959, with some of my hon. Friends, I was very busy discussing another Clause 4. Today I would not want this Clause 4 to pass without calling attention to the very serious problems which the Treasury's proposals raise.

At first, I used the right we all have to put down Amendments, and I put down Amendments to this Clause, but the times are out of joint and the only way I can secure the attention of the Treasury—I hope I have the attention of my hon. Friends on the Front Bench—is gracefully not to pursue my Amendments which, in other circumstances, I would have been pressing, and to proceed to discuss the point I want to make on the question, That the Clause stand part of the Bill.

The Clause affects substitutes which can be found as a means of smoking without the tremendous liability and risk of sickness and death which at present smoking entails. I cannot stress this too much to my hon. Friends, who are mainly preoccupied with Treasury matters. Suppose that a coach were involved in an accident now in Parliament Square and 84 people were killed. Every newspaper would headline it tomorrow, but day after day 84 people are dying through smoking. Therefore when I saw that, at a time when less harmful smoking may be possible, in this Clause there is the proposal to tax the tobacco substitutes which might be a solution to the ill consequences of smoking tobacco, my first reaction was one of shock.

Concern in this matter is not only shared by those in the health field; it is not felt only amongst doctors and those of us who take a deep interest in the health services. Tobacco manufacturers themselves have been expressing concern, and they are expressing concern at the moment to the extent of £2 million a year which they are spending on research because they recognise the hazards to health which arise from the manufacture, distribution, and smoking of cigarettes.

There are two main lines of research being pursued. One is a kind of detective story, to discover, isolate and nail down the killer in tobacco. What is the carcinogenic agent? What is it that causes and aggravates emphysema and chronic bronchitis? If it is possible to find a carcinogen-free cigarette most of us, who do not want to be killjoys, would look upon smoking as a good thing, being then free, as it would be, from the risk of sickness and death. For the first time we have started on a second line of research to find some measure of possibility—I put it no higher than that at the moment—of a tobacco substitute in order to make a satisfying and safe cigarette, and in this Clause, in subsection (2), duties of excise are to be imposed on the substitutes which may emerge at exactly the same rate as that for real tobacco. The Bill goes further in sub- section (4)(c) under which regulations may be laid afterwards which " contain provisions for the protection of the revenue ".

In other words, the Treasury seems to be saying—I hope they are not—that the revenue is paramount and that the one thing we must not touch is the revenue, irrespective of all other considerations. It is these two parts of the Clause which in particular I would have sought to amend.

4.45 p.m.

I have seen something of the work of research by the Tobacco Research Council at Harrogate. A number of us were very kindly taken to see that work, and I would also pay a tribute to the firm of Gallaher's who, independently of the Tobacco Research Council, are spending money on research which they took me to see at the Batelle Institute in Geneva.

In the first line of the attempt to save lives which may be lost through smoking there has been a breakthrough in the task of finding the killer, strangely enough because a breed of bald mice has been discovered. On these cancers can be grown more effectively as a consequence of research which has been done. I was rather surprised to find that mice are likely to have such a great impact on research in this matter. I have myself seen six cancers grown on one mouse in consequence of the tar extract from a smoking machine being put on the skin.

Hamsters are able to smoke and are being used for obtaining lung tissue after smoking. The Committee will know that I am interested in this for I am a member of the Medical Research Council. Dogs are being taught to smoke so that we can get tissue from them. Apes and monkeys are also being taught to smoke for research purposes.

The greatest break-through, in my view, is the revolution which has gone on in the production of man-made fibres being used for tobacco substitute. These may well be a safer smoking medium, and the Treasury ought to take account of these considerations as well as the revenue alone. The research which has gone on at Porton Down shows that in some of the substances now being tested, as compared with ordinary tobacco, the first benefit from the synthetic material is that the weight of a cigarette is significantly less than that made with natural material, and partly as a result of this, and partly from the smoking characteristics, the yields of smoke condensate from a standard-sized cigarette comes down from 31 milligrams, the weight of a natural material cigarette, to half of that.

I shall not weary the Committee with the whole of the research statistics, but there are two possibilities here. Firstly, if the Chancellor were able to see his way to be a bit more lenient these cigarettes could be manufactured consisting partly of tobacco and partly of synthetic material and one could have a phased process of weaning people from the ordinary cigarette to the other, part of a cigarette being taxable and part, if I had my way, not.

Alternatively, there is the possibility of encouraging people to smoke synthetic cigarettes, and I would hope that the tax situation would encourage people to smoke them, especially if the synthetic cigarette were shown to be much safer, with the advantage of freedom from the risk of lung cancer, and costing less. I think hon. Members on both sides who smoke now would get used to changing from the one to the other by this phased process, but I have no doubt that if substitutes cost the same as tobacco few will switch.

I would invite the Treasury to look at the economic consequences as well as the health consequences. Last year, in total for sickness, we paid £262 million in sickness benefit and the estimate of loss of production was £1,200 million through sickness. Respiratory diseases contributed 22 per cent. of this illness. Hon. Members on both sides are very concerned about production lost through strikes, but from sickness we are losing 60 days for every one day of strike, and seven days' production for every one lost through strikes, entirely from respiratory diseases. We are losing another eight from heart diseases, and it may be recalled that Dr. Charles Fletcher estimates we have at least 10,000 deaths a year from coronary thrombosis caused by smoking.

Sir George Godber in an excellent speech which has been reported nationally recently estimated that 190,000 years of work are lost each year through the premature loss of life caused by cigarette smoking. The Treasury should be concerned with this economic fact, and with the number of chest physicians, chest consultants and chest wards and the whole cost to the National Health Service of dealing with this problem.

The Treasury has an open mind to some extent but feels that, until there is some guarantee that the tobacco substitute is definitely less harmful to health than tobacco, any attempt to introduce a differential tax might lead people into thinking that the Government were giving the green light to the tobacco substitute and that it was O.K. Unfortunately this is a form of negative research and it is impossible to say that a cigarette made with tobacco substitute is completely harmless. There may well be another twenty years and another generation of smokers before we know the result. All one can say is that on all the evidence it is less likely to be harmful.

There is to be a special meeting convened by the Medical Research Council on 26th June when more evidence may come to light. I therefore ask my hon. Friend the Minister of State to say that, in the event of more evidence coming to light, it will be possible to lay regulations to alter the incidence of tax. I ask my hon. Friend to give an assurance that this will be seriously considered, even though there can be no guarantee of the absolute safety of the tobacco substitute. If there is a marginal hope that use of the tobacco substitute will mean that fewer people will suffer from emphysema, lung cancer or chronic bronchitis, I hope that my hon. Friend will lay regulations to encourage the use of the substitute.

I do not know who the Chancellor of the Exchequer will be after the General Election, except that he will be from this side of the House, but I ask him to receive a deputation from me accompanied by scientists and medical people to discuss the way in which tobacco and tobacco substitutes are affected by tax and the whole question of taxation, smoking and health. In economic terms, the value of the import of tobacco in 1967 was £89·3 million; in 1968, £114·6 million and in 1969, £116·6 million. There are strong economic considerations in addition to the health factors in favour of a substance manufactured in Britain taking the place of imported tobacco which is so expensive in terms of foreign exchange.

This is an extremely important issue. I apologise for delaying the Committee, and I ask my hon. Friends on the Front Bench to consider seriously not only the fiscal and economic angles, but also the health hazards to thousands of young men and women. In the last five years the number of women who have died from lung cancer has increased by 33¼ per cent. For the sake of all these people I ask the Treasury to get away from the arithmetic and consider the humanity angle and be prepared to use fiscal measures to improve the health of the nation.

I do not think that the hon. Member for Willesden, West (Mr. Pavitt) need apologise for delaying the Committee on this important subject. He has dealt with it very extensively and I do not propose to repeat what he has said. I hope that the Treasury Bench will agree to a radical breakthrough, to encourage those who are doing the experimental work and desperately trying to overcome this serious medical problem. I hope that the Minister will say that even during the trial period a tax reduction will be allowed.

I am very glad that my hon. Friend the Member for Willesden, West (Mr. Pavitt) has taken this opportunity of raising a grave social and personal problem, and I am sure that he will discover that we are all in a sense on his side. I can certainly say that there are no narrow Treasury objections to the development of the sort of cigarette which we hope to see. It may not offer a complete answer to the problem of cancer, but, as my hon. Friend says, it will at least make cigarette smoking less dangerous than it is at present.

As my hon. Friend acknowledged, the Clause is a major step forward. Our wish in putting it into the Finance Bill is to ensure that research goes forward as quickly as possible in the hope that the time will come, sooner rather than later, when it will be possible to consider marketing a cigarette which will fulfil the health requirements.

I can give this undertaking to my hon. Friend, that there is nothing in the Clause which, when the time comes, will be an impediment to the successful marketing of such cigarettes if they can be produced. I know that there is nothing between my hon. Friend and myself on this. It would be misleading and cruel if any remark made today by myself or by any other hon. Member should lead the public at large into believing that the solution had yet been found.

Had the Bill provided for the remission of duty on synthetic cigarettes which are marketed, people might have been led to believe that we were round the corner, but this is not so. When the time comes and the question of placing such a cigarette on the market is before us, I am absolutely certain that revenue considerations will not present an obstacle to doing what is right from a health point of view.

My hon. Friend mentioned the possibility of my right hon. Friend the Chancellor of the Exchequer receiving a deputation. I know that he would be prepared to receive one on the lines which my hon. Friend has suggested, and I do not believe that any successor would fail to acknowledge the need to discuss this and to examine all the considerations which my hon. Friend might put before him.

This is a matter of great social importance. The proposals in the Clause are a considerable advance, and I hope that they will facilitate and bring closer the day when the scourge of cancer is removed or at least substantially reduced.

I take this opportunity to thank the Treasury Ministers—and particularly my hon. and learned Friend the Financial Secretary—for the concession contained in the Clause. The justification for the Clause and the main point of it may not be so widely understood as they should be, and perhaps I may therefore be allowed to spend a few moments in expressing my thanks and explaining why some of us have pressed so hard for the inclusion of this concession.

I began leading deputations to the Treasury on this issue about two years ago. Although it has been a long struggle to convince the various Ministers of the merit of this concession, they have now handsomely repaid us by a straightforward admission of our case. I therefore thank my hon. and learned Friend most warmly.

In a sense, the problem is a double one. First, the Clause is concerned with a product peculiar to the small island of Trinidad. The subject of the Clause is not a palatable spirituous beverage—something that can be drunk on its own —because if a person tried to drink more than a drop or two with his gin, or with whatever else he might like, he would probably be physically sick. It cannot be called a spirituous liquor or beverage in the usual terms. It is simply a flavouring; but because of its high vegetable content it has to have in it the kind of alcohol, as a base, that makes it attract tax as a spirituous beverage.

That was the dilemma; it was one thing under one definition—in ordinary use it is a flavouring—but by Treasury and Customs rules it became a spirituous beverage, and has, therefore, been bearing a fantastic amount of tax.

This product could not be made in any other way. It is a peculiar one-island, one-product issue. Angostura had to face the difficulty that there was no way round the problem without a straightforward recognition of its peculiarity and of the need for a concession. The first reason for the concession is that it will be of some small help to the Island of Trinidad. That island has been much in the news in recent weeks. It is in the news because of the enormous social problems that arise in a growing island of the West Indies. It has a population of 1 million in which about 25 per cent. of the young people are unemployed.

The first effect of the concession, which will cost only a small amount, will be to help exports from Trinidad and, there- fore, to help solve its unemployment problem in a small way. For that, the whole of the West Indies is grateful. The Prime Minister of Trinidad has spoken to me frequently about the problem and he and the rest of the West Indies thank my hon. and learned Friend for recognising it—and the symbolism of the concession in the circumstances that now exist in the West Indies.

The second reason why the concession is appropriate is that at present we are practically the only advanced country that has not already made it. Australia, Canada and the United States have already exempted angostura bitters and after 1972 all the E.E.C. countries will do likewise. If we had not done it now we should have been the only advanced country that had not recognised the problem and made the concession.

The concession will mean a considerable reduction in the price of this product in this country: the cost might fall from as much as 31s. 9d. to 15s. a bottle. That might make it more widely used, as it is in other parts of the world, as a general flavouring in cooking of all kinds. It is not only useful in alcoholic drinks. The reduction in price may help to boost the sales of this product beyond the immediate prospect in the first year by encouraging its more general use for culinary purposes.

I therefore repeat how grateful are those of us who keep an eye on West Indies matters that our small lobby, on this small issue—which, nevertheless, will have an immense impact on a small island where the product is made—has received sympathetic consideration. The hon. Member for Surbiton (Mr. Fisher) has been waiting all day to join me in thanking the Treasury Ministers, but he has had to slip away; he has asked me to say that he joins me in thanking the Treasury for this concession and saying that when we drink our pink gins, or whatever it may be, in the future, we shall be raising a glass to the Treasury for at least once in our lifetime.

The hon. Member for Birmingham, Northfield (Mr. Chapman) is another hon. Member we shall very much miss after the next election—retiring as I believe he is, to Trinidad, or perhaps Jamaica.

We may regard this concession as an epitaph to the Government. At the end of six years it is one tax reduction that the Government have been able to offer. No doubt every hon. Member opposite will emblazen it in his election address —" At least we reduced the price of angostura bitters."

I thank my hon. Friend for his remarks. I, also, want to say how sorry I shall be not to see him here in the future. My hon. Friend has expressed far more eloquently than I could do the reason for this concession.

I beg to move Amendment No. 4, in page 9, line 23, at end insert:

With this Amendment it will be convenient to discuss Amendment No. 3, in page 9, line 31, at end insert:

Yes, Mr. Gourlay. In replying earlier to my hon. Friend the Member for Farnham (Mr. Maurice Macmillan) the Minister said that it was his unhappy job always to be rejecting on behalf of the Treasury, some attractive Amendments that clearly appealed to his heart. This is another attractive Amendment. I hope that he will not resist it as he has in the past. I am sorry that he is leaving the Chamber. We want to provide precisely the sort of thing he was advocating to my hon. Friend the Member for Farnham, namely, a cash allowance.

We have taken the drafting of the Amendment straight from the Finance Act, 1964, adding one or two words to it. There should not be much complaint about the drafting; it came from a very good vintage Budget. There is a lot of verbiage in the Amendment but it has a clear object, which is to provide for a disabled passenger the same relief from vehicle excise duty as is now given to a disabled driver. For the benefit of those who may not be familiar with the term " disabled passenger ", let me point out that he is a person who is so disabled that he cannot drive, and must have a driver. Usually he also has a constant attendant.

Why should disabled passengers be treated any less well than persons who are less disabled and who can drive? Those who can drive three-wheeled Ministry vehicles obtain the relief that I am seeking on behalf of disabled passengers.

Such people cannot normally be transferred from their wheelchairs into their vehicles without mechanical and, very often, human aid. It is nearly always obvious that a vehicle is for the use of a disabled person because it has adaptations and hoists on the top, so that the disabled passenger can be hoisted from his wheelchair into the car. There is no difficulty about identification.

There may be an anology with the blind person. Blind people cannot drive cars but, as my hon. Friend the Member for Farnham said, they receive a tax allowance of £100 for their disability. The disabled passenger receives nothing by way of tax relief or allowance in respect of his disability, whereas a blind person does. The whole situation requires regularising.

The usual Treasury argument is that this so-called concession will be abused. However, I do not think that the Treasury should continue using that argument, because it will not stand up to examination. The disabled driver, who is not so badly disabled as the disabled passenger and who has his three-wheeled car, is able to get this concession on two vehicles if he happens to own two. That is not being abused in any way, and I do not think people in the disabled passenger category would abuse the concession if it were given to them. I understand that those who get the concession under the War Disabled Scheme do not abuse it, though I believe that it was abused immediately after the war when people coming out of the Services were running their vehicles as taxis, and so on. However, those days are finished.

The disabled passenger has to be hoisted into his car and, because of that, is nearly always in need of a constant attendant. It is unlikely that the constant attendant will drive the car for pleasure, or go off in it on his own, say, to the pictures, because he must be constantly in attendance on the disabled person whom we are discussing. I suggest that these are a lot of non-arguments which are traditionally advanced by the Treasury. I hope that we shall not hear them again today.

Disabled passengers pay by way of taxation £25 road tax and about £66 in petrol tax, on the basis of 8,000 miles a year at 27 miles to the gallon and 4s. 6d. per gallon. The purchase tax on the car depreciated over eight years is £19. That comes to a total of about £110 a year in taxation. I do not think that those figures are questioned, because the Automobile Association and the British Road Federation have come up with figures somewhere between £106 and £112.

These are taxes on mobility and, as the Chief Secretary told the House on 1st April, 1969, they have risen by £38·7 per person per year since 1964. That is a tremendous extra burden, and it takes no account of the purchase tax that such a person must pay on the hoist which has to be placed on the top of his car so that he can be hoisted into the vehicle. An electric hoist for this purpose carries purchase tax of 36 per cent.

The disabled passenger is taxed very heavily, and he has to bear this burden because he is more disabled than the disabled person who can drive himself. He cannot use public transport. He is entirely dependent on his own vehicle for mobility.

Disabled passengers are the only group remaining in this category not exempt from road tax. This is a severe tax on their mobility. The best calculation that I can make is that the maximum number of people who would be affected by the concession for which I ask is 2,500. Such a concession would encourage them to be more mobile and, in my view, could contribute to the general economy of the country.

We do not ask the Government for any assistance. We are merely asking that the amount taken by the Government from disabled passengers be reduced in order to help them to become more mobile. They have great burdens to bear. I hope that the Government will help them to bear those burdens.

I beg to move new Clause 3—

Order. The hon. Gentleman may discuss new Clause 3. He does not require to move it.

I am grateful for your guidance, Mr. Gourlay. My speech will be very much concerned with the provisions which I seek to make in new Clause 3.

The hon. Member for Banbury (Mr. Marten) has moved his Amendment most felicitously. The Committee knows of his deep personal concern to improve the mobility of the severely disabled. Many of us on both sides feel strongly that new steps are needed to improve the lot of those whose mobility is restricted.

My proposition, like that of the hon. Gentleman, is designed to help the disabled passenger. The hon. Gentleman has reminded the Committee that the Finance Act, 1964, relieves the disabled driver from payment of excise duty. It is surely an anomaly that those who are too grievously disabled to drive themselves are not entitled to the relief allowed by the Finance Act, 1964.

Perhaps I might mention two cases which have been drawn to my attention by the Joint Committee on Mobility for the Disabled. I do so because I feel that it is necessary for the Committee to consider the proposition put forward by the hon. Member for Banbury against particular cases.

The first case to which I would refer is that of a man who is paralysed in all four limbs and who requires to be washed, dressed and helped with the toilet. He types using a mouthstick. Two years ago he began work, his first job, in the office of a wholesaler, using an electric typewriter and POSSUM apparatus to operate the telephone and dictaphone. Soon after beginning work, he found that it would only be possible to continue if he acquired his own transport. He and his fiancee, now his wife, were forced to purchase a car. His wife takes him to work and brings him back, as well as working full-time herself. She is able-bodied. If his wife was not working, it is obvious that they could hardly meet the loan charges, repayments and costs of running the car. Without the car, this disabled man could not work. The couple receive no help of any kind and pay both National Insurance contributions and income tax. Without a job, this disabled man would be dependent on the State.

The second case also helps to make an important point which I wish to emphasise to the Committee. The case concerns a man who is disabled by polio. He was married with two children. Polio left him paralysed in both legs, with very limited use of his arms, and incapable of driving even an invalid tricycle. At the time, he and his wife owned a small car, and his wife was able to drive her husband and the children. Shortage of money forced them to give up the car, and this was a major factor in the break-up of their marriage. He is now living at public expense in a home for the disabled.

There are those who would say of these Amendments that they may be too costly. Everyone will be interested to know how much would be involved in operating the Amendment moved by the hon. Member for Banbury and how much would be involved in operating my new Clause.

Another question is: how much can be saved by operating these Amendments? I take the view that much of our expenditure on the disabled is neither cheap nor efficient. It does not make sense not to help people to improve their mobility if they want to become workers instead of depending on State support. Some of the most severely incapacitated people want to stop being supplementary pensioners and to start being taxpayers.

The Minister of State's concern in this matter is well known to me—he has been a personal friend of mine since we were at Oxford together over 20 years ago—but I put to him the argument that we should be asking ourselves this question: how much we shall save by improving the mobility of the disabled who merely want the dignity of being able to work with the increased status of being able to move about more easily than they can now.

I will not speak at length, although I feel extremely strongly about the matter. I will, however, mention one other point. It is argued that abuse of the type of scheme that we are suggesting is the reason why it should not be accepted. This is a classical defence of those who do not really want to do anything. I think that people would regard it as deeply shameful to abuse a scheme of this kind introduced to help the disabled who want to be more mobile and to work. I am satisfied that the argument about abuse does not in any way cancel the case that we are making. I know that my hon. Friend will be as sympathetic as possible, but I strongly urge him to confer with his colleagues in the Treasury to ensure that before long we do something to help some of the most deserving people in this country.

We are discussing three possible ways in which assistance can be given to some of the most severely disabled in this country.

My hon. Friend the Member for Banbury (Mr. Marten) and the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris) have worked long and hard for the cause of the disabled. I, too, have had the privilege on many occasions of speaking on the same subject from this Box. I hope very much that this is the occasion on which the Government will be able to tell the Committee that progress is now possible.

The only argument that we have had in the past on this matter has been the difficulty of policing. I have always regarded this as a weak argument. Surely there are ways whereby this difficulty can be overcome. We are dealing here with some of the most severely disabled. After all, war disabled or civilian disabled who get an invalid car are, almost by definition, less disabled than the people about whom we are now speaking, those who are so disabled that they cannot drive a vehicle. Had they been able to drive a vehicle, in the vast majority of cases they would have been eligible not only for a vehicle, but also for all the advantages, tax and expense-wise on the running of the vehicle, which flow from possession of it. The category of people that we are considering are not only not getting exemption from the road fund tax, but they also have to bear the full cost of the vehicle's running expenses. Therefore, they are being penalised all the way round.

I do not want to introduce political controvery, but when we take into account the steep increase in the running costs of vehicles which has taken place over recent years, we can see that the case is even more powerful than previously. When we take into account the purchase tax on vehicles, the tax on petrol, and the increase in the road fund tax, it is easy to see that it has become more difficult for these people to be mobile.

As has been said time and again—we are realising this as we know more about disability—the psychological effect on the disabled of being able to go out and earn their living so that, as the hon. Member for Manchester, Wythenshawe said, they can become taxpayers, is considerable. Here is one way in which we can assist them.

I do not believe that it is impossible, either through one of these suggestions or through another, to ensure that an exemption of this kind is not abused. In many cases the people that we are considering require constant attendance. We are learning a great deal more about that. Indeed, we hope that a cash allowance for constant attendance will be introduced fairly soon. We are learning a great deal more about possible ways of ensuring that there is no abuse. Equally, in many cases the type of vehicle and its adaptation makes it fairly easy to recognise.

I hope that we will have from the Government today some real hope for the severely disabled. Above all, I hope that we will not have the excuse that we have had in the past that it will be too difficult to help some of these most deserving people.

On the eve of what may well be one of the most hard-hitting election campaigns of the century, it is typical that a Committee can reach so much accord on a question like this. As a Member of Parliament, I find a delight in such matters. I am sure that when the hon. Member for Bodmin (Mr. Bessell) has spoken, we will have had the assent of all three political parties for the Amendment.

I should like to reinforce what has been said in two regards.

First, in matters of this kind, from time to time the attitude of the Treasury and of other Government Departments, whilst having sympathy with the aim, is not to do it in the particular way suggested. I ask my hon. Friend to consider reversing the idea that everything must be done through direct benefit and to look at the matter in the light of what has become common trade union practice elsewhere—namely, having got certain basic points, to look for fringe benefits. If there is an area where fringe benefits could be useful, it is not only in the Amendment, but also in a whole series of ways. If we are having a more affluent society, if we are all to be better off, it should be to this kind of matter that the Treasury should be looking in order that those most hard-pressed sections of the community should get the fringe benefits and help of the kind being put forward.

Secondly, I should like to reinforce the argument, from a medical point of view, on the mobility of persons coping with disability. I speak from experience, because I cope with a disability. The one thing that a disabled person has to do is to make sure that he never gives up. He must never accept that he cannot do something. To him everything is a challenge.

As has been said, this is an all-party Amendment, and I was glad to hear the hon. Member for Willesden, West (Mr. Pavitt) say that this is one of those occasions on which, in spite of party differences, the Committee can speak with one voice. The hon. Member for Banbury (Mr. Marten) moved the Amendment in his usual able manner, and gave all the arguments in favour of it. He told the Committee why he believes this to be an essential aid to disabled persons, and I agreed with every thing that he said. Likewise, I agreed with what the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris) said about New Clause 3.

I should like to refer briefly to Amendment No. 3, but before doing so perhaps I may say in parenthesis that although I said the week before last that I expected that I was then making my last speech to the Committee, this interjection this afternoon is not to be regarded as a speech. Nor is it to be thought that I am behaving like Dame Nellie Melba, who constantly made comebacks. I felt that it was important to say a few words on the Amendment because of a case which has caused me anxiety for about three or four years in my constituency. I think that it illustrates the need for the kind of exemption envisaged in Amendment No. 3, rather than those envisaged in the Amendment proposed by the hon. Member for Banbury.

Some disabled people are capable of driving an ordinary motor car. They are registered as disabled, with all the benefits that accrue to them under that registration system. Nevertheless, they do not get the benefits afforded under the terms of the 1964 Act to disabled persons who use vehicles specifically designed for use by disabled people. My constituent, who is a woman in middle life, lives on the moors of Bodmin. Some years ago she received an injury to her back which makes it impossible for her to be mobile except by means of a motor vehicle, but she does not need a disabled person's vehicle. She can use her arms and legs quite freely, and she can drive an ordinary motor car.

For some years she has been trying to keep on the road a vehicle which is now elderly. It is quite safe, but it is very far from comfortable. She wants to replace this vehicle, and she could perhaps just about manage to do that within the limit of her resources, but she has found it an intolerable burden to pay the inevitable additional costs of running the car—the excise duty, the petrol tax, and so on, to which reference has been made —and she would have to pay purchase tax if she bought a new vehicle.

I feel that as this lady is doing a useful job of work—she is fully occupied—and as it is essential for her to have a vehicle to reach her employment from her remote cottage on Bodmin Moor, it would be far wiser for the Government to make the kind of concession envisaged in Amendment No. 3 which seeks to exempt disabled persons from paying the vehicle excise duty. The exemption is limited to one car. There is no question of the exemption being abused. It is a simple straightforward matter. The person concerned would take his disabled person's registration card with him when he applied for exemption from excise duty. He would be registered, not only in the normal way, but also with the local taxation office for exemption in respect of one vehicle. There would be no administrative difficulty. The cost to the Treasury would be very slight. In fact, it is possible that there would be no cost, because most people take advantage of the 1964 Act when they need not do so.

The woman I have mentioned—and in others like her—is capable of driving an ordinary vehicle, and yet she is unable to obtain the benefits afforded to disabled people under the 1964 Act. I hope, therefore, that in considering all these Amendments the Treasury will give careful consideration to Amendment No. 3, which I believe has merit at least equal to that of the Amendment proposed by the hon. Member for Banbury and the new Clause proposed by the hon. Member for Wythenshawe.

Treasury Ministers perhaps more than others occasionally find themselves in impossible positions, and I think that this is one of them because, listening to all that has been said today, and applying one's own criteria and measures to the nature of the problems we are discussing, it is impossible not to be persuaded by the argument that we should do more than we do for those who are physically disabled.

I think that the case was well put on Second Reading by my hon. Friend the Member for Manchester, Wythenshawe (Mr. Alfred Morris), when he referred to those who were physically disabled as being socially disabled as well. This is precisely the case, and perhaps the greatest deprivation is not the loss of limbs or faculties, if that was not enough, but the loss of human contacts and of mobility; those things which matter to those who arc fortunate enough not to be disabled.

I should like to be able to say that the heart takes over, not out of sentiment, but because we believe this to be a right and just, and therefore the objections which have been raised in the past to the kind of proposals set out and very well put by the hon. Member for Banbury (Mr. Marten), by my hon. Friend the Member for Wythenshawe, and by others who have contributed to the debate, have all been overcome, and that the Amendment and the new Clause are not defective or contradictory and therefore we can, in a sense, let them go by on the nod. That is what my instincts tell me I ought to do, but, whereas I think that my instincts in relation to the issue are right, my instincts in relation to legislation which fulfils the purpose required are probably wrong.

I am not saying that the argument about abuse is overwhelming. It may well be that in this, as in some other matters, one has to balance the right course against the possibility that some may abuse it. The hon. Member for Banbury was very fair when he said that after the war, in rather different circumstances, there may have been some abuse. Equally, I agree with my hon. Friend the Member for Wythenshawe, when he says that it is difficult to believe that there will be much abuse when we are dealing with a section of a community which is deprived in the real sense of the word. It may be that our judgment should fall slightly differently from what it did in the past, and that if there is abuse, or the possibility of it, this should be discounted because of the advantage to be gained by concessions of this kind. Judging from what I have heard today, that is how the Committee feels. Nor shall I say that there are administrative obstacles which cannot be overcome. There are administrative obstacles to doing virtually anything, but unless we set out to overcome them there would be no reforms and no changes in policy and attitudes in the community which had changed; and would not be represented by what was on the Statute Book.

Although I cannot advise the Committee to accept the Amendments or the new Clause, I believe that we must try very hard to overcome the obstacles. I do not say that that cannot be done or that the obstacles are overwhelming. Should I be in a position to play a part in the consideration of these matters in the months to come, I should regard it as a priority to discuss with my colleagues in the Treasury and my hon. Friends at the Department of Health and Social Security whether we can make an advance in this respect and set aside the obstacles which, although real, we should endeavour to overcome.

The Minister of State referred to there being obstacles to accepting Amendment No. 4. But he could readily accept it because it has been taken from the Finance Act, 1964, which had the approval of the House. There is nothing wrong with the Amendment if the Government are prepared not to take so much taxation from disabled passengers.

I find the Minister of States' reply very disappointing. I am not without sympathy with a Treasury Minister in what the Minister of State described as an impossible position. Some of us know what that feels like. But the hon. Gentleman was less helpful than he could have been. He did not argue, and for the reasons given by my hon. Friend the Member for Banbury (Mr. Marten) could not argue, that the Amendment was imperfectly drafted and therefore could not be accepted. He did not argue that the administrative problems, though real, were insuperable. He asked us to reject the Amendment in return for his undertaking to look into the matter in future months.

What could the Minister of State do then which the Committee cannot do now? I am glad that what appears in the 1964 Act has been accepted because I had some responsibility for that Measure and spoke on the Clause dealing with this matter. The Minister, rightly, has not said that the great Department which he represents and the Customs and Excise could not handle the matter if the Amendment were accepted. What will the hon. Gentleman spend the next few months doing which is not done by my hon. Friend in his Amendment?

The Minister has put the Committee in an extremely awkward position. There is all party support for what is proposed, and, although the Minister did not answer the question about what the cost would be, he accepted, by implica- tion, that it would be so trivial as to be unimportant. I do not know why the hon. Gentleman is not prepared to advise the Committee to accept the Amendment, which is correctly drafted, as he admits, and administrable, as he admits. Perhaps the answer is—and one would understand it if it were—that as a junior Minister he is not entitled to commit the Government. But the Chief Secretary, who is a member of the Cabinet, is present and has heard the debate. If the Minister of State does not feel able to advise the Committee to accept the proposal, I am sure that the authority of the Chief Secretary would run to that Therefore, one cannot have the sympathy which one might otherwise have had with a junior Minister left, like Casabianca, on the Treasury Bench without authority to make a concession. The Chief Secretary, who has full authority to make it, is sitting on the Front Bench, consulting his brief.

This is obviously a case of virtue unrewarded. Casabianca notwithstanding, it seems to me a case of Morton's fork, if I may mix the analogies.

I could have set before the Committee the administrative difficulties of enforcement and classification and told a dismal tale, which would have been unpopular, but a hard Treasury line. I could have gone away not expressing my feelings but carrying out the obligations in my brief. Instead, I said that I thought that this on the virtues of the case made in the was an important matter and dwelt more Committee than the difficulties. If the Committee had wished me to explain the administrative difficulties at length, I could have done so.

It would be wrong to legislate, which we would be doing by accepting what has been proposed, before being aware that administrative difficulties could be overcome. I have given the Committee an undertaking that we should do our best to ensure that the administrative problems were overcome. Therefore, an Amendment of this sort may be possible in future.

I think that what the Minister of State means by saying that the matter will be looked at is that a junior Minister at the Department of Health and Social Security is considering this question. But that is entirely different. That concerns the question of vehicles for the disabled, whether three-wheelers or four-wheelers. We are here concerned with excise duty, which lies outside the remit given to the junior Minister at the Department of Health and Social Security to go into the question of vehicles for disabled drivers.

I was not referring to that. There are differences of emphasis between the Amendments and the new Clause which must be considered in the spirit which I have suggested.

The Minister of State's reply was most unsatisfactory. The Amendment of my hon. Friend the Member for Banbury (Mr. Marten) has been taken from the Finance Act, 1964. The difference is that the 1964 Act proposal dealt with disabled drivers whereas this Amendment deals with disabled passengers. It was possible to overcome the administrative difficulties about disabled drivers in 1964. The Minister has made no case for not overcoming the administrative difficulties in this Amendment. The two cases deal with virtually the same people: one in 1964 who sat in the driving seat, and one in 1970 sitting in the passenger seat. The Department and the Customs and Excise were able to overcome the difficulties in 1964.

I am completely unconvinced by the Minister's reply. Even though it might not be usual on a special day in our affairs such as this, if I were my hon. Friend I should not withdraw the Amendment; I should divide the Committee.

Like the hon. Member for Ormskirk (Sir D. Glover), I am disturbed by the answer from the Treasury Bench. I agree with the right hon. Gentleman the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) that, if we can have no firmer undertaking from the Minister of State or the Chief Secretary, we may well have to divide, and I should be sorry to see that happen. I should he sorry because there is accord on the question. Even the Minister of State recognises that this is a genuine cause which we are seeking to fight and one which has his sympathy.

The right hon. Member for Kingston-upon-Thames, who is far more expert than I and many other right hon. and hon. Members on Treasury matters, has assured the Committee that the administrative difficulties could be overcome. We have his authority for that, and I think that few hon. Members would care to challenge that authority. In the circumstances, and because we are speaking not on party lines—the Amendment is an all-party Amendment—I hope that, if the Government are unable to accept the Amendment now, we shall at least have an unequivocal undertaking from the Minister of State that, if his party is re-elected as the Government, it will be a first priority that this proposal, in one form or other but with the same meaning, will be put into effect. It could be done simply. It would require only a short Bill to do it.

Better than that, I hope that the Amendment can be accepted now. There is no reason in logic why it should not be. I am sorry that we have had this answer. As others have said, this would be a particularly happy occasion to make the concession instead of forcing the Committee into a position in which it does not wish to be, when it may have to divide.

Could I seek your advice, Mr. Gourlay? The Committee is in some difficulty on procedure. We accepted the proposal of the Chairman of Ways and Means for the order in which Amendments should be taken. Is there any way by which we can find time for further thought? Obviously, my hon. Friend the Minister of State is in a difficult position; he cannot, off the cuff, move from the decision which has already been taken. On the other hand, I am certain that if he, other Treasury Ministers and we ourselves had a little more time, we might reach a more satisfactory resolution of the problem.

Even at this late stage, is there any way by which the Committee could have a little more time to enable the Minister of State to consult the Chief Secretary and others, perhaps, in the hope that the

I am sorry, but nothing can be done at this stage to accommodate the hon. Gentleman.

On a point of order. I understand that the Government have tabled an Amendment to leave out the Clause. I should be most unhappy if I thought that the Clause would go through without our having discussed and agreed the Government Amendment.

I understand that the background to the Clause is the Chancellor's recognition in his Budget speech that

" there is some unused capacity in the construction industry, particularly in the less prosperous parts of the country."—[OFFICIAL REPORT, 14th April, 1970; Vol. 799, c. 1245.]

That strikes us on this side of the Committee increasingly as the understatement of the year, if not of the decade. When we learn from the housing figures published yesterday by the Ministry of Housing and Local Government that the April, 1970 starts are as much as 7,000 down on the April, 1964 starts and reflect that the Government will leave office on Prorogation with 20,000 fewer houses under construction than when the Tories left office in 1964, the Chancellor's statement seems a pearl of understatement.

We might well wonder why the Chancellor did not lay more emphasis in his Budget speech on this aspect of the economy, the slack in the construction industry. However, we at least welcome the recognition implied by the Clause that there is a need to try to do something about what really amounts to a recession in the construction industry. I question the effectiveness of the Government's measures to try to deal with the evident setback in the industry.

Will the Minister of State confirm with complete confidence that it is the Government's view that the Clause will be quick-acting? I think that that was the expression the Chancellor used on 14th April. Will industrialists move more quickly in initiating industrial building as a result of the Clause? I instinctively ask this question because we are told that the Revenue cost in the current year is likely to be nil, but that means that the cash flow effect for industry will correspondingly be nil. As far as I can see the whole stimulus for the construction industry now must turn first on an adequate cash flow position in the present financial year and especially in the immediately following months, and in addition it must rest on an assurance about the pattern of future profits.

Cash flow and profits are the underlying reality of any real stimulus to industrial investment outlays by manufacturers. Are the cash flow prospects for the immediate future and profit prospects really so favourable as to permit industrialists to move quickly, as the Chancellor hopes? Are they sufficient to breathe life into the dry bones of the Clause? It is rather difficult to tie up the prospects for business investment against the background of some of the economic circumstances that now seem to prevail. We have had some sort of public confirmation that earnings in industry, which are a basic industrial cost, are likely to go up by 12 per cent. in the current year. Unless prices are to be allowed to increase at least as much, it is hard to see how there will be any very stimulating profit prospects for businessmen, let alone sound cash flow positions to encourage them to turn towards investment. This would be particularly the case in the construction industry. The prospect of higher wage costs might normally encourage businessmen to invest in plant and machinery, because capital can be substituted for labour in that way. But where it is a question of new industrial buildings the prospect of higher labour costs is the one factor that will deter investment in plant of that sort.

We must add to this the fact that the profit position in industry has been extremely lean since 1964. Looking, for example, at the figure of retained profits, which corporation tax was meant to boost and assist, we find that the trend has been steadily downwards in the volume of retained profits since 1964 even at current prices, and gross profits at current prices have barely moved.

So the profits prospects for the forthcoming year are not good, particularly if the Government do what they did after the 1966 election. We had a similar boom in earnings and wages just before the election and they imposed a squeeze and freeze immediately after it. If that happens again the environment and atmosphere for business investment is about as bleak as it could be. Does he really believe that the Clause on its own will compensate for the difficulties in the cash flow position and in the uncertainty about the future profits which is inherent in our present economic situation, particularly the prospect of high levels of increased labour costs in the coming years?

Secondly, I turn to the narrow application of the Clause. The C.B.I. is anxious to know whether the Government have considered or would further consider the possibility of extending the initial allowance increase to commercial buildings, particularly in development areas. It is right to point out that there is no reason in logic why commercial buildings should be excluded from the whole environment of capital allowances. The old, although respectable, argument is that to extend initial allowances or any sort of capital allowances to them would mean severe cost to the Revenue.

The Treasury estimated an extra £275 million as being the likely cost of extending this sort of concession to commercial buildings. I know that the Minister of State has helpfully and carefully costed the likely impact of this change on industrial buildings in development areas and perhaps he can tell us whether any estimate has been made of the cost of extending the provisions of Clause 16 to commercial buildings in development areas for these two years.

I believe that the impact of the scheme in development areas for industrial buildings is likely to be nothing this financial year and about £9 million in the next. It would be helpful to know whether the Treasury even considered what the cost would have been of extending the change to commercial buildings in development areas.

This is a reasonable query because many people regard the development of the commercial side of our economic life, which brings in the whole range of commercial buildings such as offices, shops and distributive and servicing facilities, as particularly helpful to the needful development areas. The characteristic of an advanced economy and its growth is the development of this side. It would have been sensible and rational at least to have considered the extension of the initial allowance provisions to commercial buildings in development areas and I cannot believe that the cost would have been very substantial. The whole rationale of the Government at present is deliberately to carve a bit off the Revenue for the sake of the stimulus this would give. We believe that a similar stimulus for commercial building in development areas should be considered in the narrow context of the Clause for the limited period of two years.

Commercial buildings are not only vital for a developing economy and social life of the needful areas but the rate of depreciation in these areas for such buildings is particularly acute and far more hazardous than in the ordinary areas. We want confirmation that the cash flow position in the current financial year will offer something in the way of a stimulus and not just of future prospects of allowances against profits, because there is no certainty that these profits will be to hand. We want an assurance that the Government have looked at the possibility of extending the application of the Clause to commercial buildings, particularly in development areas.

This Clause is intended to encourage the erection of industrial buildings and as such it is to be welcomed. But it will fail in its objectives unless the period it covers is extended. As drawn, the initial allowances on such buildings will only be increased if the expenditure is actually incurred by 5th April, 1972. If it is to be an incentive to the erection of new buildings, clearly the decision to erect the building must have been taken after the Chancellor made his Budget speech or after the introduction of the Bill. But the period between then and 5th April, 1972, is shorter than the length of time which often elapses between the conceiving of a project for a new industrial building and getting it up. There are two principal reasons for this.

The first reason is the increasing complexity of the planning legislation—indeed it would be a good idea if the authorities were to consider the effect of planning delays on the earning power of companies and hence on the earning power of the country. In my view, a great deal of money is lost to the country by planning delays. I could in ordinary circumstances give some most dramatic examples, including money lost to the Government on their own projects. However, planning delay is the first cause of delay in getting a project going.

The second cause is the increasing complexity of tender documents. It often takes six or more months to get a set of such documents out and a period after that to get the tenders in.

Therefore, while welcoming the Clause, I feel that, whichever Government are returned to power on 18th June—and both parties wish to have this provision—will have to lengthen the period which the Clause covers if they want to make it effective.

I want to emphasise a point made by my hon. Friend the Member for the Cities of London and Westminster (Mr. John Smith). It was also made during the Budget debate. The House should realise that to get a building planned often needs 40 different signatures on the plans before it even starts, while up to eight months can be taken up waiting for planning permissions to be completed. This means that the Clause will have little value unless the period it covers is extended.

Perhaps the Minister of State will make clear what will happen in the case of buildings uncompleted at the end of the two years. Is the initial allowance to be allowed on the amount of expenditure up to that time, or on the basis that the building has been completed? If the building is not completed, is it the case that no allowance will be made? There is some confusion on this matter.